washingtonpost.com
Tyco Exec: Abramoff Claimed Ties to Administration
By R. Jeffrey Smith, Washington Post Staff Writer
Friday, September 23, 2005;

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Republican lobbyist Jack Abramoff bragged two years ago that he was in contact with White House political aide Karl Rove on behalf of a large, Bermuda-based corporation that wanted to avoid incurring some taxes and continue receiving federal contracts, according to a written statement by President Bush's nominee to be deputy attorney general.

Timothy E. Flanigan, general counsel for conglomerate Tyco International Ltd., said in a statement to the Senate Judiciary Committee last week that Abramoff's lobbying firm initially boasted that Abramoff could help Tyco fend off a special liability tax because he "had good relationships with members of Congress," including House Majority Leader Tom DeLay (R-Tex.).

Abramoff later said "he had contact with Mr. Karl Rove" about the issue, according to the statement by Flanigan, who oversaw Tyco's dealings with Abramoff and his firm and received reports from Abramoff about progress in the lobbying campaign. Flanigan's statement is the latest indication that Abramoff promoted himself as having ready access to senior officials in the Bush administration.

A White House spokeswoman, Erin Healy, said Rove "has no recollection" of being contacted by Abramoff about Tyco's concerns.

Abramoff was indicted last month on unrelated wire fraud and conspiracy charges and has lost his high-stakes lobbying clients. He was hired in 2003 by Tyco when the company was in turmoil. Abramoff's firm, Greenberg Traurig, promoted him as Tyco's savior on the tax issue, according to Flanigan's statement and others familiar with the process.

Tyco -- whose executive L. Dennis Kozlowski had just departed under an ethics cloud -- was worried that the Bush administration might embrace legislation promoted by Democrats that would impose higher taxes on domestic-centered companies that had moved offshore to cut their tax bills. The legislation was motivated by popular anger over such offshore moves, and carried the additional penalty of barring such firms from receiving federal contracts.

Lobbying disclosure statements filed by Abramoff listing his work for Tyco cite the "Executive Office of the President" as one of his lobbying targets on the tax and contracts issues. Others were the Department of Commerce, the General Services Administration and Congress. Greenberg Traurig records submitted to Tyco describe specific contacts with the White House legislative office, a source familiar with the matter said yesterday.

Rove's personal assistant at the time, Susan Ralston, formerly worked as Abramoff's secretary. It could not be learned yesterday whether she was among those contacted by any of the 14-person Greenberg team recorded as working on the Tyco account.

The Bush administration was never enthusiastic about the tax penalty, but both the House and Senate approved language in 2002 denying federal contracts to companies largely based in the United States but incorporated in tax havens.

Tyco was among a raft of companies, including Ingersoll-Rand and Noble Corp., that hired an army of lobbyists to stall the legislation and ultimately kill most of it. House Republican leaders argued that corporate flight was merely a symptom of a much broader problem with the U.S. tax code that should be treated in a larger tax reform package.

Abramoff remains the focus of a lengthy investigation by a task force led by prosecutors at the Justice Department and including investigators at the Internal Revenue Service, the Interior Department and General Services Administration. The probe was initially focused on whether he bilked Native American tribes that paid him tens of millions of dollars in lobbying and other fees, but has since widened to include other matters.

Flanigan, who is still at Tyco while awaiting a committee vote on his nomination, said in his Sept. 15 written statement that he would "consult with DOJ ethics officials . . . and apply normal recusal standards" about the Justice Department's investigation of Abramoff.

Flanigan said he would recuse himself from any Abramoff investigation involving Tyco. Portions of his statement were first reported in the Los Angeles Times.

The ties between Tyco and Greenberg Traurig have already been investigated by a special counsel appointed by Greenberg to examine Abramoff's activities at the firm. According to knowledgeable sources and Flanigan's written statement, Greenberg has promised to repay three-quarters of a $2 million fee that Tyco paid, at Abramoff's direction, to a firm called Grassroots Interactive.

