[Senate Hearing 108-720]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-720

                        TRIBAL LOBBYING MATTERS

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   ON

       OVERSIGHT HEARING REGARDING TRIBAL LOBBYING MATTERS, ET AL

                               __________

                           SEPTEMBER 29, 2004
                             WASHINGTON, DC





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                      COMMITTEE ON INDIAN AFFAIRS

              BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

                DANIEL K. INOUYE, Hawaii, Vice Chairman

JOHN McCAIN, Arizona,                KENT CONRAD, North Dakota
PETE V. DOMENICI, New Mexico         HARRY REID, Nevada
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
ORRIN G. HATCH, Utah                 BYRON L. DORGAN, North Dakota
JAMES M. INHOFE, Oklahoma            TIM JOHNSON, South Dakota
GORDON SMITH, Oregon                 MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska

         Paul Moorehead, Majority Staff Director/Chief Counsel

        Patricia M. Zell, Minority Staff Director/Chief Counsel

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page
Statements:
    Abramoff, Jack, Washington, DC...............................    14
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      chairman, Committee on Indian Affairs......................     1
    Conrad, Hon. Kent, U.S. Senator from North Dakota............     9
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota........    11
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice 
      chairman, Committee on Indian Affairs......................     4
    Johnson, Hon. Tim, U.S. Senator from South Dakota............    12
    Lowell, Abbe, attorney.......................................    14
    McCain, Hon. John, U.S. Senator from Arizona.................     5
    Milanovich, Richard, chairman, Agua Caliente Band of Cahuilla 
      Indians....................................................    19
    Petras, Christopher, former legislative director, Saginaw 
      Chippewa Indian Tribe of Michigan..........................    38
    Sprague, Bernie, subchief, Saginaw Chippewa Indian Tribe of 
      Michigan...................................................    22

                                Appendix

Prepared statements:
    Milanovich, Richard..........................................    51
    Petras, Christopher..........................................    54
    Sprague, Bernie..............................................    53
Additional material submitted for the record:
    Documents most pertinent to matters covered by this hearing..    57

                           November 17, 2004

Statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      chairman, Committee on Indian Affairs......................   219
    Conrad, Hon. Kent, U.S. Senator from North Dakota............   227
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota........   227
    Hisa, Carlos, Lieutenant Governor, Ysleta Del Sur Pueblo.....   231
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice 
      chairman, Committee on Indian Affairs......................   231
    McCain, Hon. John, U.S. Senator from Arizona.................   222
    Schwartz, Marc, president, Marc Schwartz Partners, Inc.......   228

                                Appendix

Prepared statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      chairman, Committee on Indian Affairs......................   251
    Dodd, Hon. Christopher J., U.S. Senator from Connecticut.....   252
    Hisa, Carlos (with attachment)...............................   254
    Schwartz, Marc...............................................   276
Additional material submitted for the record:
    Documents most pertinent to matters covered by this hearing..   284

 
                        TRIBAL LOBBYING MATTERS

                              ----------                              


                     WEDNESDAY, SEPTEMBER 29, 2004


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
216, Hart Senate Building, Hon. Ben Nighthorse Campbell 
(chairman of the committee), presiding.
    Present: Senators Campbell, Inouye, Conrad, Cantwell, 
Dorgan, Johnson, McCain, and Murkowski.

        STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. 
         SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON 
                         INDIAN AFFAIRS

    The Chairman. We will now move to the second matter on the 
committee's schedule this morning. The committee today is 
launching the first in a planned series of hearing into 
allegations of improprieties by Jack Abramoff and Michael 
Scanlon involving lobbying and so-called grassroots political 
activities on behalf of Indian tribes.
    To put these allegations into some context, Mr. Abramoff 
ran the government affairs department for Greenberg Traurig, a 
Washington, DC law firm where he lobbied on behalf of several 
Indian tribes. Mr. Scanlon owned Capital Campaign Strategies, a 
firm that provided grassroots political support in the form of 
coalition building, letter writing and telephone campaigns.
    The allegations that touched off this committee 
investigation came to light earlier this year in a series of 
newspaper articles. The articles alleged that Mr. Abramoff 
convinced some of his tribal clients to retain Mr. Scanlon's 
firm. Mr. Scanlon charged the tribes exorbitant fees, while 
producing very little work, and Mr. Scanlon split the 
overcharges with Mr. Abramoff.
    Among the specific charges in the original and follow-up 
articles that were included as late as yesterday, Mr. Abramoff 
and Mr. Scanlon received more than $45 million in fees from 
tribal clients. Mr. Scanlon paid Mr. Abramoff $10 million that 
was not disclosed to the tribes or to Greenberg Traurig. Mr. 
Abramoff convinced at least one tribe to make donations to the 
Capital Athletic Foundation, a local charity which the press 
reported Mr. Abramoff supports, and Mr. Abramoff and Mr. 
Scanlon may have influenced tribal elections.
    While our investigation is continuing, we have come to some 
very disturbing conclusions. That is, the accusations in the 
newspapers were not entirely accurate. In fact, the truth is it 
is much worse than as reported. The articles vastly understated 
both the amounts the tribes paid to Mr. Scanlon and the amounts 
he gave to Mr. Abramoff. In fact, all told, six tribes paid 
more than $66 million to Mr. Scanlon, and Mr. Abramoff received 
more than $21 million from Mr. Scanlon for his share of the 
scheme.
    These are rather eye-popping sums of money, to be sure. As 
you might guess, it appears that Mr. Scanlon and Mr. Abramoff 
did not want a lot of people to know how much money they were 
making. The committee's investigation has revealed that Mr. 
Abramoff did not inform his partners at the Greenberg firm of 
this arrangement. Neither did he or Mr. Scanlon disclose this 
arrangement to their tribal clients.
    The allegation that concerns me the most is that Mr. 
Abramoff and Mr. Scanlon may have tried to manipulate the 
outcomes of tribal elections for their own personal profit. Our 
investigation has found in at least two instances, Mr. Abramoff 
and Mr. Scanlon sought to profit by becoming involved in 
attempting to manipulate tribal elections. They helped elect 
tribal council members at no charge, but apparently with the 
understanding that they would be compensated at a later date.
    Shortly after successful campaigns by the candidates Mr. 
Abramoff and Mr. Scanlon supported, they solicited and received 
multimillion dollar contracts aided by the tribal council 
members that they helped elect. Clearly, these circumstances 
raise serious, but unanswered, questions about whether there 
was an explicit or implicit quid pro quo, ``we get elected and 
then you will give us big money contracts.''
    Today, the committee will hear testimony from individuals 
on both sides of these allegations. Their testimony will shed 
considerably more light on the information that I have 
discussed so far. In recovering the information that I have 
discussed so far, the committee and its staff has combed 
through literally thousands of pages of documents. While these 
documents were available to committee members prior to this 
hearing, they have not been available to the public.
    To assist the members as well as the general public, the 
committee staff has prepared those documents most pertinent to 
the matters covered by this hearing. I now offer in the form of 
a motion these documents for the record, and move that they be 
entered into the record at this hearing.
    Senator Inouye. Second.
    The Chairman. Senator Inouye seconds it. Those in favor say 
aye.
    [A chorus of ayes.]
    The Chairman. Are there any opposed?
    [No response.]
    The Chairman. Hearing none, that will be included. All the 
documents will be part of the record.
    [Referenced documents appear in appendix.]
    The Chairman. Now, I will relay in brief the story the 
documents provide on how Mr. Abramoff and Mr. Scanlon 
successfully manipulated tribal elections for their own profit.
    In the case of the Agua Caliente Band of Cahuilla Indians, 
who we will hear from later today, Mr. Scanlon did everything 
but actually vote for the tribal candidates that he supported. 
Just before the 2002 Agua Caliente tribal election, Mr. Scanlon 
asked Mr. Abramoff in an e-mail:

    How much do you want me to spend on the AC race, the Agua 
Caliente race? I have to get a team out there as soon as 
possible and to rotate a new team in after that, so travel is 
going to run about $20,000 and materials about $5K to $10K. 
Should we go for it?

    Mr. Abramoff's instructions were, yes, go for it big time, 
which is just what they did. Mr. Scanlon's own documents now on 
the record show that he ran the overall strategy, crafted the 
messages, wrote his candidates' speeches, coordinated a 
candidates night, ran the get-out-the-vote drive, and even 
counted the votes, which should really raise some eyebrows.
    Shortly thereafter, Mr. Scanlon pitched his business to the 
Agua Caliente and his own successful candidate made the motion 
to approve his contract over the objections of long-time 
Chairman Richard Milanovich.
    The same pattern occurred at the Saginaw Chippewa Tribe of 
Michigan. We will hear their story later also. For example, 
just before the Saginaw Chippewa elections of 2001, Mr. 
Abramoff told Mr. Scanlon:

    I had dinner with Chris Petras of the Sag-Chip. He was 
salivating at the $4 million to $5 million program described to 
him. Is that enough? Probably not. They have their primary for 
tribal council on Tuesday which should determine if they are 
going to take over.

    That is, take over the general election in November.

    He is going to come in after the primary with the guy who 
will be the chief if they win, a big fan of ours already, and 
we are going to help him win. If he wins, they will take over 
in January and we will make millions.

    By the way, we are having some of the e-mails blown up and 
shown to the public. You may or may not be able to read them, 
but I have asked staff just to try to keep up with my 
presentation by rotating those charts.
    The day after the election in which seven of the eight 
candidates running as the slate of eight to one, Mr. Scanlon 
sent out the following e-mail to his employees and Mr. 
Abramoff:

    Well, team, last night was amazing. The slate of eight 
kicked ass, and I want to thank all of you for helping out and 
watching the bottom line. We had less than 3 weeks to take 8 
guys we never met before and get them elected. It was a great 
plan and great execution by a great team. Just to recap, we 
elected 7 out of our slate of 8. We now control 9 of the 12 
seats on the Council.

    I was wondering who ``we'' is as I was reading that e-mail.

    Maynard Kahgebab, who is the elected chief of the 
organizational meeting on December 4 and hopefully we will be 
doing some future work for the tribe in the near future. That 
makes us two-to-one in tribal elections this year.

    Earlier this year, the slate of eight were voted out of 
office, due largely to the allegations at the heart of this 
investigation. Mr. Abramoff financed a recall effort run by the 
ousted tribal council.
    I will close my opening statement by bringing to light one 
additional matter that I find perhaps most troubling on the 
personal record. It appears from their own words, Mr. Abramoff 
and Mr. Scanlon held their tribal clients in absolute contempt, 
clients, mind you, that paid them millions of dollars. E-mails 
obtained by the committee show that they regularly referred to 
their clients using contemptuous, even racist language.
    Allow me to give you one example I am talking about. In an 
e-mail discussing a dinner meeting with a client, which is now 
part of the record, Mr. Abramoff asked Mr. Scanlon to meet with 
a client. The reason Mr. Abramoff could not attend:

    I have to meet with the monkeys from the Choctaw Tribal 
Council. You need to close the deal with a client.

    Mind you that these ``monkeys,'' as Mr. Abramoff refers to 
the tribal council of the Mississippi Band of the Choctaw 
Indians, had enriched him over a 5-year period with over $7 
million in lobbying fees. The story the committee will hear 
today using Mr. Abramoff's and Mr. Scanlon's own e-mails and 
documents is not a pretty one.
    It is a story of greed run amok. It is a story of two 
already powerful, wealthy men lining their own pockets with the 
hard-earned money of people whom they held in contempt and low 
regard.
    I will have questions as we move along, but I would like to 
yield to Vice Chairman, Senator Inouye, for his opening 
statement, then Senator McCain.
    Senator Inouye. Thank you very much.

 STATEMENT OF HON. DANIEL K. INOUYE U.S. SENATOR FROM HAWAII, 
           VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Inouye. For the past 7 months, as noted by the 
chairman, newspapers and journals of national renown have been 
reporting on the findings of their research into allegations 
that Indian tribal governments have engaged the services of 
professional lobbyists and so-called grassroots organizations 
and the costs associated with those contracts.
    Some have asserted that the amounts charged to tribes have 
been excessive or that revenues received by those employed by 
the tribal governments far exceeded the value of the products 
and services provided to the tribes. Sadly, excessive fees and 
large profits are part of everyday life in our Nation's 
capital. Ordinarily, they may not amount to a violation of 
Federal law.
    With that in mind, however, if the allegations of 
interference in the election processes of tribal governments 
and the purposeful manipulation of circumstances to solicit 
business from the tribes are proven to be accurate, we will 
have to explore whether any of the actions taken are violations 
of criminal law.
    Today, the committee is delving into just two of a series 
of dealings with at least six Indian tribal governments. As I 
understand it, there will be further hearings to follow this 
one. So I join my colleagues on the committee today to listen 
and to learn what may have taken place, and whether the 
activities described constitute a pattern and practice of 
dealings that are either inappropriate or illegal.
    Therefore, I fully support my chairman in his decision to 
initiate this investigation because if proven true, the 
allegations are by any measure deeply troubling and profoundly 
serious.
    Mr. Chairman, it saddens me that after the glorious events 
of last week, when thousands of Native people came to our 
National Mall to celebrate the opening of the National Museum 
of the American Indian, and what we all hoped to be the 
beginning page of a new chapter in our Nation's relations with 
the first Americans, that we must now turn our attention to 
something that at the minimum appears to be another most 
unseemly manifestation of the exploitation of the Native people 
of this land.
    Mr. Chairman, this is not a happy matter. I think I would 
rather be almost anywhere else today, but as members of the 
Senate Committee on Indian Affairs, we take our responsibility 
seriously. So I, as I suspect all of my colleagues on this 
committee will do, will reserve judgment until all the facts 
are brought to light.
    I thank you, sir.
    The Chairman. I thank my colleague.
    Senator McCain.

    STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA

    Senator McCain. Thank you, Mr. Chairman.
    I want to thank you and the vice chairman for your 
tremendous effort on behalf of this investigation and your 
continued dedication and effort of many years on behalf of 
Native Americans.
    Mr. Chairman, etched in the history of our great Nation is 
a long and lamentable chapter about the exploitation of Native 
Americans. It began with the sale of Manhattan and has 
continued every since. Every kind of charlatan and every type 
of crook has deceived and exploited America's native sons and 
daughters.
    While the accounts of unscrupulous men are sadly familiar, 
the tale we hear is not. What sets this tale apart, what makes 
it truly extraordinary, is the extent and degree of the 
apparent exploitation and deceit. Earlier this year, the 
Washington Post reported that Jack Abramoff, and influential 
lobbyist, together with Michael Scanlon, a self-styled public 
relations executive and former Capitol Hill staffer, collected 
over $45 million in 3 years from a handful of Indian tribes 
around the country.
    In the case of one tribe, not the subject of today's 
hearings, the funds were allegedly paid from accounts reserved 
for tribal housing, education and health care. That same tribe 
and another reportedly paid millions of dollars into an outfit 
called the American International Center, a self-proclaimed 
think-tank run by two of Mr. Scanlon's buddies at Rehoboth 
Beach, one a yoga instructor and the other a lifeguard.
    Even in this town where huge sums are routinely paid as the 
price of political access, the figures are astonishing. But 
what the tribes actually received for such astronomical sums is 
mystifying. In the 7 months since the article ran, the 
committee on Indian Affairs has worked with my staff on the 
Commerce Committee to examine the relationship between Mr. 
Abramoff and Mr. Scanlon and their relationship with the Indian 
tribes they represented. I am pleased to report that we now 
have the cooperation of all of the tribes mentioned in the Post 
article, along with others not mentioned.
    Even Chief Phillip Martin of the Mississippi Band of 
Choctaw Indians, who defended Mr. Abramoff at the outset of 
this investigation, wrote last month in a letter to Chairman 
Campbell and me that, quote:

    In the light of information we have recently obtained from 
various sources, it now appears that our tribe may in fact have 
been the victims of serious wrongdoing by Abramoff and Scanlon. 
Thus, despite my prior concerns, I appreciate your committee's 
work on this matter.

    I thank Chief Martin for his sentiments and I extend my 
gratitude to all the tribes cooperating in this investigation.
    I am especially grateful to the Saginaw Chippewa Indian 
Tribe and the Agua Caliente Band of Indians who are 
participating in today's hearings. Both tribes have cooperated 
with us since the beginning. I commend the tribes and their 
leaders for having the wisdom to understand that this 
investigation is not an attack on tribal sovereignty, for 
displaying the courage to cooperate in the face of their 
critics, and for having the perseverance to see this through 
until the bitter end.
    We have also obtained and are grateful for the cooperation 
of Mr. Abramoff's former employer, Greenberg Traurig, which 
like his former clients may have been deceived by this 
vainglorious and once-powerful rainmaker.
    Not surprisingly, we have not received the voluntary 
cooperation of Mr. Abramoff and Mr. Scanlon. We have had to 
subpoena documents from Mr. Abramoff and Mr. Scanlon. Even at 
this late date, their production of documents remains 
incomplete. I am told Mr. Scanlon and his attorney have 
frustrated the committee's attempts to serve Mr. Scanlon with a 
subpoena for this hearing. Last I had heard, Mr. Scanlon was 
dodging the U.S. Marshals attempting to serve him.
    I want Mr. Abramoff and Mr. Scanlon to know that their 
failure to cooperate in the face of compulsory process will not 
be tolerated, and their attempt to slow-roll this committee 
will not be brooked. Once the chairman has ruled on their 
outstanding objections, I will urge the committee to pursue 
contempt if their compliance with the subpoenas is not 
immediately forthcoming. The time for games has ended.
    Despite Mr. Abramoff's and Mr. Scanlon's obstinence, the 
committee has begun to unravel the complex and tangled web they 
wove. In the case of both tribes testifying today, the 
documents show that Mr. Abramoff and Michael Scanlon 
systematically sought out impressionable tribal leaders and 
representatives, seduced them with promises of power and 
prestige, and helped them obtain positions of power within 
their tribes. Once in power, their allies on the tribal council 
steered multimillion dollar contracts to Mr. Abramoff's 
lobbying firm and Mr. Scanlon's PR company.
    Mr. Abramoff also directed the tribes to donate generously 
to a long list of political action committees and candidates, 
think-tanks and charities. As the Washington Post reported only 
yesterday, prominent among the charities was the Capital 
Athletic Foundation, Mr. Abramoff's personal charitable 
foundation which he primarily used to fund an all-boys school 
he established. Mr. Abramoff and Mr. Scanlon did so all the 
while privately deriding and maligning their clients.
    Chairman Campbell described for us Mr. Abramoff's and Mr. 
Scanlon's interference in tribal elections and governance, and 
revealed the utter contempt these men held for their clients. 
But to truly understand this story and appreciate the depth of 
their misconduct, we need to consider the interference and 
contempt against the backdrop of the huge fees these men 
connived from the tribes.
    In addition to the $150,000 to $180,000 per month retainers 
the tribes paid to Mr. Abramoff for lobbying services, it was 
widely reported that at Mr. Abramoff's direction, the tribes 
paid Mr. Scanlon over $45 million for ``grassroots activity.'' 
It was also widely publicized that unknown to the tribes, Mr. 
Abramoff received up to $10 million of these funds from Mr. 
Scanlon.
    Financial records and internal e-mails reviewed by this 
committee establish that those figures, while shocking, are 
inaccurate. The amounts paid to Mr. Scanlon and the amounts he 
paid to Mr. Abramoff are much higher. Mr. Abramoff and Mr. 
Scanlon's accounting, bank and tax records establish that 
between 2001 and 2004, six tribes paid more than $66 million to 
Michael Scanlon's company, Capital Campaign Strategies, which 
also did business as Scanlon, Gould Public Affairs. The tribes 
include the Coushatta Tribe of Louisiana, the Mississippi Band 
of Choctaw Indians, the Saginaw Chippewa Indian Tribe of 
Michigan, the Agua Caliente Band, the Tigua Indians of Ecelta 
del Sur Pueblo of El Paso, and Pueblo Sandia Tribe of New 
Mexico.
    These same accounting, bank and tax records clearly 
indicate that Capital Campaign Strategies paid Jack Abramoff 
personally and Kay Gold, a company owned and controlled by Mr. 
Abramoff, over $21 million. The $21 million appears to be one-
half of Capital Campaign Strategies' profit from its Indian 
client revenue over 3 years.
    Let me emphasize what the $66 million figure does not 
include. The $66 million does not include payments made by the 
tribes for lobbying services provided by Greenberg Traurig. The 
$66 million does not include the substantial payments made by 
these tribes directly to other entities owned or managed by 
Abramoff, such as the Capital Athletic Foundation. The $66 
million does not include the substantial political and dubious 
charitable contributions that the tribes made at Mr. Abramoff's 
direction.
    It is my hope the committee will address these payments at 
another time and another hearing. The $66 million only includes 
the payments by the tribes to Mr. Scanlon's Capital Campaign 
Strategies. It is those sums that we focus on today.
    The first question we need to ask is why? Why did Mr. 
Scanlon pay Mr. Abramoff half of his profit? After all, in his 
interview with the Post reporter, Mr. Abramoff denied having 
any financial interest in Mr. Scanlon's companies. The answer 
is surprisingly simple. Mr. Abramoff and Mr. Scanlon were 
partners. Their partnership apparently began over 3 years ago 
on June 18, 2001. In an e-mail to Mr. Abramoff, Mr. Scanlon set 
forth his vision. Mr. Abramoff would develop the client base 
and Mr. Scanlon would serve them. In Mr. Scanlon's own words:

    Bottomline, if you help me get CCS a client base of $3 
million a year, I will get the clients served and the firm 
acquired at $9 million, we can split up the profits. What do 
you think?

    Lest there be any doubt on this point, one year later, Mr. 
Abramoff extolled his partner's virtues in an e-mail. After Mr. 
Scanlon reported on the receipt of $3 million from the 
Louisiana Coushatta for undisclosed services, Mr. Abramoff 
replied:

    You are a great partner. What I love about our partnership 
is that when one of us is down, the other is there. We are 
going to make dollars for years together.

    Scanlon was equal in his enthusiasm, ``Amen. You've got it 
boss. We have many years ahead.''
    What is wrong with this relationship, some may ask? 
Possibly nothing, had it been disclosed to the tribes, but it 
never was. Jack Abramoff, the tribes' trusted lobbyist and 
adviser, instructed the tribes to hire Michael Scanlon for 
millions of dollars, but he never disclosed that he would 
receive about half of the net proceeds from the multimillion 
dollar contracts. In fact, it appears he hid his relationship 
with Mr. Scanlon from just about everyone.
    In a March 25, 2002 e-mail, Mr. Abramoff writes to a close 
associate and confidante about his personal financial 
statement, ``No one knows about the CCS stuff.'' Indeed, they 
did not. Yet Jack Abramoff owed the tribes he represented a 
duty, a duty to disclose his financial stake in the 
multimillion dollar contracts he was steering Michael Scanlon's 
way. That he and Scanlon did not speak up was immoral. It was 
unethical and ultimately it may have been illegal.
    I know that Mr. Abramoff has attempted in the past to deny 
that he directed the tribes to hire Mr. Scanlon. His e-mails 
tell another story. In a December 2, 2004 e-mail, Mr. Abramoff 
wrote to Chris Petras, the former legislative director of the 
Saginaw Chippewa Tribe about racing initiatives in Michigan:

    Where is Scanlon on this? What is he doing? Have you guys 
pushed the button? We need to get him firing missiles. How do 
we move it faster? Please get the council focused on this as 
soon as you can. Every day we lose now is going to hurt.

    Mr. Abramoff apparently copied or forwarded the e-mail to 
Mr. Scanlon, whose only reply was, ``I love you.''
    What did the tribes receive for the millions of dollars 
they paid Capital Campaign Strategies? According to some 
tribes, not much. The Committee continues to investigate this 
issue. We do know however, that Mr. Scanlon subcontracted out a 
substantial amount of work to what appeared to be legitimate 
service providers. He did so at an unbelievably small fraction 
of what he charged the tribes, thus explaining the 
unconscionable amounts that he and Mr. Abramoff were able to 
put into their pockets.
    A February 20, 2003 e-mail from Mr. Abramoff to his 
accountant last year sheds considerable light on how much money 
Jack Abramoff and Michael Scanlon pocketed. In that e-mail, Mr. 
Abramoff wrote:

    I think I understand what he [Michael Scanlon] did. We 
received $5 million into CCS from which I guess I am write, DC 
requires a gross receipts tax franchise tax. He divided the $5 
million into three piles: $1 million for actual expenses and $2 
million for each of us.

    Two million dollars for each of us. That phrase alone 
explains why Mr. Abramoff so fervently pushed Mr. Scanlon's 
services on the tribes. ``Two million dollars for each of us'' 
also explains what the tribes got or did not get for their 
money.
    Many of you are probably wondering where those many 
millions of dollars went after falling into the pockets of Mr. 
Scanlon and Mr. Abramoff. According to the records reviewed by 
the committee thus far, it appears Mr. Abramoff used his share 
to sustain his restaurant ventures, Signatures and Stacks, and 
to finance Eshkol, the all-boys school he established. Since 
the tribes stopped paying Mr. Scanlon, however, Mr. Abramoff 
has had to close Stacks and Eshkol. Meanwhile, Mr. Scanlon 
invested heavily in real estate and securities.
    At the end of the day, wherever the money went, it should 
be returned to the tribes where it belongs. The story does not 
end here, and I know that the hearing today will undoubtedly 
raise as many questions as it answers. To the aggrieved tribes 
and Native Americans generally, I say rest assured that this 
committee's investigation is far from over. Together, we will 
get to the bottom of this and hopefully in the end our efforts 
will help other tribes avoid their own tragic tale in this 
shameful chapter of American history.
    I thank you, Mr. Chairman.
    The Chairman. Thank you, Senator McCain.
    [Applause.]
    The Chairman. We prefer that we do not display a lot of 
emotion in this committee. It is a U.S. Senate committee. The 
only people that are allowed to get real angry and show emotion 
will be Senator McCain and me. [Laughter.]
    I would like to add to your voice, though, that Mr. Scanlon 
has been very adept at avoiding the U.S. Marshals, but he will 
come up for air. The Senate committee will be here, and sooner 
or later he will come in under his own volition or be escorted 
by the U.S. Marshals.
    Do other Senators have comments? Senator Conrad or Senator 
Dorgan? Senator Conrad, go ahead and we will do it in order of 
appearance.

 STATEMENT OF HON. KENT CONRAD, U.S. SENATOR FROM NORTH DAKOTA

    Senator Conrad. Thank you, Mr. Chairman. I thank the 
committee for holding this hearing and conducting these 
investigations. I must say, this is about as bad as it gets. I 
believe there is criminal conduct here and it needs to be 
pursued not only by this committee, but by law enforcement as 
well.
    I was struck by the article in the Washington Post on 
Sunday. The beginning paragraph says Washington lobbyist Jack 
Abramoff and public relations consultant Michael Scanlon 
quietly worked with conservative religious activist Ralph Reed 
to help the State of Texas shut down an Indian tribe casino in 
2002. Then the two quickly persuaded the tribe to pay $4.2 
million to try to get Congress to reopen it. If this is not 
cynical behavior, I do not know what is.
    On the one hand, it turns out Scanlon and Abramoff paid 
Ralph Reed $4 million to conduct a campaign to close down a 
casino, at the very time they are asking the casino to hire 
them so that it can get reopened. One week later, after Mr. 
Abramoff met with the Tiguas who were in danger of getting 
their casino shut down, a Texas consultant employed by the 
tribe thanked Abramoff for his visit and said he would push his 
proposal. Abramoff forwarded the e-mail to Scanlon with the 
message, ``This guy needs us to save his ass.''
    It goes on to say, Ralph Reed, the conservative religious 
leader, was paid $4.2 million by Abramoff and Scanlon for his 
work opposing several tribal casinos. There is an e-mail 
traffic that is laid out in the paper in which Abramoff writes 
to Ralph Reed, ``Great. Thanks, Ralph. We should continue to 
pile on until the place is shuttered,'' referring to the 
casino.

    Perhaps we could get one of our guys in the legislature to 
introduce a bill which disqualifies from state contracts any 
vendor who provides goods or services to a casino in the state. 
This way, Cornyn can sit back and not be scared. Let one of our 
tigers go get him. Do we have someone like this and can we get 
it introduced as soon as possible?

    This is the response from Ralph Reed:

    We have tigers. The Texas legislature is only in session 
every other year. Let me check. Good idea.

    Abramoff back to Reed:

    Even if we never get it passed, it will scare the you-know-
what out of vendors and make life tough on the tribe. We should 
do it in [some other place blocked out] too.

    In an e-mail to Ralph Reed on February 11, Abramoff did not 
mention he had been in contact with the Tiguas. He wrote:

    I wish those moronic Tiguas were smarter in their political 
contributions. I would love us to get our mitts on their 
moolah. Oh, well, stupid folks get wiped out.

    Reed's response:

    Wow. These guys are really playing hardball. Do you know 
who their consultants are?

    Abramoff responded:

    Some stupid lobbyists up here who do Indian issues. We will 
find out and make sure all our friends crush them like bugs.

    Who were their friends?
    Chairman Campbell. If I might interrupt the Senator just 
for a moment. There are six tribes we are going to be dealing 
with a succession of hearings. The Tiguas will be one of them.
    Senator Conrad. I appreciate that. We are supposed to be 
dealing with Mr. Abramoff this morning. These are questions I 
wanted to ask him. Unfortunately, he has not appeared.
    The Chairman. He will be here.
    Senator Conrad. I would just like to close by pointing out, 
after Abramoff became their lobbyist, three tribes, the Saginaw 
Chippewa Indian Band, the Mississippi Band of Choctaws, and the 
Coushatta Tribe of Louisiana, contributed more than $2 million 
to the Capital Athletic Foundation. The Choctaws also gave $1 
million to the National Center for Public Policy Research. 
Saginaw Chippewa officials have told Federal investigators they 
made the donations because Abramoff told them it would impress 
DeLay, a fellow golf buff whom Abramoff described in a 1995 
letter to Arnold Palmer as a very close personal friend. It 
goes on to say the ties between Abramoff and DeLay go back a 
long way. Since 1997, Abramoff and his wife contributed $40,000 
to DeLay's political action committees, and last year the 
Capital Athletic Foundation contributed $25,000 to the DeLay 
Foundation for Kids.
    DeLay has also shown support for causes important to 
Abramoff's clients. A source close to Abramoff, who asked not 
to be named because of the continuing grand jury investigation, 
said Abramoff lobbied DeLay's office to organize a June 2003 
letter cosigned by DeLay, House Speaker Dennis Hastert, 
Majority Whip Roy Blount, and Deputy Whip Eric Cantor that 
endorsed a view of gambling law benefitting the Coushatta's 
desire to block gambling competition by another tribe.
    The letter sent to the Interior Secretary said the House 
leaders opposed a plan by the Jena Band of Choctaws to open a 
casino at a non-reservation site, expected at the time to be 
outside Shreveport, Louisiana, not far from a casino owned by 
the Coushattas. The intent of the letter was to protect the 
income from the Coushatta's casino, about $300 million a year.
    I will close with this. A lobbyist, V. Heather Sibbison, a 
lobbyist at the time for the Jena Band, said:

    I do this for a living. I have never seen a letter like 
that before. It was incredibly unusual for that group of 
people, who do not normally weigh-in on Indian issues to 
express such a strong opinion about a particular project not in 
any of their home states.

