[Senate Hearing 109-135]
[From the U.S. Government Publishing Office]



                                                 S. Hrg. 109-135, Pt. 1
 
                        TRIBAL LOBBYING MATTERS

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


                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON

       OVERSIGHT HEARING REGARDING TRIBAL LOBBYING MATTERS, ET AL

                               __________

                             JUNE 22, 2005

                             WASHINGTON, DC

                               __________

                                 PART 1

                               __________


















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                      COMMITTEE ON INDIAN AFFAIRS

                     JOHN McCAIN, Arizona, Chairman

              BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
CRAIG THOMAS, Wyoming                KENT CONRAD, North Dakota
GORDON SMITH, Oregon                 DANIEL K. AKAKA, Hawaii
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
MICHAEL D. CRAPO, Idaho              MARIA CANTWELL, Washington
RICHARD BURR, North Carolina
TOM COBURN, M.D., Oklahoma

                 Jeanne Bumpus, Majority Staff Director
                Sara G. Garland, Minority Staff Director

                                  (ii)
















                            C O N T E N T S

                              ----------                              
                                                                   Page
Statements:
    Akaka, Hon. Daniel K., U.S. Senator from Hawaii..............     9
    Benn, Charlie, director of administration, Office of the 
      Chief, Mississippi Band of Choctaw Indians.................     9
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice 
      chairman, Committee on Indian Affairs......................     6
    Grosh, David, former director, American International Center.    33
    Halpern, Gail, former tax preparer, adviser to Jack Abramoff.    31
    Kilgore, Donald, attorney general, Mississippi Band of 
      Choctaw Indians............................................    14
    Mann, Brian, former director, American International Center..    33
    McCain, Hon. John, U.S. Senator from Arizona, chairman, 
      Committee on Indian Affairs................................     1
    Ridnour, Amy, president, National Center for Public Policy 
      Research...................................................    29
    Ring, Kevin, former Abramoff associate.......................    26
    Rogers, Nell, planner, Mississippi Band of Choctaw Indians...    11
    Stetter, Aaron, former associate, Capitol Campaign Strategies    33
    Vasell, Shawn, former Abramoff associate.....................    26

                                Appendix

Prepared statements:
    Halpern, Gail................................................    51
    Martin, Phillip, chief, Mississippi Band of Choctaw Indians..    52
    Ridnour, Amy.................................................    59
Additional material submitted for the record:
    Referenced material..........................................    63
    Letter from Chairman McCain to Kevin Ring c/o Richard Hibey..   355
    Letter from Richard Hibey on behalf of Kevin Ring to Chairman 
      McCain.....................................................   356
    Letter from Bryan D. Parker to Richard Hibey.................   357
    Letter from Richard Hibey to Bryan D. Parker.................   358



















                        TRIBAL LOBBYING MATTERS

                              ----------                              


                        WEDNESDAY, JUNE 22, 2005


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:44 a.m. in room 
216 Senate Hart Building, Hon. John McCain (chairman of the 
committee), presiding.
    Present: Senators McCain, Akaka, Dorgan, Inouye, and 
Thomas.

   STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. Good morning.
    Last February, the committee launched an investigation in 
to allegations of misconduct made by six Indian tribes against 
their former lobbyist Jack Abramoff and former political 
consultant Michael Scanlon. Later in the year, the committee 
held two hearings examining the duo's representation of the 
Saginaw Chippewa Indian Tribe of Michigan, the Agua Caliente 
Band of Cahuilla Indians of Palm Springs and the Tigua Tribe of 
El Paso.
    Among other things, the committee determined that Mr. 
Scanlon's companies collected at least $66 million from the six 
tribes and secretly paid Mr. Abramoff almost $22 million from 
that amount.
    Today's hearing is the third in this series of hearings. 
The committee is pleased to have with us representatives of the 
Mississippi Band of Choctaw Indians, Nell Rogers who was the 
tribe's primary contact with Jack Abramoff, Michael Scanlon, 
and Donald Kilgore, the tribe's attorney general who is 
presently examining the full extent of the tribe's injuries.
    Also attending is Chief Martin's personal representative, 
Charlie Ben, the director of administration in the Office of 
the Chief. Chief Martin and I met in my office just weeks ago 
to discuss this hearing. Given the knowledge and candor of Ms. 
Rogers and Mr. Kilgore, the committee concluded that Chief 
Martin's presence would not be necessary. The committee 
nevertheless appreciates Chief Martin's graciousness in sending 
his personal representative here today.
    During our meeting, Chief Martin shared with me the rumors 
and misinformation that persists about the committee's 
investigation. Let me reiterate the focus of the committee's 
investigation and today's hearing. The committee's 
investigation is and always has been directed at the 
allegations of misconduct made by a number of tribes against 
their former lobbyists and political consultants and the 
consequent harm to the tribes. This investigation has never 
been an attack on tribal sovereignty nor an assault on the 
tribe's legitimate participation in our great democracy.
    This particular hearing is not aimed at Chief Martin, his 
administration or the tribe. There have been no allegations of 
wrongdoing made against them, nor have we seen any evidence of 
such wrongdoing.
    With that in mind, I thank Chief Martin for the Mississippi 
Choctaw's complete and continuing cooperation in the 
committee's investigation. During our collaborations, the tribe 
has raised concerns about public revelation of certain matters 
it deems protected by the First Amendment.
    Sensitive to the tribe's concern, whether couched in 
constitutional terms or not, the committee and the tribe have 
successfully worked together to ensure that the committee has 
full access to pertinent information, without needlessly 
disclosing information potentially damaging to the tribe. This 
is a commitment I ask my colleagues to honor and respect, and 
one which I intend to uphold as chairman.
    From our first hearing emerged the utter contempt that Mr. 
Abramoff and Mr. Scanlon held for their tribal clients. In the 
second, Mr. Abramoff's and Mr. Scanlon's insatiable greed came 
to the fore. Today's hearing is about more than contempt; even 
more than greed. It is simply and sadly a tale of betrayal. 
When that betrayal began, exactly when and why, we do not and 
may not ever know. What we do know is that Mr. Abramoff 
betrayed a longstanding client, betrayed his colleagues, 
betrayed his friends.
    Of all his tribal representations, the Mississippi Choctaw 
was Abramoff's longest. As far back as 1995, the Mississippi 
Choctaw hired Mr. Abramoff while at Preston Gates to represent 
their interests on Capitol Hill. By all accounts, Mr. Abramoff 
and his team discharged their duties ably and with great 
success.
    When Mr. Abramoff and his team left Preston Gates for 
Greenberg Traurig at the end of 2000, the tribe moved their 
account with him. Over the preceding 5 years, the tribe, and 
more particularly Chief Martin and his aides, had grown to 
trust Jack Abramoff and his team. Little did they know that 
that trust would soon be abused.
    Over the next 3 years, it appears that Mr. Abramoff 
separately and in concert with Mr. Scanlon and others defrauded 
the tribe in three ways. The first is not new to this story. 
The previous hearings revealed the secret partnership shared by 
Mr. Abramoff and Mr. Scanlon and the artificially inflated 
prices they obtained under false pretenses. The second and 
third ways have not yet been examined. These are the use of tax 
exempt organizations to effect their scheme, and the fraudulent 
billing of fees and expenses by Jack Abramoff and his team at 
Greenberg Traurig.
    According to witnesses, Mr. Abramoff introduced the tribe 
to Mr. Scanlon and recommended it hire him in late 2001. The 
two presented Mr. Scanlon as an independent operator. Never did 
they confess their secret partnership to the tribe. Never did 
they reveal that together they set prices to account for Mr. 
Abramoff's stake in the profits. Never did they even hint that 
the two devoted a small fraction of the payments to the uses 
intended by the tribe, pocketing the rest.
    Until last year, the tribe had no reason to question the 
man that had represented and advised them for years. At all 
times the tribe understood and expected that Mr. Abramoff and 
Mr. Scanlon were working in their best interests. Even today, 
the tribe could not have envisioned the betrayal it suffered at 
their hands.
    How big was that betrayal? According to a January 8, 2002 
e-mail from Mr. Abramoff to Mr. Scanlon, the two had charged 
the Mississippi Choctaw $7.7 million for projects in 2001. Of 
that amount, Mr. Scanlon spent $1.2 million for the efforts. He 
and Mr. Abramoff split an astounding $6.5 million.
    Not content with these astronomical sums, Mr. Abramoff and 
Mr. Scanlon conspired for more. In a November 4, 2002 e-mail, 
Mr. Scanlon asked Mr. Abramoff how he should seek more money 
from the tribe's legislative liaison Nell Rogers:

    Last time you said to me to just tell her that we are 
spending our own money to get it done and we are going deep 
into the hole.

    Mr. Abramoff replied:

    I think you should call her and tell her that we have 
turned the corner, but you are pouring it on to make sure we 
win. Tell her as of now you are finally willing to say that we 
will win this, but laughingly say, I do not know how I am going 
to get back all the money I had to dump into this.

    This, of course, was untrue.
    Since our first hearing, Mr. Abramoff and Mr. Scanlon have 
suggested to the tribes that the two were not partners and that 
the sums Mr. Scanlon paid Mr. Abramoff were merely referral 
fees. That explanation strains credulity. Not only did Mr. 
Scanlon pay Mr. Abramoff one-half his company's profits, 
conspire with him to set prices and refer to him as a partner, 
we now know that Mr. Abramoff was prepared to claim to 
prospective financiers on another venture that, ``2000 was a 
business transition year where I was building CCS.'' CCS, of 
course, was Capitol Campaign Strategies, a company owned and 
operated by Mr. Scanlon.
    Last year, the committee reported that Mr. Abramoff's and 
Mr. Scanlon's partnership apparently commenced in June 2001. It 
appears that their scam actually started earlier. It apparently 
began with payments to the American International Center, the 
self-styled international think tank in Rehoboth Beach, DE that 
was Greenberg Traurig's fifth largest lobbying client in 2002, 
paying $840,000 in fees to the firm.
    With us today are the center's former directors, Brian Mann 
and David Grosh. These two gentlemen will hopefully be able to 
educate us on the nature and scope of the American 
International Center's business. I suspect both men will be 
surprised to learn that Mr. Scanlon and Mr. Abramoff used the 
center to carryout their allegedly fraudulent scheme.
    As an example of this, in a May 2, 2001 e-mail, Mr. 
Abramoff informed Mr. Scanlon that the Mississippi Choctaw were 
about to pay money into the American International Center. 
According to Mr. Abramoff:

    I am going to try to get us $175,000, $100,000 to Ralph, 
$25,000 to contribution, $5,000 immediately to the Conservative 
Caucus, the rest, give me $5,000.

    Ultimately in April 2003, the AIC paid Mr. Abramoff's 
company, Kaygold, almost $1 million. Their ``gimme five'' 
scheme seems to have begun with a modest $50,000, as we know. 
It would soon rocket into millions.
    Based on the evidence thus far, the Mississippi Choctaw 
paid approximately $15 million directly to Mr. Scanlon's 
companies and Mr. Scanlon paid Mr. Abramoff more than $5 
million from those funds.
    Unfortunately, the alleged fraud perpetrated against the 
tribe does not end there. In 2002, Mr. Abramoff and Mr. Scanlon 
successfully employed other vehicles to extract another $2 
million from the tribe. Apparently at Mr. Scanlon's direction, 
the tribe paid $1 million into the Capital Athletic Foundation, 
Jack Abramoff's personal charitable foundation. The tribe 
intended and understood that the $1 million would be 
distributed to various grassroots organization to advance the 
tribe's legislative interests. At all times relevant, the tribe 
understood that the foundation's sole function was a conduit of 
money, never a legitimate charity.
    The tribe neither intended nor authorized its money to be 
used as a charitable contribution to the foundation. It 
certainly never agreed to the uses that Mr. Abramoff ultimately 
put those funds. To what uses did Mr. Abramoff and his 
foundation put the money received from the Mississippi Choctaw 
and other donors in 2002? According to the foundation's tax and 
accounting records, nearly 80 percent of the funds went to the 
Eshkol Academy, the all-boys Jewish school established by Jack 
Abramoff. The foundation also paid a monthly stipend and Jeep 
payments to Mr. Abramoff's high school friend living in the 
Israeli West Bank who conducted sniper workshops for members of 
the Israeli defense force and others.
    As Mr. Abramoff tried to square these payments with the 
charitable mission of the foundation, according to Mr. 
Abramoff's secretary, his friend suggested that he could write, 
``some kind of letter with his sniper workshop logo and 
letterhead.'' It is an ``educational'' entity of sorts. Mr. 
Abramoff could only respond, ``No, don't do that. I don't want 
sniper letterhead.''
    Based on evidence examined by the committee, Mr. Abramoff 
adjusted the transactional structure on the books to continue, 
in the words of his tax planner, ``the Jeep payments, as well 
as all the other military expenses that do not look good on the 
foundation's books.''
    His cohort in Israel did so by establishing a bank account 
in the name of a school that apparently existed only on paper. 
Whether the substance as opposed to the form of the transaction 
comports with our tax laws will likely be of interest to the 
IRS.
    Interestingly, in 2002 the foundation listed as 
beneficiaries of its largest the Alexandria Police Youth Camp 
Foundation, Boy Scouts of America, YMCA of Metropolitan 
Washington, and other legitimate organizations. Yet 
cumulatively, those organizations received only $7,000 in 
donations that year, a sum that pales in comparison to what 
each of the three largest recipients received individually. In 
fact, the listed organizations together received less than 1 
percent of the money spent.
    Before its website was taken out, Mr. Abramoff's foundation 
listed its mission as fostering character development through 
sportsmanship, which it defined as:

    Ethical behavior both on and off the playing field, both in 
athletics and in business, both as a youth and as an adult.

    Given what we have learned over the past year and what we 
will hear today, that mission statement rings hollow.
    More betrayals were to come. In October 2002, Mr. Abramoff 
and Mr. Scanlon successfully defrauded the tribe of another $1 
million. To accomplish this, Jack Abramoff betrayed not just 
the tribe, but also two long-time friends and violated his 
fiduciary duty to the non-profit organization on whose board he 
sat. The process was two-fold. On the top end, Mr. Abramoff 
directed the tribe to pay $1 million into the National Center 
for Public Policy Research, upon whose board he sat and whose 
executive director he knew for over 20 years.
    To induce the tribe in to making the payment, he told them 
that the money would be used for their grassroots activities, 
activities which he knew the center could not and would not 
undertake either on its own or through another. To the center, 
Mr. Abramoff explained that part of the money was a donation 
ultimately destined for the Capital Athletic Foundation and the 
rest was intended for a huge educational effort the tribe was 
undertaking to educate the public on the benefits of Indian 
gaming and the distinction between Indian and non-Indian 
gaming. The center understood it would participate in that 
educational effort.
    On October 10, 2002, the center provided Mr. Abramoff with 
an invoice for $1 million for, ``contribution to the National 
Center for Educational and Research Programs and Activities.'' 
But the tribe never saw that invoice because Mr. Abramoff never 
sent it. Instead, he sent an invoice fabricated by Mr. 
Scanlon's shop purportedly from the National Center for Public 
Policy Research, for ``professional services.'' That was the 
invoice the tribe ultimately saw and paid.
    Once the money arrived at the center, Mr. Abramoff told the 
center to pay $500,000 to Capitol Campaign Strategies, which 
Mr. Abramoff claimed was performing the heavy lifting on the 
educational effort, and $50,000 to Nurnberger and Associates, 
which Mr. Abramoff said would be supervising the effort. He 
told the center the remaining $450,000 was intended as a 
charitable contribution to the Capital Athletic Foundation.
    In fact, the tribe never intended to donate any of that 
money to Mr. Abramoff's personal charity. Mr. Nurnberger never 
worked on behalf of the center or the Choctaw. He received his 
money in repayment of a personal loan he had made to Mr. 
Abramoff years earlier. When Mr. Nurnberger raised concerns 
about the center repaying the loan, Mr. Abramoff assured him 
that the funds were due Mr. Abramoff as director of the center.
    To try and give his activities the veneer of legitimacy, 
Mr. Abramoff instructed his executive assistant to ``make up 
invoices'' from Nurnberger and Associates and the Capital 
Athletic Foundation which he then submitted to the center. 
According to Mr. Nurnberger, he neither saw nor approved the 
invoice submitted in his firm's name. Believing the transaction 
in order and relying upon the word and fiduciary duty of their 
director, the center disbursed the funds. By abusing the trust 
of those involved, Mr. Abramoff and Mr. Scanlon profited by 
another $1 million.
    I want to thank Amy Ridenour, the president of the National 
Center for Public Policy Research, for agreeing to appear here 
today to help illuminate what appears to be a $1-million fraud.
    The third area of possible fraud identified by the 
committee involves the possible fraudulent billing of fees and 
expenses by Mr. Abramoff and his team while at Greenberg 
Traurig. It ranges from charging non-business meals at Mr. 
Abramoff's restaurant, Signatures, to the impermissible 
expensing for club dues and other items hidden from the tribe. 
It apparently also involves the padding of bills.
    As just one example, when Mr. Abramoff learned that the 
tribe's bill was nowhere near the $150,000 monthly mark, Mr. 
Abramoff instructed one of his associates to ``add 60 hours'' 
for him, and to ``pump up Scanlon, Todd, and you; give Amy some 
hours if you have to.'' Even when Mr. Scanlon began running his 
own companies and receiving payments directly from the tribes, 
Mr. Abramoff nevertheless tried to bill clients for Mr. 
Scanlon's time.
    There is other evidence which I believe the Department of 
Justice should review if it has not already begun to do so. If 
proven true, such activity could well constitute a violation of 
the mail and wire fraud statutes.
    There is much more to this story than I could possibly 
describe in the limited time we have today. Indeed, the 
committee has come upon evidence suggesting that Mr. Abramoff 
may have perpetrated a similar scam on some of his non-tribal 
clients. While we cannot emphasize enough the harm Mr. Abramoff 
and Mr. Scanlon inflicted upon the tribe, we should not 
overlook the toll their actions took on the men and women they 
betrayed.
    How that wound can be salved, I cannot say. I leave it to 
Mr. Abramoff and Mr. Scanlon to try. I asked the vice chairman 
for his concurrence in having documents that I will be asking 
questions on, those related to these areas, entered as part of 
today's record.
    Senator  Dorgan. Without objection. I would support that.
    [Referenced documents appear in appendix.]
    The Chairman Senator Dorgan.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
       DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Dorgan. Mr. Chairman, thank you very much. I will 
make a similar request that the documents on which I ask 
questions be made a part of the record.
    The Chairman Without objection.
    [Referenced documents appear in appendix.]
    Senator Dorgan. Mr. Chairman, this is, as you have 
described, a disgusting story of greed unlike any that I have 
seen in my service in Congress. I think it is important to 
begin, as you did, to point out that there is no evidence of 
wrongdoing by the Choctaws, the Indian tribe that will be 
discussed here. We have had their full cooperation. We 
appreciate the cooperation of Chief Martin and others from that 
tribe.
    It is important to understand that this tribe has been a 
victim of fraud, we believe, and we will describe some of that 
in the hearing and learn much more from the witnesses.
    The commitment that the chairman has made in this committee 
to provide a thorough and exhaustive investigation of how a 
number of Indian tribes were deceived and defrauded by Jack 
Abramoff and Mr. Scanlon is important. Today, we focus on the 
Choctaw Tribe of Mississippi and how they were victimized.
    The Choctaw Tribe is a notably successful tribe in its 
business operations. It is the second-largest employer in the 
State of Mississippi. The tribe has a very substantial annual 
payroll. Its businesses are diversified and successful. These 
are business-savvy people with a business plan. Part of their 
plan was to hire someone who they could trust to advance their 
agenda.
    The Choctaw Tribe began its relationship with Jack Abramoff 
10 years ago. Mr. Abramoff designed a business model for the 
tribe, running their money through a variety of people and 
entities for grassroots public policy and public relations 
purposes. These included Preston Gates, Greenberg Traurig, 
Americans for Tax Reform, Capitol Campaign Strategies, Ralph 
Reed, and many more. In fact, there were a large number of 
characters who became recipients of the tribe's money through 
various means.
    At some point, it appears to me that around January 2002 
Mr. Abramoff and Mr. Scanlon decided they could be making 
millions themselves instead of sending money to others, 
including Ralph Reed. They referred to him as a bad version of 
us; no more money for him, in January 2002. And then they 
hatched the scheme whereby Abramoff told the tribe to hire 
Scanlon for millions. But he failed to tell the tribe that his 
firm would be getting at least one-third of the Scanlon fee as 
his reward.
    The tribe was accustomed to sending money at Abramoff's 
direction to various organizations as a part of its public 
relations efforts. It appears they did not raise questions 
about the new groups that began to appear at Mr. Abramoff's 
recommendation: The American International Center, which is a 
Scanlon company; the National Center for Public Policy 
Research, whose board membership included Abramoff; the Capital 
Athletic Foundation whose sole board members were Abramoff and 
his wife; and Scanlon and Gould Public Affairs, also known as 
Capitol Campaign Strategies.
    As part of its investigation, the committee uncovered a 
mind-boggling list of organizations used as financial and 
grassroots conduits by both Scanlon and Abramoff. The 
organizations provided an alarming picture of how these groups 
were used, and in some cases manipulated, sometimes for 
personal gain and sometimes for political gain. The goal was 
always the same: To hide, to obscure and to mislead where the 
money was coming from and where it was going.
    The committee did not need a Deep Throat to tell us to 
follow the money. The e-mail that you will see today have done 
that for us. E-mail show that Mr. Abramoff may have tried to 
evade taxes by having earned income sent to his private 
charitable foundation which seemed also to serve as his 
personal piggy bank, the Capital Athletic Foundation. Quoting 
from one of his e-mail:

    I have some money due me from CCS, Capitol Campaign 
Strategies. If I have them write it to the Capital Athletic 
Foundation for services rendered, can the Capital Athletic 
Foundation just take it and not pay taxes if the services are 
in the realm of what the Capital Athletic Foundation does, 
advice on athletics or something like that? That way, the CCS 
could expense it and the Capital Athletic Foundation could take 
it in tax-free.

