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|  | APRIL 22, 2005
By Eamon Javers and Lee Walczak "Fear and Loathing" Among the GOPLots of Republicans are in a sweat over the widening ethics investigation into the dealings of Washington rainmaker Jack AbramoffPublicly, most House Republicans are rallying around embattled Majority Leader Tom DeLay as the Texan struggles to fend off a multifront ethics assault. On Apr. 20, Republicans on the House Ethics Committee said they were willing to end weeks of partisan wrangling with their Democratic counterparts by offering to take a fresh look at allegations that the conservative leader sidestepped the rules of the House of Representatives limiting junkets and otherwise abused his power. DeLay's strategy has been to cast opponents' criticisms as part of an organized smear campaign, one that's propelled by the secular Left and its handmaidens in the media. And he has had at least partial success. "People are making a conscientious effort to bring down Tom DeLay," says GOP lobbyist Robert S. Walker, a former House member from Pennsylvania. "Most of [the alleged missteps] have been circumstantial, situations where he has followed House rules." But even such conservative stalwarts as former House Speaker Newt Gingrich, who spent his own time on the ethics griddle, have opined that this "vast, Left-wing conspiracy" approach won't cut it in the absence of a full disclosure of the facts. CLOUDS OVER A RAINMAKER. The mood among Hill Republicans is edgy, because nobody knows where the ethics wars are heading. Anxiety is palpable in House GOP cloakrooms, where the buzz is of unconfirmed reports that DeLay associate Jack Abramoff might drag key Republicans into a widening influence-peddling imbroglio. Abramoff is a Washington rainmaker enmeshed in a grand jury probe into his lobbying on behalf of Indian tribes grown wealthy on their casino operations. A Justice Dept. task force is investigating whether Abramoff and ex-Delay aide Michael Scanlon defrauded the Indian tribes they billed for millions of fees for lobbying and PR work. The pair, who could face possible jail time if charged and convicted, are huddled with their attorneys. Abramoff has admitted errors of judgment but denies that he misled or double-crossed any of his Native American clients. He has hired top criminal lawyer Abbe Lowell as his lead defender. The 52-year-old Lowell has represented many high-profile clients. Among them: House Democrats defending Bill Clinton during 1998-99 impeachment proceedings, former Representative Gary Condit (D-Calif.), ousted HealthSouth founder Richard Scrushy, and ex-ImClone Systems Ceo Samuel D. Waksal. Lowell is "intelligent, and he knows the game" in Washington, says Skadden, Arps litigator Robert S. Bennett (see BW Online, 4/22/05, "A Talk with Jack Abramoff's Attorney"). "GOING TO GET UGLY." Lowell and his GOP client have kept a relatively low profile, but that's not halting the nail-biting on Capitol Hill. Lawmakers' fears were stoked several weeks ago, when reports surfaced that Abramoff might have information that could -- emphasis on could -- make trouble for some Republicans. Lowell flatly dismisses that idea. "I'm trying to help Jack," he told BusinessWeek Online. "He's a good and decent man, and he has been made into a caricature." Still, the chatter persists. "There's a lot of fear and loathing among those House offices that were dealing with Abramoff," says one GOP lobbyist. "It's going to get ugly." An inquiry into the complex business dealings of Abramoff and Scanlon has fallen to a Justice-led group that includes agents from the Treasury Dept., IRS, Interior Dept., and Bureau of Indian Affairs. More than 30 FBI agents are believed to be working in tandem with the task force. ULTIMATELY ACCEPTABLE? While the criminal probe unfolds, the Senate Indian Affairs Committee has subpoenaed records relating to the duo's lobbying activities. The Senate Finance Committee has opened a separate inquiry and is examining, among other things, transactions of the tax-exempt National Center for Public Policy Research. The NCPPR is an Abramoff-linked think tank that underwrote trips to Russia, Britain, and Scotland for DeLay. Abramoff's Indian and Russian clients allegedly made contributions to NCPPR at the time of those excursions in amounts that matched the trip costs. Under House ethics rules, lawmakers cannot take trips funded directly by lobbyists. And it's against the rules for any groups to finance trips through fronts. This case, however, may ultimately be deemed acceptable. DeLay has said he did nothing improper with the NCPPR-financed trips. And the center put out a statement that read in part, "The National Center for Public Policy Research was careful to pay all the expenses associated with Congressman DeLay's trip. Reports to the contrary are incorrect." (Editor's note: The Washington Post reported Sunday that the airfare for trips to London and Scotland in 2000 for DeLay was charged to an American Express card issued to Jack Abramoff, and that some of DeLay's expenses on the trip were covered by a credit card used by a second registered Washington lobbyist, Edwin A. Buckham. A lawyer for DeLay told the Post that DeLay's staff knew Abramoff's then-firm, Preston Gates & Ellis, worked on arrangements for meetings and hotels on the trip, but that DeLay was unaware of the "logistics" of bill payments.) Even so, Abramoff's Hill ties are so extensive that many lawmakers are reviewing their fund-raising records. In response to a BusinessWeek query, House Speaker Dennis J. Hastert (R-Ill.) reported on Apr. 15 that his political action committee had failed for almost two years to pay for a 2003 fund-raising dinner that Abramoff hosted for the Speaker at Signatures, the lobbyist's plush Pennsylvania Avenue restaurant (see BW Online, 4/15/05, "Denny Hastert's Late Payment"). In 2005, Hastert's PAC finally paid for the event, which was attended by several of Abramoff's colleagues from his former law firm, Greenberg Traurig. JACK WHO? Abramoff's avid schmoozing involved a lot more than golfing in Scotland with lawmakers. He routinely entertained Hill leaders, hosting at least 60 political fund-raisers at Signatures and socializing with senators at a skybox in Washington's MCI Center sports arena. Republicans weren't the only guests in the skybox: Senator Byron L. Dorgan (D-N.D.), now the top Democrat on the Indian Affairs panel, held a fund-raiser in the Abramoff-controlled MCI Center skybox in 2001. In committee hearings, Dorgan has fiercely attacked Abramoff's lobbying efforts as "a cesspool of greed...a disgusting pattern of, certainly, moral corruption and very likely criminal corruption. I think that we have an obligation to follow this trail wherever it leads to the very end." A spokesman for Dorgan now says the senator thought the box belonged to the Mississippi Band of Choctaw Indians. "He doesn't know Jack Abramoff, has never met Jack Abramoff," the spokesman told BusinessWeek Online. Dorgan's PAC reported its use of the box in IRS disclosures as an $1,800 in-kind contribution from the Choctaws. Is this another tempest in a teapot dome? In the end, the question of whether DeLay and other Republicans have any exposure comes down to whether Abramoff -- an activist with deep roots in the conservative movement -- has either the evidence or the inclination to ignite a huge flap over GOP fund-raising. While lawmakers sweat, some Republican strategists are keeping their cool. That's because they believe the GOP's downside risk may ultimately be limited by the official who has the final say over the scope of the task force's investigation -- new Attorney General Alberto Gonzales. As George W. Bush's White House Counsel, Gonzales was viewed as a discreet, personable man with many admirable qualities. The one that comes to mind first is loyalty.  With Lorraine Woellert in Washington Javers is BusinessWeek's Capitol Hill correspondent, and Walczak is Washington bureau chief Edited by Mike McNamee
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