January 17, 2006
Spotlight on Lobbying Swings to Little-Known Congressman
By ANNE E. KORNBLUT. NY TIMESLINK
WASHINGTON, Jan. 16 - Until recently, Representative Bob Ney was little more than an obscure, sometimes eccentric, lawmaker from Ohio.
He had made his biggest public splash in 2003, when he ordered the House cafeteria to start calling French fries "freedom fries" because France had opposed the war in Iraq. Fluent in Farsi - an interest that grew out of having an exchange student live with his family - Mr. Ney lived for a time in Iran as a teacher, and later taught in Saudi Arabia.
In Congress, where the language of money and power is spoken, he is known as the Mayor of Capitol Hill, a nickname derived from his position as chairman of the House Administration Committee, which controls aspects of daily Congressional life like the allotment of parking spots.
Now, Mr. Ney has a new title: Representative No. 1, in court documents filed in connection with the Jack Abramoff case. And the modest glory he has achieved as a lawmaker appears to be rapidly eroding.
Even more than Tom DeLay, the former House majority leader, Mr. Ney has become the most visible elected target of the broad Justice Department inquiry into corruption and influence-peddling in Washington.
He is under increasing attack from Democrats over allegations that he assisted Mr. Abramoff in exchange for gifts and travel. Over the weekend, Mr. Ney relinquished his chairmanship of the administration committee temporarily, acknowledging that his association with Mr. Abramoff was becoming a distraction for the Republican Party. As chairman of that committee, he would also be at the center of efforts to revise Congressional ethics rules, which members of both parties are proposing.
Mr. Ney's legal problems may loom even larger than his political ones because he is in serious jeopardy of being indicted, people directly involved in the legal case have said. As a result, Mr. Ney is working intensely to convince Justice Department prosecutors that he was tricked by Mr. Abramoff into doing favors for the lobbyist's clients.
He and his lawyers are presenting evidence they hope will counter allegations by Mr. Abramoff, who agreed to testify in the corruption case in exchange for a reduced sentence.
Mr. Ney has shown credit card receipts to prosecutors to demonstrate that he paid for his own meals at Signatures, the restaurant that Mr. Abramoff once owned, participants in the case have said.
His lawyers have gone through thousands of Mr. Ney's e-mail messages in an effort to determine that he did not put his involvement in any bribery scheme, if there was any, into writing.
"Any action taken by Congressman Ney was done in good faith and consistent with the rules of the House and his ethical obligations," his lawyer, Mark H. Tuohey, said Friday. "He has done nothing wrong."
Colleagues describe Mr. Ney as simple and down-to-earth, a reflection of the mainly blue-collar district in eastern Ohio that he represents. He helped lead the fight against the McCain-Feingold campaign finance overhaul bill, a battle important for many House Republican leaders, and has overseen some modernizations of the House building.
Even his political opponents say that Mr. Ney has worked hard for his constituents, and that they would not have picked him as a high roller or someone likely to be caught up in a corruption scheme.
"I've had Democrats say to me that they feel badly for Bob," said Representative Ted Strickland, Democrat of Ohio.
While Democrats have celebrated Mr. DeLay's fall - he is under indictment in Texas and under investigation in Washington - they have been somewhat baffled by Mr. Ney's role in the Abramoff case, Mr. Strickland said. "An indictment could be forthcoming, and I don't think anyone is taking any particular pleasure in that," he said.
The portrait of Mr. Ney as he is depicted in Mr. Abramoff's plea agreement is quite different.
The former lobbyist acknowledged about a dozen criminal transactions with Representative No. 1, confirmed to be Mr. Ney by participants in the case, stating that he repeatedly lavished gifts and campaign donations on the congressman in return for help with legislation. Some of the allegations in the plea deal are corroborated by Michael Scanlon, a former Abramoff business partner who is also cooperating with government lawyers in exchange for a reduced sentence.
Among the most damaging assertions by Mr. Abramoff is that Mr. Ney knew that an expensive golfing trip to Scotland in 2002 was being financed by the lobbyist around the time that Mr. Ney was pushing a measure in Congress beneficial to one of Mr. Abramoff's Indian tribe clients. That, some participants in the case believe, may have amounted to bribery.
Participants in the case were granted anonymity because the Justice Department has asked people not to talk about the case.
Although it is a violation of House ethics rules for a lawmaker to take a trip paid for by a lobbyist, it is the appearance of a possible quid pro quo in Mr. Ney's case that is of interest to prosecutors.
Although Mr. Ney has said that he believed the trip was paid for by a public policy center - and that he was duped by the lobbyist - it may be much more difficult for him to convince prosecutors of his innocence now that they have reached a plea agreement with Mr. Abramoff and appear to trust the lobbyist's version of events.
Another example of how Mr. Ney sought to assist Mr. Abramoff comes from the lawmaker's entries into the Congressional Record at the time the lobbyist was trying to buy the SunCruz casino boat line in Florida. The comments heaped praise on Adam Kidan, Mr. Abramoff's business partner in the SunCruz deal, who has since pleaded guilty in the Florida case.
In a statement entered into the record on Oct. 26, 2000, Mr. Ney described Mr. Kidan as having "a renowned reputation for honesty and integrity."
Within weeks, Mr. Kidan and others were hosts of a fund-raiser for Mr. Ney in an MCI Center skybox in Washington rented by Mr. Abramoff. Prosecutors are examining how the Congressional Record comments came about. While rarely read by the public, such comments are often circulated by grass-roots organizers or turned into advertisements to support a given cause, as proof of official support in Washington.