The fee was supposed to finance a letter-writing campaign by Tyco suppliers against the offshore tax bill, but Greenberg concluded that $1.5 million of it was "diverted to entities controlled by Mr. Abramoff" and misspent, according to Flanigan's statement.

Andrew Blum, a spokesman for Abramoff's law firm, declined to comment, as did Jill Perry, a spokeswoman for Greenberg Traurig.

Staff reporter Jonathan Weisman contributed to this report.

© 2005 The Washington Post Company

Did Rove help Tyco lobbyist?
Report: Tyco exec tells Senate its indicted ex-lobbyist bragged Rove could help him fight law.
September 23, 2005: 7:52 AM EDT

NEW YORK (CNN/Money) - Republican lobbyist Jack Abramoff bragged two years ago that he was in contact with White House political aide Karl Rove to fight a move to crackdown on firms which used offshore headquarters to pay lower U.S. taxes, according to a published report.

The Washington Post reported Friday that boast by Abramoff, who is facing wire fraud and conspiracy charges on another matter, was revealed by Timothy E. Flanigan, general counsel for conglomerate Tyco International (Research) in a statement to the Senate Judiciary Committee. Flanigan is a Bush administration nominee to be deputy attorney general, and the statement to the committee was part of his confirmation process.

Flanigan's tie to the controversial Abramoff has caused troubles for his confirmation chances, according to a report in the Los Angeles Times, which earlier had reported some details of the statement.

Flanigan has told the committee he would recuse himself from any Justice Department investigation or action against Abramoff if he is confirmed.

Bush Official Arrested in Corruption Probe
By R. Jeffrey Smith and Susan Schmidt, Washington Post Staff Writers, Tuesday, September 20, 2005

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The Bush administration's top federal procurement official resigned Friday and was arrested yesterday, accused of lying and obstructing a criminal investigation into Republican lobbyist Jack Abramoff's dealings with the federal government. It was the first criminal complaint filed against a government official in the ongoing corruption probe related to Abramoff's activities in Washington.

The complaint, filed by the FBI, alleges that David H. Safavian, 38, a White House procurement official involved until last week in Hurricane Katrina relief efforts, made repeated false statements to government officials and investigators about a golf trip with Abramoff to Scotland in 2002.

It also contends that he concealed his efforts to help Abramoff acquire control of two federally managed properties in the Washington area. Abramoff is the person identified as "Lobbyist A" in a 13-page affidavit unsealed in court, according to sources knowledgeable about the probe.

Until his resignation on the day the criminal complaint against him was signed, Safavian was the top administrator at the federal procurement office in the White House Office of Management and Budget, where he set purchasing policy for the entire government.

The arrest occurred at his home in Alexandria. A man who answered the phone there yesterday hung up when a reporter asked to speak to Safavian.

Abramoff was indicted by federal prosecutors in Miami last month on unrelated charges of wire fraud and conspiracy. He remains the linchpin of an 18-month probe by a federal task force that includes the Internal Revenue Service, the Interior Department and the Justice Department's fraud and public integrity units. His lawyer did not respond to phone calls seeking comment.

Abramoff's allegedly improper dealings with Indian tribes -- which netted him and an associate at least $82 million in fees -- prompted the federal probe. But investigators have found that his documents and e-mails contain a trove of information about his aggressive efforts to seek favors for clients from members of Congress and senior bureaucrats.

Accompanying Safavian and Abramoff on the 2002 trip to Scotland, for example, were Rep. Robert W. Ney (R-Ohio), chairman of the House Administration Committee, lobbyist and former Christian Coalition leader Ralph Reed and Neil Volz, a lobbyist with Abramoff at the Washington office of Greenburg Traurig.

Like Abramoff, Safavian is a veteran Washington player. He is a former lobbying partner of anti-tax crusader Grover Norquist and previously worked with Abramoff at another firm. Both he and Abramoff have represented gambling clients and Indian tribes with gambling interests.

