Jack Abramoff is now right where the feds seem to want him—in a squeeze. The former superlobbyist for the Seattle-based Preston Gates Ellis law firm has been indicted by a federal grand jury in Florida for alleged fraud and conspiracy. Prosecutors say the purchase by him and a business partner of a fleet of casino gambling ships in 2000 involved a fake wire transfer of $23 million and the falsification of loan documents.
Arrested Thursday, Aug. 11, in Los Angeles, Abramoff says he's not guilty. He faces up to five years in prison for each of six counts and the forced return of $60 million lost by a casino investor. The Florida indictment could in part be an attempt to pressure Abramoff, a top Bush fund-raiser, into striking a deal with prosecutors. Abramoff's Capitol Hill lobbying is being probed by a D.C. grand jury and Senate and House committees. Investigators are looking into as much as $66 million in questionable funds involving Abramoff's lobbying for Indian casinos at Preston Gates Ellis and a second law-and-lobbying firm, Greenberg Traurig of Miami. Officials are also probing his close connections with House Majority Leader Tom DeLay, R-Texas, whose fund-raising campaigns are being investigated in D.C. and Texas. (See "Following the Money," April 6.)
U.S. officials are indicating Abramoff shouldn't expect any favors because of his Republican connections. Southern Florida Special Agent in Charge Michael Clemens says in a statement that the indictment "demonstrates that regardless of position, status, wealth, or associations, fraudulent activity will not be tolerated." That might be a signal to others involved. "Those who have worked closely with Abramoff in the past will be looking over their shoulder," former federal prosecutor Christopher Bebel told Bloomberg News. "This is a very dangerous situation for those who have worked hand in hand with Abramoff and have skeletons in their closet."
Abramoff, 46, worked as one of the capital's top lobbyists for Preston Gates Ellis from 1994 until 2001. The Seattle firm is not charged or named in the Fort Lauderdale indictment, and there is no direct evidence that Abramoff used his former Preston Gates Ellis position to facilitate the deal for SunCruz Casinos. However, The Washington Post reports that Abramoff did leverage his congressional connections to advance the purchase from businessman Konstantinos "Gus" Boulis (who, unrelated to the deal, was later killed in a gangland-style hit). On his loan papers, Abramoff also lists Rep. Dana Rohrabacher, R-Calif., and Tony Rudy, then an aide to DeLay, as personal references.
According to U.S. Attorney R. Alexander Acosta, Abramoff and partner Adam Kidan, former owner of a Dial-a-Mattress franchise in D.C., agreed to purchase SunCruz for $147.5 million in June 2000 and later provided a down payment of $23 million. But the wire transfer they sent, according to Acosta, was counterfeit. Additionally, he says, "both defendants provided personal financial statements that contained false information concerning their respective assets and liabilities."
Adding to the Abramoff backstory, The Los Angeles Times reported Aug. 7 that Abramoff was the target of a 2002 grand jury probe in Guam. He was suspected of influence peddling in a case involving court reform on Guam, a U.S. territory. A day after a subpoena was issued, the federal prosecutor in the case was demoted by President Bush. The inquiry then stalled, the Times said.