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



                                                 S. Hrg. 109-135, Pt. 2
 
                        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

                               __________

                            NOVEMBER 2, 2005
                             WASHINGTON, DC

                               __________

                                 PART 2

                               __________


                    U.S. GOVERNMENT PRINTING OFFICE
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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:
    Baggett, Fred, managing shareholder; chairman, National 
      Government Affairs Practice, Greenberg Traurig, 
      Tallahassee, FL............................................    20
    Cathcart, Christopher, former associate, Capitol Campaign 
      Strategies.................................................    57
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice 
      chairman, Committee on Indian Affairs......................     6
    Griles, J. Steven, former deputy secretary, Department of 
      Interior...................................................    88
    Halpern, Gail, Jack Abramoff's former tax advisor............    59
    Leeper, Charlie, esq., Spriggs and Hollingsworth.............    57
    McCain, Hon. John, U.S. Senator from Arizona, chairman, 
      Committee on Indian Affairs................................     1
    McConnon, B.R., president, Democracy Data and Communications.    57
    Rossetti, Michael, former counsel to the Secretary of the 
      Interior, Department of the Interior.......................    89
    Sickey, David, council member, Coushatta Tribe of Louisiana..    13
    Sickey, Kevin, chairman, Coushatta Tribe of Louisiana........    10
    Thomas, Hon Craig, U.S. Senator from Wyoming.................     9
    Van Hoof, Kathryn, former outside counsel, Coushatta Tribe of 
      Louisiana..................................................    19
    Worfel, William, former tribal council member, Coushatta 
      Tribe of Louisiana.........................................    17

                                Appendix

Prepared statements:
    Baggett, Fred................................................   109
    Sickey, David................................................   112
    Sickey, Kevin................................................   110
    Thomas, Ronnie, chairman, Alabama-Coushatta Tribe of Texas 
      (with attachment)..........................................   443
Additional material submitted for the record:
    Hartman, Barry M., Kirkpatrick & Lockhart Nicholson Graham 
      LLP, letter to Senator McCain on behalf of Steven Griles...   116
    Murphy, Kevin M, Carr Maloney P.C., letter to Senator Dorgan 
      on behalf of Gail Halpern..................................   123
    Additional e-mails...........................................   125


                        TRIBAL LOBBYING MATTERS

                              ----------                              


                      WEDNESDAY, NOVEMBER 2, 2005


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

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

    The Chairman. Good morning.
    Last year, this committee launched its investigation into 
serious allegations of misconduct levied by a number of Indian 
tribes against their former lobbyist, Jack Abramoff and 
political consultant Michael Scanlon. The picture painted by an 
earlier Washington Post article about the duo had given cause 
for grave concern.
    Little did we know then what a complex and tangled web we 
would begin to unravel. Some may have known. According to one 
e-mail sent by former Abramoff associate Kevin Ring on February 
22, 2004 to a colleague, ``I know more than the article and the 
truth is worse.'' Indeed, the truth has proven much, much 
worse.
    The story is alarming in its depth and breadth of potential 
wrongdoing. It is breathtaking in its reach. It has spanned 
across the United States, sweeping up a number of tribes, the 
Coushatta Tribe of Louisiana, the Mississippi Band of Choctaw 
Indians, the Saginaw Chippewa Indian Tribe of Michigan, the 
Agua Caliente Band in Palm Springs, the Tigua Indians of El 
Paso, and the Pueblo Sandia Tribe of New Mexico.
    It has taken us from tribal reservations across the land to 
luxury sports boxes here in town; from a sham international 
think tank in Rehoboth Beach, DE, to a sniper workshop in 
Israel, and then beyond. But let us not forget that the 
unifying threads of this entire investigation have been the 
astronomical fees the tribes paid Michael Scanlon, where those 
fees ultimately went, and why.
    Recall that between 2001 and 2004, six tribes paid more 
than $66 million to Michael Scanlon's company, Capitol Campaign 
Strategies, and its affiliates. Remember, too, what the $66 
million figure does not include. The $66 million does not 
include payments made by the tribes for lobbying services 
provided by Greenberg Traurig. The $66 million does not include 
the substantial payments made by the tribes directly to other 
entities owned or controlled by Abramoff, such as the Capital 
Athletic Foundation. The $66 million does not include the 
substantial political and dubious charitable contributions that 
the tribes made at Mr. Abramoff's direction. The $66 million 
only includes the payments by the tribes to Mr. Scanlon's 
companies.
    The revelations in the Washington Post's February 22, 2004 
article sparked many reactions. Upon its publication, Mr. Ring 
wrote again to his colleague: ``Now what do you think of my 
partner Jack? Not too shady, huh?'' Mr. Ring's colleague could 
only reply, ``That is a lot of cake.'' It was. Mr. Abramoff and 
Mr. Scanlon considered the Coushatta to be the biggest slice.
    In a September 10, 2001 e-mail, Mr. Abramoff asked Mr. 
Scanlon, ``Can you let me know how much more, than the current 
$660,000, we would each score should Coushatta come through for 
this phase and Choctaw continue to make the transfers. I need 
to assess where I am at for the school's sake.'' Mr. Scanlon 
replied, ``Coushatta is an absolute cakewalk. Your cut on the 
project as proposed is at least $800,000.''
    All in all, Mr. Scanlon reported that Mr. Abramoff would 
get at that time $1.5 million on top of the $660,000, for a 
total of $2.1 million. Mr. Abramoff heaped praise on his 
partner: ``How can I say this strongly enough? You iz da man!''
    Mr. Scanlon, however, was not content with the $2.1 
million. He exhorted Mr. Abramoff in that same e-mail, ``Let's 
grow that $2.1 million to $5 million. We need the true `gimme 
five'.'' ``Gimme five,'' as we learned from the last hearing, 
was Mr. Abramoff's and Mr. Scanlon's code phrase for their 
alleged money-making scheme. Mr. Abramoff and Mr. Scanlon 
apparently convinced the tribes to pay grossly inflated fees to 
Mr. Scanlon's companies.
    How did they do this? According to Mr. Ring's February 22, 
2004 e-mail, Mr. Abramoff, ``talks tribes into hiring 
Scanlon.'' Ultimately, the two men each reaped at least $21 
million in profit.
    Almost 6 months after the ``cake walk'' exchange, Mr. 
Abramoff and Mr. Scanlon tried to achieve the true ``gimme 
five'' with the Coushatta. While Mr. Scanlon was drafting a 
grassroots proposal for the tribe, Mr. Abramoff guided him in a 
March 12, 2002 e-mail: ``It is great, but don't give the option 
of shaving costs. Of course, they should do all at once, and 
there are no savings!!!, otherwise we will sacrifice $2 million 
that they would otherwise gladly pay.''
    Mr. Abramoff and Mr. Scanlon saw the Coushatta as their 
``money train.'' Mr. Abramoff summed it up in his June 2, 2002 
e-mail to Mr. Scanlon, ``They are ripe for more pickings. We 
have to figure out how.''
    The committee has tried to determine how expensive the 
money train was. Preliminarily, the committee has determined 
that in less than 3 years, the tribe paid Capital Campaign 
Strategies over $26.6 million; American International Center 
another $3.6 million; and the Capital Athletic Foundation $1 
million, for a grand total of almost $32 million.
    Again, that does not include lobbying fees paid to 
Greenberg Traurig at a rate of $125,000 per month. Thirty-two 
million dollars is an astounding number over such a short 
period of time. When one examines what benefits the tribe 
actually derived, some may say the payments were almost 
criminal.
    Today, we have with us Kevin Sickey, the current chairman 
of the tribe, and David Sickey, a current council member. We 
also have with us William Worfel, the tribe's former vice 
chairman, and Kathryn Van Hoof, the tribe's former general 
counsel. I want to thank them and the tribe for their 
continuing cooperation with the committee's investigation. I am 
interested to hear their reaction to the evidence presented 
today.
    Although the questionable transactions in which Mr. 
Abramoff and Mr. Scanlon engaged are too numerous to cover in 
this hearing, I want to focus on an illustrative few. Take, for 
example, $3.17 million that Mr. Scanlon requested from the 
Coushatta for the Louisiana Battleground Program.
    In an October 24, 2001 e-mail, Mr. Abramoff wrote to Mr. 
Scanlon, ``I want to see if we can pump up our LDA for the 
second-half to make sure we do not fall out of the top 10. I 
can achieve this if I can run some of the money for the 
Coushattas through the firm, then get it to CCS.'' Concerned, 
Mr. Scanlon asked, ``Are you sure Baggett will let you rip it 
back out?'' Mr Abramoff responded, ``If not, it will be a cold 
day in hell that they get this check from my grubby hands.''
    To get the money into Greenberg Traurig, Scanlon made the 
pitch to Kathryn Van Hoof, outside counsel to the Coushatta at 
the time. ``We broke this into two invoices, one to be paid to 
Greenberg Traurig for $1 million and one paid to Capitol 
Campaign Strategies, GT's public affairs entity, for the 
balance. We usually just invoice through Capitol Campaign 
Strategies, so the lawyers at the firm rest easy, while we are 
out burning the countryside. In this instance, however, we plan 
to do some things through the law firm umbrella due to their 
highly sensitive nature and confidentiality reasons. I hate 
hiding behind lawyers, but we are going to do some crazy stuff 
on this one so I guess it is okay.''
    The attached invoice Mr. Scanlon submitted under Greenberg 
Traurig's name identified the purpose of the payment as 
``public affairs services.'' It appears that at no point did 
Mr. Scanlon or Mr. Abramoff tell the Coushatta that their money 
would be used for anything other than political activities.
    But that $1 million never went to the tribe's political 
activities. At Mr. Abramoff's direction, it instead padded the 
coffers of the Capital Athletic Foundation, Jack Abramoff's 
private charity. Greenberg Traurig, too, was deceived in this 
transaction. To extract the money from Greenberg Traurig's 
trust accounts, Mr. Abramoff told the firm that the Coushatta 
knew about the payment to the Foundation and had authorized it.
    Let me be clear. The tribe did not know about and had not 
approved the transaction. Certainly, the tribe had no intention 
of providing what turned out to be the seed money for 
Abramoff's private charity. I think the Department of Justice 
and the Internal Revenue Service will be interested in this 
apparently fraudulent and tax-evasive transaction.
    I want to stop for a moment and recognize Greenberg Traurig 
and its able lawyers at Williams and Connolly. I know this 
chapter in the firm's history is embarrassing and painful in 
many ways, but I want the record to reflect that consistent 
with their professional obligations, Greenberg Traurig and its 
counsel have always been responsive to the committee's 
requests; always made themselves available to answer questions; 
and have always conducted themselves with dignity and 
professionalism in these trying circumstances. I thank them for 
their assistance in this investigation.
    Now, if you look back at Mr. Scanlon's e-mail to Ms. Van 
Hoof, we need to ask: How did Capitol Campaign Strategies spend 
the other $2.17 million it requested? According to Capitol 
Campaign Strategies' internal records, a small part was paid to 
outside vendors for actual work before Mr. Scanlon began to 
raid it. On November 2, 2001, Mr. Scanlon took $1.4 million as 
a shareholder draw. Later entries in the CCS accounting ledger 
show at least $115,000 apparently going for Mr. Scanlon's 
wedding which did not happen. Of course, Mr. Scanlon ultimately 
paid some to Mr. Abramoff.
    What happened to the more than $4 million the tribe paid to 
CCS on January 18, 2002 for another of Mr. Scanlon's ``high-
octane'' programs? Mr. Scanlon withdrew the first $1.9 million 
as a shareholder draw. He paid another $20,000 to Jon van Horn, 
who was at that time an employee of Greenberg Traurig. Mr. 
Scanlon then paid $2.7 million to Kaygold, Mr. Abramoff's 
alter-ego.
    And where did the $2.3 million that the Coushatta paid into 
the American International Center on April 9, 2003 go? Four 
days after its receipt, $991,000 went to Kaygold, Jack 
Abramoff's company. Another $1.3 million went to Capitol 
Campaign Strategies on April 22. From there, $15,000 was paid 
to a research company for work performed. Michael Scanlon drew 
down $1.4 million, apparently for work on his house, personal 
expenses and as a general shareholder draw.
    Where it went after that, the committee cannot yet say. 
What it can say, however, is that the Coushatta apparently 
received little of the intended benefit for the vast sums it 
paid. During his pitch to the tribes, Mr. Scanlon made much of 
the databases he sold them. He called them customized and state 
of the art. They were technological wonders that contained 
everything from voter preferences to opposition research. He 
claimed that his company constructed, maintained and updated 
them.
    But ``high-technology'' came at a steep price, according to 
Mr. Scanlon. In his October 23, 2001 memorandum to the tribe 
about their Battleground Program, Mr. Scanlon claimed that 
modifying the tribe's already existing database would cost 
$1,345,000. In the Coushatta political program, Mr. Scanlon 
pitched in 2003, for which the tribe paid millions of dollars, 
he claimed that ``we are well underway in what is the most 
significant part of the 2003 program, and quite frankly the 
most expensive part of the program thus far.'' Yet Mr. Scanlon 
paid no more than $105,000 for the Coushatta database. His 
company did not construct it. He outsourced the database to 
another company.
    We are fortunate to have with us today B.R. McConnon, the 
president of Democracy Data and Communications, the vendor that 
actually provided the software program and constructed the 
database. I think his testimony will be instructive on this 
issue and I thank him for his appearance and cooperation.
    I could continue identifying other individual transactions, 
but our time today is limited. Suffice it to say that Mr. 
Scanlon and Mr. Abramoff made much money off the Coushatta.
    Today, the committee will also examine certain issues 
related to a nonprofit called the Council of Republicans for 
Environmental Advocacy, commonly known as CREA. Information in 
the committee's possession indicates that Mr. Abramoff directed 
at least four of his tribal clients to contribute no less than 
$250,000 to this organization from 2001-03. The question is 
why. The committee can point to nothing that the CREA did for 
the tribes in particular, or on Native American issues in 
general, that merited such generosity.
    In fact, documents obtained in the course of the 
investigation suggest that Mr. Abramoff might have had his 
tribal clients pay so much because he perceived that CREA's 
president, Italia Federici, would help him get inside 
information about, and possibly influence, tribal issues 
pending at the Department of the Interior. Internal business 
communications between Mr. Abramoff and his associates reflect 
that Mr. Abramoff believed that Ms. Federici had ``juice'' at 
the Department of the Interior and deemed her ``critical'' to 
his tribal lobbying practice. Whether she actually did have 
access and influence or whether she was just saying so to have 
Mr. Abramoff's tribes continue their donations is a question I 
hope is answered today.
    Whatever the answer, one point should be made clear, and I 
believe all the witnesses on the fourth panel will agree. There 
has been no evidence to suggest that Secretary Norton knew of, 
much less sanctioned, Mr. Abramoff or anyone else using her 
name in seeking fees and donations from Native Americans. To 
suggest otherwise based on the current record would do a great 
disservice to the Secretary.
    This hearing brings the committee one step closer to 
concluding its investigation. Over the next few months, the 
committee will continue its work and early next year it will 
prepare an appropriate report. Of course, should the evidence 
warrant, the committee will conduct further hearings.
    As I sit here today, I cannot say what specific legislative 
remedies will result from this investigation. Clearly, lobbying 
reform is one of the issues that will be addressed. Whatever 
those remedies, I sincerely hope that the sanitizing light of 
public scrutiny shed on these lobbying practices has benefitted 
not just the affected tribes, not just Indian country, but all 
who participate in and are part of our great democratic 
process.
    Finally, in preparation for this hearing, Vice Chairman 
Dorgan has asked that certain documents produced in response to 
committee subpoenas in this matter that he is keenly interested 
in be made part of the record. I have likewise asked that 
certain documents be made part of the record. I now ask for 
unanimous concurrence that both sets of documents, which were 
exchanged and agreed upon before today's hearing, be made part 
of the record.
    Finally, I believe that Ms. Federici is not here. Is that 
correct? As far as we know, Ms. Federici has not chosen to 
respond to subpoena or we have been unable to subpoena her. As 
I wrote to her lawyer, we will have another hearing with her as 
the witness at whatever time we are able to track her down. It 
is very unfortunate that she has chosen not to cooperate in 
this hearing.
    Senator Dorgan.

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

    Senator Dorgan. Mr. Chairman, I will not repeat much of 
what you have added. However, I do have a statement of some 
length.
    Let me say that when this committee began this odyssey some 
long while ago, I doubt if any of us would have imagined the 
tangled web that we would have uncovered. Schemes and 
personalities; it is a little like a bad novel with many 
characters and sub-plots. Each additional hearing has raised 
even more questions and added to the bizarre twists of the 
story. Each successive hearing has also increased my concern 
about a political system that in these circumstances seemed to 
encourage and reward unethical behavior.
    While the committee has focused on the corruption and greed 
of two individuals, in particular Jack Abramoff and Michael 
Scanlon, I think in some ways they are symptomatic of larger 
problems. We only need to open the newspaper each morning to 
read of the latest scandals.
    One person has been indicted, in fact, in part for giving 
false information to this committee during this investigation. 
Our staff has received information indicating there have been 
other attempts to obstruct this investigation. Our staff has 
received reports and questions of senior Government officials 
interceding on behalf of friends in Government decisionmaking.
    It is my hope that when the final report is written on this 
investigation, it not only recounts the facts and recognizes 
the illegal and unethical conduct that has occurred, but that 
it will address what is at the heart of why we sit on this dais 
today. We cannot change the ethics or the moral conduct of 
those who decide for their own reasons to break the law or make 
a living deceiving people, but this Congress can tighten up on 
the laws to ensure full disclosure and transparency, that it 
becomes a practice, not just a concept.
    I thank the Chairman and his staff for their persistence in 
seeking the truth and making sense of the morass of information 
that we have received. I particularly appreciate the respectful 
manner in which the committee has worked with the tribes during 
the course of the investigation. Our focus has been on fraud 
and deception committed against the tribes as the committee's 
congressional mandate encompasses all issues affecting Native 
Americans and the unique trust relationship that they share 
with the Federal Government. But it needs to be emphasized that 
the fraud and deception committed by Mr. Abramoff and his 
cohorts reached well beyond the tribes.
    At the committee's hearing in June of this year, we heard 
from witnesses about the fraud that was committed against the 
Choctaw Tribe in Mississippi. In preparation for that hearing, 
we uncovered a number of questionable transactions involving 
tax-exempt charitable organizations.
    Subsequent to that hearing, the Chairman and Ranking Member 
of the Senate Finance Committee have written us requesting that 
this committee provide them with documents that fall within the 
jurisdiction of the Finance Committee about the use or 
potential misuse of 501(c)(3) and 501(c)(4) organizations. It 
is my understanding that we will provide those documents and 
pertinent correspondence following today's hearing to the 
Senate Finance Committee.
    The fraudulent activities that the investigation has 
discovered really almost know no boundaries, not by committee 
jurisdiction, geography, greed or deception. Our staffs working 
together have reviewed over 500,000 documents, documents that 
tell a complicated and tortured tale of influence-peddling, 
friends betraying friends for political and monetary gain, and 
sadly, of many innocent victims who were unwittingly snared 
into a web of deceit.
    Our focus today is on the Coushatta Tribe of Louisiana, a 
tribe that spent a stunning $37 million on Mr. Abramoff and 
many of his schemes. Documents suggest that while some of this 
money was spent on legitimate lobbying activities, an alarming 
amount can be tracked to the pockets and personal interests of 
Mr. Abramoff and Michael Scanlon. During the period from 
February 2001 to March 2004 when the tribe was represented by 
Greenberg Traurig, the Coushattas have two major goals: First, 
to renew its compact with the State of Louisiana; and second, 
to protect its financial turf by keeping out gaming 
competitors.
    To be fair, Mr. Chairman, in the beginning the overall 
goals of the tribe were for the most part achieved. However, 
along the way it appears that about two-thirds or something 
nearing that of the money paid by the tribe was skimmed off the 
top by Mr. Abramoff and Mr. Scanlon, through Mr. Scanlon's 
company called Capitol Campaign Strategies. These millions 
could have been directed in other ways, creating new jobs, 
providing health care for tribal members and so on, but instead 
it appears it helped pay for a very expensive wedding, seaside 
mansion, a charitable foundation; charitable, I might add, only 
to Mr. Abramoff. I think that once again it calls into question 
judgment and ethics and the morals of those who have been 
involved in this.
    I want to note that the Indian tribes were not Mr. 
Abramoff's only targets. His pitch to potential clients was in 
fact global. For him, it was a simple proposition. If they had 
money, he offered access and influence.
    In 2003, he offered to arrange for the President of Gabon a 
visit with President Bush, Members of Congress, and other 
policy opinion-makers in the United States in exchange for $1 
million. To close the deal, he told the President of Gabon that 
he was ``willing to travel to Western Africa at the conclusion 
of his visit to Scotland with Congressmen and Senators I take 
there each year. It is possible they will want to join me in 
Gabon, which would be an extra bonus.'' That arrangement was 
not concluded, but it shows the global reach and the interests 
of influence.
    The experience of the Coushatta Tribe continues themes we 
have seen in previous hearings. There is substantial evidence 
the tribe received value for some of the lobbying fees but a 
lot of it, we may never know exactly how much, was siphoned off 
by Mr. Abramoff and Mr. Scanlon. The excessive amount of money 
involved, a staggering $37 million, magnifies the situation. 
Influence-peddling appears to have reached new heights. The use 
of shell companies, so-called charitable organizations, to hide 
the sources of money has been found to be even more robust.
    In two instances, Mr. Abramoff asked the Coushattas to 
contribute to the Council of Republicans for Environmental 
Advocacy, or CREA, a business-backed 501(c)(4) environmental 
group. The executive director of CREA is the person that 
Senator McCain indicated has failed to show for today's hearing 
under subpoena, and will be asked to appear by herself, I 
understand, at the next hearing, and we will have a hearing 
that devotes itself exclusively to her recollection of events. 
But the e-mail traffic suggests that Mr. Abramoff expected the 
executive director of CREA to do his own bidding with a close 
friend of hers a top official at the Department of the Interior 
who is testifying today.
    According to the former tribal Vice Chairman William 
Worfel, the tribe was asked by Abramoff to contribute $50,000 
to CREA to pay for a Department of the Interior study on the 
national park system that allegedly the department could not 
afford. The contribution was made to CREA, which by the way is 
not affiliated with the Department of the Interior except by 
friendships. We have so far found no evidence that a study was 
ever conducted. Later, the tribe gave $100,000 to CREA and 
Italia Federici, the head of CREA she thanked Abramoff for the 
generosity, saying that without contributions that Abramoff 
arranged, CREA would not have been able to pay for the half-
page ad in the Washington Post supporting President Bush's 
energy plan.
    As Mr. Abramoff had learned with other clients, mobilizing 
and manipulating the Christian Coalition was also an effective 
way to turn back potential gaming competitors. The e-mail 
traffic in previous hearings and this hearing that will be 
released shows that with the Coushatta situation, it was no 
different than the other tribes that we discussed previously, 
but the stakes were even higher.
    No surprise then that Mr. Abramoff called his friend at 
Century Strategies, Ralph Reed, for assistance. No surprise, 
either, that a decision was made to send Mr. Reed's 
compensation through a number of entities to hide its origin. 
At the request of Mr. Reed, the Coushatta, like the Choctaw 
before them, routed their funds to him through a variety of 
entities because of his concern about being publicly associated 
with gaming money.
    The tribe's outside counsel in an interview with committee 
staff described how in one instance $400,000 flowed from casino 
revenues to Southern Underwriters, a company owned by tribal 
contractor Aubrey Temple, to the American International Center, 
and then on to Mr. Reed's company, Century Strategies. The 
counsel indicated it was no secret about who the intended 
ultimate recipient was. She also said the only revenues 
available to the Coushatta were from their gaming enterprise, 
so anyone paid by the tribe was being paid by gaming revenue.
    Mr. Abramoff gained the trust of the Coushattas. He not 
only portrayed himself as a friend of some of the most powerful 
people in the world, he actually delivered them. Letters from 
Members of Congress, many of whom were not from Louisiana, 
appeared at the Department of the Interior opposing gaming 
expansion in Louisiana, which would have had the practical 
effect of protecting the Coushatta gaming turf.
    Through Abramoff's connections, the Coushatta were invited 
to the White House to have a photo taken with the President. 
The Coushatta trusted Abramoff so much that when he asked them 
to send $1 million to his firm, they assumed it was a 
legitimate business expense.
    Abramoff's firm trusted him, too, and when the $1 million 
check arrived, they followed his directions and ran it through 
their corporate trust account and rewrote it to the Capital 
Athletic Foundation. Little did the tribe or the law firm know 
this particular $1 million provided the seed money for the 
Capital Athletic Fund, which we discovered in the last hearing 
was operated as Mr. Abramoff's personal charity, among other 
things used to start a school for his children and others and 
to pay for sniper education in Israel.
    Mr. Chairman, finally, we have a number of witnesses with 
us today who can speak to many transactions and schemes that I 
have described and you have described. As human beings, we are 
often exposed to the same set of facts and circumstances, yet 
perceive them differently. The task of this committee is to 
sort through the facts and perceptions to gain clarity into 
what happened, where clarity sometimes might seem out of reach. 
In this case, Mr. Chairman, clarity at least shows me, and I 
think shows you, a pretty seamy side of American politics and 
influence-peddling.
    I look forward today to hearing from the witnesses.
    The Chairman. Senator Thomas.

   STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM WYOMING

    Senator Thomas. Thank you, Mr. Chairman. I will be very 
brief so we can get on with the hearing.
    I want to thank you, of course, for all the interest you 
have taken in this. It is a tough issue and certainly it is one 
that is important to this country and to this committee. We 
have heard a great deal about it and the public needs to know 
more about it. It is my understanding that the Justice 
Department really has the role in doing this, and I think we 
ought to limit ourselves to what our role ought to be as a 
legislative committee.
    I also think, frankly, we are talking about these dollars, 
maybe it would be interesting to know that the tribes that are 
usually short of money are giving $35 million or $40 million 
for lobbying. I think that is kind of an interesting technique 
that I have not heard much about. So I think you ought to 
expand your scope a little bit on that.
    We learn from experience, but I hope pretty soon, Mr. 
Chairman, we can wind this up and move on with some of the 
other issues that affect the tribes in this country.
    I want to welcome my friend Steve Griles here, the Deputy 
Interior Secretary in the past, who has done a great job, and 
thank you for being able to be here.
    The Chairman. Thank you, Senator Thomas.
    Our first panel is Kevin Sickey, the chairman of the 
Coushatta Tribe of Louisiana; and David Sickey, the council 
member of the Coushatta Tribe of Louisiana. Welcome to both 
witnesses. We will begin with you, Chairman Kevin Sickey. 
Please proceed.

    STATEMENT OF KEVIN SICKEY, CHAIRMAN, COUSHATTA TRIBE OF 
                           LOUISIANA

    Mr. Kevin Sickey. Good morning, Chairman McCain, Senator 
Dorgan, and distinguished members of this committee.
    I am Kevin Sickey, chairman of the Coushatta Tribe of 
Louisiana. With me at the table is my brother and council 
member David Sickey and the tribal attorney Jimmy Faircloth.
    I would also like to recognize tribal council member Tee 
LaBuff and the members of our tribe who made this trip to 
attend this hearing. Many of these tribal members were the 
first to suspect that something had gone terribly wrong with 
the lobbyist Jack Abramoff and Mike Scanlon, so it is 
appropriate that these tribal members are present for this 
proceeding. At one time, they were referred to as dissidents 
for questioning the lobbyists' actions, a label provided by the 
lobbyists to divert suspicion from their own activities.
    We are grateful for the opportunity to appear before this 
important committee. Your staff has been cooperative and 
respectful and we appreciate their hard work.
    We will divide our opening statement into two parts. First, 
I will provide a brief history of our tribe and I will explain 
our government and the political environment that lobbyists 
used to their advantage. And I will comment briefly on the harm 
caused by their fraud. Obviously, the information the committee 
is making public today is both shocking and is deeply 
disturbing to me, both as chairman of the tribe and as a tribal 
member.
    Following my brief comments, Councilman Sickey will provide 
a broad overview of some of the things we discovered in our own 
review. Before we proceed, however, I must respectfully qualify 
our testimony. Neither Councilman Sickey nor I had any direct 
dealings with Mr. Abramoff or Mr. Scanlon.
    We were not involved in the decision to hire these 
lobbyists, nor were we involved in any aspect of coordinating 
their work. We are both reluctant to speculate about the 
conduct and motives of the lobbyists. I suspect that any such 
speculation or conjecture will not aid the work of this 
committee.
    Finally, because we are currently involved in litigation 
about these events, we must be cautious in our comments 
concerning the actions of others.
    We are descendants of the Creek Confederacy from the 
Muskogee family of tribes. Our ancestors were stripped of 22 
million acres of land by the United States following the Creek 
War in 1814. Approximately 50 years later, a small band of 
Coushattas settled in the Calcasieu River area near Kinder, LA.
    In 1884, they were forced to move again when homesteaders 
began claiming their land. They then purchased a small tract of 
land 3 miles north of Elton, LA. In 1898, the United States 
placed 160 acres of land into trust for the tribe. 
Unfortunately, the trust was revoked in 1953, which began a 20-
year struggle for re-recognition.
    In 1973, the Coushatta Tribe of Louisiana was again 
recognized, and 7 years later our reservation was again 
formally established. In 1985, we held our first election of 
leaders by popular vote. We then established our own judicial 
system, police department, housing authority and many other 
social programs.
    Today, our tribe consists of over 850 members, 
approximately 400 of whom live in the Coushatta community. We 
are proud of our culture and heritage, and we are dedicated to 
maintaining the sovereignty that generations of our ancestors 
sacrificed and even died to protect.
    Our casino and resort opened in January 1995, and since 
then we have been blessed with economic prosperity. We employ 
approximately 2,800 people, with a total annual payroll in the 
range of $80 million. We purchase goods and services from 
Louisiana vendors in the range of $40 million per year. And we 
contribute approximately $7 million per year to State and local 
governments. We are proud to be a vital part of the economy of 
southwest Louisiana.
    This brief period of prosperity follows hundreds of years 
of unjust treatment by outsiders, which resulted in abject 
poverty and hardship within the tribe. This is why it is 
particularly painful that, after all those terrible years, our 
tribe again has been preyed upon by outsiders.
    But on this occasion, at least we are in good company. 
Certainly within the modern era, no victimization of Native 
Americans has received so much attention, no doubt because the 
underlying scandal has touched so many influential people. 
Nevertheless, we deeply appreciate the actions of this 
committee in bringing this matter to light.
    Our tribe is governed by an elected council consisting of a 
chairman and four council members. None of the current council 
members were in office when Mr. Abramoff was hired in early 
2001. Councilman Sickey took office in 2003. He had no direct 
contact with either Mr. Abramoff or Mr. Scanlon and very little 
knowledge of their activities. In fact, he became a vocal 
spokesperson against them.
    Council members LaBuff, Verlis Williams, and I took office 
this past June. One of our council seats is currently vacant. 
This wholesale change in leadership was in large part a result 
of the mess created by Mr. Abramoff and Mr. Scanlon.
    While Indian county has seen so many con-men throughout 
history, few, if any, were as skilled as Mr. Abramoff and Mr. 
Scanlon at creating and then preying on our insecurities. They 
preyed upon our political insecurities, they preyed upon our 
economic insecurities, and they preyed upon our insecurities 
about each other.
    Our political system is no more turbulent than any other. 
We, too, have cycles in leadership and influence, and it 
occasionally turns partisan. The lobbyists came to our tribe 
during one of these transition periods, and they viewed this as 
an opportunity for exploitation.
    To any decent person, vulnerability in others provides an 
opportunity to help, but to con-men like Mr. Abramoff and Mr. 
Scanlon, our vulnerability simply provided an opportunity to 
steal. And they hit the jackpot with us, a Native American 
tribe with a fairly new casino in the midst of a political 
transition, and naive to the underworld of governmental 
affairs.
    They inserted themselves into our internal tribal politics, 
excluded and attempted to discredited those who questioned or 
opposed them, and deliberately created paranoia on both sides 
by exaggerating threats from inside and outside the tribe. They 
exaggerated political threats and they exaggerated economic 
threats. Then they exaggerated their ability to deal with these 
exaggerated threats. And in the midst of this, they incited 
political upheaval to provide cover for their scheme to steal 
millions of dollars.
    We are pleased to report that the political storm within 
the tribe has calmed. And we are taking steps to recover the 
money that was stolen and to correct our system of checks and 
balances to ensure that this will never happen again.
    It is important to understand that the harm caused by Mr. 
Abramoff and Mr. Scanlon is much greater than the money they 
stole. Even though this amount is shockingly large, the scar of 
victimization runs even deeper, particularly because it has 
touched our leadership.
    Moreover, the misconduct of Mr. Abramoff and Mr. Scanlon 
has harmed all Native Americans in a way that deserves the 
particular attention of this committee. The lobbyists' actions 
have created a perception that there is something improper 
about officials working closely with Indian tribes. This 
stereotype threatens to chill tribal communications with 
officials who can profoundly influence the well-being of 
tribes.
    Even worse, it unfairly shifts the blame from where it 
belongs to the victims. Jack Abramoff is not a product of 
Indian country. On the contrary, he is the golden boy gone bad 
of the American political system. Our tribe and others were 
victimized when we attempted to fit into the American political 
system and we were led to believe that Mr. Abramoff was the 
gatekeeper.
    We have begun the process of repairing the political damage 
to our tribe's reputation. We have met with several of our 
State and Federal officials, and they seem genuinely committed 
to providing our tribe with the same access and the same 
channels of communication open to all individuals, businesses 
and special interest groups, nothing more, nothing less, and 
without favors or contributions. That is the way the system 
should work, and that is certainly the way we would like to 
participate.
    There have been a lot of adjectives used to describe Mr. 
Abramoff and Mr. Scanlon. Greedy and corrupt come to mind. But 
those are common terms, often used to describe people who 
forfeit judgment for money. Abramoff's and Scanlon's actions 
were hardly common. They set a new high-water mark for greed 
and corruption.
    I have read that Mr. Abramoff considers himself a religious 
man. If that is the case, then I do not understand the basis of 
his faith, and it is certainly different than ours. Most 
religions promote compassion and concern for others, and it is 
clear that Mr. Abramoff and Mr. Scanlon had no concern 
whatsoever for the welfare of our people.
    Your committee has done a great service for all Americans 
by exposing this sad affair. There are lessons here for 
everyone. I am grateful for the opportunity to address this 
committee on behalf of the Coushatta Tribe of Louisiana. 
Council member David Sickey will now provide a brief overview 
of our factual findings.
    Thank you.
    [Prepared Statement of Kevin Sickey appears in appendix.]

 STATEMENT OF DAVID SICKEY, COUNCIL MEMBER, COUSHATTA TRIBE OF 
                           LOUISIANA

    Mr. David Sickey. Good morning, Chairman McCain, Senator 
Dorgan, and distinguished members of this committee.
    I am David Sickey, a member of the tribal council of the 
Coushatta Tribe of Louisiana. I took office in June 2003.
    As Chairman Sickey has noted, I was not in office when Mr. 
Abramoff and Mr. Scanlon were hired, and I did not participate 
in the decisions by the tribal council to authorize their 
projects or pay them. I would respectfully submit that it will 
not aid the committee's efforts for me to speculate about the 
events at issue.
    My brief comments today will therefore be limited to 
certain facts established by the documents we have seen. As you 
are aware, many of the documents reviewed by this committee 
were not available to us. However, my observations today are 
also based on information provided by your staff, for which we 
are grateful.
    My intention is to provide a broad overview of the 
environment in which this fraud was committed. As your 
investigation must have revealed, while the scheme of Mr. 
Abramoff and Mr. Scanlon was reprehensible, it was also very 
clever and well-timed. Like Chairman Sickey, I should note that 
our tribe is currently involved in litigation about these 
lobbying activities, so I am limited in what I can say today.
    I have attempted to organize my observations in 
chronological order because the way that this scheme evolved 
over time was critical to its success.
    Mr. Abramoff was hired in March 2001. The tribe entered a 
contract with his firm, Greenberg Traurig, to provide lobbying 
services related to our tribe's compact negotiation and 
important regional gaming issues. According to the contract, 
Greenberg Traurig was to receive $125,000 a month plus 
reasonable expenses. The contract did not mention Mr. Scanlon 
nor any of the entities that he used to charge the tribe an 
additional $30 million.
    During the first 6 months or so of the lobbyists' 
employment, they appeared to deliver on their promises, and so 
the lobbying costs appeared justified. During that initial 
period, the tribe paid roughly $3.5 million for assistance with 
our tribal compact, which was successfully negotiated, and to 
achieve several legislative objectives. I say that they 
appeared to deliver on their promises because it is difficult 
to assess how much impact the lobbyists actually had in 
accomplishing these tribal objectives. Of course, they took 
credit for everything.
    If it had ended at that point, around September 2001, then 
this would be nothing more than another story about high-priced 
lobbyists taking credit for results that they may or may not 
have influenced. But it did not stop there. They leveraged 
their initial success as a platform for fraud, and by the 
spring of 2002 had extracted another $17 million from our 
tribe. By the time it was over in 2004, the tribe had spent 
approximately $36 million. Ironically, as the scheme progressed 
and the bills and rhetoric increased, the lobbyists' actual 
work for the tribe clearly decreased.
    The Texas threat. On October 5, 2001, the tribe paid 
$870,000 to Mr. Scanlon's company, Capitol Campaign Strategies 
to create a ``grassroots political structure'' in Texas. Mr. 
Abramoff and Mr. Scanlon were insistent that Texas was on the 
verge of legalizing gambling and that this would devastate the 
Coushatta casino. The majority of our casino customers travel 
from Texas, particularly the Houston area, and we have long 
understood that legalized gambling in Texas would erode our 
customer base and our casino revenues.
    Recognizing this potential threat and our fear of the 
consequences, the lobbyists claimed to have critical influence 
with the Texas officials who could defeat Texas gambling. This 
appears to be the starting point for their most egregious 
exaggerations and fabrications. This also appears to be the 
timeframe when they committed to gouging the tribe for as much 
money as they could and to say or do anything that was 
necessary to prolong the payout.
    The $1 million payment funneled to one of Abramoff's 
causes. On October 30, 2001, the tribe paid $3.17 million for 
the ``Louisiana program.'' This payment marks a high point in 
the lobbyists' creative billing. They split the bill by 
requesting that $2.17 million be sent to Capitol Campaign 
Strategies and $1 million to Greenberg Traurig.
    According to information shared by the staff, the $1 
million payment to Greenberg Traurig was not for any services 
provided by the firm. Instead, this $1 million payment was used 
to pump the firm's reported lobbying revenues, thereby 
maintaining Greenberg Traurig's public status as one of the top 
10 providers of legal and lobbying services to Native American 
tribes.
    E-mails involving Mr. Abramoff, Mr. Scanlon and others at 
Greenberg Traurig revealed that this $1 million payment was 
funneled through the firm and then used to finance one of Mr. 
Abramoff's favorite causes. The suspect nature and purpose of 
this payment structure is reflected in an e-mail from Mr. 
Scanlon to the tribe's former attorney dated October 25, 2001, 
where he wrote, ``we broke this into two invoices, one to be 
paid to Greenberg Traurig for $1 million and one paid to 
Capitol Campaign Strategies, GT's public affairs entity, for 
the balance. We usually just invoice you through Capitol 
Campaign Strategies so the lawyers at the firm rest easy while 
we are out burning the countryside. In this instance, however, 
we plan to do some things through the law firm umbrella due to 
their highly sensitive nature and confidentiality reasons. I 
hate hiding behind lawyers, but we are going to do some crazy 
stuff on this one, so I guess it is okay.''
    Mr. Abramoff, who was a partner at Greenberg Traurig, 
directed this creating billing arrangement. In my personal 
view, this payment reveals the extent of Abramoff's 
shamelessness. Not only was he stealing the tribe's money, but 
he was also using the theft to improve his professional 
reputation and the reputation of the firm.
    Hyping the Texas threat. In a memorandum dated November 6, 
2001, Mr. Scanlon reports that he had just returned from Texas, 
and States, ``We believe now that the Alabama Coushatta will 
open soon if we do not intercede. This would like be a small 
facility and not the class III facility the council is worried 
about, but we believe you should shut it down regardless.''
    This exemplifies the lobbyists' strategy of identifying an 
exaggerated threat to the tribe's casino revenues, as does the 
following assertion in a report from Mr. Scanlon to the tribe 
dated December 21, 2001: ``Despite our best efforts, the voting 
public in Texas remains very pro-gaming. The State economy is 
lagging and with the Enron and Continental Airlines debacles 
hitting the Houston area back-to-back, they are desperate for 
revenue.
    As we said when we came to you with the original Texas 
proposal, things are really bad over there. We have never 
before seen such a pro-gaming atmosphere in Texas or anywhere 
else in the country. In our collective political careers, and 
although we have it contained for the time being, this 
environment is a very serious threat to the Grand Casino's 
future.''
    Threats of infiltration. According to a memorandum from Mr. 
Scanlon dated January 3, 2002, the company that owned one of 
our competitors was ``well known for their ability to 
infiltrate the electorates of Indian tribes and this will 
undoubtedly happen there, if they get a foothold in your 
region.''
    After hammering this point and others, Mr. Scanlon states--
--
    The Chairman. Mr. Sickey, would you try to summarize as 
much as you can, since we have to move forward. Go ahead.
    Mr. David Sickey. Okay.
    At about this time, perhaps sensing some opposition to 
their proposals and programs within the tribe and likely 
planning to increase their fees and profits, Mr. Abramoff and 
Mr. Scanlon began excluding and attempting to discredit their 
political opposition on the council and within the tribe.
    On October 31, 2002, the tribal CFO sent an e-mail to Mr. 
Abramoff stating the tribal auditors would requesting 
confirmation that the tribe had paid a total of $18,559,700 for 
``demographic surveys and studies and professional consulting 
services.'' Mr. Abramoff worded the e-mail to Mr. Scanlon 
asking, ``what should I say, especially about the last part, 
the request concerning no contracts?''
    In response to several frantic comments from Mr. Abramoff, 
Mr. Scanlon states, ``f-ing weird, really f-ing weird. I hope 
that this is a standard operating procedure.'' He then 
recommends that Mr. Abramoff talk to the tribe's vice chairman 
before writing anything. There was never a formal reply. The 
confirmation requested by the auditors was not provided. 
Instead, a decision apparently was made to lay low until the 
storm passed.
    There is no doubt by this point the lobbyists knew that 
questions were being raised about their fees. As is clear from 
subsequent events, they obviously did not care. Apparently, 
they felt confident that even this type of blatant misconduct 
was fair game in the world of big-time lobbying.
    At this time, I will go into my closing comments.
    The Chairman. Thank you.
    Mr. David Sickey. In conclusion, as Chairman Sickey and I 
have both noted, since we were not involved in any direct 
dealings with Mr. Abramoff or Mr. Scanlon, there is very little 
we can say here today about the events at issue that would not 
involve speculation and conjecture. Therefore, until our own 
investigation is complete, both of us are reluctant to comment 
further on the lobbying activities in question. Moreover, any 
speculative comments on our part could jeopardize our legal 
efforts to recover the tribe's money.
    But what we can state with firm conviction, based on our 
own review and the findings of this committee, is that our 
tribe was defrauded out of most of the money we paid. And no 
matter who the lobbyists used or who they try to blame, this 
fraud was orchestrated and carried out by Jack Abramoff and 
Michael Scanlon. From the tribe's perspective, the fraud was 
orchestrated under the banner of Greenberg Traurig.
    Your committee has performed an important service by 
exposing this fraud and I am grateful for the opportunity to 
address the committee today. As Chairman Sickey has noted, 
there are lessons in this sad episode for everyone.
    Thank you.
    [Prepared Statement of David Sickey appears in appendix.]
    The Chairman. Thank you very much.
    Senator Dorgan.
    Senator Dorgan. Mr. Chairman, in the interest of time, I 
will not ask questions. I would thank the tribal 
representatives for being here to present testimony. I would 
also say that my colleague from Wyoming asked an important 
question on all of this. I think there was fraud and deception 
and so on, but it is also the case that the decision to spend 
that quantity of money is quite an extraordinary matter of 
strange judgment nonetheless, so I agree with my colleague from 
Wyoming about that.
    I thank you for at least filling in some pieces of the 
puzzle from your perspective and I hope the committee will be 
able to fit the rest of the pieces together as well.
    The Chairman. Senator Thomas.
    Senator Thomas. Thank you, Mr. Chairman.
    I had to go to the floor so I did not really hear the 
testimony, so I have no questions. Thank you.
    The Chairman. Thank you very much.
    Councilman Sickey, your complete statement will be made 
part of the record. I had a chance to read it last night, and I 
thank you.
    I thank you both and I wish you luck. I appreciate your 
candid testimony today. Thank you very much.
    Mr. Kevin Sickey. Thank you, Mr. Chairman.
    Mr. David Sickey. Thank you.
    The Chairman. Our next panel is William Worfel, who is the 
former tribal council member of the Coushatta Tribe of 
Louisiana; Kathryn Van Hoof, former outside counsel to the 
Coushatta Tribe of Louisiana; and Fred Baggett, the managing 
shareholder and chairman of National Governmental Affairs 
Practice of Greenberg Traurig, Tallahassee, FL.
    Please come forward.
    Since we have four panels, I would appreciate your 
witnesses keeping their opening statements as brief as 
possible. We will begin with Mr. Worfel. Welcome and please 
proceed.

