Accountability and transparency within our institutions and leadership.
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1)FDCH Political TranscriptsSeptember 29, 2004 WednesdayCOMMITTEE HEARINGCOMMITTEE: SENATE INDIAN AFFAIRS COMMITTEEHEADLINE: U.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO) HOLDS HEARING ON LOBBYING BY INDIAN TRIBESSPEAKER:U.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO), CHAIRMANLOCATION: WASHINGTON, D.C.WITNESSES:JACK ABRAMOFF, FORMER HEAD OF GOVERNMENT AFFAIRS DEPARTMENT FOR, GREENBERG TRAURIG LAW FIRMABBE LOWELL, ATTORNEY FOR JACK ABRAMOFFRICHARD MILANOVICH, CHAIRMAN, AGUA CALIENTE BAND OF CAHUILLA INDIANSBERNIE SPRAGUE, SUBCHIEF, SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGANCHRISTOPHER PETRAS, FORMER LEGISLATIVE DIRECTOR, SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGAN(CORRECTED COPY: ADDED ABBE LOWELL TO WITNESS LIST) U.S. SENATE INDIAN AFFAIRS COMMITTEE HOLDSA HEARING ON LOBBYING BY INDIAN TRIBESSEPTEMBER 29, 2004 SPEAKERS:U.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO)CHAIRMANU.S. SENATOR JOHN MCCAIN (R-AZ)U.S. SENATOR PETE V. DOMENICI (R-NM)U.S. SENATOR CRAIG THOMAS (R-WY)U.S. SENATOR ORRIN G. HATCH (R-UT)U.S. SENATOR JAMES M. INHOFE (R-OK)U.S. SENATOR GORDON SMITH (R-OR)U.S. SENATOR LISA MURKOWSKI (R-AK) U.S. SENATOR DANIEL K. INOUYE (D-HI)RANKING MEMBERU.S. SENATOR KENT CONRAD (D-ND)U.S. SENATOR HARRY REID (D-NV)U.S. SENATOR DANIEL K. AKAKA (D-HI)U.S. SENATOR BYRON L. DORGAN (D-ND)U.S. SENATOR TIM JOHNSON (D-SD)U.S. SENATOR MARIA CANTWELL (D-WA)*CAMPBELL: The committee today is launching the first in a planned series of hearings into allegations of improprieties by Mr. Jack Abramoff and Mr. Michael Scanlon involving lobbying and so-called grassroots political activities on behalf of Indian tribes.To put these allegations into some context, Mr. Abramoff ran the government affairs department for Greenberg Traurig, a D.C. law firm, where he lobbied on behalf of several Indian tribes.Mr. Scanlon owned Capitol Campaign Strategies, a firm that provided grassroots political support in the form of coalition building, letter writing and telephone campaigns. The allegation that touched off this committee investigation came to light earlier this year in a series of newspaper articles, and the articles alleged that Mr. Abramoff convinced some of his tribal clients to retain Mr. Scanlon's firms; Mr. Scanlon charged the tribes exorbitant fees, while producing very little work; and Mr. Scanlon split these overcharges with Mr. Abramoff.Among the specific charges in the original and follow-up articles that were included as late as yesterday, Mr. Abramoff and Mr. Scanlon received more than $45 million in fees from tribal clients; Mr. Scanlon paid Mr. Abramoff $10 million that was not disclosed to the tribes or to Greenberg Traurig; Mr. Abramoff convinced at least one tribe to make donations to the Capitol Athletic Foundation, a local charity which the press reported Mr. Abramoff supports; and Mr. Abramoff and Mr. Scanlon may have influenced tribal elections.While our investigation is continuing, we have come to some very disturbing conclusions, and that is that the accusations in the newspapers were not accurate. In fact, the truth is it's much worse than that.The articles vastly understated both the amounts the tribes paid to Mr. Scanlon and the amounts he gave to Mr. Abramoff. In fact, all told, six tribes paid more than $66 million to Mr. Scanlon, and Mr. Abramoff received more than $21 million from Mr. Scanlon for his share of the scheme.These are rather eye-popping sums of money, to be sure. As you might guess, it appears that Mr. Scanlon and Mr. Abramoff did not want a lot of people to know how much money they were making.The committee's investigation has revealed that Mr. Abramoff did not inform his partners at the Greenberg firm of this arrangement. Neither did he or Mr. Scanlon disclose this arrangement to their tribal clients.The allegation that concerns me the most is that Mr. Abramoff and Mr. Scanlon may have tried to manipulate the outcomes of tribal elections for their own personal profit. Our investigation has found in at least two instances, Mr. Abramoff and Mr. Scanlon sought to profit by becoming involved in and attempting to manipulate tribal elections. They helped elect council members, at no charge, but apparently with the understanding that they would be compensated at a later date.Shortly after successful campaigns by the candidates, Mr. Abramoff and Mr. Scanlon supported -- solicited and received multimillion dollar contracts, aided by the tribal council members they helped elect. Clearly, these circumstances raise serious but unanswered questions about whether there was an explicit or implicit quid pro quo -- we get you elected and you give us big money contracts.Today, the committee will hear testimony from individuals on both sides of these allegations. Their testimony will shed considerable more light on the information that I have discussed so far.In uncovering the information that I have discussed so far, the committee and its staff has combed through literally thousands of pages of documents. While these documents were available to committee members prior to this hearing, they have not been available to the public.To assist the members, as well as the general public, the committee staff have prepared those documents most pertinent to the matters covered by this hearing. And I now offer in the form of a motion these documents for the record and move that they be entered into the record of this hearing.Senator Inouye seconds it. Those in favor, say aye. Are there any opposed? Hearing none, that will be included, all the documents will be part of the record.Now I will relay, in brief, the story the documents provide on how Mr. Abramoff and Mr. Scanlon successfully manipulated tribal elections for their own profit.In the case of the Agua Caliente Band of Cahuilla Indians, whom we will hear from later today, Mr. Scanlon did everything but actually vote for the two tribal council candidates that he supported. Just before the 2002 Agua Caliente tribal election, Mr. Scanlon asked Mr. Abramoff in an e-mail, "How much do you want me to spend on the AC race?" -- the Agua Caliente race -- "I got to get a team out there as soon as possible and rotate a new team in after that, so travel is going to run about $20,000 and materials about $5-$10K. Should we go for it?"Mr. Abramoff's instructions were, "Yes, go for it big time," which is just what they did. Mr. Scanlon's own documents, now in the record, show that he ran the overall strategy, crafted the messages, wrote his candidate's speeches, coordinated a candidates night, ran a get-out-the-vote drive, and even counted the votes, which should really raise some eyebrows. Shortly thereafter, Mr. Scanlon pitched his business to the Agua Caliente and his own successful candidate made the motion to approve his contract over the objections of longtime chairman Richard Milanovich.The same pattern occurred at the Saginaw Chippewa Tribe of Michigan, and we will hear their story later also.For example, just before the Saginaw Chippewa elections of 2001, Mr. Abramoff told Mr. Scanlon, "I had dinner tonight with Chris Petras of the Sag Chip. He was salivating at the $4 million to $5 million program I described to him. Is that enough? Probably not. They have their primary for tribal council on Tuesday, which should determine if they are going to take over," that is take over the general elections in November. "He's going to come in after the primary with the guy who will be the chief if they win, a big fan of ours already, and we are going to help him win. If he wins, they will take over in January, and we will make millions."The day after the election -- by the way, we're having some of the e-mails blown up and shown to the public. You may or may not be able to read them, but I have asked staff just to try to keep up with my presentation by rotating those charts.The day after the election, in which seven of the eight candidates running as the "Slate of Eight" won, Mr. Scanlon sent out the following e-mail to his employees and Mr. Abramoff:"Well, team, last night was amazing. The 'Slate of Eight' kicked ass, and I want to thank all of you for helping out and watching the bottom line. We had less than three weeks to take eight guys who we'd never met before and get them elected. It was a great plan and great execution by a great team. Just to recap, we elected seven out of our 'Slate of Eight.' We now control nine of the 12 seats on the council."I was wondering who "we" is as I was reading that e-mail."Maynard Kahgegab, who is the elected chief of the organizational meeting on December 4th, and hopefully we will be doing some future work for the tribe in the near future. That makes us 2:1 in tribal elections this year."Earlier this year, the "Slate of Eight" were voted out of office due largely to the allegations at the heart of this investigation. Mr. Abramoff financed a recall effort run by the ousted tribal council.I will close my opening statement by bringing to light one additional matter that I find perhaps most troubling on the personal record.It appears, from their own words, Mr. Abramoff and Mr. Scanlon held their tribal clients in absolute contempt -- clients, mind you, that paid them millions of dollars. E-mails obtained by the committee show that they regularly referred to their clients using contemptuous, even racist language.Allow me to give you one example of what I am talking about.In an e-mail discussing a dinner meeting with a client, which is now part of the record, Mr. Abramoff asked Mr. Scanlon to meet with the client. The reason Mr. Abramoff could not attend: "I have to meet with the monkeys from the Choctaw Tribal Council. You need to close the deal with the client." Mind you that these "monkeys," quote/unquote, as Mr. Abramoff refers to the Tribal Council of the Mississippi Band of the Choctaw Indians, had enriched him over a five- year period with over $7 million in lobbying fees.The story the committee will hear today, using Mr. Abramoff and Mr. Scanlon's own e-mails and documents, is not a pretty one. It is a story of greed run amuck. It is a story of two already powerful, wealthy men lining their own pockets with the hard-earned money of people whom they held in contempt and disregard.I will have questions as we move along, but I would like to yield to my vice chairman, Senator Inouye, for his opening statement, and then Senator McCain.INOUYE: Thank you very much.For the past seven months, as noted by the chairman, newspapers and journals of national renown have been reporting on the findings of their research into allegations that Indian tribal governments have engaged the services of professional lobbyists and so-called grassroots organizations and the costs associated with those contracts.Some have asserted that the amounts charged to tribes have been excessive or that revenues received by those employed by the tribal governments far exceeded the value of the products and services provided to the tribes.Sadly, excessive fees and large profits are part of everyday life in our nation's capital and ordinarily may not amount to a violation of federal law. With that in mind, however, if the allegations of interference in the election processes of tribal governments and the purposeful manipulation of circumstances to solicit business from the tribes are proven to be accurate, we will have to explore whether any of the actions taken are violations of criminal law.Today, the committee is delving into just two of a series of dealings with at least six Indian tribal governments, and as I understand it, there will be further hearings to follow this one.So I join my colleagues on the committee today to listen and to learn what may have taken place and whether the activities described constitute a pattern and practice of dealings that are either inappropriate or illegal.And therefore, I fully support my chairman in his decision to initiate this investigation, because if proven true, the allegations are by any measure deeply troubling and profoundly serious.Mr. Chairman, it saddens me that after the glorious events of last week, when thousands of native people came to our national mall to celebrate the opening of the National Museum of the American Indian, and what we all hope to be the beginning page of a new chapter in our nation's relations with the first Americans, that we must now turn our attention to something that at the minimum appears to be another most unseemly manifestation of the exploitation of the native people of this land.Mr. Chairman, this is not a happy matter, and I think I would rather be almost anywhere else today, but as members of the Senate Committee on Indian Affairs, we take our responsibilities seriously, and so I, as I suspect all of my colleagues on this committee will do, will reserve judgment until all of the facts are brought to light.Thank you, sir.CAMPBELL: I thank my colleague.Senator McCain?MCCAIN: Thank you, Mr. Chairman.I want to thank you and the vice chairman for your tremendous effort on behalf of this investigation and your continued dedication and effort of many years on behalf of Native Americans.Mr. Chairman, etched in the history of our great nation is a long and lamentable chapter about the exploitation of Native Americans. It began with the sale of Manhattan and has continued ever since.Every kind of charlatan and every type of crook has deceived and exploited America's native sons and daughters. While these accounts of unscrupulous men are sadly familiar, the tale we hear today is not. What sets this tale apart, what makes it truly extraordinary, is the extent and degree of the apparent exploitation and deceit.Earlier this year, the Washington Post reported that Jack Abramoff, an influential lobbyist, together with Michael Scanlon, a self-styled public relations executive and former Capitol Hill staffer, collected over $45 million in three years from a handful of Indian tribes around the country.In the case of one tribe not the subject of today's hearings, the funds were allegedly paid from accounts reserved for tribal housing, education and health care. That same tribe and another reportedly paid millions of dollars into an outfit called the American International Center, a self-proclaimed think tank run by two of Mr. Scanlon's buddies at Rehoboth Beach, one a yoga instructor and the other a lifeguard.Even in this town, where huge sums are routinely paid as the price of political access, the figures are astonishing. But what the tribes actually received for such astronomical sums is mystifying.In the seven months since the article ran, the Committee on Indian Affairs has worked with my staff on the Commerce Committee to examine the relationship between Mr. Abramoff and Mr. Scanlon and their relationship with the Indian tribes they represented.I'm pleased to report that we now have the cooperation of all of the tribes mentioned in the Post article along with others not mentioned. Even Chief Phillip Martin of the Mississippi Band of Choctaw Indians, who defended Mr. Abramoff at the outset of this investigation, wrote last month in a letter to Chairman Campbell and me that, quote, "In light of information we have recently obtained from various sources, it now appears that our tribe may, in fact, have been the victims of serious wrongdoing by Abramoff and Scanlon. Thus, despite my prior concerns, I appreciate your committee's work on this matter."I thank Chief Martin for his sentiments and I extend my gratitude to all the tribes cooperating in this investigation. I am especially grateful to the Saginaw Chippewa Indian Tribe and the Agua Caliente Band of Indians who are participating in today's hearings.Both tribes have cooperated with us since the beginning. I commend the tribes and their leaders for having the wisdom to understand that this investigation is not an attack on tribal sovereignty, for displaying the courage to cooperate in the face of their critics, and for having the perseverance to see this through until the bitter end.We have also obtained and are grateful for the cooperation of Mr. Abramoff's former employer, Greenberg Traurig, which like his former clients, may have been deceived by this vainglorious and once powerful rainmaker.Not surprisingly, we have not received the voluntary cooperation of Mr. Abramoff and Mr. Scanlon. We have had to subpoena documents from Mr. Abramoff and Mr. Scanlon. Even at this late date, their production of documents remains incomplete, and I am told Mr. Scanlon and his attorney have frustrated the committee's attempts to serve Mr. Scanlon with a subpoena for this hearing.Last I had heard, Mr. Scanlon was dodging the U.S. marshals attempting to serve him.I want Mr. Abramoff and Mr. Scanlon to know that their failure to cooperate in the face of compulsory process will not be tolerated and their attempt to slow roll this committee will not be brooked.Once the chairman has ruled on their outstanding objections, I will urge the committee to pursue contempt if their compliance with the subpoenas is not immediately forthcoming.The time for games has ended.Despite Mr. Abramoff's and Mr. Scanlon's obstinance, the committee has begun to unravel a complex and tangled web they wove. In the case of both tribes testifying today, the documents show that Mr. Abramoff and Michael Scanlon systematically sought out impressionable tribal leaders and representatives, seduced them with promises of power and prestige, and helped them obtain positions of power within their tribes. Once in power, their allies on the tribal council steered multimillion dollar contracts to Mr. Abramoff's lobbying firm and Mr. Scanlon's PR company.Mr. Abramoff also directed the tribes to donate generously to a long list of political action committees and candidates, think tanks and charities.As the Washington Post reported only yesterday, prominent among the charities was the Capitol Athletic Foundation, Mr. Abramoff's personal charitable foundation which he primarily used to fund an all- boys school he established. Mr. Abramoff and Mr. Scanlon did so all the while privately deriding and maligning their clients.Chairman Campbell described for us Mr. Abramoff's and Mr. Scanlon's interference in tribal elections and governance and revealed the utter contempt these men held for their clients, but to truly understand this story and appreciate the depth of their misconduct, we need to consider the interference and contempt against the backdrop of the huge fees these men connived from the tribes.In addition to the $150,000-$180,000 per month retainers the tribes paid to Mr. Abramoff for lobbying services, it was widely reported that at Mr. Abramoff's direction, the tribes paid Mr. Scanlon over $45 million for, quote, "grassroots activity," unquote.It was also widely publicized and unknown to the tribes Mr. Abramoff received up to $10 million of these funds from Mr. Scanlon. Financial records and internal e-mails reviewed by this committee establish that those figures, while shocking are inaccurate. The amounts paid to Mr. Scanlon and the amounts he paid to Mr. Abramoff are much higher.Mr. Abramoff's and Mr. Scanlon's accounting, bank and tax records establish that between 2001 and 2004, six tribes paid more than $66 million to Michael Scanlon's company, Capitol Campaign Strategies, which also did business as Scanlon Gould Public Affairs. The tribes include the Coushatta Tribe of Louisiana, the Mississippi Band of Choctaw Indians, the Saginaw Chippewa Indian Tribe of Michigan, the Agua Caliente Band, the Tigua Indians of Ysleta del Sur Pueblo of El Paso, and Pueblo Sandia Tribe of New Mexico.The same accounting, bank and tax records clearly indicate that Capitol Campaign Strategies paid Jack Abramoff personally and Kay Gold, a company owned and controlled by Mr. Abramoff, over $21 million. The $21 million appears to be half of Capitol Campaign Strategies' profit from its Indian client revenue over three years.Let me emphasize what the $66 million figure does not include. The $66 million does not include payments made by the tribe for lobbying services provided by Greenberg Traurig. The $66 million does not include substantial payments made by these tribes directly to other entities owned or managed by Abramoff, such as the Capitol Athletic Foundation. The $66 million does not include the substantial political and dubious charitable contributions that the tribes made at Mr. Abramoff's direction.It's my hope the committee will address these payments at another time in another hearing.The $66 million only includes the payments by the tribes to Mr. Scanlon's Capitol Campaign Strategies. It's those sums that we focus on today.The first question we need to ask is why? Why did Mr. Scanlon pay Mr. Abramoff half of his profit? After all, in his interview with the Post reporter, Mr. Abramoff denied having any financial interest in Mr. Scanlon's companies. The answer is surprisingly simple: Mr. Abramoff and Mr. Scanlon were partners.Their partnership apparently began over three years ago, on June 18, 2001. In an e-mail to Mr. Abramoff, Mr. Scanlon set forth his vision: Mr. Abramoff would develop the client base and Mr. Scanlon would serve them. In Mr. Scanlon's own words: "Bottom line: If you help me get CCS a client base of $3 million a year, I will get the clients served and the firm acquired at $9 million. We can split up the profits. What do you think?"Let there be any doubt on this point one year later, Mr. Abramoff extolled his partner's virtues in an e-mail. After Mr. Scanlon reported on the receipt of $3 million from the Louisiana Coushatta for undisclosed services, Mr. Abramoff replied: "You are a great partner. What I love about our partnership is that when one of us is down, the other is there. We're going to make dollars for years together."Scanlon was equal in his enthusiasm: "Amen. You've got it, boss. We have many years ahead."What's wrong with this relationship, some may ask. Possibly nothing had it been disclosed to the tribes, but it never was. Jack Abramoff, the tribes' trusted lobbyist and adviser, instructed the tribes to hire Michael Scanlon for millions of dollars, but he never disclosed that he would receive about half the net proceeds from the multimillion dollar contracts. In fact, it appears he hid his relationship with Mr. Scanlon from just about everyone.In a March 15, 2002 e-mail, Mr. Abramoff writes to a close associate and confidant about his personal financial statement, quote, "No one knows about this CCS stuff," unquote. Indeed, they did not.Yet Jack Abramoff owed the tribes he represented a duty, a duty to disclose his financial stake in the multimillion dollar contracts he was steering Michael Scanlon's way. That he and Scanlon did not speak up was immoral, it was unethical, and ultimately it may have been illegal.I know that Mr. Abramoff has attempted in the past to deny that he directed the tribes to hire Mr. Scanlon. His e-mails tell another story.In a December 2, 2002 e-mail, Mr. Abramoff wrote to Chris Petras, the former legislative director of the Saginaw Chippewa Tribe, about racing initiatives in Michigan: "Where's Scanlon on this? What's he doing? Have you guys pushed the button? We need to get him firing missiles? How do we move it faster? Please get the council focused on this as soon as you can. Every day we lose now is going to hurt."Mr. Abramoff apparently copied or forwarded the e-mail to Mr. Scanlon, whose only reply was, "I love you."What did the tribes receive for the millions of dollars they paid Capitol Campaign Strategies? According to some tribes, not much. The committee continues to investigate this issue.We do know, however, that Mr. Scanlon subcontracted out a substantial amount of work to what appear to be legitimate service providers. He did so at an unbelievably small fraction of what he charged the tribes, thus explaining the unconscionable amounts that he and Mr. Abramoff were able to put into their pockets.A February 20, 2003 e-mail from Mr. Abramoff to his accountant last year sheds considerable light on how much money Jack Abramoff and Michael Scanlon pocketed. In that e-mail, Mr. Abramoff wrote, "I think I understand what he (Michael Scanlon) did. We received $5 million into CCS from which I guess, I guess I'm right, D.C. requires the gross receipts tax franchise tax. He divided the $5 million into three piles: $1 million for actual expenses and $2 million for each of us.""$2 million for each of us." That phrase alone explains why Mr. Abramoff so fervently pushed Mr. Scanlon's services on the tribes. "$2 million for each of us" also explains what the tribes got or did not get for their money.Many of you are probably wondering where those many millions of dollars went after falling into the pockets of Mr. Scanlon and Mr. Abramoff. According to the records reviewed by the committee thus far, it appears Mr. Abramoff used his share to sustain his restaurant ventures, Signatures and Stacks, and to finance Eshkol, the all-boys school he established.Since the tribes stopped paying Mr. Scanlon, however, Mr. Abramoff has had to close Stacks and Eshkol.Meanwhile, Mr. Scanlon invested heavily in real estate and securities. At the end of the day, wherever the money went, it should be returned to the tribes, where it belongs.The story does not end here, and I know that the hearing today will undoubtedly raise as many questions as it answers.To the aggrieved tribes and Native Americans generally, I say rest assured that this committee's investigation is far from over. Together we will get to the bottom of this, and hopefully in the end our efforts will help other tribes avoid their own tragic tale in this shameful chapter of American history.I thank you, Mr. Chairman.CAMPBELL: Thank you, Senator McCain.(APPLAUSE)We prefer that we do not display a lot of emotion in this committee. It is a U.S. Senate committee. The only people that are allowed to get real angry and show emotion will be Senator McCain and me.(LAUGHTER)I would like to add to your voice, though, that Mr. Scanlon has been very adept at avoiding the U.S. marshals, but he will come up for air. This Senate committee will be here, and sooner or later he will come in under his volition or be escorted by the U.S. marshals.Do other senators have comments, Senator Conrad or Dorgan?Senator Conrad, go ahead, and we'll do it in order of appearance.CONRAD: Thank you, Mr. Chairman, and thank the committee for holding this hearing and conducting these investigations.I must say, this is about as bad as it gets. I believe there is criminal conduct here and it needs to be pursued, not only by this committee but by law enforcement as well.I was struck by the article in the Washington Post on Sunday. The beginning paragraph says, "Washington lobbyist Jack Abramoff and public relations consultant Michael Scanlon quietly worked with conservative religious activist Ralph Reed to help the state of Texas shut down an Indian tribe casino in 2002, then the two quickly persuaded the tribe to pay $4.2 million to try to get Congress to reopen it."I mean, if this isn't cynical behavior, I don't know what is. On the one hand, it turns out Scanlon and Abramoff paid Mr. Reed, Ralph Reed, $4 million to conduct a campaign to close down a casino at the very time they are asking the casino to hire them so that it can get reopened. A week later, after Mr. Abramoff met with the Tiguas, who were in danger of getting their casino shut down, a Texas consultation employed by the tribe thanked Abramoff for his visit, said he would push his proposal. Abramoff forwarded the e-mail to Scanlon with the message, "This guy needs us to save his ass."It goes on to say Reed, Ralph Reed, the conservative religious leader, was paid $4.2 million by Abramoff and Scanlon for his work opposing several tribal casinos.There is an e-mail traffic that is laid out in the paper in which Abramoff writes to Ralph Reed, "Great, thanks Ralph. We should continue to pile on until the place is shuttered," referring to the casino. "Perhaps we could get one of our guys in the legislature to introduce a bill which disqualifies from state contracts any vendor who provides goods or services to a casino in the state. This way, Cornyn (ph) can sit back and not be scared. Let one of our tigers go get him. Do we have someone like this and can we get it introduced as soon as possible?"This is the response from Ralph Reed: "We have tigers. Texas legislature only in session every other year. Let me check. Good idea."Abramoff back to Reed: "Even if we never get it passed, it will scare the you-know-what out of vendors and make life tough on the tribe. We should do it in (some other place, blocked out), too."In an e-mail to Reed, again Ralph Reed, on February 11, Abramoff did not mention he had been in contact with the Tiguas. He wrote, "I wish those moronic Tiguas were smarter in their political contributions. I'd love us to get our mitts on their moolah (ph). Oh, well, stupid folks get wiped out."Reed's response: "Wow, these guys are really playing hardball. Do you know who their consultants are?"Abramoff responded, "Some stupid lobbyists up here who do Indian issues. We'll find out and make sure all our friends crush them like bugs."Who were their friends?CAMPBELL: If I might interrupt the senator just for a moment, there are six tribes we're going to be dealing with in a succession of hearings. And the Tiguas will be one of them.CONRAD: I appreciate that. We're supposed to be dealing with Mr. Abramoff this morning. These are questions I wanted to ask him. Unfortunately, he's not appeared.CAMPBELL: He'll be here.CONRAD: I'd just like to close by pointing out, after Abramoff became their lobbyist, three tribes, the Saginaw Chippewa Indian Band, the Mississippi Band of Choctaws and the Coushatta Tribe of Louisiana contributed more than $2 million to the Capitol Athletic Foundation. The Choctaws also gave $1 million to the National Center for Public Policy Research. Saginaw Chippewa officials have told federal investigators they made the donations because Abramoff told them it would impress DeLay, a fellow golf buff whom Abramoff described in a 1995 letter to Arnold Palmer as a very close, personal friend.Goes on to say, the ties between Abramoff and DeLay go back a long way. Since 1997, Abramoff and his wife contributed $40,000 to DeLay's political action committees and last year the Capitol Athletic Foundation contributed $25,000 to the DeLay Foundation for kids.DeLay has also shown support for causes important to Abramoff's clients. A source close to Abramoff who asked not to be named because of the continuing grand jury investigation, said Abramoff lobbied DeLay's office to organize a June 2003 letter cosigned by DeLay, House Speak Dennis Hastert, Majority Whip Roy Blunt and Deputy Whip Eric Cantor that endorsed a view of gambling law benefiting the Coushatta's desire to block gambling competition by another tribe.The letter, sent to the interior secretary, said the House leaders opposed a plan by the Jena Band of Choctaws to open a casino at a non-reservation site, expected at the time to be outside Shreveport, Louisiana, not far from a casino owned by the Coushattas. The intent of the letter was to protect the income from the Coushatta's casino, about $300 million a year.And I will close with this: A lobbyist, V. Heather Sibbison, a lobbyist at the time for the Jena Band, said, "I do this for a living. I've never seen a letter like that before. It was incredibly unusual for that group of people, who do not normally weigh in on Indian issues, to express such a strong opinion about a particular project not in any of their home states.This is a pattern of abuse that is so extraordinary. Over $50 million of payments to Mr. Scanlon, back payments by him of over $20 million to Mr. Abramoff, political contributions being funneled to not only individual candidates but political organizations and through this foundation which was a front organization, or so Mr. Abramoff indicates in the Sunday paper, that they were using it as a front organization.If there are not violations of law here, Mr. Chairman and members of the committee, I think all of us know that this is the most extraordinary pattern of abuse and criminal conduct that's come before this Committee in the entire 18 years I've served here.I have searched for language that would express what has been done here. These people were engaged in behavior that is skuzzy, outrageous and we have got to reach conclusion on this, Mr. Chairman and members of the committee, hold these people to account. I am very glad to hear that the chairman will insist that these people be brought before this committee and be brought before the bar of justice, because they deserve the full punishment that is provided for in the law.CAMPBELL: Thank you, Senator.Senator Dorgan, did you have a comment?DORGAN: Mr. Chairman, let me be brief because I think your statement, the statement by Senator McCain and others describe what we have in front of us.I too was searching for adjectives and you really can't find adjectives that describe the passion I feel about what has happened here.You know, this is a circumstance, in my judgment, where having looked at the material that's been presented here and also much additional material that is available but has not yet been disclosed, it is a cesspool of greed. It clearly is a disgusting pattern of certainly moral corruption and very likely criminal corruption and I think that we have an obligation to follow this trail wherever it leads to the very end.How did this money go from the tribes to these consultants? Where did it end up? How did it end up there? What services were performed or not performed?Let me just also say that my colleague from Arizona, with whom I serve on the Commerce Committee, has very strongly asserted here the need for Congress to be involved in this investigation, as has my colleague from Colorado.For that, I noticed yesterday my colleague from Arizona, Senator McCain, has been attacked by one of the people involved in all of this.Look, we don't have any choice. The senator from Arizona understands, as do I and others, that there are several questions here. Was there any federal money, any federal dollars that we send to tribes that found their way back into this stream? And if so, what was it? Where did it go? How was it used?Second, was there an abuse of charities? It appears to me there was, and we have federal laws dealing with how that money is used.And third, we established the framework for Indian gaming through a commission, and we certainly have an obligation to understand what has happened here just from the standpoint of that area, because that's the area I think that produces a substantial amount of this money.So let me commend Senator McCain. I think if there is a straight shooter in this Congress, if one person is described as the straight shooter, it is Senator McCain. He's an independent cuss that some of us grit our teeth at from time to time, but he calls them like they are. This is not about politics. It's about corruption. It's about a pattern of corruption that is disgusting, and when you see on the board that's put up the way these people describe their clients, it's just pathetic.And then you see, as Senator McCain, Senator Campbell and my colleague, Senator Conrad, have described, a couple of people who pay someone else some money to try to get a casino shut down so they can go approach them and see if they can bilk them for some money to open them up, not disclosing they helped try to shut them down.It is once again a pathetic, disgusting example of greed run amok, and my hope is, Mr. Chairman, that we follow this to the very end and find out what happened, how it happened, and make sure that, as my colleague indicated, that those responsible are held responsible before the bar of justice, and also that we understand whether there are any legislative areas that we need to deal with as a result of all of this.Mr. Chairman, thank you for calling this hearing.CAMPBELL: Thank you.Senator Johnson?JOHNSON: Thank you, Mr. Chairman, and I'll be very brief.I appreciate your decision to hold this hearing. This hearing will reveal a story about a highly sophisticated and extraordinarily cynical scam driven by a few individuals who appear to have an insatiable desire to line their own pockets and utter contempt for their clients.Some tribes were taken in by a few individuals because, in part, credible law firms were themselves taken in by this scam. Unfortunately, con artists find ways of taking advantage of major corporations and major players every day, but one should be able to assume that if he or she engages a top law firm in the nation that he or she will receive professional service characterized by integrity.I know the committee is continuing its investigation of this matter, and hopefully this hearing will bring to light a deeper understanding