Denny Hastert's Late Payment


By Eamon Javers Signatures restaurant, the expense-account haven owned by super-lobbyist Jack Abramoff, has hosted at least 60 GOP fund-raisers since it opened on Washington's Pennsylvania Ave. NW in early 2002. But the June 3, 2003, lunchtime gathering was special: The guest of honor was House Speaker Dennis Hastert (R-Ill.), and the event was a relatively intimate gathering dominated by lobbyists from Greenberg Traurig, the law and lobbying firm where Abramoff then worked.

The problem? Nobody paid for the lunch -- or reported it in disclosure documents as an in-kind contribution -- as federal election law requires, BusinessWeek Online has learned. The tab -- which Hastert's office would not disclose -- was paid only this month, around the time that BusinessWeek Online began to investigate fund-raisers for Republican politicos held at Signatures. Hastert's office says his staffers uncovered the oversight.

Capitol Hill Republicans are sweating over fallout from their relationships with Abramoff. The lobbyist is under investigation by two Senate committees and a criminal task force involving the Justice Dept. and the IRS for allegedly defrauding his clients -- Indian tribes flush with casino cash -- out of millions of dollars.

ABOVE THE FRAY. An associate of House Majority Leader Tom DeLay (R-Tex.), Abramoff was a key cog in the conservative political movement in Washington, with ties to scores of GOP members of Congress. DeLay, the House's No. 2 Republican, has been hammered by revelations of trips allegedly funded by Abramoff and his firm. DeLay says he never knowingly did anything improper and denounces coverage of his ties to Abramoff as a politically motivated attack on him by Democrats and what he calls the liberal media.

The long-unpaid bill from the June 3, 2003, fund-raiser is the first sign that Abramoff's largesse extended to Hastert. While DeLay enforced strict partisan discipline in the House and muscled the lobbyists and trade associations that line Washington's K Street, the genial Speaker from Illinois has been the party's Mr. Clean, floating above the fray.

Hastert spokesman Ron Bonjean says the Speaker's political action committee, the Keep Our Majority PAC [KOMPAC], discovered the missing payment and recently wrote a check to Signatures to make good on the lunch with Abramoff. "Out of an abundance of caution, KOMPAC recently paid for the event," Bonjean says. He wouldn't disclose how much the PAC paid.

ONE-WAY FLOW. An attendee says Hastert spoke briefly to the audience of 20 or 30 lobbyists about the upcoming House agenda, then took their questions. The suggested donation for the noon event was $1,500 per PAC or individual.

Days after the lunch, Hastert's PAC collected at least $14,750 in contributions, many from Greenberg Traurig lobbyists, federal disclosure documents show. Abramoff himself wrote the Speaker's PAC a check for $2,500 on June 16, 2003, two weeks after the event. A spokesman for Abramoff says the lobbyist has "hosted scores of fund-raisers for various members of Congress" and can't recall each one. Reporting any contributions "is the responsibility of the members, not Mr. Abramoff," the spokesman says.

But no check went in the other direction -- to pay for the use of Signatures or the food and drinks -- until this month. If the PAC hadn't paid -- or reported the value of the event as an in-kind contribution -- it would be in violation of federal campaign-finance laws. "The law defines a contribution as anything of value used for the purposes of influencing a federal election," says Federal Election Commission spokesman George Smaragdis. He declined to comment specifically on the Hastert fund-raiser.

MORE HEADACHES. Does a late make-good count? "If [payment] occurs years after the event, that's not an ideal situation," Smaragdis says. "But is it a violation of the law? That's up for the commission to decide." Judging by its record, the FEC isn't likely to do much. Split evenly between three Republicans and three Democrats, the commission is seldom moved to act on even gross allegations of campaign abuses.

A separate fund-raiser at the restaurant is causing headaches for freshman Senator David Vitter (R-La.). After BusinessWeek inquired about his Sept. 9, 2003, evening fund-raiser at the restaurant -- where then-Representative Vitter raised $12,000 -- the senator sent letters seeking clarification to the FEC and to Signatures restaurant on Apr. 15.

A Vitter spokesman says the campaign had signed a contract agreeing to pay for the 16-person event and provided Vitter's personal American Express card number to cover the tab -- but was never billed. Nor did the campaign report the event as an in-kind contribution.

A notice advertising the event to potential donors said the $1,000 per-head cocktail reception would be hosted by Abramoff, but Vitter's office now says that the lobbyist wasn't at the dinner.

GREAT LOBSTER. In his letter to FEC General Counsel Larry Norton, Vitter asks the commission for advice on how to "report this information on our FEC reports.... We do not want to compound one reporting error with another." In a letter to Signatures, Vitter says the restaurant "did not comply with the terms of our agreement" to charge the event to his personal credit card. "I am hereby directing you to charge my credit card today for the costs of the event and to immediately furnish me with proof that the charges have been duly posted," he writes.

Signatures opened in 2002 in a marquee location on Pennsylvania Ave. NW, halfway between the Capitol and the White House. Less than five minutes by cab from the House floor, it became popular for congressional fund-raisers.

Dinner entrees cost $21 to $41, including the chef's favorite -- a caramelized vanilla-basted Maine lobster with truffle tapioca risotto. A 2002 restaurant review in The Hill newspaper notes that the eatery features a slew of historical items for sale, including President Gerald Ford's signature on a replica of his pardon of Richard Nixon, for about $5,000, a signed portrait of Czar Nicholas, and signed letters or photos from Winston Churchill, General George Patton, Rocky Marciano, Harry Houdini, Thomas Edison, and gangster Meyer Lansky, all selling in the $5,000 to $10,000 range. Javers is BusinessWeek's Capitol Hill correspondent


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