    This is a pattern of abuse that is so extraordinary. Over 
$50 million of payments to Mr. Scanlon; back payments by him of 
over $20 million to Mr. Abramoff; political contributions being 
funneled to not only individual candidates, but political 
organizations through this foundation which was a front 
organization, or so Mr. Abramoff indicates in the Sunday paper, 
that they were using it as a front organization.
    If there are not violations of law here, Mr. Chairman and 
members of the committee, I think all of us know that this is 
the most extraordinary pattern of abuse and criminal conduct 
that has come before this committee in the entire 18 years I 
have served here.
    I have searched for language that would express what has 
been done here. These people were engaged in behavior that is 
scuzzy, outrageous. We have got to reach conclusion on this, 
Mr. Chairman and members of the committee, and hold these 
people to account. I am very glad to hear that the chairman 
will insist that these people be brought before this committee 
and be brought before the bar of justice, because they deserve 
the full punishment that is provided for in the law.
    The Chairman. Thank you, Senator.
    Senator Dorgan, did you have a comment?

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
                             DAKOTA

    Senator Dorgan. Mr. Chairman, let me be brief, because I 
think your statement, the statement by Senator McCain, and 
others have described what we have in front of us. I, too, was 
searching for adjectives, and you really cannot find adjectives 
that describe the passion I feel about what has happened here.
    This is a circumstance, in my judgment, where having looked 
at the material that has been presented here and also much 
additional material that is available, but has not yet been 
disclosed--that is a cess pool of greed. It clearly is a 
disgusting pattern of certainly moral corruption and very 
likely criminal corruption.
    I think that we have an obligation to follow this trail 
wherever it leads to the very end. How did this money go from 
the tribes to these consultants? Where did it end up? How did 
it end up there? What services were performed or not performed?
    Let me just also say that my colleague from Arizona, with 
whom I serve on the Commerce Committee, has very strongly 
asserted here the need for Congress to be involved in this 
investigation, as has my colleague from Colorado. For that, I 
noticed yesterday my colleague from Arizona, Senator McCain, 
has been attacked for actively pursuing this investigation. 
Look, we do not have any choice. The Senator from Arizona 
understands, as do I and others, that there are several 
questions here. Was there any federal money, any Federal 
dollars that we send to tribes that found their way back into 
this stream? If so, what was it? Where did it go? How was it 
used?
    Second, was there an abuse of charities? It appears to me 
there was, and we have Federal laws dealing with how that money 
is used. And third, we established the framework for Indian 
gaming through a commission, and we certainly have an 
obligation to understand what has happened here just from the 
standpoint of that area, because that is the area that I think 
produced a substantial amount of this money.
    So let me commend Senator McCain. I think if there is a 
straight shooter in this Congress, if one person is described 
as the straight shooter, it is Senator McCain. He is an 
independent cuss who causes some of us to grit our teeth from 
time to time, but he calls things like they are. This is not 
about politics. It is about corruption. It is about a pattern 
of corruption that is disgusting.
    When you see on the board that is put up the way these 
people described their clients, it is just pathetic. And then 
you see, as I think Senator McCain, Senator Campbell and my 
colleague Senator Conrad have described, a couple of people who 
pay someone else money to try to get a casino shut down so they 
can go approach them and see if they can bilk them for some 
money to open them up, not disclosing they helped try to shut 
them down, it is once again a pathetic, disgusting example of 
greed run amuck.
    My hope is, Mr. Chairman, that we follow this to the very 
end and find out what happened, how it happened, and make sure 
that, as my colleague indicated, that those responsible are 
held responsible before the bar of justice, and also that we 
understand whether there are any legislative areas that we need 
to deal with as a result of all of this.
    Mr. Chairman, thank you for calling this hearing.
    The Chairman. Thank you.
    Senator Johnson.

 STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Johnson. Thank you, Mr. Chairman. I will be very 
brief.
    I appreciate your decision to hold this hearing. This 
hearing will reveal a story about a highly sophisticated and 
extraordinarily cynical scam driven by a few individuals who 
appear to have an insatiable desire to line their own pockets 
and utter contempt for their clients. Some tribes were taken in 
by a few individuals because, in part, credible law firms were 
themselves taken in by this scam.
    Unfortunately, con artists find ways of taking advantage of 
major corporations and major players every day. One should be 
able to assume that if he or she engages a top law firm in the 
Nation, that he or she will receive professional service 
characterized by integrity. I know the Committee is continuing 
its investigation of this matter, and hopefully this hearing 
will bring to light a deeper understanding of the outrageous 
facts and the laws that may have been violated, the pattern of 
corruption that clearly is involved.
    I am pleased to see that Chairman Milanovich and Sub-Chief 
Bernie Sprague are here today. Hopefully their testimony will 
expedite this investigation of the Committee and lead to the 
parties involved being held accountable and justice being done.
    Mr. Chairman, I applaud and associate myself with the 
statements of my colleague from Arizona and the other comments 
and the statements of the members of this committee this 
morning.
    The Chairman. Thank you.
    Any further comments? Senator Conrad?
    Senator Conrad. Mr. Chairman, might I just say that I 
understand a member of this committee has been attacked 
publicly for his role in this investigation. Senator McCain has 
been attacked and that, too, is just outrageous and beyond the 
pale. Senator McCain has done I think a public service by 
coming forward. I think you as well, Mr. Chairman, have done a 
public service by authorizing this investigation to go forward. 
All of us of both parties need to stand and defend those who 
are attacked by people who have engaged in I believe criminal 
conduct.
    For them to attack a member of this committee is simply 
outrageous. If they think for 1 moment that they are going to 
intimidate Senator McCain, they have another think coming. Some 
of the people who are masters in intimidation tried to 
intimidate him. They spent 5 years trying. It did not work 
then. If they think anything they can do will equal what has 
been done to him already, they have another think coming. He is 
going to find a lot of friends standing with him, as these 
scumbags attack him.
    Senator McCain. I thank my friend from North Dakota. I 
appreciate it. [Laughter.]
    The Chairman. One time in a disagreement, I described 
Senator McCain as like hugging a cactus, but I did not really 
mean that. [Laughter.]
    I am going to pursue this with some further hearings. As my 
friends know, I will be leaving, but it is highly likely 
Senator McCain will be the new incoming chairman, as he was 
before of this committee, and if there is anybody within 
hearing distance or sight of this hearing today that thinks 
this is going to go away, you are in for a surprise. It is 
going to be for a long time.
    With that, we will start with our first panel. That would 
be Jack Abramoff. If he will come and be seated. As we 
mentioned before, Michael Scanlon is still hiding out 
somewhere. We have not been able to serve him.
    Now, I would also remind our witnesses, for Mr. Abramoff 
and for those people following that are going to testify, that 
if you have your counsel with you, they are allowed to respond 
to you, allowed to talk to you, but they will not speak to the 
committee unless they are responding to a particular question 
by one of the Senators.
    Mr. Abramoff, I am sure you are aware of this, but by 
appearing before this committee, you are under oath. I have 
been advised to swear you in.
    [Witness sworn.]
    The Chairman. We will now proceed, if you have an opening 
statement.

STATEMENT OF JACK ABRAMOFF, WASHINGTON, DC, ACCOMPANIED BY ABBE 
                    LOWELL, ATTORNEY AT LAW

    Mr. Abramoff. Mr. Chairman, I would ask if you would 
entertain a procedural question by my counsel.
    The Chairman. Yes; go ahead.
    Mr. Lowell. Thank you, Mr. Chairman.
    I was curious, given the statements by the various members, 
many of whom I know and many of whom know my deep respect for 
the processes of this legislative body, whether the committee 
has considered in light of the statements about wrongdoing, 
criminal conduct, it is Senate Rule Number 26-5(b)(3). That is 
the rule which talks about when hearings are appropriately held 
in an open session and in a closed session, and specifically 
the Senate's own rules asks the chairman and members to 
consider when they are about to conduct hearings in which the 
activities will:

    Tend to charge an individual with crime or misconduct, to 
disgrace or injure the professional standing of an individual, 
or otherwise to expose an individual to public contempt or 
obloquy, will be the kinds of hearings which ought not to be 
done in open session.

    I was curious whether or not the committee had considered 
its rule and what its findings had been on that.
    The Chairman. The committee did hear your objections. They 
were duly noted. In a letter that I sent to you on September 
20. I overruled those objections and do so now.
    Do you have an opening statement, Mr. Abramoff?
    Mr. Abramoff. Mr. Chairman, I would request and hope that 
the committee will include in the record the correspondence 
that I have sent through my counsel, because it does explain my 
situation better than I am able to do so myself this morning.
    The Chairman. Without objection, all that correspondence 
will be included in the record.
    [Referenced documents appear in appendix.]
    Mr. Abramoff. Otherwise, I am prepared to answer your 
questions, sir.
    The Chairman. Let me get right to it. I know that other 
members have a lot of questions. So what we are going to do is 
I am going to time everyone and give everyone 6 minutes, and we 
will go back two or three times, if that is acceptable to 
Senator Inouye.
    Let me just get right to it, Mr. Abramoff.
    Senator McCain. Mr. Chairman, I think this is simply a 
clerical matter, but I ask unanimous consent that your 
responses to Mr. Lowell and Mr. Abramoff be included in the 
record at this time.
    The Chairman. Without objection, they will be included in 
the record.
    [Referenced documents appear in appendix.]
    The Chairman. At one time or another, according to your e-
mails, you and Mr. Scanlon referred to tribes as morons, stupid 
idiots, monkeys, f-ing troglodytes, which you defined as a 
lower form of existence and losers.
    I want to associate my comments with Senator Inouye. We 
just opened the National Museum of the American Indian. It was 
to celebrate the people who have been here for thousands of 
years. I have to tell you that I was very personally offended 
by those comments. I think of all the time they have suffered 
in America in the last 400 years, they have a right to preserve 
their dignity.
    My question concerning your definition of those clients is 
this: Why would you want to work for people that you have that 
much contempt for?
    Mr. Abramoff. Mr. Chairman, I respect the committee's 
process. That is why I am here today. But in light of the 
correspondence that occurred between the committee and my 
counsel, including the committee's decision not to make any 
provisions for my testimony through a grant of legislative 
immunity, I have no choice but to assert my various 
constitutional privileges against having to testify. I hope 
that sometime soon I will be able to do so in order to present 
all the facts.
    The Chairman. We look forward to that.
    Senator McCain. Mr. Chairman, could I ask? I believe that 
it is required that Mr. Abramoff specifically assert his fifth 
amendment rights. I would rely on counsel, but from previous 
hearings, I think that that is a requirement that he 
specifically state his constitutional right under the fifth 
amendment.
    The Chairman. Would you like to do that, Mr. Abramoff? 
Exert your fifth amendment rights if you are going to decline 
to answer the questions of the committee?
    Mr. Abramoff. Yes, sir; the privileges that protect my 
testimony include the first amendment's right to petition 
Congress and free association; the fifth amendment's due 
process right to have adequate notice and opportunity to be 
heard; the separation of powers doctrine; and the fifth 
amendment's right for a person not to become a witness against 
himself.
    Senator McCain. Thank you, Mr. Chairman.
    The Chairman. I thank you.
    I am going to continue asking some questions, and you can 
just keep dodging if you want to.
    Do you refer to all of your clients with the same kind of 
terminology you used for Indians, that is, idiots, monkeys, 
morons, and so on?
    Mr. Abramoff. I respectfully invoke the same privileges, 
sir.
    The Chairman. Two of the tribal leaders that were paying 
you millions of dollars were Chief Phillip Martin of the 
Mississippi Band of Choctaws and Chairman Richard Milanovich of 
the Agua Caliente Tribe, who I have known for years, both of 
them. This full committee has known them for years. They are 
highly respected by the committee, highly respected in the 
Indian community, which is not a very big community. Literally 
every Indian leader in the Nation knows each other on a first-
name basis. Why would you refer to them in such despicable 
terms?
    Mr. Abramoff. I respectfully invoke the same privileges, 
sir.
    The Chairman. Okay, thank you.
    I want to ask about some of your e-mails provided to the 
committee by our investigators, which were shown on the screen 
and on the tripods, too. On July 9, 2002, you sent an e-mail to 
Mr. Scanlon which referred to some of your clients, let me read 
it to you. I will eliminate the profanities to avoid those, but 
you can fill in the blanks: ``Are you f-ing kidding me? I hate 
those f-ing boy scouts. What a bunch of a-holes.'' We can fill 
in all the blanks. To which Indians were you referring?
    Mr. Abramoff. I respectfully invoke the same privileges, 
sir.
    The Chairman. These do not sound like the comments of an 
educated man. It sounded like the comments of somebody out of 
150 years ago and some form of bigotry. Knowing your 
background, I happen to have a very, very strong concern for 
Jewish people in America, because in many cases they suffered 
in history the same things that Indians did. I would have 
thought that you would have had much more sensitivity to Indian 
people.
    On the same day, July 9, you sent another e-mail to Mr. 
Scanlon. It reads:

    Did we get a CCS check from the Kay Gold today? It sounds 
good to me. As for the $64,000, I want to use it to buy a car, 
I decided. Can we do it so neither one of us pays taxes on it?

    Now, I think the Internal Revenue Service [IRS], as well as 
the members of this committee, might be interested in knowing 
your response to that. The Kay Gold Company, as I understand 
from our staff investigators, has no employees, no clients, and 
does not do very much business. It is a consulting company that 
operates out of your home. Would you speak to that?
    Mr. Abramoff. Sir, I guess I can be asked hundreds or 
thousands of questions today, but for each one, I must 
respectfully invoke the privileges that I have stated before.
    The Chairman. I will give you that opportunity.
    On an e-mail to Mr. Scanlon dated December 7, 2002, let me 
read that to refresh your memory. It sounds, by the way, that 
it seems to me that you really mind the tribes. Let me read 
that one:

    Let's do it. We really need more money, but you and I must 
meet to work out a strategy to get things moving. We are 
missing the boat. There are a ton of potential opportunities 
out there. There are 27 tribes, which make over $100 million a 
year, according to the New York Times piece on November 24. Can 
you have your guys do the research and find out which tribes 
these may be? We need to get moving on them. Can you come to 
town this weekend?

    Now, were you interested at all in helping poor tribes, or 
just the rich tribes?
    Mr. Abramoff. I respectfully invoke the privileges stated, 
sir.
    The Chairman. On January 7, concerning the Agua Caliente, 
your e-mail said:

    We should orchestrate this to happen and then fly out there 
to war-game with them and rake in the big money. I will even 
give you a shot to recoup your losses on the golf course if 
that happens.

    Mr. Abramoff, it is obvious that you are not going to 
answer questions for the committee. I am going to give other 
members an opportunity to ask some too, however. This is not a 
court of law. It is a Senate hearing. I should think that you 
would be concerned about some of the people that you deal with, 
and not just reduce everything down to a dollar figure. But 
this certainly is the court of public opinion. I have a hunch 
that when we are all done, if you intend to get any further 
Indian contracts, you might think about looking for another 
line of work.
    I yield to Senator Inouye.
    Senator Inouye. Thank you very much.
    After listening to all of the statements and after having 
read articles, am I to assume that you did make a few dollars?
    Mr. Abramoff. Senator, I respectfully invoke the privileges 
stated.
    Senator Inouye. As a good citizen of the United States, did 
you file an income tax return?
    Mr. Abramoff. Senator, I must respectfully assert the 
privileges stated.
    Senator Inouye. And in your income tax return, how did you 
describe this income?
    Mr. Abramoff. Senator, I must invoke the privileges 
previously stated.
    Senator Inouye. Mr. Chairman, obviously I will not get any 
response, so I yield the floor.
    The Chairman. Before I turn to Senator McCain, though, you 
dealt with a number of Indian tribes, Mr. Abramoff. Indian 
people traditionally, they even with non-Indians often asked 
him if they would invite them to smoke a pipe. It sounds maybe 
strange to people that do not know the culture, but Indian 
people believe that when you smoke the pipe, your voice is 
carried to the Creator. Hence, you have to tell the truth and 
you have to be honest because he is going to know what you 
said, because it is on the smoke that goes up to him.
    When you had any dealings with Indian tribes, did you ever 
participate in that ceremony with them, to speak the truth?
    Mr. Abramoff. Senator, I respectfully invoke the privileges 
already stated.
    The Chairman. Thank you.
    Senator McCain.
    Senator McCain. I have no questions, Mr. Chairman.
    The Chairman. Senator Conrad.
    Senator Conrad. Thank you, Mr. Chairman.
    Mr. Abramoff, I do not think you are doing yourself any 
favor here by invoking repeatedly your fifth amendment rights. 
It is your constitutional right, but many of these questions 
have nothing to do with your possible criminal conduct. They 
are questions that are outlined in e-mails that you wrote in 
which you disparage the very people that you are working for 
and engaged in what appears to be just an out-and-out scam. I 
do not know what else anybody could say. I do not know what in 
your conscience you must have been thinking.
    Did you in fact send an e-mail to Mr. Ralph Reed on January 
7, 2002 in which you said:

    Great. Thanks, Ralph. We should continue to pile on until 
the place is shuttered.

    Referring to an Indian casino.

    Perhaps we could get one of our guys in the legislature to 
introduce a bill which disqualifies from State contracts any 
vendor who provides goods or services to a casino in the State.

    Did you send such an e-mail?
    Mr. Abramoff. Senator, I respectfully invoke the privileges 
previously stated.
    Senator Conrad. Did you receive an e-mail back from Mr. 
Reed in which he said,

    We have tigers. Texas legislature only in session every 
other year. Let me check. Good idea.

    Did you receive such an e-mail from Mr. Reed?
    Mr. Abramoff. Senator, respectfully I invoke the privileges 
previously stated.
    Senator McCain. Mr. Chairman, could I mention something to 
my colleague?
    The Chairman. If the Senator from North Dakota would yield?
    Senator Conrad. Yes.
    Senator McCain. We have other witnesses. This witness is 
not going to respond.
    Senator Conrad. I have some more questions that I would 
like to put to the witness to give him an opportunity to break 
from this invocation of the fifth amendment to address what are 
e-mails that have been attributed to him.
    I would like to ask, did you, Mr. Abramoff, you and your 
partner, your colleague Mr. Scanlon, give $4 million to Ralph 
Reed?
    Mr. Abramoff. Senator, I respectfully invoke the privileges 
previously stated.
    Senator Conrad. Did you send an e-mail to Mr. Reed on 
February 11, 2002 in which you did not indicate you had been in 
contact with the Tiguas, but you said, and I quote:

    I wish those moronic Tiguas were smarter in their political 
contributions. I would love us to get our mitts on that moolah. 
Oh, well, stupid folks get wiped out.

    Did you send that e-mail to Mr. Reed?
    Mr. Abramoff. Senator, I respectfully invoke the privileges 
previously stated.
    Senator Conrad. And when the Tiguas fought back by running 
ads in the Washington Post, did you receive an e-mail from Mr. 
Reed that said:

    Wow, these guys are really playing hardball. Do you know 
who their consultants are?''

    Did you receive such an e-mail?
    Mr. Abramoff. Senator, I invoke the privileges previously 
stated.
    Senator Conrad. And when you received that e-mail, did you 
respond by saying:

    Some stupid lobbyists up here who do Indian issues. We will 
find out and make sure all of our friends crush them like bugs.

    Did you send that e-mail, Mr. Abramoff?
    Mr. Abramoff. Senator, I respectfully invoke the privileges 
previously stated.
    Senator Conrad. And who are the friends that you are 
referring to in that e-mail, Mr. Abramoff? Who are the friends 
that you will use to crush your adversaries like bugs?
    Mr. Abramoff. May my counsel ask a procedural question at 
this time?
    The Chairman. If the Senator from North Dakota specifically 
asks the counsel.
    Senator Conrad. I am not asking.
    Senator McCain. I would ask my friend from North Dakota 
again, this is not appropriate because any citizen has the 
right to invoke their protections and their rights. If we are 
not careful, we are going to be badgering this witness. We have 
further hearings and investigations and further panels of 
witnesses to appear before us. So I ask my colleague from North 
Dakota, after having been chairman of this committee and served 
on it for many years, that we move on.
    Senator Conrad. I am prepared to move on. I wanted to ask 
these questions of Mr. Abramoff. These are the questions I have 
prepared to ask him. I think it is legitimate to ask Mr. 
Abramoff these questions. These are e-mails that he is alleged 
to have written. I think this committee is as outraged as I am 
by these e-mails. I think Mr. Abramoff should have to confront 
in public session the e-mails that he himself authored, 
according to the record of this committee.
    I have gone through now those that I had prepared for 
question, so I am prepared to yield at this point. But I would 
say to my colleagues, and I would say to you, Mr. Abramoff, 
shame on you. Shame on you.
    The Chairman. I thank the Senator.
    Obviously, we were going to do several rounds, but there 
will be no answers from this witness apparently, so we will go 
on to our second panel.
    If Richard Milanovich, the chairman of the Agua Calientes 
and Bernie Sprague would come forward.
    Mr. Lowell. Mr. Chairman, we are excused?
    The Chairman. Yes; you are excused. Excused for this 
hearing, but will probably be called back. I might tell you 
that, counsel.
    Senator Inouye. Mr. Chairman, for the record, who was the 
attorney?
    Senator McCain. Mr. Abbe Lowell.
    The Chairman. Mr. Abbe Lowell was the attorney.
    Chairman Milanovich, Sub-Chief Sprague, would you please 
stand and raise your right hand and state after me?
    [Witnesses sworn.]
    The Chairman. Thank you for appearing. We will start in 
that order, with Chairman Milanovich first.

 STATEMENT OF RICHARD MILANOVICH, CHAIRMAN, AGUA CALIENTE BAND 
 OF CAHUILLA INDIANS, ACCOMPANIED BY STEVEN ROSS, ATTORNEY AT 
                              LAW

    Mr. Milanovich. Thank you, Mr. Chairman.
    May I digress from my prepared statement, sir, members of 
the committee?
    The Chairman. That will be fine. Your complete written 
testimony will be included in the record if you would like to 
diverge from that.
    Mr. Milanovich. I would like to have the opportunity to 
read it, but first I want to say, over the last several months, 
sir, I have been made aware of the e-mails. When I read them, I 
was upset. Today, after such a glorious week when we opened the 
National Museum of the American Indian, knowing full well that 
the committee members sitting up here today made such a great 
effort to make certain that it was done, and as Senator Inouye 
states, it is a sad day today that we begin the week, this mid-
week, to read what a travesty has been done to tribes.
    Thank you, sir.
    Good morning, Chairman Campbell, Chairman McCain, Vice 
Chairman Inouye and members of the committee. I am Richard 
Milanovich, chairman of the Agua Caliente Band of Cahuilla 
Indians. I appreciate the opportunity to testify before you 
today. I would like to commend the members of this committee 
and your staff for bringing to light the malicious actions of 
two unscrupulous individuals and those who acted to enable 
their enterprise.
    While I had opposed the efforts of Mr. Abramoff and Mr. 
Scanlon to obtain contracts with our tribe, distrusting their 
claims, methods and quite frankly most of their costs, it was 
not until I saw the secret e-mails and other information 
obtained by the efforts of this Committee that I began to truly 
comprehend the full nature of their conniving actions.
    This morning, I would like to address four areas. First, I 
would like to provide you with a little background on our 
tribe. Second, I will share with you my thoughts at the time 
Mr. Abramoff and Mr. Scanlon contrived to obtain contracts with 
our tribe. Third, I will highlight what we have learned over 
the past 7 months concerning their actions. Finally, I will 
describe some of the things our tribe is doing in light of what 
we have learned.
    First, I have served on the tribal council since 1977. My 
service began as a member from 1977 to 1981, as Secretary from 
1981 to 1984, when I was elected as chairman, a position I have 
been honored to hold for the past 20 years. From time 
immemorial, our people resided in the Palm Springs area. Our 
people developed complex communities in the Palm, Murray, 
Andreas, Tahquitz, Chino Canyons and on the desert floor. With 
abundant water supply, plant and animal life, the Agua Caliente 
Band of Cahuilla Indians thrived. In 1876, the U.S. Federal 
Government deeded in trust to the Agua Caliente Band of 
Cahuilla Indians 32,000 acres of our ancestral land as the Agua 
Caliente Indian Reservation.
    We are industrious and creative, with a reputation for 
independence, integrity and justice. We are proud of our rich 
history and our culture. The Agua Caliente Band of Cahuilla 
Indians' constitution and bylaws was adopted in 1955. The Agua 
Caliente Band of Cahuilla Indians has a government-to-
government relationship with the U.S. Government as a federally 
recognized tribe and sovereign tribal entity. We have 
governmental authority over our reservation lands and people.
    The tribe's constitution and bylaws outlines a two-tiered 
democratic tribal government structure, the tribal membership 
and the tribal council. The tribal council consists of five 
council members, chairman, vice chairman, secretary and two 
members. The chairman, vice chairman and secretary serve 2 
years and members serve 1-year terms. Under our constitution, 
action is taken by a majority vote of the tribal council.
    I would to preface my remarks on the topic of the tribe's 
business relationship with Jack Abramoff and Mike Scanlon with 
a general statement that we are still learning, together with 
the committee, of the efforts of these individuals to recruit 
individual tribal members to collaborate in their deceitful 
undertakings. Concurrent with the committee's investigations, 
we of course have begun our own internal investigations, but at 
the time the tribe entered into business arrangements with 
these individuals and their firms, we had no idea of the steps 
they had already taken in order to manipulate our democratic 
decisionmaking process.
    While I am proud that these selfish efforts were only 
partially successful, clearly these ill-motivated actions were 
a critical element of what appears to be a scheme to obtain 
large and unjustified payments from the tribe. As a result of 
the majority vote of the council, and in my capacity as 
chairman, I signed service contracts with Greenberg Traurig and 
Scanlon Gould Public Affairs in July 2002. Jack Abramoff and 
Greenberg Traurig were hired to assist the tribe with all 
political and lobbying activities relating to a wide range of 
public policy issues. Mike Scanlon and Scanlon Gould were hired 
to help the tribe with respect to pending gaming compact issues 
in California.
    The first time that I met Jack Abramoff and Michael Scanlon 
was in the course of their presentations seeking contracts to 
represent the tribe. Mr. Abramoff identified himself as a 
representative of one of the top law and lobbying firms in the 
United States. The fact that these men and their services were 
associated with such a prestigious firm was something upon 
which some of our counsel relied. In large measure, Mr. 
Abramoff's and Mr. Scanlon's presentations rest on their self-
described success on behalf of other tribes.
    Personally, I was skeptical with regard to their 
presentation and was more than skeptical of the fees that Mr. 
Abramoff and Mr. Scanlon were seeking for their firms. I voiced 
my objections and sought to defeat the effort to obtain 
contracts. But Mr. Chairman, as I am sure you will understand 
and others on the Committee will understand, sometimes being 
Chairman is not enough if others have managed to collect the 
votes.
    When the contracts and matters relating to the contract 
came to a vote, the vice chairman and I found ourselves 
outvoted. Of course, at that point in time, I had no idea that 
Mr. Abramoff and Mr. Scanlon had already deceptively engaged in 
a full-scale effort that they themselves valued at tens of 
thousands of dollars to defeat certain tribal council members, 
myself included, in order to elect a slate more friendly to 
their sales pitch.
    I was surprised and disappointed at some others on our 
council who took a different view. But at this point, I was 
unaware of the length that Mr. Abramoff and Mr. Scanlon had 
gone into enlisting their support of certain individuals in our 
tribe. Of course, other members of our council had also been 
deceived. At the time, I did, however, take some solace in 
paying such a large retainer for Mr. Abramoff's services in 
that Greenberg Traurig is a law firm with a responsibility to 
honorably treat its clients.
    As Chairman, I thought it was my duty to try and make the 
best of the situation. Looking back from where we sit today 
with the knowledge of press reports and preliminary findings of 
this committee, it appears that some people at Greenberg 
Traurig were deceived, just as we were, regarding much of Mr. 
Abramoff's 
activities.
    It is my sense that we have only seen the tip of the 
iceberg, but already it appears that Mr. Abramoff and Mr. 
Scanlon, working in conjunction with those who willingly 
enlisted to collaborate with them, engaged in numerous 
instances of improper conduct.
    Their own words demonstrate that they improperly sought to 
manipulate for private gain the electoral processes of our 
tribe. This occurred both before and after they were hired. It 
also appears they did not view the tribe or even the tribal 
council as their clients. Instead, they worked on behalf of 
themselves and a small faction of tribal members they were 
seeking to elevate to a position of total control by 
manipulating tribal elections. In the course of their work for 
the tribe, Mr. Abramoff and Mr. Scanlon attempted to hide 
information from the full council, while working covertly with 
this collaborating faction.
    Their own secret communications indicate a willingness to 
sacrifice the interests of the tribe in exchange for the 
opportunity to make more money for themselves, of course. It 
appears that this approach seeking an outcome that would 
actually hurt their clients so that they could make more money 
was not unique in our case. While there are a number of 
specifics that your investigation is revealing, perhaps the 
saddest is the utterly callous fashion in which the mocked the 
interests of their clients they were actually hired to 
represent, and displayed a willingness to engage in virtually 
any conduct as long as they could make money.
    In April of this year, the tribal council unanimously voted 
to suspend its relationship with both Greenberg Traurig and 
Scanlon Gould. Based on information we already learned, we have 
taken further action concerning the attempts to manipulate our 
tribal elections. We have suspended certain individuals from 
appointed roles in our government. We have retained the 
services of Darryl Wold, a former chairman of the Federal 
Elections Commission, to conduct an internal tribal inquiry 
into whether there were any violations of tribal law.
    As chairman, I am working with our tribal council to reform 
our laws regarding contracting, election and other procedural 
safeguards. Additionally, we have asked our legal counsel to 
aggressively pursue all avenues of obtaining reimbursement and 
compensation for injuries caused to our tribe. We will, of 
course, continue to work with the committee and other 
authorities.
    Mr. Chairman, I would like to close by reiterating my 
gratitude to you, Chairman McCain, Vice Chairman Inouye and the 
committee on your investigation. I will be happy at the 
appropriate time to answer any questions that you may have.
    Thank you.
    [Prepared statement of Mr. Milanovich appears in appendix.]
    The Chairman. Thank you.
    Mr. Sprague.

