"One of the most disturbing elements of this whole sordid story is the
blatant misuse of charities in a scheme to peddle political
influence," said Mark Everson, commissioner of the Internal Revenue
Service."
"Abramoff and a partner, Michael P.S. Scanlon, a onetime aide to
former House Majority Leader Tom DeLay (R-Texas), admitted bilking
Indian tribes out of tens of millions of dollars and attempting to
bribe public officials. They used a network of charities and other
nonprofits — some existing, some they created — to forge a
full-service influence-peddling operation."
"There was the time he laundered money through a religious group's
accounts to try to bribe a congressional aide. He diverted funds from
a youth athletic foundation to bankroll a golf junket for a
congressman and to bolster the bank account of his Washington
restaurant. He used two other nonprofits to line his own pockets with
millions of dollars defrauded from clients."


Guess who else has been using a charity for political purposes?  Yes,
Tom DeLay.  Hey, why wouldn't he...it was working for Jack and Mike, a
former DeLay aide as was Mr. Rudy who got greased and his wife who got
hired.  And DeLay gets rewarded this week by the Republican
gang...oops, House leaders with committee seats on Appropriations (a
seat vacated by convicted criminal Cunningham (also a Republican))and
the subcommittees that oversee NASA in his home district and the
Department of Justice which is investigating him.  What's wrong with
that picture?  Looks like a real "Boehner" to me...

David Bier

http://www.latimes.com/news/nationworld/nation/la-na-charities11feb11,0,5568579.story?coll=la-home-headlines

>From the Los Angeles Times

Abramoff's Charity Began at Home
The lobbyist admits he used nonprofits to evade taxes, pad his pockets
and bribe officials.
By Chuck Neubauer and Richard B. Schmitt
Times Staff Writers

February 11, 2006

WASHINGTON — In his own way, disgraced super-lobbyist Jack Abramoff
engaged in many charitable endeavors over the course of his
decade-long career as a Washington insider.

There was the time he laundered money through a religious group's
accounts to try to bribe a congressional aide. He diverted funds from
a youth athletic foundation to bankroll a golf junket for a
congressman and to bolster the bank account of his Washington
restaurant. He used two other nonprofits to line his own pockets with
millions of dollars defrauded from clients.

Charities are supposed to advance the public interest, which is why
they aren't taxed. But Abramoff, by his own admission, used them to
evade taxes, enrich himself and bribe public officials, according to a
plea agreement he signed with federal prosecutors in January.

"One of the most disturbing elements of this whole sordid story is the
blatant misuse of charities in a scheme to peddle political
influence," said Mark Everson, commissioner of the Internal Revenue
Service.

Abramoff's use and misuse of nonprofits played a key role in each of
the three counts of his indictment: conspiracy, mail fraud and tax
evasion. He admitted evading $1.7 million in income taxes over three
years, in part by using nonprofits to conceal personal income from the
IRS.

The fast-growing ranks of tax-exempt, nonprofit organizations are
tailor-made for operators like Abramoff.

The number of tax-exempt groups in the United States has tripled over
the last three decades, but nonprofit groups usually pay no tax, so
there is little incentive for the IRS to keep an eye on them.

The lack of oversight is especially meaningful in Washington, where
trade associations, public-interest groups and grass-roots lobbying
organizations all have tax-exempt status under generous IRS rules
designed to foster public debate. Members of Congress are also getting
into the act and forming their own charities.

Abramoff and a partner, Michael P.S. Scanlon, a onetime aide to former
House Majority Leader Tom DeLay (R-Texas), admitted bilking Indian
tribes out of tens of millions of dollars and attempting to bribe
public officials. They used a network of charities and other
nonprofits — some existing, some they created — to forge a
full-service influence-peddling operation.

They included:

•  The Capital Athletic Foundation, created by Abramoff as a
sports-oriented youth charity. He funded it with millions improperly
diverted from his lobbying clients and treated it as his "personal
piggy bank," a lawmaker said, spending money on pet projects that had
nothing to do with its stated purpose.

•  The American International Center, a bogus "international think
tank" at a beach house near Rehoboth Beach, Del. Abramoff and Scanlon
used the center to collect millions from their lobbying clients and
then send it to their personal bank accounts.

