McCover-Up: Abramoff & the GOP Money Machine

The Crimes And Cover-Ups Of John McCain Part 3

Senator McCover-Up: Abramoff & the GOP Foreign Money Machine

By Mark G. Levey
Part 1, Part 2

I. Background: GOP Foreign Influence Peddling

Senator John McCain has proved to be Jack Abramoff’s best friend.

As Chairman of the Senate Indian Affairs Committee from 2005-2007, McCain was instrumental in suppressing evidence of Jack Abramoff’s role in directing illegal foreign payoffs to ranking members of the Republican Party.

McCain also did a big favor for Abramoff’s principal partners in crime, Grover Norquist and Ralph Reed , identified in the 2006 Committee report as key players in the Choctaw Indian and Marianas Island scandals. Not one of the principal witnesses in the matter were compelled to publicly testify by McCain's panel. The Committee also sequestered 99 percent of the documents it received, and these remain locked away, unseen by the public, in Senate files.

But there’s much more to the scandal than the Indian tribes rip-off McCain did disclose. The strand that runs through all the Abramoff-McCain relationship is foreign money – many, many millions – that Jack, Grover and Ralph funneled to GOP leaders from some of the world’s worst bad guys as part of a foreign influence-peddling operation.

Until Jack was finally indicted on August 11, 2005, he did some truly sinister deals with a long list of bad guys, from al-Qaeda bankers, to Russian intelligence officers, to a South Asian leader involved with rogue nuclear programs. McCain’s role was to limit the disclosures and the political damage that still threaten to destroy the GOP’s foreign funding base and the party’ hopes of ever regaining control in Washington.

This is Part 3 of a series, The Crimes and Coverups of John McCain, “Reformer” . See, Part 2, “McCain’s 30-Years of Service to Saudi Bank Raiders and Junk Bond Kings” , Link ; Pt 1, "McCain Had Key Role in Iraq WMD Deception", Link

II. Senator McCover-up: Why McCain Was Chosen by GOP Leadership to Oversee the Abramoff Investigation

By late 2005, it was becoming clear as the Justice Department started scratching the surface of Abamoff's influence-peddling network that its exposure was going to be politically explosive, and that it was going to blow up the Republicans. Details started coming out that showed the scandal was more sinister than the mere rip-off of Indian tribes by their Washington lobbyists. The Wall Street Journal, observed in article entitled, “Abramoff Scandal Threatens to Embroil GOP” :
“The Justice Department's probe is far broader than previously thought . . . its focus on prominent Republicans raises the risk of serious embarrassment to the party before next year's congressional elections.”

The Republican Congressional leadership recognized the problem. McCain was perfectly positioned to be the one to manage it. He had previously served as the Chairman of the Indian Affairs Committee, and most importantly, he had some credibility as a “maverick” reformer and a track record of highly publicized enmity with one of the primary suspects as a base to build on. McCain’s talent for damage-control was demonstrated early-on in his Senate career, when he survived his involvement in the Keating Savings & Loan scandal. (See, Pt. 2)

IV. McCain Covered Up the Malfeasances of his Fellow Senators

So, in 2005, “Straight-Talk” McCain was the natural pick as Chairman of Indian Affairs to replace the former Chair Ben Nighthorse Campbell after his sudden resignation. Campbell’s sudden retirement from the Senate has never really been explained. What we do know is what followed: Link

By the time McCain took control of the investigation started by Ben Nighthorse Campbell, who retired from the Senate in 2005, investigators knew that Ralph Reed had taken large amounts of Indian casino money in more than one state. What Reed and Abramoff did to one small tribe in Texas justified bringing Reed before the committee and putting him under oath, as was done with Abramoff. Perhaps Reed was never called because he was too powerful to confront, or because he was still considered a prospect for elected office. But he got a walk, and the Tigua tribe in El Paso never got a full accounting of what Reed and Abramoff had done to them.

The inquiry initially had a limited mandate. The committee stated it would look into the exploitation of several American Indian tribes by Abramoff and a close circle of GOP lobbyists, including Michael Scanlon, Ralph Reed, and Grover Norquist. Amazingly, none were ever put on the stand under oath and publicly questioned by the Senate Committee. Norquist and Reed were never issued subpoenas to appear. Abramoff and Scanlon refused to testify after being subpoenaed. Link Chairman McCain settled without much apparent fuss on hearing from a few underlings.