Mr. Scanlon has told investigators that he had a conversation with Mr. Ney about arranging the October remarks, and also dealt with Neil G. Volz, then Mr. Ney's chief of staff, participants in the case have said. Mr. Scanlon and Mr. Abramoff have said they believed Mr. Ney was acting in exchange for the flow of campaign donations and favors they arranged.
Mr. Volz, who joined Mr. Abramoff at the firm Greenberg Traurig in 2002 after working for Mr. Ney, is facing his own set of legal problems, including allegations set forth in the Abramoff plea deal that he violated the rule barring Congressional staff members from lobbying their former bosses for one year after leaving Capitol Hill. Mr. Volz resigned from his most recent job, at the law firm Barnes & Thornburg, this month.
Republicans are scrambling to contain the political fallout from the lobbying scandal, while some Democrats hope to capitalize on it. Congressional Democrats plan to unveil a lobbying overhaul plan on Wednesday, and House Republicans are working to assemble one as well, with Speaker J. Dennis Hastert of Illinois proposing a ban on the type of private travel that Mr. Abramoff provided.
According to Mr. Abramoff's plea agreement, Mr. Ney provided a stream of official favors to Mr. Abramoff and his associates. In one case, the court papers say, Mr. Ney helped an Israeli company win a contract in 2001 to provide wireless service to Congress.
The next year, Mr. Ney made an "agreement," as the plea deal calls it, with Mr. Abramoff that he would introduce legislation benefiting Mr. Abramoff's Indian tribe clients. At the same time, Mr. Abramoff directed tens of thousands of dollars in campaign contributions to Mr. Ney, including $10,000 to the National Republican Congressional Committee, at Mr. Ney's request, the plea agreement states.
Mr. Ney has since given away thousands in donations that Mr. Abramoff directed to him, and has distanced himself from the Republican lobbyist. "He keeps saying to me, 'As a friend, I didn't do it,' " said Neil S. Clark, a Republican lobbyist in Ohio who said he talked to Mr. Ney several times a week.
"Bobby has been a friend of mine for 26 years," Mr. Clark said. "He and I, when we were younger, we partied together, we lived in the same apartment complex. And I've never known Bobby to ever want to ruin his career."
But it may now be Mr. Ney's word against that of Mr. Abramoff, who has publicly ridiculed Mr. Ney's claim of having been victimized. In an interview in The New York Times Magazine last year, Mr. Abramoff said: "Ney told the press, 'I was duped'? It's crazy!" Mr. Abramoff has given similar accounts to prosecutors.Speaker Pressures Rep. Ney to Resign His Chairmanship
By Jonathan Weisman
Washington Post Staff Writer
Saturday, January 14, 2006; A02LINK
Speaker J. Dennis Hastert (R-Ill.) is pressuring Rep. Robert W. Ney (R-Ohio)
to relinquish the chairmanship of the House Administration Committee in the wake of a guilty plea from lobbyist Jack Abramoff that tied Ney to a far-reaching conspiracy to bribe public officials, leadership aides said.
"The Ney situation has changed after the plea agreement," said a House Republican insider close to the talks. "There are people that have pled guilty who have conspired to bribe him. It does not mean he is guilty. However, given this information and the fact that part of our reform agenda will come before his committee, it's a big problem in him leading it."
Ney was not named in Abramoff's plea agreement, but his staff has said he is the lawmaker identified in the court documents as "Representative #1." Abramoff acknowledged that he and former partner Michael Scanlon gave the lawmaker gifts including expense-paid trips to the Super Bowl, golf outings in Scotland, concerts and campaign contributions.
Ney allegedly advanced the prospects of a number of Abramoff's clients
. Ney has denied any wrongdoing.
"Ney is confident that he has done nothing wrong and that his name will be cleared," said his spokesman, Brian J. Walsh. "He also recognizes, though, that these misleading allegations about him might be a distraction, and he wants to do what is right for the [GOP] conference. He is taking the weekend to evaluate things and will make a decision next week."
Hastert does not have the power to remove Ney, aides said, but can urge the House Republican Conference to act.
Hastert spokesman Ronald D. Bonjean Jr. said discussions between Hastert and Ney "have been ongoing."Abramoff Pleads Guilty to 3 Counts
Lobbyist to Testify About Lawmakers In Corruption Probe
By Susan Schmidt and James V. Grimaldi
Washington Post Staff Writers
Wednesday, January 4, 2006; A01LINK
Jack Abramoff, the once-powerful lobbyist at the center of a wide-ranging public corruption investigation, pleaded guilty yesterday to fraud, tax evasion and conspiracy to bribe public officials in a deal that requires him to provide evidence about members of Congress.
The plea deal could have enormous legal and political consequences for the lawmakers on whom Abramoff lavished luxury trips, skybox fundraisers, campaign contributions, jobs for their spouses, and meals at Signatures, the lobbyist's upscale restaurant.
In court papers, prosecutors refer to only one congressman: Rep. Robert W. Ney (R-Ohio). But Abramoff, who built a political alliance with House Republicans, including former majority leader Tom DeLay of Texas, has agreed to provide information and testimony about half a dozen House and Senate members, officials familiar with the inquiry said. He also is to provide evidence about congressional staffers, Interior Department workers and other executive branch officials, and other lobbyists.
"The corruption scheme with Mr. Abramoff is very extensive," Alice S. Fisher, head of the Justice Department's criminal division, said at a news conference with other high-ranking officials of the Internal Revenue Service and the FBI. "We're going to follow this wherever it goes."
Fisher declined to identify the officials under scrutiny. "We name people in indictments," she said, adding: "We are moving very quickly."
