Double-dealing cost Tiguas casino, $4.2 million
Gary Scharrer and Sergio Bustos, El Paso TimesSunday, November 28, 2004
As El Paso's Tigua Indians desperately tried to convince the Texas Legislature last year to let them reopen their casino, the tribe's highly paid Washington lobbyist worked behind their backs to keep Speaking Rock Casino closed.
"We have to stop this. There is no other option at this point," lobbyist Jack Abramoff wrote in a Feb. 27, 2003, e-mail. The message urged the undisclosed recipient to push for a federal law that would limit the Texas Legislature's ability to permit Tigua gaming.
The previously undisclosed e-mail was among 116 pages of documents recently released by the U.S. Senate Indian Affairs Committee, which is investigating work done by Abramoff and public relations consultant Michael Scanlon on behalf of the Tiguas and other Native American tribes. The e-mail is the first evidence to suggest Abramoff continued to work to sabotage the Tiguas' attempts to legalize gambling even after he and Scanlon divided $4.2 million of the tribe's money.
The Senate documents, mostly e-mails between Abramoff and Scanlon, offer a rare behind-the-scenes look at deception, deceit, greed, backstabbing and political- influence peddling in the nation's capital.
"This is a really bad example of everything wrong with the system," said Fred Lewis, president of Campaigns For People, a non-partisan organization that supports campaign finance reform. "It is a story of big money, corruption and excessive lobby power. It's a very good example of the fact that there is way too much big money in our system -- and there's way too much lobby special influence and corruption."
In addition to the ongoing Senate committee investigation, the FBI also is reportedly looking into the estimated $66 million worth of business between the Abramoff-Scanlon team and six Native American tribes. Abramoff and Scanlon have declined to comment publicly and cited their Fifth Amendment rights against self-incrimination in refusing to testify before the Indian Affairs Committee.
The Washington Post and other media reported earlier this year that Abramoff and Scanlon worked behind the scenes in 2001 and 2002 to help support efforts by then-Texas Attorney General John Cornyn to close Speaking Rock Casino. They were representing tribes in Mississippi and Louisiana who were trying to block competition in Texas, the Washington Post reported.
The Post reported that Abramoff and Scanlon funneled $2 million from their tribal clients to former Christian Coalition leader Ralph Reed to help build a church-based network to support Cornyn's court fight to close Speaking Rock.
After federal courts ruled in early 2002 that the casino was operating illegally, the Washington power brokers convinced the Tiguas to pay them $4.2 million for an ultimately futile effort to pass a federal law that would allow the casino to reopen, according to the recently released documents.
The Feb. 27, 2003, e-mail suggests Abramoff's apparent duplicity continued after the Tiguas hired him and Scanlon to help them reopen Speaking Rock.
The identity of the e-mail recipient was blacked out by the committee. In his e-mail, Abramoff said he was working on behalf of an out-of-state Indian tribe whose identity also was deleted by the Indian Affairs Committee before public release.
He recommended rewriting federal law so the Tiguas could only offer bingo unless Gov. Rick Perry, a gambling opponent, would sign a compact with them.
"On this one, we are totally in bed with the anti-gambling guys," Abramoff said of blocking a state bill that would have allowed the Tiguas and Alabama Coushatta Tribe in east Texas to offer slot machines and other gambling. The bill eventually died in the Legislature.
Marc Schwartz, the Tiguas' El Paso-based consultant who helped hire Abramoff and Scanlon, called the pair's tribal dealings -- or double-dealings -- "the absolute blueprint for a fraud."
Tigua leaders said they learned a valuable lesson from their work with Abramoff and Scanlon. But they won't necessarily shy away from the "pay-for-play" influence game in Washington and Austin.
"It just takes one person with the right connections to move things in Washington or in the state of Texas. But that same one person can kill everything and harm good people," Tigua Lt. Gov. Carlos Hisa said.
"There's always another interest out there with more money that's going to try to kill your interest, or whatever you are trying to accomplish. We now realize that if you want to do something, it's going to cost money -- and there's always that one individual out there working against you," Hisa said.
Anatomy of a deal
In early February 2002, the Tiguas' decade-old casino was on the verge of closing under court order. The casino -- which pumped an estimated $5 million a month into tribal coffers -- violated a federal law that gave the Tiguas official tribal status, a succession of federal courts ruled.
Former Christian Coalition director Reed, now an influential Republican leader, sent Abramoff an e-mail Feb. 5, 2002, indicating that the final court closure order might be only days away. But Reed fretted that further appeals could slow the closing.
Abramoff forwarded the e-mail to his associate, Scanlon. Both men were proteges of House Majority Leader Tom DeLay and had worked together on behalf of a number of Native American tribes with gambling interests.