of the outrageous facts and the laws that may have been violated, the pattern of corruption that clearly is involved.I am pleased to see that Chairman Milanovich and Sub-Chief Bernie Sprague are here today. Hopefully their testimony will expedite this investigation of the committee and lead to the parties involved being held accountable and justice being done.Mr. Chairman, I applaud and associate myself with the statements of my colleague from Arizona and the other comments and the statements of the members of the committee this morning.CAMPBELL: I thank you. Any further comments?Senator Conrad?CONRAD: Mr. Chairman, might I just say that I understand a member of this committee has been attacked publicly for his role in this investigation. Senator McCain has been attacked, and that too is just outrageous and beyond the pale.Senator McCain has done, I think, a public service by coming forward. I think you as well, Mr. Chairman, have done a public service by authorizing this investigation to go forward, and all of us, both parties, need to stand and defend those who are attacked by people who have engaged in, I believe, criminal conduct.For them to attack a member of this committee is simply outrageous, and if they think for one moment that they're going to intimidate Senator McCain, they've got another thing coming. Some of the people who are masters in intimidation tried to intimidate him. They spent five years trying. It didn't work then. If they think anything they can do will equal what's been done to him already, they've got another thing coming. And he's going to find a lot of friends standing with him as these scumbags attack him.MCCAIN: My friend from North Dakota, I appreciate it.CAMPBELL: Thank you.One time, when we had a disagreement, I described Senator McCain as like hugging a cactus, but I didn't really mean that.I'm going to pursue this with some further hearings, as you know, as my member friends know, I'll be leaving, but it is highly likely Senator McCain will be the new incoming chair as he was before of this committee, and if there is anybody -- anybody -- within hearing distance or sight of this hearing today that thinks this is going to go away, you're in for a surprise. It's going to be for a long time.With that, we will start with our first panel. That will be Mr. Jack Abramoff, if he will come and be seated. And as we mentioned before, Mr. Michael Scanlon is still hiding out somewhere. We have not been able to serve him.Now, I would also remind our witnesses, for Mr. Abramoff and for those on people following -- that are going to testify, that if you have your counsel with you, they are allowed to respond to you, allowed to talk to you, but they will not speak to the committee unless they are responding to a particular question by one of the senators.Mr. Abramoff, I'm sure you're aware of this, but by appearing before this committee, you are under oath, but I've been advised to swear you in. If you will stand, raise your right hand and state after me, I solemnly affirm that the testimony I give today will be the truth, the whole truth and nothing but the truth, so help me, God.A little louder, please.ABRAMOFF: I do.CAMPBELL: We will now proceed, if you have an opening statement.ABRAMOFF: Mr. Chairman, I would ask if you would entertain a procedural question by my counsel...CAMPBELL: Would you please pull that microphone over closer. I don't think the members can hear you.ABRAMOFF: Is this audible?CAMPBELL: Yes.ABRAMOFF: OK. I would ask at the beginning if you would entertain, Mr. Chairman, a procedural question by my counsel.CAMPBELL: Yes, go ahead.LOWELL: Thank you, Mr. Chairman.I was curious, given the statements by the various members, many of whom I know and many of whom know my deep respect for the processes of this legislative body, whether the committee has considered in light of the statements about wrongdoing, criminal conduct, if Senate Rule No. 26-5 Sub D Sub 3, that is the rule that talks about when hearings are appropriately held in an open session and in a closed session, and specifically the Senate's own rules ask the chairman and members to consider when they are about to conduct hearings in which the activities will, quote, "tend to charge an individual with crime or misconduct, to disgrace or injure the professional standing of an individual or otherwise to expose an individual to public contempt or obloquy, will be the kinds of hearing which ought not to be done in open session."And I was curious whether or not the Committee had considered its rule and what it's findings had been on that.CAMPBELL: The committee did hear your objections. They were duly noted in the letter that I sent to you on September 20. I overruled those objections and I do so now.Do you have an opening statement, Mr. Abramoff?ABRAMOFF: Mr. Chairman, I would request and hope that the committee will include in the record the correspondence that I have sent through my counsel, because it does explain my situation than I am able to do so myself this morning.CAMPBELL: Without objection, all of that correspondence will be included in the record.ABRAMOFF: Otherwise, I'm prepared to answer your questions.CAMPBELL: Well, then, let me get right to it, and I know that other members have a lot of questions, and so what we're going to do is, I'm going to time everyone and give everyone six minutes, and we'll go back two or three times, if that's acceptable to Senator Inouye.Let me just get right to it.MCCAIN: Mr. Chairman, could I -- I think this is simply a clerical -- I ask unanimous consent that your responses to Mr. Lowell and Mr. Abramoff be included in the record at this time.CAMPBELL: Without objection, they will be included in the record.At one time or another, according to your e-mails, you and Mr. Scanlon referred to tribes as morons, stupid idiots, monkeys, f-ing troglodytes -- which you define as a lower form of existence -- and losers.I want to associate my comments with Senator Inouye. We just opened the National Museum of the American Indian. It was to celebrate the people who have been here for thousands of years, and I have to tell you that I was very personally offended by those comments. I think at least -- of all the time they have suffered in America in the last 400 years, they have a right to preserve their dignity.My question concerning your definition of those clients is this: Do you -- why would you want to work for people that you have that much contempt for?ABRAMOFF: Mr. Chairman, I respect the committee's process. That's why I am here today. But in light of the correspondence that occurred between the committee and my counsel, including the committee's decision not to make any provisions for my testimony through grant of legislative immunity, I have no choice but to assert my various constitutional privileges against having to testify.I hope that sometime soon I will be able to do so in order to present all of the facts.CAMPBELL: Well, we look forward to that. Let me just pursue it...MCCAIN: Mr. Chairman, could I ask -- I think -- I believe that it is required that Mr. Abramoff specifically assert his Fifth Amendment rights. I'd rely on counsel, but in previous hearings, I think that's a requirement, that he specifically state his constitutional right under the Fifth Amendment.CAMPBELL: Would you like to do that, Mr. Abramoff? Exert your Fifth Amendment right, if you are going to decline to answer the questions of the committee?ABRAMOFF: Yes, sir. The privileges that protect my testimony include the First Amendment, the right to petition Congress and free association, the Fifth Amendment's due process right to have adequate notice and opportunity to be heard, the separation of powers doctrine and the Fifth Amendment's right for a person not to become a witness against themselves.MCCAIN: Thank you, Mr. Chairman.CAMPBELL: Thank you. I'm going to continue asking some questions, and you can just keep dodging if you want to?Do you refer to all of your clients with the same kind of terminology you used for Indians, i.e. hideous monkeys, morons, and so on?ABRAMOFF: I respectfully invoke the same privileges, sir.CAMPBELL: Two of the tribal leaders that were paying you millions of dollars were Chief Phillip Martin of the Mississippi Band of Choctaws and Chairman Richard Milanovich of the Agua Caliente Tribe, who I have known for years, both of them. This full committee has known them for years. They're highly respected by the committee, highly respected in the Indian community, which is not a very big community. Literally every Indian leader in the nation knows each other on a first name basis.Why would you refer to them in such despicable terms?ABRAMOFF: I respectfully invoke the same privileges, sir.CAMPBELL: OK. Thank you.I want to ask about some of your e-mails, provided to the committee by our investigators, which were shown on the screen and on the tripods too.On July 9, 2002, you sent an e-mail to Mr. Scanlon which referred to some of your clients, let me read it to you, I'll eliminate the profanities to avoid those, but you can fill in the blanks. "Are you f- kidding me? I hate those f- boy scouts. What a bunch of a-holes." We can fill in all the blanks. But to which Indians were you referring to?ABRAMOFF: I respectfully invoke the same privileges, sir.CAMPBELL: These don't sound like the comments of an educated man. They sound like the comments of somebody out of 150 years ago and some form of bigotry. And knowing your background, I happen to have a very, very strong concern for Jewish people in America, because in many cases they suffered in history the same things that Indians did. I would have thought that you would have had much more sensitivity to Indian people.On the same day, July 9, you sent another e-mail to Mr. Scanlon. It reads, "Did we get a CCS check from Kay Gold today? Sounds good to me. As for the 64,000, I want to use it to buy a car I decided. Can we do it so neither one of us pays taxes on it."Now, I think the Internal Revenue Service as well as members of this committee might be interested in knowing your response to that. The Kay Gold company, as I understand from our staff investigators, has no employees, no clients, and doesn't do very much business. It's a consulting company that operates out of your home.Would you speak to that?ABRAMOFF: Sir, I guess I can be asked hundreds or thousands of questions today, but for each one I must respectfully invoke the privileges, as I've said before.CAMPBELL: I'll give you that opportunity.On an e-mail to Mr. Scanlon dated December 7, 2002, let me read that to refresh your memory. It sounds, by the way -- it seems to me that you really mind the tribes. Let me read that one. "Let's do it. We really need more money. You and I must meet to work out a strategy to get things moving. We're missing the boat. There are a ton of potential opportunities out there. There are 27 tribes, which makes over $100 million a year according to the New York Times piece on November 24. Can you have your guys to the research and find out which tribes these may be? We need to get moving on them. Can you come to town this weekend?"Now, were you interested at all in helping poor tribes, or just the rich tribes?ABRAMOFF: I respectfully invoke the privileges stated, sir.CAMPBELL: On January 7, concerning the Agua Caliente, your e- mail said, "We should orchestrate this to happen and then fly out there to war game with them and rake in the big money. I'll even give you a shot to recoup your losses on the golf course if that happens."Now, Mr. Abramoff, it's obvious that you are not going to answer questions for the committee. I'm going to give other members an opportunity to ask some too, however. This is not a court of law. It's a Senate hearing. And I should think you would be concerned about some of the people that you deal with and not just reduce everything down to a dollar figure.But this certainly is the court of public opinion, and I have a hunch that when we're all done, if you intend to get any further Indian contracts, you might think about looking for another line of work.I yield to Senator Inouye.INOUYE: Thank you very much.After listening to all of the statements and after having read articles, am I to assume that you did make a few dollars?ABRAMOFF: Senator, I respectfully invoke the privileges stated.INOUYE: As a good citizen of the United States, did you file an income tax return?ABRAMOFF: I must respectfully assert the privileges stated, sir.INOUYE: And in your income tax return, how did you describe this income?ABRAMOFF: Senator, I must invoke the privileges previously stated.INOUYE: Mr. Chairman, obviously I will not get any response, so I yield the floor.CAMPBELL: Before I turn to Senator McCain now, you've dealt with a number of Indian tribes, Mr. Abramoff. Indian people traditionally -- they, even with non-Indians, often ask -- invite them to smoke a pipe. It sounds maybe strange to people who don't know the culture, but Indian people believe that when you smoke the pipe, your voice is carried to the Creator and so you have to tell the truth, then you have to be honest, because He's going to know what you said because it's on the smoke that goes up to Him.When you had any dealings with the Indian tribes, did you ever participate in that ceremony with them, to speak the truth?ABRAMOFF: Senator, I respectfully invoke the privileges already stated.CAMPBELL: Thank you.Senator McCain?MCCAIN: I have no questions, Mr. Chairman.CAMPBELL: Senator Conrad?CONRAD: Thank you, Mr. Chairman.Mr. Abramoff, I don't think you're doing yourself any favor here by invoking repeatedly your Fifth Amendment rights. It's your constitutional right, but many of these questions have nothing to do with your possible criminal conduct. They are questions that are outlined in e-mails that you wrote, in which you disparaged the very people that you were working for and engaged in what appears to be just an out and out scam.I don't know what else anybody could say. I don't know what in your conscience you must have been thinking.Did you in fact send an e-mail to Mr. Ralph Reed on January 7, 2002 in which you said, "Great. Thanks, Ralph. We should continue to pile on until the place is shuttered," referring to Indian casino. "Perhaps we could get one of our guys in the legislature to introduce a bill which disqualified from state contracts any vendor who provides good or services to a casino in the state."Did you send such an e-mail?ABRAMOFF: Senator, I respectfully invoke the privileges previously stated.CONRAD: Did you receive an e-mail back from Mr. Reed in which he said, "We have tigers. Texas legislature only in session every other year. Let me check. Good idea."Did you receive such an e-mail from Mr. Reed?ABRAMOFF: Senator, respectfully I invoke the privileges previously stated.MCCAIN: Mr. Chairman, could I mention to my colleague...CAMPBELL: If the senator from North Dakota would yield.MCCAIN: We have other witnesses. This witness is not going to respond.CONRAD: Well, I've got some more questions that I'd like to put to the witness to give him an opportunity to break from this invocation of the Fifth Amendment, to address what are e-mails that have been attributed to him.I would like to ask, did you, Mr. Abramoff, and you and your partner, your colleague, Mr. Scanlon, give $4 million to Ralph Reed?ABRAMOFF: Senator, I respectfully invoke the privileges previously stated.CONRAD: Did you send an e-mail to Mr. Reed on February 11, 2002 in which you did not indicate you had been in contact with the Tiguas, but you said, and I quote, "I wish those moronic Tiguas were smarter in their political contributions. I'd love us to get our mitts on that moolah (ph). Oh, well. Stupid folks get wiped out."Did you send that e-mail to Mr. Reed?ABRAMOFF: Senator, I respectfully invoke the privileges previously stated.CONRAD: And when the Tiguas fought back by running ads in the Washington Post, did you receive an e-mail from Mr. Reed that said, "Wow, these guys are really playing hardball. Do you know who their consultants are?"Did you receive such an e-mail?ABRAMOFF: Senator, I invoke the privileges previously stated.CONRAD: And when you received that e-mail, did you respond by saying, "Some stupid lobbyists up here who do Indian issues. We'll find out and make sure all of our friends crush them like bugs."Did you send that e-mail, Mr. Abramoff?ABRAMOFF: Senator, I respectfully invoke the privileges previously stated.Mr. Chairman, I would like...CONRAD: And who are the friends that you're referring to in that e-mail, Mr. Abramoff? Who are the friends that you will use to crush your adversaries like bugs?ABRAMOFF: May my counsel ask a procedural question at this time, Senator?CAMPBELL: If the senator from North Dakota specifically asks the counsel.CONRAD: I'm not asking counsel. I'm asking...MCCAIN: I would ask my friend from North Dakota, again, this is not appropriate, because any citizen has the right to invoke their protections and their rights, and if we aren't careful, we're going to be badgering this witness, and we have further hearings and investigations and further panels of witnesses to appear before us.So I ask my colleague from North Dakota, after having been chairman of this committee and served on it for many years, that we move on.CONRAD: I am prepared to move on. I wanted to ask these questions of Mr. Abramoff. These are the questions I had prepared to ask him. I think it is legitimate to ask Mr. Abramoff these questions.These are e-mails that he is alleged to have written.MCCAIN: I agree with you...CONRAD: And I think this committee is as outraged as I am by these e-mails. And I think Mr. Abramoff should have to confront in public session the e-mails that he himself authored according to the record of this committee.I have gone through now those that I had prepared for question, so I am prepared to yield at this point, but I would say to my colleagues, and I'd say to you, Mr. Abramoff, shame on you. Shame on you.CAMPBELL: I thank the senator.It's obvious -- we were going to do several rounds, but there will be no answers from this witness, apparently, so we'll go on to our second panel.And if the Honorable Richard Milanovich, the chairman of the Agua Calientes, and the Honorable Bernie Sprague would come forward.LOWELL: Mr. Chairman, we are excused?CAMPBELL: Yes, you are excused.LOWELL: Thank you.CAMPBELL: Excused for this hearing, but will probably be called back. I might tell you that, counsel.INOUYE: Mr. Chairman, for the record, who was the attorney?MCCAIN: Mr. Abbe Lowell.CAMPBELL: OK. Mr. Abbe Lowell was the attorney for -- if -- Chairman Milanovich, if you -- Sub-Chief Sprague and Chairman Milanovich, would you please stand and raise your right hand and state after me, I solemnly swear that the -- I solemnly affirm that the testimony I give today will be the truth, the whole truth and nothing but the truth, so help me, God.MILANOVICH: I do.SPRAGUE: I do.CAMPBELL: Thank you for appearing, and we will start in that order with Chairman Milanovich first.MILANOVICH: Thank you, Mr. Chairman.May I digress from my prepared statement, sir, members of the committee?CAMPBELL: That will be fine. Your complete written testimony will be included in the record, if you'd like to...MILANOVICH: I'd like to have the opportunity to read it, but first I wanted to say, over the last several months, sir, I have been made aware of the e-mails. When I read them, I was upset. Today, after such a glorious week, when we opened the National Museum of the American Indian, knowing full well that the committee members sitting up there today had such a great effort to make certain that it was done, and as Senator Inouye states, it is a sad day today that we begin the week, or this mid-week, to read what travesty has been done to tribes.Thank you, sir.Good morning, Chairman Campbell, Chairman McCain, Vice Chairman Inouye and members of the Committee. I am Richard M. Milanovich, chairman of the Agua Caliente Band of Cahuilla Indians. I appreciate the opportunity to testify before you today.I would like to commend the members of this committee and your staff for bringing to light the malicious actions of two unscrupulous individuals, and those who acted to enable their enterprise.While I had opposed the efforts of Mr. Abramoff and Mr. Scanlon to obtain contracts with our tribe, distrusting their claims, methods and, quite frankly, mostly their cost, it was not until I saw the secret e-mails and other information obtained by the efforts of this Committee that I began to truly comprehend the full nature of their conniving actions.This morning I would like to address four areas. First, I would like to provide you with a little background on our tribe; second, I will share with you my thoughts at the time Mr. Abramoff and Mr. Scanlon contrived to obtain contracts for their firms with our tribe; third, I will highlight what we have learned over the last seven months concerning their actions; and, finally, I will describe some of the things our tribe is doing in light of what we have learned.Personally, I have served on the tribal council since 1977. My service began as a member from 1977 to 1981, as secretary from 1981 until 1984, when I was elected as chairman, a position I have held -- been honored to hold -- for the past 20 years. From time immemorial our people resided in the Palm Springs area. Our people developed complex communities in the Palm, Murray, Andreas, Tahquitz, Chino Canyons and on the desert floor. With abundant water supply, plant and animal life, the Agua Caliente Band of Cahuilla Indians thrived.In 1876, the U.S. federal government deeded in trust to the Agua Caliente Band of Cahuilla Indians 32,000 acres of our ancestral land as the Agua Caliente Indian Reservation.We are industrious and creative with a reputation for independence, integrity, and justice. We are proud of our rich history and our culture. The Agua Caliente Band of Cahuilla Indians constitution and by-laws was adopted in 1955. The Agua Caliente Band of Cahuilla Indians has a government-to-government relationship with the United States government as a federally-recognized Tribe and sovereign tribal entity. We have governmental authority over our reservation lands and people.The tribe's constitution and by-laws outline a two-tiered democratic tribal government structure: the tribal membership and the elected tribal council. The tribal council consists of five council members: chairman, vice chairman, secretary and two members. The chairman, vice chairman and secretary serve two years and members serve a one-year term. Under our constitution, action is taken by a majority vote of the tribal council.I would like to preface my remarks on the topic of the tribe's business relationship with Jack Abramoff and Mike Scanlon with the general statement that we are still learning, together with the committee, of the efforts of these individuals to recruit individual tribal members to collaborate in their deceitful undertakings. Concurrent with the committee's investigations, we, of course, have begun our own internal investigations, but at the time the Tribe entered into business arrangements with these individuals and their firms, we had no idea of the steps they had already taken in order to manipulate our democratic decision-making process.While I am proud that these selfish efforts were only partially successful, clearly these ill-motivated actions were a critical element of what appears to be a scheme to obtain large and unjustified payments from the tribe. As a result of the majority vote of the council, and in my capacity as chairman, I signed service contracts with Greenberg Traurig and Scanlon Gould Public Affairs in July 2002. Jack Abramoff and Greenberg Traurig were hired to assist the tribe with all political and lobbying activities relating to a wide range of public policy issues. Mike Scanlon and Scanlon Gould were hired to help the tribe with respect to pending gaming compact issues in California.The first time that I met Jack Abramoff and Michael Scanlon was in the course of their presentations seeking contracts to represent the tribe. Mr. Abramoff identified himself as a representative of one of the top law and lobbying firms in the United States. The fact that these men and their services were associated with such a prestigious firm was something upon which some on our council relied.In large measure, Mr. Abramoff's and Mr. Scanlon's presentations rest on their self-described success on behalf of other tribes. Personally, I was skeptical with regard to their presentation and was more than skeptical of the fees that Mr. Abramoff and Mr. Scanlon were seeking for their firms. I voiced my objections and sought to defeat the effort to obtain contracts. But Mr. Chairman, as I am sure you will understand and others on the committee will understand, sometimes being chairman is not enough if others have managed to collect the votes.When the contracts and matters relating to the contracts came to a vote, the vice chairman and I found ourselves outvoted. Of course, at that point in time I had no idea that Mr. Abramoff and Mr. Scanlon had already deceptively engaged in a full-scale effort that they themselves valued at tens of thousands of dollars, to defeat certain tribal council members, myself included, in order to elect a slate more friendly to their sales pitch. I was surprised and disappointed that some others on our council took a different view, but at this point I was unaware of the length that Mr. Abramoff and Mr. Scanlon had gone in enlisting the support of certain individuals in our tribe.Of course, other members of our council had also been deceived. At the time I did, however, take some solace in paying such a large retainer for Mr. Abramoff's services in that Greenberg Traurig is a law firm with a responsibility to honorably treat its clients. As chairman, I thought it was my duty to try and make the best of the situation. Looking back from where we sit today with the knowledge of press reports and preliminary findings of this committee, it appears that some people at Greenberg Traurig were also deceived, just as we were, regarding much of Mr. Abramoff's activities.It is my sense that we have only seen the tip of the iceberg, but already it appears that Mr. Abramoff and Mr. Scanlon, working in conjunction with those who willingly enlisted to collaborate with them, engaged in numerous instances of improper conduct. Their own words demonstrate that they improperly sought to manipulate for private gain the electoral process of our tribe. This occurred both before and after they were hired.It also appears they did not view the tribe or even the tribal council as their clients. Instead, they worked on behalf of themselves and a small faction of tribal members they were seeking to elevate to a position of total control by manipulating tribal elections. In the course of their work for the tribe, Mr. Abramoff and Mr. Scanlon attempted to hide information from the full council while working covertly with this collaborating faction. Their own secret communications indicate a willingness to sacrifice the interest of the tribe in exchange for the opportunity to make more money -- for themselves, of course.It appears that this approach -- seeking an outcome that would actually hurt their client so that they could make more money -- was not unique in our case. While there are a number of specifics that your investigation is revealing, perhaps the saddest is the utterly callous fashion in which they mocked the interests of the clients they were actually hired to represent and displayed a willingness to engage in virtually any conduct as long as they could make money.In April of this year, the tribal council unanimously voted to suspend its relationship with both Greenberg Traurig and Scanlon Gould. Based on information we already learned, we have taken further action concerning the attempts to manipulate our tribal elections. We have suspended certain individuals from an appointed role in our government. We have retained the services of Darryl Wold, a former chairman of the Federal Election Commission, to conduct an internal tribal inquiry into whether there were any violations of tribal law.As chairman, I am working with our tribal council to reform our laws regarding contracting, election and other procedural safeguards. Additionally, we have asked our legal counsel to aggressively pursue all avenues of obtaining reimbursement and compensation for injuries caused to our tribe.We will, of course, continue to work with the committee and other authorities.Mr. Chairman, I would like to close by reiterating my gratitude to you, Chairman McCain, Vice Chairman Inouye and the committee on your investigation.I will be happy at the appropriate time to answer any questions that you may have. Thank you.CAMPBELL: Thank you.Mr. Sprague?SPRAGUE: Thank you, Mr. Chairman, and good morning to the chairman and other members of the committee.I certainly would like to thank you folks for inviting me out here today and conducting this investigation. It's been a long -- this all started back in 2001 for me. I've been battling with these guys ever since, and I'm glad to see today that it's going to come to a head. And hopefully, after today, we can get down to the bottom of what really happened in the last two or three years, not only with my tribe but other Tribes across the country.I'd like to read my statement here for you this morning.Good morning, Mr. Chairman and members of the committee. My name is Bernie Sprague. I am the sub-chief of the Saginaw Chippewa Indian Tribe. We have approximately 3,000 members located throughout Michigan and the United States.I have served my tribe for over 19 years and I have served as an elected official for almost 7 years. These last two years have been a difficult and trying period for the tribe and myself.On behalf of the Saginaw Chippewa Indian Tribe, I want to thank the committee for allowing me to testify and for conducting this important investigation.Our tribe has a long and painful history since we first came in contact with settlers hundreds of years ago. Our treaties with the United States government ceded millions of acres of our ancestral lands to the federal government. And like many tribal nations across this country, our people have endured generations of broken treaties and empty promises. We have struggled for centuries against non- Indians who have used every tactic to steal our land and our precious resources that allowed our tribe to survive.Unfortunately, Mr. Chairman, we fight a similar battle today. They may wear fancy suits and expensive shoes, but their greed, scare tactics and unscrupulous behavior is the same our people have faced for generations and their goal to take from Indian people what is not rightfully theirs is once again being painfully repeated.There is not a word in my language that is strong enough to describe what these people have done to my tribe. These unsavory characters who lie, deceive, and steal from Indian tribes need to be exposed for who and what they are.In the fall of 2001, a small group of D.C. lobbyists quietly worked to elect eight tribal members to the twelve member council. As this committee knows, it is unheard of to have non-Indians involved in tribal elections. We do not know where they got the money to run this campaign, but we do know these lobbyists smeared the reputations of other candidates running for tribal council through a series of slick brochures sent to Tribal members. This type of campaign has never happened before on our reservation.We now know these lobbyists have engaged in the same practices with other tribes across Indian country. We were also shocked to learn that members of the former tribal council and the former legislative affairs director, who is here today, who is not a tribal member, were deeply involved in this scheme. We also now know that these lobbyists struck a deal with the candidates they supported. The deal was this: If you got elected to the tribal council, the lobbyists would receive multimillion dollar contracts with the tribe.Two days after the new council took office in December of '01, a divided tribal council approved the contracts to hire these firms against the strident recommendation of our legal counsel. In doing so, they fulfilled their part of the deal, these D.C. lobbyists were hired, and the looting of the tribal treasury soon followed.In 2002, I was elected to tribal council in a special election. I began to ask questions about the outrageous fees our tribe was paying these lobbyists. I learned that there were no report or documentation for any work they may have performed. One of the most outrageous examples of unaccounted for services involves the purchase of a voter database from Mr. Scanlon. Our tribe paid nearly $4.5 million for a database of voters in Michigan. That's right, $4.5 million for a database that we never saw.The current tribal council researched this issue and found that you could purchase a database of every voter in Michigan for less than $75,000. To this day, we do not know where this money went, and this type of spending was repeated over and over and over again, costing our tribe over $14 million.There were other tribal council members who raised similar objections to this outrageous spending. Because we asked these questions and we told tribal membership what was happening, the council majority removed all of us from tribal council. We continued to object to their looting of the tribal treasury and in the election of '03, all but two of the former tribal council members lost their seats.Once a new tribal council was elected in November of '03, we called in Mr. Abramoff to discuss his contract. During this meeting, Mr. Abramoff was asked if he had a financial or business relationship with Mr. Scanlon. He looked us in the eye and told our council he had no relationship with Mr. Scanlon at all, but now we know that was not true.Mr. Chairman, I fully share your view that scheming to defraud tribes must stop here and now and that those responsible should be prosecuted to the fullest extent of the law. You will be pleased to know that the current tribal council has taken steps to ensure this never happens again to our tribe. We are committed to taking steps within our tribal government to bring openness to our contracting process.We have drafted a tribal ordinance that creates a hiring process that all lobbyists and public relations firms must follow. It ensures no secret deals or contracts for anyone. It mandates all contracts must be approved at open tribal council sessions.But, Mr. Chairman and members of this committee, I am not here just to tell you what has happened to our tribe. We have worked to put together the pieces of this bizarre puzzle, but because we have limited access to various records, we have not had a full accounting of where our money went and to this day we do not have a full account of what these lobbyists were doing.I encourage you to continue this investigation as far as it needs to go.Mr. Chairman, I want you to know that our tribe is prepared to do whatever it takes to get back the money that was wrongfully taken from us. We want to work with the committee to get to the bottom of what these people did and return to our people money that can be used for education -- for educating our children and health care for our elderly.From the beginning of this investigation, our tribe has fully cooperated with the committee and you can be assured that we will continue do so.Again, I want to thank the committee for holding these hearings. I especially want to thank Senator McCain, who has done so much to improve the quality of life for Indian people and has been a leader in pressing for these hearings. I am available for any questions you may have.Thank you.CAMPBELL: Thank you, Mr. Sprague.Chairman Milanovich, let me ask a few questions, and we'll do this in rounds, too. I'll try to keep mine down to five or six minutes.It's good to see you here today. Thank you also for being at the opening of the National Museum of the American Indian.MILANOVICH: Thank you, sir.CAMPBELL: It seems to me you've been pretty much victimized beyond comprehension.Who brought Mr. Abramoff and Mr. Scanlon to the attention of the tribal council in the first place?MILANOVICH: May I make a statement first, sir?I don't think it's necessary that the tribe or the tribes have been victimized. Perhaps there was -- I don't like that term. We weren't victimized.We were -- I'm not sure what the proper term is, but we entered into a business arrangement, not fully understanding -- or those that approved it were not fully understanding what was taking place. So -- we weren't victimized, sir.As far as who first introduced us to Mr. Abramoff and Scanlon Gould, that would have been our tribal secretary.CAMPBELL: You -- did I understand you to say you're contemplating some legal action to try to recover some of the money that you paid