  STATEMENT OF WILLIAM WORFEL, FORMER TRIBAL COUNCIL MEMBER, 
                  COUSHATTA TRIBE OF LOUISIANA

    Mr. Worfel. Good morning, Mr. Chairman and members of the 
committee. It is an honor to appear before you today. My name 
is William Worfel. I live in Oberlin, LA. I am a former member 
of the governing council of the Coushatta Tribe of Louisiana. 
My mother is a full-blooded Coushatta member. I am a happily 
married man with three daughters that keep me and my wife Tammy 
very busy.
    I again thank you for the opportunity to address you today 
regarding some very important matters that have impacted not 
only my tribe, but also Native Americans as a whole.
    My first contact with this committee in April 2004, I am 
sorry to say, was under much less informed circumstances. My 
first contact with this committee was in the form of a letter, 
first and foremost. Please understand that the letter does not 
in any way reflect how I feel about the honorable members of 
this committee or the committee's honorable purpose.
    This letter was written for me by Michael Scanlon and 
addressed to Senator McCain. Both Abramoff and Scanlon told me 
that this committee's investigation would not amount to 
anything and that if we sent in the letter he drafted, Jack 
would personally deliver the letter to the committee and the 
investigation would end.
    Since at that time we knew nothing of the rip-off that Mike 
Scanlon and Jack Abramoff had undertaken against our tribe and 
many other tribes, I trusted Mike Scanlon at his word. I regret 
the letter sent to this committee with my signature on it. I 
view that letter as the last fraud committed against me and my 
tribe by Abramoff and Scanlon.
    I sit here today very satisfied that I have since then 
fully and actively cooperated with the committee's 
investigation into the wrongdoings of Jack Abramoff and Michael 
Scanlon. The letter drafted for me by Michael Scanlon to this 
committee was addressed to Senator McCain. As this process has 
moved forward, I have learned that Senator John McCain is a 
national hero. I can assure you that my father, a Vietnam 
veteran and a Korean War veteran, would whip my butt if he knew 
I had any role in disrespecting Senator McCain. Nothing could 
be further from the truth.
    Because of the fine work done by this committee and the 
Department of Justice, we now know that these two men committed 
a consistent pattern of fraud and deception, not only against 
our tribe, but against many tribes. I have no friendship for 
these men. In my mind they are educated thieves that must be 
brought to justice so this will not happen again in Indian 
country.
    I was first elected to the Coushatta Council in 1999. 
Lovelin Poncho was our chairman. When Jack Abramoff and Mike 
Scanlon were hired in March 2001, we were involved in a very 
vigorous fight over the renewal of our gaming compact with the 
Governor of Louisiana and the local governments surrounding our 
casino.
    Terry Martin, a member of the Chitimacha Tribe of 
Louisiana, recommended Jack Abramoff and Mike Scanlon to our 
council. Mr. Martin told us that Jack Abramoff and Mike Scanlon 
worked for Chief Phillip Martin of the Choctaw Tribe of 
Mississippi. As you know, the Choctaw Tribe and Chief Martin 
are viewed in Indian country as very respected and as a 
sophisticated business-oriented tribe. From following your 
investigation, I know that Abramoff and Scanlon also defrauded 
the Choctaw Tribe.
    Chairman Poncho had delegated the responsibility of 
checking out Abramoff and Scanlon to our legal counsel, Kathryn 
Van Hoof, and former council member, Bertney Langley. I have no 
doubt that these folks looked hard at Jack Abramoff and Michael 
Scanlon and their law firm, Greenberg Traurig. That Jack worked 
for a Washington, DC mega-law firm like Greenberg Traurig was 
very impressive to us all.
    As I sit here today, knowing all the real facts, I consider 
Greenberg Traurig as guilty as Jack Abramoff and Michael 
Scanlon. During 2001, I was not responsible for working with 
Jack Abramoff and Michael Scanlon. Our attorney, Kathryn Van 
Hoof, council member, Bertney Langley, and Chairman Poncho 
worked with them at that time. As council members, we all know 
that competitive threats of expanded gaming were happening all 
the time. State-sponsored gambling, slot machines at the horse 
racetrack, and the possibility of Texas legalizing gaming and 
the casinos being built by other tribes were consistent threats 
to our market share.
    In early 2002, Kathy Van Hoof resigned. After her 
resignation, Chairman Poncho assigned me to keep tabs on 
competitive threats to our casino and to handle Government 
relations efforts for our tribe. I became the contact person 
for Jack Abramoff and Michael Scanlon in March 2002.
    The most critical issue during this time was a possible 
casino by the Jena Band of Choctaw Tribe. The Jena Band had 
tried to work with our tribe and Chairman Poncho for many years 
to get their own casino. At one point in the negotiations, our 
tribe was going to loan the necessary funds to the Jena Band 
and we would get a measuring contract in return.
    The discussion had always been that the Jena Band would put 
their casino in Northern Louisiana, and it would not in any way 
compete with our casino. However, when we learned that Jena was 
trying to locate a casino on the Louisiana-Texas border off 
Interstate 10, we began to work hard to stop them. Michael 
Scanlon was working for us to develop a grassroots campaign 
against expansion of gambling, including the Jena Band's 
efforts. Scanlon's efforts included using Christian groups that 
oppose gambling.
    Scanlon and Ralph Reed also worked in 2001 on our compact 
renewal. We never met with Ralph Reed, nor did we tell Mike 
Scanlon to use Ralph Reed. I believe that Jack Abramoff and 
Michael Scanlon did assist us during our efforts to renew our 
compact and in the fight against the Jena Band. However, there 
are other projects that I now believe were not helpful and 
never intended to be.
    For example, our tribe was billed millions of dollars for 
the development of a database of information that Abramoff and 
Scanlon said would be a great help in grassroots campaigns and 
political lobbying in the future. I have learned from your 
investigation that the database that Scanlon supposedly was 
using on our behalf was really not something that would cost 
the money they said it did. We did not know that Abramoff and 
Michael Scanlon had a secret agreement to split the fees that 
we paid Michael Scanlon for the products that he pitched to us.
    We were told that we were paying for the cost of letter-
writing campaigns, media campaigns, and political research. We 
now know that Scanlon was overcharging us and paying out one-
half or more of the money to Jack Abramoff's personal pet 
projects. I now know that Abramoff and Scanlon actually did not 
do much of the work they took credit for.
    Abramoff and Scanlon were always coming to us with the next 
project that they thought we should do. It was always one 
crisis after another. There were real threats and some not so 
real, looking back with hindsight. Texas gaming was one of 
those oversold crises.
    In 2001, we were told by Abramoff that Texas was one vote 
away from allowing casino gambling. I have since learned that 
legalized casino gambling was far from being approved by the 
Texas Legislature. In addition, we have learned that Jack and 
Mike were working for other tribes in Texas that were trying to 
get gaming, when they were supposed to be watching out for us.
    Once again, these thieves took every opportunity from us 
and other tribes. What should you spend to save a $300-million 
a year business when the lawyers who work for you tell you that 
it could be all gone if we do not act right now? Our tribe has 
one and only one business. We made tough decisions and we acted 
always in the best interests of our tribe.
    I understand and acknowledge that our council's hiring of 
Abramoff, Scanlon, and Greenberg Traurig was a mistake. No one 
chooses to be defrauded, especially by professionals who you 
have been told you could trust. However, the fact that we hired 
government relations professionals was not a mistake.
    As I know this committee understands, Native American 
gaming is highly political. It is an $18-billion industry. Not 
only do you have to have your Governor's approval, but also the 
Department of the Interior. Congress and State legislatures 
passing or not passing gaming laws directly impact the 
competitive environment in which you operate. Then there are 
the local governments that are always trying to gain something 
off your casino revenues.
    Let me tell you, there is a lot of redtape that comes along 
with gaming. I am not saying that is bad. It is just the way it 
is. Successful tribes such as ours must have the help of 
qualified, honest professionals that understand the business 
and politics of Native American gaming. I hope that your 
efforts result in keeping those professionals more honest and 
trustworthy in the future.
    I again thank this committee for the opportunity to speak 
to you today. I applaud you and your efforts. Thank you.
    The Chairman. Ms. Van Hoof.

    STATEMENT OF KATHRYN VAN HOOF, FORMER OUTSIDE COUNSEL, 
                  COUSHATTA TRIBE OF LOUISIANA

    Ms. Van Hoof. Mr. Chairman, I have no prepared statement. I 
am former counsel for the tribe and I have been authorized to 
speak to the committee today subject to attorney-client 
privilege. So long as that privilege is not implicated or the 
attorney-client work product doctrine, it is my plan to 
cooperate fully with the committee and answer your questions.
    The Chairman. Thank you very much.
    Mr. Baggett.

   STATEMENT OF FRED BAGGETT, MANAGING SHAREHOLDER; CHAIRMN, 
  NATIONAL GOVERNMENTAL AFFAIRS PRACTICE, GREENBERG TRAURIG, 
                        TALLAHASSEE, FL

    Mr. Baggett. Mr. Chairman, Mr. Vice Chairman, Senator 
Thomas, thank you for the opportunity to appear before you 
today. My name is Fred Baggett. I am a shareholder in the 
Tallahassee Florida office of Greenberg Traurig.
    I have spent my entire professional career as a lawyer and 
lobbyist in the State of Florida. I am currently a managing 
shareholder of the Tallahassee office of Greenberg Traurig and 
head of its national governmental affairs practice. I also 
maintain a full-time administrative law and lobby practice with 
the firm. It is comprised almost exclusively of work in Florida 
with the State Legislature and executive branch of Government.
    Turning to the subject of today's hearing, in 2001-04, Jack 
Abramoff worked as a non-attorney lobbyist for the Washington, 
DC office of our firm. Up until the end of Mr. Abramoff's 
tenure with Greenberg Traurig, we believed that Mr. Abramoff 
was rendering high-quality professional services to his 
clients. Late in 2003 and early 2004, reports began to emerge 
questioning the amounts of money paid by various Indian tribes 
to Mr. Abramoff and Mr. Scanlon in connection with services the 
two had rendered.
    During this timeframe, Mr. Abramoff was questioned about 
his financial relationships with Mr. Scanlon. Records available 
to the committee, including a February 3, 2004 interview of Mr. 
Abramoff conducted by Susan Schmidt of the Washington Post 
reflect that in front of firm personnel, Mr. Abramoff denied 
having any financial relationship with Mr. Scanlon or engaging 
in any improprieties in connection with his lobby work for the 
tribes.
    Nevertheless, because concerns had been raised, Greenberg 
Traurig sought to ensure that there was no impropriety on the 
part of Mr. Abramoff. In mid-February we hired Henry F. Schulke 
of the Washington, DC firm of Janis, Schulke, and Wexler to 
conduct an internal investigation focusing on the existence of 
any financial relationship between Mr. Abramoff and Mr. 
Scanlon. Mr. Schulke is a former Federal prosecutor who served 
as Assistant United States Attorney for the District of 
Columbia from 1972-79 and is a highly regarded member of the 
District of Columbia Bar.
    He and others with his firm have extensive experience in 
this type of internal investigation. As Mr. Schulke began his 
investigation, the Washington Post published the article, ``A 
Jackpot from Indian Gaming Tribes,'' raising questions about 
fees charged by Mr. Abramoff and Mr. Scanlon for lobbying and 
grassroots work.
    Around the same time, this committee announced that it 
would be looking into Mr. Abramoff's activities. Facing the 
prospect of Mr. Schulke's investigation, Mr. Abramoff for the 
first time disclosed to our firm that he had received money 
from Mr. Scanlon in connection with the work the two men were 
doing on behalf of the Indian tribes. Upon learning of this 
arrangement, the firm immediately requested and obtained Mr. 
Abramoff's resignation. The firm issued a statement to that 
effect on March 2, 2004.
    Notwithstanding Mr. Abramoff's departure, Greenberg Traurig 
asked Mr. Schulke to continue his investigation. Based on Mr. 
Schulke's investigation, the firm has made disclosures to its 
clients who were affected by Mr. Abramoff's activities, worked 
out resolutions with a number of affected clients, and hopes to 
work out resolutions with still other affected parties.
    The facts surrounding Mr. Abramoff's employment by our firm 
are unhappy ones. We at Greenberg Traurig regret the 
improprieties which occurred during Mr. Abramoff's 3 years with 
us. We share the chairman's and the rest of the committee's 
dismay at Mr. Abramoff's activities and behavior. We appreciate 
the work of the committee and its staff in thoroughly 
investigating this matter and we continue to cooperate with 
you.
    Again, I thank you for the opportunity to appear.
    [Prepared Statement of Mr. Baggett appears in appendix.]
    The Chairman. Thank you, Mr. Baggett.
    I would like to note for the record and for Mr. Worfel's 
father that William Worfel has been fully cooperating with the 
committee and the committee greatly appreciates his 
cooperation. Thank you. Please relay that to your father for 
me. I thank you.
    Ms. Van Hoof, I understand that the tribe became acquainted 
with Mr. Abramoff and Mr. Scanlon at a USET conference and then 
Mr. Abramoff and Mr. Scanlon met with the tribal council in 
Louisiana to make a proposal. Am I correct in understanding 
that Mr. Abramoff was clear that Mr. Scanlon was ``part of the 
package'' in that briefing?
    Ms. Van Hoof. Yes, sir; that was the tribe's understanding.
    The Chairman. During what time period were you the primary 
point of contact between the tribe, Mr. Abramoff, and Mr. 
Scanlon?
    Ms. Van Hoof. I believe that would have been from around 
March 2001 until the compact was signed in July 2001, and 
continuing for some short period after that, perhaps into 
October or November, but not beyond that point, I do not 
believe.
    The Chairman. When did you first learn of the American 
International Center? In 2001?
    Ms. Van Hoof. It would have had to have been during 2001, 
during that period.
    The Chairman. Based on your conversations with Mr. 
Abramoff, what did you understand the American International 
Center to be?
    Ms. Van Hoof. I understood it as represented to the tribal 
council to be an organization, a conservative organization that 
did not support the expansion of gaming in Louisiana. It was an 
organization whose cause the tribe could certainly support.
    The Chairman. Did Mr. Abramoff recommend that the Coushatta 
pay money into the American International Center to support its 
anti-gambling activities?
    Ms. Van Hoof. Yes; Mr. Abramoff raised that as an 
opportunity for a contribution by the tribe to help support any 
effort that would not expand gaming in Louisiana.
    The Chairman. Did Mr. Abramoff or Mr. Scanlon ever tell you 
that the American International Center was owned or operated by 
Michael Scanlon?
    Ms. Van Hoof. Absolutely not.
    The Chairman. Did Mr. Abramoff or Mr. Scanlon ever tell you 
that the American International Center was paying money to Mr. 
Abramoff from the Coushatta payments it received?
    Ms. Van Hoof. No.
    The Chairman. Mr. Baggett, when did you first learn of the 
American International Center?
    Mr. Baggett. It would have been in the fall of 2001.
    The Chairman. And it had something to do with Malaysian-
related issues?
    Mr. Baggett. Yes, sir; we were asked to represent, Mr. 
Abramoff brought to the firm AIC, American International 
Center, as a client for the firm to represent on various 
Malaysian business interests.
    The Chairman. For example, that it was like a think-tank?
    Mr. Baggett. We were told by Mr. Abramoff that AIC was an 
established think-tank that represented a number of interests 
both in the area of public relations and policy advocacy.
    The Chairman. And some of the issues that you were supposed 
to handle for the AIC were enhanced business and economic 
development opportunities for Malaysian business interests?
    Mr. Baggett. Yes, sir; we were told AIC represented a group 
of Malaysian business interests who were seeking to improve the 
economic opportunities of their interests in the United States.
    The Chairman. At that time, what was your understanding of 
Michael Scanlon's relationship with AIC?
    Mr. Baggett. We were told that AIC had retained, or I would 
assume retained, Michael Scanlon to assist in the public 
relations efforts on behalf of the Malaysian business interests 
and would be our contact for working with AIC.
    The Chairman. Did either Abramoff of Scanlon ever tell you 
that AIC was owned or operated by Michael Scanlon?
    Mr. Baggett. No, sir.
    The Chairman. Did they ever tell you that American 
International Center was paying money to Mr. Abramoff?
    Mr. Baggett. No, sir.
    The Chairman. What does the firm now understand the 
American International Center to be?
    Mr. Baggett. A sham. To explain that, it is our 
understanding now from information we have received and from 
our e-mails of the firm and from other investigative sources 
that AIC was a front for Mr. Abramoff and Mr. Scanlon to 
collect money.
    The Chairman. Ms. Van Hoof, I take it that Mr. Scanlon 
proposed constructing a computer program and database for the 
tribe.
    Ms. Van Hoof. He did.
    The Chairman. And how did he describe it and what benefits 
did he say the tribe would get from it?
    Ms. Van Hoof. Well, at that time the tribe was deeply 
involved in negotiations with the State for renewal of the 
compact. So as part of its public affairs and grassroots 
campaign which would support the tribe's efforts, Mr. Scanlon 
proposed the development of a database which would identify 
those who would support the tribe's efforts at that time 
involving the compact, so that it could be tweaked to support 
other efforts on behalf of the tribe as well at later dates.
    The Chairman. Was it your expectation that the actual cost 
of the database would be a fraction of what you actually paid?
    Ms. Van Hoof. No, Senator; it was not.
    The Chairman. Mr. Worfel, I understand you met with Scanlon 
and Chris Cathcart in Washington to review the multi-million 
dollar database. What did they show you?
    Mr. Worfel. Senator, they showed me a computer screen with 
names of Coushatta tribal vendors for our casino operations. 
They showed me on the screen the people, how many employees 
they had, how many people would vote, what parties they were 
affiliated with, Republican or Democrat. That was just on a 
computer screen right there.
    The Chairman. What did Mr. Scanlon say he would do with 
this database?
    Mr. Worfel. That is a good one. He said this here can help 
control the political future of the Coushatta Tribe in 
Louisiana. He said you give us a body, we can elect a State 
Representative, a State Senator, a Governor, because it had the 
precincts of each voter base in the surrounding Parishes 
statewide, and he said we had the voting results of the 
previous elections for the last 10 or 12 years.
    He said you give us a body, and we can elect a Governor, a 
Senator, using your vendors, getting your vendors mobilized to 
call these people and say, look, we do business with the 
Coushatta Tribe; this is vendor business and they need your 
support; they need somebody that would help them with their 
causes, with a new compact coming up, those kinds of things.
    The Chairman. Mr. Baggett, I understand that Greenberg 
Traurig has a policy that employees should not receive income 
from outside sources. Is that correct?
    Mr. Baggett. Yes, sir.
    The Chairman. And obviously Mr. Abramoff violated this 
prohibition by receiving money from Scanlon?
    Mr. Baggett. Yes, sir.
    The Chairman. Did anybody else violate the policy?
    Mr. Baggett. Our investigation has found, and as we have 
informed Federal authorities and I believe this committee, we 
found a number of other instances where members of Mr. 
Abramoff's team had received compensation outside of the firm.
    The Chairman. What names?
    Mr. Baggett. Sir?
    The Chairman. And they were?
    Mr. Baggett. We received, to my knowledge, and my knowledge 
is not necessarily conclusive because I do not have Mr. 
Schulke's investigation report, Kevin Ring, Jon Van Horn, 
Michael Smith, and I believe Stephanie Leger.
    The Chairman. Mr. Van Horn was a shareholder in your firm?
    Mr. Baggett. Yes, sir.
    The Chairman. Mr. Baggett, would you take a look at exhibit 
128. Exhibit 128 is an e-mail exchange dated January 17, 2002 
between Jack Abramoff and Michael Scanlon, subject ``Van 
Horn''. Mr. Abramoff writes, ``I told him,'' meaning Van Horn, 
``we would kick him $20,000 from CCS when we score next. Let's 
do so.'' Mr. Scanlon replies, ``Cool. No problem here.''
    [Exhibit follows:]

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    The Chairman. Mr. Baggett, did either Mr. Abramoff or Mr. 
Van Horn approach the firm about the legitimacy of this 
transaction?
    Mr. Baggett. No, sir.
    The Chairman. And there is another e-mail, exhibit 220, and 
it says, there is an entry for a $20,000-payment to Jon Van 
Horn for ``legal work.'' For the record, according to bank 
records, that money appears to have been paid out of Coushatta 
funds received by Mr. Scanlon on January 18, 2002. Mr. Baggett, 
was Mr. Van Horn's receipt of that $20,000 from Scanlon while a 
Greenberg Traurig employee a violation of firm policy?
    Mr. Baggett. Yes, sir.
    The Chairman. Mr. Worfel, I would like you to look at 
exhibit 182. Can we show that to Mr. Worfel please? There is a 
binder in front of you. Would you look at it, exhibit 182. 
Maybe one of the staff can help.
    It is an e-mail that we are looking at there, Mr. Worfel. 
It is an e-mail exchange between Mr. Abramoff and Mr. Van Horn. 
In it, Mr. Abramoff writes, ``Jon, please get me language asap 
which includes the Alabama Coushatta in the repeal of the anti-
gaming provisions of the Reorganization Act. I believe we have 
come to terms with them through Neil Volz. You and I might be 
the only ones who will know about this on our side.''
    It appears that Mr. Abramoff and Mr. Van Horn were 
preparing to help the Alabama Coushatta get legalized gaming in 
Texas. Is that the way you read that?
    Mr. Worfel. Yes, sir.
    The Chairman. What is your reaction to that?
    Mr. Worfel. Another way for these thieves to extort money 
from us again. They are supposed to be looking after the best 
interests of the Coushatta Tribe, receiving payments from our 
tribe to oppose gaming in Texas. Now they are here trying to 
help another tribe or any gaming in Texas, which goes against 
any ethics that they should stand by.
    The Chairman. Ms. Van Hoof and Mr. Baggett, look at 183, if 
you would, exhibit 183, an e-mail exchange between Mr. Abramoff 
and Mr. Van Horn. If you look at the last page which is 
actually the first e-mail in the exchange, Mr. Abramoff tells 
Mr. Van Horn, ``the basic deal is that if we get them,'' 
talking about the Alabama Coushatta, ``legal, they have to pay 
into a fund which we control 10 percent of their gaming 
revenue, which is the best approach here. What is done with 
other percentage deals with tribes and we will use those funds 
at our complete discretion.''
    Ms. Van Hoof, what is your reaction to Mr. Abramoff's 
attempt to represent the Alabama Coushatta to get legalized 
gambling?
    [Exhibit follows:]