•  Toward Tradition, a nonprofit in Mercer Island, Wash., that
promotes "traditional Judeo Christian values" and was used to help
Abramoff funnel an alleged $50,000 bribe of an aide to DeLay.

•  The National Center for Public Policy Research in Washington, an
obscure conservative organization that Abramoff used to defraud an
Indian tribe and an offshore gaming alliance of at least $2 million
for his and Scanlon's personal enrichment.

Abramoff's story is not just one of clever fraudsters, but of the
seeming willingness of some donors and charities to look the other
way. They say that they too are victims, although some experts
question whether they were diligent enough.

Rabbi Daniel Lapin, the head of Toward Tradition, said he had no
reason to be suspicious of a gift from an Abramoff client called
eLottery, even though his organization is avowedly anti-gambling.
Abramoff, a former board member of the group, was considered a trusted
friend.

"Toward Tradition and I interact with thousands of individuals and
hundreds of organizations every year," Lapin said in a statement. "It
is just unrealistic to suppose that none of these relationships are
ever going to become problematic. There was no reason for Toward
Tradition to spurn Jack Abramoff's support."

Some experts say charities ask for trouble when they accept gifts with
strings attached.

"The moment the donor appears to have a vested interest in who I hire
and how I conduct my business … I think I have an obligation to look
into that," said Diana Aviv, the president and chief executive of
Independent Sector, a Washington-based coalition that lobbies on
behalf of nonprofit groups.

The story of Abramoff's misuse of charities and nonprofits was pieced
together from his plea agreement, nonprofit tax returns, interviews,
and e-mails and other documents released by the Senate Indian Affairs
Committee, as well as testimony from the committee's hearings on Abramoff.

The Senate Finance Committee is investigating Abramoff's use of
charities and other tax-exempt organizations, and has requested
detailed information from the Capital Athletic Foundation and the
National Center for Public Policy Research

Abramoff, a Republican activist since college, became a lobbyist when
the GOP captured control of Congress in 1994. He was good at his job.
Among his early handiwork was helping to preserve tax breaks for the
$20-billion-a-year Indian gaming industry, which bankrolls schools,
hospitals and tourist attractions for the tribes.

By the new millennium, he was viewed as one of the most powerful and
effective lobbyists in Washington. In January 2001, he moved his
lobbying business to the new Washington office of the Greenberg
Traurig law firm of Miami, which would become the base for an even
more aggressive operation.

Abramoff, by then secretly in partnership with Scanlon, aggressively
recruited new Indian tribes as clients. In addition to paying lobbying
fees to Greenberg, Abramoff persuaded the tribes to send millions to
Scanlon's consulting firm, Capitol Campaign Strategies, which
performed "grass-roots and public relations work" for inflated fees.

Through that arrangement, according to their guilty pleas, the men
secretly split about $40 million they stole from the tribes between
2001 and 2004.

Less than a year into his new job, Abramoff engineered his first major
fraud involving a charity, converting a $1-million check that one of
his new tribal clients, the Coushatta Tribe of Louisiana, had written
to Greenberg for lobbying services.

He persuaded his new partners at Greenberg Traurig that the Coushatta
intended the money as a contribution to a charitable organization, the
Capital Athletic Foundation. Abramoff had organized the group a few
years earlier. The law firm forwarded the money.

But he told Scanlon he wanted the money to first go through Greenberg
to pump up its lobbying revenues so it did not drop out of the ranks
of the top 10 lobbying firms. The tribe believed that the money was
being used for lobbying or political activities on its behalf. Scanlon
sent the tribe a fraudulent $1-million invoice on behalf of Greenberg
— misspelling it "Greenburg" — for "public affairs services."
Greenberg had not authorized the invoice; the Coushatta had not
authorized giving the money to the Capital Athletic Foundation.

Abramoff had thus achieved an unusual twofer: He defrauded the tribe
out of its money using the false Greenberg invoice, and then shook the
money loose from Greenberg by telling his partners that it was a
charitable donation from the Coushatta.

"In my personal view, this payment reveals the extent of Mr.
Abramoff's shamelessness," David Sickey, a Coushatta tribal council
member, told a Senate panel investigating Abramoff last fall.