STATEMENT OF BERNIE SPRAGUE, SUB-CHIEF, SAGINAW CHIPPEWA INDIAN 
                       TRIBE OF MICHIGAN

    Mr. Sprague. Thank you, Mr. Chairman, and good morning to 
the chairman and other members of the committee. I certainly 
would like to thank you folks for inviting me out here today 
and conducting this investigation.
    This all started back in 2001 for me. I have been battling 
with these guys ever since, and I am glad to see today that it 
is going to come to a head. Hopefully, after today we can get 
down to the bottom of what really happened in the last 2 or 3 
years, not only with my tribe, but with other tribes across the 
country. I would like to read my statement for you this 
morning.
    Good morning, Mr. Chairman and members of the committee. My 
name is Bernie Sprague. I am the Sub-Chief of the Saginaw 
Chippewa Tribe. We have approximately 3,000 members located 
throughout Michigan and the United States.
    I have served my tribe for over 19 years and I have served 
as an elected official for almost 7 years. These last 2 years 
have been a difficult and trying period for the tribe and 
myself. On behalf of the Saginaw Chippewa Indian Tribe, I want 
to thank the committee for allowing me to testify and for 
conducting this important investigation.
    Our tribe has a long and painful history since we first 
came in contact with settlers hundreds of years ago. Our 
treaties with the U.S. Government ceded millions of acres of 
our ancestral land to the Federal Government. Like many tribal 
nations across this country, our people have endured 
generations of broken treaties and empty promises. We have 
struggled for centuries against non-Indians who have used every 
tactic to steal our land and our precious resources that 
allowed our tribe to survive.
    Unfortunately, Mr. Chairman, we fight a similar battle 
today. They may wear fancy suits and expensive shoes, but their 
greed, scare tactics, and unscrupulous behavior is the same our 
people have faced for generations. And their goal to take from 
Indian people what is not rightfully theirs is once again being 
painfully repeated.
    There is not a word in my native language that is strong 
enough to describe what these people have done to my tribe. 
These unsavory characters who lie, deceive, and steal from 
Indian tribes need to be exposed for who and what they are.
    In the fall of 2001, a small group of Washington, DC 
lobbyists quietly worked to elect 8 tribal members to the 12-
member council. As this committee knows, it is unheard of to 
have non-Indians involved in tribal elections. We do not know 
where they got the money to run this campaign, but we do know 
these lobbyists smeared the reputations of other candidates 
running for tribal council through a series of slick brochures 
sent to tribal members. This type of campaign has never 
happened before on our reservation. We now know these lobbyists 
have engaged in the same practices with other tribes across 
Indian country.
    We were also shocked to learn that members of the former 
council and the former legislative affairs director who is here 
today, who is not a tribal member, were deeply involved in this 
scheme. We also now know that these lobbyists struck a deal 
with the candidates they supported. The deal was this: If you 
get elected to a tribal council, the lobbyists would receive 
multi-million dollar contracts with the tribe.
    Two days after the new council took office in December 
2001, a divided tribal council approved the contracts to hire 
these firms against the strident recommendation of our legal 
counsel. In doing so, they fulfilled their part of the deal. 
The Washington, DC lobbyists were hired and the looting of the 
tribal treasury soon followed.
    In 2002, I was elected to tribal council in a special 
election. I began to ask questions about the outrageous fees 
our tribe was paying these lobbyists. I learned that there were 
no reports or documentation for any work they had supposedly 
performed.
    One of the most outrageous examples of unaccounted-for 
services involved the purchase of a voter database from Mr. 
Scanlon. Our tribe paid nearly $4.5 million for a database of 
voters in Michigan. That is right: $4.5 million for a database 
that we never saw. The current tribal council researched this 
issue and found that you could purchase a database of every 
voter in Michigan for less than $75,000. To this day, we do not 
know where this money went and this type of spending was 
repeated over and over and over again, costing our tribe over 
$14 million.
    There were other tribal council members who raised similar 
objections to this outrageous spending. Because we asked these 
questions and we told the tribal membership what was happening, 
the council majority removed all of us from the tribal council. 
We continued to object to their looting of the tribal treasury. 
In the election of 2003, all but two of the former tribal 
council members lost their seats.
    Once a new council was elected in November 2003, we called 
in Mr. Abramoff to discuss his contract. During this meeting, 
Mr. Abramoff was asked if he had a financial or business 
relationship with Mr. Scanlon. He looked us in the eye and told 
our counsel he had no relationship with Mr. Scanlon at all. But 
now we know that this was not true.
    Mr. Chairman, I fully share your view that scheming to 
defraud tribes must stop here and now, and that those 
responsible should be prosecuted to the fullest extent of the 
law. You will be pleased to know that the current tribal 
council has taken steps to ensure this never happens again to 
our tribe.
    We are committed to taking steps within our tribal 
government to bring openness to our contracting process. We 
have drafted a tribal ordinance that creates a hiring process 
that all public relations firms must follow. It ensures no 
secret deals or contracts for anyone. It mandates all contracts 
must be approved at open tribal council sessions.
    Mr. Chairman and members of this committee, I am not here 
just to tell you what has happened to our tribe. We have worked 
to put together the pieces of this bizarre puzzle, but because 
we have limited access to various records, we have not had a 
full accounting of where our money went. To this day, we do not 
have a full account of what these lobbyists were doing. I 
encourage you to continue this investigation as far as it needs 
to go.
    Mr. Chairman, I want you to know that our tribe is prepared 
to do whatever it takes to get back the money that was 
wrongfully taken from us. We want to work with the committee to 
get to the bottom of what these people did, and return to our 
people money that can be used for educating our children and 
health care for our elderly. From the beginning of this 
investigation, our tribe has fully cooperated with the 
committee and you can be assured that we will continue to do 
so.
    Again, I want to thank the committee for holding these 
hearings. I especially want to thank Senator McCain who has 
done so much to improve the quality of life for Indian people 
and has been a leader in pressing for these hearings.
    I am available for any questions you may have.
    Thank you.
    [Prepared statement of Mr. Sprague appears in appendix.]
    The Chairman. Thank you, Mr. Sprague.
    Chairman Milanovich, let me ask a few questions, and we 
will do this in rounds, too. I will try to keep mine down to 5 
or 6 minutes.
    It is good to see you here today. Thank you also for being 
at the opening of the National Museum of the American Indian.
    Mr. Milanovich. Thank you, sir.
    The Chairman. It seems to me you have been pretty much 
victimized beyond comprehension. Who brought Mr. Abramoff and 
Mr. Scanlon to the attention of the tribal council in the first 
place?
    Mr. Milanovich. May I make a statement first, sir? I do not 
think it is necessary that the tribe or the tribes have been 
victimized. I do not like that term. We were not victimized. We 
were, I am not sure what the proper term is, but we entered 
into a business arrangement not fully understanding, or those 
that approved it, did not fully understand what was taking 
place. So we were not victimized, sir.
    As far as who first introduced us to Mr. Abramoff and 
Scanlon Gould, that would have been our tribal secretary.
    The Chairman. Did I understand you to say you are 
contemplating some legal action to try to recover some of the 
money that you paid them?
    Mr. Milanovich. There is a consideration on our part that 
there should be some sort of remuneration from those 
individuals involved, yes, sir.
    The Chairman. Did they disclose at any time their 
partnership or deny it if they were asked?
    Mr. Milanovich. They never disclosed.
    The Chairman. They did not?
    Mr. Milanovich. No, sir.
    The Chairman. When you first hired Mr. Scanlon, did he make 
any representations about how much work product he was going to 
produce for the tribe?
    Mr. Milanovich. He was quite, how do I put it properly, 
grandiose in his scheme as to how he was to put together a 
grassroots effort concerning people in California, vendors in 
California and a nationwide grassroots effort as well, to 
convince the Governor, yes.
    The Chairman. The exhibits we showed, I think of exhibit 15 
and 16 over there. You might put them up again, staff. Were you 
aware of those at all before this hearing? They are appearing 
on the screen. Were you aware of those at all before this 
hearing?
    Mr. Milanovich. No, sir.
    The Chairman. Were you ever aware that these two gentlemen 
were working for particular tribal candidates?
    Mr. Milanovich. No, sir; we did not learn this until within 
the last several months and several weeks that we read copies 
of the e-mail.
    The Chairman. Sub-Chief Sprague, Mr. Petras is going to be 
up next, but I understood you to say he is not a member of the 
tribe?
    Mr. Sprague. That is correct, Mr. Chairman.
    The Chairman. How much discretion was he granted to make 
deals for the tribe? Was it kind of carte blanche or did you 
oversee each one of his decisions?
    Mr. Sprague. During the term under the former tribal 
chairman, Chairman Kahgebab, Mr. Petras had a lot of authority. 
He had a lot of lead-way. He was more privy to information than 
individual council members were.
    The Chairman. Was Mr. Petras the person that introduced the 
so-called slate of eight to Mr. Abramoff and Mr. Scanlon?
    Mr. Sprague. Yes; I believe he was. Back in the fall of 
2001 when our term was winding down, and their campaign had 
started, myself along with other members in our community knew 
that someone was running their campaign. It was not them. It 
was not the individual council members.
    The Chairman. Did Mr. Abramoff ever reveal his relationship 
to Mr. Scanlon to you?
    Mr. Sprague. No; he did not.
    The Chairman. I will come back to some more questions, but 
I would yield to Vice Chairman Senator Inouye, if you have some 
questions.
    Senator Inouye. Yes.
    Chairman Milanovich, I presume there is a contract 
involved.
    Mr. Milanovich. Yes, sir.
    Senator Inouye. Does the committee have a copy of that 
contract?
    Mr. Milanovich. I believe they do. Yes, sir.
    Senator Inouye. In the negotiations, who was your counsel? 
Or did you have a counsel?
    Mr. Milanovich. We had a counsel, sir, but it hurts me to 
say that there was such a movement on the council membership 
that there was no full willingness to accept the review of our 
counsel on the contract as it stood. It was more or less just 
ramrodded through.
    Senator Inouye. Are you telling the committee that in 
negotiating a multi-million dollar contract, you did not have 
an attorney?
    Mr. Milanovich. We had an attorney, yes, sir, but the 
advice that was given was somewhat limited in that some members 
of the council felt that it was sufficient to move forward with 
a draft of the contract as proposed.
    Senator Inouye. Who proposed the draft of the contract?
    Mr. Milanovich. It was presented by Mr. Abramoff initially, 
and then it was approved, as was stated, by three members of 
the tribal council.
    Senator Inouye. And the tribal council members, without 
conferring with your lawyers, said okay?
    Mr. Milanovich. There was brief interchange between what 
the contents of the document, the contract was, and tried more 
clarifying language what it really meant, but that was not 
sufficient to keep the majority of the council not approving 
it.
    Senator Inouye. You just told us that in the last few 
months and the last few days, you learned that some of the 
members of your council had received assistance from these two 
men. Have you discussed this with these council members?
    Mr. Milanovich. No, sir.
    Senator Inouye. Have they made any public statements?
    Mr. Milanovich. No, sir.
    Senator Inouye. They have not apologized or anything like 
that?
    Mr. Milanovich. I have not seen them.
    Senator Inouye. Are they still on the council?
    Mr. Milanovich. No, sir; one was serving as a proxy member 
of the council. The council took immediate action to suspend 
that person, and then she later resigned.
    Senator Inouye. So all of those who received assistance are 
no longer on the council?
    Mr. Milanovich. Not that we are aware of.
    Senator Inouye. In these negotiations, did the two men from 
Washington suggest that they would provide you with monetary 
assistance?
    Mr. Milanovich. At Christmastime of I believe it was 2003, 
they sent me an expensive video camera, which I sent back. But 
other than that, they knew how I felt about them. Their 
willingness to maintain a secret cabal with certain tribal 
members was sufficient for them to know that they were 
maintaining the relationship irrespective of what I was 
attempting to question or how I thought.
    Senator Inouye. Does your internal investigation indicate 
what sort of payments the other council members received?
    Mr. Milanovich. The investigation is ongoing as we speak 
sir, so there has been no final determination.
    Senator Inouye. Chairman Sprague, did you have counsel, a 
lawyer, in your negotiations for this contract?
    Mr. Sprague. The first contract with Greenberg Traurig and 
Jack Abramoff was reviewed by our legal counsel and he advised 
the council not to sign the contract. The tribal council did 
not take his advice and they approved the contract anyway.
    Senator Inouye. How did the council, your tribal council 
sign it? Was it signed against the advice of legal counsel?
    Mr. Sprague. If the legal counsel gives you a 
recommendation not do to something, the council has that right 
to accept that recommendation or discard it. In this case, they 
did not accept any of the legal counsel's recommendation about 
the contract.
    Senator Inouye. And this tribal council was the one that 
was elected by these two men?
    Mr. Sprague. Yes; it was. Yes, they had the majority vote. 
Once you have 8 out of 12, even if you do have the chairman 
elected, you still have 7 votes. You still have the majority 
vote.
    Senator Inouye. Are these council members still members of 
your council?
    Mr. Sprague. There is just one that is on the council with 
us now. We have two other council members presently that have 
been trying to defeat our efforts here.
    Senator Inouye. Have they had any discussions with you as 
to what they did? About their relationship with the two men?
    Mr. Sprague. No; they have not.
    Senator Inouye. Have you conducted any investigation and 
have you found any evidence of an unseemly relationship?
    Mr. Sprague. We have not. We started an investigation, but 
it has not gotten serious. We have not gotten in depth with the 
investigation. Since we have been here and we have seen these 
e-mails and we have seen exactly what has been going on, is 
what we had suspected all along. Now, I think the council is 
going to be more willing to take a more serious approach on 
these investigations, because there is obviously wrongdoing.
    Senator Inouye. So as far as you are concerned at this 
moment, what you know is what you have seen in the papers and 
what you have seen on the screen here?
    Mr. Sprague. Yes; we had suspected that they were helping 
them in the 2001 election. We suspected they helped them in 
their effort to recall myself and three other members of our 
executive board, here just in 2003. The information that we 
have seen in the past 2 days verifies those suspicions.
    Senator Inouye. Have the two men from Washington given you 
gifts?
    Mr. Sprague. No; I could not even get a phone number of 
either one of them for almost 1 year after I got on council in 
a special election in 2002.
    Senator Inouye. Thank you.
    The Chairman. Thank you.
    Senator McCain, did you have questions?
    Senator McCain. Thank you, Mr. Chairman.
    First of all, I want to thank both Sub-Chief Sprague and 
Chairman Milanovich for their courage. I know that they have 
been under very intense pressures of varying kinds throughout 
this saga and I want to thank you for standing up for the 
people that you represent. I am very grateful for both of you.
    A question for both of you. You both have said that there 
had been efforts by these individuals to influence the outcome 
of tribal elections. In that information, do you know whether 
money was spent or not on behalf of these candidates?
    Mr. Milanovich. Senator McCain, I am aware that according 
to the e-mails and copies that we have received from the 
committee, they spent upwards of $25,000 to $30,000 in 2002.
    Mr. Sprague. Senator McCain, the e-mails that I have seen 
concerning our tribe, Mr. Scanlon indicates that over a 4-month 
period, he spent over $100,000 on our tribe.
    Senator McCain. In order to influence the outcome of the 
election?
    Mr. Sprague. Yes.
    Senator McCain. The reason why I bring that up, Mr. 
Chairman, I believe that it is illegal to interfere with tribal 
elections. My next question is, according to tribal law, is 
that allowed?
    Mr. Milanovich. Sir, we have ordinances prohibiting, well, 
conflict of interest and a code of ethics which more or less 
outline any, so in that case, yes, it would not be allowed, 
sir. It would be against tribal law, because it was not 
reported. Had they reported it, perhaps there would have been a 
difference, but they did not even report that they had used the 
services of Scanlon Gould.
    Mr. Sprague. Our laws are very relaxed. When it comes time 
for elections, our people through the years have been elected 
because of who they are in the community and the community 
knows who they are and how they feel on issues. They know if 
they are an honorable person or not. At this time, there is 
nothing specific in our laws.
    Senator McCain. I think there are Federal laws, but I will 
check on it. I am pretty sure there are.
    Do you know of any moneys that were solicited by Mr. 
Scanlon or Mr. Abramoff for other political purposes, such as 
for political campaigns or also additional donations to other 
outside organizations, but particularly to other political 
campaigns?
    Mr. Milanovich. Sir, in our process, the budget process, we 
have a fiscal year beginning October 1. We ask our lobbyists to 
submit a proposed list of contributions that would be made in 
the future so they did make recommendations to particular 
legislators, Senators, Representatives, as well as PACs and 
other charitable organizations. Yes, sir.
    Senator McCain. And do you know roughly how much money that 
was?
    Mr. Milanovich. Somewhere, I do not really remember right 
now.
    Senator McCain. Like hundreds of thousands?
    Mr. Milanovich. Yes, sir.
    Senator McCain. Would you submit that list for the record 
for us please?
    Mr. Milanovich. I believe it has been submitted, sir.
    Senator McCain. It has been?
    Mr. Milanovich. Yes.
    Senator McCain. And that is hundreds of thousands of 
dollars in political contributions recommended by Mr. Scanlon 
and/or Mr. Abramoff?
    Mr. Milanovich. Correct.
    Senator McCain. How about you, Sub-Chief Sprague?
    Mr. Sprague. The Saginaw Chippewas were taken by Mr. Petras 
and Mr. Scanlon and Mr. Abramoff over a 2-year period of 
approximately $1 million in contributions.
    Senator McCain. In campaign contributions?
    Mr. Sprague. Campaign contributions to people we never 
heard of, people we knew nothing about, organizations, 
different things of this nature. And we will get that list to 
the committee of all those individuals that were donated to.
    Senator McCain. Were you aware of some moneys being used to 
rent a skybox at FedEx Field here?
    Mr. Sprague. We had heard that, but we could not verify it, 
but I think the e-mails have done that.
    Senator McCain. Had you heard that, Mr. Chairman?
    Mr. Milanovich. We heard it and we actually participated, 
again with the majority vote of the council to participate to 
the tune of $300,000.
    Senator McCain. There are always certain ironies, Mr. 
Chairman. I guess that your tribes being done to purchase a 
skybox to watch a Redskins game has a certain irony associated 
with it.
    Mr. Milanovich. Pardon me, Senator. The skybox, there were 
multiple boxes. It was not just that one venue. There were 
several venues that they felt it was necessary I guess ask for 
the high-dollar value.
    Senator McCain. In order to make your tribe's case to 
various important people in Washington?
    Mr. Milanovich. That was how it was presented to us, yes, 
sir.
    Senator McCain. And that was $300,000?
    Mr. Milanovich. Correct.
    Senator McCain. Did you ever see a game?
    Mr. Milanovich. No, sir.
    Senator McCain. Mr. Chairman, I have a lot of questions, 
but go ahead.
    Mr. Milanovich. Senator McCain, I want to say I did not 
want to go see a game with them.
    Senator McCain. Thank you, sir. I can understand that.
    Mr. Milanovich. Thank you.
    Senator McCain. Thank you, Mr. Chairman.
    The Chairman. I do not blame you.
    Senator Conrad.
    Senator Conrad. Thank you, Mr. Chairman.
    Chairman Milanovich, how much money did your tribe pay over 
to Mr. Scanlon and Mr. Abramoff?
    Mr. Milanovich. The contract that we had with Greenberg 
Traurig's Jack Abramoff was $150,000 a month retainer plus 
expenses over a period of 18 or 19 months until the 
investigation came to light through the Washington Post and we 
suspended our relationship. With Scanlon Gould, it was a total 
as I recall of approximately $7.3 million in less than 1 year.
    Senator Conrad. So the total between those two would be 
over $10 million?
    Mr. Milanovich. I am certain of that, sir. Yes, sir.
    Senator Conrad. Chief Sprague, you testified previously 
that your tribe paid over something in the neighborhood of $14 
million?
    Mr. Sprague. Our tribe paid $10 million to Scanlon, a 
little over $10 million, and just about $4 million to Jack 
Abramoff.
    Senator Conrad. So $14 million between the two, over $14 
million.
    Mr. Sprague. Yes.
    Senator Conrad. Mr. Sprague, who did Mr. Abramoff say to 
you that he and Mr. Scanlon had special influence with, if 
anyone, here in Washington?
    Mr. Sprague. I never met Mr. Abramoff myself. His messages 
were being delivered to our tribal council by our legislative 
director, Chris Petras. The few meetings that I was in that Mr. 
Petras would come in a boast about Mr. Abramoff and his 
contacts, the Senator's name was, oh yes, Representative Thomas 
DeLay. He was very powerful, and with Jack having access to 
this guy, he was going to be able to do a lot of things for our 
tribe.
    Senator Conrad. So Mr. Abramoff was making representations 
to the tribe that he had special influence with Representative 
Tom DeLay. Is that correct?
    Mr. Sprague. That is correct.
    Senator Conrad. Did he assert that he had influence? Did he 
give a reason why he had this influence with Representative 
DeLay?
    Mr. Sprague. I do not recall that specific.
    Senator Conrad. Did he suggest that he had special 
influence anywhere else in Washington?
    Mr. Sprague. The only word we got was that he was very 
powerful. He knows very powerful people. He does not mess with 
the little people. He goes straight to the top because he has 
contacts at the top on both sides.
    Senator Conrad. Did he ever suggest that he had influence 
with the White House?
    Mr. Sprague. Not that I recall. I imagine he did, because 
he was always making these pitches to the council about how 
important he was and how in danger we were.
    Senator Conrad. How endangered you were and how powerful he 
was because of his contacts with Representative DeLay?
    Mr. Sprague. Representative DeLay and other powerful people 
in Washington.
    Senator Conrad. Chairman Milanovich, in the representations 
that were made to your tribe, did Mr. Abramoff and Mr. Scanlon 
make representations to you as to who they had special 
influence with here?
    Mr. Milanovich. Yes, sir; when Mr. Abramoff introduced Mr. 
Scanlon, his opening remarks were, or close to his opening 
remarks were, Mr. Scanlon is was Congressman DeLay's former 
aide. And you know who Congressman DeLay is, inferring, I 
assume that he was inferring that he had powerful friends.
    Senator Conrad. It is reported in the paper, yesterday's 
Washington Post, that the Saginaw Chippewa gave money to the 
Capital Athletic Foundation. Is that correct, Mr. Sprague?
    Mr. Sprague. That is correct.
    Senator Conrad. And do you know how much money was given?
    Mr. Sprague. I believe it was $25,000.
    Senator Conrad. $25,000. There is an assertion here that 
there was some $2 million given by the Chippewa Indian Tribe, 
the Mississippi Band of Choctaw, and the Coushattas of 
Louisiana. So you apparently were a small part of that.
    Mr. Sprague. Yes; and they were lucky to get that.
    Senator Conrad. They were lucky to get that. Can you tell 
me why the decision was made to give to that particular 
charity?
    Mr. Sprague. Again, it was Mr. Petras comes in and says we 
need to make this donation. So we asked what this foundation 
had done, what it was for. His reply was that it benefits poor 
and needy kids throughout the Washington, DC area and other 
members of the Congress and the Senate, and people that support 
us support this group, and it would be good for us to support 
the same foundation that others are supporting.
    Senator Conrad. And was it at the request of Mr. Abramoff 
that this contribution was made?
    Mr. Sprague. Yes; through Mr. Petras. The vote came down 
four to four. The chairman had to break the tie, and the 
chairman voted to make the donation.
    Senator Conrad. It says in the paper of yesterday that 
Saginaw Chippewa officials have told Federal investigators they 
made the donations because Abramoff told them it would impress 
Congressman DeLay. Is that correct?
    Mr. Sprague. Yes, sir; that is correct.
    Senator Conrad. So Abramoff represented to you that if you 
made these contributions to this foundation that he controlled, 
that that would impress Congressman DeLay.
    Mr. Sprague. He did not tell us who controlled it. We did 
not know who controlled it.
    Senator Conrad. He did not say that he controlled this 
foundation.
    Mr. Sprague. Right.
    Senator Conrad. But that the contributions to this 
foundation would impress Congressman DeLay.
    Mr. Sprague. Yes, and others.
    Senator Conrad. Were you aware that in August, this 
foundation flew a chartered jet with six people, including 
Abramoff, House Administration Chairman Robert Ney of Ohio, 
lobbyist and former Christian Coalition leader Ralph Reed, and 
then-General Services Administration Chief of Staff David 
Safavian to St. Andrews, Scotland for a golf outing? Were you 
aware of that?
    Mr. Sprague. No; I was not.
    Senator Conrad. Over $100,000 spent on that trip does not 
sound like anything that would benefit the children of 
Washington, DC, does it.
    Mr. Sprague. I could see through the smokescreen when they 
presented it. It was not.
    Senator Conrad. And you voted against it?
    Mr. Sprague. Yes; I did.
    Senator Conrad. Well, there is much more to ask, but I 
think my time has run out. I thank the Chair.
    The Chairman. Thank you.
    I have no further questions of this panel. Senator Inouye, 
did you?
    Senator Inouye. Yes; I do.
    Senator Dorgan. Mr. Chairman.
    The Chairman. Excuse me. Senator Dorgan, I apologize. I did 
not see you down there. Go ahead.
    Senator Dorgan. Mr. Chairman, just briefly, I think my 
colleagues have asked the requisite questions. I think our next 
witness will probably give us some additional information about 
some of this.
    If I might just ask, on document number 25 is I believe the 
contract with the Saginaw Chippewa Indian Tribal Council, or at 
least the public relations plan, document 25. Under ``goal,'' 
it says the goal is to make this tribal council the most 
powerful and effective administration in the history of the 
Saginaw Chippewa Indians of Michigan and secure their re-
election.
    What is your impression of what they meant by that, 
``secure their re-election.'' Whose re-election?
    Mr. Sprague. That statement, that section of that contract, 
plus the excessive fees, is what encouraged me to start my 
investigation back in early 2002. The tribal council knows that 
they have no right, and it is a violation of our laws, to use 
tribal funds for their campaigns or for their reelections. They 
know that and they were told that, and I pointed that out to 
them. I was brushed off, brushed aside.
    Senator Dorgan. Let me ask Chairman Milanovich, has your 
tribe yet determined whether the conduct of Virginia Siva and 
Candace Patencio violated any tribal election ordinance?
    Mr. Milanovich. Our investigation is ongoing, sir, so it 
has not made a determination.
    Senator Dorgan. Is it your impression that they acted in 
the best interests of the tribe?
    Mr. Milanovich. On a personal sense, it is that they acted 
for their personal gain, sir.
    Senator Dorgan. Document number 44 seems to appear that, 
Chairman Milanovich, they were using your tribe's money for 
activities to promote another tribe. Are you aware of that?
    Mr. Milanovich. No, sir.
    Senator Dorgan. Let me just follow-up a question my 
colleague started regarding the Capital Athletic Foundation. 
The reason that this is important is that it is classified asa 
charity. Apparently, the Capital Athletic Foundation was 
described as a charity to you, perhaps to both of you, but it 
was not disclosed that Mr. Abramoff was the person in control 
of that charity.
    Exhibit 35 is a letter that I think is probably intended, 
November 1, 2002, that was sent to your tribe, or perhaps an 
internal letter, and it is not signed. Do you have exhibit 35 
up there? You do, I think. Exhibit 35 describes the request for 
three $25,000 donations. Mr. Sprague, do you know who signed 
this letter to the tribe?
    Mr. Sprague. I do not recall who signed it, but I recognize 
it. These are donations that Mr. Petras came in with and 
requested motions on.
    Senator Dorgan. Would this likely have been a letter from 
Mr. Petras to the tribal council?
    Mr. Sprague. It usually was, but the majority of the time 
they would come straight from Mr. Abramoff and cc'd to Mr. 
Petras, and then he would bring them to the council for action.
    Senator Dorgan. Is it possible this was written by Mr. 
Abramoff?
    Mr. Sprague. Yes; it is.
    Senator Dorgan. Okay. We will ask Mr. Petras about that.
    This particular memo requested three donations. Were all 
three of those donations made? Do you recall?
    Mr. Sprague. The American Tax Reform donation was made.
    Senator Dorgan. And what is the basis for your tribe making 
a donation to Americans for Tax Reform?
    Mr. Sprague. I have no idea, Senator. I did not understand 
it then. I opposed it and I do not understand it today.
    Senator Dorgan. How was it represented to your tribe? 
$25,000 is a significant amount of money. How was it described 
to your tribe? Why would a tribe be making a donation to 
Americans for Tax Reform?
    Mr. Sprague. It was because Mr. Abramoff suggested that we 
make these donations to these various groups and organizations.
    Senator Dorgan. Because it would be helpful to you?
    Mr. Sprague. Because they help us.
    Senator Dorgan. They would help you?
    Mr. Sprague. Yes.
    Senator Dorgan. Did he describe how a donation like this 
would help you?
    Mr. Sprague. No; he never described how.
    Senator Dorgan. And so the tribal council decides to do 
this without having any notion of how this could be helpful to 
the tribe?
    Mr. Sprague. That is correct.
    Senator Dorgan. Just based on Mr. Abramoff's 
representation?
    Mr. Sprague. That is correct. Well, based on the slate of 
eight which has the majority. What Mr. Abramoff wants, he gets. 
What Mr. Abramoff did not want me and other council members to 
have, we did not have. That is way it worked. I think Mr. 
Abramoff and Mr. Scanlon were more involved in running our 
tribal council for 2 years than we realized. Hopefully, this 
investigation will uncover that.
    Senator Dorgan. My guess is that it is probably not very 
easy for you to come forward, for either of you to come forward 
at this point. Based on what I know, and I have certainly had 
several opportunities to review the information that we have 
developed so far in this investigation, it appears to me that 
there are a couple of people here who set out to bilk tribes 
out of tens of millions of dollars.
    While that is, in my judgment, likely criminal behavior in 
some respects, certainly moral bankruptcy in others, it is also 
I assume profoundly embarrassing to be part of a tribal council 
that found itself bilked out of this money. When I asked the 
question, for example, why would you pay $25,000 to Americans 
for Tax Reform, what would you get in return for that, what 
would be the motivation for making the donation, your response 
is that the tribal council voted to require us to do it, but 
apparently did not have any notion of why they were donating, 
except someone from Washington, Mr. Abramoff, said we should.
    Mr. Sprague. That is correct.
    Senator Dorgan. Do the other members of the tribal council 
understand how preposterous that sounds now? I assume they do.
    Mr. Sprague. They have not since 2002. I have been trying 
to talk to members of the slate of eight, when I found out what 
the agreement had said, the money that was being spent. But 
they had their leader, they had their roles to play, they had 
their orders, and they followed them.
    Senator Dorgan. I am going to ask the next witness about 
this memo. Let me just say also, you know, we have a full-scale 
crisis in housing, health care, education on reservations 
across this country. It is unbelievable to me to see the way 
money was spent and the way money was bilked out of tribes by 
these charlatans.
    So let me, if I have some additional questions, submit them 
in writing. Let me just say this, though. We have had some 
better and some worse cooperation, I think, from various tribes 
and interests. I think all of this panel appreciates very much 
your willingness to step forward, talk about it from your 
perspective, and respond to the requests of this committee, to 
help us understand what is going on here. We appreciate your 
attendance here today and appreciate your testimony.
    Mr. Sprague. Mr. Chairman, may I?
    The Chairman. Yes.
    Mr. Sprague. I would just like to say that the members of 
the Saginaw Chippewa Tribe, myself included, because of these 
two individuals, our tribe has lost a lot of money, lost a lot 
of respect here in Washington and back home in our own State. 
Individuals were humiliated by these individuals, fired from 
their jobs, removed from our own tribal government, because we 
tried to get the truth out to our members. These individuals 
came in, and they destroyed reputations and took honor from 
many of our people. They need to learn that they do not have 
that right.
    There are laws that protect Native American people and 
people from all races in this country from these type of 
individuals. I think a good word to describe them would be they 
are like vultures, just circling and circling. Like the one 
paper said, they wanted the top 100 tribes. They were lining up 
their next targets, as vultures flying, and I am glad that we 
are conducting this investigation.
    I would like to read a short statement before we go. I am 
glad to see that the committee has convinced Mr. Petras to 
attend this hearing. As his statement suggests, he still 
supports the actions of Mr. Abramoff and Mr. Scanlon. My 
council is here with me today. I, as well as them, look forward 
to hearing how Mr. Petras can explain his way out of this 
negligence and disgraceful conduct.
    Thank you.
    The Chairman. It will be included in the record.
    Senator Inouye, did you have further questions?
    Senator Inouye. Yes, I do.
    I think for the record, because of their courage and good 
wisdom, can we secure the names of the two in-house lawyers who 
recommended that your tribes not enter into a contract with 
these two fellows?
    Mr. Sprague. Yes; we can provide those to you.
    The Chairman. We would like to have them in the record now, 
if you know their names.
    Mr. Sprague. Okay. For the Saginaw Chippewas, it was 
Michael Phelan.
    Mr. Milanovich. For ourselves, Art Bunce is the tribal 
attorney who had some strong recommendations.
    Senator Inouye. Chairman Milanovich, you indicated that you 
were provided with a list of candidates to support.
    Mr. Milanovich. Yes, sir.
    Senator Inouye. And you supported these candidates with 
money?
    Mr. Milanovich. Some of the candidates were, it was agreed 
to support, make contributions to the recommendations list, 
yes, sir.
    Senator Inouye. Were these contributions made in cash or by 
check?
    Mr. Milanovich. By check, sir.
    Senator Inouye. And how were the checks made out, to the 
individuals or to the campaign committees?
    Mr. Milanovich. I do not recall. I do not really remember 
how the checks were made out, undoubtedly to the committee, 
though, or to the PAC, whatever it may have been.
    Senator Inouye. Were the candidates Federal candidates?
    Mr. Milanovich. There were some Federal candidates, yes, 
sir.
    Senator Inouye. Were they from the State of California?
    Mr. Milanovich. I do not remember. The list was long, and I 
questioned and the vice chairman also questioned certain names 
on the list because we did not know who they were. As SubChief 
Sprague states, there were PACs, there were charitable 
organizations, and we did not know who they were. We 
questioned, but again there was a forward movement of some 
tribal council members who said just approve it.
    Senator Inouye. Were you told that by supporting these 
candidates that your tribe would benefit?
    Mr. Milanovich. In so many ways, yes, sir. Sometimes they 
did say that we need to make these contributions in order to 
convince. Other times, it was a just a good organization and it 
will make somebody else happy.
    Senator Inouye. Were you receiving any benefits from these 
candidates?
    Mr. Milanovich. Not that I am aware of.
    Senator Inouye. Have you received any since then?
    Mr. Milanovich. Not that I am aware of.
    Senator Inouye. Were any of the contributions made to 
political party organizations, like the presidential 
committees?
    Mr. Milanovich. I do not recall a presidential committee, 
but perhaps the two party committees.
    Senator Inouye. Democrat and Republican?
    Mr. Milanovich. Yes, sir.
    Senator Inouye. To the campaign committees? Were they 
congressional or senate campaign committees?
    Mr. Milanovich. Both, sir.
    Senator Inouye. Both?
    Mr. Milanovich. Both.
    Senator Inouye. And they were made out by check?
    Mr. Milanovich. Yes, sir.
    Senator Inouye. And you have the list and you can provide 
it to the committee?
    Mr. Milanovich. It has been submitted, yes, sir.
    Senator Inouye. You have a copy of it now?
    Mr. Ross. If the chairman would allow?
    The Chairman. Yes; go ahead and proceed. Identify yourself 
for the record.
    Mr. Ross. Steven Ross of Aiken Gump, Counsel for Agua 
Caliente.
    The committee has already received from documents 
previously produced, documents that included the 
recommendations that Mr. Abramoff's firm had made to the tribe. 
The production was not made by us, but by counsel for Greenberg 
Traurig.
    Senator Inouye. Did you make out the checks? Or did Mr. 
Abramoff make out the checks?
    Mr. Ross. I think copies of the checks, which were made out 
by the tribal administration, have been produced to the 
committee already.
    Senator Inouye. Can I ask counsel this question, Mr. 
Chairman?
    The Chairman. Yes; please do.
    Senator Inouye. When these contributions were made, were 
you told what sort of benefits you may anticipate?
    The Chairman. My relationship with the tribe post-dates 
those events. I am recently retained as counsel.
    Senator Inouye. Can the chairman advise us?
    Mr. Milanovich. Would you restate the question please?
    Senator Inouye. When you made these contributions, were you 
advised as to what the nature of benefits you might be able to 
receive from the recipients of your contributions?
    Mr. Milanovich. Not directly, no, sir. It as mailed to us. 
If we had questions, we questioned Mr. Abramoff or one of his 
staffers with Greenberg Traurig. Why are we doing this? Why 
this contribution being made to this person or this candidate 
or this organization? Many times, it was just because it is for 
the best interests of the tribe.
    Senator Inouye. Do you recall if any of the recipients are 
on this committee?
    Mr. Milanovich. No, sir.
    Senator Inouye. Thank you.
    The Chairman. Senator McCain.
    Senator McCain. Very briefly, Mr. Chairman.
    Mr. Sprague, when Mr. Abramoff or Mr. Scanlon of whoever it 
is that made their presentations to you, I would like to make 
it very clear, it is my understanding of your response is that 
they would give you enormous influence on both sides of the 
aisle with both parties on both sides of the Capitol. Is that 
correct?
    Mr. Sprague. That is correct.
    Senator McCain. Thank you. It was not just one certain 
individual or one party. This was going to give you great 
influence everywhere. Is that correct?
    Mr. Sprague. That is correct.
    Senator McCain. Did Mr. Abramoff ever disclose that the 
Capital Athletic Foundation was his private foundation?
    Mr. Sprague. No; he did not.
    Senator McCain. Did he ever disclose that the vast majority 
of money donated to the Capital Athletic Foundation would be 
used to finance a private school that he established?
    Mr. Sprague. No; he did not.
    Senator McCain. Thank you, Mr. Chairman.
    Mr. Sprague. I have one thing I would like to add to the 
attorney list, a comment about Michael Phelan, when he 
suggested to the council that they do not accept a first 
contract with Mr. Abramoff, he was terminated about 3 weeks 
after that. Since then, Sean Reed has been working for us, and 
he did review one of the contracts with Capital Campaign 
Strategies, and he suggested changes, and those changes were 
not made. After that, Mr. Reed was never given the opportunity 
to review another contract.
    The Chairman. We appreciate your appearance today. We may 
have further questions that we will submit in writing, or in 
fact may call you back, and Mr. Milanovich, for further 
testimony.
    Yes, Mr. Chairman Milanovich.
    Mr. Milanovich. Mr. Chairman, I would like to add that I 
also have present in the room members of the tribal council and 
members of the tribe who are here to try to begin the healing 
process. We have been hurt dramatically by individuals of the 
tribe who worked for their personal gain and by outsiders who 
have taken advantage of those individuals. Thank goodness, 
Senator McCain, yourself, Senator Inouye, committee members are 
willing to stand up and correct the wrongs that have been done 
against us, and to stop any further actions like this from 
happening again.
    We are but one tribe, Saginaw Chippewa are another, there 
are four others involved, but we have to remember this happens 
across the country. It happened to one of the largest law firms 
here in Washington, DC, too. But the hurt is there. My heart is 
crying, but by the same token they are turning to tears of joy, 
too, knowing something is going to be done with those 
individuals.
    Thank you very much.
    The Chairman. Mr. Chairman, we are going to do everything 
we can as a committee. As you probably know, there is an 
investigation going on at one of the federal agencies related 
to these hearings. In addition to that, certainly you have the 
right to pursue it in the courts, too. I hope you do. If you 
have not already initiated some action to get back some of that 
money, I hope you do that.
    Mr. Milanovich. We will do what is necessary to make 
ourselves whole, sir. Thank you.
    The Chairman. We will be a partner to that action.
    Thank you. I appreciate your appearing today.
    Mr. Sprague. Thank you again.
    The Chairman. Now, we will proceed to our last panel which 
will be Dr. Christopher Petras, who is the former legislative 
director for the Saginaw Chippewa Indian Tribe of Michigan.
    Mr. Petras, would you please rise and raise your right 
hand?
    [Witness sworn.]
    The Chairman. Please be seated and continue with your 
testimony. We will have some questions for you at the 
conclusion.