    E-mails show how Jack Abramoff shopped around for a 
501(c)(4) or multiple 501(c)(4)s to use as pass-throughs for 
various money transactions. In an e-mail to Ralph Reed, Mr. 
Abramoff refers to Amy Ridenour at the National Center for 
Public Policy:

    She does not have a (c)(4), only a (c)(3). So we are back 
to ATR, Americans for Tax Reform, only. Let me know if this 
will work. Just do this through ATR until we can find another 
group.

    That is February 2, 2000.
    A few weeks later, Abramoff responds to Reed about how to 
continue funding Reed's work:

    Thanks, Ralph. I hope to have a decision imminently on 
going back up hard. I also have a new (c)(4) to use.

    There are numerous memos between Mr. Abramoff, Reed, ATR, 
and Mr. Norquist on how to move more money through c(4)s to 
obscure or deceive the source of the money. Mr. Chairman, while 
it is not in this committee's jurisdiction to determine whether 
non-profit organizations were acting legally or not, it 
certainly begs the question as to whether they were acting 
within their charitable or tax exempt purpose. I hope we will 
consider a future hearing perhaps with the Senate Finance 
Committee to explore the activities of these 501(c)(3)s and 
501(c)(4)s. I suggest that we consult with the Finance 
Committee about how to further investigate those activities.
    Over the course of the Choctaw's involvement with Mr. 
Abramoff and Mr. Scanlon, the tribe spent at least $20 million 
on various lobbying and grassroots activities. No one questions 
their right to contract for services to grow their business. 
Like many groups who work with lobbyists, they put their trust 
in these experts from Washington to do the right thing, but 
there was a breach of trust and a betrayal.
    This tribe was never told about the secret scheme that 
allowed Jack Abramoff to skim $5 million from the money that 
Michael Scanlon had promised the tribe would be spent on 
grassroots and public relations, but was not spent on that 
purpose. The tribe was never told that part of the $1 million 
they had been told to send to the National Center for Public 
Policy Research for grassroots organizing would be used to 
repay a personal loan going back to Jack Abramoff's days as a 
filmmaker. The tribe was never told that $10,000 of their money 
would be sent to Reed for chairman when Ralph Reed was seeking 
the chairmanship of the Georgia Republican Party. The tribe was 
not told that the $1 million they were directed to send to the 
Capital Athletic Fund was basically going to Abramoff's pet 
projects. We know that the Capital Athletic Fund, allegedly a 
private charitable foundation, was used as Mr. Abramoff's 
personal checking account.
    Were these thefts or just betrayals? And where is the line 
drawn? Mr. Chairman, this investigation has taken twists and 
turns that none of us had anticipated. It has uncovered 
deceptions and greed that even by Washington standards are 
breathtaking. It has raised questions of ethics and legality 
that we must pursue.
    I thank you especially for your persistence and for your 
dogged approach. I look forward today to hearing from the 
witnesses.
    The Chairman. Thank you very much.
    Our first panel is Charlie Benn, a representative of the 
Mississippi Band of Choctaw Indians; Donald Kilgore, Esquire, 
attorney general for the Mississippi Band of Choctaw Indians; 
and Nell Rogers, planner of the Mississippi Band of Choctaw 
Indians. Please come forward and welcome to the committee.
    I apologize. While the witnesses are seating, Senator Akaka 
has an opening statement.

  STATEMENT OF HON. DANIEL K. AKAKA, U.S. SENATOR FROM HAWAII

    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
thank you and Vice Chairman Dorgan for holding this oversight 
hearing on tribal lobbying practices.
    This is the third, as you know, in a series of hearings 
that this committee has conducted already. While I am appalled 
by these men, Jack Abramoff and Michael Scanlon, they were able 
to conduct a pattern and practice of dealings that took 
advantage of native peoples. I am hopeful that through these 
hearings, the committee will be able to provide guidance in 
resolving these matters to ensure that this type of history is 
not repeated again.
    I look forward, Mr. Chairman, to hearing the testimony from 
the witnesses who are here today. Thank you for holding this 
hearing, Mr. Chairman.
    The Chairman. Good morning.
    Ms. Rogers, who is accompanying you, for the record?
    Ms. Rogers. Bryant Rogers who is the tribe's attorney.
    The Chairman. Welcome, Mr. Rogers, just for the record.
    We will begin with you, Mr. Benn. Thank you for appearing. 
Please proceed.

 STATEMENT OF CHARLIE BENN, DIRECTOR OF ADMINISTRATION, OFFICE 
               OF THE CHIEF, MISSISSIPPI BAND OF
                        CHOCTAW INDIANS

    Mr. Benn. Thank you, sir.
    Good morning. My name is Charlie Benn and I am the director 
of administration for the Office of Chief Phillip Martin, 
Mississippi Band of Choctaw Indians. With me today are Nell 
Rogers, who works in the tribal planning office in the area of 
legislative affairs, who will also offer testimony in a few 
moments. Don Kilgore, the tribe's attorney general is here as 
well. Mr. Kilgore will also offer brief testimony and assist in 
answering questions that you may have. Also present with the 
panel is C. Bryant Rogers, outside counsel for the tribe.
    We certainly appreciate this opportunity to present the 
views of the tribe as regards the committee's ongoing 
investigation into the conduct of Jack Abramoff and Michael 
Scanlon.
    The Mississippi Band of Choctaw Indians is a federally 
recognized Indian tribe of nearly 10,000, most of whose members 
reside on eight reservation communities located on trust lands 
scattered over a five-county area in East-Central Mississippi. 
The majority of our tribal members are full-blood Choctaw 
language-speaking. We are descendants of those Choctaw people 
who resisted repeated efforts by the Federal Government to 
force their relocation to Oklahoma. This continued from 1830 
through the early 1900's. The tribe's reservation lands are 
poor and unproductive and the tribe is without any natural 
resources which could be used to generate income.
    The Mississippi Choctaws were ignored and abandoned by the 
Congress and Federal executive branch for almost a century, 
finally securing our initial Indian reservation lands in 1944 
and Federal recognition as a separate tribe in 1945. Our 
members were then essentially destitute without any resources 
and our tribal government was basically powerless to help them. 
Unemployment was so prevalent among our tribal members that we 
knew we had to find another path and we did.
    We made the choice to pursue self-determination as the best 
means to meet the growing needs of the tribe and to pursue 
manufacturing jobs as the best means of employing large numbers 
of our people. Beginning with one tribal employee in 1963, the 
Mississippi Choctaws have grown to become the second-largest 
employer in Mississippi, employing some 9,200 people. We 
operate about 25 different commercial enterprises.
    The tribe has developed a strong and stable government 
providing the full array of governmental services. This 
includes the operation of a large school system, police and 
fire protection services, courts, hospitals, clinics, social, 
housing, realty, and economic development agencies. These were 
key ingredients of our latest success in building a reservation 
economy and attracting private investment.
    The passage of the Indian Gaming Regulatory Act and the 
introduction of class III gaming in 1989 in Mississippi led to 
the development of the tribe's current Pearl River Resort. We 
have invested over $1 billion in this development, which has 
created jobs and generated income. Rather than make large 
distribution payments to tribal members, we chose to invest in 
our future in a different way.
    The success of the resort has allowed the tribe to begin 
catching up from generations of poverty. There has been 
extraordinary progress which I set forth in more detail in 
Chief Martin's written testimony. Still, significant needs 
remain particularly in the areas of health, education and 
housing. Since all of our enterprise growth has been debt-
financed, we still have a $300-million debt load to retire.
    Because of the tribe's government-to-government 
relationships with the United States and because of the need to 
protect tribal investments and our ability to repay business 
debt, the Mississippi Choctaws have engaged in extremely active 
and aggressive efforts to monitor and affect the Federal 
decisionmaking process and to shape public opinion on matters 
affecting the tribe's political and economic interests.
    To achieve this, we have long engaged experienced 
professionals, including lobbyists with prestigious law firms 
who know and understand how Federal lobbying and grassroots 
advocacy works. Our effort in this regard has historically been 
successful and we have relied upon the professional expertise 
and integrity of those law firms and their lobbyists to ensure 
that this work is handled for us in a lawful and appropriate 
manner.
    So when the initial press reports emerged last year 
regarding the large fees paid to Jack Abramoff at Greenberg 
Traurig or to Michael Scanlon by a number of tribes for 
lobbying work and grassroots advocacy, we had no reason to 
believe that anything questionable had occurred concerning 
those payments or their work for us. We were pleased with the 
results that we had achieved.
    Later, we have learned, based on the work of the committee 
and our attorneys, that Mr. Abramoff, along with Mr. Scanlon, 
had engaged in what appears to be a consistent pattern of 
kickbacks, misappropriated funds, payment induced under false 
pretenses, and padded billings, all orchestrated by Mr. 
Abramoff from his position as Senior Director of Governmental 
Affairs for Greenberg Traurig, LLP, the law firm which the 
tribe had retained to handle its public affairs needs starting 
in January 2001.
    From the onset of this matter, the tribe has fully 
cooperated with the FBI and the Justice Department. Since July 
2004, almost 1 year ago, we saw evidence of apparent wrongdoing 
on the part of Mr. Abramoff and Mr. Scanlon. We have worked 
closely with the committee to further its investigation.
    Early on in this process, however, the tribe raised with 
the committee its concern that sensitive information regarding 
its lobbyists, lawful lobbying and public affairs activities 
not be unduly disclosed through the committee's investigation 
of Mr. Abramoff and Mr. Scanlon, and of the tribe's First 
Amendment right to protect against such involuntary disclosure.
    The tribe certainly appreciates that the committee has 
respected the tribe's First Amendment rights throughout this. 
Consistent with this position, the tribe has shared all 
requested documents and information with committee staff, but 
has declined to place in the record information regarding the 
tribe's First Amendment-protected activities when disclosures 
of such information is not required. This remains the tribe's 
position today.
    I would now like to defer to Ms. Rogers to discuss how the 
tribe came to employ Mr. Abramoff and Mr. Scanlon, and further 
details on our lobbying activities, and to request that the 
committee's questions be deferred until each of us on this 
panel has had the opportunity to make our opening statements.
    Thank you, sir.
    The Chairman Thank you very much, Mr. Benn.
    Mr. Kilgore or Ms. Rogers, whichever way. Ms. Rogers is 
fine.

STATEMENT OF NELL ROGERS, PLANNER, MISSISSIPPI BAND OF CHOCTAW 
                            INDIANS

    Ms. Rogers. Thank you.
    Good morning and thank you Senator McCain, Senator Dorgan, 
and Senator Inouye for your comments. I would also like to say 
that we appreciate the work of your staff in pulling together 
our information for the hearing.
    Prior to 1994, Chief Martin was the tribe's primary 
lobbyist. Partly this was because the tribe had no funds to pay 
for these services. Later as the scale and reach of Federal 
regulations and legislation affecting Indian tribes expanded, 
and as the tribe's businesses and revenues grew, attending to 
those enterprises required more and more of the chief's time, 
leaving less time to devote to the legislative process.
    It became prudent to hire outside lobbyists and legal 
counsel to assist in addressing the tribe's Federal advocacy 
needs and to assign additional staff in the chief's office to 
assist in coordinating the tribe's public affairs efforts.
    Before the tribe retained Preston Gates, it had retained 
the law firm of Hobbs, Strauss, Dean, and Walker here in 
Washington to provide some legal services and public affairs 
work, primarily in the area of self-determination, in health, 
and in education. The tribe continues to work with Hobbs, 
Strauss, and with other law firms, firms who have represented 
the tribe for many years such as Wise, Carter and Caraway and 
Scott, Sullivan, Streetman and Fox firms in Mississippi, and 
Roth, Van Amberg, Rogers, Ortiz and Yepa in New Mexico. All of 
them have provided a high caliber of legal representation and 
have done so with honesty and scrupulous adherence to their 
duties to the tribe as a client. No less was expected from the 
other Washington firms hired by the tribe starting in 1995.
    In 1994, two simultaneous events occurred which required an 
expansion and a change in the direction of the tribe's public 
affairs work. First was a change in leadership of the Congress 
as a result of the 1994 elections. Second, the opening of the 
Silver Star Hotel and Casino by the tribe, also in 1994, gave 
rise to an array of new issues and concerns that had to be 
tracked and dealt with at the national level.
    The tribe also wanted to tell its economic story, how it 
was possible to use the tax and regulatory structures unique to 
Indian reservations and economies operating under tribal 
jurisdiction to achieve on-reservation economic development. 
This was not just a theory. The tribe had experienced 
successful economic development for 15 years before opening the 
first casino. It did so by finding products that could be made 
and sold, hiring good managers, setting up a judicial system 
that provided fair treatment for outside parties, building a 
stable constitutional government with a separation of powers, 
and honoring its business contracts.
    When the tribe opened its first casino, financed 100 
percent with borrowed money, it had to be proactive in 
protecting its casino operations and its ability to pay off its 
debt. Thus in 1995, the announcement by the then-Ways and Means 
Committee Chairman of a plan to subject tribal income to 
taxation set off extraordinary alarms with the tribe because 
that meant that the tribe's gaming and other business revenue 
could be taxed up to 34 percent, threatening the tribe's 
ability to pay off its debt and undermining its capacity to 
provide essential governmental services to the some-10,000 
tribal members.
    It was in this climate, then, that the tribe recognized the 
need to reach out to the new Republican majority and to 
redouble all efforts to outline its long-time unmet needs and 
its reservation development experiences with all members of 
Congress in a bipartisan way.
    Jack Abramoff was identified to us in 1995 as a potential 
public affairs specialist in the Washington office of a major 
law firm, Preston Gates. This firm, in addition to having ties 
to the new majority, also included former Congressman Lloyd 
Meeds, who was known to the tribe as someone knowledgeable of 
tribal issues, as well as of the government-to-government 
relationship that exists between the tribes and the Congress.
    At Chief Martin's request, I contacted the firm and 
subsequently, following a meeting with Chief Martin with Mr. 
Meeds, Mr. Abramoff, and others in the firm, a retainer 
agreement was executed and approved by the tribal council. What 
followed was a very positive relationship with Preston Gates 
from 1995 through 2000. They did very effective work for the 
tribe, both at the Federal level and through various grassroots 
projects.
    Then Mr. Abramoff and most of his team left Preston Gates 
to join Greenberg Traurig in 2001. Since the bulk of the work 
done by Preston Gates for the tribe was in the area of public 
affairs and not ordinary legal work and since Mr. Abramoff and 
most of his team who had handled that work at Preston Gates 
moved to Greenberg Traurig in 2001, the tribe then retained 
Greenberg Traurig. Later, Mr. Abramoff introduced us to Michael 
Scanlon as a political consultant who had several companies 
which he used for his public affairs, marketing and grassroots 
work.
    When Mr. Abramoff left Preston Gates to move to Greenberg, 
there was no reason to believe that anything improper or 
unlawful had occurred in connection with his work. There was no 
reason to question the integrity or otherwise doubt that the 
representation through Greenberg would be handled in any less 
professional way and honest way than we believed had previously 
occurred. Unfortunately, those expectations were not met and 
misconduct did occur. Details on what that misconduct was and 
how it occurred will be addressed by Mr. Kilgore, the tribe's 
attorney general in his opening statement.
    However, before I turn to Mr. Kilgore, there are some 
matters which the tribe wishes to clarify, largely because of 
errors by the media and reporting on these events. The first, 
the tribe has never authorized any payment for the purpose of 
sending any member of Congress on any golf trip anywhere. This 
includes the widely reported Scotland trip. Second, the tribe 
did not contribute any money to Americans for Tax Reform to buy 
the opportunity to attend a White House meeting with President 
Bush. In particular, no money was paid to ATR for that purpose 
as regards the White House meeting on May 9, 2001 and no tribal 
representative attended that meeting as has been reported in 
the press.
    Third, the tribe decided years ago that its core 
governmental operations, including public relations and related 
public affairs activities that were administered through the 
Office of the Chief, would not be funded with gaming revenue. 
In this regard, none of the funds the tribe paid to Americans 
for Tax Reform for various purposes in 1999 and 2002 were 
generated by the tribe's gaming operation.
    Finally, the tribe has been extremely careful to ensure 
that its public affairs efforts complied with all the 
applicable rules. That remains the case. The behavior of both 
Mr. Abramoff and Mr. Scanlon, which is the subject of this 
hearing, is not associated with the nature of the work they 
were doing for the tribe, but misconduct in the way the tribe 
was charged for that work and in the diversion to themselves of 
those payments from lawful authorized activities.
    In this regard, Senator McCain, the tribe appreciates your 
acknowledging that the tribe has not been accused of wrongdoing 
at any point in these proceedings and we appreciate that.
    Now, if you are agreeable, I will ask Mr. Kilgore if he can 
complete the tribe's opening statement.
    The Chairman. Mr. Kilgore.

STATEMENT OF DONALD KILGORE, ATTORNEY GENERAL, MISSISSIPPI BAND 
                       OF CHOCTAW INDIANS

    Mr. Kilgore. Thank you. Mr. Chairman, members of the 
committee, we again thank you for this opportunity to present 
the tribe's views with regard to this investigation into the 
misconduct of Jack Abramoff and Michael Scanlon.
    As previously referenced, I was only appointed to serve as 
Choctaw attorney general recently, but since then I have worked 
closely with the tribe's outside legal counsel, Mr. Rogers, to 
fully acquaint myself with this investigation and review his 
analysis and conclusions of the evidence.
    Clearly, after my consultation with outside firms and with 
your staff, Senator, it has become apparent that Jack Abramoff 
and Mike Scanlon engaged in a consistent pattern of kickbacks, 
misappropriated funds, payments induced under false pretenses, 
and padded billings.
    First of all, the kickback scheme. Under the kickback 
scheme, we learn that Mr. Abramoff calls Mr. Scanlon, who was 
represented to us as an independent contractor, to quote prices 
which included undisclosed and exorbitant add-ons in the fee. 
They would then split it, one-half going to Mr. Abramoff as a 
kickback and one-half being retained by Mr. Scanlon as moneys 
obtained under false pretenses. All of this was in furtherance 
of their ``gimme five'' scheme.
    It should be noted that while the prices were high, they 
were not out of line with other billings from other contractors 
for similar work that we have experienced. However, we now know 
after reviewing thousands of e-mail exchanges, that before 
these quotes were given, Mr. Abramoff and Mr. Scanlon had 
already agreed upon the amount of extra money that they were 
going to solicit from us under false pretenses and then split 
between themselves.
    I refer to, as an example of that kickback scheme, an e-
mail, Senator McCain, dated September 2, 2001 which your staff 
has. Mr. Abramoff:

    So let me see, that is $700,000 each for us and $100,000 
for the effort. Seriously, what do you think we can score?

    Response:

    If you think they are good for it, then I can slide you 
$350,000 with no sweat, plus you have $313,000 sitting here. So 
if you want, $663,000 is yours on Tuesday. When the clip comes 
in, another $350,000, which will put you over $1 million. But 
that is not all. There will be more when the dust settles, and 
if we get the full $4.6 million, much, much more. I think the 
350 strategy is the best way to go. It is good on the gimme 
five front.

    Response:

    Thanks. I am having a great time running the gimme fives.