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    Ms. Van Hoof. If this is true, Senator, then this would be 
a complete betrayal of the Coushatta Tribe.
    The Chairman. Mr. Worfel, as you mentioned in your opening 
statement, Mr. Abramoff wanted you to write a letter to the 
Louisiana congressional delegation in an attempt to derail this 
investigation and also suggested that the tribe not cooperate 
with the committee investigation. Is that true?
    Mr. Worfel. Very true, sir.
    The Chairman. What did he say to you?
    Mr. Worfel. He said if we should write a letter to 
congressional delegates of Louisiana to stop the committee's 
investigation because we had sovereign immunity and First 
Amendment rights. He wanted me to do that. I would not do it, 
and now I know he wanted me to take the bullet and him sit back 
and just relax.
    The Chairman. I just have a few more questions.
    Ms. Van Hoof, if you look at exhibit 99, it is an e-mail 
from Mr. Scanlon to you. Attached are invoices, one purportedly 
from Greenberg Traurig for $1 million for ``public affairs 
services.'' Ms. Van Hoof, was it your understanding that the $1 
million was going to be used for political activities 
benefitting the tribe?
    Ms. Van Hoof. Yes.
    The Chairman. Did the tribe authorize anyone to use that $1 
million as a charitable contribution to the Capital Athletic 
Foundation?
    Ms. Van Hoof. No.
    The Chairman. Did the tribe ever intend to make a $1 
million-contribution to Jack Abramoff's personal charity?
    Ms. Van Hoof. No.
    The Chairman. Mr. Baggett, was Capitol Campaign Strategies 
a Greenberg Traurig public affairs entity?
    Mr. Baggett. No, sir; we had no interest in Capitol 
Campaign Strategies.
    The Chairman. So Mr. Scanlon's statement is not true.
    Mr. Baggett. Yes, sir.
    The Chairman. Was Mr. Scanlon authorized to send an invoice 
on Greenberg Traurig's behalf?
    Mr. Baggett. No, sir; he was not.
    Mr. Chairman.
    The Chairman. Go ahead please.
    Mr. Baggett. If I might point out----
    The Chairman. Please go ahead.
    Mr. Baggett. ----the invoice exhibit 99 purporting to be 
from Greenberg Traurig, ``Greenberg'' is misspelled.
    The Chairman. Okay. That is an important point. Thank you 
for bringing it up, Mr. Baggett. [Laughter.]
    Mr. Baggett. I doubt we would be issuing an invoice with 
our name misspelled.
    The Chairman. Yes; got you. Thank you.
    To be clear, the $1 million was not treated as income by 
Greenberg Traurig.
    Mr. Baggett. No, sir; it was not.
    The Chairman. And it was not treated as a charitable 
contribution by Greenberg Traurig.
    Mr. Baggett. No, sir; it was not.
    The Chairman. One other thing, Mr. Baggett. What did Mr. 
Abramoff tell you about his skyboxes?
    Mr. Baggett. Mr. Abramoff told us that the skyboxes were 
leased by various Indian tribes.
    The Chairman. Among other things, for Redskins games?
    Mr. Baggett. Yes, sir; for Redskins games. The skyboxes 
were leased by the Indian tribes; that he had certain personal 
expenses for personal use of them, but that they were not in 
his name nor were they ever in the firm's name.
    [Exhibit follows:]

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    The Chairman. Thank you very much.
    Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much.
    Mr. Baggett, you just referred to invoice 99, which on the 
top says ``Greenberg Traurig, $1 million, payable upon 
receipt.'' The word ``Greenberg'' is misspelled, and you called 
that to our attention. I assume you feel this is a fraudulent 
invoice?
    Mr. Baggett. Yes, sir; we had no knowledge, and speaking on 
behalf of Greenberg Traurig, we had no knowledge of this 
invoice being sent.
    Senator Dorgan. You have looked, and no one in the firm has 
ever seen this or understands it as part of the firm. So you 
believe this is a fraudulent invoice?
    Mr. Baggett. Yes, sir.
    Senator Dorgan. All right.
    Mr. Worfel, let me clarify just for 1 moment. Did Mr. 
Abramoff suggest to you that you need not and should not 
cooperate with this committee?
    Mr. Worfel. Yes, sir; Mr. Dorgan. He said we had sovereign 
immunity and First Amendment rights so we should not cooperate 
and the letter would go to the congressional delegation to stop 
the investigation.
    Senator Dorgan. So he was suggesting you should not 
cooperate with this committee. You were approached by Mr. 
Scanlon, by two attorneys on behalf of Mr. Scanlon, asking you 
to sign some documentation after this committee indicated that 
the investigation was ongoing. What kind of documents?
    Mr. Worfel. It was documents saying that Mike Scanlon did a 
good job for us, and at the time, that was before we really 
knew of any fraud committed against our tribe. I just assumed 
that they were doing the right thing. That was done at Lake 
Charles, LA. I picked him up at the airport. We did a couple of 
statements and then took him back, and that is the last I have 
seen of him until I saw one of them in here this morning.
    Senator Dorgan. All right.
    Ms. Van Hoof, let me go through a couple of e-mails with 
you, if I might, that are part of the record. Number 29 is a 
March 28, 2001 cover sheet that refers to an e-mail in which 
you wrote that the Coushatta had agreed to pay one-half the 
cost of a poll requested by the Secretary of the Interior for 
CREA. Can you elaborate on that just a bit, and what your 
understanding of this was?
    Ms. Van Hoof. This was in March 2001, Senator. I truthfully 
do not remember the details, but there would have been normally 
some type of written proposal made to the tribal council or 
perhaps an in-person visit from the tribal council. There might 
have even been an e-mail exchange between myself and Mr. 
Abramoff explaining the details of this poll and why the 
request was being made to the tribe.
    Senator Dorgan. The cover sheet which is on the monitor 
says ``attached is an e-mail from Jack Abramoff with the firm 
of Greenberg Traurig, recently retained by the tribe for 
assistance in government affairs. The Coushatta and the 
Mississippi Band of Choctaw have agreed to each pay one-half 
the cost of a poll conducted by the council for Republican 
Environmental Advocacy, which is being conducted on behalf of 
Gale Norton, Secretary of the Interior.''
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.015
    
    Ms. Van Hoof. Yes, sir; the e-mail is not attached as part 
of the exhibit, though, and I am assuming the e-mail probably 
gave a greater description. Other than this, I do not recall.
    Senator Dorgan. All right. Thank you.
    Mr. Worfel, are you familiar with any of this?
    Mr. Worfel. No; all I am familiar with is the $50,000 
donation was supposed to go a national park study. The 
Department of the Interior, we were told the Department of the 
Interior would look at the Coushatta Tribe as friends if we 
would help them, and the Choctaw was to donate 50 percent also.
    Senator Dorgan. Ms. Van Hoof, if we can go to exhibit 100, 
that describes a strategy. It is a memorandum from Michael 
Scanlon in which he proposed a $3.1-million battleground 
program to fight off two potential gaming competitors.
    For $150,000, Mr. Scanlon in this memo described how the 
program would mobilize individuals to unwittingly protect 
casino revenues of the Coushatta. He says, ``simply put, we 
want to bring out the wackos to vote against something and make 
sure the rest of the public lets the whole thing slip past 
them. The wackos get their information from the Christian 
right, Christian radio and mail, the internet and telephone 
trees.''
    Do you recall this proposal and, if so, was the proposal 
engaged? Was it successful? Who was he referring to as 
``wackos''? Do you have any knowledge of this?
    [Exhibit follows:]

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    Ms. Van Hoof. I recall that the council received this and 
many proposals from either Jack Abramoff or Mike Scanlon. I do 
not recall whether all or part of it was accepted, but the 
council was definitely interested in monitoring and protecting 
itself against gaming threats.
    Senator Dorgan. In previous hearings and in documents for 
this hearing, we have seen all this evidence of moving money 
around through, among other, entities 501(c)(3)s and 501(c)(4)s 
in order to obscure the identity of the money. Money was paid 
to Ralph Reed's organization, which we have seen in document 
trails in previous hearings. When the Coushatta Tribe agreed 
with Mr. Abramoff to hire Mr. Reed's organization for its 
grassroots efforts, what arrangements were made to pay him, Ms. 
Van Hoof?
    Ms. Van Hoof. As I recall, Mr. Abramoff requested that a 
direct payment not be made from the Coushatta Tribe, who would 
be recognized as an Indian gaming tribe, to a conservative 
group associated with the Christian Coalition or other 
conservative groups, even though their interests were aligned 
in this instance, which was to oppose the expansion of gaming.
    Senator Dorgan. So how did the money flow?
    Ms. Van Hoof. If I remember correctly, Mr. Abramoff asked 
if the tribe had another entity through which the payment could 
be made? The tribe did not. A tribal friend indicated that he 
did, and that he would make the payment so long as he was 
reimbursed by the tribe, and that is my understanding of how 
the payment was made.
    Senator Dorgan. Mr. Worfel, is that your understanding as 
well?
    Mr. Worfel. Yes; the payment was made to Ralph Reed. I 
mean, it was going to Ralph Reed. That was done with the whole 
council approving it. The council sat there and they approved 
it. If they got amnesia, I cannot explain that, but it was done 
in a council meeting.
    Senator Dorgan. Was Mr. Reed aware of where the money was 
coming from?
    Mr. Worfel. I cannot say if Mr. Reed did. I do not want to 
speculate, but he should know.
    Senator Dorgan. Who was the friend? You said someone in the 
tribe had a friend and so the money moved through a friend?
    Ms. Van Hoof. Members of the tribal council had a friend 
whose name was Aubrey Temple. It was through one of his 
companies that the payment was made.
    Senator Dorgan. Was it made directly, then, through only 
one company? There are examples of it moving through two or 
three entities.
    Ms. Van Hoof. If my memory is correct, I think a wire 
transfer was made from the Coushatta Tribe to the entity owned 
by Mr. Temple, and then Mr. Temple made the payment.
    Senator Dorgan. Excuse me for interrupting. Is that a for-
profit entity or a nonprofit entity?
    Ms. Van Hoof. I do not know anything about the entity.
    Senator Dorgan. Let me ask about the contributions to CREA. 
In e-mail traffic, and Mr. Griles will be testifying later 
today in another panel, but there is so much on the record I 
will go to exhibits 29, 24 and then 37, and ask you about them. 
These are documents that are on the public record now that 
describe a relationship alleged by Ms. Federici, with Mr. 
Griles, and also by Mr. Abramoff.
    Let me read these to you, if I might. Go to 24 if you would 
first. In an e-mail on March 22, Mr. Abramoff writes that he 
``met with the Interior guys today and they were ecstatic that 
the tribe was going to help. If you can get me a check via 
Federal Express made out to the Council of Republicans for 
Environmental Advocacy for $50,000, that would be great. This 
is really going to help.''
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.020
    
    Senator Dorgan. What was your understanding of what this 
was going to help with? And who was Mr. Abramoff, do you 
believe, claiming to be meeting with at this point?
    Ms. Van Hoof. This is in March 2001, and I am not sure if I 
have my dates correct. I am not sure if this had to do with the 
polling or not. Further e-mails might better reflect what this 
actually represented.
    Senator Dorgan. There were two checks made to CREA. Is that 
correct? Were there two payments or three payments made to 
CREA?
    Mr. Worfel. I know of one.
    Senator Dorgan. For $150,000?
    Mr. Worfel. The one I know was $50,000.
    Senator Dorgan. I believe the record to show that there 
were two payments for a total of $150,000. Ms. Van Hoof, you 
are correct, there was an attachment to one of the payments 
that it was going to be, helping to pay for a survey that the 
Interior Secretary allegedly wanted done.
    I think, Mr. Worfel, you answered you were unaware of any 
survey ever being done; you never received a survey, right?
    Mr. Worfel. Correct. Never have.
    Senator Dorgan. Exhibit No. 37. In an e-mail to you, Ms. 
Van Hoof, Mr. Abramoff references Deputy Secretary Griles as 
the fellow who we helped with the CREA project. What did he 
mean by that?
    Ms. Van Hoof. No. 37?
    Senator Dorgan. I have document No. 37. It is dated April 
5, 2001.
    [Exhibit Follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.021
    
    Ms. Van Hoof. I do not recall, Senator. I have not reviewed 
this e-mail in preparation for testimony today. I am sure I 
knew at the time.
    Senator Dorgan. First, let me go to Mr. Baggett quickly. 
Mr. Baggett, the chairman of the committee appropriately, I 
think, said at the start of this hearing in his opening 
statement that your firm has been cooperative with this 
committee, I believe in every way, in our requests for 
documents and response to the subpoenas and so on.
    So we appreciate that, but I think it is important to ask, 
at that period in the firm when this occurred, what kind of 
culture existed that it was allowed to occur. Was there a 
spectacular lack of management or oversight of particularly Mr. 
Abramoff?
    Mr. Baggett. Senator, our firm is a large national firm 
that makes no excuse for anything. The shareholders and 
attorneys of our firm and the non-attorney professionals such 
as Mr. Abramoff are all held to a strict code of professional 
responsibility that applies to all lawyers and to our own 
policies and procedures of the firm.
    We expect each shareholder, each director, as Mr. Abramoff 
was, to honor those responsibilities. We, and I do not believe 
any professional services firm has the ability to micro-manage 
the day-to-day activities of their members. What Mr. Abramoff 
did was important to us. What he did he did without our 
knowledge. He is an amazingly gifted person at having two sides 
to him.
    When you meet with Mr. Abramoff in a professional 
environment, he is a most responsible-sounding person. In fact, 
one of the attractions that we had to Mr. Abramoff was his 
discipline and organization in the lobby practice. Very few 
lobbyists that I have seen in my career have the kind of 
accountable discipline that Mr. Abramoff required of his teams.
    We were probably more shocked than anyone could be to find 
what we found. We have the policies. We have the codes. We have 
the responsibilities. This was an intentional act of deception 
by Mr. Abramoff on the clients, on us, and on everyone he dealt 
with.
    Senator Dorgan. Mr. Baggett, we did not see the gifts you 
described. When Mr. Abramoff was called before this committee, 
he took the Fifth Amendment.
    Mr. Baggett. That is true.
    Senator Dorgan. So we do not know of that which you 
described about the other side of this fellow.
    I want to ask about two additional points. This relates to 
an Associated Press story of Tuesday, June 21, 2005. It relates 
to money that apparently, Ms. Van Hoof, you would have been 
aware of, a contribution for activities that were arranged by 
Americans for Tax Reform for a White House gathering. Can you 
tell us about that $25,000 contribution as described in the 
Associated Press in June?
    Ms. Van Hoof. I do not remember that particular article, 
but I can tell you about the contribution made and why it was 
made. When Mr. Abramoff and Mr. Scanlon were hired by the 
tribal council, the extreme focus at that point was on renewal 
of the compact with the State of Louisiana and establishing a 
strong PR campaign and grassroots campaign that would support 
that effort. It was a very concentrated, focused effort for 
that reason.
    The tribe had had successful lobbying relationships in 
years past with prior Administrations with great success, but 
did not have, as we understood it, the same type of 
relationship with the new Administration. So one of the things 
that Mr. Abramoff offered was opportunities to meet and greet, 
establish name recognition for the tribe, provide a photo 
opportunity, make political contributions, and this was one of 
those occasions.
    We were in the midst of a very heated compact negotiation 
process. It was a great press release to be able to say that 
the chairman had met with the President during that period of 
time. This particular organization was also a conservative 
organization, and at the meeting they really did meet and 
discuss tax reform issues. I think the tribal council in 
support of that effort did perhaps after that pass a resolution 
in support of tax reform initiatives.
    Senator Dorgan. Ms. Van Hoof, there is actually, I think, 
an activity on the part of the tribe to do so, as a result of 
being asked to go to the meeting. The $25,000 contribution, 
where did that go?
    Ms. Van Hoof. As they usually did, Jack Abramoff presented 
this as an opportunity for the tribe to contribute. I do not 
recall if it was called sponsoring or hosting the event, but it 
was a contribution made to that organization.
    Senator Dorgan. Which organization?
    Ms. Van Hoof. To Americans for Tax Reform.
    Senator Dorgan. And one final point. We have talked a lot 
about the political contributions that have been made and the 
money that was described here. I want to correct the record. 
The Associated Press article I was referring to about that 
particular issue was a June 8 Associated Press story.
    There is a June 21 Fox Newsstory that talks about, $55,000 
in contributions that had been written and then returned to a 
member of the leadership in the House, and had been requested 
to be diverted to other organizations. Can you describe that?
    Ms. Van Hoof. No, sir; I cannot. At that time, the tribal 
council was following the advice of Mr. Abramoff and if Mr. 
Abramoff made a suggestion, they trusted his advice and 
followed it.
    Senator Dorgan. Mr. Worfel.
    Mr. Worfel. Sir.
    Senator Dorgan. Are you aware of that?
    Mr. Worfel. I cannot recall that, sir.
    Senator Dorgan. I will submit written questions on that to 
the witnesses.
    Mr. Chairman, I think that is all I have for these 
witnesses at this time. I would like to ask if we could submit 
written questions.
    The Chairman. Without objection. Maybe soon you will 
receive some written questions. I thank the witnesses and I 
appreciate your testimony. It has been very helpful and you are 
dismissed.
    The next panel is B.R. McConnon, president, Democracy Data 
and Communications; Christopher Cathcart, former associate, 
Capitol Campaign Strategies; and Gail Halpern, Jack Abramoff's 
former tax adviser. Welcome.
    We will begin with you, Mr. McConnon.

   STATEMENT OF B.R. McCONNON, PRESIDENT, DEMOCRACY DATA AND 
                         COMMUNICATIONS

    Mr. McConnon. Thank you and good morning, Mr. Chairman and 
honorable members of this committee.
    My name is Bernard R. McConnon, III. I am the founder and 
CEO of Democracy Data and Communications, commonly referred to 
as DDC. Before I begin, I wish to note for the record that I am 
appearing here voluntarily at the request of this committee.
    DDC is a leading provider of grassroots impact database 
management services, and website and communications programs to 
the public affairs market. Among our products is Democracy 
Direct, a proprietary relational database management 
application which we offer under an application service 
provider model. The Democracy Direct system allows clients to 
catalog an immense amount of information about their 
stakeholders and other assets, and then search, sort and 
segment that information in complex ways to facilitate more 
effective and efficient communication efforts on legislative 
and regulatory issues.
    Our client list includes a majority of the Fortune 100, 
many of the largest trade and professional associations, and 
several of the country's largest membership organizations as 
well. In 2001, DDC was hired by Capitol Campaign Strategies and 
later by Scanlon Gould to first provide data warehousing and 
then online database management services for several Indian 
tribes, including the Louisiana Coushatta.
    I understand from your staff that the committee has some 
questions regarding our contract with CCS and I am happy to 
answer them at this time.
    The Chairman. Thank you very much.
    Mr. Cathcart.

 STATEMENT OF CHRISTOPHER CATHCART, FORMER ASSOCIATE, CAPITOL 
    CAMPAIGN STRATEGIES, ACCOMPANIED BY CHARLIE LEEPER, ESQ.

    Mr. Cathcart. Good morning, Mr. Chairman, Senator Dorgan. I 
am joined here today by Charlie Leeper, an attorney with 
Spriggs and Hollingsworth.
    Since at least as early as September 2004, I have been 
cooperating with the committee staff investigators by answering 
questions and responding to inquiries regarding work performed 
by my former employer, Capitol Campaign Strategies and its 
affiliated companies collectively, CCS, for and on behalf of 
various tribal clients.
    For example, on September 21, 2004 I was interviewed by 
committee investigators Pablo Carrillo and Katherine Rossi. On 
that occasion, I responded to each and every question posed by 
Mr. Carrillo and Ms. Rossi. Those questions pertained to 
numerous aspects of the work performed by CCS for its tribal 
clients, including the Saginaw Chippewa Indian Tribe of 
Michigan, the Agua Caliente Band of Cahuilla Indians, and the 
Tigua Indians of Ysleta del Sur Pueblo, as well as various 
other matters.
    Similarly, on November 4, 2004, I was interviewed by 
committee investigators Pablo Carrillo, Bryan Parker, and 
Katherine Rossi. On that occasion, I responded to each and 
every question posed by Messrs. Carrillo and Parker and by Ms. 
Rossi. Those questions pertained to numerous aspects of the 
work performed by CCS for its tribal clients, principally the 
Tigua Indians of Ysleta del Sur Pueblo, as well as to various 
other matters.
    On May 5, 2005, I was once again interviewed by committee 
investigators Pablo Carrillo, Bryan Parker and Katherine Rossi. 
On that occasion, I responded to each and every question posed 
by Messrs. Carrillo and Parker and by Ms. Rossi. Those 
questions pertained to numerous aspects of the work performed 
by CCS for its tribal clients, including the Mississippi Band 
of Choctaw Indians and the Saginaw Chippewa Indian Tribe of 
Michigan, as well as to various other matters.
    In all, I estimate that I have submitted to approximately 
15 hours of questioning. Furthermore, I responded verbally and 
in writing through counsel to all follow-up inquiries posed by 
committee counsel. I have done this as a result of my respect 
for this committee and its objectives.
    Recently, I was made aware of a request from the committee 
investigators to make myself available to answer inquiries 
regarding work that CCS performed for the Coushatta Tribe of 
Louisiana. Even though I no longer reside in the Washington, DC 
metropolitan area, I offered, through my counsel, to 
accommodate this request by traveling to Washington at my own 
expense to appear for a further interview on Saturday, October 
15, 2005, and at that time to answer any and all questions the 
committee investigators may have regarding the Coushatta Tribe 
of Louisiana.
    I am informed that the committee investigators rejected my 
offer to appear for an interview and instead insisted that I 
give a deposition where the questions and answers would be then 
transcribed by a court reporter. Through my counsel, I declined 
to provide a deposition, but I am appearing voluntarily at this 
hearing today.
    I am aware that the U.S. Department of Justice is 
conducting a criminal investigation of events relating to 
lobbying and other professional services rendered on behalf of 
various Native American groups, including certain services 
provided by CCS for and on behalf of the tribal clients 
identified above. I understand that as a former CCS employee, I 
am a witness to certain events within the scope of the DOJ 
investigation and I am in possession of information that could 
further the objectives of that investigation.
    I further understand that it may be inconsistent with those 
objectives for me to submit at this time to a deposition or 
transcribed questioning conducted by individuals other than DOJ 
investigators.
    With all respect, such a deposition or transcribed 
questioning by the committee investigators may give rise to 
ambiguous circumstances that could jeopardize my position as a 
witness in that ongoing investigation.
    Given these circumstances and having considered the U.S. 
Supreme Court ruling in Ohio v. Reiner that the fifth amendment 
of the U.S. Constitution protects the innocent who might be 
ensnared by ambiguous circumstances, I accept the advice of my 
legal counsel and respectfully and regretfully will decline to 
answer questions at any hearing, deposition or transcribed 
interview conducted by the committee and/or its staff on the 
basis of the rights guaranteed to me by the fifth amendment.
    The Chairman. Thank you.
    Mr. Cathcart, my understanding is that your response to any 
question from the committee at this time would be an assertion 
of your legitimate fifth amendment rights. Is that correct?
    Mr. Cathcart. That is correct.
    The Chairman. Thank you.
    Ms. Halpern.