them?MILANOVICH: There is a consideration on our part that there should be some sort of remuneration from those individuals involved. Yes, sir.CAMPBELL: Did they disclose at any time their partnership or deny it if they were asked?MILANOVICH: They never disclosed...CAMPBELL: Between Scanlon and -- they did not?MILANOVICH: No, sir.CAMPBELL: When you first hired Mr. Scanlon, did he make any representations about how much work product he was going to produce for the tribe?MILANOVICH: He was quite -- how do I put it properly -- grandiose in his scheme as to how he was to put together a grassroots effort concerning people in California, vendors in California, and a nationwide grassroots effort as well, to convince the governor. Yes.CAMPBELL: And the exhibits we showed. I think if Exhibit 15 and 16 are over there, you might put them up again, staff.Did you -- were you aware of those at all before this hearing? They're appearing on the screen. Were you aware of those at all before this hearing?MILANOVICH: No, sir.CAMPBELL: Were you ever aware that these two gentlemen were working for particular tribal council candidates?MILANOVICH: No, sir. We did not learn this until within the last several months and several weeks that we read the copies of the e-mail.CAMPBELL: Sub-Chief Sprague, Mr. Petras is going to be up next, but I understood you to say he is not a member of the Tribe?SPRAGUE: That's correct, Mr. Chairman.CAMPBELL: How much discretion was he granted to make deals for the tribe? Was it kind of carte blanche or did you oversee each one of his decisions?SPRAGUE: During the term under the former tribal chairman, Chairman Kahgegab, Mr. Petras had a lot of authority. He had a lot of leeway. He was more privy to information that individual council members were.CAMPBELL: Was Mr. Petras the person that introduced the so- called "Slate of Eight" to Mr. Abramoff and Mr. Scanlon?SPRAGUE: Yes, I believe he was. We had, back in the fall of '01, when our term was winding down, and their campaign had started, and myself along with other members in our community knew that someone was running their campaign. It was not the individual council members.CAMPBELL: Did Mr. Abramoff ever reveal his relationship to Mr. Scanlon to you?SPRAGUE: No, he had not.CAMPBELL: I will come back with some more questions, but I will yield to my vice chairman, Senator Inouye, if he has some questions.INOUYE: Yes.Chairman Milanovich, I presume there is a contract involved?MILANOVICH: Yes, sir.INOUYE: Does the committee have a copy of that contract?MILANOVICH: I believe they do. Yes, sir.INOUYE: Now, in the negotiations, who was your counsel? Or did you have a counsel, a lawyer?MILANOVICH: We had a counsel, sir, but the -- I am -- it hurts me to say that there was such a movement on the council membership, that there was no full willingness to accept the review of our counsel on the contract as it stood. It was more or less just ram-rodded through.INOUYE: Are you telling the committee that in negotiating a multimillion dollar contract, you did not have an attorney?MILANOVICH: We had an attorney. Yes, sir. But the advice that was given was somewhat limited in that the membership -- some members of the council felt that it was sufficient to move forward with the draft of the contract as proposed.INOUYE: Who proposed the draft of the contract?MILANOVICH: It was presented by Mr. Abramoff, initially, and then it was approved by -- as was stated -- three members of the tribal council.INOUYE: And tribal council members, without conferring with your lawyers, said OK?MILANOVICH: There was brief interchange between what the contents of the document, the contract, was, and tried to -- more clarifying language, what it really meant, but that was not sufficient to keep the majority of the vote of the council not approving it.INOUYE: Mr. Chairman, you just told us that in the last few months, in the last few days, you learned that some of the members of your council had received assistance from these two men. Have you discussed this with these council members?MILANOVICH: No, sir.INOUYE: Have they made any public statements?MILANOVICH: No, sir.INOUYE: They have not...MILANOVICH: When we -- pardon me, sir.INOUYE: They have not apologized or anything like that?MILANOVICH: I have not seen them.INOUYE: Are they still on the council?MILANOVICH: No, sir. They were -- one was serving as a proxy member of the council. The council took immediate action to suspend that person and then she later resigned.INOUYE: So all of those who received assistance are no longer on the council?MILANOVICH: Not that we're aware of.INOUYE: In these negotiations, the two men from Washington suggests providing you with monetary assistance?MILANOVICH: At Christmas time, I believe it was 2003, they sent me an expensive video camera, which I sent back. But other than that there was no -- they knew how I felt about them. Their willingness to maintain a secret cabal with certain tribal members was sufficient for them to know that they were maintaining the relationship irrespective of what I was attempting to question or how I thought.INOUYE: Does your internal investigation indicate what sort of payments the other council members received?MILANOVICH: The investigation is ongoing as we speak, sir, so there has been no final determination.INOUYE: Chairman Sprague, did you have counsel, a lawyer, in your negotiations for this contract?SPRAGUE: The first contract with Greenberg Traurig, Jack Abramoff, was reviewed by our legal counsel, and he advised the council not to sign the contract. The tribal council did not abide by his -- take his advice, and they approved the contract anyway.INOUYE: How did the council, your Indian council, sign it? Against the advice?SPRAGUE: If the legal counsel tells you, gives you a recommendation not to do something, the council has the right to accept that recommendation or discard it, and in this case they did not accept any of the legal council's recommendations about the contract.INOUYE: This tribal council was the one that was elected by these two men?SPRAGUE: Yes, it was. Yes. They had the majority vote. Once you have eight out of twelve, even if you do have the chairman elected, you still have seven votes. You still have the majority vote.INOUYE: Are these council members still members of your council?SPRAGUE: There is just one that is on the council with us now. We have two other council members presently that have been trying to defeat our efforts here.INOUYE: Have they had any discussions with you as to what they did, the relationship with the two men?MILANOVICH: No, they haven't.INOUYE: Have you conducted an investigation and have you found any evidence of unseemly relationships?MILANOVICH: We have not -- we started an investigation, but it has not gotten serious. We haven't gotten in depth with the investigation.Since we've been here and we've seen these e-mails and we've seen exactly what has been going on is what we have suspected all along, now I think the council is going to be more willing to take a more serious approach on these investigations, because there is obviously wrong-doing.INOUYE: So as far as you're concerned, at this moment, what you know is what you've seen in the papers and what you've seen on the screen here?MILANOVICH: Yes. We had suspected that they was helping them in the '01 election. We suspected they helped them in the -- they were helping them in their effort to recall myself and three other members of our executive board here just in '03. And the information that we've seen in the past two days verifies our suspicions.INOUYE: Were the two men from Washington giving you gifts or...MILANOVICH: No. I couldn't even get a phone number of either one of them for almost a year after I got on council in a special election in '02.INOUYE: Thank you.CAMPBELL: Thank you. Senator McCain, did you have questions?MCCAIN: Thank you, Mr. Chairman.First of all, I want to thank both Sub-Chief Sprague and Chairman Milanovich for their courage. I know that they have been under very intense pressures of varying kinds throughout this saga and I want to thank you for standing up for the people that you represent, and I am very grateful for both of you.Question for both of you. You both have said that there had been efforts to -- by these individuals to influence the outcome of tribal election. Does that -- does your information -- in that information, do you know whether money was spent or not on behalf of these candidates?MILANOVICH: Senator McCain, pardon me, Chairman McCain, I am aware that, according to the e-mail that -- the copy that we received from the Committee, they spent upwards of $25,000 to $30,000 in 2002.SPRAGUE: Senator McCain, the e-mails that I've seen concerning our tribe, Mr. Scanlon indicates that over a four month period he spent over $100,000 on our tribe.MCCAIN: In order to influence the outcome of the election?SPRAGUE: Yes.MCCAIN: The reason why I bring that up, Mr. Chairman, I believe that it is illegal to interfere with the election, with tribal elections, and my next question is, according to Tribal law, is that allowed?MILANOVICH: Sir, we have ordinances prohibiting, well, conflict of interest and a code of ethics, which more or less outline any -- so, in that case, yes it would be -- it would not be allowed, sir. It would be against tribal law. Without -- because it was not reported. Had they reported it, perhaps it would have been a difference, but they did not even report that they had used the services of Scanlon Gould.SPRAGUE: Our laws are relaxed when it comes time to elections. Our people, through the years, have been elected because of who they are in the community, and the community knows who they are, knows how they feel on issues, knows if they're an honorable person or not.At this time, there is nothing specific in our laws.MCCAIN: I think there are federal laws, but I'll check on it. I'm pretty sure there are.Has -- would -- do you know of any other monies that were solicited by Mr. Scanlon or Mr. Abramoff for other political purposes, such as for political campaigns or also additional donations to other outside organizations, but particularly to other political campaigns?MILANOVICH: Sir, in our process, the budget process, we have a fiscal year beginning October 1. We ask our lobbyists to submit a proposed list of contributions that would be made in the future, so we do have a list of -- they did make recommendations to particular representatives as well as PACs and other charitable organizations. Yes, sir.MCCAIN: And you know about roughly how much money that was?MILANOVICH: I don't really remember right now?MCCAIN: Like hundreds of thousands?MILANOVICH: Yes, sir.MCCAIN: Would you submit that list for the record for us, please?MILANOVICH: I believe it has been submitted, sir.MCCAIN: It has been?MILANOVICH: Yes, sir.MCCAIN: And that's hundreds of thousands of dollars in political contributions recommended by Mr. Scanlon and/or Mr. Abramoff?MILANOVICH: Correct.MCCAIN: How about you, Sub-Chief Sprague?SPRAGUE: The Saginaw Chippewa's were taken by Mr. Petras and Mr. Scanlon and Mr. Abramoff over a two year period for approximately $1 million in contributions.MCCAIN: Campaign contributions?SPRAGUE: Campaign contributions to people we never heard of, people we knew nothing about, organizations, different things of this nature. And we will get that list to the committee of those individuals that was donated to.MCCAIN: Were you aware of some monies being used to rent a skybox at Fed-Ex Field here?SPRAGUE: We had heard that, but we could not verify it, but the e-mails have done that.MCCAIN: Had you heard that, Mr. Chairman?MILANOVICH: We heard it and we actually participated, again, with the majority vote of the council, to participate to the tune of $300,000.MCCAIN: There is always certain ironies, Mr. Chairman. I guess that your tribes being done, to purchase a skybox to watch a Redskins game has a certain irony associated with it.MILANOVICH: Pardon me, Senator. The skybox -- there were multiple boxes. It wasn't just at one venue. There were several venues that they felt it was necessary to, I guess, ask for the higher dollar value.MCCAIN: In order to make your tribe's case to various important people in Washington?MILANOVICH: That's how it was presented to us. Yes, sir.MCCAIN: And that was $300,000?MILANOVICH: Correct.MCCAIN: Did you ever see a game?MILANOVICH: No, sir.MCCAIN: Mr. Chairman, I have a lot of questions but I -- go ahead.MILANOVICH: Senator McCain, I want to say, I didn't want to go see a game with them.MCCAIN: Thank you, sir. I can understand that.MILANOVICH: Thank you.MCCAIN: Thank you, Mr. Chairman.CAMPBELL: I don't blame you. Senator Conrad?CONRAD: Thank you, Mr. Chairman.Chairman Milanovich, how much money did your tribe pay over to Mr. Scanlon and Mr. Abramoff?MILANOVICH: The contract that we had with Greenberg Traurig, Jack Abramoff, was $150,000 a month retainer plus expenses over a period of 18, 19 months, until the investigation came to light through the Washington Post and we suspended our relationship.With Scanlon Gould, it was a matter of -- it was a total, as I recall, of approximately $7.3 million in less than a year.CONRAD: So the total between those two would be over $10 million?MILANOVICH: I'm certain of that, sir. Yes, sir.CONRAD: And Chief Sprague, you testified previously that your tribe paid over something in the neighborhood of $14 million?SPRAGUE: We paid -- our tribe paid $10 million to Scanlon, a little over $10 million, and just about $4 million to Jack Abramoff.CONRAD: So $14 million between the two, over $14 million.SPRAGUE: Yes.CONRAD: Did -- Mr. Sprague, who did Mr. Abramoff say to you that he and Mr. Scanlon had special influence with, if anyone, here in Washington?SPRAGUE: I never met Mr. Abramoff myself. His messages were being delivered to our tribal council by our legislative director, Mr. Chris Petras, and the few meetings that I was in that Mr. Petras was, he'd come in and boast about Mr. Abramoff and his contacts. The senators name was -- what's his name -- oh, yes, Representative Thomas DeLay. He was very powerful and with him -- with this guy being -- Jack having access to this guy, he was going to be able to do a lot of things for our tribe.CONRAD: So Mr. Abramoff was making representations to the tribe that he had special influence with Representative Tom DeLay. Is that correct?SPRAGUE: That's correct.CONRAD: Did he assert that he had influence -- did he give a reason why he had this influence with Representative DeLay?SPRAGUE: I don't recall that specifically.CONRAD: Did he suggest that he had special influence anywhere else in Washington?SPRAGUE: The only word we got was that he was very powerful, he knows very powerful people, he does not mess with the little people, he goes straight to the top because he has contacts at the top, on both sides.CONRAD: Did he ever suggest that he had influence with the White House?SPRAGUE: Not that I recall. I imagine he did because he was always making these pitches to the council about how important he was and how in danger we was...CONRAD: How endangered you were and how powerful he was because of his contacts with Representative DeLay?(CROSSTALK)SPRAGUE: Representative DeLay and other powerful people in Washington.CONRAD: Chairman Milanovich, in the representations that were made to your tribe, did Mr. Abramoff and Mr. Scanlon make representations to you as to who they had special influence with here?MILANOVICH: Yes, sir. When Mr. Abramoff introduced Mr. Scanlon, his opening remarks were, or close to his opening remarks were, "Mr. Scanlon is -- Congress DeLay was his former aide. And you know who Congressman DeLay is," inferring -- or I assumed that he was inferring that he had powerful friends.CONRAD: It is reported in the paper, yesterday's Washington Post, that the Saginaw Chippewa gave money to the Capitol Athletic Foundation. Is that correct, Mr. Sprague?SPRAGUE: That's correct.CONRAD: And do you know how much money was given?SPRAGUE: I believe it was $25,000.CONRAD: $25,000. There's an assertion here that there is some $2 million given by the Chippewa Indian Tribe, the Mississippi Band of Choctaw and the Coushattas of Louisiana. So you apparently were a small part of that.SPRAGUE: Yes, and they was lucky to get that.CONRAD: They were lucky to get that. Can you tell me why the decision was made to give to that particular charity?SPRAGUE: Again, it was Mr. Petras comes in and says we need to make this donation, so we ask what this foundation done, what it was for, and his reply was that it benefits the poor and needy kids throughout the D.C. area and other members of the Congress and the Senate and people that support us support this group and it would be good for us to support the same foundation that others were supporting.CONRAD: And was it at the request of Mr. Abramoff that this contribution was made?SPRAGUE: Yes, through Mr. Petras.The vote came down 4-to-4. The chairman had to break the tie, and the chairman voted to make the donation.CONRAD: It says in the paper of yesterday that Saginaw Chippewa officials have told federal investigators they made the donations because Abramoff told them it would impress Congressman DeLay.Is that correct?SPRAGUE: Yes, sir. That's correct.CONRAD: So Abramoff represented to you that if you made these contributions to this foundation that he controlled, that that would impress Congressman DeLay?SPRAGUE: He didn't tell us who controlled it. We didn't know who controlled it.CONRAD: You say he didn't say that he controlled this foundation.SPRAGUE: Right.CONRAD: But that the contributions to this foundation would impress Congressman DeLay.SPRAGUE: Yes, and others.CONRAD: Were you aware that in August this foundation flew a chartered jet with six people, including Abramoff, House Administration Committee Chairman Robert Ney, of Ohio, lobbyist and former Christian Coalition Leader Ralph Reed and then General Services Administration Chief of Staff David Safavian to St. Andrews, Scotland for a golf outing. Were you aware of that?SPRAGUE: No, I was not.CONRAD: Over $100,000 spent on that trip. Doesn't sound like anything that would benefit the children of Washington, D.C., does it?SPRAGUE: I could see through the smokescreen when they presented it. It was not...CONRAD: And you voted against it?SPRAGUE: Yes, I did.CONRAD: Well, there is much more to ask, but I think my time has run out. I thank the chair.CAMPBELL: Thank you. I have no further questions of this panel. Senator Inouye, did you?INOUYE: Yes, I do.CAMPBELL: Oh, excuse me, Senator Dorgan, I have to apologize. I didn't see you up there.DORGAN: Mr. Chairman, just briefly. I think my colleagues have asked the requisite questions and I think our next witness will probably give us some additional information about some of this.If I might just ask, on document No. 25 is I believe the contract with Saginaw Chippewa Indian tribal council, or at least the public relations plan, document 25. Under "goal" it says "The goal is to make this tribal council the most powerful and effective administration in the history of the Saginaw Chippewa Indians of Michigan and secure their reelection."What's your impression of what they meant by that, secure their reelection? Whose reelection?SPRAGUE: That statement, that section of that contract, plus the excessive fees, is what encouraged me to start my investigation back in early '02.The tribal council knows that they have no right and it is a violation of our laws to use tribal funds for their campaigns or for their reelections. They know that, and they was told that, and I pointed that out to them, and I was brushed off, brushed aside.DORGAN: Let me ask the Chairman Milanovich, has your tribe yet determined whether the conduct of Virginia Siva (ph) and Candace Atensio (ph) violated any tribal election ordinance?MILANOVICH: Our investigation is ongoing, sir, so they have not made a determination.DORGAN: Is it your impression that they acted in the interest of the tribe, the best interest of the tribe?MILANOVICH: My personal sense is that they acted for their personal gain, sir.DORGAN: Document No. 44 seems to appear that, Chairman Milanovich, they were using your tribes money for activities to promote another tribe. Are you aware of that?MILANOVICH: No, sir.DORGAN: Let me just ask a question my colleague started, on the Capitol Athletic Foundation, and the reason that is important is that is a charity. Apparently the Capitol Athletic Foundation was described as a charity to you, perhaps both of you, but it was not described that Mr. Abramoff was the person in control of that charity.Exhibit 35 is an exhibit, it's a letter that I think is probably intended -- November 1, 2002, sent to your tribe, or perhaps an internal letter, and it's not signed. Do you have Exhibit 35 up there on the -- you do, I think. Exhibit 35 describes the request for three $25,000 donations and, Mr. Sprague, do you know who signed this letter to the tribe?SPRAGUE: I don't recall who signed it, but I recognize it. This is the donations that Mr. Petras came in with and requested motions on.DORGAN: Would this likely have been a letter from Mr. Petras to the tribal council?SPRAGUE: It usually was, but the majority of the time they would come straight from Mr. Abramoff, CC'ed to Mr. Petras, and then he would bring them to the council for action.DORGAN: Is it possible this was written by Mr. Abramoff?SPRAGUE: Yes, it is.DORGAN: OK. Well, we'll ask Mr. Petras about that.This particular memo requested three donations. Were all three of those donations made? Do you recall?SPRAGUE: The Tax Reform donation was made.DORGAN: And what's the basis of your tribe making a donation to Americans for Tax Reform?SPRAGUE: I have no idea, Senator. I didn't understand it then. I opposed it. And I don't understand it today.DORGAN: But how was it represented to your tribe? $25,000 is a significant amount of money. How was it described to your tribe? Why would a tribe be making a donation to Americans for Tax Reform?SPRAGUE: Because Mr. Abramoff suggests that we make these donations to these various groups and organizations.DORGAN: Because it would be helpful to you?SPRAGUE: Because they'd help us.DORGAN: They would help you?SPRAGUE: Yes.DORGAN: Did he describe how?SPRAGUE: No, he never described how.DORGAN: Did he ever describe how this would help you?SPRAGUE: No.DORGAN: And so the tribal council decides to do this without having any notion of how this would be helpful to the tribe, just based on Mr. Abramoff's representation?SPRAGUE: That's correct. Well, based on the "Slate of Eight" had the majority. What Mr. Abramoff wants, he gets. And what Mr. Abramoff did not want me and other council members to have, we didn't have. That's the way it worked.I don't think our -- I think Mr. Abramoff and Mr. Scanlon were more involved in running our tribal council for two years than we realized. And hopefully this investigation will uncover that.DORGAN: My guess is that, you know, it's probably not very easy for you to come forward, either of you, at this point, because it is, first of all, a circumstance I think, based on what I know, and I've certainly had several opportunities to review the information that we've developed so far in this investigation.It appears to me that there are a couple of people here who set out to bilk tribes out of millions and millions -- tens of millions of dollars. And while that is in my judgment likely criminal behavior in some respects, certainly moral bankruptcy in others, it is also, I assume, profoundly embarrassing to be part of a tribal council that found itself bilked out of this money.And when I ask the question, for example, why would you pay $25,000 to Americans for Tax Reform, what would you get in return for that, I mean, what would be the motivation for making the donation, your response is that the tribal council voted to require us to do it, but apparently didn't have any notion of why they were doing it except someone from Washington, Mr. Abramoff, said we should.SPRAGUE: That's correct.DORGAN: Do the other members of the tribal council understand how preposterous that sounds now? I assume they do.SPRAGUE: They haven't since 2002.SPRAGUE: I've been trying to talk to members of the "Slate of Eight" when I found out what the agreements had said, the money that was being spent.But they had their leaders. They have their roles to play. They had their orders and they followed them.DORGAN: I'm going to ask the next witness about this memo. And let me just say also, you know we have a full-scale crisis in housing, health care, education on reservations across this country. It is unbelievable to me to see the way money was spent and the way money is bilked out of tribes by these charlatans. And so let me, if I have some additional questions, submit them in writing.Let me just say this, though: We've had some better and some worse cooperation from various tribes and interests. And I think all of this panel appreciates very much your willingness to step forward, talk about it from your perspective and respond to the request of this committee to help us understand what's going on here. We appreciate your attendance here today, appreciate your testimony.SPRAGUE: Mr. Chairman, may I?CAMPBELL: Yes.SPRAGUE: I'd like to say that members of the Saginaw Chippewa tribe, myself included, because of these two individuals our tribe has lost a lot of money, lost a lot of respect here in Washington and back home in our own state. Individuals were humiliated by these individuals, were fired from our jobs, were removed from our own tribal government because we tried to get the truth out to our members.These individuals came in and they destroyed reputations and took honor from many of our people. And they need to learn that they do not have that right. There are laws that protect Native American people and people from all races in this country from these type of individuals.I think a good word to describe them would be they're like vultures. They're just circling and circling and like the one paper said they wanted to stop (ph) 100 tribes. Lining up their next targets, they're vultures flying. And I'm glad that we're conducting this investigation.And I'd like to read a short statement before we go. I'm glad to see that the committee has convinced Mr. Petras to attend this hearing. As his statement suggests, he still supports the actions of Mr. Abramoff and Mr. Scanlon. My council is here with me today. I, as well as them, look forward to hearing how Mr. Petras can explain his way out of this negligence and disgraceful conduct. Thank you.CAMPBELL: And it will be included in the record.Senator Inouye, did you have further questions?INOUYE: I think for the record because of their courage and good wisdom, can we get the names of the two in-house lawyers who recommended that you do not enter into a contract with these two fellows?SPRAGUE: Yes, we can provide those to you.INOUYE: We'd like to have them in the record now, the addition of their names.SPRAGUE: Michael Phelan.(UNKNOWN): Mr. Art Bunce (ph) is the tribal attorney who had some strong recommendations.INOUYE: Chairman Milanovich, you indicated that you were provided with a list of candidates to support?MILANOVICH: Yes, sir.INOUYE: And you supported these candidates with money?MILANOVICH: Some of the candidates were, it was agreed to support, make contributions for the recommendation list, yes, sir.INOUYE: Were these contributions made in cash or by check?MILANOVICH: By check, sir.INOUYE: And how were the checks made out to the individuals or to their campaign committees?MILANOVICH: I don't recall. I believe, I don't really remember how the checks were made out, undoubtedly to the committee though or to the PAC, whatever it may have been.INOUYE: Were the candidates federal candidates?MILANOVICH: There were some federal candidates, yes, sir.INOUYE: Were they from the state of California?MILANOVICH: I don't remember. The list was long. I questioned and vice chairman also questioned certain names on the list because we didn't know who they were, as Subchief Sprague states.MILANOVICH: There were PACs. There were charitable organizations that we didn't know who they were. We questioned, but again there was a forward movement of some tribal council members that said just approve it, just approve it.INOUYE: Were you told that by supporting, your tribe would benefit?MILANOVICH: In so many ways, yes, sir. Sometimes they did say that we need to make these contributions in order to convince; other times it was just the good organizations, it'll make somebody else happy.INOUYE: Were you receiving any benefits from these candidates?MILANOVICH: Not that I'm aware of.INOUYE: Have you received any since then?MILANOVICH: Not that I'm aware of.INOUYE: Were any of the contributions made to political party organizations like the presidential committees?MILANOVICH: I don't recall a presidential committee, but perhaps the two party committees.INOUYE: Democrat and Republican?MILANOVICH: Yes, sir.INOUYE: Through the campaign committees? Were they congressional or Senate campaign committees?MILANOVICH: Both, sir.INOUYE: Both?MILANOVICH: Both.INOUYE: And they were made out by check?MILANOVICH: Yes, sir.INOUYE: And you have the list that you can provide us?MILANOVICH: It has been submitted, yes, sir.INOUYE: Do you have a copy of it now?STEVEN ROTH (ph), COUNSEL FOR AGUA CALIENTE: If the chairman will allow...CAMPBELL: Go ahead and proceed. Identify yourself for the record.ROTH (ph): Steven Roth (ph), counsel for Agua Caliente.The committee has already received some documents previously produced, documents that included the recommendations that Mr. Abramoff's firm had made to the tribe. The production was not made by us, but by council for Greenberg Traurig.INOUYE: Now, did you make out the checks, or did Mr. Abramoff make out the checks?ROTH (ph): I think copies of checks, which were made out by the travel administration, have been produced to the committee already.INOUYE: Can I ask counsel this question, Mr. Chairman?CAMPBELL: Yes, please do.INOUYE: Now, when these contributions were made, were you told as to what sort of benefits you may anticipate?ROTH (ph): My relationship with the tribe post-dates those events. I was recently retained as counsel.INOUYE: Can the chairman advise us?MILANOVICH: Would you repeat the question, please?INOUYE: When you made these contributions, were you advised as to what nature of benefits you may be able to receive from the recipients of your contributions?MILANOVICH: Not directly. No, sir. It was mailed to us. If we had questions, we questioned the -- Mr. Abramoff, or one of those staffers on the -- with Greenberg Traurig, "Why are we doing this? Why is this contribution being made to this person or this candidate or this organization?" And many times, it was just, Because it's for the best interests of the tribe.INOUYE: Do you recall if any of the recipients are on this committee?MILANOVICH: No, sir.INOUYE: Thank you.CAMPBELL: Senator McCain?MCCAIN: Very briefly, Mr. Chairman.Mr. Sprague, when Mr. Abramoff or Scanlon or whoever it is that made their presentations to you, I'd like to make it very clear, it's my understanding your response is that they would give enormous influence on both sides of the aisle, with both parties, on both sides of the Capitol. Is that correct?SPRAGUE: That's correct.MCCAIN: Thank you. It wasn't just one certain individual or one party. This was going to give you great influence everywhere. Is that correct?SPRAGUE: That's correct.MCCAIN: Did Mr. Abramoff ever disclose that the Capitol Athletic Foundation was his private foundation?SPRAGUE: No, he did not.MCCAIN: Did he ever disclose that the vast majority of money donated to the Capitol Athletic Foundation would be used to finance a private school that had established?SPRAGUE: No, he did not.MCCAIN: Thank you, Mr. Chairman.SPRAGUE: I have one thing I'd like to add to the attorney list. Just a comment about that Michael Phelan one. When he suggested to the council that they do not accept the first contact with Mr. Abramoff, he was terminated about three weeks after that and since then we've had Sean Reed has been working for us and he did review one of the contracts with Capitol Campaign Strategies and he suggested changes.And those changes were not made and after that Mr. Reed was never given the opportunity to review another contract.CAMPBELL: We appreciate your appearance today. And we may have further questions that we will submit in writing or, in fact, may call you back further.Mr. Milanovich, further testimony. Yes?MILANOVICH: Mr. Chairman, I would like to add that I also have present in the room members of the tribal council and members of the tribe who are here to try to begin the healing process. We have been hurt dramatically by individuals of the tribe who were for their personal gain and by outsiders who have taken advantage of those individuals.Thank goodness, Senator McCain, yourself, Senator Inouye, committee members are willing to stand up and correct the wrongs that have been done against us and to further stop any further actions like this from happening again. We are one tribe, Saginaw Chippewa is another. There's four others involved. But we have to remember this happens across the country.It happened to the largest law firm, one of the largest law firms here in Washington, D.C., too. But the hurt is there. My heart is crying. But by the same token, they're turning to tears of joy, too, knowing that something's going to be done with those individuals. Thank you, very much.CAMPBELL: Mr. Chairman, we're going to do everything we can as a committee. As you probably know, there is a investigation going on with one of the federal agencies, too, that's unrelated to these hearings and in addition to that certainly you have the right to pursue it in the courts, too.And I hope you do. If you haven't already initiated some action to get back some of that money, I hope you do that.MILANOVICH: We will do what's necessary to make ourselves whole, sir.CAMPBELL: We will be a partner to that action. Thank you and appreciate you appearing today.MILANOVICH: Thank you, again.CAMPBELL: Now we'll proceed to our last panel, which will be Mr. Christopher, Dr. Christopher Petras who is the former legislative director for the Saginaw Chippewa Indian Tribe of Michigan.Mr. Petras, would you please rise and raise your right hand and repeat after me: I solemnly swear that the testimony I give today will be the truth, the whole truth and nothing but the truth, so help me God. Please be seated and continue with your testimony and we'll have some questions for you at the conclusion.PETRAS: Mr. Chairman, I ask that a written statement that I prepared be submitted for the record.CAMPBELL: Will be included in the record.PETRAS: Thank you.CAMPBELL: Do you want to ad lib anything at all?PETRAS: No, sir.CAMPBELL: You just want to go for questions?All right. Let me maybe start then. It appears from information the committee's attained that you worked for the Saginaw Chippewa tribe for a number of years. How many years did you work for the tribe?PETRAS: A little over five.CAMPBELL: Over five. And what jobs did you do for the tribe in that five years? Was it always the same job?PETRAS: Policy research analyst, interim director of legislative affairs and then director of legislative affairs.CAMPBELL: And I understand from a former witness that you are not a member of the tribe.PETRAS: No, sir.CAMPBELL: How did you happen to get a job with the tribe in the first place?PETRAS: Well, I was at a concert at the Soaring Eagle Resort. And an individual who I knew that worked in human resources, this was back in 1998, approached me and said that there was a position open, a new department called the legislative affairs department at the tribe. And she said that you would be a good candidate for that.I'd been teaching political science, was familiar with government processes to some extent. And she said it would be good if you put in an application. So I followed up on it. I turned in an application. A few weeks later I received a call from Ms. Kim Sawmick, who was working in the department at the time, asking if I was interested in coming in to interview with then Director William Cross.I said, sure. I came in and interviewed and accepted the job.CAMPBELL: And in dealing with your relationship to Mr. Abramoff, we have exhibit three we can put up on the screen please, staff. He states that you were going to come in after the primary with a guy who will be the chief if they win.CAMPBELL: And I mentioned this once before. And we're going to help him win. If he wins, we'll take over in January. And we will make millions. Are you familiar with that statement?PETRAS: No, I don't recall that statement at all.CAMPBELL: When did you first meet Mr. Abramoff?PETRAS: Well, I met Mr. Abramoff basically in 2000. There was a tribal council then that was headed by then Chief Phil Peters. And Ms. Sawmick had indicated to me that the council was interested in looking for representation out here in Washington, D.C. to work with Mr. Larry Rosenthal, who was the lobbyist at the time for the Saginaw Chippewa tribe.What I did was I went on the Internet and typed in keywords, basically, tribes and lobbyists. And several came up. There were three companies that I had contracted in Washington here. I came out and did a preliminary discussion with the companies. I came back. I asked Ms. Sawmick if she would come back and review the companies with me since she was a tribal member and was close, basically, with the tribal council at the time.She had a brother council member at the time, David Otto (ph). She agreed. We came out. We interviewed with three companies, one was Preston Gates, in which she met Mr. Abramoff.CAMPBELL: And so after that meeting, did you recommend that the tribe hire him?PETRAS: She recommended that the tribe bring him in for an interview.CAMPBELL: Did you encourage or assist Mr. Abramoff in encouraging the tribes to donate to these so-called charities that he promoted?PETRAS: What my role was, was the council -- I would get a directive. And so you understand how it worked in legislative affairs, we answer directly to the councils. We have 12 different bosses to answer to.There were no efforts on my behalf to try to push either way any type of political contribution that would come in. The tribe received them regularly and then they would be submitted to the council to consider.CAMPBELL: In the same e-mail, Mr. Abramoff said that you were very excited about the prospect of hiring Mr. Scanlon. Whose idea was it first to bring Mr. Scanlon in to run the tribal candidate campaigns? Did Mr. Abramoff suggest that you bring Scanlon in?PETRAS: Excuse me, can you repeat that?CAMPBELL: Yes, whose idea was it to bring Mr. Scanlon in to run the tribal candidate campaigns? Did Mr. Abramoff suggest that?PETRAS: I don't recall any discussion related to brining Mr. Scanlon to run campaigns.CAMPBELL: In his e-mails, Mr. Abramoff gives the impression that you knew fully how much he and Mr. Scanlon planned on charging a tribe. Is that accurate or not?PETRAS: No, the only discussion I ever had regarding that with Mr. Abramoff was that -- see, it began with Mr. Otto, after Mr. Abramoff at Preston Gates had been hired back in 2000, they'd worked for the Saginaw Chippewa Tribe for about a month. And Mr. Otto was very interested in Mr. Abramoff, and wanted to keep in tough with him after they had been terminated, because Mr. Abramoff had left for Greenberg Traurig.The tribal council, at the time, decided not to hire the services of Greenberg Traurig, instead hired someone else. And I don't recall any discussion regarding Mr. Scanlon running any type of campaign.CAMPBELL: In your e-mails, after the tribal council members were taken out of office -- in your e-mails, you asked Mr. Abramoff to provide $2,500 to help out former council members who were less than 50 signatures short of the recall and were running out of money. Do we have a poster of that e-mail? It's up there.My question is: How much did Mr. Abramoff give in total for that effort?PETRAS: (OFF-MIKE)CAMPBELL: That's an e-mail from you.I may be corrected by staff here. That may be an e-mail from Abramoff to you, excuse me, but concerning the same thing.PETRAS: That doesn't look like it's an e-mail from me. And I don't recall...CAMPBELL: Do we have the right one up there? I can't see them from here.Well, in any event, do you know how much Mr. Abramoff gave in total to that recall effort?PETRAS: I do not recall.CAMPBELL: Did he do anything else to assist the recall effort that you know?PETRAS: I do not recall.CAMPBELL: Well, if you had it to do all over again, would you recommend him again to your employer?PETRAS: Well, I'd let the council decide that.CAMPBELL: Would you have recommended him again?PETRAS: I don't know if the allegations are true on Mr. Abramoff or not, so it'd be difficult to say.CAMPBELL: OK.Senator Inouye?INOUYE: Now, you were provided with a list of candidates to assist? Did the two men from Washington provide you with a list of candidates that your tribe should assist?PETRAS: When?INOUYE: Political candidates.PETRAS: I don't recall any list of candidates being provided to me.INOUYE: Were you called upon to provide counsel on who your tribe should support in the political elections?PETRAS: No. The elections were left up to the individual tribal members.INOUYE: And you had no role to play in that?PETRAS: No.INOUYE: Did you receive any gift or remuneration or compensation from these two men from Washington?PETRAS: All I recall receiving was a video camera, digital camera, a leather travel document holder, and some type of slide projection desktop screen.INOUYE: Did you feel that it was proper or improper?PETRAS: It was at Christmas. I didn't...