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Two Former Aides to DeLay Paved Way for Lobbyist’s Deal

Times Staff Writers

Two former top aides of House Majority Leader Tom DeLay’s brokered a political deal here five years ago that helped land island government contracts worth $1.6 million for a Washington lobbyist now the target of a federal corruption probe.

Using promises of U.S. tax dollars as bartering chips, Edwin A. Buckham and Michael Scanlon traveled to these remote Pacific islands in late 1999 to convince two local legislators to switch their votes for speaker of the territory’s 18-member House of Representatives. They succeeded.

Once in office, the new speaker pressed the governor of the Commonwealth of the Northern Mariana Islands to reinstate an expired lobbying pact with Jack Abramoff, now under grand jury and congressional investigation.

Within months of the visit, Abramoff’s law firm had a contract paying $100,000 a month from the Marianas government. Also, the island districts of the legislators who switched sides soon won federal budget benefits from Congress, apparently supported by DeLay.

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Although Abramoff collected most of his fees from the island government, his lobbying efforts most benefited owners and operators of apparel manufacturing firms using the territory’s cheap labor.

The lawyer-lobbyist, whose fees then were reportedly as high as $500 an hour, helped beat back congressional efforts to raise the minimum wage here to $5.15 an hour.

New details of the Buckham-Scanlon overseas mission that benefited Abramoff, and the trade of political favors nearly half the globe from Capitol Hill, come from interviews, government documents and e-mails reviewed by The Times.

The latest disclosures coming out of the Marianas may add fuel to the year-long political scandal swirling around Abramoff and his ties to congressional leaders, especially DeLay. The Republican majority leader lately has sought to distance himself from the besieged lobbyist he once called a close friend.

DeLay has been stung by charges that Abramoff paid some of the congressman’s expenses on foreign travel, including a golf junket to Scotland, in potential violation of House ethics rules. DeLay said he thought expenses were properly paid by a think tank.

Abramoff’s prominent lobbying career crashed last year after the Senate Committee on Indian Affairs accused him and Scanlon of ripping off six Indian tribes who had paid them $66 million. Both men took the 5th Amendment at the hearings. A federal grand jury is now investigating.

“This is starting to smell more like criminal activity -- trading congressional appropriations for votes,” said U.S. Rep. George Miller (D-Martinez). A longtime critic of Abramoff and DeLay’s activities in the Pacific island territories, Miller renewed his recent call for an investigation of Abramoff by the House Resources Committee that oversees the region.

DeLay declined to respond to a series of detailed questions for this report but his spokesman issued a statement defending the congressman’s actions, which he said were aimed at improving the standard of living for U.S. citizens living in the territory.

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In December 1999, when they traveled to Saipan, about a 50 minute plane ride north of Guam, Scanlon was in his last days as communications director for DeLay and also was listed as a staff aide to DeLay on the House Appropriations Committee. A spokesman for DeLay said Scanlon was on unpaid leave at the time of the trip, but records show he did not leave the payroll until January 2000.

Buckham, a former chief of staff for the Texas Republican, had opened his own lobbying firm, Alexander Strategy Group. At the time, his firm collected fees from DeLay’s main political fund and then paid a salary to DeLay’s wife, Christine, for her work for the fund.

Buckham declined to respond to detailed questions. Scanlon’s lawyer did not respond to similar questions. A spokesman for Abramoff also declined to answer questions.

The Northern Mariana Islands, a self-governing U.S. territory subject to acts of Congress, have proven to be a veritable treasure chest for Abramoff. His lobbying successes have been closely linked to his relationship with DeLay.

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Since 1995, Abramoff and two law firms where he was a partner collected more than $7.7 million from the commonwealth government, records show.

He lobbied to keep Washington from cracking down on the island’s garment industry where workers are paid $3.05 an hour, well below the federal minimum wage of $5.15, to work in what critics say are sweatshop conditions.

The workers, many brought in from China under less-restrictive immigration rules than in the U.S. and most of its territories, produce garments that are still stamped “Made in U.S.A.,” thanks, in part, to the efforts of Abramoff and DeLay.

DeLay helped lead the fight beginning in 1997 to keep Congress from enacting reforms opposed by Abramoff and his clients that would have required garment manufacturers to pay their workers the higher federal minimum wage.

