LOBBYING & LAW
By Peter H. Stone, National Journal
© National Journal Group Inc.
Monday, Feb. 13, 2006
Federal investigators have issued a subpoena for documents relating to the U.S. Family Network, a sign that the influence-peddling probe into the activities of convicted lobbyist Jack Abramoff continues to expand. The U.S. Family Network, a now-defunct grassroots advocacy group that had ties to Rep. Tom DeLay R-Texas, reportedly obtained most of its funding in the late 1990s from key Abramoff clients.
Sources familiar with the Justice Department-led probe say that one area of interest to investigators is $15,600 that the U.S. Family Network paid in 1999 to Liberty Consulting, a firm run by Lisa Rudy, the wife of Tony Rudy, who was a deputy chief of staff to DeLay before becoming a lobbying colleague of Abramoff's.
Tony Rudy was one of two former Hill staffers identified in Abramoff's January plea-bargain agreement with the Justice Department as having provided Abramoff with legislative help in exchange for gifts and other financial favors.
The U.S. Family Network, which existed for five years and raised about $2.5 million, was set up in 1996 by Ed Buckham, who was DeLay's chief of staff at the time.
The total of $15,600 was delivered in three payments in 1999 to Liberty Consulting before Rudy left DeLay's office and joined Abramoff in early 2001 as a lobbyist at the firm Greenberg Traurig, according to a source familiar with the group's operations. The timing of the payments is significant, sources say, because investigators have been focusing on what favors Abramoff may have provided to public officials in exchange for their help on client matters.
The payments to Lisa Rudy at Liberty Consulting were in addition to $50,000 that two Abramoff clients -- eLottery and the Magazine Publishers of America -- made to her consulting firm in 2000 through a nonprofit conservative Jewish group called Toward Tradition, which boasted Abramoff as a board member.
The subpoena requesting records and documents involving the U.S. Family Network was issued on February 6 to J. Thomas Smith, the Tennessee attorney who represented the network, according to a copy of the subpoena obtained by National Journal. Smith, reached by phone, declined to comment. Neither Rudy nor his attorney responded to calls seeking comment. The subpoena, which has a compliance deadline of February 17, appears to signal increasing interest by investigators in the ties among former DeLay aides and Abramoff.
The subpoena asks for U.S. Family Network documents relating to Abramoff; Tony and Lisa Rudy; DeLay and his wife, Christine; Buckham and his wife, Wendy; and several dozen other individuals and groups that have been linked to Abramoff by investigators and news reports. Others mentioned in the subpoena include Ralph Reed and Grover Norquist, two of Abramoff's longtime friends who played roles in some of his lobbying activities for his Indian casino clients.
The Washington Post reported late last year that most of the network's $2.5 million in funding over a five-year period came from Abramoff clients. For instance, the Mississippi Band of Choctaws and a small group of textile executives from the Commonwealth of the Northern Mariana Islands together donated a total of $750,000 to the U.S. Family Network in the late 1990s. Another $1 million donation was made in 1998 by an anonymous donor through a London law firm that may have been used as a conduit by two Russian oil executives.
The U.S. Family Network, a group that promoted itself as "pro-family" and advocating "moral fitness," was closely affiliated with DeLay and his aides, particularly Buckham. The latter left DeLay's office in 1998 to start the Alexander Strategy Group with help from Abramoff, who sent some clients to Buckham for grassroots lobbying and other work.
After working with Abramoff at Greenberg Traurig, Tony Rudy joined the Alexander Strategy Group in 2002. Rudy worked with Buckham at ASG until last month, when the firm announced it was closing its doors because of adverse publicity from the Abramoff probe.
The U.S. Family Network, during its five years, purchased a townhouse near Capitol Hill where DeLay reportedly made fundraising calls. And DeLay signed at least one fundraising letter for the network in 1999 in which he referred to it as "a powerful nationwide organization dedicated to restoring our government to citizen control."
The network, which had a tiny staff and did little public advocacy, also paid hundreds of thousands of dollars to Buckham and the Alexander Strategy Group, which for a period of time was based in the same townhouse. Christine DeLay was a consultant to the ASG lobby shop for three years and earned $115,000 in fees for work related to charities. Investigators have been seeking to find out whether Abramoff clients helped to underwrite her work.
The Abramoff clients who bankrolled the family network all had significant contacts with DeLay on overseas or domestic trips, two of which included Abramoff. In 1997, Abramoff and DeLay met in Moscow with Russian energy executives Alexander Koulakovsky and Marina Nevskaya from the firm Naftasib on a trip that was officially sponsored by the National Center for Public Policy Research. CongressDaily first reported last year that this trip, which cost about $60,000 and included Buckham and a few other DeLay aides, was actually paid for by an offshore company called Chelsea Commercial Enterprises, a client of Abramoff's which had close ties to the Russian energy executives and Naftasib.
The Post reported late last year that the U.S. Family Network received a donation of $1 million in June 1998 from a London law firm that is now out of business and whose former partners declined to comment on the source of the funds. But the paper reported that Pastor Christopher Geeslin of Frederick Md., who was the network's president and a member of the board, said that Buckham had told him that the $1 million came from Russian energy executives to influence DeLay's vote on an issue related to funding from the International Monetary Fund to help the troubled Russian economy and its business elites. Nevskaya told the Post that neither she, nor Koulakovsky, nor their firm were connected to the $1 million payment.
In August 1998, DeLay publicly criticized the IMF financing legislation, but the following month he voted for a foreign-aid bill that contained new funds for the IMF. A DeLay spokesman has denied that DeLay's vote was influenced in any way by donations to the U.S. Family Network.
Further, the network received $500,000 from the textile owners' group in the Marianna Islands, an Abramoff client that depended heavily on cheap immigrant labor for its garment industry. Abramoff and DeLay went to the islands over New Year's 1998, and DeLay was the leading congressional champion in efforts to block Democratic bills that would have ended the islands' exemption from U.S. minimum-wage laws.
The Mississippi Choctaws contributed $150,000 to the grassroots network in 1998 after Tom and Christine DeLay and DeLay's then-Chief of Staff Susan Hirschmann visited the tribe; the Choctaws donated another $100,000 in to the network in 1999. The tribe, Abramoff's largest client at the time, had been fighting against efforts to tax its casino revenues. DeLay sided with the Choctaws on that issue.
The newly issued subpoena also asks for information about the network's dealings with the Choctaws, the Marianna garment executives, and Koulakovsky and Nevskaya.
Abramoff, who is cooperating with the government, pleaded guilty in January to defrauding four Indian casino clients of more than $20 million and conspiring to corrupt public officials. One sitting member of Congress, identified as Rep. Bob Ney, R-Ohio, has been cited in Abramoff's plea agreement. Rudy and Neil Volz, a former chief of staff to Ney, were the two former aides cited in the plea agreement.
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