(LAUGHTER)INOUYE: Do you know whether the members of the council received Christmas gifts?PETRAS: I do not know.INOUYE: Thank you, sir.CAMPBELL: Senator McCain?MCCAIN: Dr. Petras, in late 2001, didn't you and David Otto meet with Michael Scanlon at a Bob Evans restaurant and discuss campaign strategy for the Slate of Eight?PETRAS: The meeting at -- if it was at Bob Evans -- I don't recollect where the meeting was -- had to do with Mr. Otto was interested in understanding what the Mississippi Choctaws do. Mr. Otto had been to Washington before, had attended a sporting event at the MCI Center. And in the sports box there was a magazine story -- I can't remember which magazine story -- that praised Chief Martin and the work he had done for the Mississippi Choctaws. And Mr. Otto was interested in knowing how they could do that for the Saginaw Chippewa.MCCAIN: You never discussed a strategy for the Slate of Eight?PETRAS: I don't recall discussing any strategy for a Slate of Eight...MCCAIN: Don't recall, or you didn't?PETRAS: I don't recall.MCCAIN: I see.Now, obviously, you are defending the tribe, what happened, which is pretty bizarre, but let read you a couple of e-mails, what Mr. Abramoff and Scanlon thought about you.Do you remember e-mailing Todd Bollinger (ph) in 2003 about Kenny Loggins concert tickets for State Representative Ahart (ph). Do you remember that? Well, let me refresh your recollection.On February 18th, 2003, you e-mailed Mr. Bollinger (ph). And this was your e-mail: "I just received a message from a state representative who is running for Congressman Nick Smith's seat in 2004. He last name is Ahart (ph). He wants tickets to the Kenny Loggins concert."Mr. Bollinger (ph) passed on your request to Mr. Abramoff. Mr. Abramoff replied, and I quote from Mr. Abramoff's e-mail: "Neither rain nor snow nor the heat of day will keep him from his appointed idiocy."In June 2000, while contemplating a trip out to the tribe, Mr. Scanlon wrote Mr. Abramoff in an e-mail; Mr. Scanlon to Mr. Abramoff, an e-mail: "I really think a trip out to those fools solo is not worth it, regardless, because we will not come back with cash or a firm commitment, but we'll throw in the pain-in-the-ass factor and the Petras bullshit factor, it's really a bad idea."MCCAIN: This is what these people thought of you, that you recommended to the tribal council.Does that arose any emotion in you, Dr. Petras?PETRAS: I don't know what the context is of it, sir.MCCAIN: This is the outfit that you recommended, Dr. Petras.An e-mail, Mr. Abramoff: "How much is the Kay Gold amount?" Mr. Scanlon responds, "800 K." To this, Mr. Abramoff asks, "800 K? I thought we got $1.9 million." Mr. Scanlon replies, "We did, $800,000 for you, $800,000 for me, $250,000 for the effort, and $50,000 went to the plane and miscellaneous expenses."Do you think that's appropriate, Dr. Petras?PETRAS: Again, I don't know what the context was of that e-mail. But I don't...MCCAIN: Remember, you are under oath here, Dr. Petras. You never had anything to do with any of the campaigns for tribal council? Is that correct or incorrect?PETRAS: I don't recall at any time having anything to do with the elections.MCCAIN: Wouldn't you recall or not recall if you had anything to do with a tribal election?PETRAS: I don't recall, Senator.MCCAIN: I have no more questions, Mr. Chairman.CAMPBELL: Senator Conrad?CONRAD: Dr. Petras, did you recommend Mr. Abramoff to the tribal council as somebody they should hire?PETRAS: That was Mr. Otto who did that. I wasn't present at Mr. Abramoff's presentation to the council.CONRAD: Did you recommend to Mr. Otto that recommend Mr. Abramoff?PETRAS: No. Mr. Otto was already pretty much determined he wanted to have Jack Abramoff.CONRAD: Did you play any role in the hiring of Mr. Abramoff?PETRAS: No.CONRAD: You played no role? You played no role in the hiring of Mr. Abramoff? That's your testimony here today?PETRAS: My testimony regarding that question is that the role in terms of what? I couldn't advise the council either way. It was their vote. It was their decision.Mr. Otto had asked me to keep in touch with him...CONRAD: Didn't you come to Washington, Mr. Petras, for the purpose of interviewing firms to hire?PETRAS: Ms. Sawmick recommended him.CONRAD: Wait a minute. That's not my question here, sir.Didn't you come on the trip to Washington to interview firms to hire to represent the tribe?PETRAS: Yes.CONRAD: Well, didn't you identify firms to hire through your Internet search?PETRAS: Yes.CONRAD: So how could you assert that you played no role in the hiring or the recommendation of the hiring of a firm to hire?PETRAS: Well, I looked at my role was that I was bringing Ms. Sawmick out as a tribal member to let her select who she was interested in in having to bring back to the council to recommend as a tribal member.CONRAD: But, sir, by your own testimony, you were involved in identifying the firms for her to select from, is that not correct?PETRAS: Well, she could have gone with other firms. These were just three firms that ended up being the three firms that we were going to take a look at, for her to interview, to look at.CONRAD: And did you not recommend that those were the three firms that she should look at?PETRAS: I just said I spoke with three firms and: Would you like to come out and talk to them?CONRAD: Well, on what basis did you decide that those were the three firms to talk to?PETRAS: On the basis of their work with Native American issues.CONRAD: OK. So in fact you did play a role in helping the firms that were presented to her for her recommendation back to the tribal council?PETRAS: My role was not in terms of whether or not I said you should hire somebody. She was the one who came out and interviewed with them and said...CONRAD: Did she decide what firms she would interview, or did you make a recommendation to her what firms to interview?PETRAS: I just said that I had spoke with three firms out here and...CONRAD: And those are the three firms that she interviewed with?PETRAS: That she came out to see, right.And then wanted to know if there would be any others, and I said that would be up to her to decide.CONRAD: And did Mr. Abramoff make claims to you about influence that he had here in Washington?PETRAS: I don't think it was in terms of influence as it was how many staff he had and their specializations where they came from so you could cover more offices on the Hill.CONRAD: Did he make assertions to you that he had special influence with certain members of Congress?PETRAS: No, not special influence.CONRAD: Did he make suggestions to you that he had special contacts, special relationships with certain members of Congress?PETRAS: I only recall that it was in the context of his staff had worked for members on the Hill.CONRAD: And do you recall who he said his staff had worked for on the Hill?PETRAS: Some.CONRAD: Well, I'm asking you specifically who the members were. Certainly, you recall that.PETRAS: Well, his staff consisted of individuals that worked for senators from Louisiana and House members -- had worked for some of the leadership. Just basically they, you know, had a significant work experience out here working with different legislators and committees.CONRAD: Chief Sprague indicated that there was an indication -- series of indications that Mr. Abramoff, Mr. Scanlon, had special contacts with Representative Tom DeLay. Do you recall that?PETRAS: That they had mentioned that?CONRAD: Yes.PETRAS: Only in the statement that was made that one of his staff had worked for him previously.CONRAD: That one of...PETRAS: Mr. Abramoff's staff.CONRAD: One of Mr. Abramoff's staff had worked for who?PETRAS: For Mr. DeLay.CONRAD: For Congressman DeLay?PETRAS: Right.CONRAD: And how about Mr. Scanlon? Were you under the impression -- did you have knowledge that Mr. Scanlon had worked for Congressman DeLay?PETRAS: Not until later.CONRAD: Not until later.And when the decision was made to hire Mr. Abramoff and Mr. Scanlon, you say you didn't make the recommendation, but you narrowed down the number of firms to interview, and then a recommendation was made to the council. When you spoke to the council -- did you speak to the council at all?PETRAS: Ms. Samick and I did go into the council in 2000, and she had make the recommendation...CONRAD: Did you speak to the council at that time?PETRAS: I don't recall what I would have said to the council because I remember...CONRAD: I'm not asking you what you said. I'm asking you, first, whether you spoke to the council when you went in with the other representative. Did you speak to the council?PETRAS: I don't recall.CONRAD: You don't recall whether you spoke or not.PETRAS: No.CONRAD: Have you at any time made representations to the tribe that Mr. Abramoff, Mr. Scanlon, or you had a relationship with the White House that would be useful to the tribe?PETRAS: I don't recall doing that. And I definitely didn't have a relationship with the White House.CONRAD: Have you ever had you picture taken with key staff at the White House?PETRAS: With key staff such as?CONRAD: Well, have you ever had your picture taken with key staff of the White House of the United States?PETRAS: I don't know about key staff. We had our photo taken with the president.(LAUGHTER)CONRAD: I think that qualifies.(LAUGHTER)CONRAD: And how does that...PETRAS: Staff, I'm assuming the staff that works, you know, key staff under the president...CONRAD: Did you have your picture taken with Mr. Karl Rove? And did you make representations that this indicated that you had special influence at the White House?PETRAS: I don't recall that.CONRAD: You don't recall that?PETRAS: No.CONRAD: Would it surprise you to know that people are saying that, in fact, you did make such representations, that photos with Mr. Rove indicated that you had special pull at the White House?PETRAS: I have no idea what others are saying. I haven't seen anything to that affect.CONRAD: Did you -- if I can just conclude, Mr. Chairman -- how did the photo with the president come about?PETRAS: That was through an organization that the tribe contributed to through the RNC, the Republican Eagles.CONRAD: The Republican Eagles.And do you recall how much the contribution was?PETRAS: May have been $10,000.CONRAD: Would it might have been more than $10,000?PETRAS: My recollection is the tribe contributed twice, and maybe the second time, the donation amount went up.CONRAD: And how much would that have been?PETRAS: I don't recall.CONRAD: All right. I thank the Chair.CAMPBELL: Senator Dorgan?DORGAN: Mr. Chairman, thank you.Dr. Petras, how long have you had this problem with recall?(LAUGHTER)Is this a new phenomenon, or is it just related to this particular set of hearings, or is this an ongoing, serious issue?You don't recall that either.CONRAD: I do not recall.(LAUGHTER)DORGAN: Dr. Petras, you know, I listened to your testimony, and you say you don't know what the truth is here, and we're searching for the truth, and we hoped that you could help us find the truth.You know, Senator McCain asked you how it feels when the people that were your clients called you an idiot, and you said depends on the context, you don't know the context, I don't understand that, when you somebody calls you an idiot, why do you need context to understand how you feel about that?PETRAS: Because I do.DORGAN: All right.Exhibit 35 was put on the screen a while a go. I'd like to go back to exhibit 35. This was a request for contributions. And it is unsigned, dated November 1st, 2002. Are you familiar with this document?Previous testimony suggested, at least, it might have been a memorandum from you or it might have been a memorandum from Mr. Abramoff passed through to you to the tribe.PETRAS: I'm not sure.DORGAN: You can't recall, or you're just not sure? Or is that the same thing?PETRAS: I haven't had a chance to read the document, so I wouldn't be able to...DORGAN: I'll be happy to read part of it if you wish.And I'm not trying to be badgering here. Look, we need to understand where all this leads, where it comes from, what the origin is, and you need to help us do that. And you're not, frankly, being very helpful.This is a memorandum that asks the tribe to make certain contributions. It asks the tribe to make the contribution to the Capitol Athletic Foundation, to Americans for Tax Reform, to the National Republican Campaign Committee, and so on. It seems to me that from previous testimony that it was either written by you or by Mr. Abramoff.And the reason I'm asking what the origin was because I'd like to understand: What was the representation to the tribe of what their benefit would be from a contribution to the Capitol Athletic Foundation, or to the Americans for Tax Reform for that matter? I mean, I'm trying to understand what the origin was so I can ask who made what representations about this.PETRAS: With the Americans for Tax Reform, that focused on the issue of taxation in tribal nations. That organization fought tax issues and had worked doing the same thing for tribal nations, and that Mr. Norquist had presented -- I don't remember the year -- but he had presented at a National Indian Gaming Association conference and did a presentation on taxation and tribes and how he didn't think that that was good.PETRAS: And so my recollection is that struck a chord with Mr. Otto and the time and some of the other council, where they were presented with a contribution request for the Americans for Tax Reform and they voted and approved it.CONRAD: Was that request from Mr. Norquist?PETRAS: I'm not sure.CONRAD: Was the request from Mr. Abramoff?PETRAS: I'm not sure. I can't remember either.CONRAD: Mr. Chairman, you know, my hope was that we would get more assistance from Dr. Petras. I indicated to the other panel, I'm sure there is some substantial embarrassment. There always is.I think the tribes are victims here. The tribes have been victimized by people that have bilked them out of a great amount of money under false pretenses it appears to me, and the question of whether it's criminal or not is left to the people in the criminal justice system. The question of whether there are issues for us is something that we are trying to explore.We know there are issues here. The question is what and how. And my hope was that Dr. Petras would be able to clear up a few of these issues. It appears that will not be the case.But I must say, from the briefings that I have had on these issues, what we are talking about today merely scratches the surface on the range of issues that surround the some $66-plus million additional that we don't yet have a complete handle on.I think we are this morning simply scratching the surface on this money, where it went, who requested it, who it benefited, why, how. We do know I think now in many cases, especially this morning's case, who the victims are.And the one thing that disappoints me, Dr. Petras, is that you don't see what we see from evidence that is put on the screen. What we have at the moment is we've unearthed a substantial trail of documents, and they are quite clear. The documents indicate a great disrespect for the clients that these two people were serving. They document that they did not disclose to you, for example, who controlled the Capitol Athletic Foundation.I mean, you were largely in the dark for all of this. I'm frankly surprised that you, at this point, reserve judgment. The question is not about whether this was done to the tribes. It clearly was. The question isn't: Who did it to the tribes? We know who did it. The question is: How deep does this cesspool go and what are the layers and what does it tell us?So I'm a little surprised that you come to us today suggesting that this might all be just fine. These old contracts might be just all right, and this might just be one large misunderstanding.It seems to me that's what you're suggesting, because you're reserving judgment on everything or not recalling anything.Respond to that, if you would.PETRAS: I have no comment on that.CONRAD: All right.Mr. Chairman, thank you for the time. And my hope is...CAMPBELL: This is just the first hearing. And we'll be doing several more. And as you said, we're probably just scratching the surface. And I think that Mr. Petras may be back. And hopefully his recall will be better then. But at least he did not try to hide behind the Fifth Amendment.CONRAD: But the Fifth Amendment is available to people. And coming and saying nothing and not recalling anything is not much more helpful to us.(LAUGHTER)CAMPBELL: I'm not sure what amendment covers that.(LAUGHTER)Senator Inouye, did you have a...INOUYE: Yes. I have one question.You were the legislative director of the Saginaw tribe.PETRAS: Yes.INOUYE: From what period to what period?PETRAS: I was interim director for a few months and then was full director, and that wasn't even for a year. And then my position was eliminated in January of '04.INOUYE: What were your responsibilities or duties as legislative director?PETRAS: To basically work with the tribal council on policy issues and conduct research.INOUYE: In that capacity did you participate in council meetings?PETRAS: Yes.INOUYE: Did you discuss with them, or you had someone talking for you?PETRAS: In terms of what?INOUYE: Well, so far you have testified that you did not have any occasion to talk to the council, that some woman did all the talking.PETRAS: That was with regard to Mr. Abramoff when he was fired.INOUYE: In other matters, did you talk to the council?PETRAS: Yes.INOUYE: What subject matters?PETRAS: Legislation, federal and state.INOUYE: And in those discussions, did you talk about Washington representation? You were called upon to make recommendations on legislation, I presume. You were their legislative director.PETRAS: Well, it didn't necessarily work like that. The council -- it would depend on which council it is. Some councils would hire their own lobbyists and not even tell us about it.INOUYE: I'm talking about the Saginaw Council.PETRAS: Right, that's who I'm talking about. I served on four councils, four completely different councils.INOUYE: You just testified that you were called upon to make recommendations on legislation in Washington. And...PETRAS: I'm sorry, sir, can you rephrase?INOUYE: And in this discussion, did you tell them who they should retain as counsel here, in Washington or lobbyists?PETRAS: Tell them who they should retain. No, I would just bring in -- to tell whoever would call, you have to send your materials to the council and then they would schedule a meeting with council and do their presentation.INOUYE: You were just a conduit?PETRAS: Basically.INOUYE: How much did they pay you, if I may ask, to serve as conduit?PETRAS: My salary was different. When I first started it was $40,000. And then it went up, I don't recall, maybe in the $50,000 then $75,000 as interim and then $100,000 as director.INOUYE: One hundred thousand dollars. But you made no recommendations as to who they should retain as your agents here in Washington?PETRAS: The recommendations -- by the time I was director or interim director, the lobbyists were already hired, the consultants for the tribe.INOUYE: And what was your relationship with these lobbyists?PETRAS: To basically pass on what the policy objectives were of the council.INOUYE: Well, apparently, we're not going to get too far.But do you have any questions?CONRAD: Yes.Mr. Petras, the lobbyists were already hired when you were the legislative director. Is that correct?PETRAS: Right.CONRAD: And did you do a review of the performance of the people who were working for you here in Washington?PETRAS: No, that was distributed to council in mid-year and year-end reports from Greenberg Traurig.CONRAD: So you played no role in making ongoing recommendations to the council as to the performance of their lobbying firm in Washington?PETRAS: Well, my recollection was they understood. They were coming out here and participating in the policy process themselves, going to meetings, talking about the issues.CONRAD: Would you comment? Would you make observations to the members of the council on how well or poorly the lobbying firm was performing?PETRAS: No, I don't recall doing that.CONRAD: You never made an assessment to the members of the council on the performance of the lobbying firms that had been hired?PETRAS: No, they would see, for example, if they were working on, let's say with a local government or county to help fund a road project, that would come into the council. They would see the legislation with the dollar amount in it. So they would know.CONRAD: You know, it sounds almost like an immaculate conception here, that you didn't really -- you were in this position, but it's very unclear to me listening to you what you did. It sounds like you did nothing but take a batch of papers from this group and hand them to this group. Was that your role?PETRAS: I'm not sure I would describe it like that.CONRAD: How would you describe it?PETRAS: It was more, taking the policy requests of a council -- different departments internally would go to the tribal council and say, we could really use this type of program, like a residential treatment center or a new school. And then that would be passed on to Greenberg Traurig. And then they would say, well, you need to have a proposal lined up. And then the different departments would put their proposals in.CONRAD: Did you feel that you had some responsibility for getting results on these various proposals?PETRAS: Some.CONRAD: Let me ask you a final question, if I could. Aside from the gifts that were given that you've described previously, did Mr. Scanlon ever pay you money?PETRAS: No.CONRAD: Did Mr. Abramoff ever pay you money?PETRAS: No.CONRAD: Did any of their agents ever pay you money?PETRAS: No.CONRAD: Did you ever have an understanding that you would be hired in the future by either Mr. Abramoff or Mr. Scanlon?PETRAS: No.CONRAD: Did you ever have an understanding that you would receive compensation at any time in the future from Mr. Scanlon or Mr. Abramoff?PETRAS: No.CONRAD: And so did you ever say to the council that you believed Mr. Abramoff was doing a good job?PETRAS: I may have. The council, when he was hired with Greenberg Traurig, was very involved. They came out here and worked and came to meetings at their offices.CONRAD: You may have said to the council that you believed Mr. Abramoff was doing a good job?PETRAS: Yes.CONRAD: Did you ever say to the council that you believed Mr. Scanlon was doing a good job?PETRAS: I may have from time to time.CONRAD: You may have from time to time? How frequently would you have told the council that he was doing a good job?PETRAS: It would depend what the project is. He was hired for three separate projects, Capitol Campaign Strategies were.CONRAD: All right. I thank the acting chairman.INOUYE: I thank you, Dr. Petras.The committee will stand in recess until our next hearing. And for the next two weeks the record will remain open. So if any of you wish to change your testimony or submit documents, please feel free to do so.ENDNOTES:[????] - Indicates Speaker Unknown [--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said.PERSON: MICHAEL SCANLON (94%); JACK ABRAMOFF (94%); BEN NIGHTHORSE CAMPBELL (94%); JOHN MCCAIN (57%); PETE V DOMENICI (57%); JAMES M INHOFE (56%); ORRIN G HATCH (56%); CRAIG THOMAS (56%); LISA MURKOWSKI (55%); GORDON SMITH (55%); HARRY REID (54%); KENT CONRAD (54%); DANIEL K INOUYE (54%); TIM JOHNSON (53%); DANIEL K AKAKA (53%); MARIA CANTWELL (52%);
2)Federal Document Clearing House Congressional TestimonySeptember 29, 2004 WednesdayCAPITOL HILL HEARING TESTIMONYCOMMITTEE: SENATE INDIAN AFFAIRSHEADLINE: LOBBYING BY INDIAN TRIBESTESTIMONY-BY: BEN NIGHTHORSE CAMPBELL, CHAIRMANAFFILIATION: OPENING STATEMENTOpening Statement of Chairman Ben Nighthorse CampbellCommittee on Senate Indian AffairsSeptember 29, 2004The Committee will come to order. Good morning. The Committee today is launching the first in a planned series of hearings into allegations of improprieties by Mr. Jack Abramoff and Mr. Michael Scanlon involving lobbying and so-called grassroots political activities on behalf of Indian tribes.To put these allegations into some context: Mr. Abramoff ran the government affairs department of Greenberg Traurig, a D.C. law firm, where he lobbied on behalf of several Indian tribes. Mr. Scanlon owned Capitol Campaign Strategies, a firm that provided grassroots political support in the form of coalition building, letter writing and telephone campaigns.The allegations that touched off this Committee investigation came to light earlier this year in a series of newspaper articles, alleging that:-Mr. Abramoff convinced some of his tribal clients to retain Mr. Scanlon's firms;-Mr. Scanlon charged the tribes exorbitant.-fees, while producing very little work product; and -Mr. Scanlon split these overcharges with Mr. Abramoff. Among the specific charges in the original and follow-up articles were that:-Mr. Abramoff and Mr. Scanlon received more than $45 million in fees from tribal clients;-Mr. Scanlon paid Mr. Abramoff $10 million that was not disclosed to the tribes or Greenberg Traurig;-Mr. Abramoff convinced at least one tribe to make donations to the Capital Athletic Foundation, a local charity which the press reported Mr. Abramoff supports; and-Mr. Abramoff and Mr. Scanlon may have influenced tribal elections.While our investigation is continuing, we have come to some very disturbing conclusions. Our investigation shows that these press allegations are not entirely accurate. The truth is worse -- much worse. The articles vastly understated both the amounts the tribes paid to Mr. Scanlon and the amounts he gave to Mr. Abramoff. In fact, all told, six tribes paid more than $66 million to Mr. Scanlon, and Mr. Abramoff received more than $21 million from Mr. Scanlon for his share of the scheme..-3-Those are eye-popping sums of money to be sure. As you might guess, it appears that Mr. Scanlon and Mr. Abramoff did not want a lot of people to know how much money they were making. The Committee's investigation has revealed that Mr. Abramoff did not inform his partners at the Greenberg firm of this arrangement. Neither did he or Mr. Scanlon disclose this arrangement to their tribal clients.But I must say, the allegation that most concerns me is that Mr. Abramoff and Mr. Scanlon may have tried to manipulate the outcomes of tribal elections for their own personal profit.Our investigation has found that, in at least two instances, Mr. Abramoff and Mr. Scanlon sought to profit by becoming involved in and attempting to manipulate tribal elections. They helped elect council members, at no charge, but apparently with the understanding that they would be compensated later. Shortly after successful campaigns by the candidates Mr. Abramoff and Mr. Scanlon supported, they solicited and received multi- million- dollar contracts, aided by the tribal council members they helped elect. Clearly these circumstances raise serious but unanswered questions about whether there was an explicit or implicit quid pro quo: We get you elected and you get us big money contracts.Today the Committee will hear testimony from individuals on both sides of these allegations. Their testimony will shed considerable more light on the information that I have discussed so far..-4- In uncovering the information that I have discussed so far, the Committee and its staff has combed through literally hundreds of thousands of pages of documents. While these documents were available to Committee Members prior to this hearing, it has not been available to the public.To assist the Members, as well as the general public, the Committee staff have prepared those documents most pertinent to the matters covered by this hearing. I now offer these documents for the record and move that they be entered into the record of this hearing. With those documents now in the record, I will relay, in brief, the story the documents provide of how Mr. Abramoff and Mr. Scanlon successfully manipulated tribal elections for their own profit.In the case of the Agua Caliente Band of Cahuilla Indians, whom we will hear from later today, Mr. Scanlon did everything but vote for the two tribal council candidates he supported.Just before the 2002 Agua Caliente tribal elections, Mr. Scanlon asked Mr. Abramoff: How much do you want me to spend on the AC race - I gotta get a team out there ASAP - Then rotate a new team in after that - So travel is gonna run about 20K and materials like 5-10K. Should we go for it?.-5-Mr. Abramoff's instructions were: "Yes, go for it big time." Which is just what they did. Mr. Scanlon's own documents, now in the record, show that he ran the overall strategy, crafted the messages, wrote his candidate speeches, coordinated a candidates night, ran the get-out-the-vote drive, and even counted the votes.Shortly thereafter, Mr. Scanlon pitched his business to the Agua Caliente and his own successful candidate made the motion to approve his contract over the objections of the long- time Chairman, Richard Milanovich.The same pattern occurred at the Saginaw Chippewa Tribe of Michigan, and we will hear their story later also. For example, just before the Saginaw Chippewa elections in 2001, Mr. Abramoff told Mr. Scanlon: I had dinner tonight with Chris Petras of Sag Chip. He was salivating at the $4-5 million program I described to him (is that enough? Probably not). They have their primary for tribal council on Tuesday, which should determine if they are going to take over (general elections in November). . . . He is going to come in after the primary with the guy who will be chief if they win (a big fan of ours already) and we are going to help him win.If he wins, they take over in January, and we have millions..-6- The day after the election, in which seven of the eight candidates running as "The Slate of Eight" won, Mr. Scanlon sent out the following email to his employees and Mr. Abramoff: Well team . . . Last night was amazing - The slate of 8 kicked ass, and I want to thank all of you for helping out - and watching the bottom line.We had less than three weeks to take 8 guys who never met before and get them elected. It was a great plan, and great execution by a great team. Just to recap, we elected 7 out of our slate of 8 . . . we now control 9 out of the 12 seats on the council. Maynard [Khagegab] will be elected Chief at the organizational meeting on December 4 th , and hopefully we will be doing some more work for the tribe in the near future.THIS MAKES US 2-0 in tribal elections this year! Earlier this year, the Slate of Eight were voted out of office - due largely to allegations at the heart of this investigation. Mr. Abramoff financed a recall effort run by the ousted tribal council.I will close my opening statement by bringing to light one additional matter that I find perhaps the most troubling on a personal level. It appears, from their own words, that Mr. Abramoff and Mr. Scanlon held their tribal. clients in absolute contempt - clients mind you that paid them millions of dollars. E- mails obtained by the Committee show that they regularly referred to their clients using contemptuous, even racist, language.Allow me to give you one example of what I am talking about. In an e-mail discussing a dinner meeting with a client, which is now part of the record, Mr. Abramoff asked Mr. Scanlon to meet with the client. The reason Mr. Abramoff couldn't attend?I have to meet with the monkeys from the Choctaw tribal council. You need to close the deal . . . with the client. Mind you these "monkeys," as Mr. Abramoff refers to the Tribal Council of the Mississippi Band of Choctaw Indians, had enriched him over a five year period with over $7 million in lobbying fees.The story the Committee will hear today, using Mr. Abramoff and Mr. Scanlon's own e-mail and documents, is not a pretty one. It is a story of greed run amuck. It is a story of two already powerful, wealthy men lining their own pockets with the hard- earned money of people whom they held in contempt and disregard.I now turn to Vice Chairman Inouye for his opening remarks. . . ..