It was an obvious conflict of interest to allow McCain to head a body investigating Abramoff’s Indian lobbying, as he had headed the Committee in 1995-97, a time when Abramoff successfully lobbied on behalf of the Choctaw to exempt tribal wagering earnings from proposed federal taxes. Link

Also perplexing is McCain’s decision in March to hire former Senator Conrad Burns, who had received $137,000 from Abramoff, as his Montana campaign chairman. Burns lobbied the Interior Committee to disperse some $3 million that had been set aside for underprivileged Indian schools to an Abramoff client, a relatively affluent tribal body in Michigan.
Link /

Burns lost his seat in 2006, following publication of an article in The Wall Street Journal naming him, along with House Majority Leader Tom DeLay of Texas, Rep. Bob Ney (R., Ohio), Rep. John Doolittle (R., Calif.), as the subject of an ongoing Justice Department investigation into Abramoff’s lobbying activities. When allegations of his own wrongdoing spilled out, Burns was quoted as saying he wished Jack “had never been born.” Link

Oddly, such indiscretions and outbursts by his Senate colleagues don’t seem to bother the man who, after his close call with the Keating scandal, “reinvented himself as the scourge of special interests, a crusader for stricter ethics and campaign finance rules, a man of honor chastened by a brush with shame.” Link

That McCain’s mission was primarily to contain political fallout and minimize damage to the GOP was never in doubt. Prior to hearings in 2005, Roll Call reported McCain “assured his colleagues that his expanding investigation into the activities of a former GOP lobbyist and a half-dozen of his tribal casino clients is not directed at revealing ethically questionable actions by Members of Congress.” Paul Kane, Roll Call, “McCain Won’t Target Members” ( March 9, 2005), Link When a batch of Abramoff e-mails were released in March, 2006, McCain’s office redacted all the names of the members of Congress who had a “positive response” to Abramoff’s lobbying. Link

V. McCain’s Missing Documents

Indeed, the Abramoff scandal seems to have become “The Case of the Amazing Vanishing Corruption Investigation”, as Scott Horton recently described it in Harper’s. Link

While the Committee never heard from the principals in the case, what it did receive were their records. As Committee Chairman, John McCain made shrewd use of Senate rules to subpoena 750,000 pages of documents related to Abramoff’s lobbying -- literally tons of Abramoff scandal documents – billing records, memos, appointment calendars -- keeping 99.7 percent of them out of the record, and buried the rest in locked files in the basement of the Hart Senate Office Building . Link

This scandal eerily parallels an earlier betrayal of Native American peoples overseen by John McCain while he was Chairman of that Indian Affairs Committee. McCain has served on the Committee since 1987, and previously headed the committee between 1995 and 1997, a period when the Indian Lands Trust scandal was in full-bloom for the rip-off of billions of dollars worth of land leases supposedly held in trust by the federal government.

During that scandal, as well, McCain made many statements sympathetic to the plight of exploited native peoples, gaining his vaunted reputation as a “maverick” Republican, but nothing was really done for the victims by his committee. It was during this period that the tribes finally filed federal suit, Cobell v. Babbitt , and it was then learned that the Interior Department had destroyed 162 boxes of documents needed by plaintiffs to prove the cases in court. Link Further rounds of document destructions came to light, and the federal government has continued to resist settling the case. Link This appalling breech of trust led to a comment in The National Catholic Observer: Link

The century of stalling meant the money owed increased exponentially and no administration wants to pay the billions back on its watch. Thus, both the Clinton administration and the current Bush administration tried to derail the Indian trust fund lawsuit. A Jan. 26, 2004, editorial in The New York Times called the refusal to pay half a million Native Americans what is rightfully theirs “a continuing shame.” Compared to a scandal of comparable size such as Enron, the federal government’s egregious conduct has been hidden from the public.

Next, we see how McCain misused his power as Chairman to limit the scope of public hearings into how Abramoff, Norquist and a circle of GOP lobbyists and politicians sucked up millions from foreign sources linked to terrorism and espionage, violated lobbying laws to change U.S. policy, and then funneled huge wads of cash back to the Bush White House along with Republican Congressional campaign coffers.

