Trapped & Wrapped by the U.S. Senate
John McCain’s U. S. Senate Committee Investigation Blows Lid Off Bob Riley’s Secret Indian Casino Funding Scheme in Abramoff/Scanlon Scandal
Overview:
Bob Riley played a definite role in the Jack Abramoff/Michael Scanlon scandal. In order to “deliver” for their Indian casino clients in Mississippi, they needed his commitment to shut down gaming in Alabama, while he needed their money in a tight gubernatorial race against the pro-gaming incumbent.
The Washington Post was the first to shine the light and expose the Abramoff/Scanlon scheme that defrauded their Indian tribal clients around the country. It published a series of stories which described the illegal and highly unethical business practices used by the pair.
The U.S. Senate’s Indian Affairs Committee then launched an investigation into the allegations made by the Post. The committee concluded in its final report that Abramoff and Scanlon had conspired to obscenely over-charge their Indian clients for lobbying and public relations work.
Also discovered were many other illegal activities which ensnared other public officials in wrongdoing.
The committee documented how Abramoff and Scanlon made it a standard practice to solicit Indian casino proceeds as political donations to their favored candidates and elected officials who were running for office.
Again, one of these candidates was Representative Bob Riley. E-mail evidence and campaign disclosure records show that Michael Scanlon, Riley’s former Press Secretary, funneled as little as $800,000 and perhaps as much as $2.5 million dollars into Riley’s campaign coffers. The campaign money was “laundered” through several political action committees.
Despite Scanlon’s open admissions, Riley refuses to admit to this very day that he accepted Indian casino money from the Mississippi Choctaws by way of Scanlon. Meanwhile, the Choctaws, who claimed to have poured in as much as $13 million dollars to assist Riley in 2002, have benefited greatly from Riley’s opposition to allow or expand gaming in Alabama.
PART 2 OF 3
Background:
From Watergate to Indian Casino-gate, The Washington Post exposes the corruption of power.
Anybody recall how a bungled burglary brought down a president?
If not for a seemingly unrelated investigative report published on February 22, 2004, by The Washington Post titled, “A Jackpot From Indian Gaming Tribes,” we might not have ever discovered the web of deceit and hypocrisy spun by Bob Riley and his powerful, politically-connected cronies.
The Post article (and its subsequent a series of of Pulitzer Prize-winning special report called “Investigating Abramoff”) initially exposed an excessive billing scam that later turned out to be a mammoth-sized political and government scandal. The plot was chiefly orchestrated by two relatively obscure Washington, D.C. characters: lobbyist Jack Abramoff, and his 33-year old business partner, Michael Scanlon.
The pair gave birth to a monster of corruption that was truly national in its reach. Its poisonous tentacles tagged politicians from California to Capitol Hill in Washington, D.C., and from Mount Pleasant, Michigan to Montgomery, Alabama.
YES, Montgomery, Alabama!
While most of the country had never heard of either Jack Abramoff or Michael Scanlon, Alabama Congressman Bob Riley knew both of them.
P. R. “Specialist” Michael Scanlon Worked for Riley; Jack Abramoff Was a Riley Campaign Contributor!
Michael Scanlon had served as Representative Riley’s Press Secretary right after he was elected to congress in 1996. Abramoff’s cozy dealings on the Hill prompted him to donate money to Riley’s last re-election effort in 2000.
Though Scanlon had left Riley’s staff to take the same position with the more powerful Congressman from Texas, Tom Delay, he never severed his friendship with Riley. This made it easy to accommodate each other’s parallel ambitions, as when Riley announced he was going back home to run for Governor in 2002.
Scanlon left Congressional employment with Delay to begin his own public relations outfit. While searching for more action and income, he approached and later teamed with his good friend, Abramoff in 2001, after Abramoff had switched his own employment between lobbying firms.
Scanlon and Abramoff formed a secret partnership that hood-winked Abramoff’s Indian tribe clients and led to the massive fraud, corruption and conspiracy which was detailed in The Washington Post.
The partners devised a scheme where Abramoff would solicit lobbying business with various tribes. After securing the contracts to represent tribal interests, Abramoff would then offer glowing “referrals” to his new clients in order to hire Scanlon for public relations work and grassroots political activity.