3)Federal Document Clearing House Congressional TestimonySeptember 29, 2004 WednesdayCAPITOL HILL HEARING TESTIMONYCOMMITTEE: SENATE INDIAN AFFAIRSLOBBYING BY INDIAN TRIBESTESTIMONY-BY: BERNIE SPRAGUE, SUBCHIEFAFFILIATION: SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGANStatement of Bernie Sprague SubChief, Saginaw Chippewa Indian Tribe of MichiganCommittee on Senate Indian AffairsSeptember 29, 2004Mr. Chairman, I am Bernie Sprague, Sub-chief of the Saginaw Chippewa Indian Tribe. We have approximately 3,000 Tribal members located in Arenac and Isabella counties in the state of Michigan. I have served my Tribe for over 19 years and I have served as an elected official of the Saginaw Chippewa Tribe for almost 7 years. These last two years have been a difficult and trying period for my Tribe and myself. On behalf of the Saginaw Chippewa Indian Tribe, I want to thank the Committee for allowing me to testify and for conducting this important investigation. Our Tribe has a long and painful history since we first came in contact with settlers hundreds of years ago. Our Treaties with the United States government ceded millions of acres of our ancestral lands to the federal government. And like many Tribal nations across this country, our people have endured generations of broken treaties and empty promises. We have struggled for centuries against non-Indians who have used every tactic to steal our land and our precious resources that allowed our Tribe to survive. Unfortunately, Mr. Chairman, we fight a similar battle today. They may wear expensive suits and fancy shoes, but their greed, scare tactics and unscrupulous behavior is the same our people have faced for generations. And their goal to take from Indian people what is not rightfully theirs is once again being painfully repeated.There is not a word in my language that is strong enough to describe what these people have done to my Tribe. These unsavory characters who lie, deceive, and steal from Indian Tribes need to be exposed for who and what they are. In the fall of 2001, a small group of Washington, D.C. lobbyists quietly worked to elect eight tribal members to the twelve member Council. As this Committee knows, it.is unheard of to have non-Indians involved in Tribal elections. We do not know where they got the money to run this campaign, but we do know these lobbyists smeared the reputations of other candidates running for Tribal Council through a series of slick brochures sent to Tribal members. This type of campaign has never happened before on our reservation. We now know these lobbyists have engaged in the same practices with other Tribes across Indian country.We were shocked to learn that members of the former Tribal Council and the former Legislative Affairs Director, who is not a tribal member, were deeply involved in this scheme. We also now know that these lobbyists struck a deal with the candidates they supported at Saginaw Chippewa. The deal was that if they got elected to Tribal Council, these lobbyists would receive multi- million dollar contracts with the Tribe. Two days after the new Council took office in December of 2001, a divided Tribal Council approved the contracts to hire these firms against the strident recommendation of our Office of Legal Counsel. In doing so, they fulfilled their part of the deal, these D.C. lobbyists were hired, and the looting of the tribal treasury soon followed.In 2002, I was elected to Tribal Council in a special election. When I began to ask questions about the outrageous fees our Tribe was paying these lobbyists, I learned that there were no reports or documentation for any work they may have performed. One of the most outrageous examples of unaccounted for services involves the purchase of a voter database from Mr. Scanlon. Our Tribe paid nearly $4.5 million for a database of voters in Michigan. That's right, $4.5 million for a database that we never saw. The current Tribal Council researched this issue and found that you could purchase a database of every voter in the state of Michigan for less than $75,000. To this day, we do not know where this money went. And this type of spending was repeated over and over again, costing our Tribe over $14 million.There were other Tribal Council members who raised similar objections to this outrageous spending. Because we asked these questions, and we told Tribal membership what was happening, the Council majority removed all of us from Tribal.Council. We continued to object to their looting of the Tribal treasury and in the election of 2003, almost all of the former Tribal Council members lost their seats in that election. Once the new Tribal Council was elected in November of 2003, we called in Mr. Abramoff to discuss his contract. During this meeting, Mr. Abramoff was asked if he had a financial or business relationship with Mr. Scanlon. He told our Council he had no relationship with Mr. Scanlon. We now know that was not true.Mr. Chairman, I fully share your view that scheming to defraud tribes must stop here and now and that those responsible should be prosecuted to the fullest extent of the law. You will be pleased to know that the current Tribal Council has taken steps to ensure this never happens again to our Tribe. We are committed to taking steps within our Tribal Government to bring openness to our contracting process. We have drafted a Tribal ordinance that creates a hiring process that all lobbyists must follow. It ensures no secret deals or contracts for anyone. It mandates all contracts must be approved at open Tribal Council sessions.But, Mr. Chairman, and members of this Committee, I am not here just to tell you what has happened to our Tribe. We have worked to put together the pieces of this bizarre puzzle, but because we have limited access to various records, we have not had a full accounting of where our money went. And we do not have a full account of what these lobbyists were doing. I encourage you to continue this investigation as far as it needs to go.Mr. Chairman, I want you to know that our Tribe is prepared to do whatever it takes to get back the money that was wrongfully taken from us. We want to work with the Committee to get to the bottom of what these people did and to return to our people money that can be used for educating our children and health care for our elderly. From the beginning of this investigation, our Tribe has fully cooperated with the Committee and you can be assured that we will continue do so.Again, I want to thank the Committee for holding these hearings. I especially want to thank Senator McCain who has done so much to improve the quality of life for. Indian people and has been a leader in pressing for these hearings. I am available for any questions you may have.
4)FDCH Political TranscriptsNovember 17, 2004 WednesdayCOMMITTEE HEARINGCOMMITTEE: SENATE INDIAN AFFAIRS COMMITTEEU.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO) HOLDS HEARING ON LOBBYING PRACTICES INVOLVING INDIAN TRIBESSPEAKER:U.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO), CHAIRMANLOCATION: WASHINGTON, D.C.WITNESSES:MARC SCHWARTZ, PRESIDENT, MARC SCHWARTZ PARTNERS, INC.CARLOS HISA, LIEUTENANT GOVERNOR, YSELTA DEL SUR PUEBLOMICHAEL SCANLON, PRESIDENT, CAPITOL CAMPAIGN STRATEGIES, LLCU.S. SENATE INDIAN AFFAIRS COMMITTEE HOLDS A HEARINGON LOBBYING PRACTICES INVOLVING INDIAN TRIBES NOVEMBER 17, 2004 SPEAKERS:U.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO)CHAIRMANU.S. SENATOR JOHN MCCAIN (R-AZ)U.S. SENATOR PETE V. DOMENICI (R-NM)U.S. SENATOR CRAIG THOMAS (R-WY)U.S. SENATOR ORRIN G. HATCH (R-UT)U.S. SENATOR JAMES M. INHOFE (R-OK)U.S. SENATOR GORDON SMITH (R-OR)U.S. SENATOR LISA MURKOWSKI (R-AK) U.S. SENATOR DANIEL K. INOUYE (D-HI)RANKING MEMBERU.S. SENATOR KENT CONRAD (D-ND)U.S. SENATOR HARRY REID (D-NV)U.S. SENATOR DANIEL K. AKAKA (D-HI)U.S. SENATOR BYRON L. DORGAN (D-ND)U.S. SENATOR TIM JOHNSON (D-SD)U.S. SENATOR MARIA CANTWELL (D-WA) *CAMPBELL: Good afternoon. I'm glad we have such a good turnout for this. It's an important hearing.The committee -- this hearing today is the second in a series of hearings into allegations of improper business lobbying and financial transactions by Mr. Jack Abramoff, Mr. Michael Scanlon, and their entities on behalf of Indian tribes.At the committee's first hearing on September 29th, the evidence and testimony showed that under a variety of arrangements, six tribes paid Mr. Scanlon more than $66 million, and that Mr. Scanlon, in turn, paid Mr. Abramoff more than $21 million. The September hearing also revealed that Scanlon and Abramoff assisted in the campaigns and elections of tribal council members at two of the tribes, did not charge for their services, and after the elections, obtained multimillion dollar contracts from the same tribal councils that they helped to elect.Finally, the hearing revealed that while they were being paid tens of millions of dollars, Abramoff and Scanlon held their tribal clients in a very low regard, often referring to them as monkeys, troglodytes, morons, and worse.While the hearing in September disclosed very offensive evidence, our investigation has continued to uncover other distasteful and shocking details.Today's hearing will focus on the Tigua tribe of Texas. The story of Abramoff, Scanlon, and the Tiguas looks to me like nothing short of a classic shake-down operation.These men, working with allies, persuaded the state of Texas to force the closure of the tribe's casino located in El Paso. Having achieved this interim step of shutting down the tribe's casino, Abramoff and Scanlon then approached the Tiguas, offering their services to assist the tribes in re-opening the casino. And for their services, they charged the tribe the tidy sum of $4.2 million.Documents uncovered by committee investigators shed more light on the Tiguas. To assist the members, as well as the general public, committee staff has prepared those documents, the most pertinent to the matters covered by this hearing.These are the stack, and I now offer these documents and move that they be entered into the record at this hearing.Is there a second, Senator McCain?MCCAIN: I second.CAMPBELL: Senator McCain seconds it. And hearing no opposition, these documents will be included in our hearing testimony.These documents demonstrate the extent of Scanlon and Abramoff's cynical manipulation of the Tigua tribe. Let me just point out a few of these things in detail.In 2002, Abramoff first offered to help the Tiguas on a pro bono basis, provided the tribe hired him in the future as a lobbyist for between $125,000 and $175,000 per month. That's some pro bono work.And then, just last year, Abramoff approached the Tiguas with yet another scheme that would have benefited the Eshkol Academy, the Jewish boy school he founded, located just outside of Washington, D.C.Mr. Abramoff declined the tribal request that he be paid a retainer. Mr. Abramoff recommended that, at no cost to the tribe, the academy would buy up term life insurance policies on particularly elderly tribal members, and that the academy would be named as the beneficiary in case of their death. In effect, Abramoff asked to be paid by putting prices on the lives of tribal elders.We have witnessed a lot of unseemly and unethical and vulgar things during the course of this investigation, but asking a tribe to pay a lobbyist with death benefits, I think, is the most distasteful thing that we've seen yet in this hearing, or the former one.Writing to one of his key allies, in an effort to shut down the Tiguas' casino, Abramoff references the tribe's donations to the Democrats, saying, "I wish those moronic Tiguas were smarter in their political contributions. I'd love to get our mitts on that moolah," and that's in quotations. "Oh well," he continues, "stupid folks get wiped out.""Stupid folks get wiped out" -- and I think that about says it all about their opinion about their very clients, the Tiguas.Finally, on the day the Tigua tribe voted on their contract, Mr. Abramoff and Mr. Scanlon exchanged e-mails regarding a newspaper story about some 450 Indian employees at the tribe's recently shuttered casino being thrown out of work. This group of workers included an elderly woman who worried that she would not be able to find another job because of her age.Mr. Scanlon was evidently very excited that the article was on the front page. And in quotes, in his e-mails, "While they" -- the Tiguas -- "will be voting on our plan," Mr. Abramoff's reply to that: "Is life great or what?"Now, I have been around this town for almost two decades -- the strike to me is more than cynical. Rather than being concerned about the misfortunes of the tribe and some of its members, particularly the elderly, they were soliciting for business. Abramoff and Scanlon seemed happy, in fact, almost gloating about the prospect that the Tiguas are having their casino closed so that hundreds of employees would be thrown out of work, all because they were slated to make millions on trying to get the very casino re-opened.There is another element to the Tigua story that I feel compelled to address, too. It appears that Mr. Abramoff and Mr. Scanlon used the good name and reputation of our fellow members in Congress in their attempts to part the tribe from its money.You'll hear today from witnesses and read from documents indicating that Mr. Abramoff and Mr. Scanlon contended that Senator Dodd and Congressman Ney were enlisted to spearhead efforts in Congress to provide a legislative fix to the Tigua's problems.From what we know, that was not the case. Senator Dodd knew nothing about the proposed legislative fix, never supported it. And in fact, we are told that when the idea was proposed to his senior staff, it was rejected at least three times.Congressman Ney agreed to support a legislative fix after being told by Mr. Abramoff that Senator Dodd wanted the language. So there was a lot of shady things going on.In short, the evidence demonstrates that Mr. Scanlon and Mr. Abramoff told their clients that Senator Dodd and Congressman Ney would push their proposal, knowing full well that was not the case, in an effort to further persuade the Tigua tribe into continuing to paying them more millions of dollars.Today the committee will hear from the Honorable Carlos Hisa, the Tigua tribe's lieutenant governor; and Marc Schwartz, a consultant, who essentially was the point person for contact between the Tiguas and Abramoff and Scanlon.I would like to also mention another relevant item. For those of you who watched or listened to the September 29th hearing or who were here, you may recall that the committee repeatedly sought the presence of Mr. Scanlon and had been obliged to issue a number of subpoenas to that affect. At first, Mr. Scanlon's attorney declined to accept the subpoena, even though he had accepted other committee subpoenas for Mr. Scanlon and the various corporate entities he owned or operated.And at that time, I said to the U.S. Marshals, asked them very specifically to find out why he hadn't been served and to try to make sure that he was served when he did surface, and at some point, that he would sooner or later become before this committee.Well, that subpoena has been served and I understand he's here in the audience today, and we'll hear from him just a little bit later.There's another person who I believe rather flaunted the authority of this committee. That person is John Vanhorn (ph), who was served with a document subpoena that was due on October 5th. To this date, the committee has not received the documents called for under the subpoena, nor an explanation for his non-compliance.This will be the last committee I am chairman of, but I am convinced that Senator McCain, who will be the new incoming chair, and Senator Dorgan, who will be the new vice chair when we start again, will take that into consideration. And if those documents are not forthcoming, I would hope that they would ask for a vote of this committee to find him in contempt of Congress by not providing the information this committee asked.And with that, I will just go ahead and submit the rest of my testimony in the record, and the rest of my opening statement, because I know we have other members who would also like to comment.And since Senator Inouye is not here quite yet, I'll go ahead and ask Senator McCain if he would like to offer some opening remarks, since you were instrumental in asking for this investigation.MCCAIN: Thank you very much, Mr. Chairman. And thank you for your dedication to this effort.And in light of the fact that this may be the last committee hearing you may chair before your retirement, I would like to express, on behalf of all of my colleagues on both sides of the aisle, your outstanding contributions to Native Americans, to their welfare, and your continued dedication and commitment, and your outstanding work as chairman of this committee. We admire you and we respect you, and we will miss you enormously. And we wish you every success in the future."Is life great or what?" exclaimed Jack Abramoff in an e-mail to his friend and business partner, Michael Scanlon, on February 19, 2002. Few would have quibbled with Mr. Abramoff at the time. As we learned during the committee's September 29th hearing, the two men shared a secret partnership that connived to collect at least $66 million from six American Indian tribes across the nation.When Mr. Abramoff sent his February 19th e-mail, he had already received approximately $3 million from Mr. Scanlon's companies.Over the next couple of years, he would receive almost $18 million more. The two, however, kept their partnership hidden from the tribes, and hidden from the world. For these two men, it was seemingly all about the money.In February 2002, the money flowed, so life was indeed great for Jack Abramoff and Michael Scanlon. At the same time, life was not so good for the Yselta Del Sur Pueblo of El Paso, Texas, also known as the Tigua. The tribe was fighting for its financial life in the Texas courts and legislature.According to a September 26th, 2004, article in the Washington Post, the state of Texas had sought a judicial order closing the tribe's Speaking Rock Casino. The Post article also reported, in some detail, how Mr. Abramoff and Mr. Scanlon had worked behind the scenes to support Texas efforts to close the casino. They had participated in a grassroots and public relations campaign that was designed, in part, to lend political cover to Texas legal efforts.Evidence suggests that Mr. Abramoff and Mr. Scanlon also worked behind the scenes in Texas to quash the Tigua's attempts at a legislative solution. In an internal e-mail, Mr. Abramoff boasted to colleagues in 2003, quote, "A bill is moving, H.B. 809, in the Texas state House, which will enable the Indians in Texas to have totally unregulated casinos. It passed out of the House Criminal Jurisprudence Committee by a 6:2 vote."The current speaker, Tom Craddick, is a strong supporter. Last year we stopped this bill after it passed the House using the Lieutenant Governor Bill Ratliff, to prevent it from being scheduled in the state Senate."Former Texas Lieutenant Governor Ratliff did refuse to schedule legislation for a floor vote. The state's legal efforts were successful and the Tigua closed its casino on February 12, 2002.It was a low point for the tribe. According to tribal representatives, the revenues generated from the Speaking Rock Casino helped to lift the tribe out of poverty and enabled the tribe to provide education for its children and health care for its elders, and it gave them hope where there was none before.The closure of the casino, according to the tribe, threatened the promise of a new and better tomorrow for future generations.In the Tigua's desperation and despair, Mr. Abramoff and Mr. Scanlon found opportunity and hope, not for the tribe but for themselves. In the tribe's misery, Jack Abramoff and Michael Scanlon saw money. Quote, "I'm on the phone with Tigua. Fire up the jet, baby, we're going to El Paso," wrote Jack Abramoff in a February 6, 2002 e-mail. Responding, Michael Scanlon summarized their objective, "I want all their money."When Mr. Abramoff and Mr. Scanlon approached the tribe, they painted themselves as sympathetic to the tribe's plight. In a February 18, 2000 e-mail, the tribal consultant, Marc Schwartz, which we have blown up onto a poster board, Mr. Abramoff wrote, "Our motivations for this representation are manifold, including the critical importance of not allowing tribal sovereignty to be eroded by the actions of the state of Texas. While we are Republicans and normally want all Republicans to prevail in electoral challenges, this ill-advised decision on the part of the Republican leadership in Texas must not stand. And we intend to right this using, in part, Republican leaders from Washington."Mr. Abramoff downplayed his primary motivation by writing that, quote, "It would be insincere of me not to note that our other motivations include the hope and expectation that if we succeed, we can expect to have a long-term relationship with the tribe by representing their interests on the federal level."Mr. Abramoff's statement was the height of hypocrisy, the pinnacle of deception. The very injustice he described, he and Mr. Scanlon had helped to create.With a straight face and without expressed remorse, Jack Abramoff and Michael Scanlon solicited the tribe to retain them to help re-open the Tigua casino. According to witnesses interviewed by my investigators, neither Mr. Abramoff nor Mr. Scanlon ever disclosed their role in the lobbying and public relations campaigns waged to close the same Tigua casino. They certainly never disclosed the lucrative partnership they shared.Their duplicity was pervasive. At the same moment they solicited the tribe, Jack Abramoff wrote, "I wish those moronic Tiguas were smarter in their political contribution. I'd love us to get our mitts on that moolah." That's exactly what Jack Abramoff and Michael Scanlon set out to do.The very next day, on February 12, 2002, they traveled by private jet to the Tigua reservation in El Paso. There they made their pitch.According to witnesses at that meeting, Jack Abramoff offered to help the tribe for free. He would later repeat that promise in his February 18th e-mail to Mr. Schwartz. But Mr. Abramoff insisted that the tribe had to retain Michael Scanlon for the effort to be successful. Jack Abramoff claimed that Michael Scanlon was the preeminent expert in grassroots lobbying. "Michael Scanlon wasn't cheap", Mr. Abramoff told the tribe, "but he was the best there was in the business."Mr. Scanlon's asking price: $5.4 million.Of course, from the last hearing, we know that when Mr. Abramoff advocated Mr. Scanlon's interests, he was advocating his own financial interests. Make no mistake, Jack Abramoff was not going to work for free.On February 18, 2002, Jack Abramoff submitted to the tribe a document entitled "Operation Open Doors," a proposal prepared by Michael Scanlon. Mr. Abramoff endorsed the proposal wholeheartedly: "The proposal Mike Scanlon has prepared is, in my view, the best chance the tribe has to overcome the gross indignity perpetrated by the Texas state authorities.""Operation Open Doors" supposedly entailed a massive undertaking funded by a nationwide political operation: "This political operation will result in a majority of both federal chambers either becoming close friends to the tribe, or fearing the tribe in a very short period of time. Simply put, you need 218 friends in the U.S. House and 51 senators on your side very quickly, and we will do that through both love and fear."Scanlon said his firm promised to build two customized databases for the tribe, conduct numerous polls, and wage a grassroots and grasstops (ph) campaign. While he did not guarantee success, Mr. Scanlon wrote, quote, "Under no circumstances do we believe it could be classified as high-risk either."Mr. Scanlon's promises have so far proven empty. Witnesses interviewed by my staff can confirm that the database was not customized. Scanlon Gould did not even construct it. They subcontracted out the work for less than $100,000, a small sum that pales in comparison to the $1.8 million he charged the tribe for it. And it seems Scanlon Gould failed to provide the vast majority of services to implement the, quote, "massive undertaking" the tribe was told would occur.On February 19, 2002, El Paso Times newspaper reported that the tribe had to lay off 450 employees as a result of shutting down its casino. It was not enough the two men sought to capitalize on the tribe's plight, they actually reveled in it. Mr. Scanlon forwarded the article to Mr. Abramoff, advising him, quote, "This is on the front page of today's paper, while they'll be voting on our plan."It was in response to Mr. Scanlon that Mr. Abramoff dashed off his, "Is life great or what?" e-mail. Jack Abramoff and Michael Scanlon smelled money. In fact, 19 minutes later, Mr. Abramoff e- mailed Mr. Scanlon again, "One hour, 45 minutes and counting, my friend."The tribal council ultimately decided to move forward with the plan, believing Mr. Abramoff's representation that he already had, quote, "a couple of senators willing to ram this through initially," unquote.The key to Mr. Abramoff and Mr. Scanlon's plan was secrecy. No one was to know about their involvement in the effort to assist the Tigua. According to witnesses interviewed by my staff, Mr. Abramoff would take no money from the tribe to avoid having to register under the Lobbying Disclosure Act.In meetings and telephone conversations with witnesses, Jack Abramoff maintained his role was simple. He would have one or more representatives or senators slip into a conference report very discreet language allowing the Tigua to re-open their casino. After passage of such an amendment, Michael Scanlon and his company would then run a public relations campaign to beat back any attempts to repeal the language.Almost immediately, Mr. Abramoff's cover was nearly compromised when he was included on an e-mail list from a tribal representative. Mr. Abramoff was furious. In an e-mail to Mr. Scanlon, Mr. Abramoff wrote, and I will try to redact the profanity so I don't offend anyone, "That f-ing moron put my name on an e-mail list. What a f-ing moron. He may have blown our cover, damn it. We're moving forward anyway and taking their f-ing money."That the secrecy and hence the effort may have been compromised could not dissuade Mr. Abramoff from taking the tribe's money. He was resolved to take the tribe's money whether he could help them or not. Even before the Tigua signed a formal contract with Scanlon Gould Public Affairs, Mr. Abramoff could not wait for the money to arrive.On March 3, 2002, he asked Mr. Scanlon, "Did we get the Tigua money?" Even after the tribe sent a check for $2.1 million, the two could not contain their insatiable greed. On March 19, 2002, Michael Scanlon e-mailed Jack Abramoff asking, "Is he" -- meaning Marc Schwartz -- "happy? Where is our f-ing money?"Abramoff responded 10 minutes later, instructing Mr. Scanlon to call Mr. Schwartz and "ask him for our damn money."By the end of March, the tribe had paid Scanlon Gould a total of $4.2 million for what was supposedly going to be a massive public relations campaign.And on April 8, 2002, Capitol Campaign Strategies, the alter-ego of Scanlon Gould, paid $2.1 million to Mr. Abramoff's company, Kay Gould (ph).During this time, Jack Abramoff and Michael Scanlon identified election reform as the vehicle unto which they would insert the Tigua's provision. Of course, only after the tribe had paid Scanlon Gould millions of dollars did Michael Scanlon re-assess the likelihood of success.In an April, 2002 report to the tribe, Mr. Scanlon wrote that, quote, "With political cover generated, we feel pretty good about our prospects of tacking the legislation on and getting it through, but please be advised we are taking the most high-risk approach to this by using election reform as a vehicle."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.Despite receiving $4.2 million from the tribe, Jack Abramoff and Michael Scanlon wanted more. From mid to late 2002, Jack Abramoff hounded the tribe for contributions to the Capital Athletic Foundation, his private charitable foundation that he used to support the all-boys school he had founded and operated in Maryland. He asked the tribe to contribute $50,000 to a golf trip to Scotland sponsored by his foundation. Ultimately, the tribe declined. That did not deter Mr. Abramoff and Mr. Scanlon, however.In a September 18, 2002 e-mail, Mr. Abramoff reminded himself, quote, "We need more money for backlash after the Tigua launch." Two and a half hours later, Mr. Abramoff write to Mr. Scanlon, "Did you speak with Marc Schwartz? I have a great idea. Let's tell him we are launching all missiles to get the bill a vote, and therefore we are using all our resources so that once the bill passes, we immediately need more money, OK?"Approximately one month later, election reform became law without the Tigua's provision. To this day, the tribe remains unclear on where the $4.2 million they paid Scanlon went, because it appears it was not used for the purportedly massive P.R. campaign Mr. Scanlon had promised to wage on their behalf.Mr. Abramoff's pursuit of more money from the tribe did not end in 2002. Only last year, Mr. Abramoff attempted to convince the tribe to take out life insurance on its elders and make Eshkol Academy, the all-boy school he founded, the sole beneficiary.Mr. Abramoff claimed that the proceeds of the policies would go to his school, which would then pay Greenberg Traurig for the lobbying fees incurred by the Tigua.I again direct everyone's attention to the poster, which reflects Mr. Abramoff's e-mail to Mr. Schwartz on the subject: "Marc, per our discussion, the following short memo describes the opportunity to obtain lobbying funds via the insurance program. This will also greatly benefit our school, which means the whole world to me. If it can work, it's truly a win-win."On behalf of a registered non-profit charity such as a school, CFS (ph) will enroll Native American elders, 75 years and older, in term life insurance. The premiums will be entirely financed with both debt and equity, using the insurance policies, no obligation of any kind to the tribe or Native Americans of the charity, and repaid by the proceeds of the policy at the demise of the insured. Any remaining funds at that time will accrue to the charity."From these funds, the school shall pay Greenberg Traurig its fees and any out-of-pocket costs for a new Washington representation. The Washington representation worked on by Greenberg Traurig, made possible as a consequence of this program, should be for the sole benefit of the tribe, including efforts to obtain federal appropriations grants and other legislative and administrative assistance for the tribe."After brief consideration, the Tigua rejected it, because, quote, "It just wasn't right."The story I just shared with you, and which we will learn more about today, is tragic. Jack Abramoff and Michael Scanlon preyed upon the tribe and its members when they were most vulnerable. They played upon their hopes and fears. They went to El Paso, selling salvation, and instead delivered snake oil.Those two men walked away with money that would have gone, and should have gone to the children and elders of the tribe. Why? Because Jack Abramoff and Michael Scanlon were all about the money.In closing, I just want to thank the Tigua tribe, Lieutenant Governor Hisa, and Mr. Schwartz for their invaluable assistance and continuing cooperation in the investigation, and for their participation in today's hearing.Mr. Schwartz told my investigators that after the Washington Post article spoke earlier this year about the other tribes, Mr. Abramoff called him and said, "Don't worry. No one will ever know about the Tigua."Well, Mr. Abramoff, the committee knows. And now the rest of the world knows, too, about the gross indignity it seems you and Mr. Scanlon perpetrated against the tribe.And I pledge, as a member of the Committee on Indian Affairs, that we will not stop until the complete truth is told.I thank you, Mr. Chairman.CAMPBELL: Thank you, Senator McCain.I'd like to yield to Senator Dorgan, who will be the incoming vice chairman of this committee, starting in January.Senator Dorgan.DORGAN: Mr. Chairman, thank you very much.And let me add my voice to that of Senator McCain, to thank you, Senator Campbell, for the remarkable work you have done over a long period of time. It's been an honor to serve with you.It would serve no purpose for me to repeat much of what -- that which Senator McCain has just described. I think he has described this in great detail.And all I can say is that the substantial amount of reading I have done, which includes almost all of the memos that have been referenced here, leaves me to say that those involved in this sickening episode should all hang their head in shame. It is a disgusting thing to investigate and to read. And it's about double- dealing. It's about secret deals. It's about billing for things that weren't performed. But mostly it's about deceit and deception.And I would agree with Senator McCain, we need to follow this to the end of the trail, find out who did what and make them accountable for it. So let me not repeat it.Let me thank my colleague, Senator McCain, for the statement that you have made, which I think is explicit in its detail.Thank you very much.CAMPBELL: Senator Conrad?CONRAD: I thank the chairman, and I want to thank my colleague as well, Senator McCain and Senator Dorgan, certainly Senator Inouye as well.It's hard to find the words to describe this. It's despicable. It's corrupt. Most of all, it's incredibly, deeply cynical. It's hard to believe that people could sit around and conjure up a scheme like this, who, on the one hand, work behind the scenes to get casinos shut down, and then to go to the affected tribes and ask for millions of dollars to get the casinos opened back up.And all the time to refer to their clients as morons, as idiots, troglodytes -- it's a level of arrogance that, I must say, is almost unparallel.I mean, if you were to set out to write down a scheme that would reveal the basest nature of people, you'd have a hard time coming up with more examples than have been provided by this case. Mr. Jack Abramoff, Michael Scanlon, taking advantage of the political system in the most crass and crude way, all for their own enrichment. You have to ask yourselves, what kind of people are these?What kind of people are these that would cook up such a scheme and then actually carry it out? It's despicable. And they deserve the harshest treatments that the legal system can provide.I thank the chairman.CAMPBELL: Thank you.And we will now proceed with the first panel, and that will be Lieutenant Governor Hisa of the Tigua tribe and Mr. Marc Schwartz.Would you please raise your right hand? Do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God?Please be seated.And I think -- excuse me -- Mr. Schwartz, I think we'll go ahead and start with you, if it's all right.You may have to pull that microphone