Sunday, April 09, 2006

Lobbying Cases Shine Spotlight on Family Ties

The New York Times
Lobbying Cases Shine Spotlight on Family Ties

WASHINGTON, April 8 — On Dec. 3, 2003, Aeneas Enterprises opened for business in the Woodland Hills neighborhood of Los Angeles, and judging by its bank records, the small consulting company with no listed telephone number was an instant success. Within a month, its records show, Aeneas had taken in $2.3 million from a single client.

Aeneas is under scrutiny by the Justice Department and Congressional investigators. Its founder, Robert Abramoff, a lawyer and sometime Hollywood movie producer, is the brother of Jack Abramoff, the Republican lobbyist at the center of a Washington influence-peddling scandal involving several members of Congress.

The company's records show that the $2.3 million was received from another consulting firm, GrassRoots Interactive of Silver Spring, Md., which was established by Jack Abramoff and where he directed some of his huge lobbying fees. Billing statements prepared by Aeneas do not show what service Robert Abramoff provided to warrant millions of dollars in payments from his brother's company.

Robert Abramoff did not return phone calls for comment. His apparent entanglement in his brother's business is an example of what investigators say is something remarkable about the criminal inquiry centered on Jack Abramoff and his Washington lobbying network.

To a surprising degree, the spouses and other family members of the investigation's central targets are being caught up in the inquiry, dealing with subpoenas and interviews with the Federal Bureau of Investigation, with at least the possibility that some of them could face civil or criminal charges themselves.

Lawyers with detailed knowledge of the Justice Department's investigation, who were granted anonymity because of rules barring public discussion of grand jury evidence, say that so many of the wives of lawmakers and lobbyists have become tied up in the investigation that F.B.I. agents have begun referring to them as "The Wives Club."

The lawyers said the scrutiny of the families would increase the leverage of prosecutors, since the targets might be willing to plead guilty and incriminate others to spare family members from being charged.

At least one of the wives, Julie Doolittle, who is married to Representative John T. Doolittle, Republican of California, has been subpoenaed in the investigation of Mr. Abramoff and questioned by the F.B.I. The June 2004 subpoena sought information about Mrs. Doolittle's marketing and events-planning work for Mr. Abramoff's lobbying firm and for his Washington restaurant, Signatures, which he later sold. Her lawyer, William L. Stauffer, said Mrs. Doolittle was contacted by the Justice Department again last year and asked for additional records.

Mr. Stauffer said that Mrs. Doolittle's consulting firm, Sierra Dominion Financial Solutions, has "complied fully with the subpoena."

Lisa Rudy, who is married to Tony Rudy, the former deputy chief of staff to Representative Tom DeLay, Republican of Texas, received $50,000 in consulting fees as a result of what her husband has acknowledged was a corrupt scheme with Mr. Abramoff to influence the workings of Mr. DeLay's office and promote the concerns of Mr. Abramoff's clients on Capitol Hill.

Mr. Rudy pleaded guilty to federal conspiracy charges last month. The Justice Department has said that Mrs. Rudy has agreed to cooperate with the investigation and will sign her own agreement with prosecutors. The Rudy family's lawyer, Laura A. Miller, did not return phone calls for comment.

Christine A. DeLay, Mr. DeLay's wife, received $115,000 in consulting fees from 1998 to 2002 from a lobbying firm set up by her husband's former chief of staff, Edwin A. Buckham, who is also under scrutiny by the Justice Department because of his lobbying contacts with Mr. DeLay's House office.

Although there is no suggestion of any criminal investigation focused on Mrs. DeLay, lawyers involved in the investigation say prosecutors have asked about the circumstances of her hiring by Mr. Buckham and whether it was an effort to influence Mr. DeLay, the former House majority leader. Mr. DeLay announced this week that he was resigning from Congress, saying he wanted to avoid an "ugly" re-election fight this fall that might focus on ethical issues.