At the time of the golf trip, Safavian was chief of staff at the General Services Administration, where ethics rules flatly prohibited the receipt of a gift from any person seeking an official action by the agency. When Safavian asked GSA ethics officers for permission to go on the trip, he assured them in writing that Abramoff "has no business before GSA," according to the affidavit signed by FBI special agent Jeffrey A. Reising.

Reising alleged, however, that Abramoff had by then already secretly enlisted Safavian in an effort to buy 40 acres of land that GSA managed in Silver Spring for use as the campus of a Hebrew school Abramoff founded. Safavian also allegedly tried to help Abramoff lease space for Abramoff's clients in an old post office building downtown.

On July 22, 2002, Abramoff sent Safavian an e-mail with a proposed draft letter that "at least two members of Congress" could send to GSA supporting the lease, according to the affidavit. "Does this work, or do you want it to be longer?" Abramoff asked.

Three days later, Safavian forwarded Abramoff an e-mail describing how an employee at OMB was resisting Abramoff's plan to lease space at the post office. "I suspect we'll end up having to bring some Hill pressure to bear on OMB," Safavian messaged Abramoff.

On the same day Safavian discussed the golf trip with the ethics office, he sent an e-mail to Abramoff from his home computer, advising him how to "lay out a case for this lease." Abramoff subsequently wrote in an e-mail to his wife and two officials of the school that Safavian had shown him a map of the property at his GSA office but had cautioned that Abramoff should not visit again "given my high profile politically."

Safavian nonetheless arranged a meeting for Abramoff's wife and business partner with officials at GSA on the day before he departed for Scotland aboard Abramoff's chartered jet. The trip cost more than $120,000 and was paid for mostly by a charity founded and run by Abramoff, the Capital Athletic Foundation.

When Safavian was questioned by The Washington Post about the trip in January, he said he paid his share of the expenses and took unpaid leave. "The trip was exclusively personal; I did no business there. . . . Jack is an old friend of mine," Safavian said.

But the complaint alleges that Safavian lied about his contacts with Abramoff on three occasions after his initial false pledge to the GSA ethics officer. The first was during a 2003 investigation by GSA's inspector general, who was responding to an anonymous tipster's hotline complaint; the second was in a March 17, 2005, letter to the Senate Committee on Indian Affairs; and the third was during an FBI interview on May 26, 2005.

© 2005 The Washington Post Company

Ex-Lobbyist Is Focus of Widening Investigations
By Susan Schmidt, Washington Post Staff Writer, Friday, July 16, 2004

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Former powerhouse lobbyist Jack Abramoff and public relations entrepreneur Michael Scanlon are the focus of widening investigations this summer, one by Congress and the other a criminal probe involving five federal agencies.

A criminal task force of investigators from the FBI, Internal Revenue Service, the Justice Department's public integrity section, the National Indian Gaming Commission and the Interior Department inspector general's office is looking into payments Abramoff and Scanlon received from an array of clients, including 11 wealthy Indian tribes that operate gambling casinos, according to officials familiar with the investigation.

In Congress, the Senate Indian Affairs Committee has set a deadline of this week for responses to subpoenas it has issued. Congressional staff members from the Indian Affairs Committee and the Commerce Committee have spent five months gathering documents and interviewing tribal members and others in preparation for a public hearing in September, officials said.

Government sources and people who have been interviewed said the twin investigations are examining tens of millions of dollars in fees that Abramoff and Scanlon received from clients, including, in Abramoff's case, a number of foreign entities. Investigators also are looking into ties the two have to members of Congress, into campaign donations and into whether criminal or tax codes were violated in the work they contracted to do or by the fees they collected, the sources said.

The Washington Post reported earlier this year that Abramoff, who is well-connected to conservative Republicans in the White House and Congress, and Scanlon, a former spokesman for House Majority Leader Tom DeLay (R-Tex.), received more than $45 million in lobbying and public affairs work from four newly wealthy tribes in the past three years. Those fees rival what some of the biggest corporate interests in the country pay to influence public policy.

