Lobbying Scandal Brewing In D.C.

Michael Scanlon, right, a former partner of lobbyist Jack Abramoff leaves U.S. District Court, Monday, Nov. 21, 2005, in Washington. Scanlon, a former aide to Rep. Tom DeLay, pleaded guilty Monday to conspiring to bribe public officials. CBS

A former partner of Jack Abramoff has agreed to cooperate in the fraud case against the Washington lobbyist over his 2000 purchase of the SunCruz Casinos gambling fleet.

Documents filed in federal courts in Miami and Washington say the agreement was part of a plea deal Michael Scanlon, a former aide to Rep. Tom DeLay, reached with prosecutors in a separate case.

When Scanlon pleaded guilty to bilking clients for millions, it looked like just another white collar crime – only this scandal could shake some of Washington's biggest names, report CBS News correspondent Gloria Borger.

"The problem is that it's like the Titanic, you see the iceberg coming but you don't see how big it is under the water," said Stanley Brand, former U.S. House of Representatives counsel.

The man with connections to both DeLay and Abramoff is now talking to the Justice Department about a get-rich-quick scheme that netted $82 million from casino Indian tribes, reports Borger.

If Scanlon provides "substantial assistance," prosecutors will seek a lighter sentence, according to the agreement.

The plea deal was filed Monday, when Scanlon pleaded guilty to conspiring to bribe public officials. He was ordered to pay restitution totaling more than $19 million to Indian tribes that he admitted had been defrauded while he and Abramoff represented them.

Scanlon attorney Stephen Braga confirmed in an e-mail Wednesday that his client was cooperating in the SunCruz case but refused to elaborate.

Abramoff and New York businessman Adam Kidan are scheduled to go to trial in January on wire fraud, mail fraud and conspiracy charges in their $147.5 million purchase of SunCruz.

Federal prosecutors say they defrauded lenders by faking a $23 million wire transfer to make it appear they put their own money into the purchase. Both have pleaded not guilty and remain free on bail.

In his plea agreement, Scanlon admits helping Abramoff and Kidan buy SunCruz by persuading U.S. Rep. Bob Ney, R-Ohio, to insert comments into the Congressional Record that were "calculated to pressure the then-owner to sell on terms favorable" to Abramoff and Kidan.

According to court papers filed in Scanlon's plea deal, Ney received trips, tickets and campaign donations allegedly in exchange for official acts. He has repeatedly denied any wrongdoing and said he was duped by Scanlon and Abramoff. He has not been charged.

Scanlon says they went on all-expenses paid junkets, including a golf trip to Scotland and to the Super Bowl. Ney says he was defrauded, reports Borger, but Scanlon's cooperation could have a domino effect – leading to more congressman as the Justice Department follows the money.

"These things are usually bigger by a magnitude than you think in the beginning because there are people involved who you don't know about," Brand said.

Borger reports one of those people could be DeLay, the former House majority leader who once called Abramoff one of his "closest friends." DeLay has not been questioned, but many expect he will – given that he's taken his own golf trip to Scotland paid for by the lobbyists.
  • Joel Roberts

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