 STATEMENT OF CHRISTOPHER PETRAS, FORMER LEGISLATIVE DIRECTOR, 
           SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGAN

    Mr. Petras. Yes, Mr. Chairman; I ask that a written 
statement that I prepared be submitted for the record.
    The Chairman. It will be included in the record.
    [Prepared statement of Mr. Petras appears in appendix.]
    Mr. Petras. Thank you.
    The Chairman. So do you want to adlib anything at all?
    Mr. Petras. No, sir.
    The Chairman. You just want to go for questions? All right.
    Let me start then. It appears from information the 
committee has obtained that you worked for the Saginaw Chippewa 
Tribe for a number of years. How many years did you work for 
the tribe?
    Mr. Petras. A little over 5 years.
    The Chairman. Over 5 years. What jobs did you do for the 
tribe in that 5 years? Was it always the same job?
    Mr. Petras. Policy research analyst, interim director of 
legislative affairs, and then director of legislative affairs.
    The Chairman. I understand from the former witness that you 
are not a member of the tribe.
    Mr. Petras. No, sir.
    The Chairman. How did you happen to get a job with the 
tribe in the first place?
    Mr. Petras. I was at a concert at the Scaring Eagle Resort 
and an individual who I knew that worked in human resources, 
this was back in 1998, approached me and said that there was a 
position open, a new department called the Legislative Affairs 
Department at the tribe. She said that you would be a good 
candidate for that.
    I had been teaching political science and was familiar with 
Government processes to some extent. She said it would be good 
if you put in an application. So I followed up on it. I turned 
in an application. A few weeks later I received a call from Kim 
Sawmick, who was working in the department at the time, asking 
if I was interested in coming in to interview with then-
Director William Cross. I said sure. I came in and interviewed 
and accepted the job.
    The Chairman. In dealing with your relationship to Mr. 
Abramoff, we have exhibit three we can put up on the screen, 
please. He states that you were going to come in after the 
primary with a guy who will be the chief if they win, I 
mentioned this once before, and we are going to help him win. 
If he wins, we will take over in January and we will make 
millions.
    Are you familiar with that statement?
    Mr. Petras. No; I do not recall that statement at all.
    The Chairman. When did you first meet Mr. Abramoff?
    Mr. Petras. I met Mr. Abramoff basically in 2000. There was 
a tribal council then that was headed by then-Chief Phillip 
Peters. Ms. Sawmick had indicated to me that the council was 
interested in looking for representation out here in 
Washington, DC to work with Larry Rosenthal who was the 
lobbyist at the time for the Saginaw Chippewa Tribe.
    What I did is I went on the Internet and typed in cue 
words, basically ``tribes'' and ``lobbyist'' and several came 
up. There were three companies that I contacted in Washington 
here. I came out and did a preliminary discussion with the 
companies. I came back. I asked Ms. Sammick if she would come 
out and review the companies with me, since she was a tribal 
member and was close, basically, with the tribal council at the 
time. She was the sister of council member at the time David 
Otto. She agreed. We came out. We interviewed with three 
companies. One was Preston Gates, in which she met Mr. 
Abramoff.
    The Chairman. So after that meeting, did you recommend the 
tribe hire him?
    Mr. Petras. She recommended that the tribe bring him in for 
an interview.
    The Chairman. Did you encourage or assist Mr. Abramoff in 
encouraging the tribes to donate to these so-called charities 
that he promoted?
    Mr. Petras. What my role was is the council, I would get a 
directive. So you understand how it worked in legislative 
affairs, we answered directly to the council so we had 12 
different bosses to answer to. There were no efforts on my 
behalf to try to push either way any type of political 
contribution. It would come in. The tribe receives them 
regularly, and then they would be submitted to the council to 
consider.
    The Chairman. In this same e-mail, Mr. Abramoff said that 
you were very excited about the prospect of hiring Mr. Scanlon. 
Whose idea was it first to bring Mr. Scanlon in to run the 
tribal candidate campaigns? Did Mr. Abramoff suggest that you 
bring Scanlon in?
    Mr. Petras. Excuse me? Can you repeat that?
    The Chairman. Whose idea was it to bring Mr. Scanlon in to 
run the tribal candidate campaigns? Did Mr. Abramoff suggest 
that?
    Mr. Petras. I do not recall any discussion related to 
bringing Mr. Scanlon to run campaigns.
    The Chairman. In his e-mails, Mr. Abramoff gives the 
impression that you knew fully how much he and Mr. Scanlon 
planned on charging the tribe. Is that accurate or not?
    Mr. Petras. No; the only discussion I ever had regarding 
that with Mr. Abramoff was that, see, it began with Mr. Otto, 
after Mr. Abramoff or Preston Gates had been hired back in 
2000, they had worked for the Saginaw Chippewa Tribe for about 
a month, and Mr. Otto was very interested in Mr. Abramoff, and 
wanted to keep in touch with him after they had been 
terminated, because Mr. Abramoff had left for Greenberg 
Traurig. The tribal council at the time decided not to hire the 
services of Greenberg Traurig and instead hired someone else.
    I do not recall any discussion regarding bringing in Mr. 
Scanlon to run any type of campaign.
    The Chairman. After the tribal council members were taken 
out of office, in your e-mails you asked Mr. Abramoff to 
provide $2,500 to help out former council members who were less 
than 50 signatures short of the recall, but were running out of 
money. Do we have a poster of that e-mail? It is up there.
    My question is, how much did Mr. Abramoff give in total for 
that effort? That is an e-mail from you. I may be corrected by 
staff here. That may be an e-mail from Abramoff to you, excuse 
me, but concerning the same thing.
    Mr. Petras. That does not look like it is an e-mail from 
me. I do not recall.
    The Chairman. Do we have the right one up there? I cannot 
see them from here. In any event, do you know how much Mr. 
Abramoff gave in total to that recall effort?
    Mr. Petras. I do not recall.
    The Chairman. Did he do anything else to assist the recall 
effort that you know?
    Mr. Petras. I do not recall.
    The Chairman. If you had it to do all over again, would you 
recommend him again to your employer?
    Mr. Petras. I would let the council decide that.
    The Chairman. But would you have recommended him again?
    Mr. Petras. I do not know if the allegations are true on 
Mr. Abramoff or not, so it would be difficult to say.
    The Chairman. Okay.
    Senator Inouye.
    Senator Inouye. Now, you were provided with a list of 
candidates to assist? Did the two men from Washington provide 
you with a list of candidates that your tribe should assist?
    Mr. Petras. When?
    Senator Inouye. Political candidates.
    Mr. Petras. I do not recall any list of candidates being 
provided to me.
    Senator Inouye. Were you called upon to provide counsel on 
who your tribe should support in the political elections?
    Mr. Petras. No; the elections were left up to the 
individual tribal members.
    Senator Inouye. And you had no role to play in that?
    Mr. Petras. No.
    Senator Inouye. Did you receive any gift or remuneration or 
compensation from these two men from Washington?
    Mr. Petras. All I recall receiving was a video camera-
digital camera, a leather travel document holder and some type 
of slide projection desktop screen.
    Senator Inouye. Did you feel that it was proper or 
improper?
    Mr. Petras. It was at Christmas. [Laughter.]
    Senator Inouye. Do you know whether the members of the 
council received Christmas gifts?
    Mr. Petras. I do not know.
    Senator Inouye. Thank you, sir.
    The Chairman. Senator McCain.
    Senator McCain. Dr. Petras, in late 2001, didn't you and 
David Otto meet with Michael Scanlon at a Bob Evans Restaurant 
and discuss campaign strategy for the slate of eight?
    Mr. Petras. The meeting, if it was at Bob Evans, I do not 
recollect where the meeting was, had to do with Mr. Otto was 
interested in understanding what the Mississippi Choctaws do 
for their work. Mr. Otto had been to Washington before and had 
attended a sporting event at the MCI Center. In the sports box, 
there was a magazine store, I cannot remember which magazine 
store, that praised Chief Martin and the work he had done for 
the Mississippi Choctaws. Mr. Otto was interested in knowing 
how could they do that for the Saginaw Chippewa.
    The Chairman. You never discussed a strategy for the slate 
of eight?
    Mr. Petras. I do not recall discussing any strategy for a 
slate of eight.
    Senator McCain. Do not recall or you did not?
    Mr. Petras. I do not recall.
    Senator McCain. I see.
    Now, obviously you are defending the tribe, what happened, 
which is pretty bizarre. But let me read you a couple of e-
mails of what Mr. Abramoff and Mr. Scanlon thought about you. 
Do you remember e-mailing Todd Bollinger in 2003 about Kenny 
Loggins concert tickets for State Representative Ehart? Do you 
remember that? Let me refresh your recollection.
    On February 18, 2003, you e-mailed Mr. Bollinger, and this 
was your e-mail:

    I just received a message from a state representative who 
is running for Congressman Nick Smith's seat in 2004. His last 
name is Ehart. He wants tickets to the Kenny Loggins concert.

    When Mr. Bollinger passed on your request to Mr. Abramoff, 
Mr. Abramoff replied, and I quote from Mr. Abramoff's e-mail, 
``Neither rain nor snow nor the heat of day will keep him from 
his appointed idiocy.''
    In June 2002, while contemplating a trip out to the tribe, 
Ms. Scanlon wrote Mr. Abramoff in an e-mail. Mr. Scanlon to Mr. 
Abramoff in an e-mail:

    I really think a trip out to those fools solo is not worth 
it regardless, because we will not come back with cash or a 
firm commitment. But you throw in the pain in the ass factor 
and the Petras bullshit factor, it is really a bad idea.

    This is what these people thought of you, that you 
recommended to the tribal council. Does that arouse any emotion 
in you, Dr. Petras?
    Mr. Petras. I do not know what the context is of it, sir.
    Senator McCain. This is the outfit that you recommended, 
Dr. Petras. An e-mail, Mr. Abramoff, ``How much is the Kay Gold 
amount?'' Mr. Scanlon responds: ``800K.'' To this, Mr. Abramoff 
asked, ``800K? I thought we got $1.9 million.'' Mr. Scanlon 
replies, ``We did. 800K for you, 800K for me, 250K for the 
effort, and 50K went to the plane and miscellaneous expenses.''
    Do you think that is appropriate, Dr. Petras?
    Mr. Petras. Again, I do not know what the context was of 
that e-mail.
    Senator McCain. Remember, you are under oath here, Dr. 
Petras.
    Mr. Petras. I understand.
    Senator McCain. You never had anything to do with any of 
the campaigns for tribal council. Is that correct or incorrect?
    Mr. Petras. I do not recall at any time having anything to 
do with the elections.
    Senator McCain. Wouldn't you recall or not recall if you 
had anything to do with a tribal election?
    Mr. Petras. I do not recall, Senator.
    Senator McCain. I have no more questions, Mr. Chairman.
    The Chairman. Senator Conrad.
    Senator Conrad. Dr. Petras, did you recommend Mr. Abramoff 
to the tribal council as somebody they should hire?
    Mr. Petras. That was Mr. Otto who did that. I was not 
present at Mr. Abramoff's presentation to the council.
    Senator Conrad. Did you recommend to Mr. Otto that he 
recommend Mr. Abramoff?
    Mr. Petras. No; Mr. Otto was already pretty much determined 
he wanted to have Jack Abramoff.
    Senator Conrad. Did you play any role in the hiring of Mr. 
Abramoff?
    Mr. Petras. No.
    Senator Conrad. You played no role. You played no role in 
the hiring of Mr. Abramoff. That is your testimony here today?
    Mr. Petras. My testimony regarding that question is that 
the role in terms of what? I could not advise the council 
either way. It was their vote. It was their decision. Mr. Otto 
had asked me to keep in touch with Mr. Abramoff.
    Senator Conrad. Didn't you come to Washington, Mr. Petras, 
for the purpose of interviewing firms to hire?
    Mr. Petras. That was Ms. Sawmick that recommended him.
    Senator Conrad. That is not my question to you, sir. Didn't 
you come on the trip to Washington to interview firms to hire 
to represent the tribe?
    Mr. Petras. Yes.
    Senator Conrad. And didn't you identify firms to hire 
through your Internet search?
    Mr. Petras. Yes.
    Senator Conrad. So how could you assert that you played no 
role in the hiring or the recommendation of a hiring of a firm 
to hire?
    Mr. Petras. I looked at my role was that I was bringing Ms. 
Sawmick out as a tribal member to let her select who she was 
interested in having to bring back to the council to recommend, 
as a tribal member.
    Senator Conrad. But sir, by your own testimony, you were 
involved in identifying the firms for her to select from. Is 
that not correct?
    Mr. Petras. Well, she could have gone with other firms. 
These were just three firms that ended up being the three firms 
that we were going to take a look at, for her to interview, to 
look at.
    Senator Conrad. And did you not recommend that those were 
the three firms that she should look at?
    Mr. Petras. I just said I just spoke with three firms, and 
would you like to come out and talk to them.
    Senator Conrad. On what basis did you decide that those 
were the three firms to talk to?
    Mr. Petras. On the basis of their work with Native American 
issues.
    Senator Conrad. Okay, so in fact you did play a role in 
helping select the firms that were presented to her, for her 
recommendation back to the tribal council.
    Mr. Petras. My role was not in terms of whether or not I 
said you should hire somebody. She was the one who came out and 
interviewed with them.
    Senator Conrad. Did she decide what firms she would 
interview? Or did you make a recommendation to her what firms 
to interview?
    Mr. Petras. I just said that I had spoken with three firms 
out here.
    Senator Conrad. Those are the three firms that she 
interviewed with.
    Mr. Petras. That she came out to see, right. And then 
wanted to know if there would be any others, and I said that 
would be up to her to decide.
    Senator Conrad. Did Mr. Abramoff make claims to you about 
influence that he had here in Washington?
    Mr. Petras. I do not think it was in terms of influence as 
it was how many staff he had and their specializations where 
they came from, so you could cover more offices on the Hill.
    Senator Conrad. Did he make assertions to you that he had 
special influence with certain members of Congress?
    Mr. Petras. No; not special influence.
    Senator Conrad. Did he make suggestions to you that he had 
special contacts, special relationships with certain members of 
Congress?
    Mr. Petras. I only recall that it was in the context of his 
staff had worked for members on the Hill.
    Senator Conrad. Do you recall who he said his staff had 
worked for on the Hill?
    Mr. Petras. Some.
    Senator Conrad. I am asking you specifically who the 
members were. Certainly, you recall that.
    Mr. Petras. Well, his staff consisted of individuals that 
worked for Senators from Louisiana and House members; had 
worked for some of the leadership. Just basically they had 
significant work experience out here in working with different 
legislators and with committees.
    Senator Conrad. Chief Sprague indicated that there was an 
indication, a series of indications, that Mr. Abramoff and Mr. 
Scanlon had special contacts with Representative Tom DeLay. Do 
you recall that?
    Mr. Petras. That they had mentioned that?
    Senator Conrad. Yes.
    Mr. Petras. Only in the statement that was made that one of 
his staff had worked for him previously.
    Senator Conrad. One of?
    Mr. Petras. Mr. Abramoff's staff.
    Senator Conrad. One of Mr. Abramoff's staff had worked for 
who?
    Mr. Petras. For Mr. DeLay.
    Senator Conrad. For Congressman DeLay.
    Mr. Petras. Right.
    Senator Conrad. And how about Mr. Scanlon? Were you under 
the impression, did you have knowledge that Mr. Scanlon had 
worked for Congressman DeLay?
    Mr. Petras. Not until later.
    Senator Conrad. Not until later. And when the decision was 
made to hire Mr. Abramoff and Mr. Scanlon, you say you did not 
make the recommendation, but you narrowed down the number of 
firms to interview and then a recommendation was made to the 
council. Did you speak to the council at all?
    Mr. Petras. Ms. Sammick and I did go into the council in 
2000 and she had made the recommendation.
    Senator Conrad. Did you speak to the council at that time?
    Mr. Petras. I do not recall what I would have said to the 
council.
    Senator Conrad. I am not asking you what you said. I am 
asking you, first, whether you spoke to the council when you 
went in with the other representative. Did you speak to the 
council?
    Mr. Petras. I do not recall.
    Senator Conrad. You do not recall whether you spoke or not?
    Mr. Petras. No.
    Senator Conrad. Have you at any time made representations 
to the tribe that Mr. Abramoff, Mr. Scanlon or you had a 
relationship with the White House that would be useful to the 
tribe?
    Mr. Petras. I do not recall doing that, and I definitely 
did not have a relationship with the White House.
    Senator Conrad. Have you ever had your picture taken with 
key staff at the White House?
    Mr. Petras. With key staff such as?
    Senator Conrad. Well, have you ever had your picture taken 
with key staff of the White House of the United States?
    Mr. Petras. I do not know about key staff. We had our photo 
taken with the President. [Laughter.]
    The Chairman. I think that qualifies. [Laughter.]
    Mr. Petras. Staff, I am assuming the staff that works, you 
know, key staff under the President.
    Senator Conrad. Did you have your picture taken with Mr. 
Karl Rove?
    Mr. Petras. Yes.
    Senator Conrad. And did you make representations that this 
indicated you had special influence at the White House?
    Mr. Petras. I do not recall that.
    Senator Conrad. You do not recall that.
    Mr. Petras. No.
    Senator Conrad. Would it surprise you to know that people 
are saying that in fact you did make such representations? That 
photos with Mr. Rove indicated that you had special pull at the 
White House?
    Mr. Petras. I have no idea what others are saying. I have 
not seen anything to that effect.
    Senator Conrad. If I can just conclude, Mr. Chairman.
    How did the photo with the President come about?
    Mr. Petras. That was through an organization that the tribe 
contributed to through the RNC, the Republican Eagles.
    Senator Conrad. Republican Eagles. Do you recall how much 
the contribution was?
    Mr. Petras. It may have been $10,000.
    Senator Conrad. But it might have been more than $10,000?
    Mr. Petras. My recollection is the tribe contributed twice, 
and maybe the second time the donation amount went up.
    Senator Conrad. And how much would that have been?
    Mr. Petras. I do not recall.
    Senator Conrad. I thank the Chair.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you.
    Dr. Petras, how long have you had this problem with recall? 
[Laughter.]
    Senator Dorgan. Is this a new phenomenon related to this 
particular set of hearings or is this an ongoing serious issue?
    Dr. Petras, I listened to your testimony. You say you do 
not know what the truth is here and we are searching for the 
truth. We hope that you could help us find the truth. When 
Senator McCain asked you how it feels when the people that were 
your clients called you an idiot, and you said it depends on 
the context. I do not understand that. You do not know the 
context. When somebody calls you an idiot, why you need context 
to understand how you feel about that?
    Mr. Petras. Because I do.
    Senator Dorgan. All right. Exhibit 35 was put up on the 
screen a while ago. I would like to go back to exhibit 35. This 
was a request for contributions. It is unsigned, dated November 
1, 2002. Are you familiar with this document? Previous 
testimony suggested at least it might have been a memorandum 
from you or it might have been a memorandum from Mr. Abramoff 
passed through to you to the tribe.
    Mr. Petras. I am not sure.
    Senator Dorgan. You cannot recall or you are just not sure? 
Or is that the same thing?
    Mr. Petras. I have not had a chance to read the document, 
so I would not be able to----
    Senator Dorgan. I would be happy to read part of it, if you 
wish. I am not trying to be badgering here. Look, we need to 
understand where all this leads, where it comes from, what the 
origin is. You need to help us do that. You are not, frankly, 
being very helpful.
    This is a memorandum that asks the tribe to make certain 
contributions. It asks the tribe to make a contribution to the 
Capital Athletic Foundation, to Americans for Tax Reform, to 
the National Republican Campaign Committee and so on. It seems 
to me that, from previous testimony, it was either written by 
you or by Mr. Abramoff.
    The reason I am asking what the origin was is because I 
would like to understand what was the representation to the 
tribe of what their benefit would be from a contribution to the 
Capital Athletic Foundation or to the Americans for Tax Reform, 
for that matter. I am trying to understand what the origin was 
so I can ask who made what representations about this.
    Mr. Petras. With the Americans for Tax Reform, that focused 
on the issue of taxation on tribal nations. That organization 
fought tax issues and had worked doing the same thing for 
tribal nations. Mr. Norquist had presented, I do not remember 
the year, but he had presented to the National Indian Gaming 
Association Conference, and did a presentation on taxation and 
tribes. He did not think that that was good.
    So my recollection is that struck a chord with Mr. Otto at 
the time and some of the other council where they were 
presented with a contribution request for the Americans for Tax 
Reform and they voted and approved of it.
    Senator Dorgan. Was that request from Mr. Norquist?
    Mr. Petras. I am not sure.
    Senator Dorgan. Was it a request from Mr. Abramoff?
    Mr. Petras. I am not sure if it came from him either.
    Senator Dorgan. Mr. Chairman, my hope was that we would get 
more assistance from Dr. Petras. I indicated to the other 
panel, I am sure there is some substantial embarrassment. There 
always is. I think the tribes are victims here. The tribes have 
been victimized by people that have bilked them out of a great 
amount of money under false pretenses, it appears to me. The 
question of whether it is criminal or not is left to officials 
in the criminal justice system. The question of whether there 
are issues for us is something that we are trying to explore.
    We know there are issues here. The question is what and 
how. My hope was that Dr. Petras would be able to clear up a 
few of these issues. It appears that will not be the case. But 
I must say, from the briefings that I have had on these issues, 
that what we are talking about today merely scratches the 
surface on the range of issues that surround this some $66 
million in public relations fees that tribes paid plus 
additional payments that we do not yet have a complete handle 
on.
    I think we are this morning simply scratching the surface 
on this money, where it went, who requested it, who had 
benefitted, why, how. We do know, I think now in many cases, 
especially this morning's case, who the victims are. The one 
thing that disappoints me, Dr. Petras, is that you do not see 
what we see from evidence that is put on the screen.
    What we have at the moment is a substantial trail of 
documents and they are quite clear. The documents indicate a 
great disrespect for the clients that these two people were 
serving. They document that they did not disclose to you, for 
example, who controlled the Capital Athletic Foundation. You 
were largely in the dark for all of this. I am frankly 
surprised that you at this point reserve judgment.
    The question is not about whether this was done to the 
tribes. It clearly was. The questions are not who did it to the 
tribes. We know who did it. The question is, how deep does this 
cesspool go and what are the layers and what does it tell us?
    So I am a little surprised that you come to us today 
suggesting that, this might all be just fine. These contracts 
might be just all right, and this might just be one large 
misunderstanding. It seems to me that is what you are 
suggesting because you are reserving judgment on everything, or 
not recalling anything.
    Respond to that, if you would.
    Mr. Petras. I have no comment on that.
    Senator Dorgan. All right.
    Mr. Chairman, thank you for the time.
    The Chairman. This is the first hearing. We will be doing 
several more. As you said, we are probably just scratching the 
surface. I think that Mr. Petras may be back and hopefully his 
recall will be better then, but at least he did not try to hide 
behind the fifth amendment.
    Senator Dorgan. No; but the fifth amendment is available to 
people and coming and saying nothing and not recalling anything 
is not much more helpful to us.
    The Chairman. I am not sure what amendment covers that. 
[Laughter.]
    Senator Inouye, did you have a question?
    Senator Inouye. Yes; I have one question.
    You were the legislative director of the Saginaw Tribe?
    Mr. Petras. Yes.
    Senator Inouye. From what period to what period?
    Mr. Petras. I was interim director for a few months, and 
then was full director, and that was not even for a year. And 
then my position was eliminated in January 2004.
    Senator Inouye. What were your responsibilities or duties 
as legislative director?
    Mr. Petras. To basically work with the tribal council on 
policy issues, conduct research.
    Senator Inouye. And in that capacity, did you participate 
in council meetings?
    Mr. Petras. Yes.
    Senator Inouye. Did you discuss with them, or did you have 
someone speaking for you?
    Mr. Petras. In terms of what?
    Senator Inouye. So far, you have testified that you did not 
have any occasion to talk to the members of the council and 
that some woman did all the talking.
    Mr. Petras. That was with regard to Mr. Abramoff when he 
was hired.
    Senator Inouye. In other matters did you talk to the 
members of the council?
    Mr. Petras. Yes.
    Senator Inouye. What were the subject matter of your 
dicussions with tribal councils members?
    Mr. Petras. Legislation, Federal, and State.
    Senator Inouye. And in those discussions, did you talk 
about Washington representation? You were called upon to make 
recommendations on legislation, I presume. You were the 
legislative director.
    Mr. Petras. Well, it did not necessarily work like that. 
The council, it would depend on which council it is. Some 
councils would hire their own lobbyist and not even tell us 
about it.
    Senator Inouye. I am talking about the Saginaw Council.
    Mr. Petras. Right. That is who I am talking about. I served 
on four councils, four completely different councils.
    Senator Inouye. You just testified that you were called 
upon to make recommendations on legislation in Washington.
    Mr. Petras. And? I am sorry, Senator. Can you re-phrase?
    Senator Inouye. In this discussion, did you tell them who 
they should retain as counsel here in Washington? Or who they 
should retain as a lobbyist?
    Mr. Petras. Tell them who they should retain? No, I would 
just bring in, tell whoever you would call, you have to send 
your materials to the council, and then they would schedule a 
meeting with counsel and do their presentation.
    Senator Inouye. So you were just a conduit?
    Mr. Petras. Basically.
    Senator Inouye. How much did they pay you, if I may ask, to 
serve as conduit?
    Mr. Petras. My salary was different. I had several. When I 
first started, it was $40,000. Then it went up. I do not 
recall, maybe in the $50's, then $75,000 as interim and then 
$100,000 as director.
    Senator Inouye. $100,000
    But you made no recommendations as to who they should 
retain as your agents here in Washington?
    Mr. Petras. By the time I was director or interim director, 
the lobbyists were already hired, the consultants for the 
tribe.
    Senator Inouye. And what was your relationship with these 
lobbyists?
    Mr. Petras. To basically pass on what the policy objectives 
were of the council.
    Senator Inouye. Well, apparently we are not going to get 
too far. Do you have any questions?
    Senator Conrad. Yes; Mr. Petras, the lobbyists were already 
hired when you were the legislative director. Is that correct?
    Mr. Petras. Right.
    Senator Conrad. And did you do a review of the performance 
of the people who were working for you here in Washington?
    Mr. Petras. No; that was distributed to council in mid-year 
and year-end reports from Greenberg Traurig.
    Senator Conrad. So you played no role in making ongoing 
recommendations to the council as to the performance of their 
lobbying firm in Washington?
    Mr. Petras. My recollection was they understood, they were 
coming out here and participating in the policy process 
themselves, going to meetings, talking about the issues.
    Senator Conrad. Would you comment, would you make 
observations to the members of the council on how well or 
poorly the lobbying firm was performing?
    Mr. Petras. No; I do not recall doing that.
    Senator Conrad. You never made an assessment to the members 
of the council on the performance of the lobbying firms that 
had been hired?
    Mr. Petras. No; they would see, for example, if they were 
working on let's say with a local government county to help 
fund a road project, that would come into the council. They 
would see the legislation with the dollar amount in it, so they 
would know.
    Senator Conrad. You know, it sounds almost like an 
immaculate conception here. You were in this position, but it 
is very unclear to me listening to you what you did. It sounds 
like you did nothing but take a batch of papers from this group 
and hand them to this group. Was that your role?
    Mr. Petras. I am not sure I would describe it like that.
    Senator Conrad. How would you describe it?
    Mr. Petras. I was more taking the policy requests of the 
council, different departments internally would go to the 
tribal council and say, we could really use this type of 
program, like a residential treatment center or a new school. 
And then that would be passed on to Greenberg Traurig, and then 
they would say, well, you need to have a proposal lined up, and 
then the different departments would put their proposal 
together.
    Senator Conrad. Did you feel that you had some 
responsibility for getting results on these various proposals?
    Mr. Petras. Some.
    Senator Conrad. Let me ask you a final question, if I 
could. Aside from the gifts that were given, that you have 
described previously, did Mr. Scanlon ever pay you money?
    Mr. Petras. No.
    Senator Conrad. Did Mr. Abramoff ever pay you money?
    Mr. Petras. No.
    Senator Conrad. Did any of their agents ever pay you money?
    Mr. Petras. No.
    Senator Conrad. Did you ever have an understanding that you 
would be hired in the future by either Mr. Abramoff or Mr. 
Scanlon?
    Mr. Petras. No.
    Senator Conrad. Did you ever have an understanding that you 
would receive compensation at any time in the future from Mr. 
Scanlon or Mr. Abramoff?
    Mr. Petras. No.
    Senator Conrad. So did you ever say to the council that you 
believed Mr. Abramoff was doing a good job?
    Mr. Petras. I may have. The council, when he was hired with 
Greenberg Traurig, was very involved. They came out here and 
worked and came to meetings at their offices.
    Senator Conrad. You may have said to the council that you 
believed Mr. Abramoff was doing a good job?
    Mr. Petras. Yes.
    Senator Conrad. Did you ever say to the council that you 
believed Mr. Scanlon was doing a good job?
    Mr. Petras. I may have from time to time.
    Senator Conrad. You may have from time to time. How 
frequently would you have told the council that he was doing a 
good job?
    Mr. Petras. It would depend on what the project is. He was 
hired for three separate projects, Capital Campaign Strategies 
were.
    Senator Conrad. All right.
    I thank the Acting Chairman.
    Senator Inouye. Thank you, Dr. Petras.
    Mr. Petras. Thank you, Mr. Chairman.
    Senator Inouye. The committee will stand in recess until 
our next hearing. For the next 2 weeks, the record will remain 
open. So if any of you wish to supplement your testimony or 
submit additional documents, please feel free to do so.
    [Whereupon, at 12:25 p.m., the committee was adjourned, to 
reconvene at the call of the chair.]
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                            A P P E N D I X

