Indian Gaming Loss
In March, we reported on Steven Griles, the deputy secretary of the Interior Department during President Bush's first term, when he pleaded guilty to obstructing a government investigation into the Jack Abramoff lobbying scandal. Now his former girlfriend, Italia Federici, who was a close political aid to former Interior Secretary Gale Norton and a go-between between Abramoff and Griles has agreed to plead guilty to criminal charges of tax evasion and obstructing a U.S. Senate proceeding. She is due to enter her plea before a federal judge on Friday.
Federici's 2005 testimony before the Senate Indian Affairs Committee was especially notable as she defied questioning by Arizona Republican John McCain, then committee chairman, who threatened her with contempt. In one exchange he asked, "Ms. Federici, I would very much appreciate it if you would specifically answer the question." To which she replied, "I'm proud of myself for having been personally helpful to a friend who had desperate clients." That friend was Abramoff.
Federici's ensuing legal trouble comes as no surprise. In a thick report last June, the committee called her "veracity" suspect. The report found Federici's political group, founded by Norton, the Council of Republicans for Environmental Activists (CREA), received half a million dollars from Abramoff-represented Indian tribes between 2001 and 2003. A chain of E-mails from Abramoff asking about Interior business suggested a quid pro quo existed – contributions to her group in exchange for access to top Interior officials. North Dakota Democrat Byron Dorgan, then committee vice chairman, told Federici, "You had juice. You got paid for that juice by having Mr. Abramoff direct funds to your organization. It looks to me like you were working for Mr. Abramoff and you were getting money from Indian tribes to do it." The committee said Federici warranted further investigation.
Further investigation by the Justice Department found: "During much of Griles' tenure," Federici in fact "served as a conduit for information between Abramoff and Griles to foster Abramoff and his clients' interests." It began in March 2001, when she introduced the two men a week before Griles' Senate confirmation and continued as Griles' became the number-two official in the cabinet department that regulates Indian affairs. Justice officials claim that in her testimony and interviews with Senate investigators, Federici lied about the extent to which she, Abramoff, and Griles discussed issues that affected Abramoff's clients.
Now for the tax evasion. The criminal information states in the two years after Federici relocated CREA from Colorado to DC in early 2001, it received $723,500 in donations, but that Federici essentially used CREA coffers as a personal piggy bank, for example, repeatedly using ATM cash machine withdrawals on the CREA account for salary. In sum, Federici drew $233,955 from CREA in income between 2001 and 2003 and owed $77,243 in federal taxes. Despite several extensions, she never paid her tax bill, according to the criminal information. CREA's physical address in Washington was nothing more than a P.O. Box, and it went defunct about six months ago, but the CREA website is still up.
"Italia Federici regrets her failure to timely file her income tax returns and pay her individual income taxes for tax years 2001 through 2003," say Federici's attorneys, Jonathan Rosen and Noam Fischman. "She also regrets her past trust and confidence in Jack Abramoff, a then highly-regarded Washington lobbyist who professed a shared interest in Ms. Federici's environmental advocacy, and obscured the number and nature of Mr. Abramoff's contacts with Mr. Griles."
Her conduct "contradicts her years of public service in the not-for-profit community as a committed environmental advocate," her attorneys continue." Nevertheless, Ms. Federici agrees with the government that her liability in this matter begins and ends with her failure to timely file income tax returns and pay her taxes and her failure to provide truthful answers to questions posed by the government."