Three days after another one of his former spokesmen copped a plea on corruption charges in l’affaire Abramoff, U.S. Rep. Tom DeLay announced his resignation April 3. Yet DeLay’s current spokespeople keep insisting that this lame-duck congressman is not a target of the federal probe that has enveloped some of his closest associates. Haven’t we been here before? DeLay aides delivered these same lines last year—even as Texas prosecutors counted down DeLay’s last days as House majority leader before they indicted him on money-laundering charges.
While a federal indictment of DeLay is no certainty, it would be consistent with what has transpired so far in the Justice Department investigation of disgraced lobbyist Jack Abramoff. Prosecutors plucked all three of their initial Abramoff-probe plea-bargainers from DeLay’s inner sanctum. DeLay’s resignation, moreover, recalls the fate of his three guilty cronies—who all lost their powerful jobs prior to their indictments. Meanwhile, the Observer found that several other lobbyists who lost their jobs when a DeLay-linked firm folded recently already are scrambling back into the game.
The beginning of Jack Abramoff’s end came in 2004. That’s when the Greenberg Traurig lobby firm sacked its once-vaunted rainmaker amidst allegations that he shook down Native American gambling clients—without cutting in his employer. Abramoff convinced the tribes to pay tens of millions of dollars in “public relations” fees to crony Michael Scanlon. This former DeLay aide’s plea deal in late 2005 was the first domino in the Abramoff probe. Just six weeks after Scanlon’s plea, Abramoff cut his own deal with prosecutors.
Abramoff admitted in his January plea that he had corrupted public officials. One of these, Tony Rudy, worked with Scanlon as a top DeLay aide until 2001, when both Rudy and Scanlon left DeLay’s office to join Abramoff at Greenberg Traurig. Abramoff pled guilty to using expensive gifts and cash payments to bribe Rudy during his DeLay years. In exchange, Abramoff said that Rudy performed official acts at DeLay’s office that benefited Abramoff’s clients.
Two DeLay-related announcements followed within a week of Abramoff’s January plea deal. In one, DeLay announced that he would not seek to regain the majority leader post that he lost last year after Texas prosecutors charged him with conspiring to break a state prohibition on electioneering with corporate funds. The same week, a major lobby firm run by DeLay-aide retreads announced its demise, citing adverse publicity from the Abramoff probe.
Rev. Edwin Buckham, the evangelical minister who had been DeLay’s chief of staff, and Karl Gallant, who had run DeLay’s Americans for a Republican Majority PAC (ARMPAC), started Alexander Strategy Group in 1998. Buoyed by its DeLay credentials and a fat Enron contract, ASG quickly became a Washington powerhouse. This lobby shop housed DeLay’s ARMPAC in its offices, kept DeLay’s wife on its payroll, shared clients with Abramoff and recruited Tony Rudy from Greenberg in 2002.
Rudy’s own recent plea deal with federal prosecutors corroborates Abramoff’s earlier one. Rudy admits that he accepted bribes that were given or arranged by Abramoff and Rev. Buckham. Rudy contends in his plea that these bribes induced him, for example, to persuade members of Congress to oppose a 2000 bill to prohibit Internet gambling. This failed bill, which DeLay opposed, would have hurt Abramoff client eLottery Inc. Rudy also pleaded guilty to violating revolving-door restrictions by lobbying DeLay’s office within a year of leaving it.
Rudy’s plea deal, signed just three days before DeLay announced his resignation, contains the Abramoff probe’s first public references to DeLay and Rev. Buckham. This is significant given that some Washington insiders say Rev. Buckham established ASG so the Hammer could cash in on his office. “DeLay sent Buckham downtown to set up shop,” lobbyist and former Republican Majority Leader Dick Armey told the New York Times in January. “The whole idea was ‘What’s in it for us?’” Given the direction the Abramoff probe has taken, it is likely that prosecutors already have asked this question about Rev. Buckham and DeLay.
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Given alarming rates of recidivism among lobbyists, the Observer ran traps to see if anyone employed at ASG three months ago had already returned to the lobby. So far, three ASG lobbyists are gigging again. The most prominent is Gallant, the only one of ASG’s former DeLay aides who has yet to be mentioned in an Abramoff-probe indictment.