Getting money from the Coushatta was "an absolute cake walk," Scanlon
e-mailed Abramoff.

Greenberg Traurig fired Abramoff nearly two years ago after learning
of "conduct we found unacceptable," the firm said in a statement. The
firm said it was cooperating with investigators.

Abramoff's spokesman had no comment for this story. Scanlon's attorney
did not respond to written questions.

The Coushatta check was the first of several large payments that
Abramoff and Scanlon diverted from clients, often by laundering the
sums through friendly charities. Abramoff used the $1 million as seed
money for the athletic foundation, which he had formed in 1999 and was
apparently his favorite "charity." It was established with the stated
mission of funding sports programs in the Washington area. But tax
records show that little money went for that purpose.

Soon after the Coushatta check was received, for example, Abramoff and
a business associate discussed in e-mails depositing the $1 million in
a Maryland bank headed by a friendly banker to help "grease" the way
for obtaining a favorable bank reference letter for an oil-drilling
venture in Israel. They deposited the money in the athletic
foundation's account at the bank in November 2001, but it is not clear
whether he got his letter or what happened to the oil deal.

In early 2002, the bank account grew when another tribal client — the
Mississippi Choctaws — made the first of two $500,000 payments to the
athletic foundation. Tribal leaders testified that they had been led
to believe it would be "passed through" to other organizations that
would support grass-roots projects to educate voters about Indian
gaming issues.

Around the time the first $500,000 was received in the foundation's
bank account, $200,000 was transferred out of the account to Livsar
Enterprises, the holding company that Abramoff had set up to establish
Signatures, the high-end restaurant he was getting ready to open the
following month in Washington, The Times learned.

An e-mail exchange with his restaurant partner showed that Abramoff
had been anxiously awaiting the Choctaw money as they scrambled to get
the restaurant opened. The Choctaw money arrived Jan. 3. His partner
wrote that night that a banker "really saved us today" by transferring
money from the athletic foundation to the restaurant account. Money
was transferred back a few weeks later.

The restaurant became a centerpiece of Abramoff's lobbying operation,
where he wined and dined congressmen and their staffs as part of his
acknowledged bribery schemes.

The athletic foundation gave Abramoff an aura of respectability around
town. He once persuaded Washington Redskins owner Dan Snyder to lend
his name to a fundraiser for the foundation, although the benefit
never took place.

The athletic foundation also gave Abramoff access to millions for his
pet causes, many of which dovetailed with his orthodox Jewish beliefs.
The biggest beneficiary was Eshkol Academy, an Orthodox Jewish boys
school he founded in Columbia, Md., which at least one of his sons
attended. The foundation also sent $100,000 to an Israeli settler who
ran a sniper training workshop for militant Jews.

Abramoff has admitted that he used the foundation to pay the $166,000
cost of a trip to play the storied St. Andrew's golf course in
Scotland, which included Rep. Bob Ney (R-Ohio), two top aides and others.

Abramoff admitted in his plea agreement that the trip was part of a
bribery scheme intended to offer "things of value" to Ney and his
staff in exchange for a series of official acts. Ney, who has denied
any wrongdoing, is under federal investigation.

Abramoff also acknowledged that in raising money toward the golf
outing, he defrauded two clients that thought they were donating to an
athletic foundation. He obtained $25,000 apiece from the Saginaw
Chippewa Indian Tribe and SPI Spirits Group, the manufacturer of
Stolichnaya vodka. Officials of the Chippewa tribe have said they made
the donation because Abramoff told them it would impress DeLay.

There is no indication that DeLay knew his name was being used this way.

"The congressman would never allow his name to be used for nefarious
purposes as is the case here," said DeLay spokeswoman Shannon Flaherty.

Abramoff told a fellow lobbyist at Greenberg Traurig, Tony Rudy, in an
e-mail that the athletic foundation was "a foundation doing some
issues education." But another lobbyist at the firm, Todd Boulanger,
suspected something was awry.

Asked by Rudy to help raise funds from the Chippewa, Boulanger
responded in an e-mail, "I'm sensing shadiness."

Rudy, a top aide to DeLay before going to work for Abramoff, figured
in an earlier chapter of the lobbyist's saga.

It involved another node in Abramoff's network of nonprofits: Toward
Tradition, the Judeo Christian group that supports "a moral public
culture," according to its website.