over a little closer.Go ahead and proceed.SCHWARTZ: Thank you, Mr. Chairman and distinguished members of the committee.My name is Marc Schwartz and I have had the privilege of working with the Tigua tribe in matters involving public relations and government affairs since 1998.I'm sure many of you are wondering just how Abramoff and Scanlon came before the Tigua tribe, maybe more importantly, how seemingly bright folks could have fallen for their schemes.In early 2002, Mr. Abramoff, through an attorney representing the Choctaw tribe, had offered to visit with the Tigua tribe about a solution to their gaming problems.I first spoke with Mr. Abramoff on February 6th, and he expressed his indignation over what had occurred with the tribe, and specifically referred to the need to right the terrible injustice that had been brought upon the tribe.Unlike others who offered solutions, Mr. Abramoff had both the credentials, as best could be determined, and more importantly, had offered the service of both himself and his firm at no charge. This was quite a difference from the usual band of con men who surface during a crisis to prey on those involved in the crisis.During Mr. Abramoff's first meeting with the tribe on February 12th, he characterized his presence at the meeting alternately as being interested in righting the wrong that had been perpetrated on the tribe, and representing the tribe after his ultimate success in a legislative effort.He explained to us that Mr. Scanlon was a preeminent expert in grassroot politics, and that with his experience with Representative Tom DeLay, had developed a reputation as, quote, "the go-to guy" for the most difficult campaigns.Also during that meeting, Mr. Scanlon represented that his part of the effort would be expensive, essential, and exclusive. He described in his proposal to the tribe shortly after the first meeting that, quote, "Operation Open Doors is a massive undertaking, fueled by a nationwide political operation. This political operation will result in a majority of both federal chambers either becoming close friends of the tribe, or fearing the tribe in a very short period of time."After the initial meeting, in an e-mail to me dated February 18th, Abramoff said, and I quote, "As we discussed, until we are able to achieve the federal legislative fix, we at Greenberg Traurig will not be engaged by the tribe for services officially. All our work will be done on a pro bono basis."Once the legislation is signed by the president, we would anticipate the tribe engaging us to represent it at the federal level and assist with efforts to obtain a Class III compact. Our normal rate in our tribal government practice is between $125,000 and $175,000 per month," end quote.Critical to the success of the program, according to Abramoff and Scanlon, was a necessity to maintain absolute and complete secrecy. The friendly legislators that would be carrying this measure for Abramoff required this, and Abramoff explained that this was the most important concept to the program; of course, second, possibly, to the political contributions that had to be made in support of his friends.From every outward view, Mr. Abramoff was searching for legislation and, quote, "friends on the Hill" that would do this for him. Mr. Scanlon and his associates were busy creating the tribe's monolithic political response effort that would be centered around a customized data source, one that I had come to believe, from their accounts, would be the envy of even the most sophisticated presidential campaigns.In late March of 2002, Abramoff had reported that he and his staff had spoken to Representative Bob Ney, who was carrying the Election Reform Bill, and had agreed to carry the Tigua language.On March 26th, I received a phone call from Mr. Abramoff telling me that the tribe needed to make additional contributions to Congressman Ney through some pacts he had. He told me it was critical. I approached the tribal council with the request for the $32,000 in contributions, and it was approved.Later that same day, I received an e-mail from a Greenberg Traurig staff person with the breakout and addresses for those contributions.Each of the additional contributions were outside of what the council had previously approved as part of the initial agreement with Abramoff. But those kinds of requests continued throughout the summer of 2002.On June 7th of the same year, I received an e-mail from Abramoff stating that Congressman Ney had asked if the tribe could cover an expense for a trip to Scotland. The cost was suggested to be $50,000. And again, Abramoff referred to him as "our friend," quote.As the election reform measure languished throughout the summer, Abramoff and Scanlon continued to report on substantial progress and a virtual guarantee of success.During that time I requested a meeting between tribal representatives and Congressman Ney. Abramoff set up the meeting in early August of 2002. In an e-mail, Abramoff mentioned that Congressman Ney did not want his trip to Scotland brought up, as he would show his appreciation to the tribe later.For the rest of the month leading up to October of 2002, both Abramoff and Scanlon continued to report that the Senate side would not be a problem since Senator Dodd had agreed to include the solution through his side.It wasn't until the announcement of the final passage of the election reform measure that Abramoff phoned to say that Congressman Ney had reported Senator Dodd had gone back on his word and stripped the measure from the committee report.Mr. Chairman and members of the committee, you can only imagine the sheer disappointment we all felt about these events. For an almost sure thing, as Abramoff had stated numerous times, to utter defeat was extremely hard to take.In a phone call on October 4th, Abramoff said Congressman Ney wanted to speak directly to the tribal council to express his outrage. On October 8th, Congressman Ney held a conference call with the tribal council and told them about his disbelief that Senator Dodd had gone back on his word. He further reported that he would continue to work on the issue and believed that the tribe was entitled to their gaming operation.We were extremely disappointed by all of these actions, and certainly by the results that we've discovered since the outcome of the Washington Post articles.I thank you all for your kind attention and for the opportunity to share this information with you.CAMPBELL: Normally we take both people's testimony first, but since you have referred, in your testimony, to several of our colleagues, I'd like to yield to Senator Dorgan for a statement from Senator Dodd.DORGAN: Mr. Chairman, the committee did contact Senator Dodd, having the information that Mr. Schwartz revealed, and Senator Dodd asked that his statement be included in the record and also read for the record. So I will...CAMPBELL: Please proceed.DORGAN: I will read it in as much as his name was used. And these are all in quotes.Statement of Senator Chris Dodd on Marc Schwartz's testimony, quote: "I don't know Jack Abramoff or Mike Scanlon" -- again, this is Senator Dodd -- "so any representations they might have made without my knowledge regarding me and efforts at recognition of the Tigua tribe are categorically wrong and false."They never contacted me on recognition of the Tigua tribe, and I never represented either to them or Congressman Ney that I would, in any manner, work legislatively to recognize the Tigua tribe."Congressman Ney's staff and Lottie Shackelford did approach my office during the waning hours of negotiations over the HAVA legislation to inquire whether recognition provisions for the Tigua tribe could be included in the bill. The suggestion was summarily rejected. The fact that the HAVA Bill never included any legislative language regarding this tribe should confirm that fact in no uncertain fashion."Continuing to quote Senator Dodd, "I am particularly proud of the HAVA legislation and am angry that there were those who were seeking to use it to advance their own interests."I am also, needless to say, angry that unbeknownst to me, people were trading on my good name, especially since I have aggressively fought for years to reform the recognition process so that the criteria at the BIA is based upon facts and not politics. I intend to continue to push for those reforms, especially since this activity clearly highlights further problems with the recognition process."I had no involvement whatsoever in any effort to recognize this tribe. Mr. Abramoff and his associates need to be held accountable for their duplicitous, greedy and underhanded actions."That, in its entirety, is the statement from Senator Dodd that he wished to be read into the record today.CAMPBELL: It will be included in the record in written and verbal form.Senator Inouye, did you have any opening comment before we proceed with Lieutenant Governor Hisa?INOUYE: Yes.I am sorry that I am late, but as you know, we are having our appropriations conference now, trying to resolve our differences before we end the session.But Mr. Chairman, as we undertake the second hearing on the lobbying practices, I would just like to observe that in the 27 years I have served on this committee, I don't believe we've had before us such a sad and sickening set of circumstances.And I hope, Mr. Chairman, that we will be able to reach a resolution of the matters as soon as possible and that this may never happen again.Thank you.CAMPBELL: Thank you.Lieutenant Governor Hisa, would you like to proceed?HISA: Yes.Chairman, Vice Chairman and members of the committee, my name is Carlos Hisa. I am the lieutenant governor for the Yselta Del Sur Pueblo, a thoroughly recognized Indian tribe located in El Paso County, Texas.The Pueblo was initially contacted regarding Jack Abramoff by Brian Rogers (ph), an attorney in Santa Fe, New Mexico, who indicated that Jack Abramoff was a prominent Washington lobbyist who had helped a number of Indian tribes. Attached under tab one is a memorandum from Norman Gordon (ph), one of our tribal attorneys, to Tom Diamond (ph) regarding a conversation with Brian Rogers (ph).As a result of this contact, we authorized Marc Schwartz, our public relations representative, to contact Jack Abramoff regarding a possible proposal, which Marc Schwartz did. Marc Schwartz indicated that Jack Abramoff was a prominent lobbyist and worked for one of the largest law firms in Washington, D.C. He was identified in various national magazines and newspapers as one of the top lobbyists in Washington, D.C., who had helped several Indian tribes in legislative matters.Jack Abramoff and Mike Scanlon came to El Paso in early February of 2002 and met with Governor Albert Alvidrez, Marc Schwartz, and a tribal attorney, Tom Diamond (ph), who made a proposal for lobbying efforts to gain federal legislation allowing the tribe to resume gaming, requiring an extensive lobbying effort by Scanlon Gould & Associates, and Jack Abramoff.On February 18, 2002, Jack Abramoff sent an e-mail to Marc Schwartz, a tribal representative. Such for that the services he proposed to provide to the tribe and a copy of the Scanlon Gould Operation Open Door proposal.Attached under tab two is a copy of the e-mail and the enclosure.Mr. Abramoff represented that the legislative effort would not succeed without the implementation of Operation Open Door, and the required database to be developed by Scanlon Gould.On February 22, 2002, Jack Abramoff appeared before the tribal council in El Paso, Texas, and made a verbal presentation of the proposal outlined in the February 18, 2002 e-mail and the Operation Open Door document.Subsequent to that meeting, later that day tribal council made a counterproposal to Abramoff, lowering the Abramoff/Scanlon Gould proposal by $1.5 million, offering a total compensation package of $4.2 million.Marc Schwartz was directed to communicate this to Abramoff, and did so. Abramoff accepted the tribe's counteroffer.Mike Scanlon provided a memorandum of agreement, which was executed by the tribe on March 5, 2002.Attached under tab three is a copy of the memorandum of agreement.Subsequent to the signing of the memorandum of agreement, the tribal council directed Marc Schwartz, tribal representative, to be the direct contact with Abramoff and Scanlon Gould regarding the operation of endorsed projects.The tribe provided all information requested to Scanlon Gould and Abramoff for the creation of the database required for Operation Open Door, and provided all cash disbursements required for the political contributions and other expenses required by Operation Open Door.From April of 2002 through the summer, numerous oral representations were made by Jack Abramoff and Mike Scanlon with regards to the progress of the projects, so specifically they identified a number of bills that the language modifying the restoration act, which would allow the tribe to resume gaming, were moving, and the bill language would be able to be slipped into those bills.Later spring and early summer, 2002, Abramoff and Scanlon identified the Election Reform Bill as a bill that would contain the amendment to the restoration act language that would allow the tribe to resume gaming.HISA: Marc Schwartz, tribal representative, received a number of e-mails and verbal communications from Abramoff and Scanlon that the progress of the bill was a little slower than had been anticipated, but was moving forward and was expected to fall into place in late summer.During this period of time, the tribe made numerous requests through its representative, Marc Schwartz, to Abramoff and Scanlon regarding the database and the progress of the Open Doors project. We were told that the progress of the bill had slowed down, but that everything was still in place on numerous occasions throughout the summer of 2002.In October, 2002, we were informed by Abramoff and Scanlon, through Marc Schwartz, that the language amended in the restoration act, which would allow the tribe to resume gaming, was taken out of the Election Reform Bill.After the Election Reform Bill passed at the end of 2002 without the language amending the restoration act, which would have allowed the tribe to resume gaming, Abramoff and Scanlon continued to make representations that there were other bills that would be available to place the necessary language amending the restoration act into, and they expected to still successfully complete Operation Open Door.Tribal representatives met with Jack Abramoff and Michael Scanlon in January of 2003, where similar representation was repeated. Additionally, the tribal representatives, for the first time, were able to see the database that had been proponently (ph) created to complete Operation Open Door.Subsequent to the disclosure in the Washington Post of the Senate committee investigations into alleged improprieties and misconduct by Jack Abramoff and Mike Scanlon, the tribe has examined all its documents, correspondences, and spoken with key tribal representatives, officials, and employees involved to determine whether or not services promised to be performed by Scanlon and Abramoff were ever performed.After a lengthy investigation, it does not appear at this time that the database was ever used in the manner represented in any way or benefit to the tribe, and there was never any success by Abramoff or Scanlon in placing any language amended in the restoration act into any bill that was considered by Congress.More specifically, Jack Abramoff and Scanlon Gould Associates failed to provide the following as they had promised: Number one, they failed to make contact with key suppliers and vendors as outlined in Operation Open Doors, whether by personal contact, phone calls or written communications.Number two, failed to provide suppliers and vendors with letters to send to their legislative representatives.Number three, failed to provide a phone bank operation for large suppliers and vendors.Number four, failed to generate 375,000 contacts as set forth in Operation Open Doors.Number five, failed to complete the program in the time promised.Number six, failed to have employees and vendors and suppliers write and call into targeted legislative districts.In fact, the database was essentially a compilation of the tribe's suppliers, vendors and customer list, which were provided to Scanlon and Gould and Jack Abramoff. It appears that Scanlon Gould did nothing more with respect to the creation of the database than rearrange the list provided to them by the tribe.It now appears that Abramoff Scanlon, under cover of various religious groups, worked behind the scenes to shut down the operation of the tribe's casino, and then came to El Paso, and with false promises, said to the tribe that they could get the casino re-opened through Operation Open Doors, undoing the wrong they had secretly helped cause so they could cheat us out of our money.We ask that you do the following: Punish the people who cheated us. Help us recover the money we were cheated out of, and pass laws to protect all Americans from corrupt political activities.On behalf of my tribe, Yselta Del Sur Pueblo, I want to thank the committee for its critical work in investigating and remedying the wrongs perpetrated by Jack Abramoff and Michael Scanlon on my tribe and on other Native American tribes.CAMPBELL: Thank you.Your -- before I ask some questions, I'm going to yield to my colleagues, too. I read your testimony. On the last page, as you mentioned, you would ask us to punish the people who cheated, is one of the reasons this committee has moved a little bit slowly, as there is an ongoing investigation by the Justice Department, and it's yet to be determined what they'll come up with. But I have a hunch that's going to be done, very frankly.Secondly, to help you recover the money, that's probably going to be something you'll have to take up in the civil courts, to try to get your money back. And I hope you do that, very frankly.And third, to pass laws to protect all Americans from corrupt political activity -- we've already got it on our books. Passing the laws and getting them implemented -- there's always a loophole somewhere, or a way to get around them of a person who's larcenous in nature, very simply. So we hope that the ones we already have on the books are going to be enough to do the job.In any event, let me ask a couple of questions of each of you before I yield to my colleagues.Mr. Schwartz, thank you.And by the way, thank you both for cooperating with this investigation. I know sometimes it's a little embarrassing or difficult to come before a committee, in front of the cameras and newspaper people and so on, and admit that, very frankly, you got scammed. I mean, that's not an easy thing to do.But I'd like to ask you a couple of questions about it.Was this the first time the tribe has dealt with a high-powered Washington firm? Maybe Mr. Schwartz could answer that.SCHWARTZ: This had been the first time that the tribe -- yes, Senator, it had been the first time.CAMPBELL: Good.Well, I hope -- very frankly, there's a lot of them. Look in the yellow pages. You'll find pages and pages of people who represent different entities in America. And I would hope you understand that this is not a norm, in my view, from most people that are back here representing their clients and different things. It's just something that happened that went terribly wrong.On February 18th, the -- I think we have it. In fact, exhibit 16, it was either up there a minute ago or is now. Jack Abramoff proposed his lobbying work for the Tiguas would be done on a pro bono basis. Did you take that to mean that that was a normal process by which firms dealt with tribes here, that they would do things on a pro bono basis?In fact, they do. But the glitch here, of course, was we'll do it in a -- it was at least implied -- "we do it on a pro bono basis and then you ante up with $125,000 to $175,000 per month after we get it done."Did you take it to -- did you believe at the time that was the normal kind of things that's done?SCHWARTZ: No, Senator, we did not think it was a normal situation.CAMPBELL: Did you think that when he proposed that, that that would have been a fair exchange, or that it was -- did it strike you as a quid pro quo arrangement.SCHWARTZ: Absolutely, based on his discussions with us privately on -- in telephone calls and then from the council, that there would be a payoff, so to speak, for the firm once the casino was opened. So yes, it certainly would have been a quid pro quo.CAMPBELL: Mr. Hisa, these activities were particularly offensive to me, the -- what was so-called a elderly legacy program.Being a Native American yourself, how did you react to that when you found out that they were going to pay for the lobbying efforts with a scheme that would take out its life insurance policies on your tribal elders?HISA: I felt uncomfortable. It didn't seem right.CAMPBELL: And it was rejected by the tribe too, is that correct?HISA: It was approved initially. But through going -- the tribal council got together outside the meeting and we discussed it for a week or two, and then we just decided not to move forward on anymore.CAMPBELL: We have exhibit 58. Let me put that back up here -- somewhere we have it. Exhibit 58 is the e-mail from Mr. Abramoff outlining the elderly legacy program, in which he said the scheme provided the opportunity to provide lobbying funds by this insurance program, obviously, that if tribal members died, that that money would pay for his efforts.He also said in there that "it would mean the whole world to me if the tribe would accept this."It seems to me that he got a real twofer -- first of all, this arrangement would benefit the school that he supported, that private charities supported, and also, it would pay Greenberg Traurig for their fees and out-of-pocket costs for Washington representation.Mr. Schwartz, was your reaction to that as cynical as mine is, if I'd have heard it for the first time?SCHWARTZ: It was certainly extremely a morbid subject. It was...CAMPBELL: Yes, morbid. The word morbid fits pretty well, I think.SCHWARTZ: The context was that he was searching for a way to expand his ability to serve the tribe without, in his mind, draining any of the precious resources of the tribe.CAMPBELL: Did he represent to the tribe that it was a normal or a legal kind of arrangement that was often done, or did...SCHWARTZ: My recollection, Senator, was that his representation of it was it was a brand new deal.CAMPBELL: It sure was.SCHWARTZ: The firm had just developed, and it was a great concept.CAMPBELL: It sure was.OK, I'd like to yield to Senator Inouye for questions.INOUYE: I just have a few.At your first meeting -- and I would call on Mr. Schwartz -- did you have anything to lead you to believe that you were dealing with fast-talking Washington con men?SCHWARTZ: No, Senator, and thank you for the question.At the time that Mr. Abramoff made the initial contact with us, and it had come through the tribal attorneys, we had done an Internet search just as kind of a cursory effort to see who he was, never having heard his name. And at that time, there had been a series of stories, both in the New York Times -- Wall Street Journal, excuse me, kind of at that very moment, where he was described as the "uber" lobbyist of Washington.So it was not something that really -- his credentials appeared to be extremely legitimate. And obviously, the law firm that he represented -- is employed by was certainly one of the top law firms in the area, and certainly up and down the East Coast.INOUYE: When did you begin to doubt his credibility, integrity and character?SCHWARTZ: In all honesty, Senator, I think that probably came after he told us that nobody would ever find out about the Tiguas this year.INOUYE: But you continued to deal with him?SCHWARTZ: We didn't have a lot of contact with him last year. And the articles came out in February of this year. So it was shortly after than when he suggested that there was nothing to the articles, that it was certainly more of a witch hunt that a reporter had done and the suggestion that there would be hearings was nothing more than political payback.INOUYE: But up until then you believed in him?SCHWARTZ: We had no reason at that point not to, yes, sir.INOUYE: Thank you very much.CAMPBELL: Let me ask one more thing before I yield to Senator McCain, to Mr. Hisa.What was the economic and social cost of that closure?HISA: It was a great impact, not only to the tribe, but the El Paso community.CAMPBELL: Because a number of them probably were non-Indians working for the tribe, I assume, like is with most casinos.HISA: Exactly.CAMPBELL: Did the tribe's reaction was -- I mean, by-in-large, did you get most of it from the seniors? Did they find out that this proposal had been made, that they'd take out life insurance policies on them?HISA: Yes, it was.We have an elder center, and I had gone and talked to the elder center and sort of mentioned the idea before, because Jack Abramoff wanted to send an insurance representative to sign them up.CAMPBELL: OK.HISA: And so, I met with the elders before. And I told them I didn't feel comfortable with the idea, but it was something new, and see how they felt. And their reaction to it was...CAMPBELL: It didn't work for it, huh?(CROSSTALK)HISA: ... so that's when I reported back to Marc Schwartz to tell him, "You know what, it's not a good idea. I have talked to other council members and they agree, so just tell Jack that it's not going to fly."CAMPBELL: I'm glad he didn't send an undertaker to start taking measurements, very frankly. I was just horrified when I heard about it.Senator McCain?MCCAIN: Thank you, Mr. Chairman.I noticed, Governor Hisa, that they gave -- that your tribe has been very generous in its campaign contributions and to the tune at least of $300,000 at least in one batch, is that correct?HISA: Yes.MCCAIN: Tribal members are familiar with the Rely On Your Beliefs funds, or perhaps the Missouri Millennium fund, or Restore America PAC, or Friends Of The Big Sky.HISA: All those contributions...MCCAIN: Superior California Federal Leadership fund. It looks to me like your tribe has great political interests throughout America.HISA: Those contributions were recommended by Jack Abramoff. It was, according to his statements, he needed to give his money to these compactees (ph) -- and we called it hard money and soft money -- to generate the support to get our bill passed.CAMPBELL: Would the senator yield a moment?I hadn't seen that list, but Senator McCain read some of the names of those things. You know, it's like the Association Of God- Fearing Citizens. Who is that? And did some of these names ring a bell? I mean, or did you ask, "Who are these people that we are being asked to contribute to"?HISA: No, I never asked.CAMPBELL: You took Abramoff's word at face value that it was something good?HISA: Yes.CAMPBELL: Senator McCain?MCCAIN: Well, I'll move on.But there was several requests made of the tribe, right, for additional funds throughout the campaign cycles, is that right?HISA: Yes.SCHWARTZ: Yes sir, Senator.There were additional requests that were made after the list that you're referring to was given to the tribe at the moment that Mr. Abramoff made his presentation. And those checks were required by Mr. Abramoff, directed that the tribe do those immediately, so there was not a lot of time. But the request from him for additional contributions continued throughout the process.MCCAIN: Not a lot of time for you to investigate the Friends of the Big Sky or the Rely On Your Beliefs fund and others, I guess.Anyway, in January, 2003, after the bill was signed, you came to Washington to meet with Mr. Scanlon. Was that both of you? Mr. Schwartz, were you and the governor together on that?SCHWARTZ: Yes, sir.MCCAIN: OK.Was there anything that -- what did Mr. Scanlon say to you at that time, when you met with him after the bill was signed into law without the provision for your tribe? What did he say?SCHWARTZ: Well, and certainly with due respect to Senator Dodd, there was a tremendous amount of wringing of hands and blaming going around, mainly at the feet of Senator Dodd. And it was not easy, of course, to try and contact him to determine what his feelings were. Obviously, had we done that, we could have discovered that much sooner.But the feelings...MCCAIN: Yes, what's your recollection, Governor Hisa?HISA: The same as Marc is stating.He also stated that he was still committed to get this language inserted into another bill, that the effort had not died. It was just a battle lost in the war, but we will move forward on it.MCCAIN: Did he mention he needed more money for that effort?HISA: He did mention at the time that if we were to use the -- request the usage of the database once again that there would be an extra charge.MCCAIN: Did Mr. Scanlon ever say why Senator Dodd was so disappointing?SCHWARTZ: The position of it, Senator, was that -- and my recollection of it -- was that there had been an agreement between Mr. Abramoff and Senator Dodd early in the process. And Representative Ney came on the scene somewhat later.So the concern at that point was that Senator Dodd would not be a problem. The problem might be more in the House than it would be in the Senate, so it was a shock. Then at the end when I -- and I certainly, with all due respect, don't use this term, but it had been greased with Senator Dodd, so that was not an issue. And Mr. Scanlon's position was that they were going to be dumping lots of information into his state.MCCAIN: What did Mr. Abramoff tell you about the need for the Tigua tribe to pay to the Capitol Athletic Foundation?SCHWARTZ: He had brought a proposal to us, and specifically in an e-mail, referring to a request directly from Congressman Ney wanting to take a trip to Scotland. It was in June of 2002, and that he -- during that time, the trip was going to be approximately a $50,000 expense. And he wanted the tribe to sponsor that trip since Congressman Ney had asked him that.One of the reasons that he said in many e-mails was that Congressman Ney was not doing anything else for other Indian tribes that he represented or others that he knew of, so we were the likely target -- or the Tiguas were the likely target to sponsor the trip.MCCAIN: Did you have any conversation with Mr. Abramoff after the Senate investigation was announced?SCHWARTZ: Yes, he had called to -- of course, several times during that process to let us know there was nothing to these articles, that it was just -- he was blaming it on tribal in-fighting between those tribes that had been identified in the early Washington Post articles. And with respect to the Senate hearings, he had suggested that maybe you and he had a personal issue and that that was why you were calling for the hearings.CAMPBELL: He's got a personal issue now, I'd venture to say.(CROSSTALK)(LAUGHTER)MCCAIN: Governor, I have many other questions, but my colleagues are waiting.I just want to ask you, Governor, what's the impact on your tribe, on your tribal members, on the tribal council? This must be a devastating kind of thing for you.Maybe you could, in your own words, give us a little -- a few words about how the impact of this has been on both the tribal council and you as their elected lieutenant governor, and the membership of the tribe.HISA: Well, going back to the closure of the casino, that impacted the tribe significantly. And then coming back and losing another $4.2 million that could have been used to provide more educational opportunities for our people, health care or housing, be given away. And I don't know if we'll ever see it back.It has impacted the tribe even more. Our tribal members were disappointed, angry. They don't blame the tribal council. They recognize that our efforts at the time were for the better benefit of the tribe, and there was no way of us knowing that Jack Abramoff and Mike Scanlon had worked to shut us down at the time.So the tribe is in support. They want us to follow through and make sure that these gentlemen do not get away with it, if gentlemen is a word. So the people are outraged, just as I was.My personal feeling, at first I was disappointed with myself. But going back and looking at the facts, there's no way that I could have known that this was going on. So I accepted that and I'm here to work with the committee, within the investigations here to make sure that these men don't get away with it and they don't do it again.MCCAIN: Thank you, Mr. Chairman.CAMPBELL: We'll be adjourning soon, but that does not mean this issue is going to go away.And I certainly would recommend to Senator McCain that some of these names that are kind of, you know, nondescriptive, that when you take this investigation back up next year, we might look into -- or you might look into what was the connection between Mr. Abramoff, Mr. Scanlon and some of those groups. Was it another feeding process like it was with the school? I'd be interested to know that as -- when I am back in the private sector.Senator Dorgan?DORGAN: Mr. Chairman, thank you very much.Mr. Schwartz and Governor Hisa, now that you have seen the e- mails that have moved back and forth between Mr. Abramoff and Mr. Scanlon, and also Mr. Reed, I believe the import of your testimony is that you did not know this scheme existed, a scheme by which Mr. Scanlon and Mr. Abramoff employed Mr. Reed, and together they worked to find ways to accelerate the shut down of the Tigua casino.That was done without your knowledge, is that correct?SCHWARTZ: Yes, Senator.DORGAN: And then following the order to shut down the casino, Mr. Abramoff and Mr. Scanlon both approached your tribe, saying that they would be able to help you to re-open the casino?SCHWARTZ: Well, the initial contact was made by Mr. Abramoff and his scheduling the meeting. Once the meeting was scheduled, then he -- a day or two before the meeting was to take place, which ironically occurred on the very day the casino was going to close, that he then told me that Mr. Scanlon would be coming with him -- he was bringing an associate and identified him as Michael Scanlon.DORGAN: And was the name Ralph Reed employed in any way? I assume it was not employed in any way in representations to your tribe?SCHWARTZ: Mr. Abramoff was extremely vocal about Ralph Reed, describing him as a friend of his, that they had come up together in various party affiliations and organizations, but that he didn't agree with Mr. Reed on a lot of issues and that Mr. Reed was, in fact, a friend of his of longstanding.At one point, I believe either during the first or second meeting, he acknowledged the fact that he had received a page or an e- mail while he was with us from Mr. Reed. But he never disclosed in any way, shape or form that they had all been involved in some function together previous to our issue.DORGAN: Does it surprise you to know that while he was working with you, he was paying Mr. Reed to help shut down your casino?SCHWARTZ: It's probably one of the most disturbing details.Yes, it was a complete surprise.DORGAN: And do you think, based on any information you have, that Mr. Reed knew that he was also working with you to achieve funding to re-open your casino?SCHWARTZ: I don't think I understand your question.I'm sorry, sir.DORGAN: Well, we have a partnership here, in effect. More than $2 million was paid to Mr. Ralph Reed by Abramoff and Scanlon, or by one or the other, but perhaps both, to help accelerate efforts to shut down the casino.And the e-mail trail suggests contacts with the Texas attorney general, work with various pastors, P-A-S-T-O-R-S, and others. And that partnership was to accelerate the closing down of your casino. And then Mr. Abramoff and Mr. Scanlon were attempting to get money from you to open the casino back up.My question is: Does that partnership with Mr. Reed extend to the other side, that is, the re-opening of the casino?SCHWARTZ: We were not aware of any relation -- in any discussion that he had. There was a member of the council during one of the meetings that had asked that very question about how do you kind of reconcile your issues with Mr. Reed, and he said, "Well, we just don't agree," -- this is Mr. Abramoff saying, "We just don't agree on all things." So he never represented that Mr. Reed was involved with this issue, in particular, in opening the casino.DORGAN: Knowing what you now know, do you and the governor believe that Mr. Abramoff and Mr. Scanlon and Mr. Reed perpetrated a fraud on your tribe?SCHWARTZ: I can speak for myself, and I would absolutely say that yes, that was -- it's obvious from just the limited information we've seen here today in the committee's hearing and what we've seen since then, I would say that there's no doubt there was a fraud.DORGAN: Also, there is a golfing trip to Scotland by a private jet. And my understanding is that our records disclosed that trip includes passengers Mr. Scanlon, Mr. Abramoff, Representative Ney and Ralph Reed. Would that suggest to you that at least some participants knew most of what was happening here?SCHWARTZ: That would be yes, absolutely, Senator.DORGAN: Let me ask you about that -- about the e-mails with respect to that trip.In June of 2002, you received an e-mail asking the Tigua tribe to pay for a trip to Scotland for, quote, "our friend." Who did you understand the "our friend" to be?SCHWARTZ: We had had a phone conversation previous to that, and so, it referred to Congressman Ney.DORGAN: This e-mail also said, "We did this for another member, you know who, two years ago."Do you know to whom that was referring?SCHWARTZ: He told me in that same phone call that that was Representative Tom DeLay.DORGAN: Let me ask a question about the meeting that was held.My understanding from your testimony was that you held a two hour, meeting, or at least a meeting that went on for some while, with Representative Ney in his office. Is that correct?SCHWARTZ: Yes, sir.DORGAN: And what was the length of that meeting?SCHWARTZ: My recollection is it was a long -- it was about an hour and a half. It may have been two hours. I just have been kind of fuzzy on the time.DORGAN: Governor, were you at that meeting?HISA: Yes, about an hour and a half to an hour and 45 minutes.DORGAN: That's a -- my colleagues will recognize that's a very lengthy meeting here on Capitol Hill. Most -- you know, we have the attention span of gnats.