Among the allegations in the court documents is that Abramoff arranged for payments totaling $50,000 for the wife of an unnamed congressional staffer in return for the staffer's help in killing an Internet gambling measure. The Washington Post has previously reported that Tony Rudy, a former top aide to DeLay, worked with Abramoff to kill such a bill in 2000 before going to work for Abramoff.
Abramoff's appearance in U.S. District Court came nearly two years after his lobbying practices gained public notice because of the enormous payments -- eventually tallied at $82 million -- that he and a public relations partner received from casino-rich Indian tribes. Yesterday, he admitted defrauding four of those tribal clients out of millions of dollars. He also pleaded guilty to evading taxes, to conspiring to bribe lawmakers, and to conspiring to induce former Capitol Hill staffers to violate the one-year ban on lobbying their former bosses.
Under terms of his plea agreement, Abramoff can expect to receive a jail sentence of 9 1/2 to 11 years, and he is required to make restitution of $26.7 million to the IRS and to the Indian tribes he defrauded. Today he is to plead guilty to fraud and conspiracy counts in a related case in Florida involving his purchase of a casino cruise line.
Standing before U.S. District Judge Ellen Segal Huvelle in Washington yesterday, Abramoff looked sheepish and sad. "Your Honor, words will not be able to ever express how sorry I am for this, and I have profound regret and sorrow for the multitude of mistakes and harm I have caused," he said softly. "All of my remaining days, I will feel tremendous sadness and regret for my conduct and for what I have done. I only hope that I can merit forgiveness from the Almighty and from those I have wronged or caused to suffer."
Abramoff has been in extensive discussions with government lawyers for months leading up to yesterday's plea.
Ney, chairman of the House Administration Committee, is among the first of those expected to feel the fallout. In the court documents -- which identify him only as "Representative #1" -- Ney is accused of meeting with one of Abramoff's clients in Russia in 2003 to "influence the process for obtaining a [U.S.] visa" for one of the client's relatives and of agreeing to aid a California tribe represented by Abramoff on tax and post office issues.
Ney also placed comments in the Congressional Record backing Abramoff's efforts to gain control of the Florida gambling company, SunCruz Casinos, and offered legislative language sought by Abramoff that would have reopened a Texas tribe's shuttered casino.
The court papers said Ney advanced the prospects of an Abramoff client, a telecommunications company that won a contract to wire the House.
Two of Abramoff's former partners have already pleaded guilty and have promised to cooperate in the ongoing investigation of congressional corruption and are prepared to testify against Ney in connection with his aid in the SunCruz purchase. Prosecutors in Florida and Washington are in discussions about where a case against Ney should be brought, officials said.
Ney reiterated yesterday that he had done nothing wrong and said he was misled by Abramoff.
One of Abramoff's former associates, Michael Scanlon, a onetime press aide to DeLay, was a secret partner in Abramoff's Indian tribal scheme. Abramoff not only charged the tribes lobbying fees but also urged them to hire Scanlon's public relations firm at hugely inflated prices. Scanlon, in turn, kicked back half of the money to Abramoff, who was thus able to conceal the funds from public disclosure and even from the lobbyist's law firm.
They spread tribal money around and sought legislative favors in return. Abramoff and Scanlon "offered and provided a stream of things of value to public officials in exchange for official acts and influence and agreements to provide official action and influence," a statement of facts attached to the plea agreement said. "These things of value included, but are not limited to, foreign and domestic travel, golf fees, frequent meals, entertainment, election support for candidates for government office, employment for relatives of officials and campaign contributions."
Among the things of interest to investigators are payments made by Abramoff and his colleagues to the wives of some lawmakers and actions taken by Rudy and other senior Capitol Hill aides, some of whom went to work for Abramoff at the law firm Greenberg Traurig LLP, lawyers and others familiar with the probe said.
Another person under scrutiny, sources said, is DeLay, who is facing separate campaign finance charges in his home state of Texas.
"Tom DeLay is not concerned that Mr. Abramoff is cooperating," said Richard Cullen, his attorney. "He urges everyone involved to cooperate in the investigation and to tell the truth." Cullen had no comment on allegations involving former DeLay aides Rudy and Scanlon.
Among the trips under scrutiny is a golf excursion to Scotland that DeLay and aides took with Abramoff in 2000 and a similar trip Ney took two years later.
DeLay has taken three overseas trips with Abramoff since 1997 -- to the Mariana Islands, Russia and Scotland -- and received more than $70,000 from Abramoff, his associates and tribal clients for his campaign committees.
Investigating DeLay, who is facing campaign finance charges in Texas, could take up to a year and require the cooperation of other witnesses before issues surrounding the Texas Republican are resolved, according to people familiar with the case.
Sen. Conrad Burns (R-Mont.), Rep. John T. Doolittle (R-Calif.) and other legislators involved with Indian issues are among those being investigated, sources said.
A spokesman for Doolittle, whose wife received payments from Abramoff's lobbying firm, has previously said there was no connection with her husband's work. Burns's office has said his actions on behalf of Abramoff's tribal clients were in sync with his support for improving the lot of Indian tribes.
Also of interest to prosecutors is former deputy interior secretary J. Steven Griles, who held the job from 2001 to 2004. He has said he never tried to intercede on behalf of Abramoff's clients, but e-mails released by a Senate committee show more than half a dozen contacts Griles had with Abramoff or with a woman working as the lobbyist's go-between.
Prosecutors are continuing to investigate two of DeLay's top former deputies, Rudy and Edwin A. Buckham. Rudy is under investigation for assistance he allegedly provided Abramoff's lobbying clients while he was working for DeLay. Payments from Abramoff clients and associates to Liberty Consulting -- a political firm founded by Rudy's wife, Lisa -- are also under review by the Justice Department. Rudy did not return calls seeking comment yesterday.