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“Make no mistake about it, passage of that bill would kill jobs, growth and opportunity,” DeLay said in a statement he put in the Congressional Record in 1997.

In a June 1997 letter to the Marianas governor, Delay, then the majority whip, and Majority Leader Dick Armey promised to block any legislation to increase federal regulation on garment manufacturers, according to published accounts.

Three years later a bill that would have barred the use of “Made in USA” by the island’s apparel industry was never brought up for a House vote though it had 234 co-sponsors, more than a majority.

DeLay traveled to Saipan, the Marianas capital, with his family in 1998 on a trip arranged by Abramoff, who billed the island government for the time his firm spent setting up the trip, records show.

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Abramoff told island officials that DeLay was “our biggest supporter on Capitol Hill.”

In a statement issued this week a Delay spokesman said the legislation that the majority leader opposed “would have strangled the [Marianas’] burgeoning economy.” He also cited the island government’s commitment “to implement free-market reforms that would dramatically increase employment opportunities and living standards.”

Despite his success, however, Abramoff’s lobbying arrangement with the Northern Marianas government ended in late 1998, according to official lobbying reports, because of a change in administrations and commonwealth fiscal problems. His government work had been suspended for more than a year when DeLay’s former aides came to the islands before Christmas 1999.

One of Abramoff’s strong local allies and supporters was Benigno Fitial, an underdog contender for speaker of the House. The speakership vote was set for early 2000.

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In an interview, Fitial called Buckham a longtime friend and said the former DeLay chief of staff offered to help and bring along Scanlon. “They supported me and wanted me to be speaker,” Fitial said.

He said he met with the Washington visitors after they arrived, and targeted two key members of the Legislature for persuasion efforts -- Alejo Mendiola and Norman S. Palacios.

Both said in separate interviews that Buckham and Scanlon promised to help get money for needed projects in their impoverished island districts. For Palacios, it was assistance repairing a dilapidated, 50-year-old breakwater on the island of Tinian. Palacios agreed to switch and backed Fitial.

“They said they would lobby for money for the breakwater,” he said of his meeting with Scanlon and Buckham. Asked why he, a longtime Democrat would switch support to Fitial, the head of the rival Covenant Party, Palacios said, “That’s politics.”

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In October 2000, Congress passed a federal appropriations bill for energy and water that included $150,000 for the first steps in the breakwater restoration project. DeLay, then a member of the House Appropriations Committee, was on the conference committee approving the allocation.

Mendiola, who no longer serves in the Marianas House, said he was promised federal assistance but denied any specific project was mentioned. Island records show efforts were underway to provide federal funding for an airport repaving project on Rota, the island Mendiola represented.

In May 2000, the Rota runway resurfacing project was among the airport projects that the House Appropriations Committee directed should be given priority for discretionary grants in the Federal Aviation Administration budget for 2001, according to the committee report on the bill. DeLay also was a member of the transportation subcommittee that prepared the report.

Both Palacios and Mendiola said they were aware of Scanlon’s and Buckham’s ties to DeLay.

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“They worked for him,” Mendiola said.

Fitial denied the federal budget benefits were tied to his speakership vote.

“No! No! No! There was no -- I give you something, you give me something,” Fitial said.

After the visit of Buckham and Scanlon, Fitial took several steps to pressure the island government to renew and extend contracts with Abramoff’s law firm.

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He sent e-mails to top government officials warning of dire consequences if Abramoff was not awarded a new contract. In an e-mail to a top aide of then-Gov. Pedro P. Tenorio on June 30, 2000, Fitial wrote:

“Please urge Teno to execute the agreement as we will continue to encounter problems ... if the contract is not executed. We need P & G [Abramoff’s law firm] to help save our economy.... Please help!!”

The Fitial-led House also passed two resolutions urging the governor to hire a lobbyist, including a July 26, 2000, resolution calling for selection of Abramoff’s firm.

A few days later, Tenorio relented and hired the firm for $100,000 a month.

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In 2001, Fitial again went to bat for Abramoff, pressing to assure that the lobbyist’s contracts were extended. He supported a resolution saying that the Sept. 11 terrorist attacks “have created an urgent need for the continued services” of Abramoff’s firm. Palacios was a sponsor of that resolution.