A lawyer for the DeLays, Richard Cullen, said Mrs. DeLay had been employed by Mr. Buckham's firm, the Alexander Strategy Group, to gather information on the favorite charities of members of Congress. "Christine DeLay is a very talented woman with a keen political mind, and the project she was working on was one that had substance and added value to Alexander," he said.

The phone records of the couple's daughter, Dani DeLay Ferro, a political organizer for her father, were formally requested last year by a grand jury in Travis County, Tex., where Mr. DeLay is under indictment, accused of violating his home state's election laws.

Mr. Buckham's wife, Wendy, shared more than $1 million in consulting fees with her husband from the U.S. Family Network, a nonprofit group tied to Mr. DeLay. The group has drawn the scrutiny of law enforcement officials because so much of its income was directed to the Buckham family and appears to have come from Russian businessmen eager to court favor from Mr. DeLay. The Buckhams did not return phone calls seeking comment.

Jack Abramoff's wife, Pamela, was tied to at least some of her husband's activities that he has now acknowledged were crimes.

Although there is no suggestion by the Justice Department that Mrs. Abramoff was aware of her husband's criminal acts, she and her husband were the sole directors of a nonprofit group, the Capital Athletic Foundation, which Mr. Abramoff used illegally to channel millions of dollars from his clients to pet projects that had nothing to with the charity's supposed mission: sports programs for needy children.

Most of the charity's money was spent to underwrite a Jewish school in Maryland that was founded by Mr. Abramoff and where the couple educated two of their sons. The foundation also underwrote a 2002 trip to Britain for Representative Bob Ney, an Ohio Republican who is under investigation by the Justice Department for gifts he received from Mr. Abramoff. Mr. Ney has denied wrongdoing, saying he was duped by Mr. Abramoff about the financing of the $150,000 trip, which included rounds of golf at the fabled course at St. Andrews in Scotland.

There are also references to Mrs. Abramoff's activities in the indictment of a former senior White House budget official, David F. Safavian. The Justice Department has accused Mr. Safavian of lying about his ties to Mr. Abramoff, who sought Mr. Safavian's help in trying to buy government land for himself and clients. Mr. Abramoff has acknowledged that he sent his wife to inspect the properties, instructing her not to reveal her real name to government officials to avoid scrutiny.

A spokesman for Mr. Abramoff's defense team, Andrew Blum, had no comment when asked whether Mrs. Abramoff had obtained separate counsel in the investigation. Mr. Blum also would not comment on Mr. Abramoff's involvement with GrassRoots Interactive, the Maryland consulting firm, and the lobbyist's business ties to his brother Robert.

The Abramoff brothers have been doing business together for years. They co-wrote — and Jack Abramoff produced — a poorly reviewed 1989 action-adventure movie called "Red Scorpion."

State business records in California show that Robert Abramoff, who went on to produce other little-known films, is a director or registered agent for almost 100 companies, many of them with colorful names, including FilmSoup, Deliberate Ink, It's Pawfect, Knot-2-Much-2-Ask and Make-Up Your Mind Inc.

He is also the registered agent for Nicole Richie Inc., an umbrella company for the business activities of the young Hollywood celebrity. Ms. Richie's spokesman, Cindy Guagenti, said that Mr. Abramoff had been hired to deal with the logistics of the company's incorporation. She said Ms. Richie "has never met him, never talked to him."

Robert Abramoff appears to have been drawn into his brother's Washington lobbying network through Aeneas Enterprises, which shared its offices and phone number with Robert Abramoff's law office.

Documents gathered from Jack Abramoff's files by government investigators and provided to The New York Times show that Robert Abramoff sent an e-mail message to his brother's accountant on Dec. 19, 2000 — 16 days after Aeneas was incorporated — that provided instructions on wiring money to Aeneas's bank account.

An Aeneas billing statement sent later that month to Grassroots InterActive shows that $1.4 million was received from GrassRoots on Dec. 26. A January statement shows that an additional $900,000 was received by Aeneas on Jan. 2, 2004.

The one-page statements make no reference to what service, if any, was performed by Robert Abramoff's company in exchange for the payments, nor do they indicate how Aeneas disbursed the money.