Abramoff maintained a business relationship with Buckham, who runs the Alexander Strategy Group with Rudy. Among the areas of interest to prosecutors is client business directed to the Alexander Strategy Group when the firm was hiring the spouses of members of Congress, including DeLay's wife, Christine.
Christine DeLay was paid about $115,000 over three years while performing a special project -- contacting members of Congress to find out their favorite charity, according to her attorney.
Fisher, offering the Justice Department's first public comments on an inquiry that began in spring 2004, said that the Abramoff case is "very active and ongoing." She said the department is committed to making sure that people know "government is not for sale."
© 2006 The Washington Post Company
Tuesday, December 20, 2005Abramoff singing, but what tune? LINK
Anne Kornblut of the New York Times scoops
this story, which may have more serious implications
than the earlier AP story for DeLay, on how Jack Abramoff is discussing a deal with prosecutors.
I wrote recently about how the noose is tightening
. But here's the first, even if anonymous, record that a deal is in the works:
Jack Abramoff, the Republican lobbyist under criminal investigation, has been discussing with prosecutors a deal that would grant him a reduced sentence in exchange for testimony against former political and business associates, people with detailed knowledge of the case say.
Mr. Abramoff is believed to have extensive knowledge of what prosecutors suspect is a wider pattern of corruption among lawmakers and Congressional staff members. One participant in the case who insisted on anonymity because of the sensitivity of the negotiations described him as a "unique resource."
Other people involved in the case or who have been officially briefed on it said the talks had reached a tense phase, with each side mindful of the date Jan. 9, when Mr. Abramoff is scheduled to stand trial in Miami in a separate prosecution.
Can't imagine it's the only tense place right now. The question is, how many members of Congress will call their lawyers in the morning when they pick up the Times? And pity that only President Bush, with his secret wiretapping, will know...Will Ney fall next?
Toward the end of the Washington Post's follow up
to the New York Times' Jack Abramoff piece, there's this interesting nugget:
Prosecutors have told one lawmaker, Rep. Robert W. Ney (R-Ohio), that they are preparing a possible bribery indictment against him over official acts that benefited clients of Abramoff. Ney inserted comments in the Congressional Record at Scanlon's request praising Kidan and castigating the reputation of SunCruz's then-owner, Konstantinos "Gus" Boulis, during contentious purchase negotiations.
Is this new? Did I miss this? Prosecutors told Ney that they are preparing a possible bribery indictment?
posted by David Donnelly at 8:36 AM Lawmaker From Ohio Subpoenaed in Abramoff Case
By James V. Grimaldi and Susan Schmidt
Washington Post Staff Writers
Saturday, November 5, 2005LINK
Rep. Robert W. Ney notified Congress yesterday that he had been subpoenaed by a federal grand jury examining the lobbying activities of Jack Abramoff, making the Ohio Republican the first lawmaker to receive such a demand in the expanding influence-peddling investigation.
The subpoena, delivered to Ney in recent days, seeks records and testimony from his office. His spokesman, Brian Walsh, said it is the first contact Ney has received from federal investigators looking at Abramoff, once one of Washington's most powerful lobbyists. Ney has denied any wrongdoing.
"I voluntarily provided information to the Senate Indian Affairs Committee last year and I have offered to make myself available to meet with the House Ethics Committee," Ney said in a statement yesterday. "I believe, however, that although the government's investigation of Mr. Abramoff has been well-publicized through other sources, it is inappropriate for my office to comment in any detail about an ongoing investigation."Lawmaker's Abramoff Ties Investigated
Ohio's Ney Has Disavowed Lobbyist
By James V. Grimaldi and Susan Schmidt
Washington Post Staff Writers
Tuesday, October 18, 2005; A01LINK
As federal officials pursue a wide-ranging investigation into the activities of Washington lobbyist Jack Abramoff, his arrest on fraud charges in the purchase of a Florida casino boat company has increasingly focused attention on a little-known congressman from rural Ohio.
Rep. Robert W. Ney (R-Ohio) placed comments in the Congressional Record favorable to Abramoff's 2000 purchase of the casino boat company, SunCruz Casinos. Two years later, Ney sponsored legislation to reopen a casino for a Texas Indian tribe that Abramoff represented.
Ney approved a 2002 license for an Israeli telecommunications company to install antennas for the House. The company later paid Abramoff $280,000 for lobbying. It also donated $50,000 to a charity that Abramoff sometimes used to secretly pay for some of his lobbying activities.
Meanwhile, Ney accepted many favors from Abramoff, among them campaign contributions, dinners at the lobbyist's downtown restaurant, skybox fundraisers, including one at his MCI Center box, and a golfing trip to Scotland in August 2002. If statements made by Abramoff to tribal officials and in an e-mail are to be believed, Ney sought the Scotland trip after he agreed to help Abramoff's Texas Indian clients. Abramoff then arranged for his charity to pay for the trip, according to documents released by a Senate committee investigating the lobbyist.
Ney is under investigation by Florida federal prosecutors looking into Abramoff's acquisition of SunCruz, according to sources familiar with the investigation who spoke on the condition of anonymity. Abramoff and his business partner Adam Kidan were indicted in August on fraud charges related to the purchase.
Ney declined to be interviewed. He has said his actions benefiting Abramoff had nothing to do with the favors he received. He said he was misled by Abramoff and his associates.
"I am absolutely outraged by the dishonest and duplicitous words and actions of Jack Abramoff," Ney said last year when Abramoff's statements about Ney first came up in e-mails released by the Senate Indian Affairs Committee. "As the testimony at both committee hearings has revealed, Jack Abramoff repeatedly lied to advance his own financial interests."