 STATEMENT OF GAIL HALPERN, JACK ABRAMOFF'S FORMER TAX ADVISOR

    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 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 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 serve 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 trust for which I prepared income tax 
returns was reported and included in the relevant tax returns.
    Thank you.
    The Chairman. Thank you very much.
    Mr. McConnon, your business, as you mention, is to build 
databases so that people can send out e-mails, communicate with 
voters, et cetera. Right?
    Mr. McConnon. That is correct.
    The Chairman. Mr. Scanlon apparently told the Louisiana 
Coushatta Tribe and other tribes that his company built your 
database. Is that correct? Is that your understanding?
    Mr. McConnon. That is my understanding, yes.
    The Chairman. And ended up charging the Coushatta Tribe and 
other tribes millions of dollars for it. Too bad you did not 
get in on that, huh Mr. McConnon?
    In fact, there was not a lot of activity on the account, 
was there?
    Mr. McConnon. After an initial period of time when we set 
the system up, which was in 2001, the contract lasted through 
2000 and ended in 2003, and there was substantial drop-off in 
activity after the initial set up of it.
    The Chairman. Your company built, updated, and maintained 
the database. Is that right?
    Mr. McConnon. Yes; it is important to note that when 
talking about the database, that there are two ways that that 
term can be used. One is to describe the system itself, the 
Democracy Direct system in this case that I am talking about, 
which is the application. There is also the data that goes into 
the application that is derived from a lot of different 
sources.
    The Chairman. The work you did paid you about $104,000? Is 
that roughly correct?
    Mr. McConnon. That is right.
    The Chairman. They created a database basically that was 
less capable than yours?
    Mr. McConnon. At some point, I believe what you are 
referring to is at some point with tribes other than those that 
we were working for through CCS and Scanlon Gould, apparently 
at some point CCS or Scanlon Gould began to offer their own 
version of a similar system to other tribes.
    The Chairman. That was less capable than yours?
    Mr. McConnon. From what I have been shown, yes, far less.
    The Chairman. Mr. Scanlon charged the Pueblo Sandia Tribe 
$1 million for that database. Are you aware of that?
    Mr. McConnon. I was not, no.
    The Chairman. Do you think the database was worth anything 
near $1 million?
    Mr. McConnon. From what I have seen, no.
    The Chairman. We are told by other witnesses it was really 
worth about $20,000. Is that a good estimate?
    Mr. McConnon. That is probably in the neighborhood.
    The Chairman. Do you have a theory as to how those 
databases were probably designed?
    Mr. McConnon. From what I have seen, the databases that 
were offered to the other tribes, the part that is visible to 
the tribes, the screen as was described earlier, is strikingly 
similar to a portion of our system that was being licensed for 
the first set of tribes.
    The Chairman. Like reverse engineering?
    Mr. McConnon. Like reverse engineering.
    The Chairman. Mr. Cathcart negotiated the contract with 
your company on Mr. Scanlon's behalf. Is that correct?
    Mr. McConnon. That is correct. Well, the initial contract 
involved Mr. Cathcart, Mr. Scanlon, myself, and other people on 
my staff. There were subsequent contracts that were negotiated 
by Chris with other people on my staff.
    The Chairman. Mr. Cathcart seemed to be the one who was 
running operations for Mr. Scanlon. Is that correct?
    Mr. McConnon. From interaction with our firm, yes.
    The Chairman. Mr. McConnon, you have conducted business 
with lots of lobbying shops and other similar organizations. 
How common is it for a grassroots firm to pay referral fees for 
businesses brought to it by a lobbyist?
    Mr. McConnon. In my experience, it is not done. My 
understanding is that lobbyists cannot receive referral fees 
for business that their clients are doing.
    The Chairman. Mr. Cathcart, while working for Mr. Scanlon, 
I understand you were very handsomely compensated. In fact, you 
started off with a salary of $44,000 plus an additional $35,000 
bonus in 2001. By 2003, you received a salary of $105,000 and a 
bonus of $390,000. Do you wish to comment on how you merited 
such generous compensation from Mr. Scanlon?
    Mr. Cathcart. Mr. Chairman, regrettably I have to stand by 
my statement.
    The Chairman. Ms. Halpern, while working for Mr. Abramoff 
as his tax advisor, you provided, when asked, tax advice on the 
Capital Athletic Foundation. Correct?
    Ms. Halpern. Correct, sir.
    The Chairman. In the course of your employment with Mr. 
Abramoff, did you ever observe the Capital Athletic Foundation 
engaging in activity inconsistent with its own tax exempt 
mission?
    Ms. Halpern. Based on my limited knowledge of the tax law 
in the tax exempt areas, and based on the limited knowledge 
that I have of the Capital Athletic Foundation, I am not aware 
of any activities that it engaged in that would negate the tax 
law.
    The Chairman. In 2001, the Capital Athletic Foundation 
claimed that the Louisiana Coushatta Tribe was the single 
largest contributor with a payment of $1 million. As has 
already been testified, the tribe never intended to make a 
contribution to the Capital Athletic Foundation. Mr. Scanlon 
told the tribe its $1 million was going to go to Greenberg 
Traurig for grassroots activities. Did Mr. Abramoff tell you 
anything about that purported $1 million donation?
    Ms. Halpern. I found out about the $1-million donation 
after the fact, that is, after it occurred sometime. In trying 
to recollect what happened, Mr. Abramoff has an internal 
accountant who kept the books of the Capital Athletic 
Foundation and he booked this contribution income.
    The Chairman. Do you know the name of that accountant?
    Ms. Halpern. David Pierce. I believe he was preparing the 
2001 books at some time in 2002. Okay? In other words, let me 
give you a little bit more background to give you a better 
understanding. Mr. Abramoff had a business office. This 
business office did not startup, did not have employees running 
it until sometime early in 2002. During 2001, Mr. Abramoff had 
a very close associate at Greenberg who maintained, to the best 
of my knowledge at least, maintained these types of 
transactions for him.
    The Chairman. Who was that?
    Ms. Halpern. That person's name is Mr. Rodney Lane.
    Therefore, when I am saying I found out after the fact, it 
is not like someone lifted up the telephone and said to me, you 
know, Gail, we just got $1 million in. I was looking at the 
QuickBooks that Mr. Pierce had prepared. First, the QuickBooks 
did not have that donation recorded, and then it had it 
recorded, I believe, as a donation from Mr. Abramoff.
    I said to Mr. Pierce, you know, I think Mr. Abramoff would 
tell me if he made a $1-million donation and I do not see it 
coming out of his personal account. So can you please research 
this and tell me if you have it correct. He went back and 
researched this entry that he did, and he said, I apologize; I 
made a mistake. It came from a Coushatta Tribe. That is, the $1 
million came from a Coushatta Tribe.
    At that point, trying to recollect what happened, I said, 
okay, you know, correct the books to properly show whatever it 
is you are saying it did. And I would say it was approximately 
November 2002 when the 2001 tax return was being prepared by 
the tax accountants. I said to Mr. Abramoff, I believe it is an 
e-mail which I have submitted to your committee, I just want to 
touch base with you again about this $1 million. I say, 
``again'', because of whenever it was that I initially found 
out about the contribution and Mr. Pierce said, no, it is not 
from Mr. Abramoff, it is from Coushatta.
    At that point, I said to Mr. Abramoff, I just want to make 
sure that this is correct information and that this income is 
not your income nor can it be construed as your income, because 
if it can be construed as your income, it is not a charitable 
donation. It is your earned income. And Mr. Abramoff assured me 
that this was a donation from a tribe.
    Just to back up to where I started off, in November 2002, 
just before he signed the tax return, I repeated my information 
to him again, saying I just wanted to make sure because this is 
what you told me back when I found out about the contribution. 
I just want to make sure that all this information in the tax 
return is correct, and I am faxing to you that page of the tax 
return that lists contributors.
    Private foundations list contributors of $5,000 or greater. 
This document is a public document. It is displayed on the 
Internet. You or I could go on the Internet and look and see 
who contributed to what foundation. It is not hidden 
information. It is totally disclosed.
    In addition, the private foundation also maintained a 
disclosure copy of the tax return in their business office. 
They maintain a copy of this tax return at their business 
office. So I faxed the form to Mr. Abramoff that shows the 
contributors and he looked at it, and he got back to me and, 
apparently the forms listed a different Coushatta Tribe. There 
is another Coushatta Tribe that is not from Louisiana; 
Mississippi perhaps. The form had Mississippi Coushatta, and 
Mr. Abramoff said this is wrong. This contribution is from 
Louisiana Coushatta.
    So I said, okay, and I went back to Mr. Pierce, the 
internal accountant, and I told him what Mr. Abramoff said. I 
said, you know, how can this happen? How are you documenting 
what took place here? Where are you getting your information 
from? He apologized. He made a mistake. He saw Coushatta Tribe 
on whatever paper trail came into the office and he just 
assumed it was another Coushatta Tribe, not Louisiana.
    It certainly to me seemed like he just made an innocent 
mistake. I informed the tax accountants what Mr. Abramoff said 
that it was Louisiana Coushatta and please correct the 
information on the return. And that page was corrected, and 
when Mr. Abramoff signed the return, it documented that 
Louisiana Coushatta contributed $1 million.
    The Chairman. Does that change the underlying problem here?
    Ms. Halpern. Sir, I am just telling you the events that 
took place. I am not changing any problem.
    The Chairman. As a tax advisor you would advise him about 
CAF. It was established by Mr. Abramoff in 1999. Is that 
correct?
    Ms. Halpern. Yes, sir.
    The Chairman. All decisions were made by Mr. Abramoff and 
possibly his wife. Is that correct?
    Ms. Halpern. To the best of my knowledge, the decisions I 
remember were made by him. I cannot recall his wife making any 
decisions on it.
    The Chairman. Being familiar with the profit-loss 
statements and e-mails associated with CAF, you can confirm 
that from 2001 to 2003, the Eshkol Academy, the all-boys 
Yeshiva started by Abramoff in 2001, was the primary 
beneficiary of the CAF. Is that correct?
    Ms. Halpern. It was a substantial beneficiary. Yes, sir.
    The Chairman. And from 2001-03, many of the top recipients 
of distributions made by the CAF at Mr. Abramoff's direction 
had significant ties to Mr. Abramoff. For example, in 2002 Mr. 
Abramoff had a personal connection to Pitach, a special Jewish 
school, Kollel Ohel Tiferet, which appears to be a sham 
organization designed to funnel, in your own words, Ms. 
Halpern, ``spy equipment and other military expenses'' totaling 
$97,000 to a sniper workshop in Israel.
    Ms. Halpern, the person who apparently ran the sniper 
workshop, Shmuel Ben Zvi, is a close friend of Mr. Abramoff. Is 
that correct?
    Ms. Halpern. I believe they are friends. I do not know the 
extent of that relationship.
    The Chairman. Toward Tradition a non-profit educational 
organization received $10,000 from the CAF and the president of 
this organization, Rabbi Daniel Lapin, is a close friend and 
business associate of Mr. Abramoff. Isn't he?
    Ms. Halpern. I believe they are associates. I am not sure 
of the relationship.
    The Chairman. Let's go back to the Eshkol Academy, the 
CAF's top beneficiary from 2001-03. For 1 year, Mr. Abramoff 
instructed you to reduce the amount of his charitable 
contribution to the CAF, instead of paying tuition for at least 
one of his children. Is that correct?
    Ms. Halpern. Yes; and that occurred after, every year I 
looked at Mr. Abramoff's personal checkbooks and if it ever 
came to my attention that he did not pay tuition for his 
children, I told the assistants that were responsible at that 
time, and 1 year Mr. Lane was responsible and another year it 
was the other people in the business office, which was Mr. 
Pierce. I specifically said that Mr. Abramoff must pay tuition 
like everybody else and please make sure that you do so from 
his personal account.
    Now, 1 year when I found out after the fact that the 
tuition was not paid, it was apparently an oversight by his 
business office, at least that is what I am told. And Mr. 
Abramoff instead of taking a full deduction on his personal tax 
return for what he contributed to the foundation, he reduced 
his deduction on his personal tax return by that amount that is 
allocated to tuition. So that way, it was made sure that he 
paid tuition for his children just like everybody else.
    The Chairman. Would you refer to exhibit 219 for me please? 
It is an e-mail from you to Jack Abramoff.
    Ms. Halpern. Yes, sir.
    The Chairman. Part of the e-mail says, ``but let's try to 
square it out in a way where we do not screw up the foundation. 
We need to get the money to a 501(c)(3) or an educational 
institution, not directly to him. Can you ask him if he can 
work something out within kollel so the money goes from the 
kollel,'' I am not sure I am pronouncing that word right, ``to 
him.'' ``Him'' I think, is referring to Mr. Zvi. Is that right?
    Ms. Halpern. I would have to review this whole e-mail in 
context, but it appears from where you are reading, I did not 
see where you are reading from, but it appears that what you 
are saying is correct, sir.
    The Chairman. And you go on to say in your e-mail, ``if he 
can't, then I need to sit down and have him make amendments in 
grant procedures and all kinds of other stuff to make this 
legit from a tax point of view. I already need to talk with Mac 
about the skating rink, so let me know what Shmuel says about 
getting money to a kollel, and if it will not work, then I will 
add this to the list.''
    It seems to me, Ms. Halpern, from your e-mail here that you 
must have known that some of this money was going to purchase 
paramilitary equipment.
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.022
    
    [GRAPHIC] [TIFF OMITTED] T4471.023
    
    [GRAPHIC] [TIFF OMITTED] T4471.024
    
    Ms. Halpern. Mr. Chairman, I realize you are picking out 
one e-mail in a series of many correspondences and 
conversations that were had. So if you don't mind, I would like 
to explain to you in context when this e-mail came up.
    In approximately May 2002, I learned from looking at the 
foundation books that Mr. Abramoff wanted to support a school 
in Israel, a kollel. A kollel is a Jewish school of higher 
learning, kind of similar to a post-graduate type program in a 
way. When I learned of this, like I told you in my opening 
statement, I do not practice in the area of not-for-profits.
    So I said to Mr. Abramoff, I do not know if this is 
something that a foundation is permitted to do. I would 
recommend to you that you ask the foundation attorneys. The 
Capital Athletic Foundation has expert attorneys who practice 
in the area of not-for-profits. He said, fine; go ask them on 
my behalf.
    I contacted the attorneys and I said, there is a school in 
Israel that Mr. Abramoff would like to support, and he would 
like to support it for security and self-defense. Is that a 
permissible activity of the foundation? And they came back to 
me and they said it is permitted. Because it is in Israel a 
grant follow-up procedure needs to be done. I do not see where 
you are reading from, but I heard you mention that when you 
were reading the e-mail. That is what the grant follow-up 
procedure is. To the best of my knowledge, the Capital Athletic 
Foundation did comply with that requirement.
    Now, I would also like to express to you that when I 
learned about the school in May 2002 and immediately sought 
expert advice from the Capital Athletic Foundation attorneys, 
it was not something, you might think, gee, well this sounds 
like an odd request. Why would he want to do something like 
that?
    Just to put it in context, 2 months earlier, in March 2002, 
a terrorist infiltrated a Jewish school in Israel and randomly 
went shooting off with his gun in the study hall of the Jewish 
school. Five young men, 5 innocent young men were killed and 23 
innocent young men were injured. So when I learned of this 2 
months later, in May, it was not something that stood out in my 
mind that it was a rare request.
    The Chairman. It is not a rare request to ask money for a 
sniper workshop? You were aware that it was a sniper workshop, 
right?
    Ms. Halpern. Sir, if you are listening to what I am telling 
you.
    The Chairman. I am listening to what you are telling me. 
For you to say that it is not unusual to give money to a sniper 
workshop, which there was an exchange of e-mails that says Mr. 
Abramoff's assistant did suggest he could write some kind of 
letter with his ``sniper workshop logo and letterhead''. ``It 
is an educational entity of sorts''.
    Ms. Halpern, it does not pass the smell test.
    Ms. Halpern. I am sitting here today, sir, so I can tell 
you what I knew at that time. At that time what was presented 
to me, information that was given to me----
    The Chairman. Did you know it was a sniper workshop?
    Ms. Halpern. I did not know. I am not aware of a sniper 
workshop. Now, as you know from the thousands and thousands of 
documents that I have given to your committee, sir, I got a lot 
of e-mails from Mr. Abramoff or his associates. I cannot say I 
read every attachment or every forward. It would have been very 
time consuming.
    So I do not recall ever hearing something about a logo in 
an e-mail that you just referred to. I am telling you, sir, 
that to the best of my knowledge, Mr. Abramoff was funding a 
school for security and self-defense.
    The Chairman. Were you aware that it was a sniper workshop 
at the time?
    Ms. Halpern. At the time, I was not aware that Mr. Abramoff 
was funding a sniper workshop.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Ms. Halpern, are you upset that you are 
here having to answer these questions for the committee?
    Ms. Halpern. No; actually I am not upset, sir. I have been 
very helpful with your committee. I have met with your staff 
for several days. I am here to answer whatever I can.
    Senator Dorgan. Senator McCain asked the question about the 
e-mail. I want to just read it again because it is hard for me 
to believe that with all that was going on, substantial amounts 
of money coming into all kinds of different organizations, that 
you did not perhaps understand that there were some real 
problems here. You say, let's try to square it in a way where 
we do not screw up the foundation.
    Ms. Halpern. Yes.
    Senator Dorgan. We need to get the money to a 501(c)(3) or 
an educational institution.
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.025
    
    [GRAPHIC] [TIFF OMITTED] T4471.026
    
    [GRAPHIC] [TIFF OMITTED] T4471.027
    
    Ms. Halpern. Can I explain that, sir?
    Senator Dorgan. Of course.
    Ms. Halpern. Because I think you raise a good point, when 
you read out of context, you can think of a lot of things. As a 
matter of fact, whenever someone takes tax advice or looks at 
tax advice, they cannot look at that one e-mail. They need to 
see what came before, the e-mail that came after and before, 
and the conversations that took place.
    So let me just explain to you, and maybe this will clarify 
things for you. Mr. Abramoff asked his office to make 
purchases, security purchases for this institution in Israel. 
What I could not understand at that point was why he was doing 
that. If you want to fund a school, just give them the money, 
ask them for a receipt, and get on with life. Let them worry 
about what they are going to do with it.
    And then when I learned that Mr. Abramoff was actually, he 
said fine; we are not going to purchase any equipment; we will 
just give him the money. Then I learned that he gave him the 
money directly and not to the school.
    Now, this is kind of similar to if there is a school next 
door that had a broken elevator, and you wanted their broken 
elevator to get fixed, you would not go and give the money to 
the elevator man to repair the elevator. You would give money 
to the school and the school would arrange for the elevator man 
to come to fix the elevator.
    This is similar. What I was saying here is do not take the 
money and give it to the agent for the school, and that is what 
Mr. Abramoff told me he was, the agent for the school. Give it 
directly to the school. Have them give you their wire 
information, wire the money to them, whatever means you need to 
do to get it to the school.
    Senator Dorgan. Because if he would give to the agent 
directly, it would ``screw up the foundation''?
    Ms. Halpern. No, sir; again to the extent of my knowledge 
of not-for-profit laws, I do not think it would screw up the 
foundation. It would be, to the extent of my knowledge, still a 
permitted distribution. However, I kind of like things simple 
and to the point. And why bother with having to do grant 
follow-up work.
    Mr. Abramoff had a limited staff and I did not want 
something falling through the cracks. I wanted him to do the 
simplest thing possible. He presented information to me where 
he wanted to support a school in Israel and my answer was, you 
want to do it, fine, just have the money go directly to the 
school.
    Senator Dorgan. Ms. Halpern, it does not seem to me like 
there was much that was not permitted in all these 
transactions. You talk about ``permitted issues.'' I mean, as 
you go through these e-mails and take a look at these 
transactions, it looks like the sky was the limit in terms of 
transactions.
    Let me ask you about a number of entities. In addition to 
the Capital Athletic Foundation and Kaygold, Mr. Abramoff had a 
number of other companies. In an e-mail from you to him and 
several of his associates on February 16, 2003, you mentioned 
the following entities. Could you just tell us what each of 
them are?
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.028
    