The fees and $2.9 million in federal political contributions Abramoff advised the tribes to make, two-thirds of it to Republicans, have led to battles in some tribes. Some tribe members question why their leaders approved such payments.

Abramoff also directed tribes to donate to several obscure foundations that appear to have no connection to Indian concerns, including a think tank in Rehoboth Beach, Del., set up by Scanlon.

The revelations led to Abramoff's ouster in March from Greenberg Traurig, the law firm where he led one of Washington's most successful lobbying groups. Greenberg Traurig said it acted after Abramoff "disclosed to the firm for the first time personal transactions and related conduct which are unacceptable to the firm."

Lawyers for Abramoff and Scanlon declined to comment this week on the investigations.

Congressional investigators learned in March that Scanlon or organizations he was associated with paid Abramoff $10 million, an arrangement that was not known to the tribes or to Greenberg Traurig. Abramoff, who must publicly disclose lobbying fees, urged the tribes to hire one of Scanlon's public relations firms, often for much higher amounts than Abramoff's firm was receiving. Those public relations fees did not have to be disclosed under federal lobbying rules.

In an interview earlier this year, Abramoff denied having any financial stake in Scanlon's business.

Federal law permitting Indian gambling requires that the proceeds be spent to benefit the tribe, but regulators in Washington do not normally become involved in monitoring the money that closely. "Nobody is tasked to see where all the dollars get spent," said Philip N. Hogen, chairman of the National Indian Gaming Commission.

Hogen declined to comment on the investigations of Abramoff and Scanlon. But he said federal agencies have formed a working group to more closely coordinate criminal investigations that have arisen out of Indian gambling over the past six months.

"This is really high on the priority list of tribal concerns," he said. "This is a cash cow in many circumstances, and tribes are concerned about protection of tribal assets."

Indian gambling, officials said, has grown from a $100 million-a-year industry in 1988 to a $16 billion industry today.

Ernst Weyand, an official in the FBI's Indian Country investigative unit, said his office is working closely with organized-crime investigators. Officials in various agencies said the new working group makes it easier for federal investigators to take on larger and more complex investigations.

One person who has been interviewed by the FBI in connection with the investigation of Abramoff and Scanlon said the areas of interest ranged from foreign lobbying clients to billing practices involving the tribes and whether there were efforts to illegally fix tribal elections. He also said the FBI is looking at the relationship Abramoff and Scanlon and their firms had with some members of Congress.

© 2004 The Washington Post Company

Link to Lobbyist Brings Scrutiny to GOP Figure
By Kate Zernike and Anne E. Kornblut, The New York Times, Monday 23 May 2004

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Washington - In Republican Washington, Jack Abramoff and Grover Norquist worked all the angles.

One was a $750-an-hour lobbyist, the other an antitax activist, and they helped drive the Republican takeover of the capital and cement the party's power. Both had a close ally in the House majority leader, Tom DeLay. And they shared a conservative ideology and a friendship going back to their days in college.

Now, with widening Congressional and criminal inquiries in the capital into Mr. Abramoff's dealings, they are sharing trouble, too.

While Mr. Abramoff has been under scrutiny for more than a year, Mr. Norquist has attracted unwelcome attention in recent weeks. A Congressional committee investigating whether Mr. Abramoff defrauded Indian tribes has subpoenaed records from Mr. Norquist's group, Americans for Tax Reform, after he refused for six months to turn them over voluntarily.

The Justice Department is reviewing records of an advocacy group Mr. Norquist started with Gale A. Norton, now secretary of the interior, after reports that Mr. Abramoff instructed Indian tribes to give it $250,000. And Mr. Norquist's name appears over and over in newly disclosed documents outlining Mr. Abramoff's work in the Northern Mariana Islands, an American protectorate in the Pacific, which Democrats are agitating to investigate.