Abramoff, whose attorneys declined to comment for this article, has publicly denied that he misled Ney.
This spring, Ney hired a prominent Washington criminal defense lawyer, Mark Tuohey, to handle inquiries from the Justice Department and congressional investigators pursuing the widening scandal. Tuohey has not returned phone calls in recent weeks to discuss his client.
Comments for SunCruz
A six-term congressman from rural eastern Ohio, Ney, 51, does not have a national profile. A former teacher and public safety director for his home town of Bellaire, Ney was an Ohio legislator in 1994 when he defeated the Democratic incumbent in the congressional district once represented by Wayne Hays (D).
But to members of Congress, Ney is known as the mayor of Capitol Hill. Ney is Administration Committee chairman, a powerful position that doles out budgets, equipment, offices and parking spaces to House members. These perks are used by House Republican leaders to keep their rank and file in line.
Ney became chairman of the committee thanks to his political patron, Rep. Tom DeLay (R-Tex.), who recently stepped down as House majority leader after he was indicted on a charge of conspiracy to violate a Texas campaign law. Shortly after Ney arrived in the House in 1994, he became a part of DeLay's Retain Our Majority Program (ROMP), a fundraising effort in which GOP colleagues donated to Republicans such as Ney in districts without a safe majority. After lines were redrawn to make Ney's district more Republican, he returned the favor, donating to other vulnerable House Republicans. That helped him earn his chairmanship in 2001, leapfrogging over a colleague with more seniority.
Ney and Abramoff, whom DeLay once described as "one of my closest and dearest friends," crossed paths as early as 1996. That year Ney took a trip to Montenegro sponsored by a foundation that had links to Abramoff, who was a lobbyist for Montenegro.
A few years later, Ney paid unusual attention to another Abramoff client, the Florida gambling boat company SunCruz, which was headquartered more than 1,000 miles outside of Ney's congressional district. Abramoff and his business partner were trying to buy the cruise ship fleet from Konstantinos "Gus" Boulis, but Boulis was demanding unwelcome additional terms.
In March 2000, Ney used the Congressional Record to assail Boulis.
"On the Ohio River we have gaming interests that run clean operations and provide quality entertainment," Ney wrote. "I don't want to see the actions of one bad apple in Florida, or anywhere else to affect the business aspect of this industry or hurt any innocent casino patron in our country."
Ney's remarks were orchestrated by Michael Scanlon, a former DeLay spokesman who had just been hired to work for Abramoff at Preston Gates & Ellis LLP. Scanlon had approached Ney through his chief of staff, Neil Volz, according to sources who spoke on the condition of anonymity. Volz has repeatedly declined to be interviewed.
A few months later, Boulis agreed in principle to sell SunCruz to Abramoff and Kidan for $147.5 million. The deal closed in the fall. But Abramoff and Kidan failed to make good on a $23 million payment owed to Boulis, court records show.
When Boulis was being difficult in the negotiations, Ney again made an official statement, this time heaping praise on Kidan.
"Since my previous statement, I have come to learn that SunCruz Casino now finds itself under new ownership and, more importantly, that its new owner has a renowned reputation for honesty and integrity," Ney said in the Congressional Record on Oct. 26, 2000. "The new owner, Mr. Adam Kidan, is most well known for his successful enterprise, Dial-a-Mattress, but he is also well known as a solid individual and a respected member of his community.
"While Mr. Kidan certainly has his hands full in his efforts to clean up SunCruz's reputation, his track record as a businessman and as a citizen lead me to believe that he will easily transform SunCruz from a questionable enterprise to an upstanding establishment that the gaming community can be proud of."
But Kidan's "track record" included a string of lawsuits, judgments, liens, bankruptcies and failed businesses. His Dial-a-Mattress franchise in the District was in bankruptcy. He had filed personal bankruptcy, and he had surrendered his law license in New York after being accused of fraud. One of his mentors, Anthony Moscatiello, was alleged by law enforcement to be an accountant for New York's Gambino crime family.
Ney later said he did not know about Kidan's background.
Four months after Ney's remarks in the Congressional Record, Boulis was murdered in Fort Lauderdale. Police did not make any arrests in the case until September, when they charged four men in the slaying, including Moscatiello and a business associate of Moscatiello's whom Kidan had paid $250,000 as catering consultants.
Five weeks after the Boulis killing, SunCruz officials, including Kidan, threw a $1,000-a-head fundraiser for Ney at Abramoff's skybox at the MCI Center, according to Abramoff's fundraising log.
Language for Tiguas
In early 2002, Volz left his post as Ney's chief of staff to join Abramoff's lobbying team. Soon after, in March 2002, Ney agreed to sponsor legislation that would benefit the Tigua tribe of El Paso, an Abramoff and Scanlon client. They wanted Ney's help to reopen the Tiguas's casino, which the state of Texas had shut down.
"Just met with Ney!!! We're f'ing gold!!!! He's going to do Tigua," Abramoff told Scanlon in a March 20, 2002, e-mail.
Six days later, Abramoff directed tribal officials to make three contributions totaling $32,000 to Ney's campaign and political action committees. A Ney spokesman recently said that money has been donated to Ohio charities.
On June 7, 2002, Abramoff wrote in an e-mail to Tigua consultant Marc Schwartz that "our friend" had "asked if we could help (as in cover) a Scotland golf trip for him and some staff."
The e-mail does not name "our friend," but Schwartz testified in the Senate last fall that it was Ney.
