- Mike Martinez
Scoundrels: Political Scandals in American History—Jack Abramoff and Influence Peddling
As I discuss in my forthcoming book Scoundrels: Political Scandals in American History, Jack Abramoff was a lobbyist whose name became synonymous with influence-peddling and financial corruption in American politics. Many citizens mistrust lobbyists who cozy up to elected officials seeking access and special deals for their wealthy corporate clients. The rejoinder to objections about the lobbying profession is that interest groups necessarily must communicate with elected officials to ensure adequate and fair representation even if sometimes a few “bad apples” seek to influence public policy through bribes and payoffs.
Abramoff became the poster boy for bad apples, but he did not start out that way. He began his career as a lawyer-lobbyist legitimately working to represent his clients. Eventually, he engaged in a complex series of illegal practices to reap the enormous financial benefits that come from taking shortcuts. The list of his crimes was long: Abramoff provided financial bribes to members of Congress in express violation of federal campaign laws; he overbilled and defrauded Native American clients; and he hired ex-congressional staffers to lobby their former bosses in violation of the one-year ban on lobbying activity by former employees. In 2006, he agreed to plead guilty to three felony counts of conspiracy, fraud, and tax evasion. Abramoff’s activities did not constitute the worst bribery offenses in American history, but his notoriety and numerous shady activities ensured that he would become an emblematic figure in the annals of American political scandals.
Jack Allan Abramoff was born on February 28, 1959, in Atlantic City, New Jersey. His father, Franklin, was president of the Franchises unit of the Diners Club credit card company. In 1968, his family moved across the country, settling in Beverly Hills, California. At Beverley Hills High School, Abramoff played football and enjoyed weightlifting. He was reared to be competitive, and he hated to lose.
He attended college at Brandeis University in Waltham, Massachusetts, graduating with an English degree in 1981. Like his father, Jack Abramoff became a conservative Republican. In college, he became chairman of the Massachusetts Alliance of College Republicans. Owing to his father’s contacts within Republican circles, young Jack became acquainted with influential party leaders at an early age.
Following college graduation, Abramoff was elected chairman of the College Republican National Committee (CRNC), a national organization created to “recruit, train, mobilize and engage” young conservatives. He had already developed an uncompromising style of bare-knuckle politics, which he honed at the CRNC. “It is not our job to seek peaceful coexistence with the left,” he wrote in the CRNC 1983 annual report. “Our job is to remove them from power permanently.”
During these years, Abramoff became friends with Grover Norquist, a Harvard MBA who founded Americans for Tax Reform (ATR), a lobbying group dedicated to preventing federal tax increases. The ATR was known for asking elected officials to adopt a taxpayer protection pledge. Along with another young conservative activist, Ralph Reed—who started as a CRNC intern and eventually became executive director of the Christian Coalition—Abramoff and Norquist formed the “Abramoff-Norquist-Reed triumvirate.” The three young men remade the CRNC in their image as they purged dissenters. The triumvirate sought to remake Washington politics into a conservative bastion by engaging young men and women early and often.
As CRNC chairman, Abramoff addressed the 1984 Republican National Convention. It was an auspicious start for a young conservative activist on the rise. The contacts he made during these years served Abramoff well. Many of the young conservatives of the 1980s were elected officeholders in the 2000s, and access to those people allowed Abramoff to develop a lucrative lobbying business.
An unusually perceptive operative, Abramoff planted the seeds for his later success early. In 1985, he joined Citizens for America, an organization created to assist Lt. Col. Oliver North in building support for the Nicaraguan Contras. A year later, Abramoff earned a law degree from Georgetown University Law Center, an impressive credential for an up-and-coming Republican lobbyist.
Even as he learned his way around Washington politics, the young conservative understood the power of Hollywood in shaping public opinion. Along with his brother, he developed a story, “Red Scorpion,” about a Soviet assassin dispatched to kill an African revolutionary. The would-be assassin witnesses Soviet abuses and changes his mind. The story became a 1989 film starring a prominent Swedish action star, Dolph Lundgren, and promoted a narrative favorable to the white South African regime. It was a controversial position owing to the regime’s support for racist apartheid policies. Aside from the political controversy, Red Scorpion was hardly high-brow entertainment. One critic called the film “seriously God-awful,” while another opined that the “movie’s reflective moments belong to Mr. Lundgren’s sweaty chest.” Nonetheless, Abramoff was on his way as a budding manipulator of public opinion.