In interviews, Mr. Norquist dismissed any suggestion of wrongdoing on his part and said that the only reason he is "getting dragged into this" is because Senator John McCain, the head of the Senate Indian Affairs Committee, which is investigating Mr. Abramoff, holds a grudge against Mr. Norquist for campaigning for President Bush in the 2000 Republican primaries.

"McCain hates me," he said.

Mr. McCain, Republican of Arizona, said in a statement that he subpoenaed the records only after six months of negotiations with Mr. Norquist failed.

Temperamental and sound-bite-ready, Mr. Norquist, 48, has had a hand in nearly every conservative cause in Washington for nearly two decades - from naming institutions after Ronald Reagan to the current battle over judicial nominees - largely through his Wednesday meetings, weekly beat-the-drum sessions attended by lobbyists, think tank employees and politicians that command such influence that the Bush administration routinely sends an envoy.

With Mr. DeLay's eager backing and Mr. Abramoff's help, Mr. Norquist engineered a shift in the city's lobbying corps by making it clear to K Street firms and trade associations that if they wanted access on Capitol Hill, they had to hire and donate to more Republicans.

As Mr. Abramoff's problems touched Mr. DeLay - the majority leader may face an ethics inquiry over trips arranged by Mr. Abramoff - Mr. Norquist was their most vocal defender. But in recent weeks he has distanced himself from the two men whose success has been so intertwined with his own.

At a gala dinner this month to support Mr. DeLay, Mr. Norquist declined a seat on the dais, despite being listed as a host. He slipped out after a predinner reception, he said later, for a dinner party at his home.

Mr. Abramoff attended his wedding on April 2, yet Mr. Norquist described him as simply a "friend," someone he has lunch or dinner with a few times a year. "I knew him when we were in college," he said. "But there's no business or financial relationship."

Mr. Norquist later elaborated: "I haven't seen that much of him recently, and I don't - and it's mostly because - I'm not shunning him or anything. It's just, I'm busy, he's busy, he's in a different world. He took the path I didn't take, which was to go make money as a consultant, and I decided to build A.T.R."

But Mr. Abramoff's lobbying billing records for one client, recently released under a Freedom of Information Act request, show that Mr. Abramoff billed for consulting with Mr. Norquist.

The two men's paths have intersected frequently since their days as young Republicans, organizing Massachusetts campuses for Ronald Reagan in 1980; Mr. Norquist was at Harvard, Mr. Abramoff at Brandeis.

The next year, Mr. Norquist managed Mr. Abramoff's successful campaign to become chairman of College Republicans, a national campus organization; the two men left amid complaints of financial mismanagement. Similar criticism followed them to Citizens for America, a conservative group that shut down soon after they left.

They seemed an odd pair, Mr. Norquist as rumpled as Mr. Abramoff is hand-tailored. But they shared a fierce ambition: when they talked about Democrats, they tended to use fiery language and were unapologetic about being strongly partisan.

Mr. Norquist went on to be president of Americans for Tax Reform, founded in 1985 to mobilize support for tax cuts, and he and the group became prominent in the conservative movement. From the group's offices near K Street, Mr. Norquist runs the Wednesday meetings, which started as strategy sessions to defeat the Clinton health care plan in 1993, then evolved to try to develop grass-roots support for every item on the Republican agenda.

"He has for years successfully worn the hat of being an ideologue rather than a typical business lobbyist, and in a way in this town that gets you more respect," said Hilary Rosen, a Democrat and the former president of the Recording Industry Association of America.

Mr. Norquist and Mr. Abramoff resumed working in tandem in 1994, when Mr. Abramoff returned to Washington from a stint in Hollywood as a producer of B movies. The Republicans were newly triumphant, and Mr. Norquist had become close to Newt Gingrich, the House speaker.

"Abramoff would have had no value without Norquist," said J. Michael Waller, a scholar at the Institute of World Politics who followed the two men at College Republicans. "Norquist was the pivot, he had the speaker of the House as his friend, all the new leadership, all the visionaries for more than a decade."

