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A Lobbyist's E-Mail Trail of Billing, Status, Charity

As he was allegedly bilking Indian tribes of millions, Jack Abramoff bankrolled a Jewish school and fretted about his social standing.

June 25, 2005|Mary Curtius | Times Staff Writer

WASHINGTON — In 2002, even as he raked in millions of dollars in allegedly excessive fees from Indian tribes and other clients, Washington super-lobbyist Jack Abramoff found himself in a financial crunch.

"I am concerned that while you are being very good to others and building a school, we are not taking care of your family financial needs," his accountant wrote in a November 2002 e-mail. "Even with another few million coming in the next few months we still need to tighten up."

Once closely allied with House Majority Leader Tom DeLay (R-Texas), Abramoff is under investigation by the Senate Indian Affairs Committee and a federal grand jury for allegedly bilking Indian tribes that were seeking political influence in Washington. He has insisted he did nothing wrong.

This week, Senate investigators released hundreds of e-mails that shed light not only on Abramoff's multilayered financial dealings, but the complex life of the man at the center of an ethics scandal that had cast a shadow over DeLay.

The e-mails portray Abramoff as so focused on his social status that he asked a rabbi to falsify awards to improve his chances of becoming a member in an exclusive Washington club, and so concerned about the quality of Jewish education in the Washington area that he founded his own Orthodox school.

Even as he boasted in e-mails of padding bills and falsifying expenses to tribal clients, Abramoff poured millions into the school, sent thousands of dollars a month to equip Jewish militias in the West Bank, donated to charity and sent a monthly stipend to at least one relative.

In a December 2002 e-mail, the accountant reminded him that Abramoff's wife liked to say: "There is a reason why Hashem [God] gave Jack the ability to earn so much money."

Gail Halpern, the accountant, went on to warn that the lobbyist's commitment to the Eshkol Academy was a tremendous drain on his finances. He opened the academy in suburban Maryland in 2002 as an elite, boys-only boarding school offering a high-quality Jewish education.

Noting that he was spending about $200,000 a month to cover rent and salaries at the school, which had a peak enrollment of about 100 students, Halpern wrote: "Please don't get too upset with me asking you this but is it at all possible for you to suspend your kindness and generosity until we have this Eshkol matter under control?''

Abramoff closed the school in 2004 after questions were raised in the press about his financial dealings with Indian tribes.

In the December 2002 e-mail, Halpern advised Abramoff to end his $3,560 monthly stipend to Shmuel Ben Zvi, a Jewish settler, and to stop buying "spy equipment," including night vision goggles and camouflage, which Ben Zvi was using to equip paramilitary units in the West Bank.

She also urged Abramoff to stop sending $2,000 a month to his cousin and another stipend of an unspecified amount to a rabbi, and to "hold off on any other charitable contributions for awhile ... every small bit will help."

But Abramoff resisted: "I can't suspend [Ben Zvi] on short notice nor my cousin," he wrote back. "We will just have to make more money."

And that he did, in what Sen. Byron L. Dorgan (D-N.D.), the ranking Democrat on the Indian Affairs Committee, said was an arrangement that constituted "fraud on a pretty grand scale, even by Washington standards."

Investigators are still trying to untangle Abramoff's web of financial dealings with a business partner, Michael Scanlon.

Senate investigators have established a paper trail of e-mails, invoices and other documents that, along with testimony, indicates Abramoff established a secret partnership with Scanlon. The documents suggest that the pair lined their pockets with millions of dollars in questionable fees from the Mississippi Band of Choctaw Indians and other clients.

Under the arrangement, dubbed "gimme five" by Abramoff and Scanlon, Abramoff would retain a client, then bring in Scanlon as an independent consultant, records show. Scanlon would then allegedly charge exorbitant fees for his services and expenses in representing tribal interests and secretly split much of the money with Abramoff.

In 2002, Scanlon's firm paid Abramoff $13.5 million in "referral fees" under the "gimme five" arrangement, Sen. John McCain (R-Ariz.), chairman of the Indian Affairs Committee, said at this week's hearing.

Based on the documents and testimony, the investigators also believe that Abramoff and Scanlon financed congressional junkets by funneling money extracted from tribes through nonprofit organizations.

The question surrounding DeLay is whether some of his overseas trips were improperly financed by Abramoff. DeLay has denied any wrongdoing.

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