Abramoff wrote that "the trip will be quite expensive (we did this for another member -- you know who) 2 years ago." He was referring to an earlier Scotland golf trip that Abramoff had arranged in 2000 for DeLay. Abramoff suggested to Schwartz that the tribe send $50,000 to a charity he directed, the Capital Athletic Foundation, which would pay for the trip "as an educational mission."
Ney later stated on disclosure forms filed with the House that the August 2002 trip cost $3,200 and was paid for by the National Center for Public Policy Research, a conservative advocacy group on whose board Abramoff served. The Washington Post reported last year that the trip was actually paid for by the Capital Athletic Foundation, which reported in tax records that it spent $150,225 on the trip.
Ney has said he was misled by Abramoff about who paid for the trip.
"In April, 2002, I was approached by Mr. Abramoff, who I believed to be a respected member of the community, and asked to go on a trip to Scotland which Mr. Abramoff said would help support a charitable organization, that he founded, through meetings he organized with Scottish Parliament officials," Ney said in a statement last November.
Ney's report to Congress listed as a purpose of the trip: "speech to Scottish Parliamentarians." However, there is no record of Ney's speech in the Scottish Parliament's register of official visits kept by the external liaison office, which is available on the Web. In addition, at the time of Ney's trip, the Scottish Parliament was out for its August recess, spokeswoman Sally Coyne said.
Ney is not the first public official who has come under scrutiny by investigators for the Scotland trip. David Safavian, then chief of staff at the General Services Administration, also went on the trip with Ney, Abramoff and former Christian Coalition leader Ralph Reed Jr. Safavian, who went on to become the chief White House procurement officer, was indicted this month on charges that he lied to investigators looking into the Scotland trip when he said that Abramoff had no business before the his agency.
The trip, Ney said in his statement last year, had nothing to do with legislation for the tribe.
"I want to be absolutely clear that at no point, ever, was I made even remotely aware that any Indian tribe played any role in this trip," Ney said in his statement.
Ney said he supported the Tigua legislation at Abramoff's request after the lobbyist told him the provision was supported by Sen. Christopher J. Dodd (D-Conn.), who was sponsoring the election reform bill that would carry the Tigua provision.
"I then [in July 2002] personally asked Senator Dodd about this provision and he expressed no knowledge of it," Ney said. "In short, I had been misled by Jack Abramoff. I then asked Jack Abramoff why Senator Dodd was apparently not supporting it and Mr. Abramoff told me that someone had lied to him. The matter was then closed from my perspective."
However, the Tiguas say no one told them the matter was closed. Tigua consultant Schwartz later testified to the Senate Indian Affairs Committee that Ney remained a strong supporter of the Tigua legislation and Abramoff long after his conversation with Dodd.
Schwartz said that in August 2002 -- a month after Ney's reported conversation with Dodd and around the time of the Scotland trip -- Abramoff arranged for Ney to meet with Tigua representatives in his office. Before the meeting, "in an e-mail 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," Schwartz testified.
The meeting lasted more than 90 minutes, two tribal members testified at the Senate hearing. The tribal leaders who attended the meeting were pleased and impressed with the outcome, Schwartz said.
"During that meeting, Congressman Ney was very animated about Mr. Abramoff's skill and repute as a leader in the lobbying circles," Schwartz testified. "We were told about the impending success of Mr. Abramoff's legislative plan and how much Congressman Ney wanted to help to restore the Tribe's ability to conduct gaming on their reservation."
Two months later, on Oct. 8, after the election bill came out of a House-Senate conference committee without a Tigua provision, Ney held a conference call with tribal officials and told them of his "disbelief that Dodd had gone back on his word" to support the provision, Schwartz testified. Ney also expressed his continued support for the Tiguas, tribal officials said.
Ney responded to Schwartz's testimony by saying, "I, like these Indian tribes and other members of Congress, was duped by Jack Abramoff."
Ney later said he was very angry at Abramoff and Scanlon, who he said had misled him about Dodd. Ney has called Abramoff and Scanlon's activities in the Tigua episode "nefarious."
Abramoff shot back by referring to the conference call when he spoke to the New York Times Magazine this spring. "It's crazy" for Ney to say he was duped, Abramoff said. "He was on the phone for an hour and a half!"
Contract for Foxcom
In the late 1990s, members of Congress became increasingly frustrated at the lack of cell phone coverage inside the Capitol and its nearby office buildings.
The House decided to let the major wireless companies select -- and pay for -- a company to install antennas for cellular phones. In 1999, AT&T Wireless had asked LGC Wireless of San Jose to work with the House bureaucracy to put the antennas and repeaters into House buildings. The project was one of the largest of its kind, worth more than $3 million.
At the time, LGC was the world's leading provider of such equipment and had wired the headquarters of most cellular phone companies, including Nextel and AT&T. During the next year, LGC worked with the architect of the Capitol and the House Information Resources office to develop a plan.
Then Foxcom Wireless, an Israeli start-up telecommunications firm, entered the picture. Foxcom, which has since moved headquarters from Jerusalem to Vienna, Va., and been renamed MobileAccess Networks, lobbied for the job.
In early 2001, Ney took charge of the House Administration Committee, which was ultimately responsible for the antenna job. Sometime that year, exactly when is unclear, Foxcom donated $50,000 to the Capitol Athletic Foundation, Abramoff's charity. Foxcom officials have declined to be interviewed about the donation or the wireless project. A spokesman for Foxcom, now MobileAccess, referred all questions Monday to Ney's committee.
Also that same year, a decision was delayed on the antennas, which caught House staff by surprise.