    The Chairman. And who was that?
    Mr. Kilgore. That was an exchange between Mike Scanlon and 
Jack Abramoff.
    The Chairman. Without objection, it will be made part of 
the record.
    Mr. Kilgore. Thank you.
    [Referenced document appears in Phillip Martin's prepared 
statement located in appendix.]
    Mr. Kilgore. The pass-through scam, the second phase of the 
fraud that was perpetrated on the tribe. Regarding grassroots 
advocacy projects, some of the actual work was always going to 
be performed by various third parties after passing through the 
Scanlon companies, for example, American International Center, 
Capitol Campaign Strategies, Scanlon Gould Public Affairs or 
other entities such as the National Center for Public Policy 
Research or the Capital Athletic Foundation.
    The tribe never agreed that any of these moneys were to be 
retained by Ms. Scanlon or Mr. Abramoff. When the tribe was 
quoted a price for a given project, the tribe expected that its 
payment to fund that work would be expended for that purpose, 
and where there were pass-throughs involved that the money 
would be passed through to the appropriate lawful entity for 
that purpose.
    In this regard, the tribe was also induced in 2002 to send 
large sums to NCPPR and CAF. Mr. Abramoff did not, as the 
chairman has observed, disclose to us that CAF was Mr. 
Abramoff's private charity, nor that he sat on the board of 
directors of NCPPR. These payments were made on Mr. Abramoff's 
representation that the funds would be used to carryout 
previously approved grassroots projects.
    Instead, these additional funds were solicited and used to 
generate money to complete the financing of unauthorized 
kickbacks and fee-sharing arrangements for Mr. Abramoff's and 
Mr. Scanlon's ``gimme five'' scheme.
    Another e-mail was an e-mail between Mike Scanlon and Jack 
Abramoff dated Friday May 31, 2001. In an extraordinarily 
candid exchange, Mr. Scanlon says:

    Here is the overall plan. We need about $200,000 to run the 
operation, leaving $1.3 million to split or $650,000 apiece. To 
make you whole, the idea was to get the $500,000 to CAF 
directly then have AIC cut Kaygold a check for the remaining 
$150,000.

    Clearly, perpetrating a fraud on his client.
    The last area that we have investigated and looked at 
thousands of documents, along with your staff. We have learned 
that a number of the bills received by the tribe from Greenberg 
Traurig contained fabricated time entries and unauthorized 
expense charges. Unlike many or all of the other tribal clients 
who retained Greenberg and Jack Abramoff, the Choctaws retainer 
agreement with the firm was on a regular hourly billing basis. 
The tribe never agreed to pay a flat fee per month.
    However, it is now clear that Mr. Abramoff consistently 
manipulated the bills at Greenberg in order to have them 
approach a minimum billing target of fees and expenses of 
between $135,000 and $150,000 a month. When the actual hours of 
work completed were insufficient to approach that target, Mr. 
Abramoff routinely directed that the bills be padded and pumped 
up.
    The e-mail that I wanted to refer to, Mr. Chairman, is the 
one that you have already referred to about he only had 2 
hours, and therefore directed that be pumped up. So I am not 
going to repeat that e-mail. But we also note there are 
significant amounts of unauthorized expenses charged in those 
billings. It was structured in such a way that looking at the 
bill, the tribe could not detect those unauthorized expenses 
and billings.
    After we learned what had happened, we were surprised that 
a senior director at a major law firm could and would engage in 
misconduct of this type, whether it is the billing fabrication 
or the more egregious ``gimme five'' scheme, and he was able to 
get away with it for so long. What we have learned regarding 
Mr. Abramoff's misconduct at Greenberg has caused us to take a 
closer look at his work at Preston Gates. Those inquiries have 
just begun.
    It presently appears that some similar financial misconduct 
also occurred while Mr. Abramoff was at Preston Gates, though 
on a vastly smaller scale, both as to billing improprieties and 
as to Mr. Abramoff's unlawful diversion of money. We have 
initiated discussion with Preston Gates on these matters. 
However, those discussions are in a very preliminary stage.
    In regard to Greenberg Traurig, we wish to acknowledge that 
positive settlement negotiations with that firm are now 
underway and that we have been assured that they will take 
appropriate action to address and remedy any concerns and 
issues which we may identify as to any respect of our 
relationship with that firm. They have responded to this 
situation in a professional and honorable way, which we very 
much appreciate. Thus, we are confident a mutually agreeable 
settlement of our claims respecting these issues will be 
reached with Greenberg.
    In closing, I want to thank the committee for its efforts 
in the investigation. We are moving forward with our efforts to 
build our reservation economy, which also benefits our non-
Indian neighbors as well, and to strengthen our government-to-
government relationship with the United States to enhance our 
capacity to improve health care, education and employment 
opportunities for our members.
    Mr. Chairman, we consider this a lesson and we will 
endeavor to ensure that we will not experience anything like 
this in the future.
    Thank you.
    The Chairman. Thank you very much.
    Senator Inouye, do you want to say anything?
    Senator Inouye. Mr. Chairman, I have an opening statement.
    The Chairman. Without objection, Senator Inouye's opening 
statement will be made part of the record.
    Ms. Rogers, you said that these funds that were expended 
did not come from gaming revenues. Where did they come from?
    Ms. Rogers. Revenues from the tribe's other businesses, 
manufacturing businesses, printing plants.
    The Chairman. I see.
    Ms. Rogers, Jack Abramoff recommended the tribe hire 
Michael Scanlon at the end of the year 2001, as you have 
testified. Did Mr. Abramoff tell you that Mr. Scanlon was an 
independent contractor?
    Ms. Rogers. He did.
    The Chairman. Did Jack Abramoff or Michael Scanlon ever 
disclose to you that Mr. Scanlon would pay Mr. Abramoff any of 
the money paid to Mr. Scanlon by the tribe?
    Ms. Rogers. No, sir.
    The Chairman. The tribe never intended the money it paid to 
Michael Scanlon and his company be kicked back to Jack 
Abramoff?
    Ms. Rogers. No.
    The Chairman. Ms. Rogers, in 2002 the Capital Athletic 
Foundation, Mr. Abramoff's private charitable foundation, 
reported on its tax forms that the Mississippi Band of Choctaw 
Indians was far and away the single biggest contributor. 
According to publicly available tax forms, of the $2.6 million 
that the Capital Athletic Foundation raised that year, almost 
$1.9 million, 70 percent of it, went to the Maryland Jewish 
boys school started by Mr. Abramoff. Michael Scanlon and Jack 
Abramoff directed the tribe to make these contributions?
    Ms. Rogers. These were not intended as contributions, 
Senator. They were intended to be pass-throughs to other groups 
doing grassroots public advocacy work for the tribe.
    The Chairman. In other words, the tribe did not know that 
70 percent of these moneys were going to----
    Ms. Rogers. Not at all. They were never intended to be 
contributions.
    The Chairman. Jack Abramoff and Michael Scanlon never told 
you that the Capital Athletic Foundation was Mr. Abramoff's 
private charity?
    Ms. Rogers. No.
    The Chairman. Ms. Rogers, another major beneficiary of the 
Capital Athletic Foundation in 2002 was an entity called the 
Kollel Ohel Tiferet. I am sure I mispronounced that. It 
received almost $100,000 from the Capital Athletic Foundation 
that year. Based on this committee's investigation, it appears 
this organization was a sham entity designed to funnel payments 
from Mr. Abramoff to an Israeli settler who ran a sniper 
workshop. Is it fair to say that neither Mr. Abramoff or Mr. 
Scanlon ever told anyone at the tribe that the tribe's money 
would be used to finance paramilitary activities in Israel?
    Ms. Rogers. Oh, no; we only learned that from your staff.
    The Chairman. Mr. Kilgore, exhibit 95 is an e-mail exchange 
between Jack Abramoff and Michael Scanlon on March 3 and 4, 
2002. Basically, it says:

    By any chance did you send us a balance? Can you get me a 
check to Presidential Kosher Holidays for my Choctaw share? Do 
you think we could figure a way to expense this? Any idea? 
Thanks.

    That is from Mr. Abramoff to Mr. Scanlon. Mr. Scanlon says:

    I will think of something on this. I will get back to 
you.'' And then Mr. Abramoff says:

    You is that man.

    Did you intend any of the money you paid to Mr. Scanlon's 
companies to be used to cover Jack Abramoff's Passover 
vacation?
    Mr. Kilgore. Absolutely not, Mr. Chairman.
    The Chairman. We could go on and on. Mr. Kilgore, in 
October 2002, as you mentioned, the tribe paid $1 million to 
the National Center for Public Policy Research at the direction 
of Jack Abramoff. Is that correct?
    Mr. Kilgore. That is correct.
    The Chairman. Jack Abramoff told the tribe that the entire 
$1 million would be passed through to the grassroots 
organizations working on issues important to the Mississippi 
Choctaw Tribe. Is that true?
    Mr. Kilgore. That was our understanding.
    The Chairman.  There are other questions, but the pattern 
is clear here. I first of all want to thank the tribe. I know 
that this has been a very difficult time for them. There was 
concern that somehow the tribe would be blamed for this 
exploitation and ripoff that has taken place. I view you as 
people who were trying to act in the best interests of your 
tribe and recognized that a lot of those interests are affected 
here in our Nation's capital. There is no one I have greater 
respect for than Chief Martin who I have had the privilege of 
knowing for more than 24 years.
    I only have one additional question, Senator Dorgan, that I 
guess I would ask. Ms. Rogers had the most interface with Mr. 
Abramoff and Mr. Scanlon. If they were here right now, Ms. 
Rogers, what would you say to them?
    Ms. Rogers. Chief Martin asked me that same question. I 
told him that I am past anger and bitterness, but it is the act 
of betrayal, betrayal of the tribe's trust, betrayal of those 
of us who worked with him. It is an extraordinary story of 
betrayal, of deliberately building trust and then betraying it.
    The Chairman. Would you like to make any additional 
comments, Mr. Ben.
    Mr. Ben. No, sir; we certainly appreciate the time you have 
provided for us, sir.
    The Chairman.  Mr. Kilgore.
    Mr. Kilgore. No, Mr. Chairman; I have no further comments.
    The Chairman. How long have you been in office?
    Mr. Kilgore. March 1, 2005. That is after 32 years of 
private practice.
    The Chairman. You have a very large task ahead of you and 
we thank you for all of your cooperation.
    Mr. Kilgore. Thank you, Mr. Chairman.
    The Chairman. We have a vote beginning shortly. I am going 
to run over and vote while Senator Dorgan asks his questions. I 
am going to try and get right back.
    Senator Dorgan. Mr. Chairman, thank you very much. We were 
told the vote would begin about 10:45, so if it works the right 
way, we will be able to proceed with the hearing without a 
brief recess. If that is delayed just a bit, we will have a 
very brief recess.
    First of all, Ms. Rogers, Mr. Kilgore, and Mr. Ben, thank 
you for your cooperation. The staff has indicated to us that 
you have been extraordinarily helpful to them and I know based 
on your statement, Ms. Rogers, that you used the word 
``betrayal'' which I think is an awfully good description of 
what has happened here.
    There are two tracks here that I want to talk about. One I 
think Senator McCain has covered pretty well, and that is the 
track of just what appears to be outright fraud--extracting 
money for one purpose and then using it for something else and 
not disclosing to the tribe who was spending this money as part 
of a secret business relationship.
    It is pretty clear with the research that our investigators 
have done that the trail on that is evident. It is in writing. 
We have many, many, many documents that go back and forth that 
describe in great detail exactly what has happened.
    The other area that I described briefly in my opening 
statement is not the kind of fraud that is just up-front fraud. 
It is the obscuring of the source of money in order to deceive 
where money came from or where it was spent. That also is of 
interest. It is kind of a different set of circumstances 
because it appears to me that money was run through (C)(3)s or 
(c)(4)s, to deliberately to obscure the source of the funds. 
That was at the request of Mr. Abramoff, as I understand it, 
and others.
    I want to ask you just a bit about that, if I might, 
whether everybody knew that. There is an exhibit number 33, I 
believe. Ms. Rogers, you indicated that the money was spent on 
activities that were perfectly legal--grassroots activities and 
the money came from non-gaming sources. Is that correct?
    Ms. Rogers. Right. That is correct.
    Senator Dorgan. What would be the purpose then of the 
recipients of that money demanding that it be washed through 
organizations in order to obscure and deceive the identity of 
the money? If it is in fact non-gaming, what was the purpose of 
the deception on behalf of the recipients and those who decided 
to run it through (C)(4) organizations?
    Ms. Rogers. I may have to consult with the tribe's 
attorneys because I am obliged by the tribe to be concerned 
about First Amendment issues. I would like to try to answer 
your question. We did not have a sense of an effort to obscure 
the money. There was simply the use of intermediaries, which is 
a common practice in this country by businesses and political 
and professional groups, to use intermediaries to get their 
message out. Jack Abramoff had structured that.
    I am sure there probably were concerns or public perception 
concerns about some of the recipients about not being 
associated with a gaming tribe. I hope I have answered your 
question. I am not trying to be evasive.
    Senator Dorgan. I understand.
    Ms. Rogers. I am trying to deal with my obligation to the 
tribe as well.
    Senator Dorgan. Memorandum number 33 is a memorandum I 
believe from Mr. Abramoff to Mr. Reed that says:

    Thanks, Ralph. The firm has held back all payments pending 
receipt of a check from Choctaw which was held up because of a 
paperwork glitch.

    In this case, because of this e-mail, my expectation would 
be the recipient or the expected recipient of the money knew 
exactly where the money was coming from. For that reason, I do 
not understand the reason to try to move that money through a 
(c)(4) organization to obscure the identity of the money. Do 
you have any notion of why that was the case?
    Ms. Rogers. If I can consult the attorney on that.
    Senator Dorgan. Yes; of course.
    Ms. Rogers. Yes; the recipient did know where the money was 
coming from.
    Senator Dorgan. And presumably then wanted it obscured so 
that it was not evident to others?
    Ms. Rogers. Presumably. We have never had any direct 
conversations.
    Senator Dorgan. You know, some money to that type of 
recipient, Mr. Reed and some others I believe, was passed 
through Preston Gates at one point. Did Preston Gates charge 
for being a conduit for some of that money?
    Ms. Rogers. I do not know the answer to that question. I 
would have to ask the attorneys who are looking at all the 
billing. It was so long ago.
    Senator Dorgan. But there was a charge for the purpose of 
obscuring the identity of the source of the money. There was a 
charge made by the Americans for Tax Reform. Is that correct?
    Ms. Rogers. No, sir; I do not believe there was a charge 
made for obscuring the money.
    Senator Dorgan. Let me rephrase it then. A certain portion 
of the money that was run through the (C)(4), Americans for Tax 
Reform, included a fee that was charged by the Americans for 
Tax Reform for the purpose of moving the money through that 
(C)(4). Is that correct?
    Ms. Rogers. There was a small management fee, but we had a 
long-term relationship with Americans for Tax Reform and 
assumed that that payment would simply be used to support the 
overall activity of ATR.
    Senator Dorgan. How large was that payment? Do you 
remember?
    Ms. Rogers. I believe it was $50,000 over a period of time, 
but we routinely made contributions to Americans for Tax Reform 
because they had allied themselves with the tribe early on in 
the tax fight to tax tribal revenues.
    Senator Dorgan. Let me ask about, if I might, the issue you 
raised in your testimony, the issue of money for the purpose of 
a meeting with the President or a White House meeting.
    Ms. Rogers. No donation was made for that purpose nor did 
anyone attend the meeting.
    Senator Dorgan. Are you aware at this point, based on the 
evidence, that some of the money went for that purpose?
    Ms. Rogers. The attorneys are saying we do not know that.
    Senator Dorgan. I believe there are a series of e-mails. I 
do not think I have the number for those at the moment. An e-
mail dated April 5, 2001, Abramoff dictated a note to Grover 
Norquist.
    Ms. Rogers. Do we have that exhibit?
    Senator Dorgan. I believe you do. It is exhibit number 38.
    Ms. Rogers. Okay.
    Senator Dorgan. Abramoff appears to dictate a note to 
Grover saying:

    Here is the first of the checks for the tax event at the 
White House. I will have another $25,000 shortly.