In 1994, the lobbying firm Preston Gates Ellis & Rouvelas Meeds hired Abramoff owing to his close ties to important Republican elected officials. Abramoff used the resources and prominence of his new firm to propel him into the top ranks of Washington lobbyists. In 1995, he began his long association with Native American tribes when he represented the Mississippi Choctaws in the successful effort to defeat a congressional bill to tax Native American casinos. Texas Congressman Tom DeLay, the House majority whip (and later House majority leader), led the effort to derail the bill, calling Abramoff one of his “closest and dearest friends.”
From the outset, Abramoff understood that he could influence federal legislation by arranging “goodies” for members of Congress. Journeymen lobbyists seek meetings with lawmakers to educate them on issues crucial to their clients’ causes, but Abramoff largely eschewed such pedestrian tactics. Instead, he wined and dined members of Congress and other elected decision-makers with expensive meals, lavish trips and vacations, and hard-to-get tickets to concerts and sporting events. He also arranged for spouses and relatives of lawmakers to be employed in positions that paid handsomely without requiring much work, in effect, sinecures for the well-connected.
The Commonwealth of the Northern Mariana Island (CNMI) hired Abramoff’s firm to champion a policy exempting the CNMI from federal immigration and labor laws. From 1995 until 2001, the Islands paid $6.7 million for these services. To facilitate his actions, Abramoff secretly paid for prominent members of Congress to travel to the Marianas. He focused especially on three California Republican congressmen, Dana Rohrabacher, John Doolittle, and Ken Calvert.
Abramoff advertised himself as a full-stop shop. Aside from providing lucrative trips, he and his staff prepared statements for congressmen to read on the floor of the House of Representatives. Congressman Ralph Hall, a Texas Republican, attacked a story offered by an escaped adolescent sex worker, “Katrina,” in the Marianas with remarks that Abramoff ghost-wrote.
Abramoff used Ralph Reed’s marketing firm to send mailings to conservative Christian voters. He provided gifts to Roger Stillwell in the United States Department of the Interior. He arranged for Congressman Tom DeLay to visit Russia on a “fact-finding” trip before DeLay supported legislation to allow the International Monetary Fund to bail out the weak Russian economy.
Abramoff operated on a global stage representing multiple industries, especially energy companies and the gaming industry. He had no qualms about taking on foreign governments as clients. During his career, Abramoff represented the governments of Malaysia and Sudan. No client was too repugnant or loathsome to represent--provided that the client paid exorbitant fees for Abramoff’s services.
He brought in millions of dollars for his firm, but not everyone was enamored of his business, or his tactics. Some partners expressed unease at Abramoff’s lack of concern for ethics and fair play. In 2001, he realized that it was time to move on from Preston Gates. He joined Greenberg Traurig, a prominent law firm and lobbying outfit that allowed him to assemble a crackerjack team to revamp the firm’s lobbying practice. “Team Abramoff,” as it was called, was composed of former congressional aides who used connections with members of Congress to ensure that the team leader enjoyed access within the highest circles of power.
When George W. Bush entered the White House in January 2001, Abramoff was well-positioned to cash in on his contacts to a degree he had never known before. He served on the administration’s transition advisory team for the Department of the Interior and became friends with the department’s incoming deputy secretary, coal lobbyist J. Steven Griles.
The House Government Reform Committee later combed through Abramoff’s records and found that the lobbyist had 485 contacts with the Bush White House during the first three years of the administration, including 345 meetings or face-to-face contacts. His influence was astonishing. Among other victories, Abramoff repeatedly persuaded senior administration officials to assist his clients in the Indian casino industry.
Abramoff’s high-flying lobbying business could not operate indefinitely without attracting the attention of law enforcement as well as congressional investigators. By late 2004, the latter were examining the lobbyist’s work on behalf of Native American casinos. In September 2004, Abramoff appeared before the Senate Indian Affairs Committee but asserted his Fifth Amendment rights against self-incrimination rather than answer uncomfortable questions about his business dealings.
Abramoff was wise to plead the Fifth. Records later revealed that he and partner Michael Scanlon, a former aide to Tom DeLay, conspired to bilk Indian casinos out of tens of millions of dollars in fees. Abramoff charged a huge retainer to four tribes, the Saginaw Chippewas of Michigan, the Agua Caliente of California, the Choctaws of Mississippi, and the Coushattas of Louisiana, to lobby for their interests in Washington, D.C. When they realized that their fees might be in jeopardy, Abramoff and Scanlon orchestrated opposition to the casinos so they could convince their clients to keep the duo on retainer. In November 2005, Scanlon entered a guilty plea to conspiring to bribe members of Congress and other public officials for his actions in the Indian casino matters. A few months later, Abramoff also agreed to plead guilty. As part of his sentence, the court ordered Abramoff and his codefendants to pay $25 million in restitution.