After succeeding in getting Scanlon hired, the partners concocted a bogus program whereby Scanlon would over-bill the Indians for his professional services and then secretly split the ill-gotten gains with Abramoff. The inflated prices amounted to 10-20 times what the tribes had paid in fees to their former lobbyists.
They called their ruse “Gimme Five,” which was a play on words from their shared interest in golf and also their shared goal of making at least $5 million in revenue a year for their business.
Scanlon and Abramoff also set up other ventures, including Abramoff’s athletic foundation and boys school and Scanlon’s international think tank, with the intent to milk even more funds from the Indians. These outside endeavors essentially became personal slush funds, which enabled both men to enjoy their newfound, enormous wealth without paying much in taxes.
By the time The Washington Post got wind of what was happening and began asking questions in 2004, Scanlon, himself, had collected $66 million in fees from 6 tribes. It is believed he split nearly half of that with Abramoff.
McCain’s Indian Affairs Committee Enters the Stage … and Things Start to Unravel.
Immediately after The Washington Post story broke in February of ‘04, its findings triggered outrage among members of Congress, officials within the Bush administration, and the public at-large, who were all disgusted by the degree of exploitation of the lobbyists against the Indian tribes.
After a request for a more thorough investigation was made by Congressman Frank Wolf (R-Va.) to Attorney General John Ashcroft, the FBI and the IRS were assigned the case to explore the charges of corruption.
Later that year, on September 29, 2004, the U.S. Senate Committee on Indian Affairs began its first inquiry into the details of the whole sordid affair. The committee’s chairman at that time was a Native American, Republican Senator Ben Nighthorse Campbell, from Colorado. Campbell presided over two of the committee’s hearings on the Abramoff/Scanlon scandal before his term ran out in Congress that year.
Another senator took over Campbell’s chairmanship duties and was responsible for delivering the final report titled, “Gimme Five”— Investigation of Tribal Lobbying Matters. This new chairman was none other than the senate’s ethics crusader, “Maverick” Senator John McCain, Republican from Arizona.
“Gimme Five”— Investigation of Tribal Lobbying Matters
The Senate Committee, under McCain’s leadership, oversaw an intense two-year investigation into the scandal.
In all, there were:
- 5 senate committee hearings
- 70 formal requests for documents
- 750,000 pages produced
- 60 depositions and witness interviews.
The conclusion of the report was simply astounding.
Rewind Back to 2002: Scanlon and Abramoff Need Riley’s Help, So They Help Riley’s Needs
Getting back to Bob Riley…
The man who had made a campaign promise not to raise taxes, but tried to do so anyway immediately after his election by proposing a billion dollar boondoggle.
As a “conservative” candidate, he had made campaign promises not to raise state taxes. But once the election was certified in his favor, he quickly violated that promise by proposing a billion dollar boondoggle immediately after assuming office.”
He begged the legislature to “let the people vote” in a statewide referendum. Then, to garner support, he resorted to strong-arming members of his own party to endorse his plan publicly, or else they were threatened with retribution if they didn’t.
Ultimately, he was rejected by the wisdom of 70% of the people when they voted against his plan at the polls. Ironically, he now holds their opinions in such contempt that he won’t allow them to vote on statewide measures to allow electronic bingo and other gaming proposals.
Former Riley staffer and friend, Michael Scanlon was a big reason for this. After washing through at least $800,000 of contributions from Indian Casinos in Mississippi to help elect Bob Riley, Scanlon needed a return on the Indians’ “investment.”
Abramoff’s “Smoking Gun” Email…
According to e-mail transcripts entered into the Senate Committee’s exhibits of evidence, on Monday, December 9th, 2002, barely a month after Riley had claimed victory as Alabama’s new governor, Scanlon received curious orders from Abramoff. With the Subject Line in the email as: “Nell,” Abramoff typed, “Just had a great chat with her (Nell Rogers, Planner for the Mississippi Choctaw tribe) about next year’s election. I told her that Erlich is going to be in touch with the Delawares and will give them a compact. That, with a Haley (Barbour) governorship (in Mississippi), could mean a Jena casino in Mississippi. I told her we need to find you the resources to get you going in a huge way. I reminded her that if you had not done what you did in Alabama, she would have to spend millions over the next four years (damn!!:-)) and that if we don’t get Mississippi squared away, as in beating Haley, we can expect to spend triple that. Call me for the rest of the discussion, but she definitely wants Riley to shut down the Poarch Creek operation, including his announcing that anyone caught gambling there can’t qualify for a state contract or something like that. Anyway, are you in town this week? Call me.” (Bolded for emphasis.)