    Are you familiar with that? On the top of that memo, I 
believe it says Nell approved that.
    Ms. Rogers. What we funded, Senator Dorgan, if you look at 
the first memo at the bottom of the e-mail, Jack Abramoff sent 
an e-mail to me asking us to make a contribution to the new 
anti-tax campaign. That is what we approved, a contribution for 
that.
    Senator Dorgan. So you were making a contribution you 
thought for that purpose.
    Ms. Rogers. Right. And then he represented to ATR that we 
had made the contribution apparently from this e-mail trail. 
His representation to ATR was that it was for the White House 
dinner.
    Senator Dorgan. And then there was another follow-up memo 
from ATR about a White House meeting, the second year, I 
believe 2002. And that is where I think the confusion was 
because in that memorandum it was represented by ATR that the 
Choctaws were involved in the White House meeting previously 
and had made a contribution for that event. So you are saying 
that that representation is inaccurate, right?
    Ms. Rogers. That is inaccurate.
    Senator Dorgan. These pieces of information are part of the 
record and I think hopefully will clarify exactly what was 
happening. It appears to me that Mr. Abramoff and others, ATR, 
Mr. Norquist and others, were trying to put together events at 
the White House. One event apparently must have happened in 
2001, and they were seeking $25,000 contributions for the cost 
of those events and promising meetings with the President and 
so on. It is helpful for us to know because the written 
information from Mr. Abramoff and ATR also would suggest that 
the Choctaws participated.
    Ms. Rogers. The Choctaws did not participate. I remember 
those invitations, but normally they were primarily for State 
legislators to come in and meet with the President, and then 
tribes were extended invitations. But the Choctaws did not 
participate, did not respond to any of those invitations.
    Senator Dorgan. The money that the tribe paid to the 
National Center for Public Policy Research, that money was 
expected to go where, in your judgment?
    Ms. Rogers. It would have gone to support some of the 
activities, grassroots activities with smaller groups, polling, 
research, opinion pieces, education pieces. NCPPR had done some 
of those for us earlier when Ms. Ridenour visited the 
reservation and had expressed a real interest in how the tribe 
was using gaming revenue to support tribal culture, language 
and that sort of thing.
    Senator Dorgan. So sending that money to the National 
Center for Public Policy Research and discovering that a 
portion of that was used to repay a bill for $75,000 that Mr. 
Abramoff owed to someone going back to his days as a filmmaker, 
that was something that you would not have been aware of and 
would have been an unauthorized use of the funds?
    Ms. Rogers. Absolutely.
    Senator Dorgan. How about the $10,000 of your money being 
sent to ``Reed for Chairman'', when Ralph Reed seeking the 
chairmanship of the Georgia Republican Party.
    Ms. Rogers. We did not know that or certainly did not 
authorize it.
    Senator Dorgan. So what you have, it seems to me, is a 
substantial amount of money going from the tribe with the 
expectation it is going for a normal business purpose, the 
business relationship with Mr. Abramoff. When in fact, a 
substantial portion of that money was being skimmed off to a 
secret partnership established by Mr. Abramoff and Mr. Scanlon. 
That represents what appears to us to be a fraud committed on 
the tribe. Of course that is a judgment that I am sure the 
Department of Justice and others will make in the criminal 
arena.
    And then on the other side, money that is moved through 
(c)(4) and perhaps a (c)(3) organization, part of which appears 
to have been, I was going to say misdirected, but that is too 
soft a word, part of which appears to have also been 
fraudulent, particularly the expenditure of the money to the 
National Center for Public Policy Research. I am not suggesting 
that they are the ones that spent that money. In fact, they are 
going to testify today and we appreciate their cooperation. But 
I am suggesting the money was diverted by Mr. Abramoff and Mr. 
Scanlon.
    Then the other question that I mentioned is whether there 
was misuse of (c)(3) and/or especially (c)(4) organizations to 
be a conduit to receive funds in order to obscure its identity 
for the purposes of others. I do not know the answer to that. I 
suggested to the chairman that we hold open that question and 
perhaps meet with the Senate Finance Committee.
    I think it does warrant additional inspection because in 
addition to the information we have, we have references in e-
mails to other (c)(4) organizations that have been used. So I 
do not know what the entire inventory of (c)(4) organizations 
would be here, but it appears to me that the (c)(4) 
organizations were used as a convenient buddy system to move 
money around in order to obscure its identity.
    Sometimes that is called laundering, but that has a 
criminal connotation. I do not know that this is criminal at 
all, but I know that it is laundered from the standpoint of the 
recipient so that it comes out clean for the recipient. That 
appears to be what the e-mail trail suggests, and not from the 
standpoint of the tribe, but from the standpoint of the 
recipient.
    So I think all of these raise an enormous number of 
questions. We have, as I said, e-mail trails and e-mail tracks 
on it which I think will be helpful.
    Let me ask Senator Inouye if you have some questions at 
this point, Senator.
    Senator Inouye. Thank you.
    During this period of relationship with Mr. Scanlon and Mr. 
Abramoff, how much did the tribe provide these two men and 
their organizations?
    Mr. Kilgore. Senator Inouye, in both Senator Dorgan's 
opening comments and Senator McCain's opening comments, they 
referred to those amounts. They got those from the staff. We 
have provided that detailed financial information to the staff. 
They have cumulated those figures. Yesterday we met with the 
staff and in anticipation of that question, those figures that 
were given are what are records showed.
    Senator Inouye. I am sorry I was not here, but what is the 
number?
    Mr. Kilgore. I believe that on payments to Capitol Campaign 
Strategies, d/b/a Scanlon-Gould and his groups was 
approximately $15,855,000. And then Mr. Abramoff's receipt out 
of those funds was in the range of $5 million to $7 million. We 
have not been able to pin those down exactly, but we are 
working on that and we would be glad to supplement the record 
at a later date once we get an agreement with the staff as to 
exactly what the figure is going to be.
    Senator Inouye. As a general rule, organizations and law 
firms who are doing business would provide periodic reports in 
writing to their clients telling them, giving them a progress 
report on projects and such. Did you ever receive any report 
from Mr. Abramoff or Mr. Scanlon?
    Ms. Rogers. Yes, sir; we received detailed reports. We know 
that the work was done. We met once a year or twice a year. We 
also had independent means of determining that work was done.
    Senator Inouye. And this was not fraudulent work?
    Ms. Rogers. No, sir.
    Senator Inouye. Did you also receive receipts from these 
organizations?
    Ms. Rogers. We received bills from the law firm. Yes, sir, 
we received receipts.
    Senator Inouye. From the law firms.
    Ms. Rogers. We always had a budget and cost from Mr. 
Scanlon's companies as well and from the grassroots companies.
    Senator Inouye. These reports would advise you that certain 
things had occurred?
    Ms. Rogers. Yes, sir.
    Senator Inouye. Did you take the time to see if they did 
actually occur?
    Ms. Rogers. We know that the work was done.
    Senator Inouye. So you are saying that a certain portion 
was not fraudulent?
    Ms. Rogers. The work was done. What appears to be 
fraudulent was the overcharges and the conspiracy (I probably 
should not use that word because I am not a lawyer) between the 
two to plan to overcharge.
    Senator Inouye. Setting aside the work that was done, the 
legitimate work, how much of the amount that you mentioned 
would you attribute to fraud or overpayment or padding of 
books, et cetera?
    Mr. Kilgore. Senator Inouye, may I inject here? The 
circumstances that we are faced with here, we are not able to 
give you the amount of harm in money terms. The reason is this. 
We are in very sensitive settlement negotiations with various 
parties. If we go into much detail on that, Senator Inouye, I 
think you can appreciate it will jeopardize our ability to 
settle that civil matter with those parties.
    We have already mentioned two of the firms that we have 
either made an inquiry in or are in serious negotiations. What 
we will do is once we conclude that, we would be glad to get 
with the staff and supplement this record. We would even agree 
to an in camera meeting with you and your staff to detail those 
monies. It is just that this is a very sensitive time for us in 
those negotiations.
    Senator Inouye. When did the tribe realize that it was 
being defrauded or conned?
    Ms. Rogers. I believe it was in June 2004 when Chief Martin 
and Mr. Rogers met with the law firm that was conducting the 
internal investigation for Greenberg Traurig. They were shown 
evidence.
    Senator Inouye. What step did you take at that point?
    Ms. Rogers. The tribe immediately terminated its 
relationship with Mr. Abramoff. The lawyers began working with 
that internal investigative group. We were contacted by the 
committee and of course we have been cooperating with the 
committee. We have cooperated fully with the Justice Department 
and the FBI. We have provided them documents and details.
    Senator Inouye. When did the Justice Department and FBI 
participate in this investigation?
    Ms. Rogers. They began last summer. We had our first 
contact with them last summer. They came to Mississippi for 
interviews and records review and we have had a subsequent 
meeting with them, also in Mississippi.
    Senator Inouye. Are you satisfied that the investigation is 
moving along properly?
    Ms. Rogers. I have not had any contact with them, but the 
tribe's attorneys have had, so they may be able to address 
that.
    Mr. Kilgore. Senator Inouye, we are aware that the 
investigation is moving forward. Frankly, my personal opinion 
is that they are inundated with records. We have looked at 
probably 60,000 e-mails and that is a lot of paperwork, a lot 
of paper trail. Your staff has done a terrific job in putting 
that in some semblance of order. I think Senator Dorgan 
mentioned that every time that you take another look at this, 
it takes a twist or turn that is unexpected. I think that is 
true for the criminal side, too. I think that every time they 
look at something, another avenue opens up. So that is my take 
on where the Justice investigation is.
    Senator Inouye. My last question, since you severed your 
relationship officially with the two men, did they ever contact 
you?
    Ms. Rogers. They have not.
    Senator Inouye. Thank you very much.
    Ms. Rogers. Thank you.
    Senator Dorgan. Just one additional point, it is exhibit 
102 that I was looking for when we talked about the White House 
issue. I think just for the record, you do not need to refer to 
it, but for the record I wanted to make clear what it was I was 
referring to. I think it is important that it be cleared up 
because it is the one that indicates, as you say, inaccurately 
that the Choctaws were at the White House.
    The vote has just started. I am sure Senator McCain will be 
back momentarily. Let me ask you, Ms. Rogers, as I said in my 
opening statement, this is a very successful tribe, with 
substantial business skills evidenced by the success that they 
have had with their business enterprises. They hire many people 
and I think are one of the largest employers in Mississippi. So 
a very successful tribe.
    We understand from the outset that you have legitimate 
business interests, that you would contract with people to 
engage in legitimate business activities. So we understand all 
that. The assumption with all these questions is not that you 
yourself, although your name is on some of these memos, but the 
implication is not that you did something wrong; it is that the 
tribe was deceived. It appears to me that the tribe was 
defrauded. Obviously, that is a matter for perhaps the Justice 
Department or someone else.
    I think what Senator McCain and I and others on the 
committee are trying to do is just understand the story, what 
has happened here, and how can we prevent this from happening 
again. You were asked by my colleague Senator McCain how you 
would address Mr. Scanlon and Mr. Abramoff. I understand the 
passion of the answer. When Mr. Abramoff began to hand-off a 
business relationship to Mr. Scanlon, what kind of relationship 
did the tribal representatives have with Mr. Scanlon? Was their 
frequent contact?
    Ms. Rogers. There would be frequent contact, frequent 
reports.
    Senator Dorgan. At that point, did you still continue to 
have a relationship with Mr. Abramoff as well?
    Ms. Rogers. Not as much. There were times when we contacted 
Mr. Scanlon to do something independently. The unanswered 
question is whether or not Mr. Abramoff got a portion of that. 
I do not know. We do not know that, knowing what we know now. 
From looking at the e-mails, it appears that Mr. Abramoff was 
driving, and you have probably seen the same e-mails, the call 
up, do this, do that. Many of the e-mails where Mr. Abramoff 
was directing Mr. Scanlon to do that, I did not get a call or I 
did not get an e-mail.
    Senator Dorgan. Mr. Kilgore referred to this, but I know 
that you are aware of it as well, we now know what ``gimme 
five'' means. You have had a chance to review the e-mails. Mr. 
Kilgore, you have as well. Your reaction to ``gimme five''?
    Mr. Kilgore. Senator, it is a blatant calculated scheme to 
defraud a client. We have been surprised, you understand. We 
dealt with reputable law firms all these years, and we relied 
on those law firms' internal ability to audit what goes on 
among its members and its shareholders. We have been surprised 
at the lack of institutional oversight on Mr. Abramoff. It 
never occurred to us.
    As a practitioner for 32 years, when I bill a client, that 
client can be assured that I am billing actual time and my 
actual expenses. If I were in a firm, there would be somebody 
that would have some oversight. We assumed that oversight was 
in place. Apparently if it was in place, it was insufficient.
    Senator Dorgan. Let me refer finally, and the chairman has 
just returned and I will then run and vote, let me refer to 
exhibit number 45 just for the purpose of saying, as it occurs 
in a number of memos, the last two words are ``gimme five.'' 
Obviously, we know what that means now. It means ``I am taking 
a cut of this; we are going to slice away a part of this for my 
bank account.''
    Mr. Chairman, I have finished with these witnesses. I do 
again want to say that we very much appreciate their 
cooperation. Ms. Rogers, you especially perhaps were 
uncomfortable coming to a committee, your name is on some of 
these memoranda, but from all that we know, you are a victim 
and the tribe was victimized by what appears to be grand theft 
and fraud. Your willingness to help us try to understand this, 
Mr. Kilgore and Mr. Benn and others, your willingness to help 
us is very much appreciated. We appreciate your being here 
today.
    The Chairman. I thank the witnesses. Thank you for being 
here. Hopefully, you will never see anything like this again.
    Our next panel is Kevin Ring who is a former member of Jack 
Abramoff's lobbying team who has information about Mr. 
Abramoff's practice pertinent to the investigation, and Shawn 
Vasell, who is a former member of Jack Abramoff's lobbying team 
who has information about Mr. Abramoff's practice pertinent to 
the investigation.
    Mr. Ring, we will begin with you.

       STATEMENT OF KEVIN RING, FORMER ABRAMOFF ASSOCIATE

    Mr. Ring. Mr. Chairman, members of the committee, I am 
sorry to be here today under these circumstances. As I informed 
the committee a few weeks ago on the advice of counsel, I 
regretfully must decline to answer any questions concerning the 
subject matter of this hearing. I am sorry that clients for 
whom I worked have had to endure the enormous emotional and 
financial burden associated with this matter, as well as the 
multiple investigations that prompt it.
    As the committee knows and as my counsel has advised me, my 
constitutional right to remain silent at this time would be 
forfeited should I try to answer any questions. Therefore, I 
must abide by that advice and would like to truly apologize for 
not being able to answer the committee members' questions at 
this time.
    The Chairman. Let me make it clear, Mr. Ring. You are 
asserting your rights under the 5th amendment of the 
Constitution. Is that correct?
    Mr. Ring. That is correct, Senator.
    The Chairman. Mr. Vasell.

      STATEMENT OF SHAWN VASELL, FORMER ABRAMOFF ASSOCIATE

    Mr. Vasell. Thank you, Mr. Chairman.
    Mr. Chairman, honorable members of the committee, I am here 
today at the committee's request with the greatest respect for 
the important work of this committee and the Senate itself. I 
have been called to testify because of my past association with 
Jack Abramoff, whose activities are the focus of this 
committee's current inquiry.
    The committee staff reached out to me earlier this year and 
assured me they sought my information solely as a witness to 
the conduct of others. Given the range of pending 
investigations and inquiries relating to the work of Mr. 
Abramoff's government affairs practice, I engaged outside 
counsel to guide me toward my goal of providing meaningful and 
complete cooperation to such efforts. I now feel constrained to 
follow that guidance.
    Accordingly, I assert my privilege under the 5th amendment 
to the Constitution and decline to respond to questions related 
to my employment in Mr. Abramoff's group. I reach that decision 
reluctantly and with no purpose of impeding the committee's 
inquiry. I am persuaded that this is the right decision, 
however, and I will maintain it in response to any and all 
questions from the committee today.
    In advance of this hearing, my counsel confirmed my 
position in writing to the committee, yet I was not excused 
from this appearance. Therefore, I yield to questions of the 
committee.
    Thank you, Mr. Chairman.
    The Chairman. Both of you have the right, obviously, to 
assert your 5th amendment rights and the committee obviously 
will respect it.
    Mr. Ring, what is KAR Consulting? You can respond if you 
wish to or assert your 5th amendment privileges under your 
previous statement if you choose.
    Mr. Ring. I respectfully invoke my constitutional right.
    The Chairman. According to the information we have, KAR 
Consulting is a Maryland limited liability company formed on 
April 25, 2002 and registered to your home address. We have 
attached corporate registration from the Maryland Department of 
Assessments and Taxation. In February 2004, KAR Consulting, 
which is listed to your home address, Mr. Ring, received a 
$25,000-payment from a company called Grassroots Interactive. 
We have an exhibit which I will enter into the record, without 
objection, exhibit 183 of December 15, 2003 check for $25,000 
from Grassroots Interactive LLC to KAR Consulting.
    [Referenced document appears in Phillip Martin's prepared 
statement located in appendix.]
    The Chairman. Do you know who KAR Consulting is, Mr. Ring?
    Mr. Ring. I respectfully invoke my constitutional right 
under the 5th amendment.
    The Chairman. At the time of the payment, did you know that 
Jack Abramoff controlled Grassroots Interactive?
    Mr. Ring. Mr. Chairman, I respectfully invoke my 
constitutional right under the 5th amendment.
    The Chairman. In March and April 2002, did you receive a 
total of $125,000 from Michael Scanlon's company Capitol 
Campaign Strategies?
    Mr. Ring. Mr. Chairman, I respectfully invoke my 
constitutional right under the 5th amendment.
    The Chairman. Did that money come from payments made by 
Pueblo Sandia Tribe of New Mexico to Capitol Campaign 
Strategies?
    Mr. Ring. Mr. Chairman, I respectfully invoke my 
constitutional right under the 5th amendment.
    The Chairman. What services benefiting the Pueblo Sandia 
did you provide for that $125,000? In fact, you did not provide 
any services, according to the information that we have.
    Let's take a look at exhibit 43. It is an e-mail exchange 
between you, Mr. Ring, and Jack Abramoff dated April 24, 2001. 
In that e-mail, you asked Mr. Abramoff whether there is any way 
to ``bury'' your University Club dues in the Choctaw or SGMA 
bill. What did you mean when you asked Mr. Abramoff where you 
could ``bury'' your University Club dues in the Choctaw bill?
    Mr. Ring. Regretfully, Mr. Chairman, I must respectfully 
invoke my constitutional right under the 5th amendment.
    The Chairman..Did you ever seek to expense your University 
Club dues to the Mississippi Choctaw or to any other clients of 
Greenberg Traurig?
    Mr. Ring. I respectfully invoke my constitutional right 
under the 5th amendment.
    The Chairman. I now refer to exhibit 136, which is Mr. 
Ring's expense report for September 27, 2002 in which he 
apportions his club dues to the Choctaw Indian Tribe.
    Mr. Vasell, please review exhibit 47, an e-mail exchange 
between you, Mr. Vasell, and Mr. Abramoff dated June 19, 2001. 
It begins with you asking Mr. Abramoff why Michael Scanlon was 
billing time to Greenberg Traurig clients. Did Mr. Scanlon bill 
time through Greenberg Traurig to the Choctaw in 2001?
    Mr. Vasell. Mr. Chairman, I respectfully decline to answer 
that question on the basis of my privilege under the 5th 
amendment to the Constitution not to be made a witness against 
myself. It is my intention to respond to all of the committee's 
questions in this same manner.
    The Chairman. Were you concerned that Mr. Scanlon was 
billing Greenberg Traurig clients through the law firm?
    Mr. Vassel. Mr. Chairman, I respectfully decline to answer 
that question on the basis of my privilege under the 5th 
amendment to the Constitution.
    The Chairman. You were the tribe's client manager. You were 
aware, weren't you, of Mr. Abramoff billing the tribe for fees 
and expenses unrelated to the services that Greenberg Traurig 
provided the tribe.
    Mr. Vassel. Mr. Chairman, I respectfully decline to answer 
the question on the basis of my constitutional right.
    The Chairman. I refer both to Mr. Ring and Mr. Vasell to 
exhibit 37, which is on the screen. I will have to quote from 
it, which is a March 14, 2001 e-mail exchange between Jack 
Abramoff and his executive assistant. In it, Mr. Abramoff 
indicates he will ask the client managers to tell him how many 
hours they want him to bill. Either one of you, both of you, do 
you know if Mr. Abramoff ever fabricated time for himself or 
any associate to bill the Choctaw? You can just say, ``I give 
you the same answer.''
    Mr. Ring. The same answer.
    Mr. Vassel. The same answer, Mr. Chairman.
    The Chairman. Let's take a look at exhibit 53, an e-mail 
between Abramoff and his assistant dated August 29, 2001. In 
it, the assistant indicates that he is ``creatively'' entering 
Mr. Abramoff's July and August time for the Choctaw account, 
quote, ``with the help of some great language Shawn and Kevin 
have provided.'' What kind of language did you provide Mr. 
Abramoff for billing purposes?
    Mr. Ring. Again Mr. Chairman, the same answer.
    Mr. Vassel. The same answer.
    The Chairman. Mr. Vasell, I would like you to take a look 
at exhibit 42 which is an April 18, 2001 e-mail from Mr. 
Abramoff to you. In that e-mail, Mr. Abramoff instructs you to 
add 60 hours to the Choctaw bill to pump up Scanlon, Todd, and 
you. Was this done?
    Mr. Vassel. Again, Mr. Chairman, I have to invoke my 
constitutional right.
    The Chairman. The March 2001 bill to the Choctaw totaled 
$147,340.50 in fees and the April 2001 bill totaled 
$146,963.97.
    Well, the list goes on. I am sorry that young men like 
yourself are engaged in such activities that you come before 
this committee and invoke your constitutional rights under the 
5th amendment. We had hoped that you would cooperate with the 
committee. Obviously, you have chosen not to do so, which again 
is your right.
    Senator Dorgan, I do not think there are any additional 
questions for the witnesses. They have invoked their 5th 
amendment rights.
    Senator Dorgan. Mr. Chairman, they certainly have a right 
to invoke that privilege, but I share your disappointment. I 
believe that justice would be better served by being 
forthcoming about what has happened here, but I think you have 
asked a series of questions that are questions that I would 
have asked as well. I have no further questions.
    The Chairman. The witnesses are dismissed.
    The next panel is Amy Ridenour, who is the president of the 
National Center for Public Policy Research, a non-profit 
foundation on whose board Mr. Abramoff sat, who has information 
pertinent to the investigation; Gail Halpern, Jack Abramoff's 
tax adviser, who has information about Mr. Abramoff's 
businesses pertinent to the investigation; Brian Mann, a yoga 
instructor who served as a director one of Michael Scanlon's 
companies who has information about Mr. Scanlon's businesses 
pertinent to the investigation; David Grosh, a lifeguard who 
served as a director for one of Michael Scanlon's companies who 
has information about Mr. Scanlon's businesses pertinent to the 
investigation; and Aaron Stetter, a former employee of Michael 
Scanlon who has information about Mr. Scanlon's business 
pertinent to the investigation.
    Ms. Ridenour, we will begin with you.