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              Additional Material Submitted for the Record

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 Prepared Statement of Richard M. Milanovich, Chairman, Agua Caliente 
                        Band of Cahuilla Indians

    Good morning Chairman Campbell, Vice Chairman Inouye, Senator 
McCain, and members of the committee. I am Richard M. Milanovich, 
chairman of the Agua Caliente Band of Cahuilla Indians. I appreciate 
the opportunity to testify before you today. I would like to commend 
the members of this committee and your staff for bringing to light the 
malicious actions of two unscrupulous individuals, and those who acted 
to enable their enterprise. While I had opposed the efforts of Mr. 
Abramoff and Mr. Scanlon to obtain contracts with our tribe, 
distrusting their claims, methods and, quite frankly, mostly their 
cost, it was not until I saw the secret e-mails and other information 
obtained by the efforts of this committee that I began to truly 
comprehend the full nature of their conniving actions. This morning, I 
would like to address four areas: First, I would like to provide you 
with a little background on our tribe; second, I will share with you my 
thoughts at the time Mr. Abramoff and Mr. Scanlon contrived to obtain 
contracts for their firms with our tribe; third, I will highlight what 
we have learned over the last 7 months concerning their actions; and, 
finally, I will describe some of the things our tribe is doing in light 
of what we have learned.
    I have served on the tribal council since 1977. My service began as 
a member from 1977 to 1981, as secretary from 1981 until 1984, when I 
was elected as chairman, a position I have been honored to hold for the 
past 20 years.
    From time immemorial our people resided in the Palm Springs area. 
Our people developed complex communities in the Palm, Murray, Andreas, 
Tahquitz, Chino Canyons and on the desert floor. With abundant water 
supply, plant and animal life, the Agua Caliente Band of Cahuilla 
Indians thrived. In 1876, the Federal Government deeded in trust to the 
Agua Caliente Band of Cahuilla Indians 32,000 acres of our ancestral 
homeland as the Agua Caliente Indian Reservation. We are industrious 
and creative with a reputation for independence, integrity, and 
justice. We are proud of our rich history and our culture.
    The Agua Caliente Band of Cahuilla Indians constitution and by-laws 
were adopted in 1955. The Agua Caliente Band of Cahuilla Indians has a 
government-to-government relationship with the U.S. Government. As a 
federally recognized tribe and sovereign tribal entity, we have 
governmental authority over our reservation lands and people.
    The tribe's constitution and by-laws outline the two-tiered 
democratic tribal government structure: The tribal membership and the 
elected tribal council. The tribal council consists of five council 
members: Chairman, vice chairman, secretary and two members. The 
chairman, vice chairman and secretary serve 2-year terms and members 
serve a 1-year term. Under our constitution, action is taken by a 
majority vote of the tribal council.
    I would like to preface my remarks on the topic of the tribe's 
business relationship with Jack Abramoff and Michael Scanlon with the 
general statement that we are still learning, together with the 
committee, of the efforts of these individuals to recruit individual 
tribal members to collaborate in their deceitful undertakings. 
Concurrent with the committee's investigations, we, of course, have 
begun our own internal investigation, but at the time the tribe entered 
into business arrangements with these individuals and their firms, we 
had no idea of the steps they had already taken in order to manipulate 
our democratic decisionmaking process.
    While I am proud that these selfish efforts were only partially 
successful, clearly these ill-motivated actions were a critical element 
of what appears to be a scheme to obtain large and unjustified payments 
from the tribe.
    As a result of the majority vote of the council, and in my capacity 
as chairman, I signed service contracts with Greenberg Traurig, LLP, 
and Scanlon Gould Public Affairs on July 9 and July 24, 2002. Jack 
Abramoff and Greenberg Traurig were hired to assist the tribe with all 
political and lobbying activities relating to a wide range of public 
policy issues. Michael Scanlon and Scanlon Gould were hired to help the 
tribe with respect to pending gaming compact issues in California.
    The first time that I met Jack Abramoff and Michael Scanlon was in 
the course of their presentations seeking contracts to represent the 
tribe. Mr. Abramoff identified himself as a representative of one of 
the top law and lobbying firms in the United States. The fact that 
these men and their services were associated with such a prestigious 
firm was something upon which some on our council relied. In large 
measure, Mr. Abramoff's and Mr. Scanlon's presentations rested on their 
self-described success on behalf of other tribes. Personally, I was 
skeptical with regard to the presentation and was more than skeptical 
of the fees that Mr. Abramoff and Mr. Scanlon were seeking for their 
firms.
    I voiced my objections and sought to defeat the effort to obtain 
contracts. But Mr. Chairman, as I am sure you will understand, 
sometimes being chairman is not enough if others have managed to 
collect the votes. When the contracts and matters relating to the 
contracts came to a vote, the vice chairman and I found ourselves 
outvoted. Of course, at that point in time I had no idea that Mr. 
Abramoff and Mr. Scanlon had already deceptively engaged in a full-
scale effort that they themselves valued at tens of thousands of 
dollars, to defeat certain tribal council members, myself included, in 
order to elect a slate more friendly to their sales pitch.
    I was surprised and disappointed that some others on our council 
took a different view, but at this point I was unaware of the lengths 
that Mr. Abramoff and Mr. Scanlon had gone to in enlisting the support 
of certain individuals in our tribe. Of course, other members of our 
council had also been deceived. At the time I did, however, take some 
solace in paying such a large retainer for Mr. Abramoff's services in 
that Greenberg Traurig is a law firm with a responsibility to honorably 
treat its clients. As chairman, I thought it was my duty to try and 
make the best of the situation. Looking back from where we sit today 
with the knowledge of press reports and the preliminary findings of 
this committee, it appears that some people at Greenberg Traurig were 
deceived, just as we were, regarding much of Mr. Abramoff's activities.
    It is my sense that we have only seen the tip of the iceberg-but 
already it appears that Mr. Abrarnoff and Mr. Scanlon, working in 
conjunction with those who willingly enlisted to collaborate with them, 
engaged in numerous instances of improper conduct. Their own words 
demonstrate that they improperly sought to manipulate for private gain 
the electoral process of our tribe. This occurred both before and after 
they were hired. It also appears they did not view the tribe or even 
the tribal council as their clients. Instead, they worked on behalf of 
themselves and a small faction of tribal members they were seeking to 
elevate to a position of total control by manipulating tribal 
elections. In the course of their work for the tribe, Mr. Abramoff and 
Mr. Scanlon attempted to hide information from the full council while 
working covertly with this collaborating faction. Their own secret 
communications indicate a willingness to sacrifice the interest of the 
tribe in exchange for the opportunity to make more money for 
themselves. It appears that this approach, seeking an outcome that 
would actually hurt their client so that they could make more money, 
was not unique in our case. While there are a number of specifics that 
your investigation is revealing, perhaps the saddest is the utterly 
callous fashion in which they mocked the interests of the clients they 
were actually hired to represent and displayed a willingness to engage 
in virtually any conduct as long as they could make money.
    In April of this year, the tribal council unanimously voted to 
suspend its relationship with both Greenberg Traurig and Scanlon Gould.
    Based on information we have already learned, we have taken further 
action concerning the attempts to manipulate our tribal elections. We 
have suspended certain individuals from any appointed role in our 
government. We have retained the services of Darryl Wold, a former 
chairman of the Federal Election Commission, to conduct an internal 
tribal inquiry into whether there were any violations of tribal law. As 
chairman, I am working with our tribal council to reform our laws 
regarding contracting, election and other procedural safeguards. 
Additionally, we have asked our legal counsel to aggressively pursue 
all avenues of obtaining reimbursement and compensation for injuries 
caused to our tribe. We will, of course, continue to work with the 
committee and other authorities.
    Mr. Chairman, I would like to close by reiterating my gratitude to 
you, Chairman McCain, Vice Chairman Inouye and the committee on your 
investigation. I will be happy, at the appropriate time, to answer any 
questions that you may have. Thank you.
                                 ______
                                 

   Prepared Statement of Bernie Sprague, Sub-chief, Saginaw Chippewa 
                              Indian Tribe

    Mr. Chairman, I am Bernie Sprague, Sub-chief of the Saginaw 
Chippewa Indian Tribe. We have approximately 3,000 tribal members 
located in Arenac and Isabella counties in the State of Michigan. I 
have served my tribe for over 19 years and I have served as an elected 
official of the Saginaw Chippewa Tribe for almost 7 years. These last 2 
years have been a difficult and trying period for my tribe and myself. 
On behalf of the Saginaw Chippewa Indian Tribe, I want to thank the 
committee for allowing me to testify and for conducting this important 
investigation.
    Our tribe has a long and painful history since we first came in 
contact with settlers hundreds of years ago. Our treaties with the U.S. 
Government ceded millions of acres of our ancestral lands to the 
Federal Government. And like many tribal nations across this country, 
our people have endured generations of broken treaties and empty 
promises. We have struggled for centuries against non-Indians who have 
used every tactic to steal our land and our precious resources that 
allowed our tribe to survive. Unfortunately, Mr. Chairman, we fight a 
similar battle today. They may wear expensive suits and fancy shoes, 
but their greed, scare tactics and unscrupulous behavior is the same 
our people have faced for generations. And their goal to take from 
Indian people what is not rightfully theirs is once again being 
painfully repeated.
    There is not a word in my language that is strong enough to 
describe what these people have done to my tribe. These unsavory 
characters who lie, deceive, and steal from Indian tribes need to be 
exposed for who and what they are.
    In the fall of 2001, a small group of Washington, DC lobbyists 
quietly worked to elect eight tribal members to the 12 member council. 
As this committee knows, it is unheard of to have non-Indians involved 
in tribal elections. We do not know where they got the money to run 
this campaign, but we do know these lobbyists smeared the reputations 
of other candidates running for tribal council through a series of 
slick brochures sent to tribal members. This type of campaign has never 
happened before on our reservation. We now know these lobbyists have 
engaged in the same practices with other tribes across Indian country.
    We were shocked to learn that members of the former tribal council 
and the former legislative affairs director, who is not a tribal 
member, were deeply involved in this scheme. We also now know that 
these lobbyists struck a deal with the candidates they supported at 
Saginaw Chippewa. The deal was that if they got elected to tribal 
council, these lobbyists would receive multi-million dollar contracts 
with the tribe.
    Two days after the new council took office in December 2001, a 
divided tribal council approved the contracts to hire these firms 
against the strident recommendation of our Office of Legal Counsel. In 
doing so, they fulfilled their part of the deal, these Washington, DC 
lobbyists were hired, and the looting of the tribal treasury soon 
followed.
    In 2002, I was elected to tribal council in a special election. 
When I began to ask questions about the outrageous fees our tribe was 
paying these lobbyists, I learned that there were no reports or 
documentation for any work they may have performed.
    One of the most outrageous examples of unaccounted for services 
involves the purchase of a voter data base from Mr. Scanlon. Our tribe 
paid nearly $4.5 million for a data base of voters in Michigan. That's 
right, $4.5 million for a data base that we never saw. The current 
tribal council researched this issue and found that you could purchase 
a data base of every voter in the State of Michigan for less than 
$75,000. To this day, we do not know where this money went. And this 
type of spending was repeated over and over again, costing our tribe 
over $14 million.
    There were other tribal council members who raised similar 
objections to this outrageous spending. Because we asked these 
questions, and we told tribal membership what was happening, the 
Council majority removed all of us from tribal council. We continued to 
object to their looting of the tribal treasury and in the election of 
2003, almost all of the former tribal council members lost their seats 
in that election.
    Once the new tribal council was elected in November 2003, we called 
in Mr. Abramoff to discuss his contract. During this meeting, Mr. 
Abramoff was asked if he had a financial or business relationship with 
Mr. Scanlon. He told our council he had no relationship with Mr. 
Scanlon. We now know that was not true.
    Mr. Chairman, I fully share your view that scheming to defraud 
tribes must stop here and now and that those responsible should be 
prosecuted to the fullest extent of the law. You will be pleased to 
know that the current tribal council has taken steps to ensure this 
never happens again to our tribe. We are committed to taking steps 
within our tribal government to bring openness to our contracting 
process. We have drafted a tribal ordinance that creates a hiring 
process that all lobbyists must follow. It ensures no secret deals or 
contracts for anyone. It mandates all contracts must be approved at 
open tribal council sessions.
    But, Mr. Chairman, and members of this committee, I am not here 
just to tell you what has happened to our tribe. We have worked to put 
together the pieces of this bizarre puzzle, but because we have limited 
access to various records, we have not had a full accounting of where 
our money went. And we do not have a full account of what these 
lobbyists were doing. I encourage you to continue this investigation as 
far as it needs to go.
    Mr. Chairman, I want you to know that our tribe is prepared to do 
whatever it takes to get back the money that was wrongfully taken from 
us. We want to work with the committee to get to the bottom of what 
these people did and to return to our people money that can be used for 
educating our children and health care for our elderly. From the 
beginning of this investigation, our Tribe has fully cooperated with 
the committee and you can be assured that we will continue do so.
    Again, I want to thank the committee for holding these hearings. I 
especially want to thank Senator McCain who has done so much to improve 
the quality of life for Indian people and has been a leader in pressing 
for these hearings. I am available for any questions you may have.
                                 ______
                                 

Prepared Statement of Christopher Petras, Former Legislative Director, 
               Saginaw Chippewa Indian Tribe of Michigan

    Mr. Chairman and distinguished members of the committee:
    I am pleased to be here this morning to participate in this hearing 
regarding the lobbying practices involving Indian tribes. I was 
employed by the Saginaw Chippewa Indian Tribe of Michigan in their 
Legislative Affairs Department for a little more than 5 years beginning 
in December 1998 as policy research analyst and ending in January 2004 
as director of legislative affairs. During my employment with the 
Saginaw Chippewa Indian Tribe of Michigan I served under the direction 
of four tribal councils, including an interim tribal council appointed 
by former Bureau of Indian Affairs Assistant Secretary, Kevin Gover in 
1999. My employment ended with the tribe when the current tribal 
council headed by Chief Audrey Falcon and Sub-chief Bernard Sprague 
voted to completely eliminate the tribe's legislative affairs director 
position. A few newspaper stories however reported that I was fired. 
This is not true and is reflected in the January 23, 2004 minutes of 
the tribal council, special session, minutes, where the minutes clearly 
indicate that the current tribal council voted to eliminate the 
director of legislative affairs position as a departmental 
restructuring move and not for inadequate performance or any other 
reason as reported in other news publications.
    One newspaper printed a correction after incorrectly reporting in a 
story that I was fired by the Saginaw Chippewa Indian Tribe's current 
tribal council and only was the correction printed until after the 
reporter re-checked the facts by reading the January 23, 2004 minutes 
of the Saginaw Chippewa Tribal Council special session.
    I have read over the past several months in news publications the 
attacks on former tribal council members of the Saginaw Chippewa Tribe 
of Michigan who voted through democratic tribal council procedures and 
with contract review by in-house tribal legal counsel to hire 
consultants Capital Campaign Strategies and Greenberg Traurig to assist 
the Saginaw Chippewa Indian Tribe of Michigan in advocating policy 
positions of the tribe at the Federal and State levels of government. 
What is disconcerting about the news stories is the claim, by 
unidentified congressional staff, that no significant issues were 
present during the employment period of Capital Campaign Strategies and 
Greenberg Traurig with the Saginaw Chippewa Tribe of Michigan. This is 
not the case.
    Indian country has experienced challenges to tribal self-
sufficiency and determination over many decades. Policy proposals that 
attempt to undermine important tribal government service areas such as 
Indian health care, Indian education, and even Indian free enterprise 
efforts have all surfaced. These threats have from time-to-time 
specifically affected tribal nations, including the Saginaw Chippewa 
Indian Tribe of Michigan. A tribal nation's ability to express the will 
of its members to Federal, State, and local governments and participate 
in our American democracy requires both public officials and the 
general public to respect and have trust in the capabilities of tribal 
leaders. Calling into question the intellectual capabilities of tribal 
leaders to make policy and hiring decisions only insults Indian country 
and assumes Native Americans are incapable of running their own 
governments. This surely is not what tribal nations want or expect from 
public officials and the general public.
    Unfortunately, democratically elected Tribal-legislators and the 
tribal member voters who elect them are facing a more personal threat 
to their self-sufficiency and determination throughout Indian country. 
And that is an attack on their intellectual capabilities to make 
informed decisions about what their tribal government needs are and who 
they may hire to advocate their tribe's policy positions at the Federal 
and state levels of government. Tribal members who are elected 
democratically to their tribal legislatures understand the needs of 
their governments much better than non-Native Americans who typically 
are unfamiliar with the culture, Federal, State, and local policy 
issues directly affecting a particular tribe, and especially when it 
comes to understanding the intra-tribal family dynamics that often 
serve as the compass for finding a tribal nation's direction. 
Determining what is in the best interest of a tribal nation should be 
left to a tribal nation to decide. The United States, for example, does 
not establish policy for its citizens based on the desires of what 
other countries feel the United States should offer its citizens. While 
outside factors can clearly change the course of direction for a 
government, its path is chosen by the people through their elected 
representatives.
    Tribal government leaders like their counterparts in Federal and 
State government are fully capable of making informed decisions and 
calculating the cost/benefits of those decisions. The decision of a 
tribal government to hire a company to advocate its policy positions 
and protect its economic well-being is the choice of that tribal 
government and not that of tribal employee staff or outside observers. 
To subjectively challenge the decision of a tribal government to spend 
an amount agreed to by the tribe and its vendor on services to be 
provided really challenges two things: First, it challenges the 
intelligence of the elected tribal legislators and thus their voters 
and second, it challenges the notion of a free-market system where 
individuals can enter into the market with a good or service and sell 
the goods or services at a price that they and the consumer agree to.
    The Saginaw Chippewa Indian Tribe of Michigan made a decision to 
hire Capital Campaign Strategies and Greenberg Traurig at an amount 
agreed to by both companies and the tribe. The decision to hire both 
firms was conducted by a democratic vote of the tribal council. The 
tribe's in-house legal counsel negotiated the contracts. Opinions over 
whether or not the amount paid by the tribe to Capital Campaign 
Strategies and Greenberg Traurig was too high is subjective and appears 
over the last few months to be used in politicizing Native Americans 
and their intellectual capabilities. While some unidentified 
congressional staff, as reported in newspapers, may have felt that no 
significant Federal issues existed that affected Indian country during 
the time Capital Campaign Strategies and Greenberg Traurig were hired 
by the Saginaw Chippewa Indian Tribe, this clearly was not the position 
held by the tribal council at that time.
    In addition, the recently rendered Federal labor decisions 
affecting tribal government labor practices for example show that there 
actually were significant Federal issues pending that affected Indian 
country. Not to mention for example that Indian health care funding and 
education funding were and have been for some time significant policy 
issues for Indian country.
    Tribal governments have come a long way in establishing strong and 
positive government-to-government relations with the United States. Now 
more than ever, many tribal nations are hiring the best firms, 
protecting their self-sufficiency and determination, and expressing the 
will of their Members to Congress and State legislatures. The Saginaw 
Chippewa Indian Tribe is one of those tribal governments. Challenging a 
tribal government's capability while at the same time politicizing the 
cost of a mutually agreed upon contract for services between a tribe 
and a vendor, sends a dangerous message to Indian country. Does the 
committee intend to review all contracts with sovereign nations, or at 
least the current contracts with the current tribal governments? If 
Native Americans are treated as unintelligent decisionmakers and their 
democratic tribal council procedures for approving contracts are 
considered non-legitimate, Indian country progress will be set back 150 
years.
    In closing, I would like to thank the committee for granting me 
this opportunity to share these thoughts on lobbying practices in 
Indian country.
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                        TRIBAL LOBBYING MATTERS

                              ----------                              


                      WEDNESDAY, NOVEMBER 17, 2004


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to other business, at 3 p.m. in 
room 216, Hart Senate Office Building, Hon. Ben Nighthorse 
Campbell (chairman of the committee) presiding.
    Present: Senators Campbell, McCain, Inouye, Dorgan, and 
Conrad

        STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. 
         SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON 
                         INDIAN AFFAIRS