In forwarding the e-mail, Abramoff added a note about Reed, their ally in efforts to close the Tiguas' casino: "Whining idiot. Close the (expletive) thing already!"
The reason behind Abramoff's urgency became clear a day later. The Tiguas -- unaware that Abramoff and Scanlon had been backing efforts to close their casino -- were negotiating with the duo to represent them in Washington. The negotiations bore fruit on Feb. 6, 2002, according to an e-mail exchange between Abramoff and Scanlon with the subject line "I'm on the phone with Tigua!"
Abramoff: "Fire up the jet baby, we're going to El Paso!!"
Scanlon: "I want all their MONEY!!!"
Abramoff: "Yawzah!"
The Tiguas first learned of Abramoff after a Feb. 4, 2002, phone call to El Paso lawyer Norman Gordon from a lawyer in Santa Fe who represented Indian tribes in New Mexico.
"According to Mr. (Bryant) Rogers, Mr. Abramoff is with a firm that is well connected to the Bush Administration (Greenberg-Trauring Firm in Washington, D.C., which represented the Bush campaign in the Florida dispute-lobbying arm) and has been effective in the past in efforts for other tribes," Gordon wrote in a memo to the Tiguas' lawyer, Tom Diamond. "He is willing to come to El Paso and meet with the council at no cost to discuss whether he can be of assistance."
The casino closed Feb. 12, 2002. A week later, the Tribal Council voted to hire Abramoff and Scanlon to help them push through federal legislation that would allow Speaking Rock to reopen without threat of further court intervention.
On the day of the Tribal Council vote, Scanlon sent Abramoff an e-mail that included an El Paso Times story that reported 450 casino employees would lose their jobs that day. "This is on the front page of today's paper while they will be voting on our plan," Scanlon wrote.
Abramoff responded: "Is life great or what?"
Tigua leaders said the Tribal Council decided to hire Scanlon and Abramoff after negotiating their $5.4 million "Operation Open Doors" proposal down to $4.2 million.
Abramoff told tribal leaders he would work for them for free during the lobbying process, with the expectation that the Tiguas would hire his Washington law firm for up to $175,000 a month once the casino reopened, according to records released by the Senate Indian Affairs Committee.
The $4.2 million was to be paid to Scanlon for public relations efforts. But records unearthed by the Indian Affairs Committee showed that Scanlon sent half the money to Abramoff, despite his promise to work for the Tiguas on a pro-bono basis.
The decision to hire Abramoff and Scanlon generated controversy among the tribal leadership.
"Certainly, I did not support the Abramoff proposal," said Albert Alvidrez, who was tribal governor at the time. "I had significant concerns regarding that and talked to the tribal members during the pueblo junta (community meeting)."
The tribal governor votes only in the case of a tie on the Tribal Council. Alvidrez did not get a vote on the lobbyist issue.
Alvidrez said he decided not to run for election to a fourth, one-year term as tribal governor for 2003 in part because of his opposition to Abramoff and Scanlon's multimillion-dollar pitch that had created friction among tribal leaders.
Lt. Gov. Hisa said the attitude of the tribal leaders was: "It sounds like a lot of money, but we'll be able to get that back in a month or two, so it's worth the chance."
Playing the game
In crafting a lobbying strategy, Abramoff and Scanlon told Tigua tribal leaders that they urgently needed to contribute $300,000 to key lawmakers and both major parties to get legislation approved by Congress to reopen the shuttered gaming operation.
Tribal officials went along with the idea, sending checks to Abramoff to distribute to the National Republican Senatorial Campaign Committee, the Superior California Leadership Fund, the National Republican Congressional Campaign Committee and several members of Congress.
Abramoff also directed the Tiguas to contribute to groups such as Rely On Your Beliefs, Missouri Millennium and Friends Of The Big Sky --organizations the tribe knew nothing about, according to testimony before the Senate Indian Affairs Committee this month.
The Tigua saga has caught the attention of public interest groups that monitor lobbying and political fund-raising.
"Next time a politician promotes gambling as a painless way to raise revenue, remember how this mangy pack of backbiting lobbyists and politicians burned through millions of dollars of casino money that was supposed to benefit average Tiguas," says Andrew Wheat, research director of Texans for Public Justice, a watchdog group that monitors political money trails.
E-mails from Abramoff made it clear that he did not want to be publicly identified with the Tigua lobbying efforts.
"Our presence in this deal must be secret as we discussed," Abramoff wrote to Tigua consultant Schwartz on Feb. 25, 2002, after Schwartz had included Abramoff in an e-mail sent to several people. He told Schwartz to never again include him in group e-mails.
