Ex-DeLay aide pleads guilty in corruption case

Reuters

Ex-DeLay aide pleads guilty in corruption case

By Richard Cowan

WASHINGTON (Reuters) - An ex-aide to former House Majority Leader Tom DeLay and partner to a powerful Republican lobbyist pleaded guilty to conspiracy on Monday under a deal in which he is cooperating with prosecutors probing alleged influence-buying involving the lobbyist and lawmakers.

Michael Scanlon, 35, pleaded guilty to one count of conspiracy in defrauding Indian tribes of millions of dollars and lavishing gifts upon a member of the U.S. Congress.

He was ordered to pay $19.7 million in restitution to the tribes, could serve up to five years in prison and be fined $250,000 and must cooperate with prosecutors.

Scanlon left Delay's office and became a partner to wealthy lobbyist Jack Abramoff, who has been indicted for fraud in a separate case in Florida. The plea agreement has been seen as a major advance in prosecutors' efforts to investigate alleged influence-buying involving Abramoff, members of Congress and government agencies.

Scanlon's lawyer Plato Cacheris said Scanlon has more information to provide to the government, but in an exchange with reporters after the hearing refused to comment on whether more members of Congress might be implicated.

"Guilty, your honor," Scanlon, 35, told federal Judge Ellen Huvelle in formalizing the plea deal.

Abramoff has pleaded not guilty to federal charges in Florida that he defrauded lenders in a casino cruise line deal.

'LOBBYIST A'

According to prosecutors, from January 2000 through at least April 2004, Scanlon conspired with a lobbyist, only identified as "Lobbyist A," to "corruptly" give gifts to government officials. In return, the officials were to perform acts benefiting Scanlon and "Lobbyist A."

In court papers filed last week, Scanlon was alleged to have given a member of Congress and his staff a golf trip to Scotland, sports tickets and other entertainment, as well as meals and campaign contributions.

DeLay has faced questions about whether his expenses for the Scotland trip were paid by Abramoff, which would violate House rules.

The congressman was not named, but Rep. Bob Ney, a six-term Ohio Republican, recently said he had been subpoenaed as part of the U.S. Justice Department's investigation of Abramoff. Ney chairs the House Administration Committee, which oversees operations in the Capitol.

A spokesman for Ney said the congressman was cooperating with the federal investigation and has not been told he is the target of any probe.

Following the plea, Ney's office said the congressman was a victim of Scanlon's illegal activities.

"All that this plea agreement shows is that Mr. Scanlon had a deliberate, secret, and well-concealed scheme to defraud many people, and it appears, unfortunately, that Representative Ney was one of the many people defrauded," spokesman Brian Walsh said in a written statement.

Prosecutors say clients of Scanlon and the lobbyist were defrauded of millions of dollars as part of a conspiracy "to enrich themselves."

The charges say an Indian tribe in Mississippi paid Scanlon's company, Capital Campaign Strategies, about $14.8 million. According to the charges, Scanlon concealed the fact that "Lobbyist A" would get half of the profits from the tribe's payments to Scanlon.

There were similar arrangements for tribes in Louisiana, Michigan and Texas, according to the court documents.

The plea deal does not preclude other state and federal jurisdictions from pursuing Scanlon in other cases.

He is to return to the federal court in March to discuss the case's progress and possible timing for sentencing.

DeLay, a Texas Republican, resigned as majority leader in September after being indicted on conspiracy and money laundering charges in Texas related to a campaign finance investigation. DeLay has maintained his innocence and hopes to ultimately regain his powerful leadership post.