    The Chairman. Good afternoon. I'm glad we have such a good 
turnout for this. It's an important hearing.
    The committee hearing today is the second in a series of 
hearings into allegations of improper business lobbying and 
financial transactions by Jack Abramoff, Michael Scanlon and 
their entities on behalf of Indian tribes. At the committee's 
first hearing on September 29, 2004 the evidence and testimony 
showed that under a variety of arrangements, six tribes paid 
Mr. Scanlon more than $66 million and that Mr. Scanlon in turn 
paid Mr. Abramoff more than $21 million.
    The September hearing also revealed that Scanlon and 
Abramoff assisted in the campaigns and elections of tribal 
council members at two of the tribes, did not charge for their 
services and after the elections obtained multi-million dollar 
contracts from the same tribal councils that they helped to 
elect. Finally, the hearing revealed that while they were being 
paid tens of millions of dollars, Abramoff and Scanlon held 
their tribal clients in very low regard, often referring to 
them as monkeys, troglodytes, morons, and worse.
    While the hearing in September disclosed this evidence, our 
investigation has continued to uncover other distasteful and 
shocking details.
    Today's hearing will focus on the Tigua Tribe of Texas. The 
story of Abramoff, Scanlon, and the Tiguas looks to me like 
nothing short of a classic shakedown operation. These men, 
working with allies, persuaded the State of Texas to force the 
closure of the tribe's casino, located in El Paso. Having 
achieved this interim step of shutting down the tribe's casino, 
Abramoff and Scanlon then approached the Tiguas, offering their 
services to assist the tribe in reopening its casino. For their 
services, they charged the tribe the tidy sum of $4.2 million.
    Documents uncovered by committee investigators shed more 
light on the Tiguas. To assist the members, as well as the 
general public, committee staff has prepared those documents 
most pertinent to the matters covered by this hearing. This is 
the stack I am holding, and I now offer these documents and 
move that they be entered into the record of this hearing.
    Is there a second?
    Senator McCain.
    Senator McCain. I second.
    The Chairman. Senator McCain seconds it, and hearing no 
opposition, these documents will be included in our hearing 
testimony.
    [Referenced documents appear in appendix.]
    The Chairman. These documents demonstrate the extent of 
Scanlon's and Abramoff's cynical manipulation of the Tigua 
Tribe. Let me just point out a few of these things in detail.
    In 2002, Mr. Abramoff first offered to help the Tiguas on a 
pro bono basis, provided the tribe hire him in the future as a 
lobbyist for between $125,000 and $175,000 per month. That's 
some pro bono work.
    Then just last year, Mr. Abramoff approached the Tiguas 
with yet another scheme that would have benefitted the Eshkol 
Academy, the Jewish boys school he founded located just outside 
of Washington, DC. Mr. Abramoff declined the tribal request 
that he be paid a retainer. Mr. Abramoff recommended that at no 
cost to the tribe, the Academy would buy up term life insurance 
policies on elderly tribal members and that the Academy would 
be named as the beneficiary in case of their death.
    In effect, Mr. Abramoff asked to be paid by putting prices 
on the lives of tribal elders. We have witnessed a lot of 
unseemly and unethical and vulgar things during the course of 
this investigation, but asking a tribe to pay a lobbyist with 
death benefits I think is the most distasteful thing I think we 
have seen yet in this hearing or the former one.
    Writing to one of his key allies in the effort to shut down 
the Tigua's casino, Mr. Abramoff's references the tribe's 
donations to the Democrats, saying, ``I wish those moronic 
Tiguas were smarter in their political contributions. I'd love 
to get our mitts on that moolah.'' And that's in quotations. 
``Oh, well,'' he continues, ``stupid folks get wiped out.'' 
Stupid folks get wiped out. I think that about says it all 
about their opinion about their very clients, the Tiguas.
    Finally, on the day the Tigua Tribe voted on their 
contract, Mr. Abramoff and Mr. Scanlon exchanged e-mails 
regarding a newspaper story about some 450 Indian employees at 
the tribe's recently shuttered casino being thrown out of work. 
This group of workers included an elderly woman who worried 
that she would not be able to find another job because of her 
age. Mr. Scanlon was evidently very excited that the article 
was on the front page, and in quotes in his e-mails, ``While 
they [the Tiguas] will be voting on our plan.'' Mr. Abramoff's 
reply to that: ``Is life great or what!!!''
    Now, I have been around this town for 2 decades. This 
strikes me as more than cynical. Rather than being concerned 
about the misfortunes of the tribe and some of its members, 
particularly the elderly, that they were soliciting for 
business, Abramoff and Scanlon seemed happy, in fact almost 
gloating, about the prospect that the Tiguas were having their 
casino closed, so that hundreds of employees would be thrown 
out of work, all because they were slated to make millions on 
trying to get that very casino reopened.
    There is another element to the Tigua story that I feel 
compelled to address. It appears that Mr. Abramoff and Mr. 
Scanlon used the good name and reputation of our fellow members 
in Congress in their attempts to part the tribe from its money. 
You will hear today from witnesses and read from documents 
indicating that Mr. Abramoff and Mr. Scanlon contended that 
Senator Dodd and Congressman Ney were enlisted to spearhead 
efforts in Congress to provide a legislative fix to the Tigua's 
problems.
    From what we know, that was not the case. Senator Dodd knew 
nothing about the proposed legislative fix, never supported it. 
And in fact, we are told that when the idea was proposed to his 
senior staff, it was rejected at least three times. Congressman 
Ney agreed to support a legislative fix after being told by Mr. 
Abramoff that Senator Dodd wanted the language. So there was a 
lot of shady things going on.
    In short, the evidence demonstrates that Mr. Scanlon and 
Mr. Abramoff told their clients that Senator Dodd and 
Congressman Ney would push their proposal, knowing full well 
that was not the case, in an effort to further persuade the 
Tigua Tribe into continuing to pay them more millions of 
dollars. Today, the committee will hear from Carlos Hisa, the 
Tigua Tribe's Lieutenant Governor, and Marc Schwartz, a 
consultant who essentially was the point person for contact 
between the Tiguas and Abramoff and Scanlon.
    I would like to also mention another relevant item. For 
those of you who watched or listened to the September 29 
hearing or who were here, you may recall that the committee 
repeatedly sought the presence of Mr. Scanlon and had been 
obliged to issue a number of subpoenas to that effect. At 
first, Mr. Scanlon's attorney declined to accept the subpoena, 
even though he had accepted other committee subpoenas for Mr. 
Scanlon and the various corporate entities he owned or 
operated.
    At that time, I said to the U.S. Marshals, asked them very 
specifically to find out why he had not been served and to try 
to make sure that he was served when he did surface, and that 
at some point he would sooner or later be coming before this 
committee. That subpoena has been served, and I understand he 
is here in the audience here today and we will hear from him 
just a little bit later.
    There is another person who I believe flouted the authority 
of this committee. That person is Jon van Horne, who was served 
with a document subpoena that was due on October 5. To this 
date, the committee has not received the documents called for 
under the subpoena nor an explanation for his non-compliance. 
This will be the last committee hearing over which I preside as 
chairman, but I am convinced that Senator McCain, who will be 
the new incoming chairman, and Senator Dorgan, who will be the 
new vice chairman when we start again, will take that into 
consideration. If those documents are not forthcoming, I would 
hope that they would ask for a vote of this committee to find 
him in contempt of Congress by not providing the information 
the committee requested.
    With that, I will just go ahead and submit the rest of my 
opening statement into the record, because I know we have other 
members here who would also like to comment. Since Senator 
Inouye is not here yet, I will go ahead and ask Senator McCain 
if he would like to offer some opening remarks, since you were 
instrumental in asking for this investigation.
    [Prepared statement of Senator Campbell appears in 
appendix.]

    STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA

    Senator McCain. Thank you very much, Mr. Chairman. And 
thank you for your dedication to this effort.
    In light of the fact that this may be the last committee 
hearing you may chair before your retirement, I would like to 
express on behalf of all my colleagues on both sides of the 
aisle your outstanding contributions to Native Americans, to 
their welfare and your continued dedication and commitment, and 
your outstanding work as chairman of this committee. We admire 
you and we respect you and we will miss you enormously, and we 
wish you every success in the future.
    Is life great or what, exclaimed Jack Abramoff in an e-mail 
to his friend and business partner, Michael Scanlon, on 
February 19, 2002. Few would have quibbled with Mr. Abramoff at 
the time. As we learned during the committee's September 29 
hearing, the two men shared a secret partnership that connived 
to collect at least $66 million from six American Indian tribes 
across the Nation.
    When Mr. Abramoff sent his February 19 e-mail, he had 
already received approximately $3 million from Mr. Scanlon's 
companies. Over the next couple of years, he would receive 
almost $18 million more. The two, however, kept their 
partnership hidden from the tribes and hidden from the world. 
For these two men, it was seemingly all about the money.
    In February 2002, the money flowed, so life was indeed 
great for Jack Abramoff and Michael Scanlon. At the same time, 
life was not so good for the Ysleta del Sur Pueblo of El Paso, 
TX, also known as the Tigua. The tribe was fighting for its 
financial life in the Texas courts and legislature. According 
to a September 26, 2004 article in the Washington Post, the 
State of Texas had sought a judicial order closing the tribe's 
Speaking Rock Casino.
    The Post article also reported in some detail how Mr. 
Abramoff and Mr. Scanlon had worked behind the scenes to 
support Texas' efforts to close the casino. They had 
participated in a grassroots and public relations campaign that 
was designed in part to lend political cover to Texas legal 
efforts. Evidence suggests that Mr. Abramoff and Mr. Scanlon 
also worked behind the scenes in Texas to quash the Tigua's 
attempts at a legislative solution.
    In an internal e-mail, Mr. Abramoff boasted to colleagues 
in 2003:

    Bill is moving H.B. 809 in the Texas State House, which 
will enable Indians in Texas to have totally unregulated 
casinos. If passed out of the House, criminal jurisprudence 
committee by a 6-2 vote, the current speaker, Tom Craddock, is 
a strong supporter. Last year we stopped this bill after it 
passed the House using the Lt Gov., Bill Ratcliffe, to prevent 
it from being scheduled in the State Senate.

    Former Texas Lieutenant Governor did refuse to schedule 
legislation for a floor vote. The State's legal efforts were 
successful and the Tigua closed its casino on February 12, 
2002. It was a low point for the tribe.
    According to tribal representatives the revenue generated 
from the Speaking Rock Casino had helped to lift the tribe out 
of poverty. It enabled the tribe to provide education for its 
children and health care for its elders. It had given them hope 
where there was none before. The closure of the casino, 
according to the tribe, threatened the promise of a new and 
better tomorrow for future generations.
    In the Tigua's desperation and despair, Mr. Abramoff and 
Mr. Scanlon found opportunity and hope, not for the tribe, but 
for themselves. In the tribe's misery, Jack Abramoff and 
Michael Scanlon saw money. ``I'm on the phone with Tigua. Fire 
up the jet, baby, we're going to El Paso,'' wrote Jack Abramoff 
in a February 6, 2002 e-mail. Responding, Michael Scanlon 
summarized their objective: ``I want all their money.''
    When Mr. Abramoff and Mr. Scanlon approached the tribe, 
they painted themselves as sympathetic to the tribe's plight. 
In a February 18, 2000 e-mail to tribal consultant Marc 
Schwartz, which we have blown up onto a poster board, Mr. 
Abramoff wrote,

    Our motivations for this representation are manifold, 
including the critical importance of not allowing tribal 
sovereignty to be eroded by the actions of the State of Texas. 
While we are Republicans and normally want all Republicans to 
prevail in electoral challenges, this ill-advised decision on 
the part of the Republican leadership in Texas must not stand, 
and we intend to right this, using in part Republican leaders 
from Washington.

    Mr. Abramoff downplayed his primary motivation by writing 
that:

    It would be insincere of me not to note that our other 
motivations include the hope and expectation that if we 
succeed, we can expect to have a long term relationship with 
the tribe by representing their interests on the Federal level.

    Mr. Abramoff's statement was the height of hypocrisy, the 
pinnacle of deception. The very injustice he described he and 
Mr. Scanlon had helped to create.
    With a straight face and without expressed remorse, Jack 
Abramoff and Michael Scanlon solicited the tribe to retain them 
to help reopen the Tigua casino. According to witnesses 
interviewed by my investigators, neither Mr. Abramoff nor Mr. 
Scanlon ever disclosed their role in the lobbying and public 
relations campaigns waged to close the same Tigua casino. They 
certainly never disclosed the lucrative partnership they 
shared.
    Their duplicity was pervasive. At the same moment they 
solicited the tribe, Jack Abramoff wrote:

    I wish those moronic Tiguas were smarter in their political 
contribution. I'd love us to get our mitts on that moolah.

    That's exactly what Jack Abramoff and Michael Scanlon set 
out to do. The very next day, on February 12, 2002, they 
traveled by private jet to the Tigua Reservation in El Paso. 
There they made their pitch.
    According to witnesses at that meeting, Jack Abramoff 
offered to help the tribe for free. He would later repeat that 
promise in his February 18 e-mail to Mr. Schwartz. But Mr. 
Abramoff insisted that the tribe had to retain Michael Scanlon 
for the effort to be successful. Jack Abramoff claimed that 
Michael Scanlon was a preeminent expert in grassroots lobbying. 
Michael Scanlon wasn't cheap, Mr. Abramoff told the tribe, but 
he was the best there was in the business. Mr. Scanlon's asking 
price: $5.4 million.
    Of course, from the last hearing, we know that when Mr. 
Abramoff advocated Mr. Scanlon's interests, he was advocating 
his own financial interests. Make no mistake: Jack Abramoff was 
not going to work for free.
    On February 18, 2002 Jack Abramoff submitted to the tribe a 
document entitled Operation Open Doors, a proposal prepared by 
Michael Scanlon. Mr. Abramoff endorsed the proposal 
wholeheartedly.

    The proposal Mike Scanlon has prepared is, in my view, the 
best chance the tribe has to overcome the gross indignity 
perpetuated by the Texas State authorities.

    Operation Open Doors supposedly entailed a massive 
undertaking funded by a nationwide political operation.

    This political operation will result in a majority of both 
Federal chambers either becoming close friends of the tribe or 
fearing the tribe in a very short period of time. Simply put, 
you need 218 friends in the U.S. House and 51 Senators on your 
side very quickly. And we will do that through both love and 
fear.

    Scanlon said his firm promised to build two customized data 
bases for the tribe, conduct numerous polls and wage a 
grassroots and grasstops campaign. While he did not guarantee 
success, Mr. Scanlon wrote, ``Under no circumstances do we 
believe it could be classified as high risk, either.'' Mr. 
Scanlon's promises have so far proven empty. Witnesses 
interviewed by my staff have confirmed that the data base was 
not customized. Scanlon/Gould did not even construct it. They 
subcontracted out the work for less than $100,000, a small sum 
that pales in comparison to the $1.8 million he charged the 
Tribe for it. And it seems Scanlon/Gould failed to provide the 
vast majority of services to implement the ``massive 
undertaking'' the tribe was told would occur.
    On February 19, 2002, El Paso Times newspaper reported that 
the tribe had to lay off 450 employees as a result of shutting 
down its casino. It was not enough the two men sought to 
capitalize on the tribe's plight; they actually reveled in it. 
Mr. Scanlon forwarded the article to Mr. Abramoff, advising him 
``This is on the front page of today's paper, while they will 
be voting on our plan.'' It was in response to Mr. Scanlon that 
Mr. Abramoff dashed off his ``is life great or what'' e-mail.
    Jack Abramoff and Michael Scanlon smelled money. In fact, 
19 minutes later, Mr. Abramoff e-mailed Mr. Scanlon again. 
``One hour, 45 minutes and counting, my friend.'' The tribal 
council ultimately decided to move forward with the plan, 
believing Mr. Abramoff's representation that he already had ``a 
couple of Senators willing to ram this through initially.''
    Key to Mr. Abramoff's and Mr. Scanlon's plan was secrecy. 
No one was to know about their involvement in the effort to 
assist the Tigua. According to witnesses interviewed by my 
staff, Mr. Abramoff would take no money from the Tribe to avoid 
having to register under the Lobbying Disclosure Act.
    In meetings and telephone conversations with witnesses, 
Jack Abramoff maintained his role was simple. He would have one 
or more Representatives or Senators slip into a conference 
report very discreet language allowing the Tigua to reopen 
their casino. After passage of such an amendment, Michael 
Scanlon and his company would then run a public relations 
campaign to beat back any attempts to repeal the language.
    Almost immediately, Mr. Abramoff's cover was nearly 
compromised when he was included on an e-mail list from a 
tribal representative. Mr. Abramoff was furious. In an e-mail 
to Mr. Scanlon, Mr. Abramoff wrote, and I will try to redact 
the profanity so I don't offend anyone:

    The f-ing moron put my name on an e-mail list. What a f-ing 
moron. He may have blown our cover, damn it. We're moving 
forward anyway and taking their f-ing money.

    That the secrecy and hence the effort may have been 
compromised could not dissuade Mr. Abramoff from taking the 
tribe's money. He was resolved to take the Tribe's money 
whether he could help them or not. Even before the Tigua signed 
a formal contract with Scanlon/Gould Public Affairs, Mr. 
Abramoff could not wait for the money to arrive. On March 3rd, 
2002, he asked Mr. Scanlon, ``Did we get the Tigua money?''
    Even after the tribe sent a check for $2.1 million, the two 
could not contain their insatiable greed. On March 19, 2002, 
Michael Scanlon e-mailed Jack Abramoff, asking, ``Is he''--
meaning Marc Schwartz--``happy? Where is our f-ing money?'' 
Abramoff responded 10 minutes later, instructing Mr. Scanlon to 
call Mr. Schwartz and asked for ``our damned money.'' By the 
end of March, the tribe had paid Scanlon/Gould a total of $4.2 
million for what was supposedly going to be a massive public 
relations campaign.
    On April 8, 2002, Capital Campaign Strategies, the alter 
ego of Scanlon/Gould, paid $2.1 million to Mr. Abramoff's 
company, K Gold. During this time, Jack Abramoff and Michael 
Scanlon identified election reform as the vehicle into which 
they would insert the Tigua's provision.
    Of course, only after the tribe had paid Scanlon/Gould 
millions of dollars did Michael Scanlon reassess the likelihood 
of success. In an April 2002 report to the tribe, Mr. Scanlon 
wrote that:

    With political cover generated, we feel pretty good about 
our prospects of tacking the legislation on and getting it 
through. But pleased be advised we are taking the most high 
risk approach to this by using election reform as a vehicle.

    Mr. Scanlon's words stand in stark contrast to his earlier 
opinion that his efforts could in no way be classified as high 
risk. Of course, he now had the luxury of being less 
optimistic, since he had the tribe's money in his pocket.
    Despite receiving $4.2 million from the tribe, Jack 
Abramoff and Michael Scanlon wanted more. From mid to late 
2002, Jack Abramoff hounded the tribe for contributions to the 
Capital Athletic Foundation, his private charitable foundation 
that he used to support the all boys school he had founded and 
operated in Maryland. He asked the tribe to contribute $50,000 
to a golf trip to Scotland, sponsored by his foundation. 
Ultimately, the tribe declined.
    That did not deter Mr. Abramoff and Mr. Scanlon, however. 
In a September 18, 2002 e-mail, Mr. Abramoff reminded himself, 
``We need more money for backlash after the Tigua launch.'' 
2\1/2\ hours later, Mr. Abramoff wrote to Mr. Scanlon:

    Did you speak with Marc Schwartz? I have a great idea. 
Let's tell him we are launching all missiles to get the bill to 
vote and therefore we're using all our resources, so that once 
the bill passes we immediately need more money. Okay?

    Approximately 1 month later, election reform because law 
without the Tigua's provision. To this day, the tribe remains 
unclear on where the $4.2 million they paid Scanlon went, 
because it appears it was not used for the purportedly massive 
PR campaign Mr. Scanlon had promised to wage on their behalf.
    Mr. Abramoff's pursuit of more money from the tribe did not 
end in 2002. Only last year, Mr. Abramoff attempted to convince 
the tribe to take out life insurance on its elders and make 
Eshkol Academy, the all boys school he founded, the sole 
beneficiary. Mr. Abramoff claimed that the proceeds of the 
policies would go to his school, which would then pay Greenberg 
Traurig for the lobbying fees incurred by the Tigua.
    I again direct everyone's attention to the poster, which 
reflects Mr. Abramoff's e-mail to Mr. Schwartz on the subject:

    Marc, per our discussion, the following short memo describe 
the opportunity to obtain lobbying funds via the insurance 
program. This will also greatly benefit our school, which means 
the whole world to me. If it can work, it's truly a win-win. On 
behalf of a registered non-profit charity, such as the school, 
CFS will enroll Native American elders 75 years and older in 
term life insurance.

    The premiums will be entirely financed with both debt and 
equity using the insurance policies, no obligation of any kind 
to the tribe or Native Americans of the charity, and repaid by 
the proceeds of the policy at the demise of the insured. Any 
remaining funds at that time will accrue to the charity. From 
these funds, the school shall pay Greenberg Traurig its fees 
and any out of pocket costs for a new Washington 
representation.
    The Washington representation work done by Greenberg 
Traurig made possible as a consequence of this program should 
be for the sole benefit of the tribe, including efforts to 
obtain Federal appropriations, grants and other legislative and 
administrative assistance for the tribe.

    After brief consideration, the Tigua rejected it, because 
``it just wasn't right.''
    The story I just shared with you and which we will learn 
more about today is tragic. Jack Abramoff and Michael Scanlon 
preyed upon the tribe and its members when they were most 
vulnerable. They played upon their hopes and fears. They went 
to El Paso selling salvation and instead delivered snake oil. 
Those two men walked away with money that would have gone and 
should have gone to the children and elders of the tribe. Why? 
Because Jack Abramoff and Michael Scanlon were all about the 
money.
    In closing, I just want to thank the Tigua Tribe, 
Lieutenant Governor Hisa and Mr. Schwartz for their invaluable 
assistance and continuing cooperation in the investigation and 
for their participation in today's hearing. Mr. Schwartz told 
my investigators that after the Washington Post articles broke 
earlier this year about the other tribes, Mr. Abramoff called 
him and said, ``Don't worry, no one will ever know about the 
Tigua.''
    Well, Mr. Abramoff, the committee knows and now the rest of 
the world knows, too, about the gross indignity it seems you 
and Mr. Scanlon perpetrated against the tribe. And I pledge, as 
a member of the Committee on Indian Affairs, that we will not 
stop until the complete truth is told.
    I thank you, Mr. Chairman.
    The Chairman. Thank you, Senator McCain.
    I'd like to yield to Senator Dorgan, who will be the 
incoming vice chairman of this committee starting in January. 
Senator Dorgan.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
                             DAKOTA

    Senator Dorgan. Mr. Chairman, thank you very much. Let me 
add my voice to that of Senator McCain's to thank you, Senator 
Campbell, for the remarkable work you have done over a long 
period of time. It has been an honor to serve with you.
    It would serve no purpose for me to repeat much of what 
Senator McCain has just described. I think he has described 
this in great detail and all I can say is that the substantial 
amount of reading I have done, which includes almost all of the 
memos that have been referenced here, leads me to say that 
those involved in this sickening episode should all hang their 
heads in shame. It is a disgusting thing to investigate and to 
read. It is about double dealing, it is about secret deals, it 
is about billing for services that were not performed. But 
mostly it is about deceit and deception. I would agree with 
Senator McCain, we need to follow this to the end of the trail, 
find out who did what and hold them accountable for it.
    So let me not repeat it. Let me thank my colleague, Senator 
McCain for the statement that you have made, which I think is 
explicit in its detail. Thank you very much.
    The Chairman. Senator Conrad.

 STATEMENT OF HON. KENT CONRAD, U.S. SENATOR FROM NORTH DAKOTA

    Senator Conrad. I thank the chairman and I want to thank my 
colleagues as well, Senator McCain and Senator Dorgan. 
Certainly Senator Inouye as well.
    It is hard to find the words to describe this. It's 
despicable, it is corrupt. Most of all it is incredibly, deeply 
cynical. It is hard to believe that people could sit around and 
conjure up a scheme like this, to on the one hand work behind 
the scenes to get casinos shut down and then to go to the 
affected tribes and ask for millions of dollars to get the 
casinos opened back up.
    And all the time to refer to their clients as morons, as 
idiots, troglodytes. It's a level of arrogance that I must say 
is almost unparalleled. If you were to set out to write down a 
scheme that would reveal the basest nature of people, you'd 
have a hard time coming up with more examples than have been 
provided by this case. This Jack Abramoff, Michael Scanlon, 
taking advantage of the political system in the most crass and 
crude way, all for their own enrichment.
    You have to ask yourselves, what kind of people are these? 
What kind of people are these that would cook up such a scheme 
and then actually carry it out? It's despicable. They deserve 
the harshest treatment that the legal system can provide.
    I thank the Chairman.
    The Chairman. I thank you, and we will now proceed with the 
first panel. That will be Lieutenant Governor Hisa of the Tigua 
Tribe and Marc Schwartz. Would you please come to the table and 
remain standing for 1 minute.
    Will you please raise your right hand? Do you swear to tell 
the truth, the whole truth and nothing but the truth, so help 
you, God?
    Mr. Hisa. Yes.
    Mr. Schwartz. Yes.
    The Chairman. Thank you. Please be seated.
    Mr. Schwartz, I think we'll go ahead and start with you, if 
that's all right. Will you also identify the people who are 
with you, too, besides the Lieutenant Governor.

STATEMENT OF MARC SCHWARTZ, PRESIDENT, MARC SCHWARTZ PARTNERS, 
       INC., ACCOMPANIED BY MITZI SHANNON AND JOHN BATOON

    Mr. Schwartz. Yes; this is my legal counsel, Mitzi Shannon, 
and legal counsel for the Tique Tribe is John Batoon.
    The Chairman. Thank you. Proceed.
    Mr. Schwartz. Thank you, Mr. Chairman and distinguished 
members of the committee.
    My name is Marc Schwartz, and I have had the privilege of 
working with the Tigua Tribe in matters involving public 
relations and government affairs since 1998. I'm sure many of 
you are wondering just how Abramoff and Scanlon came before the 
Tigua Tribe, maybe more importantly, how seemingly bright folks 
could have fallen for their schemes.
    In early 2002, Mr. Abramoff, through an attorney 
representing the Choctaw Tribe, had offered to visit with the 
Tigua Tribe about a solution to their gaming problems. I first 
spoke with Mr. Abramoff on February 6, and he expressed his 
indignation over what had occurred with the tribe and 
specifically referred to the need to right the terrible 
injustice that had been brought upon the tribe.
    Unlike others who offered solutions, Mr. Abramoff had both 
the credentials, as best could be determined, and more 
importantly, it offered the service of both himself and his 
firm at no charge. This was quite a difference from the usual 
band of con men who surface during a crisis to prey upon those 
involved in the crisis.
    During Mr. Abramoff's first meeting with the tribe on 
February 12, he characterized his presence at the meeting 
alternately as being interested in righting the wrong that had 
been perpetrated on the tribe and representing the tribe after 
his ultimate success in the legislative effort. He explained to 
us that Mr. Scanlon was the preeminent expert in grassroots 
politics and that with his experience with Representative Tom 
DeLay had developed a reputation as ``the go-to guy for the 
most difficult campaigns.''
    Also during that meeting, Mr. Scanlon represented that his 
part of the effort would be expensive, essential and exclusive. 
He described in his proposal to the tribe shortly after the 
first meeting that:

    Operation Open Doors is a massive undertaking fueled by a 
nationwide political operation. This political operation will 
result in a majority of both Federal chambers either becoming 
close friends of the tribe or fearing the tribe in a very short 
period of time.

    After the initial meeting, in an e-mail to me dated 
February 18, Abramoff said:

    As we discussed, until we are able to achieve the Federal 
legislative fix, we at Greenberg Traurig will not be engaged by 
the tribe for services officially. All our work will be done on 
a pro bono basis. Once the legislation is signed by the 
President, we would anticipate the tribe engaging us to 
represent it at the Federal level and assist with efforts to 
obtain a class III compact. Our normal rate in our tribal 
government practice is between $125,000 and $175,000 per month.

    Critical to the success of the program according to 
Abramoff and Scanlon was the necessity to maintain absolute and 
complete secrecy. The friendly legislators that would be 
carrying this measure for Abramoff required this, and Abramoff 
explained that this was the most important concept to the 
program. Of course, secondly possibly to the political 
contributions that had to be made in support of his friends.
    From every outward view, Mr. Abramoff was searching for 
legislation and ``friends'' on the Hill that would do this for 
him. Mr. Scanlon and his associates were busy creating the 
tribe's monolithic political response effort that would be 
centered around a customized data source, one that I had come 
to believe from their accounts would be the envy of even the 
most sophisticated presidential campaigns.
    In late March 2002, Abramoff had reported that he and his 
staff had spoken to Representative Bob Ney, who was carrying 
the Election Reform Bill and agreed to carry the Tigua 
language. On March 26, I received a phone call from Mr. 
Abramoff, telling me that the tribe needed to make additional 
contributions to Congressman Ney through some PAC's he had. He 
told me it was critical. I approached the tribal council with 
the request for the $32,000 in contributions and it was 
approved. Later that same day I received an e-mail from a 
Greenberg Traurig staff person with the breakout and addresses 
for those contributions.
    Each of the additional contributions were outside of what 
the council had previously approved as part of the initial 
agreement with Abramoff. But those kinds of requests continued 
throughout the summer of 2002. On June 7 of the same year, I 
received an e-mail from Abramoff stating that Congressman Ney 
had asked if the tribe could cover an expense for a trip to 
Scotland. The cost was suggested to be $50,000, and again, 
Abramoff referred to him as ``our friend.''
    As the election reform measure languished throughout the 
summer, Abramoff and Scanlon continued to report on substantial 
progress and a virtual guarantee of success. During that time, 
I requested a meeting between tribal representatives and 
Congressman Ney. Abramoff set up the meeting in early August of 
2002. In an e-mail, Abramoff mentioned that Congressman Ney did 
not want his trip to Scotland brought up, as he would show his 
appreciation to the tribe later.
    For the rest of the months leading up to October 2002, both 
Abramoff and Scanlon continued to report that the Senate side 
would not be a problem, since Senator Dodd had agreed to 
include the solution through his side. It wasn't until the 
announcement of the final passage of the election reform 
measure that Abramoff phoned to say that Congressman Ney had 
reported Senator Dodd had gone back on his word and stripped 
the measure from the committee report.
    Mr. Chairman and members of the committee, you can only 
imagine the sheer disappointment we all felt about these 
events. For an almost sure thing, as Abramoff had stated 
numerous times, to utter defeat was extremely hard to take. In 
a phone call on October 4, Abramoff said Congressman Ney wanted 
to speak directly to the tribal council to express his outrage. 
On October 8, Congressman Ney held a conference call with the 
tribal council and told them about his disbelief that Senator 
Dodd had gone back on his word. He further reported that he 
would continue to work on the issue and believed that the tribe 
was entitled to their gaming operation.
    We were extremely disappointed by all of these actions and 
certainly by the results that we've discovered since the 
outcome of the Washington Post articles.
    I thank you all for your kind attention and for the 
opportunity to share this information with you.
    [Prepared statement of Mr. Schwartz appears in appendix.]
    The Chairman. Normally we would take both testimonies 
first, but since you have referred in your testimony to several 
of our colleagues, I'd like to yield to Senator Dorgan for a 
statement from Senator Dodd.
    Senator Dorgan. Mr. Chairman, the committee did contact 
Senator Dodd, with the information that Mr. Schwartz revealed. 
Senator Dodd asked that his statement be included in the record 
and also read for the record, so I will read it, inasmuch as 
his name was used.
    The Chairman. Please proceed.
    Senator Dorgan. This is all in quotes, statement of Chris 
Dodd on Marc Schwartz testimony.

    I don't know Jack Abramoff or Mike Scanlon.

    Again, this is Senator Dodd.

    So any representations they might have made without my 
knowledge regarding me and efforts at recognition of the Tigua 
Tribe are categorically wrong and false. They never contacted 
me on recognition of the Tigua Tribe and I never represented 
either to them or to Congressman Ney that I would in any manner 
work legislatively to recognize the Tigua Tribe.

