5 nonprofits sold clout to Abramoff, report says
Published 9:00 pm Thursday, October 12, 2006
WASHINGTON – Five conservative nonprofits, including one run by prominent Republican Grover Norquist, “perpetrated a fraud” on taxpayers by selling their clout to lobbyist Jack Abramoff, Senate investigators said in a report issued Thursday.
The report includes previously unreleased e-mails between the now-disgraced lobbyist and officers of the nonprofits, showing that Abramoff routed money from his clients to the groups. In exchange the groups, among other things, produced ostensibly independent newspaper op-ed columns or news releases that favored the clients’ positions.
Officers of the groups “were generally available to carry out Mr. Abramoff’s requests for help with his clients in exchange for cash payments,” said the report, issued by the Democratic members of the Senate Finance Committee after a one-year investigation.
Abramoff has pleaded guilty to fraud and conspiracy and is cooperating with federal investigators in the ongoing influence-peddling probe that has resulted in seven guilty pleas and convictions.
The report states that the groups probably violated their tax-exempt status “by laundering payments and then disbursing funds at Mr. Abramoff’s direction; taking payments in exchange or writing newspaper columns or press releases that put Mr. Abramoff’s clients in a favorable light; introducing Mr. Abramoff’s clients to government officials in exchange for payment; and agreeing to act as a front organization for congressional trips paid for by Mr. Abramoff’s clients.”
The groups are Norquist’s Americans for Tax Reform; the Council of Republicans for Environmental Advocacy, which was co-founded by Norquist and Gale Norton before she became Secretary of the Interior; Citizens Against Government Waste; the National Center for Public Policy Research, which was a spinoff of the Heritage Foundation; and Toward Tradition, a religious group founded by Abramoff friend Rabbi Daniel Lapin.
Lapin, whose group was at the center of some of the most infamous lobbying schemes with Abramoff, told the committee that he was shutting down the Seattle-based nonprofit because of negative news coverage related to Abramoff.
E-mails released by the committee show that Abramoff routinely used the groups, often several of them for a single project, for his lobbying activities. Often with the knowledge of the groups’ leaders, Abramoff exploited the tax-exempt status and leveraged the stature of the organizations to build support among conservatives for legislation or government action sought by his corporate clients, including Microsoft Corp., mutual fund company DH2 Inc., PrimeMedia Inc.’s Channel One Network, and Brown-Forman, maker of Jack Daniels whiskey.
Norquist’s attorney told the Senate panel that as long as Americans for Tax Reform spends funds in keeping with its general purpose, “There is no ‘abuse’ of ATR’s tax status.”
Sen. Max Baucus, D-Mont., the ranking Democrat on the committee, said the Internal Revenue Service and the FBI should investigate the group. “These groups’ dealings with Jack Abramoff certainly violated the spirit, and perhaps the letter, of the laws that give charitable and social welfare organizations a break for the good work they’re supposed to do,” Baucus said in a statement.
Though the report was issued by Democrats on the Finance Committee, Chairman Charles Grassley, R-Iowa, endorsed its findings of wrongdoing by the nonprofits. An aide to Grassley said the senator did not co-author the report because he had hoped it would have included Democratic groups that he believes also breached their tax status.
The report contains new material about Norquist, as well as e-mails referred to the committee by Sen. John McCain, R-Ariz., who led a Senate investigation into Abramoff’s lobbying activities.
The Abramoff scandal has bruised the image of Norquist, a friend of Abramoff’s since their days in the College Republicans. Often consulted by White House senior political adviser Karl Rove, Norquist convenes a Wednesday morning meeting that for decades has been a touchstone strategy session for officials of conservative organizations, activists, lobbyists and Republican lawmakers.
Abramoff traded on Norquist’s cache, at one point referring to Norquist in an e-mail as a “hard-won asset” of his lobbying empire. In exchange for Norquist’s opposition to taxes on Brown-Forman products, he required a $50,000 donation to Americans for Tax Reform, according to an Abramoff e-mail.
“What is most important, however, is that this matter is kept discreet,” Abramoff wrote to a colleague at the Preston, Gates &Ellis law firm. “We do not want the opponents to think that we are trying to buy the taxpayer movement.”
The Senate report criticized “a troubling practice” by Americans for Tax Reform and other nonprofits of accepting tax-exempt donations from Abramoff’s clients to advocate for their issues – in op-eds, position statements and letters to members of Congress. Americans for Tax Reform’s advocacy “appears indistinguishable from lobbying undertaken by for-profit, taxable firms.”
The e-mails show that Abramoff and Norquist explicitly discussed client donations to Norquist’s group in exchange for Norquist’s support on issues.
Among those who agreed to donate money to Americans for Tax Reform to get Norquist to write an opinion piece was a mutual fund company, DH2 Inc., which wanted Norquist to endorse its position on legislation affecting the mutual fund industry.
In December 2003, Abramoff lobbying team associate Michael E. Williams wrote his boss about getting someone at Norquist’s group to shop an op-ed the lobbyists had written up on DH2’s issue. “Will you talk to Grover? If Grover signs, we can demand the $$$ from Rubin!” wrote Williams, referring to Robert Rubin, managing director of DH2.
Two days later Abramoff e-mailed Norquist about the op-ed, asking if he could “put you on as signatory for submission to the Washington Times.” Norquist agreed.
When Williams finalized the draft in early January, he informed his boss, saying: “I told Rubin he needs to round up some $$$ for ATR.”
Abramoff responded; “Get the money from Rubin in hand, and then we’ll call Grover.”
How much, asked Williams.
“50K,” wrote Abramoff.
On Feb. 10, 2004, Abramoff wrote Norquist: “I have sent over a $50K contribution from DH2 (the mutual fund client). Any sense as to where we are on the op-ed placement?”
Norquist wrote back: “The Wash Times told me they were running the piece … I will nudge again.”
Another tax-exempt advocacy group that was originally founded by Norquist and Norton, who resigned as interior secretary earlier this year, also appeared to have been used “as an extension of Mr. Abramoff’s lobbying organization,” the report said.
While many e-mails between Abramoff and the group’s president, Italia Federici, have already appeared in the press or in the Senate Indian Affairs Committee’s report on Abramoff’s activities, the finance committee report offered a few new wrinkles.
Abramoff directed Indian tribes he represented to donate a total of about $500,000 to the group, the Council for Republican Environmental Advocacy. The lobbyist told them the donation was the way to cultivate Norton, whose department oversees Indian tribes and tribal casinos. The new e-mails show that Abramoff told the tribes that they would be CREA’s “trustees,” and that Norton would “host” a series of CREA dinners. Interior Department documents obtained by The Post suggest that Norton was an invited guest at a CREA dinner, not a host.