Bernie Sprague, a representative of the Saginaw Chippewas of Michigan, expressed buyer’s remorse for engaging Abramoff’s services. “It totally destroyed our tribe,” he said. “All he was worried about was Jack. Jack has to get his next big check.”
The quest for the next big check led Abramoff to pursue questionable business opportunities that a more cautious man would have avoided. His operations faced the most significant threat from his business dealings with Konstantinos “Gus” Boulis, a land developer, restauranteur—he created a popular chain restaurant, Miami Subs Grill—and casino operator. Boulis had discovered the profitable business of buying ships to escort patrons on a “cruise to nowhere.” The cruise ship was a casino that sailed customers into international waters where Florida’s gambling laws did not apply.
Boulis founded SunCruz Casinos, a gambling boat company, in 1994. Afterward, he ran afoul of zealous law enforcement officers in Hollywood, Florida. Undercover investigators found that he had allowed gambling on a SunCruz ship before entering international waters. After a contentious battle, Boulis avoided liability because the Hollywood authorities did not have probable cause to believe a crime had occurred when they launched their sting. Nonetheless, Boulis knew that the authorities had their eye on him. He grew weary of the scrutiny.
By September 2000, he said he was ready to unload SunCruz. At the time, the company employed 2,000 people and contained 11 ships. It brought in tens of millions of dollars in profits annually. Jack Abramoff and a partner, Adam Kidan, agreed to purchase the enterprise for $147.5 million. As part of the deal, Boulis would retain a silent 10 percent interest in the business. He also agreed to accept a $20 million promissory note instead of a $23 million down payment.
Abramoff and Kidan did not have the money necessary to complete the transaction, but they concocted an illegal scheme to get it. They faked wire transfers indicating that they had made the $23 million down payment, which allowed them to qualify to receive a $60 million loan.
The fraud might have succeeded but for a series of unexpected developments. In December 2000, Kidan and Boulis became so upset with each other that they literally came to blows, with Boulis stabbing Kidan in the neck with a pen. In February 2001, someone murdered Boulis in his car. When the police rounded up three suspects, authorities discovered that Kidan had paid the men. Kidan testified that he had hired Anthony “Big Tony” Moscatiello to protect him from Boulis and the mob, but he never asked Big Tony to kill Boulis.
The cases dragged on interminably. After 14 years of legal wrangling, the court concluded that Moscatiello killed Boulis on his own initiative. As a result of the murder, a jury sentenced Moscatiello to life in prison. His codefendant Anthony “Little Tony” Ferrari was convicted of murder and conspiracy and sentenced to serve a life sentence. The third defendant, James “Pudgy” Fiorillo, pleaded guilty to a conspiracy charge and was sentenced to serve six years in prison.
With the scrutiny afforded the SunCruz deal, authorities uncovered the Abramoff and Kidan financing scheme. Abramoff realized that he had few options but to plead guilty to conspiracy and wire fraud, which he did in Miami on January 4, 2006. His plea agreement indicated that he would serve a maximum prison term of seven years, to run concurrently with a sentence he received the preceding day in a fraud, tax evasion, conspiracy, and bribery case. Prosecutors recommended that the sentence be reduced if Abramoff cooperated fully. In March 2006, Abramoff and Kidan received the minimum sentence of 70 months in prison and were ordered to pay $21.7 million in restitution.
Aside from the SunCruz matter, Abramoff was involved in other activities with legal ramifications, although he emerged relatively unscathed. In 2002, Abramoff accepted a retainer to serve as a subcontractor for the Guam Superior Court to lobby against a proposal to place the superior court under the authority of the Guam Supreme Court. For his services, Abramoff received $324,000. The United States Attorney for Guam, Frederick A. Black, initiated an investigation into the matter. A grand jury issued a subpoena requiring the Guam Superior Court administrator to release records about the contract. The investigation abruptly ended when the George W. Bush administration suddenly removed Black from office.
The matter appeared to be dead, but in 2005, a public auditor, Doris Flores Brooks, initiated a new investigation of the issue. Investigators found that the Guam Superior Court paid Abramoff’s retainer by sending 36 checks of $9,000 each to Howard Hills, a constitutional lawyer who had advised the court for years. Hills had retained Greenberg Traurig, Abramoff’s law firm, as a subcontractor. The structure of the deal and the amount of each check suggested that the Guam Superior Court sought to keep Abramoff’s involvement a secret. Moreover, federal requirements for transfer payments require that amounts over $10,000 to be reported to government authorities. By dividing up Abramoff’s fee into 36 payments of less than $10,000, the court appeared circumvent federal law. In addition, contracts over $10,000 must be publicized through a competitive open bidding process, and that did not happen here.