    Congressman Ney's staffer, Lottie Shackleford, did approach 
my office during the waning hours of negotiations over the HAVA 
legislation to inquire whether recognition provisions for the 
Tigua Tribe could be included in the bill. The suggestion was 
summarily rejected. The fact that the HAVA bill never included 
any legislative language regarding this tribe should confirm 
that fact in no uncertain fashion.
    Continuing to quote Senator Dodd:

    I am particularly proud of the HAVA legislation and am 
angry that there were those who were seeking to use it to 
advance their own interests. I am also, needless to say, angry 
that unbeknownst to me, people were trading on my good name, 
especially since I have aggressively fought for years to reform 
the recognition process, so that the criteria at the BIA is 
based upon facts and not politics.
    I intend to continue to push for those reforms, especially 
since this activity clearly highlights further problems with 
the recognition process. I had no involvement whatsoever in any 
effort to recognize this tribe. Mr. Abramoff and his associates 
need to be held accountable for their duplicitous, greedy and 
underhanded actions.

    That in its entirety is the statement from Senator Dodd 
that he wished to be read into the record today.
    The Chairman. It will be included in the record in written 
and verbal form.
    [Prepared statement of Senator Dodd appears in appendix.]
    The Chairman. Senator Inouye, did you have any opening 
comment before we proceed with Lieutenant Governor Hisa?

 STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII, 
           VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Inouye. Yes; I am sorry that I am late. But as you 
know, we are having our appropriations conference now, trying 
to resolve our differences before we end the session. Mr. 
Chairman, as we undertake the second hearing on the lobbying 
practices, I would just like to observe that in the 27 years I 
have served on this committee, I do not believe we have had 
before us such a sad and sickening set of circumstances. And I 
hope, Mr. Chairman, that we will be able to reach a resolution 
of the matters as soon as possible and that this may never 
happen again.
    Thank you.
    The Chairman. Thank you.
    Lieutenant Governor Hisa, would you like to proceed?

 STATEMENT OF CARLOS HISA, LIEUTENANT GOVERNOR, YSLETA DEL SUR 
                             PUEBLO

    Mr. Hisa. Yes; Mr. Chairman, Mr. Vice Chairman, and members 
of the committee. My name is Carlos Hisa. I am the Lt. Gov. for 
the Ysleta del Sur Pueblo, a federally recognized Indian tribe 
located in El Paso County, TX.
    The Pueblo was initially contacted regarding Jack Abramoff 
by Bryant Rogers, an attorney in Santa Fe, NM, who indicated 
that Jack Abramoff was a prominent Washington lobbyist who had 
helped a number of Indian tribes. Attached under tab 1 is a 
memorandum from Norman Gordon, one of our tribal attorneys, to 
Tom Diamond regarding a conversation with Bryant Rogers.
    As a result of this contact, we authorized Marc Schwartz, 
our public relations representative, to contact Jack Abramoff 
regarding a possible proposal, which Mr. Schwartz did. Mr. 
Schwartz indicated that Jack Abramoff was a prominent lobbyist 
and worked for one of the largest law firms in Washington, DC. 
He was identified in various national magazines and newspapers 
as one of the top lobbyists in Washington, DC, who had helped 
several Indian tribes in legislative matters.
    Jack Abramoff and Mike Scanlon came to El Paso in early 
February 2002 and met with Governor Albert Alvidrez, Marc 
Schwartz, and tribal attorney Tom Diamond, and made a proposal 
for a lobbying effort to gain Federal legislation allowing the 
tribe to resume gaming requiring an extensive lobbying effort 
by Scanlon/Gould Associates and Jack Abramoff.
    On February 18, 2002, Jack Abramoff sent an e-mail to Marc 
Schwartz, tribal representative, that set forth the services he 
proposed to provide to the tribe and a copy of the Scanlon/
Gould Operation Open Doors proposal. Attached under tab 2 is a 
copy of the e-mail and the enclosure. Mr. Abramoff represented 
that the legislative effort would not succeed without the 
implementation of Operation Open Doors and the required data 
base to be developed by Scanlon/Gould.
    On February 22, 2002, Jack Abramoff appeared before the 
tribal council in El Paso, TX and made a verbal presentation of 
the proposal outlined in the February 18, 2002 e-mail and the 
Operation Open Doors document. Subsequent to that meeting, 
later that day, the tribal council made a counter-proposal to 
Abramoff lowering the Abramoff-Scanlon/Gould proposal by $1.5 
million, offering a total compensation package of $4.2 million. 
Marc Schwartz was directed to communicate this to Abramoff, and 
did so. Abramoff accepted the tribe's counter-offer.
    Mike Scanlon provided a memorandum of agreement which was 
executed by the tribe on March 5, 2002. Attached under tab 3 is 
a copy of the memorandum of agreement.
    Subsequent to the signing of the memorandum of agreement, 
the tribal council directed Marc Schwartz, tribal 
representative, to be the direct contact with Abramoff and 
Scanlon/Gould regarding the Operation Open Doors project. The 
tribe provided all information requested of Scanlon/Gould and 
Abramoff for the creation of the data base required for 
Operation Open Doors and provided all cash disbursements 
required for the political contributions and other expenses 
required by Operation Open Doors.
    From April 2002 through the summer, numerous oral 
representations were made by Jack Abramoff and Mike Scanlon 
with regard to the progress of the project. So specifically, 
they identified a number of bills what the language modifying 
the Restoration Act, which would allow the tribe to resume 
gaming, were moving and the bill language would be able to be 
slipped into those bills.
    Late spring and early summer of 2002, Abramoff and Scanlon 
identified the Election Reform Bill as the bill that would 
contain the amendment to the Restoration Act language that 
would allow the tribe to resume gaming. Marc Schwartz, tribal 
representative, received a number of e-mails and verbal 
communications from Abramoff and Scanlon that the progress of 
the bill was a little slower than had been anticipated, but was 
moving forward and was expected to fall into place in late 
summer.
    During this period of time, the tribe made numerous 
requests through its representative Marc Schwartz to Abramoff 
and Scanlon regarding the data base and the progress of the 
Open Doors project. We were told that the progress of the bill 
had slowed down, but that everything was still in place on 
numerous occasions throughout the summer of 2002. In October 
2002, we were informed by Abramoff and Scanlon through Marc 
Schwartz that the language amending the Restoration Act, which 
would allow the tribe to resume gaming, was taken out of the 
Election Reform Bill.
    After the Election Reform Bill passed at the end of 2002, 
without the language amending the Restoration Act, which would 
have allowed the tribe to resume gaming, Abramoff and Scanlon 
continued to make representations that there were other bills 
that would be available to place the necessary language 
amending the Restoration Act into, and they expected to still 
successfully complete Operation Open Doors.
    Tribal representatives met with Jack Abramoff and Michael 
Scanlon in January 2003 where a similar representation was 
repeated. Additionally, the tribal representatives for the 
first time were able to see the data base that had been 
purportedly created to complete Operation Open Doors.
    Subsequent to the disclosure in the Washington Post of the 
Senate committee investigations into alleged improprieties and 
misconduct by Jack Abramoff and Mike Scanlon, the tribe has 
examined all its documents, correspondence and spoken with key 
tribal representatives, officials and employees involved to 
determine whether or not services promised to be performed by 
Scanlon and Abramoff were ever performed.
    After a lengthy investigation, it does not appear at this 
time that the date base was ever used in the manner represented 
in any way to benefit the tribe, and there was never any 
success by Abramoff or Scanlon in placing any language amending 
the Restoration Act into any bill that was considered by 
Congress. More specifically, Jack Abramoff and Scanlon/Gould 
Associates failed to provide the following as they had 
promised.
    No. 1, they failed to make contact with key suppliers and 
vendors as outlined in Operation Open Doors, whether by 
personal contact, phone calls or written communications.
    No. 2, they failed to provide suppliers and vendors with 
letters to send to their legislative representatives.
    No. 3, they failed to provide a phone bank operation for 
large suppliers and vendors.
    No. 4, they failed to generate 375,000 contacts as set 
forth in Operation Open Doors.
    No. 5, they failed to complete a program in the time 
promised.
    No. 6, they failed to have employees of vendors and 
suppliers write and call in to targeted legislative districts.
    In fact, the data base was essentially a compilation of the 
tribe's supplier, vendor and customer lists, which were 
provided to Scanlon/Gould and Jack Abramoff. It appears that 
Scanlon/Gould did nothing more with respect to the creation of 
the data base than rearrange the list provided to them by the 
tribe.
    It now appears that Abramoff and Scanlon, under cover of 
various religious groups, worked behind the scenes to shut down 
the operation of the tribe's casino and then came to El Paso, 
and with false promises said to the tribe that they could get 
the casino reopened through Operation Open Doors, undoing the 
wrong they had secretly helped cause, so they could cheat us 
out of our money.
    We ask that you do the following: Punish the people who 
cheated us; help us recover the money we were cheated out of; 
and pass laws to protect all Americans from corrupt political 
activity.
    On behalf of my tribe, the Ysleta del Sur Pueblo, I want to 
thank the committee for its critical work in investigating and 
remedying the wrong perpetrated by Jack Abramoff and Michael 
Scanlon on my tribe and on other Native American tribes. Thank 
you.
    [Prepared statement of Lt. Gov. Hisa appears in appendix.]
    The Chairman. Thank you. I am going to ask some questions, 
then yield to my colleagues. I read your testimony, and on the 
last page, as you mentioned, you had asked us to punish the 
people who cheated you. One of the reasons this committee has 
moved a little bit slowly is that there is an ongoing 
investigation by the Justice Department. It has yet to be 
determined what they will come up with, but I have a hunch 
that's going to be done, very frankly.
    Second, to help you recover the money, that's probably 
going to be something you'll have to take up in the civil 
courts, to try to get your money back. And I hope you do that, 
very frankly. And third, to pass laws to protect all Americans 
from corrupt political activity, we've already got them on the 
books. Passing the laws and getting them implemented, there's 
always a loophole somewhere or a way to get around them if a 
person is larcenous in nature, very simply. So we hope that the 
ones we already have on the books are going to be enough to do 
the job.
    In any event, let me ask a couple of questions of each of 
you before I yield to my colleagues. Mr. Schwartz, thank you, 
and by the way, thank you both for cooperating with this 
investigation. I know sometimes it's a little embarrassing or 
difficult to come before a committee, in front of the cameras 
and newspaper people and so on, and admit, that very frankly, 
you got skinned. That's not an easy thing to do.
    I'd like to ask you a couple of questions about it. Was 
this the first time the tribe has dealt with a high-powered 
Washington firm? Maybe Mr. Schwartz could answer that.
    Mr. Schwartz. This had been the first time that the tribe--
yes, Senator, it had been the first time.
    The Chairman. Good. Well, I hope, very frankly, there's a 
lot of them, look in the yellow pages, and you'll find pages 
and pages of people who represent different entities in 
America. I would hope you understand that this is not a norm in 
my view, for most people that are back here representing their 
clients and different things. It's just something that 
happened, that went terribly wrong.
    On February 18, I think we have it, in fact exhibit 16, it 
was either up there a minute ago where it is now, Jack Abramoff 
proposed his lobbying work for the Tiguas would be done on a 
pro bono basis. Did you take that to mean that that was a 
normal process by which firms dealt with tribe here, that they 
would do things on a pro bono basis? In fact, they do, but the 
glitch here of course was, it was at least implied, we do it on 
a pro bono basis, and then you ante up with $125,000 to 
$175,000 per month after we get it done. Did you take it to--
did you believe at the time that was a normal kind of thing 
that's done?
    Mr. Schwartz. No, Senator; we did not think it was a normal 
situation.
    The Chairman. Did you think that when he proposed that that 
would have been a fair exchange, or did it strike you as a quid 
pro quo arrangement?
    Mr. Schwartz. Absolutely, based on his discussions with us 
privately in telephone calls and then in front of the council 
that there would be a payoff, so to speak, for the firm, once 
the casino was opened. So yes, it certainly would have been a 
quid pro quo.
    The Chairman. Mr. Hisa, these activities were particularly 
offensive to me, what was called the Elderly Legacy Program. 
Being Native American yourself, how did you react to that, when 
you found out they were going to pay for the lobbying efforts 
with a scheme that would take out life insurance policies on 
your tribal elders?
    Mr. Hisa. I felt uncomfortable. It didn't seem right.
    The Chairman. And it was rejected by the tribe, too, is 
that correct?
    Mr. Hisa. It was approved initially, but the tribal council 
got together outside the meeting and we discussed it for 1 or 2 
weeks, and then we just decided not to move forward on it 
anymore.
    The Chairman. We have exhibit 58, can we put that back up 
here if we have it? Exhibit 58 is the e-mail from Mr. Abramoff 
outlining the Elderly Legacy Program, in which he said the 
scheme provided the opportunity to provide lobbying funds via 
this insurance program. Obviously if tribal members died, that 
would pay for his efforts. He also said in there that it would 
mean the whole world to me if the tribe would accept this.
    It seems to me that he got a real two-fer. First of all, 
this arrangement would benefit the school that he supported, 
the private charity that he supported, and also it would pay 
Greenberg Traurig for their fees and out of pocket costs for 
Washington representation. Mr. Schwartz, was your reaction to 
that as cynical as mine is if I had heard it for the first 
time?
    Mr. Schwartz. It was certainly extremely a morbid subject.
    The Chairman. The word morbid fits pretty well, I think.
    Mr. Schwartz. The context was that he was searching for a 
way to expand his ability to serve the tribe without, in his 
mind, draining any of the precious resources of the tribe.
    The Chairman. Did he represent to the tribe that it was a 
normal or legal kind of arrangement that was often done?
    Mr. Schwartz. My recollection, Senator, was that his 
representation of it was that it was a brand new deal.
    The Chairman. It sure was.
    Mr. Schwartz. One that his firm had just developed and it 
was a great concept.
    The Chairman. Sure was. I'd like to yield to Senator Inouye 
for questions.
    Senator Inouye. I just have a few.
    At your first meeting, and I am calling on Mr. Schwartz, 
did you have anything to lead you to believe that you were 
dealing with fast talking Washington con men?
    Mr. Schwartz. No, Senator; and thank you for the question. 
At the time that Mr. Abramoff made the initial contact with us, 
and it had come through the tribal attorneys, we had done an 
internet search, just as kind of a cursory effort, to see who 
he was, never having heard his name.
    At that time, there had been a series of stories, both in 
the New York Times and the Wall Street Journal, kind of at that 
very moment, where he was described as the uber lobbyist of 
Washington. So it was not something that really, his 
credentials appeared to be extremely legitimate. Obviously the 
law firm that he represented, is employed by, was certainly one 
of the top law firms in the area and certainly up and down the 
east coast.
    Senator Inouye. When did you begin to doubt his 
credibility, integrity and character?
    Mr. Schwartz. In all honesty, Senator, I think that 
probably came after he told us that nobody would ever find out 
about the Tiguas this year.
    Senator Inouye. But you continued to deal with him?
    Mr. Schwartz. We didn't have a lot of contact with him last 
year, and the articles came out in February of this year. So it 
was shortly after that when he suggested that there was nothing 
to the articles, that it was certainly more of a witch hunt 
that a reporter had done, and the suggestion that there would 
be hearings was nothing more than political payback.
    Senator Inouye. But up until then, you believed in him?
    Mr. Schwartz. We had no reason at that point not to, yes, 
sir.
    Senator Inouye. Thank you very much.
    The Chairman. One more thing before I yield to Senator 
McCain. To Mr. Hisa, what was the economic and social cost of 
that closure?
    Mr. Hisa. It was a great impact, not only to the tribe, but 
to the El Paso community.
    The Chairman. Because there were a number of non-Indians 
working for the tribe, I would assume, as with most casinos?
    Mr. Hisa. Exactly, yes.
    The Chairman. Did the tribe's reaction, by and large, did 
you get most of it from the seniors? Did they find out that 
this proposal had been made that they take out life insurance 
policies on them?
    Mr. Hisa. Yes; it was. We have an elder center, and I had 
gone and talked to the elder center and sort of mentioned the 
idea before, because Jack Abramoff wanted to send an insurance 
representative to sign them up. So I met with the elders before 
and I told them I didn't feel comfortable with the idea, but it 
was something new, and to see how they felt. And their reaction 
to it was, they didn't want it. So that's when I reported back 
to Marc Schwartz and said, you know what, not a good idea. I 
have talked to the council members and they agree, so just tell 
Jack that it's not going to fly.
    The Chairman. I'm glad he didn't send an undertaker to 
start taking measurements, very frankly. I was just horrified 
when I found out about it.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman.
    I noticed, Governor Hisa, that your tribe has been very 
generous in its campaign contributions, to the tune, at least, 
of $300,000 at least in one batch. Is that correct?
    Mr. Hisa. Yes.
    Senator McCain. Are tribal members familiar with the Rely 
On Your Beliefs Funds, or perhaps the Missouri Millennium Fund, 
or Restore America PAC or Friends of the Big Sky? The Superior 
California Federal Leadership Fund? It looks to me like your 
tribe has great political interest throughout America.
    Mr. Hisa. Those contributions were recommended by Jack 
Abramoff. According to his statement, he needed to give his 
money to these compacts. He called it hard money and soft money 
to generate the support to get our bill passed.
    The Chairman. If the Senator would yield a moment, I hadn't 
seen that list, but as Senator McCain read some of the names of 
those things, it's like the Association of God-Fearing 
Citizens. Who's that? Did some of these names ring a bell, or 
did you ask, who are these people that we're being asked to 
contribute to?
    Mr. Hisa. No; I never asked.
    The Chairman. You took Abramoff's word at face value that 
it was something good?
    Mr. Hisa. Yes.
    Senator McCain. I'll move on. But this was, there were 
several requests made of the tribe, right, for additional funds 
throughout the campaign cycles, is that right?
    Mr. Schwartz. Yes, sir; Senator, there were additional 
requests that were made after. The list that you were referring 
to was given to the tribe at the moment that Mr. Abramoff made 
his presentation. Those checks were required by Mr. Abramoff, 
directed that the Tribe do those immediately. So there was not 
a lot of time.
    But the requests from him for additional contributions 
continued throughout the process.
    Senator McCain. Not a lot of time for you to investigate 
the Friends of the Big Sky or the Rely On Your Beliefs Fund and 
others, I guess.
    Anyway, in January 2003, after the bill was signed, you 
came to Washington to meet with Mr. Scanlon. Mr. Schwartz, were 
you and the Governor together on that?
    Mr. Schwartz. Yes, sir.
    Senator McCain. What did Mr. Scanlon say to you at that 
time, when you met with him after the bill was signed into law 
without the provision for your tribe? What did he say?
    Mr. Schwartz. Well, and certainly with due respect to 
Senator Dodd, there was a tremendous amount of wringing of 
hands and blaming going around, mainly at the feet of Senator 
Dodd. It was not easy, of course, to try and contact him to 
determine what his feelings were. Obviously had we done that, 
we could have discovered that much sooner.
    Senator McCain. What is your recollection, Governor Hisa?
    Mr. Hisa. The same as Marc is stating. He also said that he 
was still committed to get this language inserted into another 
bill, that the effort had not died, it was just a battle lost 
in the war. But we will move forward on it.
    Senator McCain. Did he mention he would need more money for 
that effort?
    Mr. Hisa. He did mention it at the time, that if we were to 
use, to request the usage of the data base once again that 
there would be an extra charge.
    Senator McCain. Did Mr. Scanlon ever say why Senator Dodd 
was so disappointing?
    Mr. Schwartz. The position of it, Senator, was that, my 
recollection of it was that there had been an agreement between 
Mr. Abramoff and Senator Dodd early in the process. 
Representative Ney came on the scene somewhat later. So the 
concern at that point was that Senator Dodd would not be a 
problem, the problem might be more in the House than it was in 
the Senate.
    So it was a shock at the end, and I certainly with all due 
respect use this term, but it had been greased with Senator 
Dodd, so that was not an issue. And Mr. Scanlon's position was 
that they were going to be dumping lots of information into his 
State.
    Senator McCain. What did Mr. Abramoff tell you about the 
need for the Tigua Tribe to pay to the Capital Athletic 
Foundation?
    Mr. Schwartz. He had brought a proposal to us and 
specifically in an e-mail referring to a request directly from 
Congressman Ney wanting to take a trip to Scotland. That was in 
June of 2002, and that he, during that time, the trip was going 
to be approximately a $50,000 expense, and he wanted the tribe 
to sponsor that trip, since Congressman Ney had asked him that.
    One of the reasons that he said in many e-mails was that 
Congressman Ney was not doing anything else for other Indian 
tribes that he represented or others that he knew of, so we 
were the likely target or the Tiguas were the likely target to 
sponsor the trip.
    Senator McCain. Did you have any conversation with Mr. 
Abramoff after the Senate investigation was announced?
    Mr. Schwartz. Yes; he had called to of course, several 
times during that process, to let us know that there was 
nothing to these articles, that he was blaming it on tribal 
infighting between those tribes that had been identified in the 
early Washington Post articles. And with respect to the Senate 
hearings, he had suggested that maybe you and he had a personal 
issue and that that was why you were calling for the hearings.
    The Chairman. You've got a personal issue now, I would say. 
[Laughter.]
    Senator McCain. Governor, I have many other questions, but 
my colleagues are waiting. I just want to ask you, Governor, 
what's the impact on your tribe, on your tribal members, on the 
tribal council? This must be a devastating kind of thing for 
you. Maybe you could in your own words give us a few words 
about how the impact of this has been on both the tribal 
council and you as their elected Lieutenant Governor and the 
membership of the tribe.
    Mr. Hisa. Well, going back to the closure of the casino, 
that impacted the tribe significantly. Then coming back and 
losing another $4.2 million that could have been used to 
provide more educational opportunities for our people, health 
care or housing be given away, and I don't know if we'll ever 
see it back, it has impacted the tribe even more.
    Our tribal members were disappointed, angry. They don't 
blame the tribal council. They recognize that our efforts at 
the time were for the better benefit of the tribe and there was 
no way of us knowing that Jack Abramoff and Mike Scanlon had 
worked to shut us down at the time.
    So the tribe is in support. They want us to follow through 
and make sure that these gentlemen do not get away with it, if 
gentlemen is the word. So the people are outraged, just as I 
was. My personal feeling, at first I was disappointed with 
myself. But going back and looking at the facts, there's no way 
that I could have known that this was going on.
    So I accepted that and I'm here to work with the committee 
and with any investigation that's here to make sure that these 
men don't get away with it and they don't do it again.
    Senator McCain. Thank you, Mr. Chairman.
    The Chairman. They won't. We will be adjourning soon, but 
that does not mean this issue is going to go away. I certainly 
would recommend to Senator McCain that some of these names that 
are kind of non-descriptive, that when you take this 
investigation back up next year, we might look into, or you 
might look into what was the connection between Mr. Abramoff 
and Mr. Scanlon and some of those groups. Was it another 
feeding process like it was with the school? I'd be interested 
to know that when I'm back in the private sector.
    Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much.
    Mr. Schwartz and Governor Hisa, now that you have seen the 
e-mails that have moved back and forth between Mr. Abramoff and 
Mr. Scanlon and also Mr. Reed. I believe the import of your 
testimony is that you did not know this scheme existed, a 
scheme by which Mr. Scanlon and Mr. Abramoff employed Mr. Reed, 
and together they worked to find ways to accelerate the 
shutdown of the Tigua casino. That was done without your 
knowledge, is that correct?
    Mr. Hisa. Yes, Senator.
    Senator Dorgan. Then following the order to shut down the 
casino, Mr. Abramoff and Mr. Scanlon both approached your 
tribe, saying they would be able to help you reopen the casino?
    Mr. Schwartz. The initial contact was made by Mr. Abramoff 
in scheduling the meeting. Once the meeting was scheduled, then 
he, a day or two before the meeting was to take place, which 
ironically occurred on the very day the casino was going to 
close, that he then told me that Mr. Scanlon was going to be 
coming with him, he was bringing an associate, and identified 
him as Michael Scanlon.
    Senator Dorgan. Was the name Ralph Reed employed in any 
way? I assume it was not employed in any way in representations 
to your tribe.
    Mr. Schwartz.  Mr. Abramoff was extremely vocal about Ralph 
Reed, describing him as a friend of his, that they had come up 
together in various party affiliations and organizations, but 
that he didn't agree with Mr. Reed on a lot of issues, and that 
Mr. Reed was in fact a friend of his of long standing. At one 
point, I believe either during the first or second meeting, he 
acknowledged the fact that he had received a page or an e-mail 
while he was with us from Mr. Reed. But he never disclosed in 
any way, shape or form that they had all been involved in some 
function together previous to our issue.
    Senator Dorgan. Does it surprise you to know that while he 
was working with you he was paying Mr. Reed to help shut down 
your casino?
    Mr. Schwartz. That's probably one of the most disturbing 
details. Yes, it was a complete surprise.
    Senator Dorgan. And do you think, based on any information 
that you have, that Mr. Reed knew that he was also working with 
you to achieve funding to reopen your casino?
    Mr. Schwartz. I don't think I understand your question, I'm 
sorry, Senator.
    Senator Dorgan. Well, we have a partnership here, in 
effect. More than $2 million was paid to Ralph Reed by Abramoff 
and Scanlon, or by one or the other, perhaps both, to help 
accelerate efforts to shut down the casino. The e-mail trail 
suggests contacts with the Texas attorney general, work with 
various pastors and others and that partnership was to 
accelerate the closing down of your casino, and then Mr. 
Abramoff and Mr. Scanlon were attempting to get money from you 
to open the casino backup.
    My question is, does that partnership with Mr. Reed extend 
to the other side, that is, the reopening of the casino?
    Mr. Schwartz. We were not aware of any relationship in any 
discussion that he had. There was a member of the council 
during one of the meetings that had asked that very question, 
how do you reconcile your issues with Mr. Reed. And he said, 
well, we just don't agree, this is Mr. Abramoff saying, we just 
don't agree on all things.
    So he never represented that Mr. Reed was involved with 
this issue in particular, in opening the casino.
    Senator Dorgan. Knowing what you now know, do you and the 
Governor believe that Mr. Abramoff and Mr. Scanlon and Mr. Reed 
perpetrated a fraud on your tribe?
    Mr. Schwartz. I can speak for myself, and I would 
absolutely say that yes, it's obvious from just the limited 
information we've seen here today in the committee's hearing 
and what we've seen since then, I would say that there's no 
doubt there was fraud.
    Senator Dorgan. Also, there is a golfing trip to Scotland 
by private jet. My understanding is that our records disclose 
that trip includes passengers Mr. Scanlon, Mr. Abramoff, 
Representative Ney, and Ralph Reed. Would that suggest to you 
that at least some participants knew most of what was happening 
here?
    Mr. Schwartz. Yes; absolutely, Senator.
    Senator Dorgan. Let me ask you about the e-mails with 
respect to that trip. In June 2002, you received an e-mail 
asking the Tigua Tribe to pay for a trip to Scotland for ``our 
friend.'' Who did you understand the our friend to be?
    Mr. Schwartz. We had a phone conversation previous to that, 
so it referred to Congressman Ney.
    Senator Dorgan. This e-mail also said, we did this for 
another member, you know who, 2 years ago. Do you know to whom 
that was referring?
    Mr. Schwartz. He told me in that same phone call that that 
was Representative Tom DeLay.
    Senator Dorgan. Let me ask a question about the meeting 
that was held. My understanding from your testimony was that 
you held a 2-hour meeting or at least a meeting that went on 
for some while with Representative Ney in his office, is that 
correct?
    Mr. Schwartz. Yes, sir.
    Senator Dorgan. What was the length of that meeting?
    Mr. Schwartz. It was, my recollection it was about 1\1/2\ 
hours. It may have been 2 hours, I'm kind of fuzzy on the time.
    Senator Dorgan. Governor, were you at that meeting?
    Mr. Hisa. Yes; it was 1\1/2\ hours to 1 hour and 45 
minutes.
    Senator Dorgan. My colleagues will recognize, that's a very 
lengthy meeting here on Capitol Hill. We have the attention 
span of gnats. [Laughter.]
    And we pack a lot of meetings into 1 day. I can't remember 
the day when I had a 1\1/2\-hour meeting or a 2-hour meeting. 
So you think it was not, this meeting was not a short meeting, 
you think this meeting was well over 1 hour?
    Mr. Schwartz. Yes, Senator; absolutely.
    Senator Dorgan. Close to 2 hours?
    Mr. Hisa. Yes.
    Mr. Schwartz. Yes, sir.
    Senator Dorgan. You are confident of that?
    Mr. Schwartz. Yes, Senator.
    Senator Dorgan. Let me ask you, what did you discuss at 
that meeting with Congressman Ney? What did you discuss for a 
such lengthy amount of time? That is a very long meeting.
    Mr. Schwartz. He was extremely animated about Mr. Abramoff 
and his ability as a representative lobbyist in the city, how 
they had become friends and acquainted themselves. He discussed 
his district. My recollections were that he did not have access 
or did not have a tremendous amount of Native Americans in his 
district or reservation, I should say, in his district.
    But he had tremendous sympathy for the plight that the 
tribe had gone through and the issues that had occurred. He 
discussed some of the political ramifications of what had 
occurred to the tribe with respect to the Republicans in Texas 
that had done this, filed this lawsuit and taken it to the 
extreme of the closure of the casino.
    And then he spoke for a period, explaining to the tribal 
council representatives that were there the process by which a 
conference committee report is done and how this would work and 
what work remained, etc. Then he took the Lieutenant Governor 
and the council member on a tour of his hearing room.
    Senator Dorgan. So he was giving you assurances that he was 
on board, he was working to solve this problem for you?
    Mr. Schwartz. Absolutely, Senator.
    Senator Dorgan. And Mr. Abramoff and Mr. Scanlon were both 
at that meeting?
    Mr. Schwartz. Mr. Scanlon was not.
    Senator Dorgan. Just Mr. Abramoff?
    Mr. Schwartz. Yes.
    Senator Dorgan. So now you know that accompanying you at 
that meeting, to try to find a way to open your casino, was a 
man who actively worked with Mr. Scanlon and Ralph Reed to 
close your casino.
    Mr. Schwartz. Yes, sir.
    Senator Dorgan. My colleague, Senator Campbell, just made a 
point that I think is really important. These records, these 
memoranda that we have, move in all kinds of directions. And I 
don't know all the facts. All I know is what you're telling us, 
and I for one thank you for being here. It's likely not easy 
for you to come here and testify, because first of all, these 
folks showed great disrespect for you in their communications 
with each other. I'm talking about all of them that I've 
mentioned, great disrespect. It appears to me you were 
defrauded, and I know it's not easy to come to talk about this.
    But in order for this committee to put together the pieces 
of this puzzle and understand what happened, who did it, how 
did they do it and what should the ramifications of that be and 
how do we prevent this from happening again, we need all this 
information. But as Senator Campbell pointed out, although he's 
not going to be with us when we reconvene, that this moves in 
many directions and we ought to follow it to understand it 
completely.
    And let me just say that Senator Campbell and Senator 
Inouye have been extraordinary leaders on this committee for a 
long, long while. Senator Inouye wasn't here when I spoke of 
Senator Campbell's service, but Senator Inouye will now remain 
on the committee but move on as Ranking Member of the Commerce 
Committee. Senator McCain, I know, with his leadership, and I 
certainly with my involvement and I'm sure with Senator 
Conrad's involvement and others, will intend to pursue the 
kinds of things that Senator Campbell mentioned.
    Let me thank both of you for being here today.
    The Chairman. Senator Conrad.
    Senator Conrad. Thank you, Mr. Chairman.
    I'd like to ask Governor Hisa, how much money did you pay 
to Mr. Scanlon?
    Mr. Hisa. $4.2 million.
    Senator Conrad. How much money did you pay to Mr. Abramoff?
    Mr. Hisa. Zero. We have not paid him 1 cent.
    Senator Conrad. You didn't pay any money to Mr. Abramoff. 
What was your understanding of how Mr. Abramoff would be 
compensated?
    Mr. Hisa. After the casino would open, he would help us, 
through the law firm, get a compact through the State for class 
III gaming.
    Senator Conrad. So he would be paid in a future time?
    Mr. Hisa. Yes, sir.
    Senator Conrad. Did you have any understanding that Mr. 
Scanlon would be paying Mr. Abramoff?
    Mr. Hisa. No.
    Senator Conrad. Did Mr. Scanlon ever suggest that he had 
special influence here in Washington, DC as a reason to pay him 
that much money?
    Mr. Hisa. Yes.
    Senator Conrad. In what way did he indicate that he had 
special influence?
    Mr. Hisa. He used to work, I believe, with Tom DeLay.
    Senator Conrad. Did he say that to you?
    Mr. Hisa. Yes; he did.
    Senator Conrad. What representation did he make as to what 
special influence he might have with Mr. DeLay?
    Mr. Hisa. That's all he said, that he had special interest 
and that he would try to convince him to work to our benefit, 
try to get us open. And others as well, and using Tom DeLay's 
credibility to contact and get to other representatives.
    Senator Conrad. Did he indicate that he had special 
influence with anyone else?
    Mr. Hisa. No.
    Senator Conrad. Did Mr. Abramoff ever suggest that he had 
special influence with anyone here in Washington, DC?
    Mr. Hisa. Yes.
    Senator Conrad. He did as well?
    Mr. Hisa. Yes, sir.
    Senator Conrad. Who did he say that he had special 
influence with?
    Mr. Hisa. A majority of people, from Bob Ney all the way to 
the President of the United States of America.
    Senator Conrad. He suggested he had special influence with 
the President of the United States?
    Mr. Hisa. Yes; according to him, the President assigned him 
to staff some of the open slots for the Department of the 
Interior and such. And Jack Abramoff recommended some of the 
individuals that were placed in those positions.
    Senator Conrad. Did he provide other evidence of special 
influence that he had with the President of the United States?
    Mr. Hisa. No.
    Senator Conrad. What representation did he make about 
special influence that he had with Congressman Ney?
    Mr. Hisa. A history of working with him and that he was 
very supportive of Native Americans across the Nation, not just 
the Tiguas.
    Senator Conrad. When you were asked to make a contribution 
to the Capital Athletic Foundation--were you asked to make a 
contribution to the Capital Athletic Foundation?
    Mr. Hisa. Yes.
    Senator Conrad. In what amount were you asked to make a 
contribution?
    Mr. Hisa.  50,000.
    Senator Conrad. $50,000?
    Mr. Hisa. Yes.
    Senator Conrad. What reason was given to you for making a 
contribution in that amount?
    Mr. Hisa. Ney was going to a golfing trip, and there were 
other individuals from Congress going along and Bob Ney needed 
this trip to bring some of these individuals on board.
    Senator Conrad. Did that strike you as possibly illegal?
    Mr. Hisa. No; Jack Abramoff said he had done it before he 
and he had the foundation to justify this trip. There was a 
sporting event and it was an athletic foundation of some sort, 
so he could justify the trip.
    Senator Conrad. Did you ask your legal counsel whether such 
a contribution might be illegal?
    Mr. Hisa. No; I did not.
    Senator Conrad. Did you know that Ralph Reed was going to 
go on that private charter for this golf outing as well?
    Mr. Hisa. No.
    Senator Conrad. Did you know that Ralph Reed was leading 
the effort in Texas to close your casino?
    Mr. Hisa. Yes.
    Senator Conrad. Did you know that Mr. Scanlon was providing 
money to Mr. Reed for that effort?
    Mr. Hisa. No.
    Senator Conrad. When did you find out that Mr. Scanlon was 
providing money to Mr. Reed to close the casino which he then 
promised to try to get reopened?
    Mr. Hisa. When we started working with the investigation 
committee and the e-mails were provided to us.
    Senator Conrad. Do you recall when that was?
    Mr. Hisa. Earlier this year, I would say May of this year, 
March, around that time.
    Senator Conrad. March to May of this year. What was your 
reaction when you learned that you had paid for a golf outing 
for the man who had worked to close your casino?
    Mr. Hisa. Outrage. A rattlesnake will warn you before it 
strikes. We had no warning. They did everything behind our 
back.
    Senator Conrad. Mr. Schwartz, you said, you quoted someone, 
and I jotted down that you indicated that Abramoff said to you, 
no one would find out about the Tiguas this year. Was that Mr. 
Abramoff?
    Mr. Schwartz. Yes, Senator; that was after the initial 
articles had come out in the Washington Post, and he said, you 
know, it was political in nature, mainly involving Senator 
McCain, so no one would know about Tigua, was his statement.
    Senator Conrad. That no one would know about the Tiguas 
this year. That is very unclear to me, why he would have made 
such a statement.
    Mr. Schwartz. The context of it, Senator, is that he was in 
discussions that I had with him at that time over these 
articles, and whether or not the allegations were correct. One 
of the concerns that he had was that the secrecy of his 
representation of the tribe, you know, would be blown by this. 
So I said to him, simply whether or not there was going to be 
disclosure, and that was the context by which he said no one 
will know about Tigua.
    Senator Conrad. This year.
    Mr. Schwartz. When I said that, that conversation took 
place this year.
    Senator Conrad. I see. So there wasn't a timeframe on that?
    Mr. Schwartz. No, sir; and I apologize for the 
misunderstanding.
    Senator Conrad. So he was saying to you no one would find 
out about the Tiguas maybe forever?
    Mr. Schwartz. Correct. That was his inclination.
    Senator Conrad. What led him to that belief? Did he 
indicate a reason why no one would find out?
    Mr. Schwartz. He had stated that his, he was in a 
discussion or a beginning of a battle with his law firm, former 
employer, who represented him, was his ``lawyers.'' So there 
was an attorney-client privilege, he felt, so there would not 
be certain disclosures regarding what had happened with the 
tribe. In the legislative effort, not the fraud. We were still 
not clued in on the fraud at that point.
    Senator Conrad. Did Mr. Scanlon ever indicate to you that 
he had special influence here in Washington, DC?
    Mr. Schwartz. Oh, absolutely.
    Senator Conrad. What was the nature of the special 
influence that he had?
    Mr. Schwartz. He had established himself through his 
involvement as Representative DeLay's former press secretary, I 
believe, and regular kind of go-to guy that he had entrees into 
certain areas, and certainly with the Republican Party and the 
Republican National Committee.
    Senator Conrad. With the Republican National Committee?
    Mr. Schwartz. Yes, sir.
    Senator Conrad. That he had special influence with the 
Republican National Committee and the Republican House 
leadership?
    Mr. Schwartz. Yes, sir.
    Senator Conrad. Did he provide evidence to you of that 
special relationship or that special influence?
    Mr. Schwartz. No, sir; those discussions, he was, so that 
we're properly in context, his responsibility was to create 
this wonderful program. So from that standpoint, there wasn't a 
lot of, how should I say, with respect to the e-mails, chit-
chat time. It was needed to get to work and get this done.
    Senator Conrad. How about Mr. Abramoff? Did he make 
representations to you that he had special influence here in 
Washington, DC?
    Mr. Schwartz. Absolutely.
    Senator Conrad. What was the nature of the special 
influence that he enjoyed here, according to him?
    Mr. Schwartz. As the Lieutenant Governor has said, he had 
spoken quite highly of his association with President Bush's 
transition team back in 2000, where he had led the, been 
involved with the selection of various individuals at the 
Bureau of Indian Affairs, close friendship with the President, 
with Carl Rove. During a visit to his office, there was of 
course all those general pictures that you see, with arms 
around each other, with the House leadership mainly, certainly 
on the Republican side.
    And at the time, because of the leadership in the Senate 
being in the Democratic side, the majority side, he was, he had 
a special relationship with Senator Lott.
    Senator Conrad. Did he have a special relationship with all 
those people?
    Mr. Schwartz. There were others whose names escape me at 
this point. I apologize to all those, I don't mean to diminish 
their importance. But he was the individual.
    Senator Conrad. At any time did you feel, or at what point 
if you did begin to feel that Mr. Scanlon and Mr. Abramoff were 
taking advantage of the tribe?
    Mr. Schwartz. Senator, I have thought about that since the 
first time I was contacted by the committee. I think there was 
certainly a part early this year that led me to believe that 
there might be some issue with them. I had a phone call with 
Mr. Scanlon shortly after the news report came out.
    Senator Conrad. Which news report?
    Mr. Schwartz. The first article where it disclosed, I 
believe it was the Washington Post, that disclosed, it was in 
February I think, of this year. I had a phone call with Mr. 
Scanlon and there were some things that he said that in 
hindsight might have been the first crack, so to speak, in the 
scheme, the first opportunity to see through it, I think as I 
look back. They were just references that he made to, we'll 
certainly have to stand down for a little while, this may not 
blow over.
    And you would assume that somebody who had been simply 
maligned in a newspaper article would not be so concerned about 
the ramifications long term of that article. I think in 
retrospect, in looking back, hindsight, that may have been the 
first time that I suspect that there might be something 
untoward.
    Senator Conrad. Let me ask you this, and I'm right at the 
end, Mr. Chairman.
    But I have a copy of an e-mail that you received, I think 
all members of the Committee, I'm sure all members of the 
committee do, from Mr. Abramoff dated February 25, 2002, 
responding to some newspaper articles that you sent via e-mail 
on the situation with the casino. His reply to your message 
stated, and I quote:

