Everybody is Lying!

With Friends Like These...

A lunchtime chat with a lobbyist close to Tom DeLay suggests he may be headed for hotter water.

Jason Reed / Reuters And in this corner: DeLay remains a hero among the pro-life

By Michael Isikoff

Newsweek

April 18 issue - Jack Abramoff was somber, bitter and feeling betrayed. Once a Washington superlobbyist, Abramoff is now the target of a Justice Department criminal probe of allegations that he defrauded American Indian tribes of tens of millions of dollars in fees. As stories of his alleged excess dribble out—including the emergence of e-mails showing he derisively referred to his Native American clients as "monkeys" and "idiots"—some of Abramoff's old friends have abandoned him and treated him like a pariah. They claim they knew nothing of his questionable lobbying tactics. So last week, glumly sitting at his corner table at Signatures, the tony downtown restaurant he owns that remains his last redoubt, Abramoff lashed out in frustration.

"Everybody is lying," Abramoff told a former colleague. There are e-mails and records that will implicate others, he said. He was noticeably caustic about House Majority Leader Tom DeLay. For years, nobody on Washington's K Street corridor was closer to DeLay than Abramoff. They were an unlikely duo. DeLay, a conservative Christian, and Abramoff, an Orthodox Jew, traveled the world together and golfed the finest courses. Abramoff raised hundreds of thousands for DeLay's political causes and hired DeLay's aides, or kicked them business, when they left his employ. But now DeLay, too, has problems—in part because of overseas trips allegedly paid for by Abramoff's clients. In response, DeLay and his aides have said repeatedly they were unaware of Abramoff's behind-the-scenes financing role. "Those S.O.B.s," Abramoff said last week about DeLay and his staffers, according to his luncheon companion. "DeLay knew everything. He knew all the details."

It is a Washington melodrama that has played out many times before. When political figures get into trouble and their worlds collapse, they look to save themselves by fingering others higher in the food chain. Will Abramoff attempt to bargain with federal prosecutors by offering up DeLay—and does he really have the goods to do so? Abramoff has at times hinted he wanted to bargain—possibly by naming members who sought campaign cash for legislative favors, says a source familiar with the probe. But Abramoff's lawyer, Abbe Lowell, says, "There have been no negotiations with the Justice Department." Lowell cryptically acknowledges that Abramoff has been "disappointed" and "hurt" by the public statements of some former friends, but insists his client is currently "not upset or angry with Tom DeLay." Still, if Abramoff's lunch-table claims are true, he could hand DeLay his worst troubles yet.

DeLay has plenty to explain already. Last week, still more questions about the congressman's ethics emerged when The New York Times reported that his wife and daughter have collected $500,000 in fees from DeLay's political-action and campaign committees since 2001. DeLay and his aides mounted a fierce counterattack, pointing to numerous examples of family members of Democrats who did the same thing. Potentially more troublesome was a Washington Post story that chronicled a six-day "fact-finding" trip to Moscow in August 1997 that was circuitously financed by Naftasib, a Russian oil company. Among those on the trip—besides DeLay, his wife and four of his staff members—was Abramoff, who joined the party in Moscow and dined and golfed with DeLay.

House rules require members to accurately report who pays for their travel. In this case, DeLay reported the $64,000 trip as being sponsored by the National Center for Public Policy Research, a conservative think tank whose board members included Abramoff. The National Center said it did finance the trip. But its lawyer confirmed to NEWSWEEK that it had received a substantial contribution from a "white shoe" law firm—which sources identified as Cadwalader, Wickersham Taft—to cover the cost. Cadwalader had been retained by Naftasib and a closely related firm, registered in the Bahamas. The New York law firm in turn hired Abramoff's firm to do the heavy lifting in Washington. Both firms were paid handsomely for their work, collecting more than $440,000 in fees in 1997, primarily to set up meetings for their Russian oil clients with members of Congress and federal agencies.

Aides to DeLay insist he was in the dark about the Russian money behind the trip. But one conservative think-tank analyst, Michael Waller, was aggressively trying to warn congressional staffers about the Naftasib connection. Even after the trip, he continued to press them. The excursion was "bankrolled by influence peddlers tied to [the then] Prime Minister Viktor Chernomyrdin," Waller wrote in a bulletin faxed and e-mailed to congressional staffers shortly after the trip.

DeLay's spokesman, Dan Allen, said Naftasib's business interests were irrelevant to DeLay. "The main purpose of the trip was to talk about religious persecution," he said. But DeLay's many political enemies in Washington aren't likely to buy that explanation. And the one man who may know best so far isn't talking, except to those he invites to his restaurant for lunch.