"We were really surprised, given all the work we put in with LGC in designing the system," said Henry F. "Bud" Collins Jr., the senior network systems engineer for the House. "Then, all of a sudden this other company showed up. We had to go through this whole thing again."
LGC Chief Operating Officer Alex Gray wrote to Ney to complain about the "highly politicized selection process" that favored the Israeli company despite the House's "Buy American" posture. "Only Foxcom was permitted a full and fair hearing on the merits of its proposal -- essentially a 'back room' deal based on political expediency alone," Gray wrote.
Assistant House Counsel Carolyn Betz, replying on behalf of Ney, said in a letter to LGC that in the fall of 2001 the major wireless companies were receiving ballots to vote on who should get the contract.
In a letter to Betz, LGC president and chief executive Ian Sugarbroad called the election process "deeply flawed and unfair." He said each wireless company was sent a ballot and allowed to vote for LGC, Foxcom or "no preference." There were no details on the bid proposals, such as cost, security features, band capacity or critical performance metrics, Sugarbroad said.
Brian Walsh, Ney's spokesman, provided The Post redacted copies of the ballots. Three show checkmarks in a box next to Foxcom. The other three ballots are marked "no preference."
But representatives of all six companies said they voted no preference, according to interviews and documents. Five of them were interviewed by The Post, and the sixth made its preference known in a letter obtained by The Post.
Spokesmen for the companies -- Cingular, Nextel, Sprint, Verizon Wireless, AT&T Wireless and Voicestream -- said they remained neutral because both LGC and Foxcom were considered capable of doing the job.
Walsh said those statements are "an absolute contradiction to the documentation."
Ney awarded the license to Foxcom on Nov. 26, 2002, Walsh said. He declined to make public a copy of documents relating to the agreement, noting that the Freedom of Information Act does not apply to Congress. He noted that the work was paid for by the wireless companies and not by Congress, and he pointed out that the Senate also chose Foxcom.
LGC had no right to appeal. "This is not a traditional House procurement and, thus, House procurement policies do not apply," Betz stated in her letter to LGC.
Collins, the House engineer who has since retired, said, "It almost seemed like the cards were stacked for them."
After the contract was awarded, Foxcom listed Abramoff as its lobbyist. Over the next two years, Foxcom paid Abramoff's team $280,000.Researcher Alice Crites and database editor Derek Willis contributed to this report.THE NATION
Lenders Target State Laws
An industry that makes home loans to people with poor credit wants uniform federal rules that could undo tougher consumer protections.
By Jonathan Peterson, Los Angeles Times Staff Writer, December 28, 2005LINK
RALEIGH, N.C. A booming industry that makes home loans to people with fragile credit is lobbying Congress for nationwide rules that regulators and consumer advocates warn would roll back tougher state protections.
The debate comes as millions of Americans have taken out loans with higher fees and interest rates than the mortgages granted to people with solid credit. As these "sub-prime" loans have proliferated, so have complaints from borrowers who say they've been slammed by surprise fees and high-pressure salespeople.
More than two dozen states, led by North Carolina, have moved into a vacuum created by weak federal regulation, imposing their own laws targeting abusive practices. The industry's five biggest players are based in California, and one, Orange-based Ameriquest Mortgage Co., is nearing a $325-million settlement with 33 states over allegations of bait-and-switch tactics, inflated appraisals and other issues.
Amid increasing scrutiny of their operations, lenders have rallied behind a bill sponsored by Reps. Bob Ney (R-Ohio) and Paul E. Kanjorski (D-Pa.) that would impose uniform national rules on the industry, which last year issued $530 billion in higher-cost mortgages.
Supporters say the measure is needed to replace a hodgepodge of state and local lending laws. Some of those laws, lenders say, make it costlier to extend credit to higher-risk borrowers. In at least one case, a lender says it cannot offer North Carolina customers the lowest possible interest rate because of restrictions in state law.
Kurt Pfotenhauer, vice president of government affairs at the Mortgage Bankers Assn., said the "predatory lending problem is frankly dwarfed" by the success story of people who can now buy homes through the use of higher-cost loans. Lenders themselves are typically in a better position than bureaucrats to tailor products for the needs of the marketplace, he said: "The market works because it regulates itself."
Consumer groups say the Ney-Kanjorski bill is a thinly veiled attempt to undo tough state regulations where they exist, and to prevent new laws from being adopted.
"If we've done a public good here, why does that standard have to be diluted?" asked Joseph A. Smith Jr., North Carolina's banking commissioner.
The national proposed standards, for example, would be more permissive than several state measures when it comes to the practice known as flipping, in which loan agents persuade borrowers to refinance after a short period, in some cases just months after they took out their existing loan.
Flipping generates new fees and commissions for lenders and loan agents and can put cash in the pockets of borrowers. But it also chips away at homeowners' equity and may saddle them with costlier terms than they expected.
The practice has been abetted by rising housing prices which enable loan salespeople to tell borrowers that they can painlessly tap the added equity in their homes. But if home prices level off or decline, some debtors could find themselves with homes that are worth less than their mortgages, and they could face a heightened risk of foreclosure.
Consumer advocates are backing a bill by Reps. Brad Miller and Melvin L. Watt, both North Carolina Democrats, and Rep. Barney Frank (D-Mass.) that would parallel the North Carolina law by including a strict ban on flipping and requiring borrowers to get counseling before signing higher-cost loans. Unlike Ney-Kanjorski, it would not prevent states from imposing stricter requirements.
The mortgage banking industry has donated nearly $2 million to lawmakers in the current election cycle, according to the Center for Responsive Politics. Ney and Kanjorski led the pack, with each reporting the same amount - $38,250 - from the industry.