Several points beg to be made along with this one,
What on earth would prompt Jack Abramoff to make such a specific, yet completely unguarded, comment like that one, referring to “what” Scanlon had done in Alabama? Why would he mention Riley by name with an expectation of such a specific task? These men had no idea that this email would later be read by outside eyeballs.
This was a confidential email exchange. Its contents have to be chilling to Bob Riley.
PART 3 OF 3
Now …
1) According to a Washington Post article, “Probe to Include GOP Donations,” published on Tuesday, May 18th, 2004, The McCain Committee was set to “…examine $500,000 in contributions from Michael Scanlon’s firm to the Republican Governors Association.
“The money was paid by Scanlon’s firm, Capitol Campaign Strategies, to the RGA in the closing months of the 2002 election. But it was not disclosed until the association filed “amended” financial reports on April 27 of this year (2004).
—Half a MILLION dollars went unreported by the RGA, and lo and behold, it just happened to be the two contributions made by Michael Scanlon. What are the odds, Biloxi???
It gets better…FOLLOW THE MONEY!!
2) According to the Washington Post,
“The Capitol Campaign Strategies money was delivered in two contributions of $250,000 each on Oct. 17 and Oct 22, 2002.
“On Oct. 21, 2002, the RGA reported two transfers of cash to the Republican National State Elections Committee, a soft-money arm of the RNC. One was for $450,000, the other for $2 million.
“From Oct. 17 to Oct. 31, 2002, the RNC’s state elections committee sent seven checks to the Alabama Republican Party for a total of $603,000 and five checks to the Bob Riley’s campaign for Alabama governor for $600,000.
“Riley, the Republican who won the governorship, opposes legalized gambling. One of Scanlon’s and Abramoff’s most lucrative clients has been the Mississippi Band of Choctaw Indians, which paid Abramoff’s law firm $5.34 million in publicly reported lobbying fees between 2001 and 2003. The Choctaws run a casino near Philadelphia, Miss., about 50 miles from the Alabama border, that attracts many gamblers from Alabama.
“Riley’s opponent, then-Gov. Don Siegelman (D), was widely viewed as more sympathetic to opening the state to gambling.”
What good reason would Michael Scanlon, who was a resident of Delaware, have for pumping $500,000 into the governor’s race in Alabama. Does anybody really believe any of this stash was solely Scanlon’s personal wealth? Was Riley really THAT endearing as a boss?
3) And, according to an Associated Press story reported in 2005, “Alabama campaign finance records show Scanlon gave $100,000 in 2002 to four political action committees that contributed heavily to Riley’s campaign for governor.
“…When Scanlon contributed the money, he was doing work for the Mississippi Indians.”
Ahhhhhhhhh, not just $500,000, but at least $600,000 now. The total continues to climb. But of course, his money was getting “washed” through PACs faster than muddy socks in a Maytag.
4) A close look at the financial records for Scanlon’s firm, Capitol Campaign Strategies, that were obtained by the McCain Committee showed even more direct linkage between the Choctaw Indians and Riley’s campaign.
- Scanlon made 2 entries into his books on October 15, 2002. One entry is a deposit into his account for $800,000 and the other is a deposit for $1,000,000.. Both are listed with the source being, “MBCI” (in other words, Mississippi Band Choctaw Indians).
- Interestingly, Scanlon divvies up the money to other entities that have either made previous pass-through contributions or have received expenditures from Riley’s campaign. For example:
On Oct. 24, 2002, Scanlon cuts a direct check to “Progress PAC,” the campaign finance vehicle of the Business Council of Alabama (BCA) for $9,000.
On the same day, Scanlon writes out another $9,000 check for Capital PAC, which is run by lobbyist Mike Echols, another Riley contributor who is based in Tuscaloosa. (Incidentally, this money was funneled to Franklin PAC, operated by Montgomery insider John Crawford and then forwarded on to Riley’s Campaign.)
On October 25, 2002, Scanlon made a direct payment to Riley’s polling firm, Ayers, McHenry and Associates, Inc. for the modest sum of $50,000.