(LAUGHTER)And we pack a lot of meetings in one day. I can't remember the day when I had a one and a half hour meeting or a two hour meeting.And so, you think it was not -- this meeting was not a short meeting. You think this meeting was well over an hour?SCHWARTZ: Yes, Senator, absolutely.DORGAN: Close to two hours?SCHWARTZ: Yes, sir.HISA: Yes.DORGAN: And you're confident of that?SCHWARTZ: Yes, sir.DORGAN: Let me ask you, what did you discuss at that meeting with Congressman Ney? I mean, I'm talking about, what did you discuss for a lengthy amount of time? That's a very long meeting.SCHWARTZ: He was extremely animated about Mr. Abramoff and his ability as a representative lobbyist in the city, how they had become friends and acquainted themselves. He discussed his district.My recollections were that he did not have access, or did not have a tremendous amount of Native Americans in his district, or a reservation -- I should say -- in his district, but he had tremendous sympathy for the plight that the tribe had gone through and the issues that had occurred.He discussed some of the political ramifications of what had occurred to the tribe with respect to the Republicans in Texas that had done this -- filed this lawsuit and taken to the extreme of the closure of the casino.And then he spoke for a period explaining to the tribal council representatives that were there the process by which a conference committee report is done and how this would work, and what work remained, et cetera. And then he took the lieutenant governor and the council member on a tour of his hearing room.DORGAN: So he was giving you assurances that he was on board, he was working to solve this problem for you?SCHWARTZ: Absolutely, Senator.DORGAN: And Mr. Abramoff and Scanlon were both at that meeting?SCHWARTZ: Mr. Scanlon was not at...DORGAN: Mr. Scanlon was not, just Mr. Abramoff?SCHWARTZ: Just Mr. Abramoff.DORGAN: And so, now you know that, accompanying you at that meeting to try to find a way to open your casino was a man who actively worked with Mr. Scanlon and Mr. Ralph Reed to close your casino?SCHWARTZ: Yes, sir.DORGAN: My colleague, Senator Campbell, just made a point that I think is really important.These records, these memoranda that we have move in all kinds of directions, and I don't know all of the facts. All I know is what you are telling us.And I, for one, thank you for being here. It's likely not easy for you to come here and testify, because first of all, these folks showed great disrespect for you in their communications with each other. I'm talking about all of them that I have mentioned -- great disrespect. And it appears to me you were defrauded.And I know it's not easy to come to talk about this. But in order for this committee to put together the pieces of this puzzle and understand what happened, who did it, how did they do it, and what should the ramifications of that be, and how do we prevent this from happening again, we need all of this information.But Senator Campbell pointed out, although he's not going to be with us when we reconvene, that, you know, this moves in many directions and we ought to follow it to understand it completely.And I -- let me just say that Senator Campbell and Senator Inouye have been extraordinary leaders on this committee for a long, long while. Senator Inouye wasn't here when I spoke of Senator Campbell's service, but Senator Inouye will now -- remain on the committee, but move on as ranking member of the Commerce Committee.And Senator McCain, I know, with his leadership, and I certainly -- with my involvement -- and I am sure with Senator Conrad's involvement and others, we'll intend to pursue the kinds of things that Senator Campbell mentioned.Let me thank both of you for being here today.CAMPBELL: Senator Conrad?CONRAD: Thank you, Mr. Chairman.I'd like to ask Governor Hisa: How much money did you pay to Mr. Scanlon?HISA: Four point two million.CONRAD: And how much money did you pay to Mr. Abramoff?HISA: Zero. We have not paid him a cent.CONRAD: You didn't pay any money to Mr. Abramoff. What was your understanding of how Mr. Abramoff would be compensated?HISA: After the casino would open, he would help us, through the law firm, get a compact through the state for Class III gaming.CONRAD: So he would be paid in future -- in a future time?HISA: Yes, sir.CONRAD: Did you have any understanding that Mr. Scanlon would be paying Mr. Abramoff?HISA: No.CONRAD: Did Mr. Scanlon ever suggest that he had special influence here in Washington as a reason to pay him that much money?HISA: Yes.CONRAD: And in what way did he indicate that he had special influence?HISA: He used to work, I believe, with Tom DeLay. And...CONRAD: But did he say that to you?HISA: Yes, he did.CONRAD: And what representation did he make as to what special influence he might have with Mr. DeLay?HISA: That's all he said, he had special interests. And that he would try to convince him to work in our benefit and try to get us opened, so -- and others as well, and using, I guess, DeLay's credibility to contact and get through other representation.CONRAD: Did he indicate that he had special influence with anyone else?HISA: No.CONRAD: Did Mr. Abramoff ever suggest that he had special influence with anyone here in Washington?HISA: Yes.CONRAD: He did as well?HISA: Yes, sir.CONRAD: And who did he say that he had special influence with?HISA: A majority of people, from Bob Ney all the way to the president of the United States of America.CONRAD: He suggested he had special influence with the president of the United States?HISA: Yes.According to him, the president assigned him to staff some of the open slots for the Department of the Interior and such, and Jack Abramoff recommended some of the individuals that were placed in those positions.CONRAD: Did he provide other evidence of special influence that he had with the president of the United States?HISA: No.CONRAD: What representation did he make about special influence that he had with Congressman Ney?HISA: A history of working with him, and that he was very supportive of Native Americans across the nation, not just the Tiguas.CONRAD: When you were asked to make a contribution to the Capitol Athletic Foundation -- were you asked to make a contribution to the Capitol Athletic Foundation?HISA: Yes.CONRAD: In what amount were you asked to make a contribution?HISA: Fifty thousand.CONRAD: Fifty thousand dollars.HISA: Yes.CONRAD: And what reason was given to you for making a contribution in that amount?HISA: Ney was going to a golfing trip. And there were other individuals from Congress going along, and that Bob Ney needed this trip to put -- bring some of these individuals on board.CONRAD: Did that strike you as possibly illegal?HISA: No.Jack Abramoff said he had done it before and he had a -- the foundation to justify this trip. It was a sporting event and it was an athletic foundation of some sort so he could justify the trip.CONRAD: Did you ask your legal counsel whether such a contribution might be illegal?HISA: No, I did not.CONRAD: Did you know that Mr. Ralph Reed was going to go on that private charter for this golf outing as well?HISA: No.CONRAD: Did you know that Mr. Ralph Reed was leading the effort in Texas to close your casino?HISA: Yes.CONRAD: Did you know that Mr. Scanlon was providing money to Mr. Reed for that effort?HISA: No.CONRAD: When did you find out that Mr. Scanlon was providing money to Mr. Reed to close the casino, which he then promised to try to get re-opened?HISA: When we started working with the investigation committee and the e-mails were provided to us.CONRAD: And do you recall when that was?HISA: Earlier this year. I'd say May of this year, or March, around that time.CONRAD: March to May of this year.What was your reaction when you learned that you had paid for a golf outing for the man who had worked to close your casino?HISA: An outrage.A rattlesnake will warn you before it strikes. We got no warning. They did everything behind our back.CONRAD: Mr. Schwartz, you said -- you quoted someone on my -- I jotted down that you indicated that Abramoff said to you, no one would find out about the Tiguas this year. Was that Mr. Abramoff?SCHWARTZ: Yes, Senator, that was after the initial articles had come out in the Washington Post and he said there's -- you know, it was political in nature, mainly involving Senator McCain. And so, no one would know about Tigua, was his statement.CONRAD: That no one would know about the Tiguas this year. That is very unclear to me, why he would have made such a statement. What...SCHWARTZ: The context, Senator, of it was that he was -- in discussions that I had with him at that time over these articles, and whether or not the allegations were correct. One of the concerns that he had was that the secrecy of his representation of the tribe, you know, would be blown by this. And so, I said to him, simply whether or not, you know, there was going to be disclosure and that was the context by which he said, "No one will know about Tigua."CONRAD: This year.SCHWARTZ: When I said that, that conversation took place this year.CONRAD: I see.SCHWARTZ: But...CONRAD: And so, there was a timeframe on that...SCHWARTZ: No, sir, and I apologize for the misunderstanding.CONRAD: So he was saying to you no one would find out about the Tiguas...SCHWARTZ: Right.CONRAD: ... maybe forever?SCHWARTZ: Correct. That was his inclination.CONRAD: And what led him to that belief? Did he indicate a reason why no one would find out?SCHWARTZ: He had stated that his -- he was in a discussion or a beginning of a battle with his law firm, former employer, who represented him, was his, quote, "lawyers." And so, there was an attorney/client privilege he felt, so there would not be certain disclosures regarding what had happened with the tribe.CONRAD: When...SCHWARTZ: Meaning the legislative effort, not the fraud. We were still not clued in on the fraud at that point.CONRAD: Did Mr. Scanlon ever indicate to you that he had special influence here in Washington?SCHWARTZ: Oh, absolutely.CONRAD: And what was the nature of the special influence that he had?SCHWARTZ: He had established himself through his involvement as Representative DeLay's former press secretary, I believe, and regular kind of go-to guy, that he had entrees into certain areas and certainly with the Republican Party and the Republican National Committee.CONRAD: With the Republican National Committee?SCHWARTZ: Yes, sir.CONRAD: That he had special influence with the Republican National Committee and the Republican House leadership?SCHWARTZ: Yes, sir.CONRAD: Did he provide evidence to you of that special relationship or that special influence?SCHWARTZ: No, sir, we didn't -- those discussions -- so that we're properly in context, his responsibility was to create this wonderful program. So from that standpoint, there wasn't a lot of, how should I say, with respect to e-mails, chit-chat time. It was -- he needed to get to work and get this done.CONRAD: How about Mr. Abramoff? Did he make representations to you that he had special influence here in Washington?SCHWARTZ: Absolutely.CONRAD: And what was the nature of the special influence that he enjoyed here, according to him?SCHWARTZ: As the lieutenant governor had said, he had spoke quite highly of his association with President Bush's transition team back in 2000, where he had led the -- been involved with the selection of various individuals at the Bureau of Indian Affairs, close friendship with the president, with Karl Rove.During a visit to his office, there was, of course, all those general pictures that you see with arms around each other, with the House leadership, mainly -- certainly on the Republican side. And at the time, because of the leadership in the Senate being in the Democratic side, the majority side, he was -- had a special relationship with Senator Lott.CONRAD: That he had a special relationship with all of those people?SCHWARTZ: There were others whose names escape me at this point, and I apologize to all those. I don't mean to diminish their importance, but there was -- you know, he was the individual (inaudible).CONRAD: At any time did you feel -- or at what point, if you did begin to feel -- that Mr. Scanlon and Mr. Abramoff were taking advantage of the tribe?SCHWARTZ: Senator, I have thought about that since the first time I was contacted by the committee. And I think that there was certainly a part early this year that led me to believe that there might be some issue with them. I had a phone call with Mr. Scanlon shortly after the news report came out.CONRAD: Which news report?SCHWARTZ: The first article where it disclosed -- I believe it was the Washington Post that disclosed -- it was in February, I think, of this year. And I had a phone call with Mr. Scanlon. And there were some things that he said that, in hindsight, might have been the first crack, so to speak, in the scheme, the first opportunity to see through it, I think, as I look back.And there were just references that he made to, "We'll certainly have to stand down for a little while. This may not blow over." And you would assume that somebody who had been simply maligned in a newspaper article would not be so concerned of the ramifications, long-term, of that article.And I think that, in retrospect, in looking back, hindsight, that may have been the first time that I suspected that there might be something untoward.CONRAD: Well, let me ask you this -- and I'm right at the end, Mr. Chairman -- but I have a copy of an e-mail that you received. I think all members of the committee -- I'm sure all members of the committee do -- from Mr. Abramoff, dated February 25th of 2002, responding to some newspaper articles that you sent via e-mail on the situation with the casino.His reply to your message stated, and I quote, "If this came out of your office, please tell them NEVER," -- in capital letters -- "NEVER to include my name on a list like this. Our presence in this deal must be secret, as we discussed. Please call me so we discuss a spin on this, since some of the people on this list are real dangerous, knowing I am involved."This occurred in February of 2002. Didn't that strike you that there is something wrong, when Mr. Abramoff is telling you the relationship has got to be secret?SCHWARTZ: Thank you for the question.No, it did not strike me as anything necessarily wrong and let me share with you why. We -- throughout the entire process, we had looked into, obviously the Greenberg firm, and they were well-known and highly regarded and highly respected. Mr. Abramoff certainly being referred to in various publications as one of the top lobbyists. We had had communication directly with his office and his office staff at that point. We had spoken to various members of the firm other than Mr. Abramoff.If there was an issue, we would have assumed that this might be -- and I think in your context, if it had been quiet and our conversations only involved directly to Mr. Abramoff and back and there was no other involvement, then I could see where that could be drawn.But in this case, there was multiple contacts with his staff, with various other lawyers at Greenberg Traurig, and as early dates.And so, the concept that we felt like certainly the law firm had approved it and knew about it, and he was involved with it. So the secrecy angle, if that's what was necessary for the terrible hardship that the tribe was going through, through its closed casino to be rectified, it was certainly a price that I was willing to pay at the time.CONRAD: Over what period did you pay $4.2 million to Mr. Scanlon? Over how long a period?HISA: All in 2001...SCHWARTZ: Two thousand two.HISA: ... 2002, I'm sorry.CONRAD: All in 2002?HISA: March through, I'd say, June. There was three invoices sent. I believe each one was -- it was divided in thirds, and that's what we paid him. So when Scanlon would bill us, we would send a payment.CONRAD: In a three-month period, you paid $4.2 million?HISA: Yes, I believe so, yes.CONRAD: Didn't that strike you as wildly exorbitant?HISA: No.CONRAD: And why not? Had you ever paid any other firm money of that -- in those amounts?HISA: We did not pay the firm, we paid Michael Scanlon's company.But it was presented to us that this money needed to be paid so that our effort could move. And when Operation Open Doors was presented to us, there was a time line that by -- I believe mid-July that the bill would pass and that we would be back in operations. That's why everything had to move so fast.CONRAD: And how much money were you losing a month because the casino was closed?HISA: That year? A month? I don't have those numbers with me, but it was a great amount of money.CONRAD: Can you give us some ballpark estimate?HISA: I believe for the year, 2002, after the casino closed, we still tried to keep some people employed. And after this effort was presented to us and we were going to open -- we were going to have a second layoff, but we decided to keep the people employed. The reason that we were convinced and we hoped that the casino would open, so we kept these people employed. A number of, I believe, $2 million were lost that year.CONRAD: I thank the witnesses.(CROSSTALK)CONRAD: (Inaudible) before we move on to Mr. Scanlon.MCCAIN: Go ahead.Sir, did you want to say something?HISA: Senator, for the record, that golf trip, the tribe did not fund the $50,000.CONRAD: Excuse me?SCHWARTZ: It was just requested of...HISA: Yes, it was requested of...CONRAD: I see. You didn't provide the money.HISA: Yes.MCCAIN: Mr. Schwartz, I just have one additional question.After the Washington Post article came out, Mr. Abramoff contacted you?SCHWARTZ: Yes, sir.MCCAIN: And what was the conversation?SCHWARTZ: He, of course, wanted to know if I had seen the article, and I told him that I had.MCCAIN: And then he went on to discuss with you about cooperation or non-cooperation with the committee?SCHWARTZ: Senator, that came after I believe the second article came out.And the question was, at that point, internally, in meetings with the tribe, it was decided that we would obviously wait and sit back, and we were not going to have anymore contact with him.And at that point, he had said that if the tribe was contacted by members of investigative counsel for this committee or others, that -- I believe his words were, "They didn't have to cooperate." They didn't have to say anything. And he subsequently sent me an e-mail with his attorneys and asked that I forward that directly to the tribal attorneys so that if they were contacted, they would at least call his lawyers before speaking with committee counsel or other investigators.MCCAIN: So -- just to clarify for the record -- when he said they don't have to talk to the committee investigators or the committee, they were referring to the tribal council?SCHWARTZ: He's referring to the tribe. He's asserting -- and I would assume what he was attempting to do was have the tribe assert some sort of sovereignty.MCCAIN: Thank you, Mr. Chairman.CAMPBELL: One last question.Did I understand you, Mr. Schwartz, to say that Mr. Scanlon contracted with the tribe to create the database?SCHWARTZ: Yes, sir.CAMPBELL: And do you have that? I mean...SCHWARTZ: Well, a massive -- there were several components to the program, the database being one of these key, customized...CAMPBELL: And did he do that? Do you have that?SCHWARTZ: We have seen one this year that was sent to the tribe, at our request. And so, it is -- Senator, it is a database.CAMPBELL: Thank you.CONRAD: Mr. Chairman, might I ask one other question that has come up as a result of the answers?Governor Hisa, you just testified that the tribe -- your tribe did not pay for the golf outing. You were requested to pay for it.HISA: Yes.CONRAD: But you did not pay for it. Do you know who did pay for it?HISA: I think, in total, the golfing trip was going to be $100,000. My understanding is that the Mississippi Choctaw paid $50,000 and Alabama Coushatta paid another $50,000.CONRAD: Thank you.HISA: Yes.CAMPBELL: Thank you.We appreciate you being here. And the committee may have further questions, so they may submit them in writing. If they do, we'd appreciate your response to it...SCHWARTZ: Thank you very much.CAMPBELL: ... as quickly as you could.Thank you once again.SCHWARTZ: Thank you.CAMPBELL: The committee will now move to Mr. Michael Scanlon, if he would come forward and -- Mr. Scanlon, if you would remain standing for a moment.Mr. Scanlon, do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God?SCANLON: I do.CAMPBELL: Please be seated.And I would also remind, you have counsel with you, I assume, the two people that are with you?SCANLON: Yes, sir.CAMPBELL: I would remind you that they are free to speak to you at any time, but not free to speak to any member of the committee unless the committee asks them a specific question.SCANLON: Certainly.CAMPBELL: And if you'd like to proceed with a statement?SCANLON: No sir, no, Senator.CAMPBELL: You have no statement?SCANLON: No, Senator.CAMPBELL: Well then, we'll just proceed with some questions. And we'll take turns with the questions too.Mr. Scanlon, let me read a couple of e-mail exchanges between you and Mr. Abramoff, as has been presented to us. The day before Mr. Abramoff arranged for a presentation of the Tigua tribe, he told you to, quote, "Fire up the jet, baby, we're going to El Paso." You responded by telling him, "I want all their money." Whose money were you referring to?SCANLON: Unfortunately, Senator, upon the advice of counsel, I must decline that question based upon my rights under the Fifth Amendment.CAMPBELL: When Mr. Schwartz raised some issues with Mr. Abramoff, your response was -- let me apologize, as Senator McCain did about the language, "Is he happy? Where's our f-ing money?" And then in the same e-mail exchange, you told Mr. Abramoff, "The check came in and was way short, about $900,000 short."Was that the Tigua money you were referring to?SCANLON: Upon the advice of counsel, I must decline to answer that question based upon my rights under the Fifth Amendment.CAMPBELL: Mr. Scanlon, Mr. Abramoff spoke often of his affection for his Indian clients, even though he used some very derogatory terms for them. Do you share that same kind of affection that he had for Indians?SCANLON: Senator, upon advice of my counsel, I must decline to answer that question based upon my Fifth Amendment privileges.CAMPBELL: I see.And do you intend to invoke that privilege throughout all the questioning?SCANLON: Yes, Senator.CAMPBELL: I'd like to yield to Senator McCain.MCCAIN: Well, Mr. Scanlon, I find your behavior bizarre during and throughout this, not only incredible in the way that you treated Native Americans, but also the way you've treated this committee, refusing to come forward with us, us having to serve subpoena, and then have U.S. Marshals spend taxpayers' money waiting for you so that they can deliver a subpoena.Do you have any remorse, Mr. Scanlon, about this treatment of these innocent people that you and your partner and perhaps others took the money that could have been used for health care, for education, for the elderly? Do you have any remorse, Mr. Scanlon?SCANLON: Unfortunately, at this time, Senator, I must decline to answer that question based upon my Fifth Amendment privileges.Hopefully in the future I'll have an opportunity to do so.MCCAIN: No further questions, Mr. Chairman.CAMPBELL: Let me ask one more before I yield to Senator Conrad.Mr. Scanlon, in reading all the testimony and all the e-mails, it strikes me that you were working both sides of the street, if I understand this thing. You managed to not only con the tribe, but con Mr. Abramoff. And many people around here think he was very good at doing that, too. You were responsible for lining up political supporters to assist the Tigua tribe in re-opening its casino.You told Mr. Abramoff and the tribal council you had the Senate's support. You told them all, quote/unquote, "all the major players on the election reform package has given their support on our issue." In fact, and this is your e-mail -- in fact, numerous witnesses told the committee that nothing you told Mr. Abramoff and the tribe about Senate support was accurate.When Mr. Abramoff found out that you did not have the Senate support you had bragged about, he pleaded with you, quote/unquote, in an e-mail, "Please call me." He later demanded you quote/unquote, "Get our money back" from the person who was supposed to take care of arranging Senate support.When did you come up with this scheme to not only con the tribe, but con your partner?SCANLON: Upon advise of counsel, I must decline to answer that question based upon my rights under the Fifth Amendment.CAMPBELL: I understand. I have no further questions.Senator Conrad?CONRAD: Did you receive $4.2 million from the Tigua tribe?SCANLON: Upon the advise of counsel, I must decline to answer that question at this time based upon my rights under the Fifth Amendment.CONRAD: Did you suggest to the Tigua tribe or their representatives that you had special influence with Congressman DeLay here in Washington?SCANLON: Upon advise of counsel, I must decline to answer that question based upon my rights under the Fifth Amendment.CONRAD: Well, it's clear that we're going to get, as the witness has already indicated, that answer repeatedly.You know, I don't understand why you can't say if you do feel remorse, that you have that feeling here today. I don't know how that would possibly jeopardize your legal position.But I don't know -- I don't know how you go to sleep at night, really. I would hope your conscience bothers you.I thank the chair.CAMPBELL: Thank you.I have no further questions.But just speaking as an enrolled member of an Indian tribe, not the chairman of this committee, I have to tell you that for 400 years people have been cheating Indians in this country, so you're not the first one, Mr. Scanlon. It's just a shame that in this enlightened day that you've added a new dimension to a shameful legacy of what's happened to American Indians. You are the problem, buddy, of what's happened to American Indians.This committee is adjourned.ENDNOTES:[????] - Indicates Speaker Unknown [--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said.PERSON: BEN NIGHTHORSE CAMPBELL (94%); JACK ABRAMOFF (93%); MICHAEL SCANLON (90%); JOHN MCCAIN (72%); PETE V DOMENICI (57%); CRAIG THOMAS (57%); JAMES M INHOFE (56%); ORRIN G HATCH (56%); LISA MURKOWSKI (55%); GORDON SMITH (55%); DANIEL K INOUYE (55%); HARRY REID (54%); KENT CONRAD (54%); DANIEL K AKAKA (54%); TIM JOHNSON (53%); MARIA CANTWELL (53%);
5)Federal Document Clearing House Congressional TestimonyNovember 17, 2004 WednesdayCAPITOL HILL HEARING TESTIMONYSENATE INDIAN AFFAIRSLOBBYING BY INDIAN TRIBESTESTIMONY-BY: BEN NIGHTHORSE CAMPBELL, CHAIRMANAFFILIATION: OPENING STATEMENTOpening Statement of Chairman Ben Nighthorse CampbellCommittee on Senate Indian AffairsOversight Hearing on Lobbying Practices Involving Indian TribesNovember 17, 2004Good afternoon, the Committee will come to order. Today's hearing is the second in a series of hearings into allegations of improper business, lobbying and financial transactions by Jack Abramoff, Michael Scanlon, and their various entities on behalf of Indian tribes.At the Committee's first hearing on September 29 th , the evidence and testimony showed that under a variety of arrangements six tribes paid Mr. Scanlon more than $66 million, and that Scanlon, in turn, paid Abramoff more than $21 million.The September hearing also revealed that Scanlon and Abramoff assisted in the campaigns and elections of tribal council members at two of the tribes, did not charge for their services, and after the elections obtained multi- million dollar contracts from the same tribal councils they helped elect. Finally, the hearing revealed that, while they were being paid tens of millions of dollars, Abramoff and Scanlon held their tribal clients in very low regard and referred to them as "monkeys," "troglodytes," "morons," and worse. While the hearing in September disclosed very offensive evidence, our investigation has continued to uncover other distasteful and shocking details. Today's hearing will focus on the Tigua tribe of Texas. The story of Abramoff, Scanlon and the Tiguas looks to me like nothing short of a classic shakedown operation: These men, working with allies, persuaded the State of Texas to force the closure of the Tribe's casino, located in El Paso. Having achieved this interim step of shutting down the Tribe's casino, Abramoff and Scanlon then approached the Tiguas, offering their services to assist the Tribe in reopening its casino. For their services, they charged the Tribe the tidy sum of $4.2 million..-2-Documents uncovered by Committee investigators shed more light on the Tiguas. To assist the Members, as well as the general public, Committee staff has prepared those documents most pertinent to the matters covered by this hearing.I now offer these documents and move that they be entered into the record of this hearing. The documents demonstrate the extent of Scanlon's and Abramoff's cynical manipulation fo the Tigua Tribe. I'd like to discuss a few of them in detail:-In 2002, Abramoff first offered to help the Tiguas "on a pro bono basis," provided the Tribe hired him in the future as lobbyist for between $125,000 and $175,000 per month. That's some "pro bono" work isnt it?-Then, just last year, Abramoff approached the Tiguas with another scheme that would have benefitted the Eshkol Academy, the Jewish boys school he founded located just outside Washington, D.C. After Mr. Abramoff declined tribal requests that he be paid a retainer, Mr. Abramoff recommended that, at no cost to the Tribe, the Academy would buy-up term life insurance on particularly elderly tribal members, and the Academy would be named as their death beneficiaries. In effect, Abramoff asked to be paid by putting prices on the lives of Tribal elders. We have witnessed a lot of unseemly and unethical, things during the course of this investigation, but asking a Tribe to pay a lobbyist with death benefits may be the most distasteful thing I have heard of yet.-Writing to one of his key allies in the effort to shut down the Tiguas' casino, Abramoff references the Tribe's donations to Democrats, saying "I wish those moronic Tiguas were smarter in their political contributions. I'd love to get our mitts on that moolah! Oh well, stupid folks get wiped out." Stupid folks get wiped out. That about says it all, doesn't it, about the way Mr. Abramoff and Mr. Scanlon felt about their clients?.-3--Finally, on the day the Tigua Tribe voted on their contract, Mr. Abramoff and Mr. Scanlon exchanged emails regarding a newspaper story about some 450 Indian employees at the tribe's recently shuttered casino being thrown out of work. This group of workers included an elderly woman who worried that she would not find another job. Mr. Scanlon was evidently excited that the article was on the front page "while they [the Tiguas] will be voting on our plan." Mr. Abramoff's reply: "Is life great or what!!!"I am not naive and have been around this town for almost a quarter of a century, but it strikes me as more than cynical that, rather than being concerned about the misfortunes of the Tribe and its members, they were soliciting for business, Abramoff and Scanlon seemed happy --almost gloating -- about the prospect that the Tiguas were having their casino closed and hundreds of employees thrown out of work, all because they were slated to make millions off the tribe.There is another element to the Tigua story that I feel compelled to address: it appears that Mr. Abramoff and Mr. Scanlon used the good name and reputation of our fellow members of Congress in their attempts to part the Tribe from its money.You will hear today from witnesses, and read from documents, indicating that Mr. Abramoff and Mr. Scanlon contended that Senator Dodd and Congressman Ney were enlisted to spearhead efforts in Congress to provide a legislative fix to the Tiguas problems.From what we know, that was not the case. Senator Dodd evidently knew nothing about the proposed legislative fix; never supported it; and, in fact, we are told that when the idea was proposed to his senior staff, it was rejected at least three times. Congressman Ney agreed to support a legislative fix after being told by Mr. Abramoff that Senator Dodd wanted the language.In short, the evidence demonstrates that Mr. Scanlon and Mr. Abramoff told their clients that Senator Dodd and Congressman Ney would push their proposal, knowing full well.-4- that was not the case, in an effort to further persuade the Tigua Tribe into continuing to pay them millions of dollars.Today the Committee will hear from the Honorable Carlos Hisa, the Tigua Tribe's lieutenant governor, and Mark Schwartz, a consultant who essentially was the point person for contact between the Tiguas and Abramoff and Scanlon.I would be remiss if I did not mention a few other, relevant, items:Those of you who watched or listened to the September 29 th hearing may recall that the Committee repeatedly sought the presence of Mr. Scanlon, and had been obliged to issue a number of subpoenas to that effect. At first, Mr. Scanlon's attorney declined to accept the subpoena, even though he had accepted other Committee subpoenas for Mr. Scanlon and the various corporate entities he owned or operated.At the time, I said that the U.S. Marshals had been asked to find and serve Mr. Scanlon, and that he would surface at some point and come before the Committee. That time has come. The Marshals found Mr. Scanlon and served him, and he will appear here today.There is another person who has flouted the authority of this Committee, and that person is Jon van Horne, who was served with a document subpoena that was due on October 5 th . To date, the Committee has not received the documents called for under the subpoena nor an explanation for his non- compliance.I may be leaving as Chairman, but Mr. van Horne should know that neither this Committee nor this investigation are going to end on December 31 st .As was the case with Mr. Scanlon, sooner or later Mr. van Horne will be called to account. I will submit for the Record a written statement outlining my issues with Mr. van Horne for the record. * * *