Ney, who has been subpoenaed as part of a widening federal criminal probe of lobbyist Jack Abramoff, was not available for comment. Kanjorski's office did not respond to questions.
The industry is "hopeful there will be action early next year," said Wright H. Andrews Jr., a lobbyist for the lenders.
North Carolina's Miller expressed hope that "the planets are aligning" for significant compromise on the dueling bills in the coming months.
As the national debate unfolds, the experience of North Carolina looms as Exhibit A. Its 1999 predatory lending law is among the toughest, most scrutinized and most hotly debated of all the state efforts.
"It's the law that everybody points to," said Gregory D. Squires, an expert on predatory lending issues at George Washington University.
To prevent flipping, North Carolina forbids "knowingly or intentionally" refinancing a home loan in a way that does not give the borrower a "reasonable, net tangible benefit" considering "all the circumstances."
For mortgages of $150,000 and less, the law also bans prepayment penalties, which in some cases lenders charge when borrowers pay off the entire loan amount early.
Lenders say these penalties are needed to preserve profits after they provide credit to risky borrowers, but critics say they are an unfair way of locking people into costly loans.
"The incidence of predatory lending in North Carolina has almost disappeared," said North Carolina Atty. Gen. Roy Cooper. "Lenders are abiding by the law, and consumers are getting fairer loans."
The legislative solution has not been free of controversy. Michael E. Staten, director of the Credit Research Center at Georgetown University, maintains that sub-prime home loans to low-income minorities dropped by more than 20% in North Carolina after its predatory lending law was passed.
"The very borrowers that the law was intended to protect get squeezed out," he said.
Still, University of North Carolina professor Michael A. Stegman said his research showed that much of the initial drop in lending to poor minorities was for loans with features that had become illegal. Major lenders have remained active in the state, and there is little evidence that borrowers have been pushed out of the market, Stegman said.
Elsewhere in the nation, the record is mixed. Consumer groups say most of the laws passed in other states, including California, are not as strong as North Carolina's.
California's flipping restriction, for example, applies only to the costliest of high-cost loans, leaving most borrowers unprotected.
Beyond that, California requires that refinancings provide simply "an identifiable benefit" to the borrower. Critics say that standard leaves room for abuse. For instance, someone who refinances to pay off high-interest credit cards would have an identifiable benefit, even if the mortgage costs more than it should.
"North Carolina and some of the other state laws provide greater protections than those afforded California homeowners," said Kevin Stein, associate director of the California Reinvestment Coalition, a nonprofit group that promotes access to credit and economic development in low-income communities.
Stein noted that mortgage companies heavily lobbied for the 2001 California law.
"The lending industry has aggressively fought efforts to provide even modest enhancements to our state law's protections," Stein said.
Lenders say higher-cost sub-prime loans - which accounted for 20% of home mortgages issued last year - have helped make homeownership possible for more Americans. Consumer advocates, however, say the industry is tainted by slipshod marketing and "boiler room" practices in which loan agents lure borrowers into repeated refinancings or surprise them with obscure fees at closing time.
"We started hearing borrowers come to us saying they had horrible experiences," recalled Martin Eakes, founder of the Center for Community Self-Help in Durham, N.C. "No person of fair mind could look at these loans and not feel like tens of thousands of people in one small state were being taken advantage of."
By some accounts, lenders have compensated for fee restrictions by charging slightly higher interest rates in North Carolina compared with the same loans in other states.
For example, on certain loans, Irvine-based Option One recently was charging an interest rate about two-tenths of a percentage point higher in North Carolina than in other states. That difference amounts to about $20 to $25 a month for a $140,000 loan, said Steve Nadon, the company's chief operating officer.
An attorney who represents mortgage brokers agreed that the industry's greatest concerns about the law had yet to be realized. "The fear of rampant litigation running out the lenders it may happen, but it hasn't happened yet," said William S. Bost III.
Indeed, Smith, North Carolina's banking commissioner, said his own eyes and ears told him the law was working just fine.
"In the actual world I actually live in, I don't get complaints and I get complaints about everything in the universe." Comments on NeyLending laws
Here are highlights of North Carolina's and California's predatory lending laws, as well as rival measures in Congress.North Carolina
" Loans cannot be refinanced at any time unless the lender can show a "reasonable, net tangible benefit to borrower."
" No prepayment penalty for home loans of $150,000 or less.
" Borrowers getting certain high-cost loans must be counseled about their full costs.California
" Prepayment penalties are allowed for the first five years of traditional loans and for the first three years of higher-cost sub-prime loans.
" The most expensive high-cost loans can't be refinanced without an "identifiable benefit" to borrower, such as eliminating credit card debt.
" No "balloon" payments at the end of a loan's term for a sub-prime loan of five years or less.Ney-Kanjorski bill
" Would set uniform national standards that would replace state laws.
" The most expensive high-cost loans could not be refinanced without a reasonable, net tangible benefit to the borrower within the first 24 months of loan.
" Prepayment penalties could be imposed for the first three years of loan.Miller-Watt-Frank bill
" No refinancing at any time without reasonable, net tangible benefit to the borrower.
" Would set minimum national standards that states could exceed.
" Borrowers getting the most expensive loans would have to receive counseling on their full costs.
Source: Times research Tom DeLay's Smiling Mug Shot and the Domino Theory of Moral NonresponsibilityThe New York Times Writes That Jack Abramoff's Lawfirm, Greenberg Traurig, is Off the HookThe Secret Lives of Lobbyists and "Research Associates"Bush's Eavesdropping, Abramoff's Deception, Delay's Bribes, Fake News and Secrecy: It's a Cultural Thing