   STATEMENT OF AMY RIDENOUR, PRESIDENT, NATIONAL CENTER FOR 
                     PUBLIC POLICY RESEARCH

    Ms. Ridenour. Thank you, Mr. Chairman and committee for 
inviting me to appear before the committee.
    In the interest of brevity, I am summarizing my remarks, 
but I do refer the committee to my written testimony for 
additional details.
    The Chairman. Without objection, your entire written 
statement will be made part of the record.
    Ms.Ridenour. Thank you.
    The National Center is a 23-year-old conservative free 
market non-profit institution. I am the chief executive 
officer. One of the National Center's programs is project 21, 
which highlights the views of conservative and moderate African 
Americans. Another activity examines the extent to which low-
income and minority populations disproportionately bear the 
cost of some government regulations.
    Jack Abramoff joined our board in 1997 when we increased 
the number of board members from three to seven for the purpose 
of improving oversight. At that time, I had known Jack for 
nearly 17 years. He was a dedicated conservative, a successful 
lobbyist and businessman, and his managerial skills it seemed 
to me at the time exceeded my own.
    In 2000, the National Center adopted a conflict of interest 
policy requiring directors to reveal to the board all financial 
interests in any entity with which the National Center is 
negotiating a transaction. We required every member of the 
board to sign the resolution so that no one could later claim 
they were unaware of the policy. Every director did so.
    It was through Jack Abramoff that I had the honor in 
February 1997 of meeting Chief Phillip Martin and learning the 
Choctaw success story. From 1997 through 1999, the National 
Center received contributions of $7,500 in total from the 
Mississippi Choctaws. In 2000, we received $65,000. I 
understood all of these funds to be general support 
contributions.
    I am, of course, aware of news media coverage connecting 
part of these contributions to a trip we sponsored by a member 
of Congress. At the time I extended an invitation to this 
member of Congress through his chief of staff, I did not know 
we would be receiving contributions from the Mississippi 
Choctaws that year. At no time did I convey to the Congressman 
or to his staff that we had received these contributions and I 
was never told nor was I under the impression that the 
Mississippi Choctaws even knew we had sponsored a congressional 
trip.
    In 2002, the Mississippi Band of Choctaw Indians donated $1 
million to the National Center. Approximately 4 months before 
we received this contribution, my husband, who is vice 
president of the National Center, and I had lunch with Jack. 
The lunch was social, but we briefed him on information 
pertinent to the board, including the fact that the negative 
financial impact of 9-11 had reduced our ability to expand 
program services as we previously had planned for 2002. I told 
him that new donors would be especially valued that year, as 
would the opportunity to sponsor projects consistent with our 
mission for which funding was available.
    Jack then shared with us details of his work doing what he 
called ``a new kind of lobbying.'' He said he and his 
colleagues working with the Mississippi Choctaws had noted that 
for-profit non-Indian gaming establishments were pushing to 
establish themselves in areas of the Country not noted for 
their admiration of gaming. They believed that a public 
backlash against gaming was brewing and that before things came 
to a head, perhaps 4 to 5 years down the road, they would 
educate the public about the Choctaw success story.
    I was very interested in what I was hearing. I noted that 
his new kind of lobbying was not lobbying at all, but 
educational work and I expressed an interest in the National 
Center sponsoring it. Jack seemed mildly agreeable, but 
noncommittal. I did not press the matter, assuming the Choctaws 
were financing the project and would have to approve our 
involvement.
    Approximately four months later, Jack asked me if the 
National Center was still interested. For reasons I describe 
more fully in the written testimony, we were. Jack instructed 
me to send a $1-million invoice to the Mississippi Choctaws, 
which I did. When the funds arrived, he told me how they should 
be disbursed: $450,000 to the Capital Athletic Foundation as a 
grant; $500,000 to Capitol Campaign Strategies; and $50,000 to 
a company called Nurnberger and Associates.
    I believe Capitol Campaign Strategies was to be paid for 
educational program services, while Ralph Nurnberger was going 
to help coordinate the project. Jack referred to his receiving 
``instructions'' for the disbursements, which I took to mean 
recommendations from the donor, which was consistent with my 
belief that the Mississippi Choctaws were actively involved.
    Believing I was joining a project in progress, knowing that 
Jack was the legal representative of the Mississippi Choctaws, 
was part of a major law firm, and as a member of the National 
Center's board of directors, had a fiduciary responsibility to 
the welfare of the National Center, I disbursed the funds in 
accordance with Jack's instructions. At the time, I also 
requested and received Jack's repeated assurances, both by e-
mail and verbally, that he in assuming managerial authority for 
the project on the National Center's behalf, would adhere to 
the laws governing public charities.
    I often requested from Jack that he provide documentation 
about the educational activities we were supporting. He always 
said it would be no problem and I believed him--so much so that 
I agreed to continue the project in May and June 2003 when 
Greenberg Traurig sent the National Center $1.5 million. Jack 
told me $250,000 had been designated for the Capital Athletic 
Foundation as a grant and $1,250,000 was to be paid to Kaygold, 
a company I believed was owned by Michael Scanlon.
    I had resolved by then that if I did not promptly receive 
sufficient proof of good solid work performance, I would 
withdraw the National Center from the project. I did not get 
this proof, so I told Jack in July 2003 that we would cease 
participation. He did not object. I continued asking him for 
documentation for work performed on the payments we already had 
made.
    I always trusted Jack and I believed we would ultimately 
receive this documentation. Of the various theories I had in my 
mind as to why we were not receiving the funds, none of them 
involved a suspicion of misuse of funds. I still trusted him, 
frankly, after the negative press stories began in 2004. But 
when the Washington Post published, and that is in September 
2004, that Jack owned Kaygold, I knew that something was very 
seriously wrong. At that point, I telephoned our board of 
directors and we agreed simply on the strength of the violation 
of our conflict of interest policy alone that we had absolutely 
no choice but to accept Jack's offer to resign, which he had 
made in March 2004 and again made in October 2004.
    Consequently in October 2004, I accepted Jack's resignation 
from the board and I have not spoken with him since.
    [Prepared statement of Ms. Ridenour appears in appendix.]
    The Chairman. Thank you very much.
    Ms. Halpern.

STATEMENT OF GAIL HALPERN, FORMER TAX PREPARER, ADVISER TO JACK 
                            ABRAMOFF

    Ms. Halpern. Thank you, Mr. Chairman, Mr. Vice Chairman and 
members of the committee. My name is Gail Halpern. I am a part-
time accountant. I am a certified public accountant and 
personal financial planner.
    Mr. and Mrs. Abramoff were my clients from early 1997 until 
September 2004. I knew Mrs. Abramoff on a social basis and she 
asked me sometime in early 1997 to be her and Mr. Abramoff's 
accountant and prepare their personal income tax returns.
    The following is a general description of the services I 
performed for the Abramoffs.
    I prepared Mr. and Mrs. Abramoff's personal income tax 
returns from the 1996 tax year until the 2002 tax year 
inclusive. I prepared gift tax returns for Mr. and Mrs. 
Abramoff when required during this time as well. I prepared 
their children's income tax returns and I prepared trust income 
tax returns for the Jack and Pamela Abramoff family up to and 
including the 2003 tax year as required.
    I prepared personal and trust tax returns based on 
information provided by Mr. and Mrs. Abramoff or by those 
authorized to provide such information on their behalf, namely 
Mr. Abramoff's office at Preston Gates or later at Greenberg 
Traurig, or Mr. Abramoff's business office.
    I did not prepare any corporate, partnership or tax exempt 
entity returns, as I am not an expert in those areas of the tax 
law. Those returns were prepared by other competent 
accountants.
     Upon their request, I provided some tax planning advice to 
Mr. and Mrs. Abramoff within my limited areas of expertise. I 
also provided some estate planning advice and some financial 
planning advice to Mr. and Mrs. Abramoff as requested by them. 
I also answered general accounting and tax questions from the 
Abramoffs or from other authorized people in Mr. Abramoff's 
offices, as mentioned earlier.
    Any questions that I was not able to answer, such as 
questions that were specific to a certain area of accounting or 
law, I referred to attorneys or accountants who practiced in 
that area of accounting or law. Mr. or Mrs. Abramoff made all 
of the decisions.
    For Mr. Abramoff's daily checking account and for some of 
his business entities, I worked with Mr. Abramoff's business 
office to help implement a bookkeeping software package that 
required them to input all the information required for me or 
for others to prepare tax returns. I did not keep the book or 
prepare the books for Mr. Abramoff's daily checking account, 
business entities or for any of the non-profit entities that he 
started. Rather, my role was to answer questions or refer him 
to specialists who could answer questions when such questions 
were posed by Mr. Abramoff or by the bookkeeping personnel or 
staff.
    The day-to-day bookkeeping work was done by others. I was 
not an employee, officer, director or member of any of Mr. 
Abramoff's entities. Instead, I am an independent accountant 
and I service other clients besides the Abramoffs. The tax 
returns that I prepared and any tax, estate and financial 
planning services that I rendered were based on information 
provided to me by Mr. or Mrs. Abramoff or by personnel in Mr. 
Abramoff's offices mentioned earlier.
    To the best of my knowledge and based upon the information 
that they provided to me, all income received by the Abramoffs 
or their children or their family trusts for which I prepared 
income tax returns, was reported and included in the relevant 
tax returns.
    Thank you.
    [Prepared statement of Ms. Halpern appears in appendix.]
    The Chairman. Thank you.
    Mr. Mann.

      STATEMENT OF BRIAN MANN, FORMER DIRECTOR, AMERICAN 
                      INTERNATIONAL CENTER

    Mr. Mann. Mr. Chairman, I have no opening statement.
    The Chairman. Mr. Grosh.

      STATEMENT OF DAVID GROSH, FORMER DIRECTOR, AMERICAN 
                      INTERNATIONAL CENTER

    Mr. Grosh. I am embarrassed and disgusted to be part of 
this whole thing. The Lakota Indians have a word, ``wasichu,'' 
which aptly describes all of us right now.
    The Chairman. Thank you.
    Mr. Stetter.

STATEMENT OF AARON STETTER, FORMER ASSOCIATE, CAPITOL CAMPAIGN 
                           STRATEGIES

    Mr. Stetter. Mr. Chairman, I have no opening statement.
    The Chairman. Thank you.
    Mr. Grosh and Mr. Mann, I thank you for being here today. I 
know of no problem that we have with you personally. It is a 
situation that we are trying to get to the bottom of and we 
thank you for appearing here today.
    Mr. Grosh, you and Mr. Mann were designated as directors of 
the AIC, which was described in its own website as an 
``international think tank.'' It is very interesting on its 
website. It is described as, the American International Center 
is a public policy research foundation founded in 2001 under 
the high-powered directorship of David A. Grosh and Brian J. 
Mann.
    While only recently incorporated, the AIC has been striving 
to advance the cause of greater international empowerment for 
many years. Based on sunny Rehoboth Beach, DE, the AIC staff is 
using 21st century technology and decades of experience to make 
the world a smaller place. In summary, the AIC is bringing 
great minds together from all over the globe.
    It goes on in that vein.
    Mr. Grosh, I will begin with you. What did the AIC do?
    Mr. Grosh. I was only involved maybe 5 months, 4 or 5 
months. The whole time I was involved, we rented the first 
floor of a house and installed some computers.
    The Chairman. Mr. Mann, do you know what AIC did?
    Mr. Mann. Mr. Chairman, upon the advice of counsel I must 
respectfully decline to answer your questions based on my 
rights under the 5th amendment to the U.S. Constitution.
    The Chairman. Mr. Mann, did you know that you were 
designated a director until you recently interviewed with the 
Justice Department?
    Mr. Mann. Again, I must respectfully decline to answer your 
question based on my rights under the 5th amendment.
    The Chairman. Mr. Grosh, did you give Mr. Scanlon 
permission to put your name up on the AIC website?
    Mr. Grosh. On the website, no.
    The Chairman. Did you give Mr. Scanlon permission to hold 
you out as a director for the AIC?
    Mr. Grosh. Yes.
    The Chairman. Mr. Grosh, I would like to show you an 
exhibit which is 195. Can you provide that to the witness? Look 
in there at 195. It is a letter from the AIC that is under your 
signature. Here we are. This letter signed by David Grosh as 
president:

    Thank you very much for your recent contribution to the 
American International Center. Your donation of $200,000 will 
go a long way in assisting the AIC in its efforts to carry out 
its public policy agenda. As you know, the AIC is committed to 
influencing key policymakers on issues important to you and 
your constituents.

    On and on.

    The American International Center is a non-profit 
corporation dedicated to educating the public on important 
issues such as our national relationship with commonwealths, 
foreign governments and sovereign territories. As we discussed, 
we are not a tax-exempt organization, as your contribution is 
subject to tax. Again, we appreciate your generous support.

    Do you recall writing that letter, Mr. Grosh?
    Mr. Grosh. No; I do not.
    The Chairman. Do you ever remember seeing it?
    Mr. Grosh. No; I do not.
    The Chairman. Mr. Grosh, did the AIC conduct any board 
meetings?
    Mr. Grosh. I recall one.
    The Chairman. And how long did that last?
    Mr. Grosh. 15 minutes.
    The Chairman. Do you recall any business that was discussed 
at these board meetings?
    Mr. Grosh. Off the top of my head, no. I am sure we 
discussed something, not to be glib.
    The Chairman. Mr. Mann, I think it says when these meetings 
took place, the extent of your role in the AIC at that time was 
cleaning the downstairs office space. Is that correct?
    Oh, Mr. Mann does not want to answer.
    As far as you were concerned, Mr. Grosh, was this basically 
another Scanlon entity?
    Mr. Grosh. Well, legally, no. It was Mr. Mann and I, but he 
was calling the shots, sure.
    The Chairman. So were you a little surprised when all this 
information started coming out that you were a director of an 
internationally respected think tank?
    Mr. Grosh. Surprised, not really. The reason I got out of 
it when I found out it involved the Federal Government, Indian 
tribes and gambling, I knew that was a tad down the wrong road.
    The Chairman. I want to point out again, Mr. Grosh. I 
appreciate your cooperation. I am disappointed in your lack of 
it, Mr. Mann, but this committee holds no brief against you on 
this issue. We are trying to get to the bottom of things. We 
know of no allegation of wrongdoing on your part, at least that 
I know of.
    Tell me how this all began, Mr. Grosh. Were you friends 
with Mr. Scanlon?
    Mr. Grosh. Yes; I have known Mr. Scanlon since I was about 
14.
    The Chairman. And what happened? He approached you in some 
way?
    Mr. Grosh. A phone call.
    The Chairman. And said?
    Mr. Grosh. Do you want to be head of an international 
corporation. [Laughter.]
    It is a hard one to turn down. [Laughter.]
    The Chairman. And at the time were you living in Rehoboth 
Beach?
    Mr. Grosh. Yes, sir.
    The Chairman. And Mr. Scanlon then informed you that your 
home would be the headquarters?
    Mr. Grosh. Actually, at that point, no. There were no 
headquarters.
    The Chairman. Could you tell me just the sequence of events 
that took place after that?
    Mr. Grosh. I asked him what I had to do, and he said 
nothing. So that sounded pretty good to me. [Laughter.]
    I am trying to think how it all happened. He came by; we 
spoke about it. At the time, I was, like, yes, sure, but not 
really taking it seriously. And then he had me sign some 
papers. I met him here in Washington, DC and we took over the 
bottom of the house I was living in.
    The Chairman. Did you receive compensation for this role?
    Mr. Grosh. Yes.
    The Chairman. And your background is a very honorable one, 
I understand, as a lifeguard. Is that correct?
    Mr. Grosh. Among other things. I am not a lifeguard 
anymore, no.
    The Chairman. And could you give us a little resume of some 
of your background?
    Mr. Grosh. Right now, I am an excavator, a machine 
operator, construction workers, mentor in preschools, 
bartender. Typical beach employment.
    The Chairman. Thank you. Do you remember the extent of the 
compensation that you received from Mr. Scanlon, roughly?
    Mr. Grosh. No more than $2,000 or $2,500.
    The Chairman. A month?
    Mr. Grosh. No; total.
    The Chairman. Total.
    Did Mr. Scanlon promise you any fringe benefits?
    Mr. Grosh. Well, I do not know if this is related to the 
AIC, but we went to a Washington Capitals-Pittsburgh Penguins 
hockey game.
    The Chairman. Did you go to St. Bart's with him?
    Mr. Grosh. No; by that time I was no longer.
    The Chairman. I see.
    Well, I want to be very clear, Mr. Mann, and I am not 
asking you to change your position, but we view this as just a 
gigantic scam and you two individuals were used clearly by Mr. 
Scanlon. We feel very strongly that your testimony could help 
us. I hope you will maybe reconsider that or get a new lawyer, 
Mr. Mann, but I hope you will reconsider it.
    You obviously had nothing to do with posting this 
description of AID on the Web site, did you, Mr. Grosh?
    Mr. Grosh. No, sir; if I may?
    The Chairman. Please.
    Mr. Grosh. I am an adult. He did not use me. I have sense.
    The Chairman. It was a pretty good deal, huh?
    Mr. Grosh. Well, obviously not.
    The Chairman. At the time, it seemed like a good deal.
    Mr. Grosh. Well, you know, I didn't just crawl out of a 
cotton patch. Anything that sounds too good to be true usually 
is.
    The Chairman. And they used the bottom floor of your house?
    Mr. Grosh. Yes.
    The Chairman. Thank you very much.
    Mr. Grosh. We did.
    The Chairman. They did. I see. Thank you.
    Ms. Ridenour, since 1982 you have served as president of 
the National Center for Public Policy Research. Is that true?
    Ms. Ridenour. Yes.
    The Chairman. In October 2002 in your capacity as president 
of the NCPPR, as you testified, you received $1 million from 
the Mississippi Band of Choctaw Indians. Correct?
    Ms. Ridenour. Yes.
    The Chairman. Let's talk about how you came to receive the 
$1 million from the Choctaw Tribe. In June and July 2002, you 
told Mr. Abramoff that the NCPPR wanted to keep its ``program 
numbers'' up for marketing purposes. That is according to e-
mails that we have.
    Ms. Ridenour. In general, yes, sir.
    The Chairman. So you told Mr. Abramoff NCPPR would be 
willing to participate in any program consistent with the 
NCPPR's tax-exempt purpose that Mr. Abramoff was working on.
    Ms. Ridenour. In general, yes, sir.
    The Chairman. Mr. Abramoff told you he and his firm 
invented for the Choctaw Tribe a ``new kind of lobbying,'' as 
you have testified. And you concluded such an educational 
purpose was consistent with NCPPR's charitable mission?
    Ms. Ridenour. Yes, sir.
    The Chairman. In October 2002, Mr. Abramoff told you the 
Choctaw Tribe had $1 million to do this educational project, as 
you have testified. Ms. Ridenour, before you allowed Mr. 
Abramoff to use the NCPPR as a pass-through, you repeatedly 
warned him that whatever the $1 million was used for needed to 
be appropriate for a non-profit charitable foundation.
    Ms. Ridenour. I certainly did.
    The Chairman. After you received the $1 million, Mr. 
Abramoff instructed you to cut three checks: one $450,000 to 
Mr. Abramoff's private charity, the Capital Athletic 
Foundation; $500,000 to Mr. Scanlon's outfit, Capitol Campaign 
Strategies; and $50,000 to a small lobbying firm called 
Nurnberger and Associates. Correct?
    Ms. Ridenour. Yes; except that in some cases, they were 
wire transfers.
    The Chairman. Thank you.
    What, if anything, did Mr. Abramoff tell you about the 
$450,000 payment to Capital Athletic Foundation?
    Ms. Ridenour. It was to be a grant to the Capital Athletic 
Foundation for its purposes, consistent with the wishes of the 
ultimate donor, the Mississippi Choctaw.
    The Chairman. As you testified, you did not know that the 
Capital Athletic Foundation was Mr. Abramoff's private charity.
    Ms. Ridenour. Actually, I did not know Kaygold was owned by 
Mr. Abramoff. I did know that he had an association with the 
Capital Athletic Foundation. I simply found it consistent with 
what I knew to be a warm relationship between him and the 
Choctaws.
    The Chairman. Did you know the primary beneficiary of the 
Capital Athletic Foundation was first and foremost a Jewish 
boys school in Maryland founded by Mr. Abramoff?
    Ms. Ridenour. No; I was aware of the school, but I 
believed, based on private conversations I had with Jack, that 
it was financed through tuition from the parents.
    The Chairman. We heard testimony that Mr. Abramoff told the 
Choctaw Tribe that this $1 million would be used for 
``grassroots activities to influence legislation.'' Did he tell 
you this?
    Ms. Ridenour. Not only did he not tell me that, he 
repeatedly told me that legislation would not be involved. I 
would not have approved our participation at all had I even 
known there was legislation. I had several things that needed 
to be specified before I went okay with it. The absence of 
legislation was something he had to assure me about.
    The Chairman. What, if anything, did Mr. Abramoff tell you 
about the $500,000 payment to Mr. Scanlon's business, CCS?
    Ms. Ridenour. That it was to be used for educational 
program services, particularly polling and telephone banks, but 
not necessarily exclusively; research, potentially paid 
advertising; I was told later petition drives, that sort of 
thing, but 100 percent educational program services.
    The Chairman. What, if anything, did Mr. Abramoff tell you 
about the $50,000 payment to Nurnberger and Associates?
    Ms. Ridenour. At first he told me nothing, meaning in the 
conversation, so I immediately inquired. He told me then that 
Mr. Nurnberger was going to coordinate the project.
    The Chairman. In the invoices that you received from CCS, 
CAF and Nurnberger and Associates, the Capital Athletic 
Foundation was seeking payment for ``sports and politics 
projects.''
    Ms. Ridenour. That is what they wrote, yes.
    The Chairman. Do you believe that happened?
    Ms. Ridenour. Looking at the tax returns, it apparently did 
not.
    The Chairman. For a second, the invoice reportedly issued 
by Nurnberger and Associates for $45,000 was for a supposed 
research grant. In an interview with the committee staff, Mr. 
Nurnberger, senior partner of the lobbying firm Nurnberger and 
Associates, stated that neither he nor his firm issued this 
invoice to the NCPPR. In fact, the firm never issued an invoice 
regarding the $50,000 it received from the NCPPR. In addition, 
Mr. Nurnberger attested that Mr. Abramoff told him that the 
$50,000 he was having the NCPPR pay him was repayment on a 
personal loan that Mr. Nurnberger had made to Mr. Abramoff some 
years ago.
    Did Mr. Abramoff ever tell you that the $50,000 you were 
sending to Nurnberger and Associates was in fact repayment to 
Mr. Nurnberger on a personal loan?
    Ms. Ridenour. Absolutely not.
    The Chairman. I think I know your response if he had told 
you that.
    Ms. Ridenour. Yes, Senator.
    The Chairman. What, if anything, did you do to try to 
verify that the $1 million was being put to use in the manner 
Mr. Abramoff stated?
    Ms. Ridenour. Unfortunately, I mostly asked Jack Abramoff 
for documentation. One of the things that we are now doing at 
the National Center is putting into place a series of checks 
and balances so that in the future this sort of thing will not 
happen to us again. I trusted Jack. I believed not only that he 
had the fiduciary responsibility to us, but in fact was 
attempting to serve his clients, the Choctaws, a non-profit 
entity, to the best of his ability as well.
    So what I did do was talk to him; not enough.
    The Chairman. Thank you, Ms. Ridenour. I want to thank you 
for your candor and your willingness to appear here. I do 
believe that your organization has done excellent work over the 
years. I have been familiar with much of it. I thank you for 
your testimony today.
    Ms. Ridenour, with respect to the $1 million transaction, 
do you believe Mr. Abramoff lied to you?
    Ms. Ridenour. Certainly. I do not know how I could reach 
any other conclusion at this point in time.
    The Chairman. Do you believe that he may have defrauded the 
tribe?
    Ms. Ridenour. Certainly I do.
    The Chairman. Do you think he may have defrauded the NCPPR?
    Ms. Ridenour. Certainly I do.
    The Chairman. Thank you, Ms. Ridenour. I thank you for 
being here today. Your involvement has been sad, but helpful to 
us, and I thank you.
    Mr. Stetter, could you take the microphone please from Ms. 
Ridenour? You are a former employee of CCS. Right?
    Mr. Stetter. Yes.
    The Chairman. One of the things that you do is set up 
groups that Mr. Scanlon or Mr. Cathcart used to have you 
conduct grassroots activities. Is that correct?
    Mr. Stetter. I would not say set up groups, no. I would not 
say that.
    The Chairman. What would you say?
    Mr. Stetter. I wrote phone scripts with groups that were 
already provided to me, but I have never set up a group before, 
never.
    The Chairman. I see. Is the Christian Research Network a 
real organization, to your knowledge?
    Mr. Stetter. To my knowledge, no.
    The Chairman. How about the Global Christian Outreach 
Network?
    Mr. Stetter. To my knowledge, no.
    The Chairman. And the Concerned Citizens Against Gaming 
Expansion?
    Mr. Stetter. To my knowledge, no.
    The Chairman. And the Citizens Against Gaming, Michiganders 
Against Gaming? In other words, these organizations were used 
when your organization made phone calls, right, to various 
constituents on issues?
    Mr. Stetter. Yes.
    The Chairman. Particularly gaming.
    Mr. Stetter. Yes, sir.
    The Chairman. And these names of these organizations were 
just provided to you?
    Mr. Stetter. Yes.
    The Chairman. And again, Mr. Scanlon or Mr. Cathcart would 
instruct you to draft a phone script opposing some gaming 
initiative that might harm one of CCS's tribal clients. Is that 
correct?
    Mr. Stetter. That is correct.
    The Chairman. And they would give you some guidance on what 
the draft should actually say?
    Mr. Stetter. Yes; I would follow along from old drafts.
    The Chairman. And you returned the draft for their approval 
with the name of the organization left out. Is that correct?
    Mr. Stetter. It would be left out or provided later. It 
would be put in later.
    The Chairman. And usually that would be Chris Cathcart, Mr. 
Scanlon's primary assistant would plug in the name of a 
grassroots group.
    Mr. Stetter. I believe so, yes.
    The Chairman. For example, the Christian Research Network. 
In fact, an example of one such script that was drafted under 
that very name, it is number 124. This is a phone script and it 
says:

    Hello, my name is John. I am calling from the Christian 
Research Network. We need your help to stop the spread of 
gambling in Louisiana. The situation is very critical.
    Do you consider yourself pro-gaming or anti-gaming? Record 
response. If pro, disconnect. As you have seen in the 
newspaper, the Jena Band of Choctaw Indians is trying to bring 
yet another casino to Louisiana, this time to DeSoto Parish, 
about 70 miles from where they are based. What is more is that 
the people of this Parish have never been given a say in this 
matter. As a concerned citizen who opposes gambling, would you 
be willing to call Senators Breaux/Landrieu and tell him or her 
to stop the spread of gambling in Louisiana. If no, disconnect; 
if yes, we can connect you to the Senator's office. When they 
pick up, tell them to take a stand against gaming in Louisiana. 
Tell them to oppose the new Indian casino, patch through and 
collect data.

    Are you familiar with that one?
    Mr. Stetter. Yes; I am.
    The Chairman. And to your knowledge, you do not know who 
the Christian Research Network is?
    Mr. Stetter. To my knowledge, no, sir.
    The Chairman. As a Senator, personally I am interested in 
this ability to patch right through to the Senator's office, 
something I always suspected, but it is certainly an effective 
tool.
    I guess what I am trying to get at, Mr. Stetter, and I 
understand the business that you are in, but should somebody 
have maybe checked to see whether these organizations were 
legitimate organizations? Or was it just your job to plug in 
the script?
    Mr. Stetter. Mr. Chairman, as an entry-level employee, I 
did not have particular questions about what these groups were. 
I was just provided the names and then I provided the scripts.
    The Chairman. I see. All right, sir. We have more 
questions. I have another round, but I would like to yield to 
Senator Dorgan at this time and then I will come back for the 
others.
    Thank you. I thank the witnesses.
    Senator Dorgan. Mr. Chairman, thank you very much.
    It is hard to know where to start with all of this 
material. I know that you were asking Mr. Grosh about his 
employment and his opportunity to become a part of that 
organization. Some found it funny. There is very little that is 
funny about this issue. Going through the e-mails, I might just 
observe that this was not only fraud on a pretty grand scale, 
but let me just describe the smaller fraud here.
    Exhibit 31 has a memorandum from Mr. Abramoff to a Rabbi 
Lapin. He said:

    I hate to ask you for your help with something so silly, 
but I have been nominated for membership in the Cosmos Club, 
which is a very distinguished club composed of Nobel Prize 
winners and so on. The problem for me is most prospective 
members have received awards and I have received none. I was 
wondering if you thought it possible that I could receive an 
award from your organization. Probably you could call it 
something like scholar of Talmudic studies or distinguished 
biblical scholar award. It would even be better if it were 
possible that I received these in the years past, if you know 
what I mean.

    [Laughter.]
    The Chairman. That is to whom?
    Senator Dorgan. It is exhibit 31. It is from Mr. Abramoff 
to a Rabbi Daniel Lapin.
    My point is that this was not just cheating on a grand 
scale. In fact, I believe that goes on and on and actually they 
describe the type of----
    The Chairman. And Rabbi Lapin's response is?
    Senator Dorgan. Abramoff said I am trying to do here, it 
would only be used for this situation at the Cosmos Club, but 
there is a chance they would have to call someone to verify; 
probably just a few clever titles, awards and dates, as long as 
you can be the person to verify them.
    The response from the recipient, Mr. Lapin, is yes, I just 
need to know what needs to be produced--letters? Plaques? 
Neither? Anyway, the memorandum goes on.
    Look, the point of all of this, there is a lot of deception 
going on and there are victims of this deception. Let me go 
through a couple of areas, if I might.
    Mr. Stetter, if I might ask you first, it appears that what 
we had was the establishment of a good many bogus groups isn't 
that correct? Bogus organizations?
    Mr. Stetter. Yes; if that is the term you want to use for 
it, yes.
    Senator Dorgan. Was it a case where these organizations, in 
many cases, actually just had a telephone. Those telephones 
were all in a drawer and when the telephone would ring, you 
would just go to the drawer and pick out which telephone it was 
for whichever organization?
    Mr. Stetter. To my knowledge, there was that drawer. It was 
not my job to pick up the phones, but to my knowledge that is 
how it worked.
    Senator Dorgan. These were organizations that were created 
with names, some of which perhaps my colleague, Senator McCain 
just read, and it was not as if they did not have any 
connection to anything. They obviously had a telephone line 
with a telephone number, but you could just put all those 
organizations in a little drawer and when the phone rings, you 
open up the drawer and figure out which phone rang and then 
answer with the name of that organization. So that is what I 
refer to when I talk about bogus organizations. I believe there 
is a trail with respect to some memoranda on that as well.
    I would like to ask a couple of questions, Mr. Stetter, 
about Mr. Cathcart, because his name was just used a moment ago 
and I will go through this very quickly. You took a position 
with Michael Scanlon and his companies, Scanlon-Gould and 
Campaign Strategies, correct?
    Mr. Stetter. Scanlon Gould Public Affairs or Capitol 
Campaign Strategies.
    Senator Dorgan. And you did some administrative duties and 
some research for clients?
    Mr. Stetter. Yes, sir.
    Senator Dorgan. You always maintained a support role behind 
the scenes, you told us?
    Mr. Stetter. Yes.
    Senator Dorgan. After you left the Scanlon companies, you 
were hired by the National Restaurant Association as manager of 
a grassroots program. Is that right?
    Mr. Setter. Yes, sir.
    Senator Dorgan. Given your background prior to working for 
Mr. Scanlon, exactly what did you do at the Scanlon companies 
that qualify you for a job as manager of grassroots programs at 
this point?
    Mr. Setter. I would say the main qualification was actually 
working on some of the phone scripts and working on some of the 
campaigns. I actually went to some of the gaming facilities and 
assisted with letter-writing campaigns. So I did do some 
grassroots functions.
    Senator Dorgan. Every organization has a kind of right-hand 
man, somebody that is in charge. Who was Mr. Scanlon's right-
hand man?
    Mr. Setter. From my experience, it would be Chris Cathcart.
    Senator Dorgan. Did he run the Washington, DC office?
    Mr. Setter. When Mike was out of town, without him having a 
title or anything, it was understood that Mr. Cathcart ran the 
Washington, DC office.
    Senator Dorgan. I believe Mr. Cathcart has asserted 
publicly that he was just a mere gofer in the operation. Do you 
disagree with that?
    Mr. Setter. I guess in some degree we were all gofers for 
Mr. Scanlon. I was probably described as a gofer for probably 
everyone in the operation.
    Senator Dorgan. Who was in charge when Mr. Scanlon was not 
there in the Washington, DC office?
    Mr. Setter. I answered directly to Mr. Cathcart.
    Senator Dorgan. So Mr. Cathcart was in charge. Thank you.
    Let me ask Ms. Ridenour a couple of questions about the 
pass-through. We know of the $1 million that has been 
discussed. Is this the first time money in that quantity has 
been passed through your organization in order to obscure its 
identity?
    Ms. Ridenour. Well, I do not believe it was. Well, from our 
perspective, it was not being done to obscure its identity. The 
grant to Capital Athletic Foundation we perceived to be a 
legitimate grant, and the rest of it we perceived to be ongoing 
program work that we intended at some point to brag about on 
our Web site. So obscurity was never a goal.
    Senator Dorgan. Except that, and you may be right with 
respect to that. You have heard me describe the other attempts 
to deceive and obscure. But when Mr. Abramoff told your 
organization, which is a research organization, is it a (c)(4)?
    Ms. Ridenour. It is a (c)(3).
    Senator Dorgan. When he told your organization that he 
wanted a $500,000 check written for a grant, was there actually 
a grant request that came in for the grant that described what 
the grant money will be used for, the purpose of the grant, and 
on what basis the grant will be awarded?
    Ms. Ridenour. What happened was we received an invoice 
through Greenberg Traurig in October 2002 and I discussed with 
Jack on the telephone the activities of the Capital Athletic 
Foundation. I was aware of his affiliation with it. I also had 
had a prior knowledge of what the Capital Athletic Foundation 
at least officially was supposedly doing. One of the things 
that I worked to do at that time was ascertain that the Capital 
Athletic Foundation's mission not only was as a legitimate 
501(c)(3), which it apparently was, but also that its mission 
was consistent with our own in terms of educational program 
services. Those tests seemed to be met, so I agreed to do the 
grant, believing that that was the wish of the Choctaws.
    I also said, however, specifically to Jack at that time 
that if I am not convinced that all of the legal tests are met, 
and in this case I was thinking of (c)(3) regulations, I was 
not even thinking about larceny or anything of that sort, that 
I would simply make the offer to the Choctaws to return their 
money.
    Senator Dorgan. This is the first time that $1 million has 
been moved through your organization for the purpose of moving 
it elsewhere?
    Ms. Ridenour. Certainly, yes. It is the largest grant we 
had ever received.
    Senator Dorgan. Okay. And you did not receive a grant 
request from the Capital Athletic Foundation saying we are 
requesting a $500,000 grant with a 1-page or 2-page or 10-page 
description of what we want to do.
    Ms. Ridenour. Correct. We did not receive the formal grant 
proposal, and I assure you in the future we certainly will.
    Senator Dorgan. That is highly unusual, right?
    Ms. Ridenour. Well, since I had never done it before, 
``unusual'' would not be the term. Let's put it this way: It 
will never be anything we ever do again.
    Senator Dorgan. My understanding is that the small bit of 
trail that exists here described it as the sports and politics 
project.
    Ms. Ridenour. That is what Greenberg Traurig wrote on the 
invoice, or whoever wrote that invoice, frankly. Frankly, what 
I was told, and this is consistent with what was on the Capital 
Athletic Foundation's tax returns and also their website, was 
that they were doing actual educational programs, creating 
programs through which teachers and mentors could teach young 
people about the importance of good citizenship values. So this 
was exceedingly consistent with an educational mission.
    Senator Dorgan. I understand. Let me just say, as Senator 
McCain has, I appreciate your appearing here and your speaking 
about this issue. It is probably not comfortable for you to do 
it because you, too, were likely deceived. But what I am trying 
to get at is if in fact Greenberg Traurig's memorandum 
correctly describes the $500,000 grant to the Capital Athletic 
Foundation as a sports and politics project, the ``politics'' 
part would probably run afoul of your (c)(3), would it not?
    Ms. Ridenour. Well, yes, if I thought that was what they 
meant. I just thought it was a person who does not understand 
and wrote that, and because I had had conversations directly 
with Jack Abramoff representing the foundation and had looked 
into the foundation enough to know what it really did, I just 
thought it was an error by the copywriter or whoever actually 
created it.
    Certainly, if I had thought ``politics'' in the sense that 
we usually use it had anything to do with that foundation, 
there is no way I would have approved it.
    Senator Dorgan. Do you have some sense or do you 
understand, I hope you do, why those of us who look at this 
trail, take a look at this movement of substantial money 
through organizations, and then say wait a second; there is 
something fundamentally wrong with (c)(3)s or (c)(4)s being 
used as conduits to move tribal money through your organization 
to benefit Mr. Abramoff. And so we look at that and say how can 
this happen so easily with money that just slides through a 
(c)(3) or (c)(4) without even a 2- or 3-page grant request.
    Ms. Ridenour. It is not so easily, though. One of the 
things you have to keep in mind, Senator, is the relationship 
that we had going back by that time was just sort of 22 years. 
When you have worked with someone for 22 years; when they have 
been a member of your board of directors by October 2002 for 5 
years; when you have worked on projects together; when you know 
someone personally; when you believe, even though technically 
it is irrelevant, that you are close personal friends; when you 
believe all of these things and you also know that it is in, 
and I still believe to this day it is in a person's best 
interest to do a job right, your natural assumption is that the 
things they say to you are correct and true.
    In my future career, I will never make pretty much 
assumptions on anything again. But up until that time, 
believing that it was in Jack Abramoff's personal as well as 
professional interests to be honest, to serve his client the 
Choctaws as well as he possibly could, and in our interest as 
an educational institution to participate in bona fide 
educational activities that educate the national audience about 
important issues, it seemed perfectly consistent with our 
mission and it seemed like good, solid work.
    As you know from my testimony, by July 2003, even though I 
did not suspect anything resembling larceny, I pulled us out 
simply because we were not seeing documentation. So we did have 
what we felt at the time were fairly high standards for 
documentation. They were not high enough. They are higher now, 
but we did pull out long before there was any news media 
coverage of Jack Abramoff.
    Senator Dorgan. Do you feel this happened because he lied 
to you? Mr. Abramoff lied to you?
    Ms. Ridenour. Unless he walks into this room today and 
shows a heck of a lot of program service work, I would have to 
say yes.
    Senator Dorgan. Let me ask you for a moment about the 2000 
golf trip to Scotland for which, I believe, an amount of money 
came from your organization to help defray the costs of that 
golf trip. Is that correct?
    Ms. Ridenour. Yes.
    Senator Dorgan. Can you describe how that happened, because 
again you might well imagine when we take a look at money 
moving through (c)(3)s or (c)(4)s, we say wait 1 second; what 
is going on here. The same would be the case with respect to 
what has been described in some e-mails as the golf trip. 
Actually, there have been two golf trips, and on the 2000 golf 
trip was Congressman DeLay and a group of others, with Mr. 
Abramoff.
    So tell me if you will and tell the committee how your 
organization got involved in putting some money up for that 
golf trip.
    Ms. Ridenour. Certainly. First of all, while I am aware 
that is referred to as the golf trip, almost universally that 
is not a term that I use. We were contacted by Jack Abramoff in 
his capacity, I believed, as a member of our board of directors 
in approximately March 2000. I say ``approximately.'' It might 
have been February. It could have been April 1, but frankly 
about that time.
    He suggested to me in his capacity I believed as a director 
that it might be a nice project to have an educational trip to 
Britain, not Scotland, but Britain to meet with 
Parliamentarians. My mind went to London because to the best of 
my knowledge, Parliament is in London. I thought that is not a 
bad idea. I further thought that given what we expected to be 
at that time either Mr. Gore, with apologies Mr. Chairman, or 
Mr. Bush would be elected President, that in coming years, and 
this of course is pre-9-11, we would either be looking at 
additional expansions of health care reform, meaning 
Government-controlled health care reform, or potential 
privatization of Social Security.
    This is literally what was going through my head. I thought 
given that both of these roads are places that Britain has 
gone, one to good effect, in my opinion, one to the other, it 
is not a bad idea for a congressional leader to go over, make 
some acquaintances with members of Parliament and come home.
    The trip I believed I was approving, and indeed the trip 
that I invited the member of Congress on through his chief of 
staff, was simply to be a trip to London, meet with some 
members of Parliament, and fly home.
    I will say unfortunately, except I do not mean this except 
in the sense of this controversy, at the time I was pregnant 
with twins and we had recently adopted a newborn baby. I was 
not prepared to go to London myself. So I expressed to Jack 
that I like the idea of this project for educational reasons, 
but I was not going to be prepared to go myself, and frankly 
quite selfishly, I was not going to let, and this is in the 
husband-wife sense, my husband go with him.
    So I said we cannot do this unless there is someone 
responsible who can handle logistics. We then discussed it. He 
volunteered. We then discussed the propriety of the ethics 
laws, which I was assured, and I know this is a point, too, of 
media coverage, that it was perfectly appropriate for him based 
on his knowledge of the law to lay out some expenditures as 
long as he was promptly reimbursed by us. We discussed that in 
some further detail.
    I then approved him handling the project as a director of 
the National Center. I also said, make sure on your invoices, 
they come through your home address because I do not want there 
to be any question in anyone's mind should anyone ever look 
into this, not actually expecting anyone would, that you are 
operating as a member of the board of directors of a think tank 
and not as a lobbyist, which he agreed and in fact did.
    At that point, then, the invitation was expressed to the 
Congressman's office and I primarily bowed out of the project 
believing it to be in secure hands.
    Senator Dorgan. Did the project turn out differently than 
you have described it to us? You have just described to us the 
type of project that you approved. Obviously, the descriptions 
of that trip are very different. So tell me about that.
    Ms. Ridenour. I did become aware at approximately that same 
time of the trip, and I do not know exactly when Scotland was 
also included in the itinerary. I believed that, however, to be 
to meet with some additional members of Parliament in that 
area.
    Since then, and I refer primarily to things that happened 
in the news media in 2005 and some things we have been told by 
others, the trip seems to be very different from what I 
expected. I wish to state, however, that although the news 
media has an interest in this particular Congressman's personal 
behavior, the fact is that I know of nothing that the 
congressional office did that was inappropriate.
    Now, I was not on the trip. I do not want to expand beyond 
my knowledge, but from what I know, and I actually should 
volunteer, but when I extended the offer, the invitation to the 
Congressman's office, his chief of staff said to me that they 
were interested, but their concern would be would the trip be 
substantive enough. That is an exact quote. So I had no sense 
from them that they thought they were being invited on anything 
other than a bona fide educational opportunity.
    Senator Dorgan. I will not go further into this because it 
is not part of the Choctaw issue itself, although I think 
Choctaw money was actually used to pay for a portion of the 
second golf trip. I might say I believe that in some e-mails 
that these are both just referred to as the golf outings and 
how much fun they are.
    Ms. Ridenour. May I interject?
    Senator Dorgan. Yes.
    Ms. Ridenour. Senator, the second golf trip is something 
which I will be able to provide no information other than the 
fact that we do not know anything about it.
    Senator Dorgan. You are correct. Again, let me say that our 
committee is appreciative of the fact that you come here and 
visit with us. I still remain hopeful, and it is not for the 
purpose of suggesting that anything you have told us today is 
not accurate. Our investigators have visited with you. I have 
no basis for in any way suggesting that you have not been 
completely open in your responses.
    I think it is quite clear from what you have said, not you 
feel as do many others who have reached this witness table, you 
feel deceived by people who used money in a manner completely 
inconsistent with what you had felt you had approved.
    But I do think, because we have a number of (c)(3)s and 
(c)(4)s, and you have actually described, Ms. Ridenour, the 
importance of making sure that you are well within the bounds. 
We have certain guidelines of what the use of (c)(3)s and 
(c)(4)s are for. So my hope remains, and the chairman and I 
will talk about this, that we will consider talking to the 
Finance Committee about looking into that portion of it.
    Having said all that, I think that the contribution of this 
panel is to describe further the root of the money, the use of 
the money, in some cases with respect to a couple of the 
organizations here, what appears to be almost complete obvious 
fraud to everyone. Again, that is not part of what this 
committee will be deciding. This committee is about following 
the money and getting the facts. If you dyed that money purple, 
there would be a lot of purple pants pockets around this town 
and the country because they were moving it into so many 
different organizations.
    Mr. Stetter, when the chairman and I were asking you about 
organizations that are only names this is part of what is wrong 
with American politics today. This is probably not the only 
circumstance where that happens. We get calls, Mr. Chairman, 
you were referring to this, we get in our office from with 
people who have been contacted by a grassroots organization, 
apparently one that actually exists. These organization get 
somebody from back home on the phone and say, okay, now we are 
going to connect you with Senator Dorgan's office or perhaps 
Senator McCain's office.
    In most cases, they do not want to be connected because 
they are not interested in the subject and they do not know why 
they are connected. They are not on-message, certainly. So I do 
not think that approach works in any event.
    But let me thank all of these witnesses for being with us 
and for cooperating. Mr. Mann, I regret you have not. You 
certainly have the right to exercise your constitutional 
protections.
    The Chairman. Thank you, Senator Dorgan.
    Ms. Halpern, where did Kaygold operate from?
    Ms. Halpern. To the best of my knowledge, Kaygold operated 
from Mr. Abramoff's home.
    The Chairman. Exactly what is it?
    Ms. Halpern. Kaygold is a sole member LLC. Mr. Abramoff is 
the sole member. For tax purposes, it is reported on Mr. 
Abramoff's Form 1040, Schedule C, Self Employment Income 
Schedule.
    The Chairman. In 2002, Kaygold's sole source of income was 
$13.5 million in supposed ``referral fees.'' It came in from 
Mr. Scanlon's company, Capitol Campaign Strategies. Is that 
correct?
    Ms. Halpern. Sir, I would need to go back to check the tax 
records, but in general it sounds correct. Kaygold had income 
from Capitol Campaign Strategies.
    The Chairman. If you are the tax consultant and you see an 
organization based in an individual's home that receives $13.5 
million in 1 year from one source, does that ring any alarm 
bells with you as a tax consultant?
    Ms. Halpern. Mr. Chairman, Kaygold's business as indicated 
on the schedule C of the tax return was political consulting. I 
am not aware of what kind of revenues a political consulting 
practice is supposed to generate.
    The Chairman. You had access to records that showed that 
$13.5 million came in from one organization, that was Mr. 
Scanlon's company, Capitol Campaign Strategies.
    Ms. Halpern. Yes; a 1099 was received, two 1099's I believe 
that year were received.
    The Chairman. That did not raise any red flags with you?
    Ms. Halpern. Sir, again, my job was to prepare his tax 
return and in my engagement letter with Mr. and Mrs. Abramoff, 
I state in the engagement letter it is the client's 
responsibility to provide all the information to me so that I 
can prepare the tax return.
    The Chairman. Well, you had the information that $13.5 
million came in 1 year from one source, Mr. Scanlon's 
organization, Capitol Campaign Strategies. Now, I ask you 
again, yes or no, did this raise a red flag with you that this 
was certainly highly unusual?
    Ms. Halpern. Again, Mr. Chairman, I do not know if a 
political consulting practice, if that would be highly unusual 
in a political consulting practice. I cannot answer that. I was 
not involved in Mr. Abramoff's inner workings.
    The Chairman. I do not care if it came from the moon. If it 
is $13.5 million into an organization the only amount of money 
that they get in supposed referral fees, wouldn't anybody 
upholding their oath of office say wait 1 minute, it is 13.5 
million bucks coming in from one source in 1 year; what is 
going on here?
    Ms. Halpern. Sir, to the best of my knowledge, all 
information that Mr. Abramoff gave me was reported on his 
income tax return. Let me just state further, if you do not 
mind, sir.
    The Chairman. Sure.
    Ms. Halpern. Mr. Abramoff in no way at any time tried to 
hide this income. Now, if you tell me, did he try to hide the 
income, would that raise a red flag kind of question, that is a 
different question. You are asking me if $13 million came in 
from one entity, I am telling you that is what he presented to 
me and that was reported on his tax return.
    The Chairman. And obviously it did not arouse any curiosity 
on your part. Most people it would, Ms. Halpern.
    Senator Dorgan. Mr. Chairman, would you just yield on that 
point?
    The Chairman. Yes.
    Senator Dorgan. Ms. Halpern, were you in the room when I 
read the e-mail earlier today about moving money in order to 
avoid paying taxes?
    Ms. Halpern. I went out of the room for some time. It is 
possible. I am not sure. I do not recall.
    The Chairman. Ms. Ridenour, you had discussions with Mr. 
Abramoff that obviously as we have discussed induced you into 
passing on to Kaygold two payments, $500,000 and $750,000 in 
May and June 2003. Do you recall that?
    Ms. Ridenour. Yes.
    The Chairman. From those conversations with Mr. Abramoff, 
what were you led to believe that Kaygold was?
    Ms. Ridenour. I believed it was a public affairs firm run 
by Michael Scanlon that was very similar to Capitol Campaign 
Strategies. They simply had different companies to do different 
functions.
    The Chairman. And these two payments originally came from 
the International Interactive Alliance?
    Ms. Ridenour. They came from Greenberg Traurig. Jack 
Abramoff later told me the original source was the Interactive 
Alliance, yes.
    The Chairman. Did you know what was actually done with 
those payments?
    Ms. Ridenour. No.
    The Chairman. No; you did not.
    Ms. Ridenour. I mean, I thought they were going to be used 
for educational program work. To this day, I do not know.
    The Chairman. According to Kaygold's general ledger, the 
$500,000 payment by NCPPR to Kaygold was credited on May 18, 
2003, but within 3 weeks of arriving in to Mr. Abramoff's 
Kaygold account, it appears that what was not tucked away for 
taxes went straight to Mr. Abramoff's personal account. It 
seems to have occurred with the $750,000 that the NCPPR paid to 
Kaygold on May 30, 2003. I think your reaction to that from 
your previous testimony is fairly predictable.
    Ms. Ridenour. It is predictable and frankly I am appalled.
    The Chairman. Ms. Halpern, you look like you want to say 
something else.
    Ms. Halpern. No, sir.
    The Chairman. I am sorry.
    Well, I want to thank the witnesses for being here. The 
story speaks for itself. I hope that we will get this unraveled 
sooner rather than later, and this committee can issue a full 
report. We will have one more hearing dealing with another 
tribe, then we will issue a report. This committee expects to 
come up with recommendations to do whatever is necessary from 
the Committee on Indian Affairs standpoint to see that this 
kind of gross injustice is not inflicted on any more Native 
American tribes.
    Senator Dorgan, do you have anything to say?
    Senator Dorgan. Mr. Chairman, I do not. You indicated 
another hearing. Let me again suggest at least that we hold 
open the prospect of visiting about the issue of (c)(3)s and 
(c)(4)s, perhaps with the folks on the Finance Committee 
because I think additional questions are raised there.
    Again, let me thank the witnesses and let me thank also the 
investigators who have put in a substantial quantity of time. 
This has not been easy to piece all this together, and we 
appreciate very much their work as well.
    The Chairman. I thank the witnesses.
    This hearing is adjourned.
    [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 Gail Halpern, Part-time Accountant