The Guam Attorney General indicted Greenberg Traurig and Jack Abramoff in 2006. Fortunately for Abramoff, the case did not proceed to trial. The law firm returned the $324,000 fee in 2008, and the court dismissed the case. It had been a close call.
By the time the courts disposed of the Guam case, Abramoff was serving his prison sentence for the SunCruz deal. He had already faced trial in another influence peddling case. On September 4, 2008, a court in Washington, D.C., found him guilty of supplying expensive gifts, meals, and trips to sporting events to legislators in exchange for favorable legislation, all violations of federal campaign finance laws. Because he had cooperated with prosecutors by detailing how he operated, the judge sentenced him to a reduced sentence of four years. He could have been sentenced to more than 12 years in prison.
Addressing the judge in open court during his sentencing hearing, Abramoff exhibited the requisite contrition. He insisted that he had abandoned his profligate ways, telling the court that he was no longer the man “who happily and arrogantly engaged in a lifestyle of political corruption and business corruption.” Summarizing his remorse, Abramoff declared that “I am sorry, so sorry that I have put everyone through this.”
Because of Abramoff’s extensive influence peddling operation, two dozen people were convicted of corruption or bribery, including Steven Griles, the former deputy interior secretary and the highest-ranking Bush administration official in the scandal. Griles pleaded guilty to obstruction of justice. Congressman Robert Ney, an Ohio Republican, received a two and-a-half-year prison sentence for accepting bribes. William Heaton, Ney’s former chief of staff, entered a guilty plea on a federal conspiracy charge involving a golf trip to Scotland, expensive meals, and tickets to sporting events between 2002 and 2004. David Safavian, a Bush administration procurement official, was sentenced to 18 months in prison after he tried to cover up his relationship with Abramoff.
With his myriad schemes brought to light and his lobbying career in shambles, Abramoff reported to the minimum security Federal Correctional Institution in Cumberland, Maryland, on November 15, 2006. He became inmate number 27593-112. Accustomed to earning millions of dollars in fees and retainers, he soon found himself working in the prison chaplain’s office for twelve cents an hour. He also taught courses on public speaking and screenwriting to his fellow inmates. Always a film buff, Abramoff convinced the prison administration to institute a popular movie night for the inmates.
On June 8, 2010, Abramoff moved from federal prison to a Baltimore, Maryland, halfway house. He worked as an accountant for a local pizzeria until his release from custody on December 3, 2010. After his release, he returned to lobbying.
Despite his checkered past, Abramoff attracted a high-ranking clientele in Republican circles. In December 2016, he attempted to arrange a meeting between President-Elect Donald Trump and Republic of Congo President Denis Sassou Nguesso. Although the meeting never happened, it appeared that Abramoff was back in the game.
By 2020, however, Abramoff was back in more ways than one. After a decade outside the limelight, his name returned to the headlines when federal prosecutors charged him and Roland Marcus Andrade, founder and chief executive officer of the NAC Foundation, also referred to as the “National AtenCoin Foundation,” an organization that was created to develop and manage the new cryptocurrency AML Bitcoin, for making false statements to secure buyers. Abramoff also failed to register as a lobbyist, as required by the Lobbying Disclosure Act, after being retained. He agreed to plead guilty to the charges.
Abramoff has become a cultural figure, and a controversial one at that. Hollywood cranked out a 2010 film, Casino Jack, about Abramoff’s venality. Always a fan of movies, Abramoff must have been thrilled to learn that Oscar-winning actor Kevin Spacey, who subsequently became embroiled in a well-publicized sex scandal of his own, portrayed him in the film. Eager to cash in on his notoriety, Abramoff appeared on television news programs as a commentator and blogged about his experiences as a lobbyist.
In his 2011 book Capitol Punishment: The Hard Truth About Washington Corruption from America's Most Notorious Lobbyist, Abramoff reviewed his life as a high-flying influence peddler. He admitted that he had taken advantage of a notoriously weak and ineffectual system for policing lobbyists. Abramoff suggested that the only genuinely effective means of preventing corruption is to impose a lifetime ban on former officials serving as lobbyists. He also recommended prohibiting all gifts from lobbyists and lawmakers. In his view, term limits would prevent long-time elected officials from becoming ensconced in Washington.
Although Abramoff was a single individual mired in corruption, his activities were emblematic of a broken political system. The American system of campaign finance, with its emphasis on raising large sums of money to fund the never-ending reelection cycle, all but encourages systematic abuse by politicians and the lobbyists who court them. Jack Abramoff was but one man, but he came to symbolize the corrosive culture of political finance and manipulation in the United States.