In 2000, Abramoff got lobbying clients to give Toward Tradition
$50,000 and he set the condition that it be used to hire Rudy's wife,
when Rudy was on DeLay's staff. She was hired to organize a Washington
political conference the nonprofit was planning.

Abramoff admitted in his plea bargain that the payment was intended to
bribe the DeLay aide to help block legislative restrictions on
Internet gambling and increases in postal rates. The money came from
eLottery, an Internet lottery firm, and the Magazine Publishers Assn.
The proposed Internet restrictions were voted down, and the rate
increases were slowed.

Both organizations said they didn't know what the money would
ultimately be used for. They said the contributions were made at the
direction of Abramoff and his lieutenants in the hope of burnishing
the clients' images among conservatives in power in Washington.

Rudy did not respond to several requests for comment.

For all the money that was coursing through his operation, Abramoff
seemed under constant financial stress because of the drain from his
school and restaurant.

Moreover, some of his tribal clients were starting to balk at his
stiff fees. But he managed to tide himself over, and nonprofits were
once again the vehicle.

One was the National Center for Public Policy Research, a small
conservative Washington think tank on whose board Abramoff had sat for
years. It was run by his old friend Amy Ridenour.

"I completely trusted Jack," Ridenour told the Senate Indian Affairs
Committee investigating Abramoff in June. She told them she now
believed he lied to her and defrauded her organization and the tribe.

Abramoff used the group as a money laundromat.

In 2002, he had the Choctaws write a $1-million check to the center,
purportedly to educate the public on the benefits of Indian gaming. He
convinced Ridenour that the tribe wanted to donate $450,000 to the
athletic foundation and pay $500,000 to Capitol Campaign Strategies,
Scanlon's consulting firm, for the educational work. The final $50,000
would go to a businessman to run the program.

She later learned the $50,000 paid a personal debt of Abramoff's. She
also said she hadn't realized Scanlon was sharing his fees with
Abramoff, or that the tribe had not authorized the payment to the
foundation.

At a hearing in June, Sen. John McCain (R-Ariz.) accused Abramoff and
Scanlon of profiting by $1 million in this deal and committing what
"appears to be a $1-million fraud."

In 2003, Abramoff used the center again to convert $1.25 million from
an offshore gambling client to a company called Kaygold, which turned
out to be his personal holding company. It operated from his home and
had no other employees.

Meanwhile, Scanlon turned to the "global think tank" he had set up in
2001, the American International Center, a nonprofit based near a
vacation home he owned on the Delaware shore and which had no
discernible assets or expertise. McCain called it a "gigantic scam."

Scanlon and Abramoff had convinced the Coushatta that their profitable
central Louisiana casino was endangered by competition from another
tribe and the possibility that Texas would legalize casino gambling.

On April 9, 2003, the Coushatta tribe paid the American International
Center $2.3 million for political and grass-roots work. Four days
later, Scanlon transferred $1.3 million to his consulting firm and
$991,000 to Kaygold. Scanlon spent all but $15,000 of his share for
work on his home and other personal needs.

"Where it went after that, the committee cannot yet say," McCain said
at the Indian Affairs Committee hearing in November. "What it can say,
however, is that the Coushatta apparently received little of the
intended benefits for the vast sums it paid."

Later in 2003, a tiny Alexandria, La., newspaper, the Town Talk,
revealed that the Coushatta had paid Scanlon's company $13.7 million
for public relations work, a grossly inflated sum. Members of the
tribe began to suspect they had been duped.

In early 2004, the Washington Post revealed more details of the fraud,
including the fact that four tribal clients had paid $31 million to
Scanlon's company at Abramoff's recommendation, triggering the Senate
investigation.

Last month, Abramoff pleaded guilty and agreed to cooperate in a
wide-ranging corruption probe of members of Congress and their staffs.
He faces nine to 11 years in prison and penalties totaling $26.7 million.

Scanlon, who pleaded guilty in November to conspiring to defraud the
Indian tribes and to bribe public officials, also is cooperating with
investigators.

Abramoff's charities are dormant. His restaurant business is closed.
His Jewish academy has shut down and is being sued by its former
teachers for back pay.





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