    Ms. Halpern. Is there an exhibit I should look at?
    Senator Dorgan. I do not have an exhibit on this, but it is 
an e-mail.
    Archives, LLC? Do you remember what that was?
    Ms. Halpern. Archives LLC, is that as opposed to Archives 
Fine Dining, LLC?
    Senator Dorgan. I will write that down. That is a new one.
    Ms. Halpern. I want to differentiate them for tax purposes.
    Senator Dorgan. Archives, LLC, you have about seven of 
them. I was just curious. These are in addition to the Capital 
Athletic Foundation and also in addition to Kaygold.
    Archives, LLC, what is that?
    Ms. Halpern. Archives, LLC to the best of my knowledge is 
dormant and did not do anything. The way it came about is Mr. 
Abramoff said, I want to open a restaurant. Can you please do 
the filings. It is going to be called Archives, LLC.
    Senator Dorgan. And I did not have it on the list, but 
there is an Archives Fine Dining, LLC as well?
    Ms. Halpern. Let me explain, sir. I will be happy to 
explain it.
    Senator Dorgan. All right.
    Ms. Halpern. And then after I went ahead and did the 
paperwork to apply for a tax ID number, et cetera, all that is 
required, the person in Mr. Abramoff's business office said; 
``Oh, what is this all about, Archives, LLC?'' He already 
opened an entity for his restaurant, called Archives Fine 
Dining, LLC. So basically, his partner in the restaurant opened 
Archives Fine Dining, LLC and either it slipped Mr. Abramoff's 
mind or he did not know, and he asked me to open it.
    Senator Dorgan. DL/JA, LLC?
    Ms. Halpern. That is an entity, to the best of my 
knowledge, that owns his personal residence.
    Senator Dorgan. Entity that owns his personal residence?
    Ms. Halpern. Yes, sir.
    Senator Dorgan. So his personal residence is not in his 
name?
    Ms. Halpern. It is in the name you just read.
    Senator Dorgan. His home is owned by DL/JA, LLC?
    Ms. Halpern. To the best of my knowledge, sir. I did not 
set that up. You are going to have to ask the people involved 
who set that up.
    Senator Dorgan. Did you do the accounting for that?
    Ms. Halpern. No, sir; it was not a for-profit entity. It 
did not have tax returns, et cetera.
    Senator Dorgan. I understand.
    Ms. Halpern. It owns his house.
    Senator Dorgan. It is a separate company to own his home?
    Ms. Halpern. It is an LLC that owns his home. It was based 
on advice he received from attorneys.
    Senator Dorgan. Sounds a bit Byzantine to me.
    Livsar Enterprises, LLC?
    Ms. Halpern. Yes, sir; that is an entity that is owned 
together with him and Rodney Lane. It controlled and operated 
his restaurant, Signatures.
    Senator Dorgan. SVJA, LLC?
    Ms. Halpern. To the best of my knowledge, that entity was 
dormant. I am not aware of any income or losses passing through 
it that I knew about. It was apparently an entity that he and 
another associate founded. Apparently, whatever deal it was for 
fell through.
    Senator Dorgan. International Political Management, Inc.?
    Ms. Halpern. That is a corporation that he founded, and let 
me try to recall what it was for. It was not a very active 
entity. I did not do the tax return for it, so you are kind of 
asking me something that I have not seen in many years, which 
is a little bit difficult for me, but I do not recall it as 
something that was very active.
    Senator Dorgan. Sports Suites, LLC, Mt. Vernon Studios, 
Inc. I will not go through the rest. These are a lot of 
enterprises. Are there additional enterprises?
    Ms. Halpern. I would be happy to answer each and every one 
if you would like. It is no problem.
    Senator Dorgan. I wonder if I could do this, ask you to 
submit a list that would be an exhaustive list of the 
enterprises that you know Mr. Abramoff controlled.
    Ms. Halpern. Sure. No problem.
    Senator Dorgan. That would be helpful to the committee.
    Let me ask Mr. McConnon, on page 6 of the Coushatta 
political program, that is exhibit 64, Capitol Campaign 
Strategies makes a claim they completed 16,500 direct contacts 
with individual calls to the Governor. Any evidence in the 
Coushatta database that suggests this occurred?
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.029
    
    [GRAPHIC] [TIFF OMITTED] T4471.030
    
    [GRAPHIC] [TIFF OMITTED] T4471.031
    
    Mr. McConnon. Sir, what is the exhibit number?
    Senator Dorgan. It is exhibit 64. In that same exhibit on 
page 2, it claims that Capital Campaign Strategies custom built 
a computer program. I think the chairman has already asked 
about that. Let's start with that. On page 2, are you aware 
that the Capitol Campaign Strategies custom built a computer 
program?
    Mr. McConnon. No; to the best of my knowledge, they were 
using ours that we had licensed to them.
    Senator Dorgan. On page 6, where they make the claim they 
completed 16,500 direct individual contacts to the Governor, 
any evidence in the database that suggests this occurred?
    Mr. McConnon. The only thing that I could find in looking 
back at a series of e-mails and records was a file that we 
received that is called Mississippi Gaming: Yes Activists. It 
was approximately 15,500 records in the file that we received 
in October 2001. How that was derived is not clear at all from 
the data, but it is possible that those are accurate.
    Senator Dorgan. Mr. Cathcart, I understand that you had 
interviews with the staff of the Committee on Indian Affairs. 
My understanding is that you answered the questions asked in 
all three interviews. Although you certainly have a right to 
assert your fifth amendment rights here, I am wondering, if you 
were willing to answer the questions in all three of our 
interviews, what persuades you not to answer the questions in 
public that you previously answered in private?
    Mr. Cathcart. Frankly, I took the advice of my counsel and 
maybe it is more appropriate for him to answer than I.
    Senator Dorgan. Perhaps we could hear from your counsel.
    Mr. Leeper. Thank you, Mr. Vice Chairman.
    As you know, in a court of law counsel representing a party 
has the right to object to a question that is compound, 
argumentative, loaded with an unfounded assumption, and counsel 
can obtain a ruling from an impartial arbiter, usually a judge, 
as to whether or not the witness needs to answer the question 
as stated or whether the question needs to be restated.
    In this venue, as you know, counsel has no such ability to 
protect his or her client from such objectionable questions, 
and a record of answers to such questions, questions that are 
compound or based on unfounded assumptions, is an ambiguous and 
unreliable record, which gives rise to a hazard to a witness, 
in particular the witness' liberty interest. The right 
recognized in Ohio v. Reiner is intended to protect that very 
right and interest, including the interest of innocent persons.
    So for that reason, we are exercising that right here.
    Senator Dorgan. Counsel, I do not contest the right and the 
chairman indicated that your client certainly has that right. 
My only point was that he did come as he described, at his own 
expense, came for three interviews, answered the questions, and 
I would have thought that that which he answered in private, he 
would answer in public. I understand he has the right to assert 
it and has so asserted.
    One final question, if I might, Mr. Chairman. Ms. Halpern, 
you indicated a David Pierce was involved in some of the tax 
preparation issues and tax advice with respect to things like 
the Capital Athletic Foundation. Is that right?
    Ms. Halpern. No, sir; I said that to the best of my 
knowledge, Mr. Pierce, who was an internal accountant for Mr. 
Abramoff, hired by Mr. Lane, kept the books of several of Mr. 
Abramoff's entities. To the best of my knowledge, he did not 
prepare tax returns that I know about. And if he rendered tax 
advice to Mr. Abramoff, I would have no way of knowing that and 
I do not recall him telling me he did.
    Senator Dorgan. The final point. I think the chairman asked 
you a good number of questions about this, but with respect to 
the Capital Athletic Foundation, the establishment of an 
academy in suburban Maryland, sniper training operation in 
Israel, payments to Mr. Abramoff's cousin, and other things.
    Ms. Halpern. I am sorry. Which payments?
    Senator Dorgan. There are payments to Mr. Abramoff's cousin 
Steve?
    Ms. Halpern. From where? From the Capital Athletic 
Foundation?
    Senator Dorgan. Yes; is that not accurate?
    Ms. Halpern. Would you show me what exhibit that would be 
in, sir?
    Senator Dorgan. I do not have that exhibit in front of me.
    Ms. Halpern. I am not familiar with the fact that the 
foundation made those kind of payments.
    Senator Dorgan. Why don't we then, I am going to submit 
questions for Ms. Halpern, and I will attempt to get that 
reference for you, and I want to visit it.
    Ms. Halpern. Okay. Thank you. As you know, there were 
thousands of transactions in the CAF books and I cannot 
remember all of them.
    Senator Dorgan. I understand it is here.
    Ms. Halpern. Okay.
    Senator Dorgan. Exhibit 204, on the second page, ``can we 
cut the spy equipment and monthly stipend at $3,560; can we do 
without Steve Abramoff's monthly stipend of $2,000? Can we hold 
off on any other charitable contributions for a while'', and so 
on.
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.032
    
    [GRAPHIC] [TIFF OMITTED] T4471.033
    
    Ms. Halpern. To the best of my knowledge, sir, and correct 
me if I am wrong, but I think if your staff looks in the books 
and records, Mr. Steven Abramoff was receiving payment from 
Kaygold, which is Mr. Abramoff's consulting practice, not from 
the foundation.
    Senator Dorgan. All right.
    Mr. Chairman, I will submit some additional questions. I 
thank all three of the witnesses for being here.
    The Chairman. I have just one more question.
    Ms. Halpern, please refer to exhibit 206 in the book 
please. Now, you have stated that you, in a previous question, 
that you had no knowledge of a sniper workshop. Well, in 
exhibit 206, November 11, 2002 e-mail between you and Mr. 
Abramoff, Mr. Abramoff forwards to you an e-mail from Ben Zvi, 
in which he writes, ``last night, one of the guys from the 
emergency response team in Israel City of Ashdod, who was in 
the Army when I did the workshop for snipers in his unit, said 
they need the workshop badly and anything else I can do to 
help.''
    Mr. Ben Zvi continues, ``I am now writing out a program for 
patrolling and dealing with ambushes and containment and 
neutralization of terrorists, both in and out of the Ishuv.''
    In forwarding this e-mail to you, Mr. Abramoff writes, 
``This is why it so hard for me to cut off funding. Who else 
would fund this? He has no one else.''
    In response, you write, ``I actually had chills reading the 
two e-mails you forwarded to me. However, we need to work this 
into the tax exempt purposes of the foundation. More to come on 
this subject in an e-mail tomorrow or so. Mr. Abramoff's 
outside accountant is finishing the 2001 return, and read me 
the riot act on some of the stuff that we are doing. We need to 
fix the holes.''
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.034
    
    [GRAPHIC] [TIFF OMITTED] T4471.035
    
    The Chairman. Now, you continuously stated that there are 
thousands of e-mails. I would think you would remember 
something that caused you to have chills reading two e-mails. 
That specifically refers to this individual who, ``did the 
workshop for snipers in his unit,'' which obviously, according 
to the e-mail, Mr. Abramoff said he was funding.
    Ms. Halpern. Mr. Chairman, I am not up on what is required 
for security enhancements. Okay? That is certainly not one of 
my areas of expertise. If Mr. Abramoff, who is running the 
foundation, presented to me that he is funding the school for 
security enhancements, for security and defense, that is what I 
believed and that is what I took. What was required in order to 
provide security enhancements, I do not know. It was not my job 
to investigate. I was not running the foundation. And I was 
basing any information that I said to him, was based on what he 
told me.
    Now, you mention about the other firm, the tax accountants, 
the specialists who prepared the returns. What that is 
referring to is, I believe it was, Mr. Vice Chairman had 
mentioned in an e-mail that he read, it was referring to a 
relationship that the foundation had with an ice rink that the 
school was using. That is the reference where specialist tax 
accountants consulted the tax attorneys and made a 
recommendation specifically about the ice rink. That is what 
that line is referring to, sir.
    The Chairman. Ms. Halpern, it was forwarded to you, the e-
mail that says ``last night, one of the guys who was in the 
Army when I did the workshop for snipers and said they needed 
the workshop badly,'' and you are saying that you had no 
knowledge of a sniper workshop.
    Ms. Halpern. Sir, if you recall another e-mail which I 
believe you put in your exhibit last time, it talked about 
terrorists cutting through the fence. I do not know what is 
required to defend against a terrorist coming through a fence.
    The Chairman. I am not asking that, Ms. Halpern. I was 
asking if you knew money was being sent for a workshop for 
snipers, and it is specifically referred to in an e-mail that 
was sent to you, that you said in response, ``it gives you 
chills.''
    Ms. Halpern. Yes, sir; and I reiterate that the knowledge 
that I had was that Mr. Abramoff was funding a school in Israel 
for security enhancements. Now, what that school required, 
depending on their geographical location, I cannot answer that, 
sir, this very specific question.
    The Chairman. It was a very specific response to you from 
Mr. Abramoff, who said, ``this is why it is so hard for me to 
cut off funding.'' Clearly, that indicates he was funding.
    I have no further questions.
    Do you have any further questions?
    Senator Dorgan. One further question.
    Ms. Halpern, you have heard the testimony now at two 
separate hearings about Mr. Abramoff, testimony that I think 
pretty clearly describes deception, lying, perhaps fraud, 
including substantial evidence of that this morning. Give me 
your analysis of what you have heard.
    Ms. Halpern. It is a lot of information. It is all very 
overwhelming. As you know your committee has shown me some e-
mails that were written either relating to me or relating to e-
mails that people wrote about me, it is a very overwhelming 
massive amount of information.
    What I can tell you, though, is that I believe in our 
Justice Department and I have full confidence that they will 
make a thorough investigation and get to the bottom of this.
    Senator Dorgan. Mr. Chairman, I have no questions.
    The Chairman. Thank you very much.
    I thank the witnesses.
    Our last panel is Steven Griles, former deputy secretary of 
the Interior; Michael Rossetti, former counsel to the Secretary 
of the Interior; and Italia Federici, the president of the 
Council of Republicans for Environmental Advocacy.
    Mr. Griles, we will begin with you, sir.

    STATEMENT OF J. STEVEN GRILES, FORMER DEPUTY SECRETARY, 
                   DEPARTMENT OF THE INTERIOR

    Mr. Griles. Mr. Chairman and members of the committee, my 
name is J. Steven Griles. I am appearing today voluntarily. I 
believe the committee's work is very, very important.
    What I have heard today is extremely disheartening. This 
committee knows I have been a public servant for almost 24 
years, first with the Commonwealth of Virginia from 1968 to 
1981, and then with the United States Department of the 
Interior from 1981-89, and again from 2001 through January of 
this year.
    In my most recent position, I served as deputy secretary of 
the Interior. I considered it a privilege to work for President 
Bush, Secretary Norton, and many of you and your colleagues on 
the issues of importance to this country and its environment.
    Two weeks ago, I spent over 4 hours answering questions 
from this committee staff. I was shown documents that I had 
never seen before and told things about Mr. Abramoff that I did 
not know, and today I learned more. We have heard that Mr. 
Abramoff has taken an unbelievable amount of money from some of 
the most vulnerable people in our society. He also apparently 
has claimed to have special access to my office on behalf of 
his Indian gaming clients. That is outrageous and it is not 
true.
    If he got this money in part by misrepresenting his 
relationships with me, I am extremely pleased that you are 
investigating this. Before answering your questions, I want to 
make one important point. From the time I became deputy 
secretary, I had no responsibilities for Indian gaming issues. 
Authority over those issues was assigned to others who reported 
directly to the Secretary, like Michael Rossetti. The Secretary 
made all decisions relating to Indian gaming compacts. I want 
you to know this so that you can judge the credibility of any 
special access to my office on this issue.
    Thank you so much, Mr. Chairman, and I want to thank the 
staff for the way they treated me when we went through the 
interview.
    The Chairman. Thank you very much.
    Mr. Rossetti.

STATEMENT OF MICHAEL ROSSETTI, FORMER COUNSEL TO THE SECRETARY 
          OF THE INTERIOR, DEPARTMENT OF THE INTERIOR

    Mr. Rossetti. Thank you, Mr. Chairman.
    I have no prepared remarks, but I am happy, of course, to 
answer any questions that you have, Mr. Chairman, or that the 
Vice Chairman has of me at this time.
    The Chairman. Thank you very much.
    Mr. Griles, according to documents in the committee's 
possession, Mr. Abramoff directly and indirectly contacted you 
while you served as deputy secretary of the Department of the 
Interior about tribal issues that were pending before the 
department. I would like to explore those communications with 
you now.
    First, could you describe your relationship with Mr. 
Abramoff?
    Mr. Griles. My relationship with Mr. Abramoff was, as with 
other lobbyists, nothing more, nothing less, just as it would 
be with Senators and other interest groups. I returned calls 
directly. If people called, I had those calls returned by 
others who had direct responsibilities.
    The Chairman. At your deposition, you testified that you 
could only vaguely recall a couple of conversations you had 
with Ms. Federici about matters relating to Mr. Abramoff's 
clients pending at the department, and that was it, and that 
these were only requests by Ms. Federici to have you call Mr. 
Abramoff back. Is that correct?
    Mr. Griles. Yes, Senator; I told your investigators that I 
recalled several conversations in which she had asked me to 
call Mr. Abramoff. She had just been talking to him and wanted 
to know if I would call him. I know of one instance that I 
think, this has been a long time ago, that I made a return call 
to him.
    The Chairman. So with the benefit of time, you have been 
unable to remember anything further?
    Mr. Griles. And I have not seen any other documents, 
Senator, either to help with that.
    The Chairman. At your deposition, you said you never had 
any reason to get involved in tribal gaming issues, and that 
you ``didn't do gaming.'' At your deposition, you testified 
that as the COO at Interior, you did not intervene or get 
involved in gaming issues, except to the extent that the 
counselor asked you for advice. But to what extent did you try 
to intervene in gaming issues that related to Mr. Abramoff's 
clients?
    Mr. Griles. Senator, I do not recall intervening on behalf 
of Mr. Abramoff's clients ever.
    The Chairman. Mr. Rossetti, are you aware of any incidents 
where Mr. Griles tried to intervene in gaming issues relating 
to Mr. Abramoff's clients?
    Mr. Rossetti. I am aware, Senator, Mr. Chairman, that Mr. 
Griles at some point late in 2003, I believe it was, became 
very interested in participating in the decisionmaking process 
and indicated to me on many occasions a desire to be in 
attendance at the Secretary's decisionmaking meeting with 
respect to the two-part determination that was before her or 
would be before her with respect to the Jena Band in Louisiana.
    The Chairman. Mr. Griles, with the benefit of Mr. 
Rossetti's recollection, why did you try to intervene in the 
Jena issue?
    Mr. Griles. Mr. Rossetti has a different memory than I 
have, Senator, of that issue.
    The Chairman. Go ahead, please.
    Mr. Griles. I have, and to my recollection, never went to a 
decisionmaking meeting on the Jena Band with the Secretary. My 
recollection, and I believe if you were to check with the 
Secretary, she would indicate that also. I do not recall, 
Senator, going to any meeting with the career staff, and I 
believe if you were to check with the career staff that would 
be true.
    The Chairman. Did you try to intervene in the Jena issue?
    Mr. Griles. Senator, I was the chief operating officer. If 
I had wanted to intervene in those issues, I could have. That 
was not what I was doing at Interior. I did not do Indian 
gaming, sir.
    The Chairman. What conversations do you recall that you had 
with Mr. Abramoff regarding the Jena issue or with Ms. Federici 
concerning the Jena issue?
    Mr. Griles. Senator, I do not recall having a discussion 
with Ms. Federici about the Jena Band issue at all.
    The Chairman. Do you have a recollection of any 
conversations you had with Ms. Federici about a leadership 
dispute in the Louisiana Coushatta Tribe?
    Mr. Griles. Senator, as I told your investigators, I 
recall, as I indicated a few moments ago, that I had a call 
from Italia Federici in which she discussed something, and I do 
not recall the nature of that conversation. At the end of that 
conversation, she asked me, she said I was talking to Mr. 
Abramoff; he wondered if you could give him a call. That is my 
recollection. I called Mr. Abramoff.
    I was not in the office when he returned the call. I think 
I was on my way home or whatever. And he indicated there was a 
dispute, a mutiny dispute, a lockout or whatever it was, with 
one of the tribes in the Southeast. I then took that 
information and asked the acting assistant secretary for Indian 
Affairs, would she please look at that. I may have asked her to 
talk to him, and determine what if any appropriate action we 
should take.
    The Chairman. Did you ever talk with Mr. Abramoff about a 
potential strategy to block the Gun Lake application?
    Mr. Griles. Senator, I did not know what Gun Lake was until 
the Washington Post ran an article. I did not even know what 
the term was. I had never been involved in Gun Lake. Once I saw 
the article, it ran in the paper, I realized that at a senior 
policy meeting with the Secretary, the Solicitor's office 
informed the Secretary that the Justice Department had 
indicated they were not going to process or defend, as I 
understood it, applications for lands into trust for gaming 
unless there had been an EIS performed. It was not until those 
two things were connected that I understood that I had 
overheard the conversation, but until that point, I had no 
knowledge of it.
    The Chairman. In November 2003, you gave Michael Rossetti, 
the former counselor to the Secretary of the Department of the 
Interior a binder that contained information critical of the 
Louisiana Jena Band's application for placing land into trust. 
Did that indeed happen? Did you give him a binder?
    Mr. Griles. Yes, Senator.
    The Chairman. You did?
    Mr. Rossetti, did Mr. Griles tell you where the binder came 
from?
    Mr. Rossetti. Yes, sir.
    The Chairman. And where was that?
    Mr. Rossetti. The conversation, it took some time to get to 
the ultimate point to where the binder came from. At first, Mr. 
Griles indicated that he got it from someone on the Hill, a 
staff member to a member of either the Senate or the House. I 
have to say I do not recall which.
    I have two names that I recall and have not been able to 
refresh my recollection adequately. This took the course of a 
series of questions that I had to ask to figure out where it 
came from because it did not have a transmittal letter on it, 
an e-mail cover, or any other readily identifiable information 
as to what its genesis was or what its meaning was intended to 
be.
    But on the cover memo was, I think it was addressed to the 
department. It was addressed to somebody, but was not from 
anybody. So in our extensive conversation about where it came 
from ultimately, I learned from Mr. Griles that it came from a 
member by way of a chief of staff by way of a lobbyist who 
turned out to be Mr. Abramoff. But it was during the course of 
a series of questions that took much longer to get to that 
answer than I would have thought was necessary.
    The Chairman. Mr. Griles, binders show up in your office 
and then you just pass them on to the most important people in 
the Department of the Interior?
    Mr. Griles. Senator, if I could put this in context. First 
of all, I would like to respond to Mr. Rossetti's recollection 
of a conversation. He says a series of questions and answers. 
My recollection of it, it was less than 2 minutes, if it was 
that long. So I do not want to dispute a former friend of mine 
and a former colleague. I have a great deal of respect for him. 
He did a great job when he served the Secretary.
    So I guess I would just like to explain what actually 
happened. I was in a meeting. I came back to my office. There 
was a binder. There was no transmission on it. There was no 
envelope. There was nothing. I opened it up, and there were 
letters from Congressmen and it may have been Senators. I just 
do not recall the content of it. It was clearly something 
related to the Jena Band application.
    In Interior, we had huge litigation going on in the Cobell 
litigation, Senator, as you well know. One of the allegations 
there was records, the maintaining of records and what we 
needed to do with records if we got something, and how we 
should manage them. This binder was in the minds of the 
Solicitor's office and everyone, was a record of the Department 
of the Interior once it landed on my desk.
    My objective was three-fold: Get it to the right person; 
avoid a record-keeping issue with the litigation issue; and I 
asked, and since Mr. Rossetti, as I said before, was in fact 
the Counselor that was managing the Indian gaming issues, I 
took it to Mr. Rossetti. There was speculation, there is no 
question, there was speculation about where it came from.
    I did not say it came from Mr. Abramoff. I did not say it 
came from Congress. I speculated that it could have come from 
any of those sources. I did not know and I do not know today 
where it came from, but it was a record, Senator, that was 
laying on my desk.
    I asked my secretary, where did this come from? Her name is 
Doris Johnson. She is one of the nicest, sweetest ladies in the 
world. She said, it was delivered to the front desk and I went 
down and picked it up. I assume she meant she went down and 
picked it up from a messenger. She brought it back and I said, 
where is the envelope? She said it had your name on it, and 
nothing else.
    As I repeat myself, I went, I consulted, I was told that it 
had to be given to the people who were managing this because it 
was a record of the department, and I gave it to Mr. Rossetti. 
I asked Mr. Rossetti when he was giving the briefing to the 
Secretary on this issue, which I did not attend, and I would 
not have asked him this if I was going to attend the briefing 
and interfere in this issue, to please make sure the Secretary 
knew that there were all sides of this issue, and please brief 
her on that. I think I put him off when I said that, to be 
honest.
    I think in doing that, I think he thought I questioned his 
integrity about fully informing the Secretary. If I did that, I 
apologize to him today. But Senator, I did not know then and I 
do not know today where it came from.
    The Chairman. Mr. Rossetti testifies that on two occasions, 
you insisted on being in the meetings concerning the Jena Band. 
Is that not true?
    Mr. Griles. Senator, I have no recollection of attending 
any meetings at which the Jena Band issue was discussed. There 
were thousands and thousands of meetings in the Department of 
the Interior. My schedule has them all on it. I have looked 
through every meeting, every calendar that I have since I got 
those calendars several days ago. I spent nights reading them. 
I see nothing on there that would indicate that I went to a 
Jena Band briefing.
    The Chairman. I think Mr. Rossetti's testimony is that you 
did not go, but you insisted on going and were not able to do 
so.
    Mr. Griles. Can I comment?
    The Chairman. Yes; go ahead.
    Mr. Griles. Senator, as the deputy secretary and chief 
operating officer, if I wanted to go to a meeting, I would have 
gone. I was the number two. It didn't happen. I did not want to 
go. I did not want to be involved in Indian gaming. That is the 
truth. I am telling you the truth. I want you to know that, 
from my heart. This is not something that I was interested in 
and I have no recollection, absolutely no recollection of going 
to any meeting when any of that issue was discussed.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, I am trying to understand 
this a bit. Mr. Rossetti and Mr. Griles, your statements about 
this are in direct conflict. Let me go through some of the e-
mails.
    Mr. Griles, the point of this inquiry from the committee is 
that we have a large body of e-mails, and the e-mails come from 
Italia Federici. They come from Mr. Abramoff. So they are on 
the record. I am going to go through some, and you can perhaps 
react to them, but it is what is part of the public record at 
this point.
    Exhibit 4----
    Mr. Griles. Would you like me to refer to them, Senator?
    Senator Dorgan. Yes; I will have it up on the screen in a 
moment. Exhibit 4, and I will just read it, most of these are 
very short. It is from Italia Federici to Jack Abramoff: ``Hi, 
Jack. After I retrieved my coat, I ended up sharing a cab with 
Steve. He really enjoyed meeting you and was grateful for the 
strategic advice on BIA and insular affairs. You definitely 
made another friend.''
    That kind of starts a whole series of e-mails from Ms. 
Federici. And so that begins a long process. Exhibit 277: ``Hi, 
Jack'', again from Ms. Federici to Mr. Abramoff, ``I am talking 
with Steve in about 30 minutes. We will call you right after. I 
know he said they do not want her for the job so I do not know 
what the thought was here, but I will find out. He is calling 
back about another issue''.
    This is about ``Secretary Norton names Martin to Indian 
Affairs post''. Abramoff had written to her saying, ``I cannot 
believe they named her'', and then she wrote back and said, ``I 
am talking with Steve in about 30 minutes''.
    Exhibit 37 is an exhibit in which Abramoff describes you to 
Van Hoof as ``the fellow who we helped with the CREA project''.
    So throughout the entire set of records that came from our 
subpoenas, Mr. Griles, we have probably dozens of e-mails, 3 or 
4 or 5 dozen e-mails from both Mr. Abramoff and Ms. Federici 
describing meetings with you, discussions with you, telephone 
calls with you, and describing those meetings, discussions and 
telephone calls specifically in the context of issues, Jena 
Band issues and other Indian issues before the Interior 
Committee.
    What are we to make of that? It is certainly at odds with 
your opening statement, at great odds with it.
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.036
    