And lastly, on October 30, 2002, Scanlon replenished the coffers of the BCA with a check for $50,000 which went on to send the money to Riley’s campaign.
This adds over another $100,000 of traceable funds to Bob Riley’s 2002 campaign from Scanlon/Abramoff and the Indian Casinos!
Now we’re up to over 700,000 reasons why the Poarch Creek Indians here in Alabama never had a chance to obtain a Class III gaming license compact.
5) One last thought. This has to do with a murky, but “compelling” document filed in the McCain Committee’s Final Report. The official report states thusly,
“Among the documents that the Committee discovered is what appears to be the draft of a letter or other communication from Scanlon to Nell Rogers, the planner of the Mississippi Band of Choctaw Indians (“Choctaw”).
“Although that the Committee has been unable to determine whether this record, probably drafted late in 2001, was actually transmitted, the representations contained within it are compelling.
“In that document, Scanlon said, ‘I think the following is the best way to prioritize our efforts [this year] and make them budget friendly …’
“He explained, ‘[A] good chunk of the [money]… for [Project A] wont [sic] be needed until the general election is in full swing later in the year. That said: the overall figures are 4,850,000 for [Project A], (emphasis added) and 1,750,000 for [Project B], for a total of 6.6.” But, he added, “We will need the 1.75 for [Project B] and 1.85 for [Project A] ASAP.’
“Scanlon concluded: ‘On [Project A] we will need another 1m in about 45 days or so—and the balance we can defer till October 2nd to meet your FY issues …. Does this help?’ (emphasis added)
“A second document, also recently discovered by the Committee, describes Scanlon’s expected margins on those, and other, projects.88 According to that document, entitled ‘02 CCS Project Break Down, on the $4,850,000 Scanlon sought on “Project A,” he projected actual costs to come in at about $850,000—for a projected net profit for him and Abramoff of $4,000,000 (emphasis added).89 Likewise, on the $1,750,000 Scanlon sought on “Project B,” he projected costs at only $100,000—for a projected net profit for him and Abramoff of $1,650,000.90”
What’s especially interesting about these notes and figures for [Project A] are the striking similarities to Riley’s campaign that year.
Riley had a Republican primary battle, so the Choctaws most likely would have held back any money for him until he emerged in July as the Republican nominee (NOTE: Scanlon says the bulk of the money won’t be needed “until the general election is in full swing later in the year.”) Also, Scanlon’s projections for “actual costs” on [Project A] “come in at about $850,000.” This is an extremely close number to what we have been able to document in traceable funding from Scanlon that fall.
Witness Testifies That Abramoff Told Him That the Mississippi Choctaws Put Up As Much As $13 Million to Help Get Riley Elected.
William Worfel, former vice chairman of the Coushatta Tribe of Louisiana, is quoted by the McCain Committee report as saying that Jack Abramoff told him that,“Mississippi Choctaw Chief Phillip Martin had spent the money ‘to get the governor of Alabama elected to keep gaming out of Alabama so it wouldn’t hurt…his market in Mississippi.’” (Emphasis added.)
So, although the Choctaws honestly believed they were putting $13 million in play for Riley’s election, the figure was much lower after Scanlon and Abramoff made off with their cuts.
Again, best estimates put the total “real” spending at $2.5 million on the high end and around $800,000 on the low end for contributions to Riley’s campaign.
Question 1:
Faced with all these documented facts and figures from John McCain’s Indian Affairs Committee, how can Riley still insist, with a straight face, that he did not receive any Indian casino money from Michael Scanlon?
Question 2:
Since the cat is out of the moneybag, when does Riley plan to return at least the $700,000+ we know he collected from Scanlon? Afterall, both Abramoff and Scanlon have been ordered to make financial restitution as part of their plea deals with the Feds. Does Riley feel no guilt whatsoever that the money he received was actually extracted by manipulation and exploitation from innocent Indian victims?
Wellllllllllllllll, not necessarily.
Riley probably feels he has held up his “end of the deal.” The money didn’t come to his coffers by being pilfered from Indian accounts. The money, according to witnesses and documents, came by an agreed upon arrangement with Choctaw tribal leadership.
Chief Phillip Martin admittedly made enormous financial help available to Riley.
Riley’s campaign was very shrewd to conceal it in order to keep it off the table as an election issue.
If only John McCain’s committee had gotten the secret memo…