Ney’s Troubles Are Mounting

21 Nov 2005 // The Justice Department’s plea agreement with Michael Scanlon, the former business partner to Republican ex-lobbyist Jack Abramoff, is troubling news for House Administration Chairman Bob Ney (R-Ohio), according to legal experts and watchdog groups.

Scanlon is expected to plead guilty in federal court today to one felony count of conspiracy related to his business dealings with Abramoff and four American Indian tribes.

A “criminal information” document filed by the Justice Department last week alleges that Scanlon “corruptly” offered “money, meals, trips and entertainment” to public officials in return for official acts, and defrauded his and Abramoff’s clients to the tune of tens of millions of dollars. Abramoff is not formally named in the document, which refers only to a “Lobbyist A,” but that pseudonym is widely believed to refer to Abramoff.

A criminal information document is filed in lieu of an indictment, usually signalling a plea deal has been reached with a defendant.

When the plea agreement with Scanlon is formally unveiled before a judge today, Justice Department prosecutors will spell out their deal with Scanlon, including any stipulation requiring him to testify against Abramoff or other individuals caught up in the Abramoff probe, sources close to the investigation said.

While the criminal information document refers only to a “Representative #1,” that is widely believed to be Ney. The inference by federal prosecutors is clear: In return for a golf junket to Scotland, tickets to sporting events and free meals, the lawmaker agreed to “perform a series of official acts” that benefited Scanlon and Abramoff’s clients, including trying to insert a provision in a 2002 election-reform bill that would aid a Texas Indian tribe that was secretly paying Scanlon and Abramoff millions of dollars.

Ney also inserted statements in the Congressional Record linked to Abramoff’s purchase of a Florida gambling cruise-ship company. The Justice Department alleges, again without naming Ney, that he helped in “advancing the application” of an Abramoff client “for a license to install wireless telephone infrastructure in the House of Representatives.” That company later paid Abramoff $280,000, according to lobbying reports.

The Ohio Republican has already been subpoenaed by a federal grand jury to turn over any documents in his possession related to Abramoff to the Justice Department.

As he has for months, Ney on Friday again denied any wrongdoing in his dealings. Ney has publicly stated before that he was “duped” by Abramoff and is a victim of the former lobbyist’s manipulations.

“As we have previously said, Congressman Ney will fully cooperate in the investigation of the Abramoff matter,” said Brian Walsh, Ney’s communications director. “He has not been told that he is the target of any investigation and there would be no grounds to do so. Mr. Scanlon’s being charged with lying to and cheating his clients does not change that. In the meantime, the Congressman will continue to focus on working hard and doing the job he was sent to Congress to do.”

A prominent Washington, D.C., ethics lawyer, Stanley Brand, said the complaint against Scanlon marked the beginning of a more troublesome period of legal jeopardy for Ney, who, despite his assertion that he is not an official target of the Justice Department, is clearly in prosecutors’ sights.

Brand, a former counsel to the Speaker’s office, said that, assuming Ney is Representative #1, his biggest problem is that the federal prosecutors specifically cited overt acts — receiving the gifts in turn for legislative actions — that are considered part of the conspiracy allegation against Scanlon. Under federal law and House ethics rules, it is illegal for Members and staffers to give or receive anything of value in return for any official act, including gratuities such as trips or meals.

“If they’re illegal to give, they’re illegal to accept,” Brand said of such gratuities. In the mid-1990s, Brand defended Ways and Means Chairman Dan Rostenkowski (D-Ill.) during his investigation on mail-fraud charges.

But, Brand added, the prosecutors have not yet shown a strong hand against Ney, because in order to prove that the gifts were illegal, they have to be connected to official actions taken by Ney.

Ney also has a potentially powerful ally within constitutional privilege. In the eight-page filing on Friday, the prosecutors cited acts by Ney that will almost surely be covered by the “Speech and Debate” clause.

The federal courts have long upheld that legislative actions such as floor speeches and legislation sponsored by lawmakers cannot be used in a corruption indictment or presented before a jury, which would seem to give reprieve to Ney on the accusations regarding his statements in the Congressional Record related to the SunCruz Casinos and the effort to insert the tribal language into the electoral reform bill, Brand said. Abramoff was indicted in August on federal mail and wire fraud charges related to SunCruz.

And, as House Administration chairman, Ney may be able to plausibly argue that it was an official legislative duty of his, and thus covered by Speech and Debate, that he oversee which company got the wireless communications contract.

“[Ney] has a big constitutional privilege that they have to overcome,” Brand said.

Ney’s lawyer, Mark Tuohey of the firm Vinson and Elkins, went further, saying that the Speech and Debate clause, while applicable in those instances, wouldn’t ever be a necessary defense for his client.

Tuohey said Friday that Ney’s actions, as mentioned in the Scanlon conspiracy allegations, would be indictable and illegal “only if you know that there’s a conspiracy and you participate in the conspiracy.”

Instead, Tuohey said, Ney was “duped” by Abramoff throughout the entire process, a long-standing assertion by Ney. “He was a victim here, he was misled,” the lawyer said.

“I don’t think you ever get to Speech and Debate ... Because he’s not part of the conspiracy,” Tuohey said.

After learning of the count against Scanlon, Tuohey said he contacted Justice Department lawyers to specifically ask if Ney was an “unindicted co-conspirator,” a specific legal status that would officially put Ney in further jeopardy.

Tuohey said DOJ officials assured him Ney was not a co-conspirator. “We’re cooperating fully with the Department of Justice,” Tuohey said.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a liberal public watchdog group, said Friday’s filing by the Justice Department is “unbelievably bad news” for Ney.

Scanlon “is going to roll on everybody,” Sloan said. “Scanlon is in possession of knowledge of all of Abramoff’s activities, and Abramoff’s ties to Members of Congress.”

In light of the recent indictment of David H. Safavian, a former top official at the Office of Management and Budget and General Services Administration, Sloan believes that Scanlon and his legal advisors saw it was time to cut a deal with federal prosecutors.

“It’s always a rush to the courthouse door,” said Sloan, herself a former prosecutor. In her experience, the first person to cut a deal gets the least onerous penalty, and Scanlon has been the first one to do so.

“I do think Bob Ney is going down,” added Sloan. “But I still think it’s going to take a while for [the Justice Department] to finish the [Abramoff] investigation. It may be months, it may be a year.”