    [GRAPHIC] [TIFF OMITTED] T4471.037
    
    [GRAPHIC] [TIFF OMITTED] T4471.038
    
    Mr. Griles. Senator, I have not seen those e-mails. I hear 
you saying they are in the public record. They are not in any 
record that has been presented to me, unless they were 
presented to me by your staff at the time we did our interview. 
So I have not seen those.
    Senator, I cannot really comment on or know what one person 
says to another or what their intent or meaning is. As I said, 
my relationship with Mr. Abramoff is no different than any 
other lobbyist. Italia Federici was a friend, for a long time. 
Gale Norton introduced me to her.
    Senator Dorgan. Is Ms. Federici lying to the committee? We 
have had her in and she has been interviewed. She apparently 
did not accept a subpoena. We were not able to subpoena her, so 
apparently we will have her here as a separate witness, perhaps 
next week, before this committee.
    But we have extensive testimony from her. Is she not 
telling us the truth, because that testimony is a substantial 
body of evidence of her telling Mr. Abramoff of many 
discussions she had with you, specifically about tribal issues?
    Mr. Griles. Senator, I can tell you that I am telling you 
the truth to the best of my ability here today. For me to 
speculate on what somebody else said to Mr. Abramoff, and if it 
was the truth, it is something you really have to ask them, 
Senator. There was no special relationship for Mr. Abramoff in 
my office. It never did exist.
    Senator Dorgan. Exhibit 138 is an exhibit that is an e-
mail. It is from Jack Abramoff. It says, ``I have just returned 
from a meeting with the Deputy Secretary. The Jena compact is 
moving fast. There is a land-in-trust application with it from 
the Governor''.
    Do you recall a meeting with Mr. Abramoff as deputy 
secretary?
    Mr. Griles. I am sorry, Senator. What e-mail is that?
    Senator Dorgan. It is an e-mail from Jack Abramoff to one 
of his staff, ``I have just returned from meeting with the 
Deputy Secretary. The Jena compact is moving fast and there is 
a land-in-trust application with it from the Governor''.
    It is exhibit 138. It is up on the screen at the moment.
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.039
    
    Mr. Griles. What is the date of that, sir?
    Senator Dorgan. That date was February 5, 2002. Do you 
recall a time when Mr. Abramoff met with you either in your 
office or outside of your office and discussed the Jena Band 
compact?
    Mr. Griles. Senator, around this date, which could have 
been the photo-op that occurred with the Secretary, was around 
February 5 of 2002, I believe. That is the only time that I 
have any recollection of Mr. Abramoff ever being in my office. 
So you know, this may be something that occurred during the 
discussion over the photo-op. I do not know the context of it, 
but that is the only date that I believe that Mr. Abramoff ever 
came into my part of the Department of the Interior.
    Senator Dorgan. Mr. Rossetti, tell me the position you had 
in the Department of the Interior?
    Mr. Rossetti. I was counselor to Secretary Norton. I 
reported directly to her and was in the immediate office of the 
Secretary on her hallway and the hallway shared also by Steve 
Griles.
    Senator Dorgan. Mr. Rossetti, Senator McCain asked you 
about Mr. Griles, whether he had an interest in the Jena Band. 
You indicated that the answer was yes. Did Mr. Griles to your 
knowledge have interest in other Indian issues, and if so, how 
was that manifested and how do you have knowledge of it?
    Mr. Rossetti. Well, I know that there was an interest in 
the Jena Band two-part determination because of Steve's 
constant requests to be involved in meetings that stood in 
stark contrast to the way that we had constructed a process to 
handle these, so that the Secretary would have preserved unto 
herself the full prerogatives of the decision before her in a 
way that also protected her from allegations that would have 
been unfounded by persons outside of the department, that there 
was a process that was not as sound as we tried to construct 
it.
    So in Jena, for instance, Mr. Vice Chairman, the contrast 
in my mind was between the first Jena decision, which was a 
gaming compact decision that came in in 2002, which I have no 
recollection of Mr. Griles participating in the discussions 
with career folks and political folks on that decision, and a 
very keen interest in being involved in a meeting which, as he 
says, would have been on the Secretary's schedule anyway, and 
it is her prerogative exclusively to exclude anybody from such 
a meeting, a prerogative I would not have presumed to exercise 
myself. However, I would have given my counsel to her if I was 
concerned about a voice being in a room, so long as she was 
able to determine who the voice is and on whose behalf the 
voice is being raised.
    I am sorry, sir. The last part of your question was other 
issues, other Indian issues? There were a couple of other 
issues, Indian gaming issues now we are talking about, because 
of course, the portfolio of the deputy secretary is in many 
ways a member-at-large or an official-at-large of the 
department, involved on any day in numerous issues as duty 
dictates and requires. I have no quibble with that at all, and 
accept that as the appropriate role of the deputy secretary.
    However, here there were a couple of instances, this was 
one that I was worried about and I wanted Mr. Griles to know 
that I had my eye on him on this one because I was worried 
about it, whether founded or not, I was worried about it. There 
was a California example where I thought it was odd that Steve 
was involved, the Auburn Rancheria, which was a decision that 
the Secretary was making on a gaming parcel, and all of a 
sudden there were meetings that Steve Griles was chairing which 
had as its constituent members people from adjacent communities 
in this California area, I believe it was Placer County.
    I thought that was odd. I did not know on whose behalf he 
had interceded precisely and on whose behalf Mr. Griles was 
exercising that inquiry, but he exercised an inquiry. The 
Secretary made a decision. That, too, stood in contrast to an 
insistent voice, I am sorry, an insistent request at being a 
part of this decision for reasons that I could not in my mind 
understand.
    Senator Dorgan. Mr. Griles, I referenced an earlier 
Abramoff e-mail, and the reason I am asking you about these is 
they are on the record and you, while you are on the record, 
should be aware of them. There is another September 9, 2002 
Jack Abramoff e-mail to Marc Schwartz: ``Just finished meeting 
with the Deputy Secretary. He is supposed to get his people to 
report to him tomorrow on this issue so he can help us''. 
December 12, 2002, that is number 212 is the reference, it was 
195 on the first one, number 212 on the second, Jack Abramoff 
to Chris: ``Thanks, Chris. The meeting with Griles went well. 
We have a lot to do''.
    [Exhibit follows:]

    [GRAPHIC] [TIFF OMITTED] T4471.040
    
    Senator Dorgan. So my point is, there are e-mails, e-mails, 
e-mails, and e-mails about Mr. Abramoff saying he is meeting 
with you. There are many others in which Ms. Federici is saying 
she is talking to you. I mean, how do you reconcile all that?
    Mr. Griles. Senator, I cannot reconcile what Mr. Abramoff 
put in e-mails to anyone. Today, based on what I heard, I do 
not know if anybody can. I do not know the nature of those e-
mails and what the subject was right now. They are out of 
context for me. I do not believe your staff showed them to me. 
If they did, I apologize. But they asked me a question about I 
think September 12, this guy's name. I have absolutely no 
recollection of who that is or what that was.
    So what is the e-mail about? I do not know. I stated 
earlier that I recall Mr. Abramoff being in my office one time, 
one time, and that was that February meeting for the photo-op.
    You know, Senator, if I could, Mr. Rossetti has made a 
couple of comments. I do not know the Auburn Rancheria issue. 
Whenever I was asked by the congressional office of Interior to 
meet with certain members of Congress, I would do that. And out 
of that, they would ask me to meet with certain constituents. 
This is me having a very vague recollection, Senator, of that 
issue, of when one of the California Congressmen was interested 
in this and asked me to meet.
    This was early on, probably, in the Administration. But I 
do not have facts. I do not have calendars here. So I am really 
guessing, which is not fair to you and it is really not fair to 
the public record.
    But I did not do gaming. I did not, did not ask Mr. 
Rossetti to let me participate in anything, ever, particularly 
on the Jena Band. Now, he has a different recollection of this. 
It is completely at odds with mine. I had no reason to. I 
appreciate Mr. Rossetti, he is known to me as someone that I 
have worked with, but I do not know why he would have that 
recollection, Senator.
    The Chairman. Mr. Griles, can I just follow-up about this 
relationship that Senator Dorgan is talking about. I would like 
you to look at exhibit 280. It is in that book there, exhibit 
280. It is an e-mail dated September 9, 2003 from Mr. Abramoff 
to members of his team. Do you see it? It is entitled, 
``Griles.'' Mr. Abramoff writes----
    [Exhibit follows:

    [GRAPHIC] [TIFF OMITTED] T4471.041
    
    Mr. Griles. Senator, excuse me. What is it?
    The Chairman. Exhibit 280. Do you see it?
    Mr. Griles. I do not see anything that say, oh, it says 
``Griles''. Okay. I think I do see it, Senator.
    The Chairman. The e-mail is dated September 9, 2003 from 
Mr. Abramoff to members of his team entitled, ``Griles.'' Mr. 
Abramoff writes, ``This cannot be shared with anyone not on the 
distribution list. I met with him tonight. He is ready to leave 
Interior and will most likely be coming to join us. I expect 
that he will be with us in 90 to 120 days.'' First of all, do 
you recall meeting with Mr. Abramoff on the night of September 
9, 2003?
    Mr. Griles. I do not have a calendar.
    The Chairman. But you do not recall it without a calendar?
    Mr. Griles. That is right, Senator, and I would have a way 
to do that. If I had seen this e-mail, I would be able to 
respond to that.
    The Chairman. And you have no recollection of Mr. Abramoff 
discussing employment with you? I am only asking this question 
because Mr. Abramoff states so in an e-mail.
    Mr. Griles. And I appreciate your asking this question 
because unbeknownst to me that he had written anything of that 
nature, and of course the papers have written that. So I am 
pleased you are asking this question.
    I met with Mr. Abramoff and one of the former witnesses 
that was sitting here earlier, Mr. Baggett, one night. Mr. 
Abramoff says, I have a managing partner; if you would come by 
and have a drink, I would like for you to meet him.
    Now, that happens quite often, Senator, as you know. People 
bring people to town and ask, would you take a few minutes and 
say hello to them.
    When I sat down with them for a few minutes, the managing 
partner, Mr. Baggett, this is the second time I have ever seen 
him today, described his firm. It sounds like a very nice firm. 
At the end of it, they said, we would like for you to join our 
firm, and I said, gentlemen, I am not leaving the Federal 
Government. I had made no plans to leave the Federal 
Government. In fact, I had made a determination I was going to 
serve through the 4 years of the President before I left.
    As a result of that conversation, it raised alarms with me, 
because I am going, what was that about. I went back 
immediately and talked to the ethics officers at the Department 
of the Interior, both the deputy ethics officer and the ethics 
officer and told them that conversation had occurred.
    I said, do I need to do something? Do I need to document 
this? Do I need to recuse myself on anything here? And their 
response was, no, that if somebody in this town wanted you to 
get recused and they knew you were involved in something, they 
could come up to you in a casual conversation and say, we would 
like for you to come to our firm and company, and then you 
would be recused. And that is not how the ethics laws work, 
Senator.
    So this e-mail, as you I think know, I had not seen before. 
I had read about something like that in the Washington Post, 
and I am really happy you finally asked this question. It 
simply is not true.
    The Chairman. There was no other discussion you ever had 
about a job? Thank you.
    Mr. Griles. No, sir; not at all.
    The Chairman. Thank you.
    Senator Dorgan.
    Senator Dorgan. Mr. Rossetti, you said you were worried 
about Mr. Griles. Tell me about that.
    Mr. Rossetti. Well, I was alarmed that Mr. Griles all of a 
sudden had an inexplicable desire to be involved in this 
particular issue. I was not so much alarmed that a binder would 
appear at the department or letters collated by somebody to try 
to persuade decisionmakers, but I could not reconcile in my own 
mind why it was we had to have such a tussle over where the 
binder came from in the first instance, and then in the second 
instance, why it was repeatedly on at least one-half-dozen 
occasions, Mr. Griles insisted on being a part of a 
decisionmaking meeting with the Secretary.
    Now, ultimately he did not attend that meeting, but that 
was a by-product of one final exchange that he and I had in 
front of witnesses on this score, that ended in my open 
challenge to him as to what it was that he was doing by 
pressing this issue. Whose water was he carrying on this issue? 
And that was the end of that. The Secretary made her 
determination based on the counsel from staff, both career and 
politicals alike, who had been reviewing the materials that had 
been submitted by the State and the tribal government at the 
time.
    Senator Dorgan. Mr. Rossetti, who were those witnesses?
    Mr. Rossetti. To the best of my recollection, there were 
two. If there was a third one, I do not recall, but David 
Barnhardt and Brian Weidmann, I believe, were in the room. 
After this pointed exchange between Steve Griles and myself. 
Whether it was in that exact same room, that exact same moment, 
or later that day, but it happened within that day, I asked 
David Barnhardt what happened, in my own flowery language, and 
he indicated to me that I scared Mr. Griles from participating 
in the meeting.
    Later that day, that same day, Steve showed up in my office 
and indicated that there was no reason to include him in the 
decisionmaking meeting with the Secretary. He knew I had it 
covered and handled. As I said earlier, that was the end of 
that, so that I knew the Secretary would have at least a 
process that allowed her to do her secretarial decisionmaking 
exercise with all the up-sides and down-sides being laid for 
her in painful detail as much as she wanted from the people 
that she had come to hear from on these matters typically.
    Senator Dorgan. Mr. Griles, did you have discussions with 
the Secretary about the Jena Band issue?
    Mr. Griles. No, sir; Senator, I do not recall any 
discussion with the Secretary on Jena Band. Both as Mr. 
Rossetti indicated, there were two different decisions that 
went on, one the first time, and then one the second time. I do 
not recall ever being in a meeting with the Secretary when she 
had the decision meeting.
    Now, Senator, the way the Department works is every week 
the Assistant Secretaries and bureau heads meet with the 
Secretary and with me, if my schedule allowed, to talk about 
pending issues. In those meetings, people would update the 
Secretary on what was occurring. Senator, I do not ever recall 
having a discussion at all with the Secretary about the Jena 
Band. I had total access to her, anytime I needed it and 
anytime I wanted it. If I had wanted that access, I could have 
exercised it.
    I am confused by Mr. Rossetti's rendition.
    Senator Dorgan. Mr. Griles, on that point, I think Mr. 
Rossetti talks about two witnesses to the pointed conversation. 
What will be the witnesses' recollection, in your judgment? Do 
you remember that pointed conversation?
    Mr. Griles. Senator, I do not. I would say that Mr. 
Barnhardt and Mr. Weideman are also very fine public servants, 
and if that conversation occurred, sir, then we would have to 
understand the nature and the context of it.
    Senator Dorgan. Regrettably, Mr. Chairman, the amendment 
that Senator Grassley and I are offering, a very controversial, 
significant amendment on the floor of the Senate, had a 2-hour 
time limit. There are about 30 to 40 minutes left, so I have to 
go to speak on the floor on that amendment. I regret that I 
have to leave before this hearing is completed.
    I want to submit some questions, Mr. Griles, on a dinner 
that was held at Signatures restaurant, which was apparently, 
if not a fundraiser, nonetheless a dinner for an organization 
called CREA. Ms. Federici indicated that you were personally 
inviting everyone from Interior and talking with them about the 
dinner. And then I have the guest list for the dinner. I want 
to ask some questions about that dinner, because that also 
plays a role in a range of things that Ms. Federici claims in 
the interviews she has had with this committee.
    We are trying to find the truth here, and it seems more and 
more difficult in a number of these issues. The issues are 
significant and very important. Mr. Chairman, I will leave the 
remainder of the hearing to you, and thank you very much for 
doing that.
    The Chairman. Thank you very much.
    Mr. Griles, I only have one more question. When you served 
as Deputy----
    Mr. Griles. Mr. Chairman, may I just say something to 
Senator Dorgan?
    The Chairman. Go ahead.
    Mr. Griles. I, too, seek what you just said. I learned so 
much today. I have not seen these things. I do not know why 
people would make those kind of comments. I am really 
disappointed in what I have learned about some people today, 
and I know you are. We have struggled to help Indian country 
the 4 years I was there. We made a difference, and the things 
that went on here were not right.
    The Chairman. Thank you very much.
    When you served as deputy secretary, were you aware of any 
polling or survey project done by Interior that was funded by 
or through CREA?
    Mr. Griles. Senator, I was listening to the reading of that 
e-mail. As I recall from staff, that was March 2001. Is that 
correct, Senator?
    The Chairman. I think so.
    Mr. Griles.  Senator, I was not even confirmed by the 
Senate until July 2001. I think I assumed office on July 17. So 
first of all, I do not know anything about it. I do not have 
any recollection of that today at all. At some point back in my 
background, somebody may have told me something, but I was not 
at Interior, and I cannot imagine anybody conducting a poll for 
Interior, Senator.
    The Chairman. Thank you very much.
    Mr. Rossetti, I am sure this was not your most happy day, 
and I thank you for coming forward to the committee.
    Mr. Griles, I thank you for appearing and giving us your 
best view of the situation.
    I thank you both for appearing.
    This hearing is adjourned.
    [Whereupon at 1 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 Fred W. Baggett, Greenberg Traurig LLP

