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Abramoff and the "Benedict Arnolds"

Here's where the Abramoff story starts to get really interesting. Newsweek reports:

Another possible reason for the Feds' stance: to pressure Abramoff to cooperate in a broader, D.C.-based probe that could touch members of Congress and Bush administration officials. ...A lawyer for another client, Tyco International, tells NEWSWEEK that it's turned over to Justice evidence alleging Abramoff defrauded it with a lobbying campaign against legislation to bar federal contracts to U.S. companies, like Tyco, headquartered in overseas tax havens. Tyco, based in Bermuda, paid $1.7 million to Abramoff's firm in 2003 and 2004?plus $1.5 million for a "grass roots" campaign to gin up opposition to the effort among Tyco's domestic suppliers. The Tyco official who hired Abramoff is the firm's general counsel, Tim Flanigan, a former White House lawyer nominated by President Bush for deputy attorney general. Tyco lawyer George Terwilliger says the firm "was a victim of a rip-off." Abramoff, he says, recommended the $1.5 million be paid to Grassroots Interactive, a group that allegedly did little work and later diverted funds for other purposes. Grassroots is "controlled" by Abramoff, says Nathan Lewin, a lawyer for Tyco's registered agent.

Now this is beginning to seem like the uber-scandal, the thing that brings many of the grotesque threads of the last five years together. You've got Tyco International, just after the downfall of Dennis Kozlowski and when the Bermuda-based conglomerate was trying to lobby its way back into the appearance of corporate good citizenship, without going so far as to pay taxes. You've got another right-wing hack, Flanigan, who if confirmed as Deputy AG would have some oversight over the Plame investigation, and who was paid $800,000 by the Federalist Society to write a biography of Chief Justice Warren Burger that he never produced. (Leaving the millions, um, dozens of would-be readers of such a book to grasp desperately for intellectual sustenance by rereading one of the several biographies of the even duller Justice Blackmun.) You've got Abramoff, of course, and then you have a real bread-and-butter issue, one that doesn't have to do with tribes or obscure Pacific vassals: "corporate inversions," or the practice of reconstituting a corporation as a subsidiary of an offshore entity for tax purposes. These are what John Kerry called "Benedict Arnold" companies.

It's intriguing that Tyco and Flanigan seem so eager to portray themselves as victims of a "rip-off" by Abramoff. I guess it's better to portray yourself as dumb and gullible than as a partner with Abramoff in a successful enterprise. But are we really sure that they got ripped off? After all, although the provision denying federal contracts to corporate inverters passed both houses of Congress, it was changed in House-Senate conference (where DeLay exercises his power) so that companies like Tyco were grandfathered in and would remain eligible for federal contracts. Likewise, when the offshore loophole was finally closed altogether as part of a giant corporate tax bill in 2004, Tyco and a few others were again grandfathered in.

On the other hand, this may be one of those things that is, as they say, "overdetermined." Just take a look here for a nicely alphabetized list of all the DC lobbyists that were on hire to just a handful of companies -- Tyco, Accenture, Ingersoll-Rand, and a couple of oil drilling companies. Any of them can take credit for blocking the legislation that would have affected these offshore companies. On the other hand, most of the amounts reported by the other lobbyists in the chart are in the thousands -- $10,000 here, $20,000 there, Bob Dole got $80,000, former White House Chief of Staff Ken Duberstein $280,000. Then there's the Abramoff line: "$1.3 million in 2003; $840,000 in 2004."

But since Flanigan approved this contract, I guess it should come as no surprise that a man who could get himself paid $800,000 to not write a book that no one would want to read would think this was a good deal.

Finally, a small item in the Michael Isikoff article quoted above: "Abramoff...allegedly told Flanigan he'd lobby White House aide Karl Rove on behalf of Tyco, says the source close to the company. Rove, whose secretary formerly worked for Abramoff, has "never spoken to [Abramoff] about any of his clients," says a White House spokeswoman." Was it known that Rove's secretary -- presumably the one who testified about Rove's phone logs -- had worked for Abramoff?

Posted by Mark Schmitt on August 16, 2005 | Permalink


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drip, drip, drip...sooner or later the dike will break.

Posted by: | Aug 16, 2005 12:00:02 PM

Hey! Blackmun wasn't dull. I may be weird, but he's my favorite justice -- his views on the bench very much went through an arc, and he seems very *human* in his opinions in a way which some of his contemporaries rarely do. Read his dissent in Casey, for example. Sure, he wasn't the sharpest thinker or the best writer the bench has ever seen, but I dunno, I think he's pretty cool.

Posted by: Mike Russo | Aug 18, 2005 9:31:04 PM

Susan Ralston (spelling??) was outed at least a year ago in Salon as former Abramoff acolyte working for Rove handling phones.

Posted by: fatbear | Aug 23, 2005 1:16:20 AM

If you're prez, or v.p., you might look down the line of succession 2 or more places and take steps to ensure that those folks make bones with you in some fashion, thus locking in the pardon.

Posted by: ferd | Sep 7, 2005 2:19:37 AM

How do we know that any of this is even true?
Sounds like a lot of speculation and gossip to me.
If Abramoff had "stolen" funds, the feds would have nabbed him by now.

Sounds to me like some powerful folks just wanted the Jewboy out of DC

Posted by: Shmilke | Sep 8, 2005 9:25:00 PM