In what became known as the K Street Project, the two men pressed lobbying firms to do more business with Republicans, helping to enrich Mr. Abramoff, strengthen Mr. Norquist's influence and fortify Mr. DeLay's power.

Mr. Norquist and Mr. Abramoff worked together to help Mr. Abramoff's first big client, the Northern Mariana Islands. The garment industry there relies on cheap labor from China, and the local government was trying to avoid imposition of American minimum wage and immigration laws. Mr. Norquist promoted the Marianas in his meetings and speeches as a model of free enterprise, while Mr. Abramoff collected nearly $9 million in lobbying fees and sent members of Congress on fact-finding and golf trips to the islands.

Mr. Abramoff also billed the islands for thousands of dollars for "discussions" with Mr. Norquist and to send a staff member to the Wednesday meetings, as well as for airfare to the Marianas for staff members of Americans for Tax Reform.

Mr. Norquist sounded surprised to learn that he showed up so frequently in Mr. Abramoff's billing records. Mr. Abramoff, he said, must have been name-dropping.

Indian tribes say Mr. Abramoff dropped Mr. Norquist's name when he began trying to win their business. Mr. Norquist used his platform to argue against taxing Indian gambling. Mr. Abramoff billed the tribes tens of millions of dollars to try to fend off antigambling groups and regulators and to send members of Congress on lavish overseas trips. The tribes say Mr. Abramoff also instructed them to give money to Mr. Norquist's groups as way of getting an audience with the Bush administration. The tribes gave $1.5 million to Americans for Tax Reform and $250,000 to the Council of Republicans for Environmental Advocacy, the group founded by Mr. Norquist and Ms. Norton.

Mr. Norquist has tried to portray as a misunderstanding any perception that he was involved in buying or selling influence. Earlier this month, Americans for Tax Reform sent letters to the Coushatta tribe of Louisiana and the Saginaw Chippewas of Michigan, saying there "may be some confusion" about the reason some were invited into White House meetings in earlier years.

"Recent press reports appeared to suggest that some staff of your tribe's previous leadership thought that they were making a contribution to A.T.R. in order to be invited to a White House event," the letter said.

Once a year, Mr. Norquist said,he brings members of Indian tribal councils who have worked to pass local tax initiatives to the White House for a "thank you" from the administration. Some may have donated to Americans for Tax Reform, he said, but others did not.

Jack Abramoff: The friend Tom DeLay can't shake.
By James Harding, slate.msn.com, Thursday, April 7, 2005

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Where to begin examining the extraordinary career of Jack Abramoff? His work trying to secure a visa for the great Zairian kleptocrat Mobutu Sese Seko, perhaps, or the bilking of an estimated $66 million out of Native American tribes, clients he described as "monkeys," "troglodytes," and "idiots"? Or his leadership of a 1980s think tank financed, unbeknownst to him apparently, by the intelligence arm of South Africa's apartheid regime?

No, the chapter of our man's story that matters most at the moment begins with a toast given by House Majority Leader Tom DeLay during a New Year's trip they both took to Saipan in the Northern Mariana Islands in 1997. "When one of my closest and dearest friends, Jack Abramoff, your most able representative in Washington, D.C., invited me to the islands, I wanted to see firsthand the free-market success and the progress and reform you have made," DeLay said before an audience of Abramoff's clients in the islands' garment industry whom, upon his return to Washington, he helped win an extended exemption from federal immigration and labor laws.

The most salient fact about Abramoff these days is that he may prove DeLay's undoing. The House majority leader has so far commanded extraordinary, tight-lipped loyalty from the Republican ranks in Congress in the face of scandals detailed here. But precedent is not on his side. Newt Gingrich's political demise was a slow death by a thousand cuts. Today there is already plenty of speculation in Washington that the White House is wavering about DeLay: As much as the president prizes loyalty, he is intolerant of sleaze and impatient with damaging distractions from his agenda. "Within six months, Karl will force him out," a senior administration official from the first term says, speaking, of course, of Karl Rove. At least one conservative redoubt, the Wall Street Journal's editorial page, has already thrown open the door. Mr. DeLay has "an unsavory whiff that could have GOP loyalists reaching for the political Glade if it gets any worse," the paper wrote last week.