VI. McCain’s Trusted Role in Protecting the GOP Foreign-Money Machine.

Abramoff and Norquist operated a foreign influence-peddling network that funneled money to the Bush White House and selected Republican Congressmen from the dirtiest of dirty money sources, including terrorist bankers and ex-KGB oil barons. According to Newsweek: Link
During the 2004 campaign, Abramoff was a top fund-raiser for the Bush re-election effort, raising more than $100,000 for the campaign. While exact figures on how much he raised for the campaign aren’t known, Abramoff told The New York Times in July 2003 - months before active fund-raising began - that he had already raised $120,000 for the Bush-Cheney campaign.

In addition, between 1999 and 2005, Abramoff, entities under his control, and his clients “gave a total of $4.4 million to more than 240 members of Congress.” Link The largest recipient of that largesse was Arizona Republican Congressman J.D. Hayworth, who received $101,620, before he was defeated in the 2006 election. Large amounts of cash, $217,000, even filtered down to two GOP Arizona State Senators. Link

Much of that money came out of GOP slush funds controlled by Abramoff and his confederates. What the public wasn’t told by McCain was that a large portion of the income taken in by Abramoff and others came from sources under investigation by U.S intelligence and counter-terrorism. McCain withheld from public release the vast bulk of subpoenaed lobbying records related to a period when Abramoff engaged in extremely serious improprieties on behalf of those non-Indian tribe clients, including:

In the months immediately after 9/11, Abramoff worked with Grover Norquist to lobby the Bush Administration on behalf of a Saudi banker, Saleh Abdullah Kamel, Chairman of Dallah al Baraka Group (DBG), accused of being a longtime financier of Osama bin Laden. Kamel, who is worth a reported $2.6 billion, was the primary owner of the Sudanese and Saudi banks used by bin Laden to build his al-Qaeda network after his 1991 expulsion from Saudi Arabia. As owner of Dallah Avco, Kamel employed Omar al-Bayoumi, who shepherded the Flight 77 hijackers immediately after their arrival in the U.S. Link ; reproduced at: Link ? The 373-page Senate Indian Affairs Committee Final Report mentions neither Kamel’s name nor Dallah al Baraka. (See, Link )

In 2002, Abramoff and Scanlon received a $1.2 million fee to set up a White House meeting between George W. Bush and the leader of Malaysia, Mahathir Mohamed, who was viewed as persona nongratis by some in the State Dept. for human rights abuses and his oft-repeated condemnations of Israeli treatment of the Palestinians. hv Mohamed’s visit, which was arranged with the help of Karl Rove, was also resisted by some in U.S. intelligence and law enforcement as Malaysia had not been fully cooperative in counter-terrorism operations against al-Qaeda, including its allegedly botched surveillance of the al-Qaeda summit in Kuala Lumpur in early January 2000, at which the 9/11 and USS Cole attacks were planned. Link ; c.f., Link Malaysia was also a hub of the nuclear proliferation network of A.Q. Khan. Link Western intelligence services linked a Malaysian holding company, Kaspudu Sendirian Berhad, which is owned by the Malaysian prime minister’s only son, Kamaluddin Abdullah, to Khan’s network. Time Magazine reported that Abdullah’s holding, Scomi Precision Engineering, fulfilled a $3.5 million contract to build components for 14 uranium enrichment centrifuges that ended up being shipped to Libya’s nuclear program. Link The 373-page Senate Indian Affairs Committee Final Report mentions neither Mohamed’s name nor makes reference to Rove’s involvement. (See, Link )

Abramoff and Scanlon set themselves up as intermediaries for deals involving Malaysian gas and oil interests in Sudan, where U.S. companies are legally banned from doing business. The Washington Post stated, “Another Abramoff financial vehicle was the nonprofit American International Center, a Rehoboth Beach, Del., ‘think tank’ set up by Scanlon, who staffed it with beach friends from his summer job as a lifeguard. The center became a means for Abramoff and Scanlon to take money from foreign clients that they did not want to officially represent. Some of the funds came from the government of Malaysia. Banks and oil companies there were making deals in Sudan, where U.S. companies were barred on human rights grounds. Sudan was among several oil-rich nations in Africa, Asia and the Middle East that Abramoff eyed as venues for lucrative energy deals. Abramoff told associates he wanted to become a go-to person for U.S. companies seeking to do business with oil-patch nations.” Link The 373-page Senate Indian Affairs Committee Final Report makes no mention of Abramoff’s lobbying on behalf of Malaysian interests in Sudan. (See, Link )