Abramoff was more blunt in an e-mail to Scanlon that day on the same subject: "That (expletive) idiot put my name on an email list! What a (expletive) moron. He may have blown our cover!! Dammit. We are moving forward anyway and taking their (expletive) money."
While making a pitch for the Tiguas' contract, Scanlon offered hope that he and Abramoff could use political connections with DeLay and other prominent Republicans to reopen Speaking Rock, Schwartz said in testimony before the Indian Affairs Committee.
In a February proposal to tribal leaders, Scanlon wrote: "Before going forward we would like to make it completely clear that this strategy is not (foolproof). However, under no circumstances do we believe it could be classified as high risk either."
But Scanlon changed his assessment after the tribe paid him the $4.2 million. "With this political cover generated we feel pretty good about our prospects of tacking the legislation on and getting it through,'' he told the Tiguas in a memo two months later. "But please be advised -- we are taking the most high-risk approach to this by using the election-reform bill as the vehicle."
Scanlon's change of tune was not lost on Sen. John McCain, R-Ariz., who soon will become chairman of the Indian Affairs Committee.
"Mr. Scanlon's words stand in stark contrast to his earlier opinion that his efforts could in no way be classified as high-risk. Of course, he now had the luxury of being less optimistic since he had the tribe's money in his pocket," McCain said during the committee hearing earlier this month.
Tribal leaders contend they were victimized by Washington insiders who had sterling reputations. Abramoff had a long track record in national Republican Party politics and had been profiled in the Wall Street Journal and New York Times as the country's "über lobbyist."
"We were trying to play the game," current Tigua Gov. Arturo Senclair said. "And when you have one of the top lobbyists out there and he's telling you that you need to make contributions to that person, this person and that person -- and we were desperate for time -- you will do exactly what is asked of you."
The future
In the end, the Tiguas got nothing for their millions. Efforts failed in 2002 to slip the Tigua gambling legislation into another bill. Records released by the Senate Indian Affairs Committee don't indicate any efforts by Abramoff and Scanlon to generate legislation for the Tiguas after 2002. But that doesn't mean the Washington influentials were done with the tribe.
In searching for novel ways to cash in on the Tiguas, Abramoff proposed a plan in March 2003 to take out life insurance policies on all Tigua members who were at least 75 years old. The insurance payoff would have gone to a Jewish boys' school that Abramoff founded and controlled.
The tribal council initially approved the plan before changing course after tribal elders expressed their distaste for it, according to records and testimony.
"Even Cortes never dreamed of extracting still more plunder from the Aztecs by taking out a life insurance policy on Montezuma," Wheat of Texans for Public Justice said. "Cheating natives is a game older than this nation. Yet Jack Abramoff and his cronies took this blood sport to previously unimagined depths."
Most of the methods used by Abramoff and Scanlon on behalf of the Tiguas are not uncommon among Washington lobbyists, said Larry Noble, executive director of the Center For Responsive Politics, a Washington-based watchdog group that tracks money in politics.
The Tiguas were engaged in "classic Washington bundling" in making the political contributions, which lobbyists typically use to gain access to lawmakers on Capitol Hill, Noble said: "It's perfectly legal."
The Tiguas weren't innocent bystanders in the lobbying game, Noble said.
"If you don't have a lot of experience in Washington and you have a big Washington lobbyist come to you it's tempting to do what they say, but clearly the tribe had an obligation to take responsibility for their actions," he said.
Noble and others who keep track of the money flowing through American politics characterize the Indian gaming scandal as blatant influence peddling.
"This problem can be fixed and it needs to be fixed because it's detrimental to the public interest and the interests of the Indians and to our country. But it's going to take a sustained effort to fix," said Lewis, president of Campaigns For People.
Lobbying is not "an evil thing," Noble said.
"Lobbyists serve a purpose, but the problem is blatant abuses of influence peddling," he says. "This is a worse-case scenario. You hear cases of outright bribery, but what you are seeing here is manipulation."
The Tiguas say they've run out of money and are considering taking civil action against Abramoff and Scanlon to recover some of the millions they lost.
They also will watch any criminal action that federal prosecutors take against Abramoff and Scanlon.
"What's happening right now is that we are doing the right thing," Hisa said. "Is it going to affect things in the future at all? It always does. We can only do the right thing at the moment."
The only lobbyist the tribe employs today is former state Sen. Buster Brown in Austin. They have no Washington lobbyist.
And tribal leaders remain hopeful that Speaking Rock will someday reopen as a casino. The Texas Legislature returns to session in January seeking to fix the school's finance crisis and some see casino gambling as a revenue source for the state.
Greg Wright of Gannett News Service contributed to this story.; Gary Scharrer may be reached at gscharrer@elpasotimes.com; (512) 479-6606. Sergio Bustos may be reached at sbustos@gannett.com