Last year Gallant reported more than $2.5 million in contracts with 37 paying ASG clients—including several with DeLay ties. Security software vendor Questerra Corp. was a Gallant client at ASG. Questerra has settled criminal charges with Texas prosecutors related to its $50,000 corporate contribution to DeLay’s Texans for a Republican Majority, or TRMPAC, during the 2002 state elections. Another ASG-Gallant client, Time Warner Inc., hired DeLay’s lobbyist brother, Randy, last summer in a last-ditch effort to stop Texas legislation that now lets phone companies enter Texas cable markets on preferential terms. At ASG, Gallant also represented Christian radio chain Salem Communications Corp. Salem founder Edward Atsinger III has given $6,000 to DeLay’s legal defense fund and $28,311 to the Republican Majority Issues Committee—which kept DeLay’s daughter on a fat retainer.
Now federal lobby filings suggest that Gallant is attempting to reassemble ASG’s wreckage under the name Aduston Consulting. Aduston represents five former ASG clients: Salem Communications, National Religious Broadcasters, United Parcel Service Inc., and advertising interests International Sign Association and ValueClick Inc. The firm has yet to report a client that did not come from ASG. Gallant did not respond to a request for comment.
Gallant’s ties to DeLay’s TRMPAC co-defendants in Texas go beyond the fact that he preceded defendant James Ellis as ARMPAC’s director. As the TRMPAC scandal broke in 2003, the Washington law firm Swidler Berlin Shereff Friedman signed Texas lobby contracts with Ellis and John Colyandro, who would soon be indicted by a Travis County grand jury in the TRMPAC case. A Democratic-leaning firm that employed ex-Clinton aide Thurgood Marshall Jr., son of the late Supreme Court justice, Swidler had a “strategic alliance” with Republican-dominated ASG to work both sides of the aisle.
Future TRMPAC indictee Ellis, who lives in the Washington area, reported that Swidler contracted him in 2003 through the Austin office of Kerry Cammack, Colyandro’s officemate who married Texas Supreme Court Justice Harriet O’Neill that year. Ellis and Colyandro reported that Swidler paid them to lobby in Texas on “charitable & nonprofit organizations.” They did not disclose the ultimate client that paid Swidler to take out this mystery lobby contract. Ellis, Colyandro and Cammack did not respond to requests for comment.
Around this time in 2003, Swidler also took out a federal lobby contract with ASG, reporting Rudy as the lead man on the account. In a press release the following year, Swidler bragged that the work of ASG and Swidler lobbyists culminated in President Bush’s enacting a 2004 law that makes energy-efficient, multifamily housing projects eligible for more federal mortgage insurance. Swidler did not report the client that benefited from this handiwork. Yet it credited the victory to several lobbyists, including Rudy, as well as Marshall and Gary Gallant, both of whom now work at Swidler’s successor law firm, Bingham McCutchen.
Gary Gallant, who is not related to Karl Gallant, said Swidler’s client for this contract was Connecticut developer Becker & Becker Associates, which specializes in converting landmark buildings into affordable housing projects that yield valuable tax credits. Gary Gallant, Marshall and Ellen Katkin, a spokesperson for Swidler and Bingham McCutchen, said they do not know anything about Swidler’s 2003 hiring of Colyandro and Ellis as Texas lobbyists.
Two other ASG employees have resurfaced in the federal lobby. ASG lobbyist Allison Shulman, a former Senate Banking Committee aide, landed at law firm Dickstein Shapiro Morin & Oshinsky, where she lobbies on tax matters for financial software company Intuit Inc.
Ex-ASG lobbyist Terry Allen, a former aide to Rep. Steve Largent, a Republican from Oklahoma, has launched a new firm: Fidelis Government Relations. Fidelis has reported just one client: the Coalition to Preserve DSHEA (a dietary-supplement law). This trade group’s lobby firm in recent years has been none other than the Harbour Group—Swidler Berlin’s lobby arm. Harbour went independent earlier this year after Swidler merged into Bingham McCutchen.
Allen told the Observer that it would be inaccurate to characterize Fidelis as an ASG successor. “Fidelis is just me,” he said. Allen said he has signed additional clients that will appear in federal lobby filings soon. But he declined to identify them, saying, “I really don’t want to feed this story.”
Contributing writer Andrew Wheat is research director for Austin-based Texans for Public Justice.