Arrest of Procurement Policy Chief Could Undercut Contracting-Out Agenda
By Stephen Barr, washingtonpost.com Friday, September 30, 2005; Page B02

The arrest of the Bush administration's procurement policy chief has rocked the federal contracting community and raised questions about whether the White House can quickly recruit a replacement and maintain its "competitive sourcing" initiative.

David H. Safavian , 38, administrator of the federal procurement office at the Office of Management and Budget, was arrested Sept. 19 after the FBI filed a complaint accusing him of lying and obstructing a criminal investigation into the dealings of a Washington lobbyist. Safavian's attorney has said he will vigorously contest the charges.

The White House has started a search to find a replacement for Safavian, who has resigned. In the interim, Robert A. Burton , a career OMB official, is managing the office.

Alex Conant , an OMB spokesman, said Safavian's departure "will not impact OMB's competitive sourcing initiatives. Our priorities are the same now as they were two weeks ago."

But officials elsewhere in the administration predicted that Safavian's arrest would undercut OMB's contracting-out agenda, known as A-76, and make it easier for Bush critics to score points on Capitol Hill.

This week, Rep. Chris Van Hollen (D-Md.), who has sponsored annual amendments to force a rewrite of the administration's A-76 rules, called on the Government Accountability Office to probe the awarding of no-bid contracts for hurricane relief and recovery. He cited Safavian's arrest and asked for an investigation "of all the matters where Mr. Safavian became directly or indirectly involved."

The American Federation of Government Employees, which has lobbied against the competitive sourcing agenda because it threatens federal jobs, has stepped up its campaign and accused OMB of unwarranted intervention in contracting decisions at two agencies.

John Gage , the union president, said the arrest "provides this administration with an opportunity to rethink its misguided wholesale privatization policy."

Conant said OMB "routinely works with agencies to make competitive sourcing successful. By working with agencies receiving bids, OMB helps save taxpayer dollars and improve results."

The competitive sourcing initiative has proved controversial since its launch in 2001. OMB estimated last year that the project would create savings of $1.4 billion over five years, but AFGE argues that the savings are illusory.

Safavian's arrest represents another blow to the federal contracting community, which saw Darleen A. Druyun , a former top Air Force acquisition official, testify in court that she had favored Boeing Co. in contract decisions. Questions also have been raised about the management of contracts at the General Services Administration, Defense Department and Department of Homeland Security over the last two years.

"Obviously, it is dispiriting for the [OMB] staff . . . and the much harder issue is that it is dispiriting for the acquisition community," said Steven L. Schooner , a George Washington University professor.

Schooner said he sees the federal acquisition workforce as "tired and overworked" and buffeted by contracting controversies in Iraq and with Hurricane Katrina. "Safavian was supposed to be the point person on making Katrina go well," Schooner said. "I think it is a dark moment."

Barbara Gales will retire today after a 39-year career at the Small Business Administration, where she was chief of the Payroll and Systems Branch for many years.

Dave Thomas , chief of the FBI's Computer Intrusion Section, will be the guest on "FEDtalk" at 11 a.m. today on http://federalnewsradio.com/ and WFED radio (1050 AM).

Nuala O'Connor Kelly , former chief privacy officer at the Department of Homeland Security, will be the guest on "The IBM Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).

"Are You Still Glad to Be a Federal Employee?" will be the topic of discussion on the Imagene B. Stewart call-in program at 8 a.m. Sunday on WOL radio (1450 AM).

