Riley denies tie to tribal money

Lobbyist Scanlon gave funds to governor's supporters

4 Sep 2006 // Gov. Bob Riley says he asked Mississippi Choctaw lobbyist Michael Scanlon to raise money for a Republican group before the 2002 election, but he never asked Scanlon to help his campaign and would never knowingly accept gambling funds.

"I didn't ask for it. I didn't want it," Riley said Friday in an interview.

Scanlon, who represented the Choctaws at the time, gave money to four groups that in turn gave heavily to Riley's 2002 campaign for governor. Riley is opposed to gambling, and Democrats have tried to turn a Riley-Scanlon connection into an election-year issue, accusing Riley in a television ad of taking gambling money. Riley responded Friday that those accusations were "hype" and "ridiculous."

"I have never met a Choctaw. I have never talked to a Choctaw. I talked to Mike Scanlon once five years ago," Riley said.

Scanlon, who was briefly a congressional aide to Riley in 1997, pleaded guilty last year to defrauding his American Indian clients and agreed to pay back $19 million to the tribes. Riley said he approached Scanlon before the 2002 election, long before his legal troubles, and asked him to contribute to the Republican Governors Association.

Riley, who was running for governor at the time, said he approached Scanlon because he was a successful lobbyist with multiple corporate clients.

"When I went to see Mike, it had nothing to do with Indians, Choctaws, anything else. I think everyone in Washington understood that Mike had a very successful lobbying business with a number of clients. Nobody walked in and said, `I understand you got the Choctaws as a client,'" Riley said.

Riley said he didn't ask Scanlon to contribute to his campaign. The RGA expected Riley to raise funds for that organization, he said. "This was asking Mike Scanlon to help me raise money. He had been a Republican. He had worked for Tom DeLay, and he was doing really well. If you can't get that guy to help you raise money for the RGA, it would be hard to do," Riley said. Riley said that was his only contact with Scanlon.

Scanlon gave $500,000 of his company's funds in October 2002 to the Republican Governors' Association, which soon after transferred the money to a related Republican committee, which in turn donated $650,000 to Riley and $150,000 to the Alabama Republican Party the same month.

Individual donors claimed

RGA officials said the Scanlon money did not go to Riley. The money given to Riley was from individual donors to the RGA, not corporate donors like Scanlon, according to RGA officials.

However, campaign records show Scanlon had an interest in the 2002 Alabama elections.

Gambling was a major issue that year in Alabama and nationally. Then Gov. Don Siegelman was campaigning, again, on bringing a lottery to Alabama. The Alabama Legislature was considering proposals to operate video gambling machines at the state's dog tracks. The Poarch Creek Indians were expanding their gaming operations in Alabama. And Congress was debating ways to crack down on Internet gambling.

Scanlon gave money to groups that gave to a multitude of candidates, including Riley.

In 2002, Scanlon gave $100,000 to four Alabama-based political action committees controlled by Montgomery lobbyists Joe Fine and Bob Geddie that contributed heavily to Riley's campaign. Scanlon's company also gave $9,000 to Progress PAC, the fund-raising arm of the Business Council of Alabama, which also contributed heavily to Riley.

Ledger entry

Perhaps the strongest link to Scanlon, and the subject of the Democrats' ad, is an entry in Scanlon's ledgers, which were included in the materials released during a Senate investigation.

Scanlon's company ledgers indicated under the heading Operation Orange, the name given to his work with the Choctaws, that he planned to give $75,000 to "Riley" through the National Republican Congressional Committee. Soon after he withdrew that amount, Scanlon gave $50,000 to the NRCC, and the NRCC gave Riley $360,000.

Riley disputed that those contributions were linked to him. All of the groups that received Scanlon dollars also gave to other candidates. "He may have had somebody else in Alabama that he wanted to help who was anti-gambling. I have no idea," Riley said.

Riley's campaign also pointed out Friday that his opponent, Lt. Gov. Lucy Baxley, received money in the June primaries from political action committees that got money from dog track owner Milton McGregor, among other sources.

When asked if it was possiblethat Scanlon funneled money to Riley's campaign through third parties without his knowledge, Riley replied, "That's like asking if I believe in alien space life. I've never seen it. Do I think it might exist? It could."

BCA spokeswoman Marty Sullivan confirmed the ProgressPAC donation but said there was no indication that it, or any contribution made to ProgressPAC, was intended for any specific candidate.

"This contribution represents about one-third of 1 percent of the 2002 ProgressPAC budget, which was comprised of contributions from thousands of BCA member companies of all types and sizes," Sullivan said.

Sullivan said ProgressPac endorsed 106 candidates - 66 Republicans and 40 Democrats - in 2002.

Scanlon's records also indicate he was paying for professional campaign services in Alabama, but the recipient of those funds said it wasn't related to Riley. Scanlon's company ledger indicates he paid $155,000 to the public relations firm of Lunde and Burger for professional campaign services in Alabama in late 2001.

George Burger said recently that the Alabama work his now-defunct firm performed for Scanlon in late 2001 was not related to Riley's race. "I can confirm that it had nothing to do with Congressman Riley's campaign," Burger said. "It had to do with what was at that point gaming operations in Wetumpka."

At the time of Scanlon's payments to Burger's firm in November 2001, the Poarch Creek Indians opened a new bingo center in Wetumpka with high-stakes electronic bingo machines that the Mississippi Choctaws would likely have viewed as unwelcome competition. Burger did work on Riley's behalf the following summer, after the political action committee affiliated with the Business Council of Alabama decided to endorse Riley's campaign.

Burger said he was paid by the BCA to analyze Alabama races, and he was among many consultants helping Riley in the summer of 2002. He said his work for Riley was on an "essentially volunteer basis."

"Once BCA endorsed, off we went," Burger said.

Riley did not list the work as an in-kind contribution on his campaign finance reports. Riley said he did not think it should have been reported because organizations that endorse candidates frequently lend advice to that candidate.

"I want you to call every senatorial candidate the BCA endorsed and every House candidate and ask them if they reported it," Riley said.

State election law requires candidates to report contributions of anything of value to their campaigns, not just cash. According to the Fair Campaign Practices Act, services or expenses incurred on behalf of a candidate "without payment of full and adequate compensation by the candidate" is considered a contribution that must be reported.

Candidates regularly fill out public forms detailing their in-kind contributions, which can include things like campaign signs, office space or air time for television advertising. In-kind contributions can be anything a vendor "would get paid for but the candidate gets for free," said Ed Packard, an election specialist with the Alabama Secretary of State's office.

Remains gambling foe

Riley said he always has been, and always will be, anti-gambling. "I will never change my position on gambling. I think it is a terrible way, a terrible fiscal policy to depend on gambling for state revenue. I also think it hurts people," Riley said. "Regardless of anyone's contribution, that is not going to change."

Alabama Democratic Party Chairman Joe Turnham said Friday that Riley should have investigated the source of his major PAC contributions. "Is it a lack of judgment to not ask the source of that large of a contribution? When that much money comes in unsolicited, it should have been vetted," Turnham said. "This is not just some former staffer who gave him $1,000 and wished him well."