6)Federal Document Clearing House Congressional TestimonyNovember 17, 2004 WednesdayCAPITOL HILL HEARING TESTIMONYSENATE INDIAN AFFAIRSLOBBYING BY INDIAN TRIBESTESTIMONY-BY: JOHN MCCAIN, SENATORStatement of Senator John McCainCommittee on Senate Indian AffairsOversight Hearing on Lobbying Practices Involving Indian TribesNovember 17, 2004"Is life great or what!!!" exclaimed Jack Abramoff in an e-mail to his friend and business partner Michael Scanlon on February 19, 2002. Few would have quibbled with Mr. Abramoff at the time. As we learned during the Committee's September 29 th hearing, the two men shared a secret partnership that connived to collect at least $66 million from six American Indian tribes across the nation.When Mr. Abramoff sent his February 19 th e-mail, he had already received approximately $3 million from Mr. Scanlon's companies. Over the next couple years, he would receive almost $18 million more. The two, however, kept their partnership hidden from the tribes and hidden from the world. For these two men it was seemingly all about the money. In February 2002, the money flowed; so, life was indeed great for Jack Abramoff and Michael Scanlon. At the same time, life was not so good for the Ysleta del Sur Pueblo of El Paso, Texas. Also known as the Tigua, the Tribe was fighting for its financial life in the Texas courts and state legislature. According to a September 26, 2004 article in The Washington Post, the State of Texas had sought a judicial order closing the Tribe's Speaking Rock Casino. The Post article also reported in some detail how Mr. Abramoff and Mr. Scanlon had worked behind the scenes to support Texas's efforts to close the casino. They had participated in a grassroots and public relations campaign that was designed, in part, to lend political cover to Texas's legal efforts. Evidence suggests that Mr. Abramoff and Mr. Scanlon also worked behind the scenes in Texas to quash the Tigua's attempts at a legislative solution. In an internal e-mail, Mr. Abramoff boasted to a colleague in 2003:A bill is moving (HB809) in the Texas state house which will enable the Indians in Texas to have totally unregulated casinos. It passed out of the House Criminal Jurisprudence Committee by a 6-2 vote. The current Republican Speaker Tom Craddick is a strong supporter. Last year we stopped this bill after it passed the house using the Lt. Governor (Bill ratcliff) to prevent it from being scheduled in the state senate. Former Texas Lt. Governor Ratliff did refuse to schedule the legislation for a floor vote, the state's legal efforts were successful, and the Tigua closed its casino on February 12, 2002.It was a low point for the Tribe. According to tribal representatives, the revenue generated from the Speaking Rock Casino had helped the tribe lift its members out of poverty, had enabled the Tribe to provide education for its children and health care for its elders, and had given them hope where there was none before. The closure of the casino, according to the Tribe, threatened the promise of a new and better tomorrow for future generations.In the Tigua's desperation and despair, Mr. Abramoff and Mr. Scanlon found opportunity and hope, not for the Tribe, but for themselves. In the Tribe's misery Jack Abramoff and Michael Scanlon saw money. "I'm on the phone with Tigua! Fire up the jet baby, we're going to El Paso!!" wrote Jack Abramoff in a February 6, 2002 e-mail. Responding, Michael Scanlon summarized their objective: "I want all their MONEY!!!"When Mr. Abramoff and Mr. Scanlon approached the Tribe, they painted themselves as sympathetic to the Tribe's plight. In a February 18, 2002 e-mail to Tribal consultant Marc Schwartz, which we have blown up onto a poster board, Mr. Abramoff wrote: Our motivations for this representation are manifold, including the critical importance of not allowing tribal sovereignty to be eroded by the actions of the State of Texas. While we are Republicans, and normally want all Republicans to prevail in electoral challenges, this ill advised decision on the part of the Republican leadership in Texas must not stand, and we intend to right this using, in part, Republican leaders from Washington.Mr. Abramoff downplayed his primary motivation by writing that "it would be insincere of me to not note that our other motivations include the hope and expectation that, if we succeed, we can expect to have a long term relationship with the tribe by representing their interests on the federal level.".Page 3 of 7 Mr. Abramoff's statement was the height of hypocrisy, the pinnacle of deception. The very injustice he decried, he and Mr. Scanlon had helped to create. With a straight face and without expressed remorse, Jack Abramoff and Michael Scanlon solicited the Tribe to retain them to help reopen the Tribe's casino. According to witnesses interviewed by my investigators, neither Mr. Abramoff norMr. Scanlon ever disclosed their role in the lobbying and public relations campaigns waged to close the same Tigua casino. They certainly never disclosed the lucrative partnership they shared. Their duplicity was pervasive. At the same moment they solicited the Tribe, Jack Abramoff wrote "I wish those moronic Tiguas were smarter in their political contributions. I'd love us to get our mitts on that moolah!!" That's exactly what Jack Abramoff and Michael Scanlon set out to do. The very next day, on February 12, 2002, they traveled by private jet to the Tigua reservation in El Paso. There, they made their pitch.According to witnesses at that meeting, Jack Abramoff offered to help the Tribe for free. He would later repeat that promise in his February 18 e-mail to Mr. Schwartz. But, Mr. Abramoff insisted that the Tribe had to retain Michael Scanlon for the effort to be successful. Jack Abramoff claimed that Michael Scanlon was the preeminent expert in grassroots lobbying. Michael Scanlon wasn't cheap, Mr. Abramoff told the Tribe, but he was the best there was in the business. Mr. Scanlon's asking price: $5.4 million. Of course, from the last hearing we know that when Mr. Abramoff advocated Mr. Scanlon's interests, he was advocating his own financial interests. Make no mistake: Jack Abramoff was not going to work for free.On February 18, 2002, Jack Abramoff submitted to the Tribe a document entitled "Operation Open Doors", a proposal prepared by Michael Scanlon. Mr. Abramoff endorsed the proposal wholeheartedly: "The proposal Mike Scanlon has prepared is, in our view, the best chance the tribe has to overcome the gross indignity perpetuated by the Texas state authorities." Operation Open Doors supposedly entailed a massive undertaking fueled by a nation-wide political operation. This political operation will result in a Majority of both federal chambers either becoming close friends of the tribe or fearing the tribe in a very short period of time. . . Simply put, you need 218 friends in the U.S. House and 51 Senators on your side very quickly, and we will do that through both love and fear. Scanlon said his firm promised to build two customized databases for the Tribe, conduct numerous polls, and wage a grassroots and grasstops campaign.While he did not guarantee success, Mr. Scanlon wrote "under no circumstances do we believe it could be classified as high risk either." Mr. Scanlon's promises have so far proven empty. Witnesses interviewed by my staff have confirmed that the database was not customized. Scanlon Gould did not even construct it; they sub-contracted out the work for less than $100,000, a small sum that pales in comparison to the $1.8 million he charged the Tribe for it. And, it seems Scanlon Gould failed to provide the vast majority of services to implement the "massive undertaking" the Tribe was told would occur. On February 19, 2002, El Paso Times newspaper reported that the Tribe had to lay off 450 employees as a result of shutting down its casino. It was not enough the two men sought to capitalize on the Tribe's plight, they actually reveled in it.Mr. Scanlon forwarded the article to Mr. Abramoff advising him "this is on the front page of todays paper while they will be voting on our plan!" It was in response to Mr. Scanlon that Mr. Abramoff dashed off his "Is life great or what?" e-mail. Jack Abramoff and Michael Scanlon smelled money. In fact, nineteen minutes later, Mr. Abramoff e-mailed Mr. Scanlon again: "1 hour 45 minutes and counting my friend." The Tribal Council ultimately decided to move forward with the plan, believing Mr. Abramoff's representation that he already had "a couple of Senators willing to ram this through initially."Key to Mr. Abramoff and Mr. Scanlon's plan was secrecy. No one was to know about their involvement in the effort to assist the Tigua. According to witnesses interviewed by my staff, Mr. Abramoff would take no money from the Tribe to avoid having to register under the Lobbying Disclosure Act. In meetings and telephone conversations with witnesses, Jack Abramoff maintained his role was simple. He would have one or more Representatives or Senators slip into a conference report very discrete language allowing the Tigua to re-open their casino. After passage of such an amendment, Michael Scanlon and his company would then run a public relations campaign to beat back any attempts to repeal the language.Almost immediately, Mr. Abramoff's cover was nearly compromised when he was included on an e-mail list from a tribal representative. Mr. Abramoff was furious. In an e-mail to Mr. Scanlon, Mr. Abramoff wrote, and I will try to redact the profanity so I do not offend anyone,That f - - - ing idiot put my name on an email list. what a f - - - ing moron. He may have blown our cover!! Dammit. We are moving forward anyway and taking their f - - - ing money.That the secrecy and hence the effort may have been compromised could not dissuade Mr. Abramoff from taking the Tribe's money. He was resolved to take the Tribe's money, whether he could help them or not. Even before the Tigua signed a formal contract with Scanlon Gould Public Affairs, Mr. Abramoff could not wait for the money to arrive. On March 3, 2002, he asked Mr. Scanlon "did we get Tigua money?" Even after the Tribe sent a check for $2.1 million, the two could not contain their insatiable greed. On March 19, 2002, Michael Scanlon e-mailed Jack Abramoff asking "Is he [Marc Schwartz] happy? Where is our f - - - ing money!" Abramoff responded ten minutes later, instructing Mr. Scanlon to call Mr. Schwartz and "ASK HIM FOR OUR DAMN MONEY!!!" By the end of March, the Tribe had paid Scanlon Gould a total of $4.2 million for what was supposedly going to be a massive public relations campaign. And, on April 8, 2002, Capitol Campaign Strategies, the alter ego of Scanlon Gould, paid $2.1 to Mr. Abramoff's company Kay Gold.During this time, Jack Abramoff and Michael Scanlon identified election reform as the vehicle into which they would insert the Tigua's provision. Of course, only after the Tribe had paid Scanlon Gould millions of dollars did Michael Scanlon reassess the likelihood of success. In an April 12, 2002 report to the Tribe, Mr. Scanlon wrote that "with political cover generated we feel pretty good about our prospects of tacking the legislation on and getting it through. But please be advised - we are taking the most high-risk approach to this by using election reform as a vehicle." 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.Despite receiving $4.2 million from the Tribe, Jack Abramoff and Michael Scanlon wanted more. From mid- to late- 2002, Jack Abramoff hounded the Tribe for contributions to the Capital Athletic Foundation, his private charitable foundation that he used to support the all boys school he had founded and operated in Maryland. He asked the Tribe to contribute $50,000 to a golf trip to Scotland sponsored by his Foundation. Ultimately, the tribe declined.That did not deter Mr. Abramoff and Mr. Scanlon, however. In a September 18, 2002 e-mail, Mr. Abramoff reminded himself "we need more $ for backlash" after the "Tigua launch." Two and half hours later, Mr. Abramoff wrote to Mr. Scanlon: Did you speak with Marc Schwartz? I have a great idea. Let's tell him that we are launching all missiles to get the bill a vote and, therefore, are using all our resources, so that, once the bill passes, we immediately need more money!! OK?Approximately one month later, Election Reform became law without the Tigua's provision. To this day, the Tribe remains unclear on where the $4.2 million it paid Scanlon went, because it appears it was not used for the purportedly massive P.R. campaign Mr. Scanlon had promised to wage on their behalf.Mr. Abramoff's pursuit of more money from the Tribe did not end in 2002. Only last year, Mr. Abramoff attempted to convince the Tribe to take out life insurance on its elders, and make Eshkol Academy, the all boys school he founded, the sole beneficiary. Mr. Abramoff claimed that the proceeds of the policies would go to his school, which would then pay Greenberg Traurig for the lobbying fees incurred by the Tigua. I again direct everyone's attention to the poster, which reflects Mr. Abramoff's e-mail to Mr. Schwartz on the subject: Marc, per our discussion, the following short memo describes the opportunity to obtain lobbying funds via the insurance program. This will also greatly benefit our school, which means the whole world to me. If it can work, it's truly a win-win.On behalf of a registered non-profit charity (such as a school) CFS will enroll Native American elders, 75 years and older, in term life insurance. The premiums will be entirely financed (with both debt and equity) using the insurance policies (no obligation of any kind to the Tribe or Native Americans, or the charity) and repaid by the proceeds of the policy at the demise of the insured. Any remaining funds at that time will accrue to the charity.From these funds, the school shall pay Greenberg Traurig its fees and any out of pocket costs for a new Washington representation.The Washington representation work done by Greenberg Traurig made possible as a consequence of this program shall be for the sole benefit of the tribe, including efforts to obtain federal appropriations, grants and other legislative and administrative assistance for the tribe. After brief consideration, the Tigua rejected it, because "it just wasn't right." The story I just shared with you and which we will learn more about today is tragic. Jack Abramoff and Michael Scanlon preyed upon the Tribe and its members when they were most vulnerable. They played upon their hopes and fears. They went to El Paso selling salvation and instead delivered snake oil.Those two men walked away with money that would have gone and should have gone to the children and elders of the tribe. Why? Because Jack Abramoff and Michael Scanlon were all about the money.In closing, I just want to thank the Tigua Tribe, Lieutenant Governor Hisa, and Mr. Schwartz for their invaluable assistance and continuing cooperation in the investigation, and for their participation in today's hearing. Mr. Schwartz told my investigators that after The Washington Post articles broke earlier this year about the other tribes, Mr. Abramoff called him and said don't worry, no one will ever know about the Tigua. Well, Mr. Abramoff, the Committee knows, and now the rest of the world knows too, about the gross indignity it seems you and Mr. Scanlon perpetrated against the Tribe. And I pledge, as a member of the Committee on Indian Affairs, that we will not stop until the complete truth is told.
7)Federal Document Clearing House Congressional TestimonyNovember 17, 2004 WednesdayCAPITOL HILL HEARING TESTIMONYSENATE INDIAN AFFAIRSLOBBYING BY INDIAN TRIBESTESTIMONY-BY: MARC SCHWARTZ, MARC SCHWARTZAFFILIATION: MARC SCHWARTZ PARTNERS, INC., EL PASO, TEXASStatement of Marc Schwartz President, Marc Schwartz Partners, Inc., El Paso, TexasCommittee on Senate Indian AffairsNovember 17, 2004Thank you, Mr. Chairman and distinguished members of the committee. My name is Marc Schwartz and I have had the honor of being able to work with the Tigua Tribe in matters involving public relations and government affairs since 1998. Since the outset of the press coverage of the actions by Mr. Abramoff, Mr. Scanlon, and their contemporaries, against Indian Tribes across the country, not a day has passed that I haven't relived all of the events of my unfortunate association with them.As I was preparing for our visit here today, I was reminded of a trip I made with two members of the Tigua Tribal Council in August of 2002 to attend a briefing with Congressman Bob Ney and Mr. Abramoff for the so-called legislative effort that was underway at the time. We arrived with much anticipation and I felt a great deal of pride to be in the company of the Council members who had never been inside the Capitol much less to visit with such an esteemed member of Congress who held a leadership position in our nation's system of democracy. During that meeting, Congressman Ney was very animated about Mr. Abramoff's skill and repute as a leader in the lobbying circles. We were told about the impending success of Mr. Abramoff's legislative plan and how much Congressman Ney wanted to help with to restore the Tribe's ability to conduct gaming on their reservation. On the plane back to El Paso, I listened intently to the Council members as they recounted their thoughts, and the day's achievements. I recall vividly how wonderful it was for them to have had the experience and the good fortune of the Tribe to have Jack Abramoff working for them.As a result of that meeting, I would never have expected to be sitting before this august body two years later to testify and answer questions regarding what, in my opinion, is the most despicable acts of greed and fraud that I hope to never, ever see again.. It goes without saying that I am personally grateful and appreciative to you, Mr. Chairman, and the members of this committee and the Commerce Committee and your collective staffs for the professionalism and dedication that is evident as you search for answers to this horrific episode. It is through that tenacity and desire to seek nothing more than the truth that I join you here today.Mr. Chairman and members of the Committee, shortly after the first reports began to surface regarding the liberties Mr. Scanlon and Mr. Abramoff took against their clients, I spoke with both of them regarding the various allegations and I must report that their deception continued unabashedly. In particular, after my discussion with Mr. Scanlon, he sent an email dated February 24, 2004 that I distributed to the Tribal Council as an explanation for the motivation behind the story. He attributed it to political infighting among the Tribes quoted and even still reinforced that the work he had done for the Tigua Tribe remained as he had always represented it to our team.I'm sure many of you are wondering just how this started and, maybe more importantly, how seemingly bright folks could have fallen for Scanlon and Abramoff's schemes. During a particular Tribal Council meeting in early February of 2002, one of the Tigua Tribal Attorneys reported on a contact one of their partners had received regarding Jack Abramoff. Mr. Abramoff, through an attorney representing the Choctow Tribe of Mississippi had offered to visit with the Tigua Tribe to offer his help. Mr. Abramoff was unknown to us at that time and I was assigned the task of making contact with him to determine what he wanted to discuss. A simple internet search at the time revealed that Mr. Abramoff was a highly respected lobbyist with extensive ties to the Republican leadership, including Representative Tom DeLay and others. I recall some of the reports referred to him as the "uber" lobbyist, one who was in such an elite position with friendships that extended directly to the White House.You must bear in mind that, during those times, virtually the only relationship the Tiguas had with Republican elected officials was either in a courtroom or exchanging quotes in news articles. Nonetheless, during my conversation with Mr. Abramoff on February 6, 2002, he expressed his indignation over what had occurred with the Tigua Tribe in Texas and specifically.referred to the need to "right the terrible injustice" that had been brought upon the Tribe. He offered pro-bono services for himself and his firm, Greenberg-Traurig to effect this legislative solution. I remember thinking how confident he was in each of his statements and invited him to meet with the Pueblo's Tribal Council to speak directly to them. I must clarify here that during the period where the Tribe's litigation with the State of Texas was ongoing, there were many individuals from all walks of life that contacted the Tribe and me, attempting to sell their "guaranteed" solutions for the Tribe's problems with the State. Most would be dismissed immediately, and others that required a bit of research generally always turned out to be nothing more than offers to separate the Tribe from their money. However, Mr. Abramoff had both the credentials, as best as could be determined, and more importantly had offered the services of both himself and his firm at no charge. This was quite a difference from the usual band of con men who surface during a crisis to prey on those involved in the crisis.Throughout our telephone conversations Mr. Abramoff spoke about his broad relationships with Republican party leaders and their overall concern for how the Tribe had been mistreated by his party's leaders in Texas. It was obvious from those conversations that the Tribal Council and Mr. Abramoff needed to meet. That meeting took on February 12, 2002 and included Mr. Scanlon. Scanlon and Abramoff spent the first few minutes providing an overview of their individual biographies and purpose for the visit. It was during this meeting that, for the first time, I began to believe there might be some hope for a legislative solution from Congress. Mr. Abramoff characterized his presence at the meeting alternately as he being interested in righting the wrong that had been perpetrated on the Tribe and representing the Tribe after his ultimate success in a legislative effort. He explained to us that Mr. Scanlon was the "preeminent expert in grassroots politics" and that with his experience with Representative Tom DeLay, had developed a reputation as the "go to guy" for the most difficult campaigns.During this first meeing, Mr. Abramoff told us that his part of the work would be relatively easy but that we would need a "bulldog" on our side to keep the effort from being undone. He stated that he had already spoken to several of his friends on the hill and that he was confident it could be passed in secret, but that once the President signed it there would be lots of people out to.restore the original language and that is where Scanlon's efforts were so important. Mr. Scanlon represented that his part of the effort would be expensive, essential, and exclusive. He described in his proposal to the Tribe shortly after the first meeting that "Operation Open Doors is a massive undertaking fueled by a nationwide political operation. This political operation will result in a majority of both federal chambers either becoming close friends of the tribe or fearing the tribe in a very short period of time". Scanlon through his proposal also confirmed much of what he presented us at the first meeting. Again, quoting from his proposal, "Simply put, you need 218 friends in the U.S. House and 51 Senators on your side very quickly, and we will do that through both love and fear".Throughout all these discussions, Abramoff represented his work and that of Greenberg Traurig to be pro-bono, but the Tribe would need Scanlon's efforts in order to ensure success. During a telephone call shortly after the presentation that his efforts would be completely wasted if we didn't have the ability to maintain the win in the subsequent assault. After the initial meeting, in an email to me dated February 18, 2002, Abramoff said and I quote, "As we discussed, until we are able to achieve the federal legislative fix, we at Greenberg Traurig will not be engaged by the tribe for services officially. All our work will be done on a pro-bono basis. Once the legislation is signed by the President, we would anticipate the tribe engaging us to represent it at the federal level and assist with the effort to obtain a Class III compact. Our normal rate in our tribal government practice is between $125,000 to $175,000 per month for our clients."Key to all of these issues was the financial requirements that Tribe would have to provide. In both his presentation and proposal, Michael Scanlon detailed several items critical to the success of the campaign, including a database that would provide the most thorough single source of information that could be created. This customized product would be created by his staff, due to the confidential nature of our program, and would be proprietary to the Tribe.Critical to the success of the program according to Abramoff and Scanlon was the necessity to maintain absolute and complete secrecy. The friendly legislators that would be carrying this measure for Abramoff required this and Abramoff explained that this was the most important concept to the program. . .of course second possibly to the political contributions that had to made.in support of his friends. This particular and peculiar request for so much secrecy was not troubling to me at the time, since we had already spoken with staff members from the Greenberg firm and exchanged contact information, etc., and with that firm's reputation and Mr. Abramoff's openness about "his" firm left me with no doubt at the time of the legitimacy of this requirement.Abramoff and Scanlon were instructed to provide a proposal, which I have quoted from earlier, and to send it to the Tribe. Due to an internal issue, it was decided that Scanlon and Abramoff should make a return trip for additional discussions. That meeting took place on February 22, 2002 and although Mr. Scanlon was not able to attend, Mr. Abramoff did return and presented their proposal.The Tribal Council took extraordinary measures to meet and consider their proposal. It was decided to accept Mr. Abramoff's offer of help and retain Mr. Scanlon for the efforts Abramoff described as critical. Almost immediately, Mr. Scanlon was requesting payments in order to begin the arduous task before him. Throughout those exchanges, I had several conversations with Abramoff where he placed subtle pressure for the Tribe to finalize payments with Scanlon since he and his staff had already spoken with several members of Congress and they were willing to help.From every outward view, Mr. Abramoff was searching for legislation and "friends" on the Hill that would do this for him. Mr. Scanlon and his associates were busy creating this monolithic political response effort that would be centered around the aforementioned customized data source, one that I had come to believe would be the envy of even the most sophisticated Presidential campaign.Even before the contract or document between the Tribe and Scanlon had been completed, Abramoff had sent me a list of contributions that had to be made immediately. That list represented some $300,000 and he asked that the checks be drawn and sent to him for distribution..Of course throughout this process the key word was secrecy and so there was a very tight circle of people who knew about this effort. On March 11, 2002, Abramoff reported the first potential bill that he had targeted and in an email suggested that the language would be offered in the Terrorism Insurance Bill. These types of communication are significant in that it offered some measure of proof that the effort, at least from Abramoff's side of the equation, was moving forward and he would probably meet his goal of having this completed in a few months.In a variety of ways, Abramoff and Scanlon continued to report on minor successes. Even when reporters began questioning the size and recipients of the Tribe's political contributions, Abramoff would call and reassure that the contributions were critical in order to have the support needed to keep the measure under wraps until absolutely necessary.In late March of 2002, Abramoff had reported that he and his staff had spoken to Representative Bob Ney who was carrying the election reform bill and had agreed to carry the Tigua language in that conference committees report. On March 26, 2002 I received a phone call from Abramoff telling me that the Tribe needed to make additional contributions to Congressman Ney through some PACS he had. He told me it was critical. I approached the Tribal Council with the request for the $32,000 in contributions and it was approved. Later that same day, I received an email from a Greenberg Traurig staff person with the breakout and addresses for those contributions. Each of these additional contributions were outside of what the Council had previously approved as part of the initial agreement with Abramoff. But those kinds of requests continued throughout the summer of 2002. On June 7 th , of that same year, I received an email from Abramoff stating that Congressman Ney had asked if the Tribe could cover the expense for a trip to Scotland. The cost was suggested to be $50,000 and again Abramoff referred to him as "our friend".These types of requests became all too common during the process, but by following the progress of the election reform measure, we knew it was a stop/start proposition so there was a great deal of down time..Throughout this entire episode, I requested on behalf of the Tribe comprehensive reports in order to keep the Tribal Council informed as to the progress of the initiative. Several of these reports stated that the process Scanlon and his team were working on required a great deal of his staff's time and energies but would be completed and ready when needed. As early as April of 2002, Scanlon reported to me that the database and assorted other assets were ready and in use. On April 16 th he reported they were "already laying down cover for Senators in New York and Connecticut.As the Election reform measure languished through the summer, Abramoff and Scanlon continued to report on substantial progress and a virtual guarantee of success. During that time, I requested a meeting with Abramoff and Scanlon to brief the Council on those efforts. I suggested that we would be in Washington and would like to meet with Congressman Ney. Abramoff set the meeting up in early August of 2002. In an email to me, Abramoff mentioned that Congressman Ney didn't want his trip to Scotland brought up, as he would show his appreciation to the Tribe later. During the meeting with the Congressman the schedule of the expected passage of the Election Reform bill along with the Tribal language included.For the rest of the months leading up to October of 2002, both Abramoff and Scanlon continued to report that the Senate side would not be a problem since Senator Dodd had agreed to include the solution through his side of the conference committee. It wasn't until the announcement of the final passage of the election reform measure that Abramoff phoned to say that he had just spoken with Congressman Ney who had reported that Senator Dodd had gone back on his word and stripped the measure from the committee report. Abramoff suggested that we contact any Democratic members and see if we could get them to intercede with Dodd to restore the language. We did, in fact, contact our own Congressman who reached Senator Dodd and reported to us that Senator Dodd knew nothing about the issue, but would be happy to talk to the Congressman about it when they returned from recess.Mr. Chairman and members of the Committee, you can only imagine the sheer disappointment we all felt about these events. For an almost sure thing, as Abramoff had stated numerous times to utter defeat was extremely hard to take. In a phone call on October 4 th , Abramoff said that.Congressman Ney wanted to speak directly to the Tribal Council to express his outrage. On October 8 th , Congressman Ney held a conference call with the Tribal Council and told them about his disbelief that Senator Dodd had gone back on his word. He further reported that he would continue to work on the issue and believed that the Tribe was entitled to their gaming operation and he would personally continue to seek a solution.As a result of all of the activities I have chronicled for you, I assure you that both Abramoff, Scanlon and their associates were extremely convincing in their efforts and so it came as quite a surprise to learn of the details of their other schemes and activities.Thank you, Mr. Chairman and members of the committee for the opportunity to share this information with you and I would be happy to answer any questions, you may have.
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