    Mr. Chairman and honorable members of the committee:
    My name is Fred Baggett, and I am a shareholder with the 
Tallahassee, Florida office of Greenberg Traurig, LLP (``Greenberg 
Traurig'' or the ``Firm''). I appreciate this opportunity to testify 
before the Senate Committee on Indian Affairs (the ``committee'') today 
concerning the committee's ongoing investigation in to the misconduct 
of Jack Abramoff.
    I have spent my entire professional career of 35 years as a lawyer 
and lobbyist in the State of Florida. After graduating from the Florida 
State University College of Law in 1970, I spent 2 years working as an 
executive assistant to the Chief Justice of the Florida State Supreme 
Court. I then started a law practice in Tallahassee, FL, which the 
Chief Justice joined in 1975. The lawyers in our office joined 
Greenberg Traurig in 1991, and I have been there ever since. I am 
currently the managing shareholder of the Tallahassee office of 
Greenberg Traurig, chair of the Firm finance committee and head of the 
national governmental affairs practice. I also maintain a full-time 
administrative law and lobbying practice with the Firm, which is 
comprised almost exclusively of work at the Florida State legislative 
and executive level.
    Greenberg Traurig is an international law firm that prides itself 
on providing high quality professional services to its clients. The 
Firm is comprised of over 30 offices, with a governmental affairs 
component in 16 of those offices.
    Turning to the subject of today's hearing, from 2001 through early 
2004, Jack Abramoff worked as a lobbyist in the Washington, DC office 
of our Firm. Up until the end of Mr. Abramoff's tenure at Greenberg 
Traurig, the Firm believed that Mr. Abramoff was rendering high-quality 
professional services to his clients.
    In late 2003 and early 2004, reports began to emerge questioning 
the amount of money paid by various Indian tribes to Mr. Abramoff and 
Michael Scanlon in connection with professional services the two had 
rendered. During this timeframe, Mr. Abramoff was questioned about his 
financial relationship with Mr. Scanlon. Records available to the 
committee, including a February 3, 2004 interview of Mr. Abramoff 
conducted by Susan Schmidt of The Washington Post, reflect that, in 
front of Firm personnel, Mr. Abramoff denied having any financial 
relationship with Mr. Scanlon or engaging in any improprieties in 
connection with his lobbying work for tribal clients.
    Nevertheless, because concerns had been raised, Greenberg Traurig 
wanted to ensure that there was no impropriety on the part of Mr. 
Abramoff. In mid-February, the Firm hired Henry F. Schuelke, III of the 
Washington, DC law firm Janis, Schuelke & Wechsler to conduct an 
internal investigation focusing on the existence of a financial 
arrangement between Mr. Abramoff and Mr. Scanlon. Mr. Schuelke is a 
former Federal prosecutor, who served as an assistant U.S. attorney in 
the District of Columbia from 1972-79, and is a highly regarded member 
of the District of Columbia Bar. Both he and the other members of his 
firm have extensive experience in conducting internal investigations of 
this type.
    As Mr. Schuelke began his investigation, The Washington Post 
published the article ``A Jackpot From Indian Gaming Tribes,'' raising 
questions about the fees charged by Mr. Abramoff and Mr. Scanlon for 
lobbying and grassroots work. At around the same time, this committee 
also announced that it would be looking into Mr. Ahramoff's activity. 
Facing the prospect of being subjected to W. Schuelke's investigation, 
Mr. Abramoff for the first time disclosed to our Firm that be had 
received money from Mr. Scanlon in connection with the work that the 
two men were doing on behalf of Indian tribes. Upon learning of this 
arrangement, the Firm immediately requested and obtained Mr. Abramoff's 
resignation. The Firm issued a statement to that effect on March 2, 
2004.
    Notwithstanding Mr. Abramoff's departure, Greenberg Traurig asked 
Mr. Schuelke to continue his investigation. Based on Mr. Schuelke's 
investigation, the Firm has made disclosures to clients affected by Mr. 
Abramoff's activities, worked out resolutions with a number of affected 
clients and hopes to work out resolutions with still other affected 
clients.
    The facts surrounding Mr. Abramoff's employment by our Firm have 
been unhappy ones. We at Greenberg Traurig regret the improprieties 
that transpired during Mr. Abramoff's 3 years of employment with us. We 
share the chairman's and the rest of the committee's dismay at Mr. 
Abramoff's activities and behavior.
    I assure you that we will continue to work with you and other 
investigators to ensure that, consistent with our obligations to 
clients, all information that can be shared is shared with the proper 
authorities.
    We appreciate the work of this committee and its staff in 
thoroughly investigating and responding to this matter.
    Again, thank you for this opportunity.
                                 ______
                                 

   Prepared Statement of Kevin Sickey, Chairman, Coushatta Tribe of 
                               Louisiana

    Good morning Chairman McCain, Senator Dorgan, and distinguished 
members of this committee.
    I am Kevin Sickey, chairman of the Coushatta Tribe of Louisiana. 
With me at the table is my brother and council member, David Sickey, 
and our tribal attorney, Jimmy Faircloth. I would also like to 
recognize Council Member Tee LaBulf, and the members of our tribe who 
made the trip to attend this hearing.
    Many of these tribal members were the first to suspect that 
something had gone terribly wrong with the lobbyists, Jack Abramoff and 
Mike Scanlon, so it is appropriate that these tribal members are 
present for this proceeding. At one time they were referred to as 
``dissidents'' for questioning the lobbyists' actions--a label provided 
by the lobbyists to divert suspicion from their own activities.
    We are grateful for the opportunity to appear before this important 
committee. Your staff has been cooperative and respectful, and we 
appreciate their hard work.
    We will divide our opening statement into two parts. First, I will 
provide a brief history of our tribe. I will explain our government and 
the political environment that the lobbyists used to their advantage. 
And, I will comment briefly on the harm caused by their fraud, 
Obviously, the information your committee is making public today is 
both shocking and deeply disturbing to me both as chairman of the tribe 
and as a tribal member.
    Following my brief comments, Councilman Sickey will provide a broad 
overview of some of the things we discovered in our own review.
    Before we proceed, however, we must respectfully qualify our 
testimony. Neither Councilman Sickey nor I had any direct dealings with 
Abramoff or Mr. Scanlon. We were not involved in the decision to hire 
these lobbyists, nor were we involved in any aspect of coordinating 
their work. We are both reluctant to speculate about the conduct and 
motives of the lobbyists, and I suspect that any such speculation or 
conjecture will-not aid the work of this committee. Finally, because we 
are currently involved in litigation about these events, we must be 
cautious in our comments concerning the actions of others.

I. The History of Our Tribe

    We are descendants of the Creek Confederacy, from the Muskogee 
family of tribes. Our ancestors were stripped of 22 million acres of 
land by the United States following the Creek War in 1814. 
Approximately 50 years later, a small band of Coushattas settled in the 
Calcasieu River area, near Kinder, LA.
    In 1884, they were forced to move again when homesteaders began 
claiming their land. They then purchased a small tract of land 3 miles, 
north of Elton, LA.
    In 1898, the United States placed 160 acres of land into trust for 
the tribe. Unfortunately, the trust was revoked in 1953, which began a 
20-year struggle for re-recognition.
    In 1973, the Coushatta Tribe of Louisiana was again recognized. And 
7 years later, our reservation was again formally established.
    In 1985, we held our first election of leaders by popular vote. We 
then established our own judicial system, police department, housing 
authority, and many other social programs.
    Today, our tribe consists of over 850 members, approximately 400 of 
whom live in the Coushatta Community. We are proud of our culture and 
heritage, and we are dedicated to maintaining the sovereignty that 
generations of our ancestors sacrificed and even died to protect.
    Our casino and resort opened in January 1995, and since then we 
have been blessed with economic prosperity. We employ approximately 
2,800 people, with a total annual payroll in, the range of $80 million. 
We purchase goods and services from Louisiana vendors in the range, of 
$40 million per year. And we contribute approximately $7 million per 
year to State and local governments. We are proud to be a vital part of 
the economy of southwest Louisiana.
    This brief period of prosperity follows hundreds of years of unjust 
treatment by outsiders, which resulted in abject poverty and hardship 
within the tribe. This is why it is particularly painful that, after 
all those terrible years, our tribe again has been preyed upon by 
outsiders. But on this occasion, at least we are in good company. 
Certainly within the modern era, no victimization of Native Americans 
has received so much attention no doubt because the underlying scandal 
has touched so many influential people.
    Nevertheless, we deeply appreciate the actions of this committee in 
bringing this matter to light.

II. Our Tribal Government and the Political Environment that Was 
    Manipulated by the Lobbyists

    Our tribe is governed by an elected council consisting of a 
chairman and four council members. None of the current council members 
were in office when Mr. Abramoff was hired in early 2001. Councilman 
Sickey took office in 2003. He had no direct contact with either Mr. 
Abramoff or Mr. Scanlon and very little knowledge of their activities. 
In fact he became a vocal spokesperson against them.
    Council Members LaBuff, Verlis Williams, and I took office this 
past June. One of our council seats is currently vacant.
    This wholesale change in leadership was in large part a result of 
the mess created by Mr. Abramoff and Mr. Scanlon.
    While Indian Country has seen many con-men throughout history, few, 
if any, were as skilled as Mr. Abramoff and Mr. Scanlon at creating and 
then preying on insecurities. They preyed upon our political 
insecurities, they preyed upon our economic insecurities, and they 
preyed upon our insecurities about each other.
    Our political system is no more turbulent than any other. We, too, 
have cycles in leadership and influence, and it occasionally turns 
partisan. The lobbyists came to our tribe during one of these 
transition periods. And they viewed this as an opportunity for 
exploitation.
    To any decent person, vulnerability in others provides an 
opportunity to help. But to con-men, like Mr. Abramoff and Mr. Scanlon, 
our vulnerability simply provided an opportunity to steal. And they hit 
the jackpot with us: A Native American tribe with a fairly new casino, 
in the midst of a political transition, and naive to the underworld of 
governmental affairs.
    They inserted themselves into our internal tribal politics, 
excluded and attempted to discredit those who questioned or opposed 
them, and deliberately created paranoia on both sides by exaggerating 
threats from inside and outside the tribe.
    They exaggerated political threats and they exaggerated economic 
threats. Then, they exaggerated their ability to deal with these 
exaggerated threats. And in the midst of this, they incited political 
upheaval to provide cover for their scheme to steal millions of 
dollars.
    We are pleased to report that the political storm within the tribe 
has calmed. And we are taking steps to recover the money that was 
stolen to correct our system of checks and balances to ensure that this 
will never happen again.

III. The Harm to Our Tribe

    It is important to understand that the harm caused by Mr. Abramoff 
and Mr. Scanlon is much greater than the money they stole. Even though 
this amount is shockingly large, the scar of victimization runs even 
deeper, particularly because it has touched our leadership.
    Moreover, the misconduct of Mr. Abramoff and Mr. Scanlon has harmed 
all Native Americans in a way that deserves the particular attention of 
this committee. The lobbyists actions have created a perception that 
there is something improper about officials working closely with Indian 
tribes.
    This stereotype threatens to chill tribal communications with 
officials who can profoundly influence the well-being of all tribes.
    Even worse, it unfairly shifts the unfairly from where it belongs 
to the victims. Jack Abramoff is not a product of Indian Country. On 
the contrary, he is the golden boy gone bad of the American political 
system. Our tribe and others were victimized when we attempted to fit 
into the American political system and we were led to believe that Mr. 
Abramoff was the gatekeeper.
    We have begun the process of repairing the political damage to our 
tribe's reputation. We have met with several of our State and Federal 
officials, and they seem genuinely committed to providing our tribe 
with the same access and the same channels of communication open to all 
individuals, businesses, and special interest group--nothing more, 
nothing less, and without favors or contributions. That is the way the 
system should work, and that is certainly the way we would like to 
participate.
    There have been a lot of adjectives used to describe Mr. Abramoff 
and Mr. Scanlon; greedy and corrupt come to mind. But those are common 
terms, often used to describe people who forfeit judgment for money. 
Abramoff's and Scanlon's actions were hardly common. They set a new 
high water mark for greed and corruption.
    I have read that Mr. Abramoff considers himself a religious man. If 
that is the case, then I do not understand, the basis of his faith, and 
it is certainly different than ours. Most religions promote compassion 
and concern for others, and it is clear that Mr. Abramoff and Mr. 
Scanlon had no concern whatsoever for the welfare of our people.
    Your committee has done a great service for all Americans by 
exposing this sad affair. There are lessons here for everyone.
    I am grateful for the opportunity to address this committee on 
behalf of the Coushatta Tribe of Louisiana. Council member David Sickey 
will now provide a brief overview of our factual findings.
                                 ______
                                 

  Prepared Statement of David Sickey, councilman, Coushatta Tribe of 
                               Louisiana

    Good morning Chairman McCain, Senator Dorgan and distinguished 
members of this committee.
    I am David Sickey, a member of the tribal council of the Coushatta 
Tribe of Louisiana. I took office in June 2003.
    As Chairman Sickey has noted, I was not in office when Mr. Abramoff 
and Mr. Scanlon were hired, and I did not participate in the decisions 
by the tribal council to authorize their projects or pay them. I would 
respectfully submit that it will not aid the committee's efforts for me 
to speculate about the events at issue. My brief comments today will 
therefore be limited to certain facts established by the documents we 
have seen. As you are aware, many of the documents reviewed by this 
committee were not available to us. However, my observations today are 
also based on information provided by your staff, for which we are 
grateful.
    My intention is to provide a broad overview of the environment in 
which this fraud was committed. As your investigation must have 
revealed, while the scheme of Mr. Abramoff and Mr. Scanlon was 
reprehensible, it was also very clever and well-timed. Like Chairman 
Sickey, I should note that our tribe is currently involved in 
litigation about these lobbying activities, so I am limited in what I 
can say today.
    I have attempted to organize my observations in chronological 
order, because the way that this scheme evolved over time was critical 
to its success.

1. The First Six Months

    Mr. Abramoff was hired in March 2001. The tribe entered a contract 
with his firm, Greenberg Traurig, to provide lobbying services related 
to our tribe's compact negotiation and important regional gaming 
issues. According to the contract, Greenberg Traurig was to receive 
$125,000 per month plus reasonable expenses. The contract did not 
mention Mr. Scanlon nor any of the entities that he used to charge the 
tribe, an additional $30 million.
    During the first 6 months or so of the lobbyists' employment, they 
appeared to deliver on their promises, and so the lobbying costs 
appeared justified. During that initial period, the tribe paid roughly 
$3.5 million for assistance with our tribal compact, which was 
successfully negotiated, and to achieve several legislative objectives. 
I say that they appeared to deliver on their promises because it is 
difficult to assess how much impact the lobbyists actually had in 
accomplishing these tribal objectives. Of course, they took credit for 
everything.
    If it had ended at that point, around September 2001, then this 
would be nothing more than another story about high priced lobbyists 
taking credit for results that they may or may not have influenced. 
But, it did not stop there. They leveraged their initial success as a 
platform for fraud, and by the spring of 2002 had extracted another $17 
million from our tribe. By the time it was over in 2004, the tribe had 
spent approximately $36 million. Ironically, as the scheme progressed 
and the bills and rhetoric increased, the lobbyists' actual work for 
the tribe clearly decreased.

2. The Texas Threat

    On October 5, 2001, the tribe paid $870,000 to Mr. Scanlon's 
company, Capital Campaign Strategies, to create a ``Grassroots 
Political Structure'' in Texas. Mr. Abramoff and Mr. Scanlon were 
insistent that Texas was on the verge of legalizing gambling, and that 
this would devastate the Coushatta casino. The majority of our casino 
customers travel from Texas particularly the Houston area--and we have 
long understood that legalized gambling in Texas would erode our 
customer base and our casino revenues. Recognizing this potential 
threat and our fear of the consequences, the lobbyists claimed to have 
critical influence with the Texas officials who could defeat Texas 
gambling.
    This appears to be the starting point for their most egregious 
exaggerations and fabrications. This also appears to be the timeframe 
when they committed to gouging the tribe for as much money as they 
could, and to say or do anything that was necessary to prolong the 
payout.

3. $1 Million Payment Funneled to One of Abramoff's Causes

    On October 30, 2001, the tribe paid $3.17 million for the 
``Louisiana Program.'' This payment marks a high point in the 
lobbyists' creative billing. They split the bill by requesting that 
$2.17 million be sent to Capitol Campaign Strategies and $1 million to 
Greenberg Traurig. According to information shared by the staff, the $1 
million payment to Greenberg Traurig was not for any services provided 
by the law firm. Instead, this $1 million payment was used to ``pump'' 
the firm's reported lobbying revenues, thereby maintaining Greenberg 
Traurig's public status as one of the ``top ten'' providers of legal 
and lobbying services to Native American tribes. E-mails involving Mr. 
Abramoff, Mr. Scanlon, and others at Greenberg Traurig reveal that this 
$1 million payment was funneled through the firm and then used to 
finance one of Mr. Abramoff's favorite causes.
    The suspect nature and purpose of this payment structure is 
reflected in an e-mail from Mr. Scanlon to the tribe's former attorney, 
dated October 25, 2001, where he writes:

    ``We broke this into two invoices--one to be paid to Greenberg 
Traurig for 1m, and one paid to Capitol Campaign Strategies--GT's 
public affairs entity for the balance. We usually just invoice you 
through Capitol Campaign Strategies so the Lawyers at the firm rest 
easy while we are out burning the country side. In this instance 
however we plan to do some things through the law firm umbrella due to 
their highly sensitive nature and confidentiality reasons. I hate 
hiding behind lawyers--but we are going to do some crazy stuff on this 
one--so I guess it's ok.''

    Mr. Abramoff, who was a partner at Greenberg Traurig, directed this 
creative billing arrangement. In my personal view, this payment reveals 
the extent of Mr. Abramoff's shamelessness. Not only was he stealing 
the tribe's money, but he was using the theft to improve his 
professional reputation and the reputation of the firm.

4. Hyping the Texas Threat

    In a memorandum dated November 6, 2001, Mr. Scanlon reports that he 
had just returned from Texas, and states:

    ``We believe now that the Alabama Coushatta will open soon, if we 
do not intercede. This will likely be a small facility and not the 
class III facility the council is worried about, but we believe you 
should shut it down regardless.''

    This exemplifies the lobbyists' strategy of identifying an 
exaggerated threat to the tribe's casino revenues, as does the 
following assertion in a report from Mr. Scanlon to the tribe dated 
December 21, 2001:

    ``Despite our best efforts, the voting public in Texas remains VERY 
pro-gaming. The State economy is lagging, and with the Enron and 
Continental Airlines debacles hitting the Houston area back to back, 
they are desperate for revenue. As we said when we came to you with the 
original Texas, proposal, things are really bad over there. We have 
never before seen such a pro-gaming atmosphere in Texas, or anywhere 
else in the country, in our collective political careers, and although 
we have it contained for the time being, this environment is a very 
serious threat to the Grand Casino's future.''

5. Threats of Infiltration

    According to a memorandum from Mr. Scanlon dated January 3, 2002, 
the company that owned one of our competitors was ``well known for 
their ability to infiltrate the electorates of Indian tribes and this 
will undoubtedly happen there, if they get a foothold in your region.'' 
After hammering this point and others, Mr. Scanlon states:
    ``We have identified a strategy to deal with this, and we would 
like to propose this strategy and request a budget for it. Both the 
strategy and the budget are somewhat large. However, we cannot stress 
the importance of eliminating this concern. It is a threat to not only 
the casino, but also the tribe itself.''

6. Increasing the Threat Level

    In a report to the tribe dated February 25, 2002, Mr. Scanlon 
stated, that:
    ``It may seem like the walls are closing in with three very real 
threats on your radar screen . . . . If we handle each threat 
individually, our chances of eliminating ALL OF THEM are very good. If 
we panic, the very existence of the grand casino could be 
jeopardized.''
    At about this time, perhaps sensing some opposition to their 
proposals and programs within the tribe--and likely planning to 
increase their fees and profits--Mr. Abramoff and Mr. Scanlon began 
excluding and attempting to discredit their political opposition on the 
Council and within the tribe.

7. Going on the Offensive to Counter Criticism

    In a report dated May 8, 2002, Mr. Scanlon states:
    ``Sorry for the confusion on the funding front, but as I mentioned 
I believe that your opponents will use such payments against you and 
until such time as we deal with that issue, it's best we lay low.''
    He then recommended that the former chairman send a letter to 
tribal members attempting to justify hiring what he refers to as the 
``Washington team.''
    He also spoke negatively about another council member, and stated 
that ``we can't let [that person] run around banging on you and the 
chairman much longer or it will take hold.''
    And he recommended sending a letter to tribal members accusing the 
council member of doing something wrong to ``put the focus back on the 
people who deserve it.''

8. Lying Low to Avoid Exposure

    On October 31, 2002, the tribal CFO sent an e-mail to Mr. Abramoff 
stating that tribal auditors were requesting confirmation that the 
tribe had paid a total of $18,559,700 for ``demographic surveys and 
studies and other professional campaign consulting fees,'' and that 
there were ``no contracts in place with Capitol Campaign Strategies and 
the American International Center.''
    Mr. Abramoff forwarded the e-mail to Mr. Scanlon, asking ``what 
should I say, especially about the last part (the request concerning no 
contracts)?''
    In response to several frantic comments from Mr. Abramoff, Mr. 
Scanlon states ``f--ing weird, really f--ing weird--I hope that this is 
standard operating procedure.'' He then recommends that Mr. Abramoff 
talk to the tribe's vice chairman before writing anything.
    There was never a formal reply. The confirmation requested by the 
auditors was not provided. Instead, a decision apparently was made to 
lay low until the storm passed.
    There is no doubt that, by this point, the lobbyists knew that 
questions were being raised about their fees. As is clear from 
subsequent events, they obviously did not care. Apparently, they felt 
confident that even this type of blatant misconduct was fair game in 
the world of big time lobbying.

9. Back in Business and Full Steam Ahead

    In a report date January 21, 2003, Mr. Scanlon stated:
    ``As we outlined in our overall strategy, this year's political 
circumstances, if not addressed correctly, will literally cost the 
tribe hundreds of millions of dollars.''
    He asked for a budget of $9.3 million on the bottom end and $11.3 
million the top end,'' and added that ``when you look at the fact that 
the tribe stands to lose several hundreds of millions of dollars, the 
program costs are well worth the risk.''
    In this report, Mr. Scanlon also proposes a way to dodge concerns 
within the tribe about the lobbying fees by routing money through 
different entities, He wrote:
    ``We have attached invoices that direct the funds to several 
different entities that will play different roles in this campaign 
along with a letter from me/CCS informing the tribe that I will no 
longer be providing the political services to the tribe as I have in 
the past.''
    But, in the next paragraph, he makes it clear that this was all a 
shell game, when he states:
    ``We want to assure you that you will receive the same level of 
service we have provided in the past. We understand that what you are 
paying for is Jack and myself and we will deliver the same way we have 
in the past.
    That said, the entities we are using will technically execute 
operations of the campaign or will contract with other companies to 
cover costs associated with the campaign--with Jack and I doing the 
work. In other words, the tribe will be invoiced by an entity and once 
funded that entity will in turn hire firms such as CCS or (Jack and I 
for example) to execute the program.''
    He also enclosed a bill from Greenberg Traurig for $2 million, and 
stated:
    ``GT will simply serve as another funding entity to ease budgetary 
issues. GT will turn that funding around to cover costs associated with 
the campaign.''
    In total, the tribe routed $11.3 million through the following maze 
of entities:
    $2 million to Greenberg Traurig.
    $5 million to Scanlon Gould Public Affairs.
    $2.3 million to American International Center
    $2 million to American Research & Analysis.
    And this does not include the $125,000 per month the tribe was 
paying Greenberg Traurig.

Closing Comment

    In conclusion, as Chairman Sickey and I have both noted, since we 
were not involved in any direct dealings with Mr. Abramoff or Mr. 
Scanlon, there is very little that we can say here today about the 
events at issue that would not involve speculation and conjecture. 
Therefore, until our own investigation is complete, both of us are very 
reluctant to comment further on the lobbying activities in question. 
Moreover, any speculative comments on our part could jeopardize our 
legal efforts to recover the tribe's money.
    But, what we can state with firm conviction based on our own review 
and the findings of this committee is that our tribe was defrauded out 
of most of the money we paid. And no matter who the lobbyists used or 
who they try to blame, this fraud was orchestrated and carried out by 
Jack Abramoff and Michael Scanlon and--from the tribe's perspective--
the fraud was orchestrated under the banner of Greenberg Traurig.
    Your committee has performed an important service by exposing this 
fraud, and I am grateful for the opportunity to address the committee 
today. As Chairman Sickey noted, there are lessons in this sad episode 
for everyone.

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