E-mail:barrs@washpost.com

Kozlowski gets up to 25 years
Mark Swartz, former Tyco CFO, also gets 8-1/3 to 25; both men fined, handcuffed, sent to jail.
September 19, 2005: By Grace Wong, CNN/Money staff writer

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NEW YORK (CNN/Money) - Ex-Tyco CEO Dennis Kozlowski received 8-1/3 to 25 years in prison Monday for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate.

Former Tyco CFO Mark Swartz got the same sentence from Manhattan Supreme Court Judge Michael Obus.

Judge Obus also ordered Kozlowski and Swartz to pay $134 million back to Tyco, and Kozlowski was fined $70 million and Swartz $35 million -- bringing total fines and restitution to $239 million.

The former Tyco executives were ordered to start serving their sentences immediately and were led from the courtroom in handcuffs.

In a crowded New York state courtroom, the prosecution had asked for the maximum penalty of 15 to 30 years for both men, while Kozlowski's defense had focused on his character as a "family man."

In June, Kozlowski and Swartz were found guilty on 22 of 23 counts of grand larceny and conspiracy, falsifying business records and violating business law. Both men say they will appeal the verdicts.

That verdict came after the first trial against Kozlowski and Swartz ended in a mistrial in April 2004 after the sole juror holding out for an acquittal reported receiving threats.

During the first trial, prosecutors focused on what they called misuse of Tyco's money, such as a $2 million birthday party Kozlowski threw for his wife on the Italian island of Sardinia and a $6,000 shower curtain allegedly purchased with company funds.

But in the second trial, which started last January, prosecutors changed their strategy and narrowed their case.

The sentence was a clear signal that judges at the state level -- who have more discretion over sentencing than judges on the federal bench -- are equally concerned with sending tough messages to executives charged with "white-collar" crimes.

If Kozlowski and Swartz show good behavior, they could be eligible for parole after 6 years and 11 months, according to Linda Foglia, spokeswoman for the New York State Department of Correctional Services.

The pair will spend time at an interim facility, where they will undergo a series of tests and reviews, before a prison is designated for them. Since they received a sentence of more than six years, they likely will be sent to one of New York's maximum security prisons, which include Attica and Sing Sing.

Substantial sentence
As the first high-profile corporate fraud case tried in a state court, legal experts had been watching the sentence to see whether state judges would follow the lead of judges in federal courts, who have imposed severe sentences on corporate executives found guilty of white collar crimes.

Bernie Ebbers got 25 years for his role in the collapse of WorldCom. Adelphia founder and ex-CEO John Rigas also received a hefty sentence of 15 years. Both were tried in federal court.

"Now anyone who wants to know what trial court judges in New York state are doing when confronted with conviction in a high-profile corporate fraud case, the answer is imposing a significant sentence," former prosecutor Jacob Frenkel said.

"Even on the short end of the range, it is a substantial sentence," he said.

The sentences were harsh, but nowhere near as severe as those in previous cases, said Greg Wallance, a former federal prosecutor now at Kaye Scholer LLP in New York.

"It's a much more lenient sentence than handed out in federal cases, and I think that partly reflects the fact that the company was not forced into bankruptcy or destroyed but is doing relatively well," he said.

But he added, the conditions for Swartz and Kozlowski will be harsh. State prisons tend to house more violent criminals, such as those prosecuted for rape and homicide. White-collar criminals sentenced to federal prison often go to minimum-security facilities derisively dubbed "Club Fed."

Few were surprised that Kozlowski and Swartz received much more than a slap on the wrist, saying courts are feeling public pressure to impose harsher sentences.

But long sentences aren't necessarily warranted because the same deterrent effect could be accomplished by giving less time, said Ellen Podgor, professor at Georgia State University College of Law.

"You need imprisonment clearly. It's just the amount needs to be proportional to what we're trying to accomplish in the criminal justice system," she said. "If we're trying to make sure these crimes aren't committed in future, you don't need sentences like this."

Dear President Bush: Why DeLay?

TYCO Executives Dennis Kozlowski and Mark Swartz Go Back On Trial, Say They "Didn't Steal Anything" and They Are "Not Greedy"