    If this came out of your office, please tell them never.

    In capital letters.

    Never to include my name on a list like this. Our presence 
in this deal must be secret, as we discussed. Please call me so 
we can discuss a spin on this, since some of the people on this 
list are real dangerous, knowing I am involved.

    This occurred in February 2002. Didn't it strike you that 
there is something wrong when Mr. Abramoff is telling you the 
relationship has got to be secret?
    Mr. Schwartz. Thank you for the question. No, it did not 
strike me as anything necessarily wrong, and let me share with 
you why. We throughout the entire process, we had looked into 
obviously the Greenberg firm, and they were well known, highly 
regarded and highly respected, Mr. Abramoff certainly, being 
referred to in various publications as one of the top 
lobbyists.
    We had had communication directly with his office and his 
office staff at that point. We had spoken to various members of 
the firm, other than Mr. Abramoff. So there was, if there was 
an issue, we would have assumed that this might, I think in 
your context, if it had been quiet and our conversations only 
involved directly to Mr. Abramoff and back and there was no 
other involvement, then I could see where that could be drawn.
    But in this case, there was multiple contacts with his 
staff with various other lawyers at Greenberg Traurig and at 
early dates. So the concept that we felt like, that certainly 
the law firm had approved it, knew about it and he was involved 
with it. So the secrecy angle, if that's what was necessary for 
the terrible hardship that the Tribe was going through through 
its closed casino to be rectified, it was certainly a price 
that I was willing to pay at the time.
    Senator Conrad. Over what period of time did you pay $4.2 
million to Mr. Scanlon? Over how long a period?
    Mr. Hisa. All in 2001, from 2002--I'm sorry.
    Senator Conrad. All in 2002?
    Mr. Hisa. March through I'd say June. It was three invoices 
sent, I believe each one was divided in thirds and that's the 
way we paid it. When Scanlon would bill us, we would send a 
payment.
    Senator Conrad. In a 3-month period, you paid $4.2 million?
    Mr. Hisa. Yes; I believe so. Yes.
    Senator Conrad. Didn't that strike you as wildly 
exorbitant?
    Mr. Hisa. No.
    Senator Conrad. Why not? Had you ever paid any other firm 
money of that--in those amounts?
    Mr. Hisa. We had not paid a firm, we paid Michael Scanlon's 
company. But it was presented to us that this money needed to 
be paid so that our effort could move. When Operation Open 
Doors was presented to us, there was a timeline that by, I 
believe mid-July that the bill would pass and we would be back 
in operations. That's why everything needed to move so fast.
    Senator Conrad. How much money were you losing a month 
because the casino was closed?
    Mr. Hisa. That year, a month, I don't have those numbers 
with me. But it was a great amount of money.
    Senator Conrad. Can you give us some ballpark estimate?
    Mr. Hisa. I believe for the year 2002, after the casino 
closed, we still tried to keep some people employed. And after 
this effort was presented to us and we were going to open, we 
were going to have a second layoff, but we decided to keep the 
people employed. The reason that we were convinced we hoped 
that the casino would open, we kept these people employed. A 
number of, I believe $2 million, was lost that year.
    Senator Conrad. I thank the witnesses.
    The Chairman. I have one more before we move on to Mr. 
Scanlon.
    Senator Conrad. Go ahead, sir.
    Mr. Hisa. Senator, for the record, the golf trip, the tribe 
did not fund the $50,000.
    Mr. Schwartz. It was just requested of them.
    Mr. Hisa. Yes; it was requested.
    Senator Conrad. I see. You didn't provide the money.
    Mr. Hisa. Yes.
    Senator McCain. Mr. Schwartz, I just have one additional 
question.
    After the Washington Post article came out, Mr. Abramoff 
contacted you?
    Mr. Schwartz. Yes, sir.
    Senator McCain. What was the conversation?
    Mr. Schwartz. He of course wanted to know if I had seen the 
article, and I told him that I had.
    Senator McCain. And then he went on to discuss with you 
about cooperation or non-cooperation with the committee?
    Mr. Schwartz. Senator, that came prior, that came after, I 
believe, the second article came out. And the question was at 
that point internally, in meetings with the tribe, it was 
decided that we would obviously wait and sit back and we were 
not going to have any more contact with him.
    At that point he had said that if the tribe was contacted 
by members of investigative counsel for this committee or 
others that I believe his words were, they didn't have to 
cooperate. They didn't have to say anything. And he 
subsequently sent me an e-mail with his attorneys and asked 
that I forward that directly to the tribal attorneys so that if 
they were contacted they would at least call his lawyers before 
speaking with committee counsel or other investigators.
    Senator McCain. So just to clarify for the record, when he 
said they don't have to talk to the committee investigators or 
the committee, they were referring to tribal council?
    Mr. Schwartz. He was referring to the tribe. He was 
asserting, I would assume what he was attempting to do was 
assert or have the tribe assert some sort of sovereignty.
    Senator McCain. Thank you, Mr. Chairman.
    The Chairman. One last question. Did I understand you, Mr. 
Schwartz, to say that Mr. Scanlon contracted with the tribe to 
create a data base?
    Mr. Schwartz. Yes, sir.
    The Chairman. Do you have that?
    Mr. Schwartz. Well, a massive, and there were several 
components to the program, the data base being one of these key 
customized.
    The Chairman. Did he do that? Do you have that?
    Mr. Schwartz. We have seen one this year that was sent to 
the tribe at our request. And so it is, Senator, it is a data 
base.
    Senator Conrad. Mr. Chairman, might I ask one other 
question that has come up as a result of the answers? Governor 
Hisa, you just testified that the tribe, your tribe, did not 
pay for the golf outing. You were requested to pay for it, but 
you did not pay for it.
    Mr. Hisa. Yes.
    Senator Conrad. Do you know who did pay for it?
    Mr. Hisa. I think in total the golfing trip was going to be 
$100,000, my understanding is that the Mississippi Choctaw paid 
$50,000 and the Alabama Couchata paid another $50,000.
    Senator Conrad. Thank you.
    The Chairman. Thank you. We appreciate your being here. The 
committee may have further questions, and they may submit them 
in writing, and if they do, we'd appreciate your response to 
it.
    Mr. Schwartz. Thank you very much.
    The Chairman. Thank you once again.
    Mr. Hisa. Thank you.
    The Chairman. The committee will now move to Mr. Michael 
Scanlon, if he would come forward.
    Mr. Scanlon, if you would remain standing for 1 moment. Mr. 
Scanlon, do you swear to tell the truth, the whole truth and 
nothing but the truth, so help you, God?
    Mr. Scanlon. I do.
    The Chairman. Please be seated.
    I would also remind you, you have counsel with you, I 
assume the two people that are with you?
    Mr. Scanlon. Yes, sir.
    The Chairman. I would remind you that they are free to 
speak to you at any time but not free to speak to any member of 
the committee unless the committee asks them a specific 
question.
    Mr. Scanlon. Certainly.
    The Chairman. If you would like to proceed with a 
statement.
    Mr. Scanlon. No, sir; no, Senator.
    The Chairman. You have no statement?
    Mr. Scanlon. No, Senator.
    The Chairman. Well, then, we'll just proceed with some 
questions. And we'll take turns with the questions, too.
    Mr. Scanlon, let me read a couple of e-mail exchanges 
between you and Mr. Abramoff that have been presented to us. 
The day before Mr. Abramoff arranged for a presentation to the 
Tigua Tribe, he told you to ``fire up the jet, baby, we're 
going to El Paso.'' You responded by telling him, ``I want all 
their money.'' Whose money were you referring to?
    Mr. Scanlon. Unfortunately, Senator, upon the advice of 
counsel, I must decline that question based upon my rights 
under the Fifth Amendment.
    The Chairman. When Mr. Schwartz raised some issues with Mr. 
Abramoff, your response was, let me apologize, as Senator 
McCain did about the language, ``Is he happy? Where's our f-ing 
money?'' And then in the same e-mail exchange, you told Mr. 
Abramoff, ``The check came in and was way short, about $900,000 
short.'' Was that the Tigua money you were referring to?
    Mr. Scanlon. Upon the advice of counsel, I must decline to 
answer that question based upon my rights under the Fifth 
Amendment.
    The Chairman. Mr. Scanlon, Mr. Abramoff spoke often of his 
affection for his Indian clients, even though he used some very 
derogatory terms for them. Do you share that same kind of 
affection that he had for Indians?
    Mr. Scanlon. Senator, upon advice of my counsel, I must 
decline to answer that question based upon my Fifth Amendment 
privileges.
    The Chairman. I see. And do you intend to invoke that 
privilege throughout all the questioning?
    Mr. Scanlon. Yes, Senator.
    The Chairman. I'd like to yield to Senator McCain.
    Senator McCain. Mr. Scanlon, I find your behavior bizarre, 
throughout this, not only incredible in the way that you 
treated Native Americans but also the way you have treated this 
committee, refusing to come forward with us, us having to serve 
subpoena and then have a U.S. Marshal spend taxpayers' money 
waiting for you so that they can deliver a subpoena.
    Do you have any remorse, Mr. Scanlon, about this treatment 
of these innocent people that you and your partner and perhaps 
others took the money that could have been used for health 
care, for education, for the elderly? Do you have any remorse, 
Mr. Scanlon?
    Mr. Scanlon. Unfortunately at this time, Senator, I must 
decline to answer that question based upon my Fifth Amendment 
privileges. Hopefully in the future I will have an opportunity 
to do so.
    Senator McCain. No further questions, Mr. Chairman.
    The Chairman. Let me ask one more before I yield to Senator 
Conrad. Mr. Scanlon, in reading all the testimony, and all the 
e-mails, it strikes me that you were working both sides of the 
street, if I understand this thing. You managed to not only con 
the tribe but con Mr. Abramoff. And many people around here 
think he was very good at doing that, too.
    You were responsible for lining up political supporters to 
assist the Tigua Tribe in reopening its casino. You told Mr. 
Abramoff and the tribal council you had the Senate's support. 
You told them, ``All the major players on the election reform 
package have given their support on our issue.'' In fact, and 
this is your e-mail, in fact, numerous witnesses have told the 
committee that nothing you told Mr. Abramoff and the tribe 
about Senate support was accurate. When Mr. Abramoff found out 
that you did not have the Senate's support you had bragged 
about, he pleaded with you, in an e-mail, ``please call me.'' 
He later demanded that you ``get our money back from the person 
who was supposed to take care of arranging Senate support.''
    When did you come up with this scheme to not only con the 
tribe but con your partner?
    Mr. Scanlon. Upon advice of counsel, I must decline to 
answer that question, based upon my rights under the Fifth 
Amendment.
    The Chairman. I understand. I have no further questions. 
Senator Conrad.
    Senator Conrad. Did you receive $4.2 million from the Tigua 
Tribe?
    Mr. Scanlon. Upon advice of counsel, I must decline to 
answer that question at this time, based upon my rights under 
the Fifth Amendment.
    Senator Conrad. Did you suggest to the Tigua Tribe or their 
representatives that you had special influence with Congressman 
DeLay here in Washington, DC?
    Mr. Scanlon. Upon advice of counsel, I must decline to 
answer that question, based upon my rights under the Fifth 
Amendment.
    Senator Conrad. Well, it's clear that we're going to get, 
as the witness has already indicated, that answer repeatedly. I 
don't understand why you can't say if you do feel remorse that 
you have that feeling here today. I don't know how that would 
possibly jeopardize your legal position.
    But--I don't know. I don't know how you go to sleep at 
night, really. I would hope your conscience bothers you.
    I thank the Chair.
    The Chairman. Thank you. I have no further questions. But 
just speaking as an enrolled member of an Indian tribe, not the 
chairman of this committee, I have to tell you that for 400 
years people have been cheating Indians in this country, so 
you're not the first one, Mr. Scanlon. It's just a shame that 
in this enlightened day that you have added a new dimension to 
a shameful legacy of what's happened to American Indians. 
You're the problem, buddy, of what's happened to American 
Indians.
    This committee is adjourned.
    [Applause.]
    [Whereupon, at 4:45 p.m., the committee was adjourned.]
=======================================================================


                            A P P E N D I X

                              ----------                              


              Additional Material Submitted for the Record

=======================================================================


 Prepared Statement of Hon. Ben Nighthorse Campbell, U.S. Senator from 
         Colorado, Chairman, Senate Committee on Indian Affairs

    Good afternoon, the committee will come to order. Today's hearing 
is the second in a series of hearings into allegations of improper 
business, lobbying and financial transactions by Jack Abramoff, Michael 
Scanlon, and their various entities on behalf of Indian tribes.
    At the committee's first hearing on September 29, the evidence and 
testimony showed that under a variety of arrangements six tribes paid 
Mr. Scanlon more than $66 million, and that Scanlon, in turn, paid 
Abramoff more than $21 million.
    The September hearing also revealed that Scanlon and Abramoff 
assisted in the campaigns and elections of tribal council members at 
two of the tribes, did not charge for their services, and after the 
elections obtained multimillion dollar contracts from the same tribal 
councils they helped elect.
    Finally, the hearing revealed that, while they were being paid tens 
of millions of dollars, Abramoff and Scanlon held their tribal clients 
in very low regard and referred to them as ``monkeys,'' 
``troglodytes,'' ``morons,'' and worse.
    While the hearing in September disclosed very offensive evidence, 
our investigation has continued to uncover other distasteful and 
shocking details.
    Today's hearing will focus on the Tigua Tribe of Texas. The story 
of Abramoff, Scanlon and the Tiguas looks to me like nothing short of a 
classic shakedown operation:
    These men, working with allies, persuaded the State of Texas to 
force the closure of the Tribe's casino, located in El Paso. Having 
achieved this interim step of shutting down the tribe's casino, 
Abramoff and Scanlon then approached the Tiguas, offering their 
services to assist the Tribe in reopening its casino. For their 
services, they charged the Tribe the tidy sum of $4.2 million.
    Documents uncovered by committee investigators shed more light on 
the Tiguas. To assist the Members, as well as the general public, 
committee staff has prepared those documents most pertinent to the 
matters covered by this hearing.
    I now offer these documents and move that they be entered into the 
record of this hearing.
    The documents demonstrate the extent of Scanlon's and Abramoff's 
cynical manipulation of the Tigua Tribe. I'd like to discuss a few of 
them in detail:
    In 2002, Abramoff first offered to help the Tiguas ``on a pro bono 
basis,'' provided the tribe hired him in the future as lobbyist for 
between $125,000 and $175,000 per month. That's some ``pro bono'' work 
isn't it?
    Then, just last year, Abramoff approached the Tiguas with another 
scheme that would have benefited the Eshkol Academy, the Jewish boys 
school he founded located just outside Washington, DC. After Mr. 
Abramoff declined tribal requests that he be paid a retainer, Mr. 
Abramoff recommended that, at no cost to the tribe, the Academy would 
buy-up term life insurance on particularly elderly tribal members, and 
the Academy would be named as their death beneficiaries.
    In effect, Abramoff asked to be paid by putting prices on the lives 
of tribal elders. We have witnessed a lot of unseemly and unethical, 
things during the course of this investigation, but asking a Tribe to 
pay a lobbyist with death benefits may be the most distasteful thing I 
have heard of yet.
    Writing to one of his key allies in the effort to shut down the 
Tiguas' casino, Abramoff references the tribe's donations to Democrats, 
saying ``I wish those moronic Tiguas were smarter in their political 
contributions. I'd love to get our mitts on that moolah! Oh well, 
stupid folks get wiped out.'' Stupid folks get wiped out. That about 
says it all, doesn't it, about the way Mr. Abramoff and Mr. Scanlon 
felt about their clients?
    Finally, on the day the Tigua Tribe voted on their contract, Mr. 
Abramoff and Mr. Scanlon exchanged emails regarding a newspaper story 
about some 450 Indian employees at the tribe's recently shuttered 
casino being thrown out of work. This group of workers included an 
elderly woman who worried that she would not find another job. Mr. 
Scanlon was evidently excited that the article was on the front page 
``while they [the Tiguas] will be voting on our plan.'' Mr. Abramoff's 
reply: ``Is life great or what!!!'' I am not naive and have been around 
this town for almost a quarter of a century, but it strikes me as more 
than cynical that, rather than being concerned about the misfortunes of 
the tribe and its members, they were soliciting for business, Abramoff 
and Scanlon seemed happy almost gloating about the prospect that the 
Tiguas were having their casino closed and hundreds of employees thrown 
out of work, all because they were slated to make millions off the 
tribe.
    There is another element to the Tigua story that I feel compelled 
to address: it appears that Mr. Abramoff and Mr. Scanlon used the good 
name and reputation of our fellow Members of Congress in their attempts 
to part the tribe from its money.
    You will hear today from witnesses, and read from documents, 
indicating that Mr. Abramoff and Mr. Scanlon contended that Senator 
Dodd and Congressman Ney were enlisted to spearhead efforts in Congress 
to provide a legislative fix to the Tiguas problems.
    From what we know, that was not the case. Senator Dodd evidently 
knew nothing about the proposed legislative fix; never supported it; 
and, in fact, we are told that when the idea was proposed to his senior 
staff, it was rejected at least three times. Congressman Ney agreed to 
support a legislative fix after being told by Mr. Abramoff that Senator 
Dodd wanted the language.
    In short, the evidence demonstrates that Mr. Scanlon and Mr. 
Abramoff told their clients that Senator Dodd and Congressman Ney would 
push their proposal, knowing full well that was not the case, in an 
effort to further persuade the Tigua Tribe into continuing to pay them 
millions of dollars.
    Today the committee will hear from Carlos Hisa, the Tigua Tribe's 
Lieutenant Governor, and Mark Schwartz, a consultant who essentially 
was the point person for contact between the Tiguas and Abramoff and 
Scanlon.
    I would be remiss if I did not mention a few other, relevant, 
items:
    Those of you who watched or listened to the September 29 hearing 
may recall that the committee repeatedly sought the presence of Mr. 
Scanlon, and had been obliged to issue a number of subpoenas to that 
effect. At first, Mr. Scanlon's attorney declined to accept the 
subpoena, even though he had accepted other committee subpoenas for Mr. 
Scanlon and the various corporate entities he owned or operated.
    At the time, I said that the U.S. Marshals had been asked to find 
and serve Mr. Scanlon, and that he would surface at some point and come 
before the committee. That time has come. The Marshals found Mr. 
Scanlon and served him, and he will appear here today.
    There is another person who has flouted the authority of this 
committee, and that person is Jon Van Horne, who was served with a 
document subpoena that was due on October 5. To date, the committee has 
not received the documents called for under the subpoena nor an 
explanation for his non-compliance.
    I may be leaving as chairman, but Mr. Van Horne should know that 
neither this committee nor this investigation are going to end on 
December 31.
    As was the case with Mr. Scanlon, sooner or later Mr. Van Horne 
will be called to account.
                                 ______
                                 

   Prepared Statement of Hon. Christopher J. Dodd, U.S. Senator from 
                              Connecticut

    I don't know Jack Abramoff or Mike Scanlon. So any representations 
they might have made without my knowledge regarding me and efforts at 
recognition of the Tigua Tribe are categorically wrong and false. They 
never contacted me on recognition of the Tigua Tribe and I never 
represented--either to them or Congressman Ney--that I would in any 
manner work to legislatively recognize the Tigua Tribe. Congressman 
Ney's staff and Lottie Shackelford did approach my office during the 
waning hours of negotiations over the HAVA legislation to inquire 
whether recognition provisions for the Tigua Tribe could be included in 
the bill. The suggestion was summarily rejected. The fact that the HAVA 
bill never included any legislative language regarding this tribe 
should confirm that fact in no uncertain fashion.
    I am particularly proud of the HAVA legislation and angry that 
there were those who were seeking to use it to advance their own 
interests. I am also--needless to say--angry that unbeknownst to me 
people were trading on my good name, especially since I have 
aggressively fought for years to reform the recognition process so that 
the criteria at the BIA is based upon facts and not politics. I intend 
to continue to push for those reforms, especially since this activity 
clearly highlights further problems with the recognition process.
    I had no involvement whatsoever in any effort to recognize this 
tribe. Mr. Abramoff and his associates need to be held accountable for 
their duplicitous, greedy, and underhanded actions.
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