The fees paid Abramoff and Scanlon by Malaysia funneled through AIC were allegedly laundered through Edward Fuelner, President of the Heritage Foundation. A report issued on May 12, 2005 by Democrats.org stated that Fuelner had previously done business with Abramoff with Malaysian clients: “In August 2001, DeLay led a delegation to Malaysia where he attended informal meetings and a fancy dinner in his honor given by Prime Minister Mahathir Mohamad in Kuala Lumpur. Jack Abramoff attended the dinner thrown in DeLay's honor. Edwin Feulner was president of the Heritage foundation at the time of the trip. Feulner also went to Malaysia , saying that, "I sat by the pool while they played golf." Feulner worked for Belle Haven Consultants as a senior advisor. Official travel disclosure stated that the Heritage Foundation sponsored the travel. However, Time magazine reported that former Wyoming Senator Malcolm Wallop, a Heritage senior fellow who was on the trip, said Heritage did not pay for the trip and that Belle Haven Consultants, a for-profit, Hong Kong-based firm linked to the Malaysian government, played a key role. According to Wallop, "Heritage had nothing to do with it… Belle Haven did." Both DeLay's office and the Heritage Foundation insist Heritage paid for the trip. (Time, 4/25/05; Washington Post, 4/17/05; Member Travel Disclosure Form, 3/19/02]. “Link The 373-page Senate Indian Affairs Committee Final Report mentions neither Fuelner’s name, the Heritage Foundation, nor Belle Haven Consultants. (See, Link )

Also withheld by McCain were documents related to $3.4 million in fees received from executives of NaftaSib, a Russia energy company. According to The Washington Post, NaftaSib “has business ties with Russian security institutions.” Link Other sources specify that Abamoff and DeLay received that money from operatives working for the GRU (Russian military intelligence) as part of an influence operation. Link Abramoff worked from 1997-2005 with former Tom DeLay advisor Ed Buckham. About $60,000 was spent on a six-day 1997 Russian trip for Tom DeLay, Buckham, and Abramoff. In 1998, $1 million was sent to Buckham via his organization U.S. Family Network to "influence DeLay's vote in 1998 on legislation that helped make it possible for the IMF to bail out the faltering Russian economy." DeLay voted for the legislation. Link The 373-page Senate Indian Affairs Committee Final Report makes no reference to Abramoff’s Russian lobbying, Russian intelligence, or to NaftaSib. (See, Link )

Naftasib executives later assisted DeLay in obtaining sniper equipment and evading U.S. export license requirements for shipment to settlers groups on the West Bank. . Link A footnote in the report makes a brief reference to the diversion of funds from Indian tribes to purchase sniper equipment for export to Israeli settlers. The 373-page Senate Indian Affairs Committee Final Report makes no reference to Abramoff’s Russian lobbying nor to the role of NaftaSib in his efforts to evade U.S. arms export regulations. (See, Link )

McCain’s inquiry touched on issues that went far astray from a look into the exploitation of several American Indian tribes by Abramoff and a close circle of GOP lobbyists, including Robert Scanlon, Ralph Reed, and Grover Norquist. However, where the investigation unearthed other, more serious illegalities, these were simply skipped over, and omitted from the record.

About a year after it began its formal investigation, however, the Committee subpoenaed all of Jack Abramoff’s recent lobbying records, along with those of Norquist, Reed and Scanlon. The Committee staff received the electronic files from Jack’s former employers: the lobbying firm, Preston Gates, from 1995 to 2000, and Greenberg Traurig, LLP, a law firm with close GOP ties, where Abramoff worked from 2000 to 2004. These firms were tied to the scandal and McCain held their fate in his hands. When printed out, these amounted to an estimated 750,000 pages. McCain’s Committee would end up releasing only a small faction of these, a mere 4800 pages. Dozens of boxes of documents remain sequestered in Committee files pursuant to arrangements that McCain and the GOP majority imposed on the committee. See, page 6 of the Final Report; also, see, Dennis Greenia (“dengre”), Daily Kos, Jack Abramoff: John McCain’s other Lobbyist problem, ( Feb 22, 2008), Link

VII. Conclusion

By withholding most of the evidence received in response to his broad subpoena, McCain managed to cover-up the larger picture of the political work Abramoff did for his clients, some of which was clearly contrary to the U.S. national interest. This has thwarted the efforts of investigators outside McCain’s committee to independently examine the bulk of the record, which remains hidden.

However, it is completely consistent with McCain’s role as a career cover-up specialist for the foreign influence-peddling and financial frauds of the Republican Party.

2008. Mark G. Levey.
Reprinted with the permission of the author.

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