    Thank you Mr. Chairman, Mr. Vice Chairman, and members of the 
committee.
    My name is Gail Halpern. I am a part-time accountant. I am a 
certified public accountant and a personal financial planner.
    Mr. and Mrs. Abramoff were my clients from early 1997 until 
September 2004. I knew Mrs. Abramoff on a social basis, and she asked 
me sometime in early 1997 to be her and Mr. Abramoff's accountant and 
prepare their personal income tax returns. The following is a general 
description of the services I performed for the Abramoffs:
    I prepared Mr. and Mrs. Abramoff's personal income tax returns from 
the 1996 tax year until the 2002 tax year, inclusive. I prepared gift 
tax returns for Mr. and Mrs. Abramoff when required during this time as 
well. I prepared their children's income tax returns, and I prepared 
trust income tax returns for the Jack and Pamela Abramoff family up to 
and including the 2003 tax year as required.
    I prepared personal and trust tax returns based on information 
provided by Mr. and Mrs. Abramoff, or by those authorized to provide 
such information on their behalf, namely Mr. Abramoff's office at 
Preston Gates, or later at Greenberg Traurig, or Mr. Abramoff's 
business office.
    I did not prepare any corporate, partnership, or tax-exempt entity 
returns, as I am not an expert in those areas of the tax law. Those 
returns were prepared by other competent accountants.
    Upon their request, I provided some tax planning advice to Mr. and 
Mrs. Abramoff within my limited areas of expertise. I also provided 
some estate planning advice, and some financial planning advice to Mr. 
and Mrs. Abramoff as requested by them. I also answered general 
accounting and tax questions from the Abramoffs or from other 
authorized people in Mr. Abramoff's offices, as mentioned earlier. Any 
questions that I was not able to answer, such as questions that were 
specific to a certain area of accounting or law, I referred to 
attorneys or accountants who practiced in that area of accounting or 
law. Mr. or Mrs. Abramoff made all of the decisions.
    For Mr. Abramoff's daily checking account and for some of his 
business entities, I worked with Mr. Abramoff's business office to help 
implement a bookkeeping software package that required them to input 
all the information required for me or for others to prepare tax 
returns.
    I did not keep the books or prepare the books for Mr. Abramoff's 
daily checking account, business entities, or for any of the non-profit 
entities that he started. Rather, my role was to answer questions, or 
refer him to specialists who could answer questions, when such 
questions were posed by Mr. Abramoff or by the bookkeeping personnel or 
staff. The day-to-day bookkeeping work was done by others. I was not an 
employee, officer, director, or member of any of Mr. Abramoff's 
entities. Instead, I am an independent accountant, and I service other 
clients besides the Abramoffs.
    The tax returns that I prepared, and any tax, estate, and financial 
planning services that I rendered, were based on information provided 
to me by Mr. or Mrs. Abramoff or by personnel in Mr. Abramoff's offices 
mentioned earlier. To the best of my knowledge, and based upon the 
information that they provided to me, all income received by the 
Abramoffs or their children or their family trusts for which I prepared 
income tax returns, was reported and included in the relevant tax 
returns.
    Thank you.
                                 ______
                                 

   Prepared Statement of Phillip Martin, Chief, Mississippi Band of 
                            Choctaw Indians

    Thank you for this opportunity to present the views of the 
Mississippi Band of Choctaw Indians through written testimony as 
regards the committee's ongoing investigation into the misconduct of 
Jack Abramoff and Michael Scanlon.
    The Mississippi Band of Choctaw Indians is a federally recognized 
Indian tribe of nearly 10,000, most of whose members reside in eight 
reservation communities located on trust lands scattered over a five-
county area in east central Mississippi. The majority of our tribal 
members are full-blood, Choctaw language speaking. We are descendants 
of those Choctaw people who resisted repeated efforts by the Federal 
Government to force their relocation to Oklahoma. This continued from 
1830 through the early 1900's. The tribe's reservation lands are poor 
and unproductive and the tribe is without any natural resources which 
could be used to generate income. The Mississippi Choctaws were ignored 
and abandoned by the Congress and the Federal Executive branch for 
almost a century, finally securing our initial Indian reservation lands 
in, 1944 and Federal recognition as a separate tribe in 1945. Our 
members were then essentially destitute and without any resources and 
our tribal government was basically powerless to help them. 
Unemployment was so prevalent among our tribal members that we knew we 
had to find another path and we did. We made the choice to pursue self-
determination as the best means to meet the growing needs of the tribe 
and to pursue manufacturing jobs as the best means of employing large 
numbers of our people.
    Beginning with one tribal employee in 1963, the Mississippi 
Choctaws have grown to become the 3d largest employer in Mississippi, 
employing some 9,200 people. We operate about 25 different commercial 
enterprises. The tribe has developed a strong and stable government 
providing the full array of governmental services. This includes the 
operation of a large school system, police and fire protection 
services, courts, a hospital and clinics, social, housing, realty, and 
economic development agencies. These were key ingredients of our later 
success in building a reservation economy and attracting private 
investment which led to commercial developments, at first primarily in 
manufacturing, which created reservation-based jobs.
    The passage of the Indian Gaming Regulatory Act and the 
introduction of class III gaming in 1989 in Mississippi led to the 
development of the tribe's current Pearl River Resort comprised of two 
high rise hotel casinos, a nationally acclaimed 36 hole golf club, a 
12-acre water theme park, South Sea island beach, the soon to be opened 
300 acre Lake Pushmataha and its large entertainment and fitness 
facility. We have invested over $1 billion in this development which 
has created jobs and generated income. Rather than make large 
distribution payments to tribal members, we chose to invest in their 
future in a different way.
    The success of the resort has allowed the tribe to begin catching 
up from generations of poverty and neglect. There has been 
extraordinary progress: Our unemployment rate has dropped from nearly 
80 percent to less than 5; our life expectancy has risen from under 50 
to 70; we have been able to provide long overdue healthcare to our 
members through-the construction of-new clinics, the employment of 
medical specialists, and the provision of such basics as hearing aids 
and eyeglasses. In education, our gains have been great as well: We 
operate a system of six elementary schools and boarding middle and high 
schools; for the first time in our history, any Choctaw student who 
wants to attend college can do so through our scholarship program 
which, to date, has provided scholarships totaling over $17 million to 
1,387 tribal members. We have replaced frame school buildings built in 
the 1920's and we have built roads, water and sewer lines, wastewater 
treatment plants, and day care centers. Still, significant needs remain 
particularly in the areas of health, education, and housing; and, since 
all of our enterprise growth has been debt-financed, we still have a 
$300-million debt load to retire.
    Because of the tribe's government-to-government relationship with 
the United States and because of the need to protect tribal investments 
(and our ability to repay business debt), the Mississippi Choctaw have 
engaged in extremely active and aggressive efforts to monitor and 
affect the Federal decisionmaking process and to shape public opinion 
on matters affecting the tribe's political and economic interests. To 
achieve this we have long engaged experienced professionals including 
lobbyists with prestigious law firms who know and understand how 
Federal lobbying and grassroots advocacy works. Our efforts in this 
regard have historically been successful and we have relied upon the 
professional expertise and integrity of those law firms and their 
lobbyists, to ensure that this work is handled for us in a lawful and 
appropriate manner.
    So, when the initial press reports emerged last year regarding the 
large fees paid to Jack Abramoff at Greenberg Traurig or to Michael 
Scanlon by a number of tribes for lobbying work and grassroots 
advocacy, we had no reason to believe that anything questionable had 
occurred concerning those payments or their work for us and we were 
pleased with the results they had achieved. Later, we did come to learn 
that Mr. Abramoff, along with Mr. Scanlon, had engaged in what appears 
to be a consistent pattern of kickbacks, misappropriated funds, 
payments induced under false pretenses, and padded billings, all 
orchestrated by Mr. Abramoff from his position as Senior Director of 
Governmental Affairs for Greenberg Traurig, LLP, the law firm which the 
tribe had retained to handle its public affairs needs starting in 
January 2001. Most of this misconduct occurred in furtherance of what 
we now refer to as their ``gimme five'' scheme.
    In pursuing this matter over the past 1\1/2\ years, the tribe has 
worked hard through outside counsel and the tribe's attorney general's 
office to identify the full extent of this misconduct, the full extent 
of financial injury we have suffered as a result and to seek 
appropriate civil and criminal remedies. Although we have made 
substantial progress in pinning this down, we still don't have final 
numbers for all that occurred. At this time, however, I want to repeat 
what I said in my letter of August 5, 2004 to Senator McCain, ``Without 
your efforts it is unlike that this misconduct would ever have come to 
light. Thus, despite my prior concerns, I appreciate your committee's 
work on this matter.''
    From the outset of this matter, the tribe has fully cooperated with 
the FBI and the Justice Department. And since July 2004--almost 1 year 
ago, shortly after we first saw real evidence of wrongdoing on the part 
of Mr. Abramoff and Mr. Scanlon, we have worked closely with the 
committee to further its investigation.
    Early on in this process, however, the tribe raised with the 
committee its concern that sensitive information regarding its lawful 
lobbying and public affairs activities not be unduly disclosed through 
the committee's investigation of Mr. Abramoff and Mr. Scanlon and of 
the tribe's 1st amendment right to protect against such involuntary 
disclosure. The tribe appreciates that the committee has respected the 
tribe's 1st amendment rights throughout this process and I want to 
personally thank Senator McCain for that. Consistent with this 
position, the tribe has shared all requested documents and information 
with committee staff, but has declined to place in the record 
information regarding the tribe's 1st amendment protected activities 
when disclosure of such information is not required in furtherance of a 
``compelling governmental interest,'' for example, to expose criminal 
conduct or other financial wrongdoing. That remains the tribe's 
position today.
    In anticipation of this hearing, the tribe has worked with the 
committee staff and has identified in consultation with Senator McCain 
[three] witnesses who will speak on behalf of the tribe in person at 
the June 22 hearing.
    The first is Charlie Benn, director of administration in my office. 
Mr. Benn has served in that capacity since 1998 and is a member of the 
tribe. Charlie previously worked for the U.S. Department of Housing and 
Urban Development for approximately 20 years and in his present 
capacity oversees the daily operation of numerous administrative 
functions of the tribal government. The second, witness is Nell Rogers, 
a member of the tribe's planning staff who handles legislative affairs 
for my office. She has worked in that capacity for the past 20 years. 
Ms. Rogers has worked for the tribe (with the exception of 5 years) 
since 1971. Finally, Donald Kilgore, the tribe's attorney general, will 
participate on the panel. Don was only recently appointed to his 
position as tribal attorney general but has a life long association 
with the tribe and has practiced law in the tribal courts for many 
years. He has over 30 years experience in the private practice of law. 
I have authorized Mr. Kilgore to provide testimony at the hearing 
summarizing what we have learned about the misconduct of Jack Abramoff 
and Mike Scanlon which has given rise to this proceeding.
    Prior to 1994, I [as Chief] was the tribe's primary lobbyist. 
Partly, this was because we had no tribal funds to pay for any 
lobbyists. Later, as the scale and reach of the Federal regulatory and 
legislative process affecting Indian tribes expanded and as our tribal 
businesses and revenues grew, attending to those enterprises required 
more and more of my time, leaving less time to devote to the 
legislative process. It became prudent to hire outside legal counsel to 
assist in addressing the tribe's Federal advocacy needs both with the 
Federal agencies and with the Congress.
    As the tribe grew, tribal staff with program and legislative 
experience began to do much of this work. Prior to this, the law firm 
of Hobbs, Straus, Dean, and Walker had provided some legal services and 
public affairs work on our behalf, primarily on self-determination, 
health and education issues. We continue to work with Hobbs Straus and 
with other law firms--firms who have represented us for many years--
Wise, Carter and Caroway, and the Scott, Sullivan, Streetman and Fox 
firms in Mississippi and Roth, VanAmberg, Rogers, Ortiz & Yepa in New 
Mexico. All have provided a high caliber of legal representation for 
the tribe and have done so with honesty and scrupulous adherence to 
their duties to us as a client. We expected no less from the other 
firms and their lobbyists we hired in Washington, DC, starting in 1995.
    In 1994, two simultaneous events occurred which required an 
expansion and a change in direction in the tribe's public affairs work. 
First, of course, was a total change in the leadership of the Congress 
as a result of Republicans gaining majority control in the House 
through the 1994 elections. Second, was the opening of the Silver Star 
Hotel and Casino in July 1994 giving rise to an array of new issues and 
concerns that had to be tracked and dealt with at the national level.
    The tribe also wanted to tell its economic story--of how it was 
possible to use the tax and regulatory structures unique to Indian 
reservations and economies operating under tribal jurisdiction to 
achieve on-reservation economic development. This was not just a 
theory, the tribe had successfully done this for 15 years before 
opening our first casino. We did this by finding products that we could 
make and sell, hiring good managers, setting up a judicial system that 
provided fair treatment for outside parties, building a stable, 
constitutional tribal government involving a separation of powers, and 
honoring our business contracts. When we opened our first casino 
[financed with 100 percent borrowed money] we realized we had to be 
proactive in protecting our casino operations and our ability to pay 
off our casino financing debt. Thus, in 1995, the announcement by the 
then Ways and Means Committee Chairman of a plan to subject tribal 
income to Federal income taxes set off extraordinary alarms because 
that meant that the tribe's gaming and other business revenue could be 
taxed at 34 percent--threatening the tribe's ability to pay off its 
debt, and undermining its capacity to provide essential governmental 
services to our 10,000 tribal members, and putting us at risk of losing 
everything. It was in this climate that the Tribe recognized the need 
to reach out to the new Republican majority and to redouble our efforts 
to share our tribal needs and our reservation development experiences 
with all Members of Congress.
    Jack Abramoff was identified to us in 1995 as a lobbyist in the 
Washington, DC office of a major law firm [then known as Preston Gates 
Ellis & Rouvelas Meed] who was said to have strong relationships to 
leadership in the House. I arranged a meeting with former Congressman 
Lloyd Meeds of Preston Gates, with Mr. Abramoff and others in the firm, 
from which followed a retainer agreement. What followed was a very 
positive relationship with Preston Gates from 1995 through 2000. They 
did very effective lobbying work for us, both at the Federal level and 
through various grassroots projects. Then, Mr. Abramoff and most of his 
team left Preston Gates to join Greenberg Traurig in 2001. Since the 
bulk of the work done by Preston Gates for the tribe was in the area of 
public affairs and not ordinary legal work, and since Mr. Abramoff and 
most of his team which had handled that work at Preston Gates moved 
over to Greenberg Traurig in 2001, the tribe then retained Greenberg 
Traurig. Later, Mr. Abramoff introduced us to Mike Scanlon and his 
various companies.
    When Mr. Abramoff left Preston Gates to move to Greenberg Traurig, 
we had no reason to believe that anything improper or unlawful had 
occurred in connection with his prior work for us. So, when the team 
moved to Greenberg Traurig, there was no reason to question his 
integrity or otherwise doubt that the representation we would receive 
through Greenberg Traurig would be handled in any less professional and 
honest a way than we believed had occurred at Preston Gates or through 
the other law firms we had retained. Unfortunately, those expectations 
were not met.
    The kickback scheme, we have learned that Mr. Abramoff caused Mr. 
Scanlon, represented to us to be an independent contractor, to quote 
prices for the services of his several companies which, built in an 
undisclosed and exorbitant add-on amount which they then would split, 
one-half coming back to Mr. Abramoff as a kickback, one-half being 
retained by Mr. Scanlon as moneys obtained under false pretenses. We 
did not know of this and we did not approve it.
    Regarding grass roots advocacy projects, some of the actual work 
was always going to be performed by various third parties after passing 
through the Scanlon companies, for example, American International 
Center, Capitol Campaign Strategies, Scanlon Gould Public Affairs or 
through other entities, such as the National Center for Public Policy 
Research [NCPPW] or the Capitol Athletic Foundation [CAF], and some was 
to be performed by Capitol Campaign Strategies or its subcontractors. 
The tribe never agreed that any of those moneys were to be retained by 
Mr. Scanlon personally or kicked back to Mr. Abramoff. When the tribe 
was quoted a price for a given project the tribe expected that its 
payments to fund that work would be expended for that purpose and 
[where pass throughs were involved], that the money would be passed 
through to the appropriate entity for that purpose.
    Unlike many or all of the other tribal clients who retained 
Greenberg Traurig [and Jack Abramoff], Choctaw's retainer agreement 
with the firm was on a regular hourly billing basis. The tribe never 
agreed to pay a ``flat fee'' per month. However, our outside counsel, 
C. Bryant Rogers has now confirmed that Mr. Abramoff consistently 
manipulated the bills at Greenberg Traurig in order to have them 
approach a minimum billing target of fees and expenses of between 
$135,000 and $150,000 per month, and included unauthorized expense 
charges. When the actual hours of work completed were insufficient to 
approach that target; Mr. Abramoff routinely directed that the bills be 
padded with ``pumped-up'' time entries or made up hours to increase the 
monthly bill. Neither those unauthorized expense charges, nor the 
padded time entries, were detectable from the billings we received.
    After we learned what happened, we were astounded that a senior 
director at a major law firm would or could engage in misconduct of 
this sort--whether as regards billing fabrication or as regards the 
more egregious ``gimme five'' scheme--and that he was able to get away 
with it for so long.
    What we have learned regarding Mr. Abramoff's misconduct at 
Greenberg Traurig has caused us to take a closer look at his work for 
us at Preston Gates. Those inquiries have just begun. It presently 
appears that some similar financial misconduct also occurred while Mr. 
Abramoff was at Preston Gates, though on a vastly smaller scale, both 
as to billing improprieties and as to Mr. Abramoff's unlawful diversion 
of money we paid for one purpose which was used to pay for other things 
we had not authorized. We have initiated discussion with Preston Gates 
on these matters; however, those discussions are in a very preliminary 
stage.
    In regard to Greenberg Traurig, we wish to acknowledge that 
positive settlement discussions with that firm are now underway and we 
have been assured that Greenberg Traurig will take appropriate action 
``to address and remedy any concerns and issues'' we may identify ``as 
to any aspect of our relationship.'' They have responded to this 
situation in a professional and honorable way, which we very much 
appreciate. Thus, we are confident that a mutually agreeable settlement 
of our claims respecting these issues will be reached with Greenberg 
Traurig.
    In closing, we want to thank the committee for its efforts in this 
investigation. We are, however, ready to move forward with our on-going 
efforts to build our reservation economy [this also benefits our non-
Indian neighbors as well] and to strengthen our government-to-
government relationship with the United States to enhance our capacity 
to improve health care, education and employment opportunities for our 
members. We will take the lessons learned from this experience and will 
endeavor to ensure that we not experience anything like this in the 
future.
    Thank you, this concludes my written testimony.





