Jack Abramoff: A Man of Many Burdens
Back in his glory days, the now-beleaguered former lobbyist Jack Abramoff not only made money, he did it gleefully.
"Da man! You iz da man!" he e-mailed his partner, Michael Scanlon, after a successful deal early in 2002. "Do you hear me?! You da man!! How much $$ coming tomorrow? Did we get some more $$ in?"
But as time went on, the many commitments Abramoff had made -- pledging millions to various interests and causes at home and abroad -- put competing demands on his store of cash. That story, too, is told in the trove of e-mails to be found at the Senate Indian Affairs Committee Web site. They're labeled "exhibits released to the public as part of the oversight hearing on lobbying practices."
Scanlon has since entered a plea agreement with federal prosecutors who are still probing Abramoff. In that agreement, Scanlon makes clear that their partnership ran on kickbacks.
As a registered lobbyist, Abramoff had to disclose the fees he charged to Indian tribes he represented. Scanlon did not. So when Abramoff told the tribes to hire Scanlon's consulting firm, Capitol Campaign Strategies (CCS), those fees were not disclosed. Now, from Scanlon's plea agreement, we know those fees were padded by millions of dollars, and evenly divided between Scanlon and Abramoff.
But while Scanlon was living the single life -- he paid off his student loans and bought a place on the Caribbean island of St. Bart's -- Abramoff was financing a far more intriguing array of activities. To be sure, he knew what he liked. His accountant, Gail Halpern, listed 2002 expenses of $134,000 for a BMW and $69,000 for a family vacation. But when Abramoff hit a financial crisis exactly three years ago, it was not because of such conspicuous personal consumption.
The details emerge in three simultaneous e-mail conversations, between Abramoff and Halpern, Scanlon, and a friend in Israel, Shmuel Ben Zvi.
In November 2002 -- just weeks after Halpern had told Abramoff he'd received $12,279,000 in income from CCS that year -- she sent up a warning. "Money is tight," she wrote, ticking off the problems in a long e-mail:
Abramoff was committed to putting another $200,000 into savings, and $10,000 into life insurance. Halpern told him he didn't have enough money for both trusts and Section 529 college-savings accounts for his five children. She recommended he just do the trusts.
Abramoff, an intense Orthodox Jew, also had founded the Eshkol Academy, a Columbia, Md., school where he could feel certain his children would have a good religious education and a good athletic program. Halpern said Eshkol's rent and salaries were $200,000 a month. The school's ice rink cost even more, as did various extra people on the payroll. One was David Lapin, a consultant whose brother, Rabbi Daniel Lapin, introduced Abramoff to Rep. Tom DeLay (R-TX).
At the same time, Abramoff was responsible for business ventures he had launched: a kosher deli, Stacks, and a fancy restaurant, Signatures. Signatures became famous first as a swanky hangout for lobbyists and pols, and then as a place where members of Congress could dine or hold fundraisers and, with luck, never get a bill. But start-up costs for a restaurant are staggering, as Halpern noted.
Among other economies, she recommended cutting off an Abramoff cousin who was receiving a monthly stipend of $2,000: She wrote, "Every small bit will help."
And then there was Shmuel Ben Zvi in Israel. He was running a paramilitary program for West Bank settlers. Abramoff was paying him $3,560 a month, plus what Halpern called "the spy equipment" -- night vision gear to spot Palestinian infiltrators.
So in spite of the huge influx of cash from the tribes, Abramoff was living beyond his means. Halpern looked at his main income source -- the CCS kickbacks -- and asked, "Do you expect any other CCS money b/t now and year end?"
Abramoff replied in all caps: "YES. PROBABLY SEVERAL MORE MILLION DOLLARS."
But he was apparently stunned by Halpern's report on his balance sheet: "HOW IS THIS POSSIBLE? I THOUGHT WE PUT $2.2M IN THERE RECENTLY, AND I HAD ANOTHER $500K SENT OVER A WEEK OR TWO AGO. WHAT'S GOING ON?"
Halpern answered later: "What 2.2M? That never happened." She added, "Even with another few million coming in the next few months we still need to tighten up."
A few days later, Abramoff exchanged e-mails with Ben Zvi. They addressed each other as "brother." Abramoff apparently referred only vaguely to his money problems, and Ben Zvi described his work:
"Last night one of their guys who was in the army when I did the workshop for the snipers in his unit said that they need the workshop badly (duh)…. So I am now writing out a program for patrolling, dealing with ambushes and containment and neutralization of terrorists both in (once they have infiltrated and are in or in between the houses) and out…. They had tears in their eyes from the excitement. There is so much that they have not had the opportunity to learn in the army. The army for the most part creates soldiers, not WARRIORS…."
Abramoff hit the Forward button and sent Ben Zvi's e-mail to Halpern with this note: "This is why it is so hard for me to cut off his funding. Who will fund this? He has no one else."
She hit Reply: "I actually had chills" reading it.
But the cash flow problem wasn't getting fixed. Halpern wrote to Abramoff on Dec. 17: "Subject: VERY IMPORTANT. PLS READ ASAP." His personal account was almost empty, she said: "YOU DO NOT HAVE ANY OTHER FUNDS UNTIL YOU GET SOME MORE CCS INCOME."
So Abramoff queried Scanlon, who answered that money was due in from one of their Indian tribes -- "should be before Friday." Abramoff replied, "I hope it lands. I need it badly."
Things loosened up for a while. Halpern wrote, quoting Abramoff's wife, Pam, "There is a reason why Hashem (God) gave Jack the reason to earn so much money."
But just two months later, Abramoff ran low again. On Feb. 19, 2003, he wrote to Scanlon: "Mike!!! I need the money TODAY! I AM BOUNCING CHECKS!!!"
Today, with Abramoff already indicted in a Florida case and under investigation in Washington, Eshkol, Stacks and Signatures have all closed. There's no word on Ben Zvi.
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