Abramoff’s billing records, recently made public by the Marianas government, show how the lobbyist used the islands to woo Washington friends and then used those Washington friends to woo his island clients.

For example, the lobbyist and his law firm routinely arranged for congressional junkets to the islands, despite ethics rules barring such practices. Travel costs often were advanced by the firm or charged to Abramoff’s personal credit card, including expenses for as much as $67,466, records showed.

He expressed concern for ethics rules in one e-mail urging Mariana officials to speed reimbursement of thousands of dollars to his firm. Abramoff warned that the House ethics committee was asking questions.

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The billing records also provide a rare glimpse behind the scenes of Abramoff’s self-promotion to impress his lobbying clients.

In one 2001 memo, Abramoff bragged to Marianas officials about an unnamed top U.S. Department of Justice official who was the lobbyist’s guest at his box for a Washington Redskin game.

Abramoff said the official mentioned a secret internal document that might jeopardize the Marianas’ cherished immigration exemptions. He said there was concern in some quarters that island immigration rules, favoring the garment industry, could be used by terrorists.

“They [Department of Justice officials] have been spending a week or so telling everyone who will listen that the [Marianas], if it is not taken over, will be a major entry point for terrorists. This, of course, is patently ridiculous,” Abramoff wrote on Oct. 1, 2001.

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The lobbyist turned that threat into an opportunity to demonstrate his potential value, saying he could help thwart such efforts and would be seeing the attorney general in a week.

“It will require some major action from the Hill and a press attack to get this back in the bottle,” Abramoff wrote.

The Abramoff memo prompted denials from current and former Justice Department officials.

David Ayres, who was chief of staff to then Atty. Gen. John Ashcroft, acknowledged attending the Redskin game “at the invitation of two longtime friends and former colleagues” but denied there was any conversation about a classified memo.

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He said “a review of Justice Department records indicates that Mr. Abramoff never met with the attorney general or me during our services there.”

Justice Department spokesman Mark Corallo said that Ashcroft and Ayres never met with Abramoff and attributed the references in the memo to “a lot of bluster to impress a client.”

The Oct. 1, 2001, memo was written as Abramoff’s final contract with the islands was winding down. He warned that the territory was in jeopardy.

“I wish the situation was not as critical as it is, but unfortunately our enemies have not gone away, just been beaten back,” he concluded.

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In a Jan. 4, 2001, letter seeking a renewal of his contract, Abramoff bragged of bringing the territory “back from the brink of disaster.... It also allowed us to acquire some very powerful allies such as [then] Majority Whip Tom DeLay.”

At one time, when his pitch for a renewed contract in 2001 appeared to be failing, Abramoff sent yet another e-mail warning to island officials complaining that he was in trouble with his law partners for providing services without getting paid.

“They were not pleased that the work we did in January has to be written off and feel we might be in violation of the LDA [Lobbyist Disclosure Act]. Need you guys to get me this contract ASAP,” Abramoff wrote Feb. 5, 2001.

Though the contract was renewed shortly after that e-mail, the reprieve was temporary.

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Abramoff lost his Marianas contract in early 2002 when Juan N. Babauta took office as governor, having beaten several candidates including Fitial, the candidate of Abramoff and Delay. Abramoff donated $5,000 to Fitial’s campaign, records show.

Despite congressional defeat of the wage and immigration legislation fought by Abramoff, the Marianas apparel industry has suffered another setback with elimination of tariffs on Chinese-made goods. Several Saipan factories have closed and moved to China where labor costs are even less expensive.

But Fitial, still in the speaker post that DeLay’s aides helped him win, has not given up. He wants Congress to make it easier for island garment manufacturers to satisfy requirements for claiming it was “Made in USA” -- reducing the locally produced content from 50% to 30%.

“We don’t have Jack [Abramoff],” Fitial said, blaming what he called unfair attacks on the lobbyist.

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“We need the help of the U.S. Congress. Tom DeLay, he’s the one who can help us,” Fitial said.

Roche reported from the Mariana Islands. Neubauer reported from Washington. Times researcher Mark Madden in Washington also contributed to this report.


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