    
               Prepared Statement of Amy Moritz Ridenour

    Thank you for inviting me to appear before the committee and for 
giving me the opportunity to discuss the funds the National Center for 
Public Policy Research received from the Mississippi Band of Choctaw 
Indians. Specifically, I wish to discuss the large sums we received 
during the period of October 2002 through June 2003. I intend to share 
what I believed were the reasons why the National Center received these 
funds and how and why we dispersed these funds to for-profit entities 
we subsequently learned were associated with or owned by Jack Abramoff.
    Before addressing these particular points, I believe that it will 
be helpful to the committee if I share some background on the National 
Center.
    The National Center is a conservative/free market non-profit public 
charity that opened in February 1982. I have had the privilege to be 
the first and only chief executive officer of the National Center and 
have made it my life's work.
    The National Center's focus during approximately its first decade 
was on issues related to the Soviet Union. However, with the fall of 
the Iron Curtain, the National Center's focus turned to other 
conservative programs and issues.
    One such program is project 21, which highlights the views of 
conservative and moderate African-Americans by helping them get op-eds 
published in newspapers, arranging interviews on talk radio and other 
media, and issuing press releases based on information provided by this 
previously under-represented group. Since project 21's inception in 
1992, the news media has quoted its members approximately 10,000 times.
    Researching environmental issues and educating the public regarding 
them is another National Center program. One research project includes 
the publication of several editions of a book that highlights 100 
personal stories of Americans, who are neither wealthy nor powerful, 
who have been harmed by regulations that are excessive or improperly 
applied. In addition, the National Center has begun to examine the 
extent to which low-income and minority populations disproportionately 
bear the cost of some Government regulations.
    As the years went on, in an effort to make the National Center a 
better non-profit organization, we implemented several changes, 
including, in 1997, an increase of the number of board members from 
three to seven to improve oversight. When we began our search, we 
decided to bring in individuals who we believed would improve the 
National Center. One of the individuals we chose was Jack Abramoff. At 
that time, I had known Jack for nearly 17 years, he was a dedicated 
free-market conservative, a successful lobbyist and businessman, he had 
connections to corporate America and his managerial skills; it seemed 
to me at the time, exceeded my own. We believed we could learn from his 
experience. He seemed like the perfect choice. Consequently, we 
extended an offer to him and, in October 1997, he joined the National 
Center's board of directors.
    Our desire to improve the National Center did not stop in 1997 and 
over the years we made additional policy changes. In 2000, the National 
Center adopted a formal conflict of interest policy. This policy 
requires standing directors to reveal to the board all direct or 
indirect financial interests in any entity with which The National 
Center is negotiating a transaction or arrangement. We required every 
member of the board to sip the resolution so that no one could later 
claim that they were unaware of the policy. Every director, including 
Jack, did so.
    It was through Jack Abramoff that I first had the honor of meeting 
Chief Philip Martin of the Mississippi Band of Choctaw Indians. In 
February 1997, I participated in a trip to the reservation where I saw 
first-hand the benefits that casino gambling had for the Mississippi 
Choctaw Tribe.
    Through Chief Martin, I learned that the Mississippi Choctaw had 
once relied substantially on government handouts and that, in the past, 
members of the tribe typically had to leave the reservation in order to 
be financially successful. Thanks in significant part to the capital 
inflow made possible by their Silver Star casino, they were able to 
revitalize the tribe and better convince their young members that they 
did not need to move away in order to pursue and enjoy challenging and 
satisfying careers.
    Chief Martin struck me as one of the most impressive people I have 
met in my life. After I returned from that trip, I recall telling my 
husband that had Chief Martin not dedicated his life and his career to 
his tribe, he might well have become famous as a CEO of a top Fortune 
500 corporation.
    Approximately 1 month after my trip to the Choctaw Indian 
Reservation, the National Center received a $2,500-donation from the 
tribe. This donation was unsolicited and the National Center used this 
money for general support.
    In 1999, the National Center began soliciting funds for a program, 
which included a study commissioned from an econometrics firm, to 
determine the impact of so-called ``smart growth'' policies on minority 
home ownership rates. The National Center undertook this study in 
furtherance of our burgeoning interest in the economic prosperity of 
minorities in the United States.
    The program was to cost $50,000. We found ourselves $5,000 short. I 
turned to Jack for help. He told me he would get us a donation and even 
offered to get a donation in excess of $5,000, if we needed it. We, 
told him we only needed $5,000. Soon thereafter, we received a 
contribution for that amount from the Mississippi Band of Choctaw 
Indians and were able to fund the program. In 2000, we received a total 
of $65,000 in contributions from the Mississippi Choctaws. These 
contributions were not solicited by me or The National Center's staff, 
but were arranged by Jack Abramoff. I understood them to be general 
support contributions. We recorded them accordingly and, as part of the 
independent annual audit we have had conducted every year of our 
operation, confirmed this understanding with the Mississippi Choctaws 
through an audit letter.
    I am, of course, aware of news media coverage connecting part of 
these contributions to a trip we sponsored in 2000 for a Member of 
Congress. At the time I extended an invitation to this Member of 
Congress, through his chief of staff, I did not know we would be 
receiving contributions from the Mississippi Choctaws that year. At no 
time did I convey to the Congressman or his staff that we had received 
these contributions, and I was never told, nor I was I under the 
impression, that the Mississippi Choctaws even knew we had sponsored a 
Congressional trip to Britain.
    In October 2002, the Mississippi Band of Choctaw Indians donated $1 
million to the National Center. At that time, I believed that the 
Choctaws gave the National Center this donation to support an 
educational project related to the Mississippi Band of Choctaw Indians 
and casinos. In particular, to educate the public on the positive 
impact casino gaming had for the Mississippi Choctaws, both 
economically and culturally. In order to tell the story fully, however, 
some background information is necessary.
    Approximately 4 months before we received this donation, my 
husband, who is vice president of The National Center, and I had lunch 
with Jack Abramoff, The lunch was social but, as was our habit when 
meeting with members of the board of directors, we briefed him on 
information pertinent to members of the board, including such mundane 
things as the fact that we were current in meeting our payroll tax and 
other financial obligations and the status of projects undertaken by 
the National Center. I also described the negative financial impact of 
9-11 and stock market contractions on the philanthropic community. I 
told him that new donors would be especially valued that year, as would 
the opportunity to sponsor projects consistent with our mission for 
which funding was available.
    Once our report was over, Jack shared with us details of his 
professional career. I remember him telling us that he was doing ``a 
new kind of lobbying.'' He said he and his colleagues, working with the 
Mississippi Choctaws, had noted that for-profit, non-Indian gaining 
establishments were pushing to establish themselves in areas of the 
country not noted for their admiration of gaming. They believed that a 
public backlash against gaming was brewing and that before things came 
to a head, perhaps 4-5 years down the road, they would protect the 
Choctaw by educating the public in the surrounding States about the 
benefits of Casino gaming for the Mississippi Choctaws. To educate the 
public, they relied on phone banks and other tools to tell the Choctaw 
success story.
    I was very interested in what I was hearing. Although my visit to 
the Choctaw reservation had been more than 5 years earlier, I retained 
my enthusiasm for what the tribe had been able to accomplish. I noted 
that this ``new kind of lobbying'' was not lobbying at all, but 
educational work and I expressed an interest in the National Center 
sponsoring it. Jack seemed mildly agreeable but noncommittal. I did not 
press the matter, assuming the Choctaws were financing the project and 
would have to approve our involvement.
    Approximately 4 months later, Jack contacted me to see if the 
National Center was still interested in the project. We were because it 
was consistent with our longstanding interest in promoting minority 
economic opportunity and was especially welcome because we had 
postponed the launch of a Hispanic counterpart to project 21 because of 
a lack of funding. There were also other benefits, including an 
expansion of our program expenditures and the opportunity to gain 
experience with educational tools, such as telephone campaigns, with 
which I had no experience.
    There was also one particular opportunity that I was excited about 
on a personal level. I was excited by the prospect of working with Jack 
on a large project because I admired him for what I believed to be his 
amazing managerial skills. At that time, he not only had a lobbying 
practice successful enough to earn rave reviews in the mainstream 
press, but he was opening restaurants and starting a school. I believed 
that he could only accomplish these feats with a superb ability to 
delegate authority and manage people, and I hoped to make myself a 
better manager by seeing him in action.
    Jack seemed enthusiastic about having The National-Center on board 
with the project, and instructed me to send a $1-million invoice to the 
Mississippi Choctaws, which I did. When the funds arrived, he told me 
how they should be disbursed: $450,000 to the Capital Athletic 
Foundation, $500,000 to Capital Campaign Strategies and $50,000 to a 
company called Numberger and Associates, run by a Ralph Numberger. I 
believed Capital Campaign Strategies was to be paid for educational 
program services, such as polling, telephone calls and printing 
brochures and petitions while Mr. Numberger was going to help 
coordinate the project. In an e-mail, Jack referred to his receiving 
``instructions'' for the disbursements, which I took to mean 
recommendations from the donor. This was consistent with my belief that 
the Mississippi Choctaws were actively involved in the project.
    Believing I was joining a project-in-progress, knowing that Jack 
was the legal representative of the Mississippi Choctaw, was part of a 
major law firm and, as a member of The National Center's board, had a 
fiduciary responsibility to the welfare of The National Center, I 
disbursed the funds in accordance with Jack's instructions. As excited 
as I was, I still had some concerns about inadvertently violating 
501(c)(3) regulations governing organizations such as The National 
Center. Consequently, I reviewed the laws governing charities with 
Jack, including, restrictions on lobbying for or against legislation 
and those banning expenditures relating to elections. I received Jack's 
repeated assurances, both by e-mail and verbally, that he, in assuming 
managerial authority for the project on The National Center's behalf, 
would adhere to them. In addition, prior to transferring funds to the 
Capital Athletic Foundation as a grant in accordance with what I 
believed was the donor's recommendation, I reviewed with Jack the laws 
governing grants between 501(c)(3) organizations, and told him that if 
the test could not be met we would simply return the money to the 
donor. The proposed grant, however, seemed to be appropriate and, as 
such, I made the grant.
    It was about this time that a staff member at Greenberg Traurig, 
other than Jack, sent the National Center a fax of three invoices 
matching Jack's instructions. It all seemed very official. My only 
concern at that time was the possibility that Jack, being a lobbyist, 
would forget to strictly adhere to the laws governing tax-exempt 
charities. Nevertheless, as nearly one-half of the funds were being 
sent to the tax-exempt Capital Athletic Foundation as a grant, the 
remainder was to be used for a program for which there was no related 
legislation, and because I had received repeated assurances from Jack 
that he took the tax laws seriously, I believed everything was 
legitimate and legal.
    At the time, I expected that I would personally become involved 
with the project. That did not happen. Various explanations, all of 
which seemed reasonable at the time, occurred to me. In addition, in 
the few months following our involvement in the program my time and 
attention were diverted to other unrelated, business and personal 
events that prevented me from aggressively injecting myself into the 
management of a project I believed was in good hands.
    I often requested from Jack that he provide documentation about the 
educational activities we were supporting. He always said it would be 
no problem, and I believed him; so much so, that I agreed to continue 
the program in May and June 2003 when Greenberg Traurig sent $1.5 
million to the National Center. At that time, Jack told me this money 
was part of the program, which I believed was the educational program 
about the progress being made by the Choctaw Tribe.
    Jack told me $250,000 had been designated for the Capital Athletic 
Foundation as a grant and $1,250,000 was to be paid to Kaygold, a 
company I believed was owned by Mike Scanlon. It was not until 2004 
that I learned that this money did not come from the Choctaw, but 
rather from an Internet gambling company apparently unrelated to the 
Choctaw Tribe.
    As these events were transpiring, I resolved that if I did not 
promptly receive sufficient proof of good solid work performance, I 
would withdraw the National Center from the project. I discussed the 
matter with the CPA firm we used and, at far greater length, with our 
tax attorney. I then requested specific pieces of documentation from 
Jack related to these transactions. When I did not get them, I told 
Jack, in July 2003, that we would cease participation and he did not 
object. I did not, however, stop asking him for documentation for work 
performed for the payments we already had made.
    I always trusted Jack and believed that we would ultimately receive 
the documentation that we requested. Of the various theories I had in 
my mind as to why we were not receiving the documentation, such, as 
Jack was simply too busy, none. of them involved a suspicion of the 
misuse of lands. I completely trusted Jack. So much so, that I still 
trusted him after the negative press stories appeared in 2004. For 
months after 5 the stories appeared, I continued to believe him. It was 
not until September 2004, when the Washington Post published that Jack 
owned Kaygold, that I knew in my heart that something was seriously 
wrong.
    You see, the entire time these transactions were going on I 
believed that Mike Scanlon owned Kaygold. I know that Jack knew I 
believed this because I made statements pertaining to this issue and he 
did not dispute them. I would have never issued any money to Kaygold if 
I had known that Jack was the owner because this was a clear violation 
of the National Center's conflict of interest policy, which Jack had 
signed.
    I also will note that as I was absorbing the news that Jack owned 
Kaygold I read the e-mails written by Jack that this committee 
published last September. These e-mails revealed a side of Jack I did 
not recognize as the friend and associate I had known for almost a 
quarter century. It has been over 2 years since we received the $1 
million and began what I believed was an educational project to tell 
the American people what I still believe is the very impressive story 
of the Mississippi Band of Choctaw Indians. We have continuously 
requested documentation about the work done on the project and have 
never received any proof that work was completed or even started.
    As for Jack Abramoff, I telephoned the rest of our board and we 
agreed on strength of the violation of the conflict of interest policy 
alone that we had no choice but to accept his offer to resign that he 
had made in March 2004 and then again in October of that same year. 
Consequently, in October 2004; I accepted Jack's resignation from the 
board and I have not spoken with him since.



                                 
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