Greed and Politics

13 August 2012
Greed and Politics - Featured image

This article from the August 2012 edition of the IPA Review is by Perth-based writer, Kyle Kutasi.

Wall Street is better known for a different quote, yet this line would be a perfect epithet for the life and times of Jack Abramoff, the K Street lobbyist who went to prison in 2006 for fraud and conspiracy to corrupt a number of US congressmen.

The Abramoff scandal didn’t receive great coverage in the Australian press, but it was significant enough in the United States that nearly a dozen lobbyists and politicians faced criminal charges. It also forced Republican congressman Tom DeLay to resign as Speaker of the House.

Abramoff was born into a secular Jewish family but decided in his teens that he wished to follow the Orthodox Jewish faith, despite the problems that caused his family. His family were already very Republican, but it was this religious conversion that particularly informed his politics and he became an especially fanatical supporter of Ronald Reagan prior to and during his presidency.

He studied law at Georgetown but rarely attended classes, because he was by then taken with a passion for politics-he had become the national chairman of the College Republicans and became one of a rare few to serve multiple terms leading that organisation, such was his success as an organiser. He outshone contemporaries such as Rick Santorum, Grover Norquist and Ralph Reed as the leader of a new breed of small-government conservatives, and he seemed headed for a long and successful career in politics when he was appointed as executive director of Citizens for America (Reagan’s personal lobby group) at the tender age of 26.

Unfortunately however, his career began to head in a different direction from this time onwards. He seemingly never realises it, but everything Abramoff writes about himself from this time indicates that he had an insatiable thirst for money. He describes the $150,000 salary he was receiving at Citizens for America in 1986 as ‘modest’. He left politics for nearly a decade to make films because he thought they would be better for his bank balance.

It says a lot about the ability of Mr Abramoff that a complete novice was able to turn himself into a moderately successful filmmaker, with minor hits such as Red Scorpion (1989), starring Dolph Lundgren. Yet he still didn’t believe he had enough money. He saw the Republican ‘revolution’ in 1994 as the opportunity to leverage his considerable contacts to his commercial gain. Abramoff rightly recognised that he had skills and contacts within the conservative movement that most of the other K Street firms did not. And so began the most controversial lobbying career in history.

Between 1995 and his imprisonment in 2006, Abramoff collected an eclectic mix of clients, which included Russian oligarchs, Native American tribes, the Northern Marianas Islands and even Imelda Marcos, most of whom were charged a retainer of $150,000 per month for his services.

His big break came early in 1995 when he met Mr DeLay, who was then the Majority Whip in Congress and effectively controlled the numbers on the floor of the House.

The two hit it off when they realised that each other had a great knowledge of The Bible. They came to an unspoken understanding that if Mr DeLay could deliver results for Mr Abramoff’s clients, then those clients would help DeLay. Abramoff recounts a tale of how one Russian oligarch attempted to funnel millions of dollars to DeLay’s campaign fund by placing ‘bets’ on each hole of golf they played, and then proceeded to deliberately lose the hole. This apparently was not a breach of campaign finance laws.

This arrangement also proved to be very lucrative for Abramoff and his clients. The most controversial client relationship that Abramoff had was with many Indian tribes. In a almost incomprehensible maze of overlapping regulations, the tribes are all recognised differently under federal and state laws, which means that some tribes have the right to operate full casinos, others only have the right to operate slot machines, (pokies) while others have no special rights to offer gambling services at all. The tribes with no casinos wanted in, whilst those in the tent wanted to stop others from joining them. Given that Abramoff’s biggest tribal client, the Choctaws of Mississippi, were grossing $400 million annually from gaming operations, this was very big business for them and they were prepared to pay a lot to protect it. As the stakes grew, so did the opportunities for congressmen on relatively paltry salaries to fatten their wallets.

In time, Abramoff would collect a staggering $60 million in fees from all of his Native American clients. Yet at the same time he was gathering powerful enemies whose interests he was hurting, and they were looking for opportunities to destroy him. Eventually, Abramoff provided these opportunities in spades. He had started to double-deal with the tribes. After working with one tribe to defeat another’s application for a casino, he would then offer his services to the vanquished tribe.

It was only a matter of time before this backfired and Senator John McCain took the opportunity to boost his career by launching an inquiry into it all. Abramoff’s rapacious appetite for money also caused him to get involved in side projects that ended up mired in financial difficulties and gangland murders. In the wash-up, it would become apparent that Abramoff had committed fraud on some loan documents, so desperate was he to seal the deal.

At the height of his career, Abramoff was doing whatever it took to achieve results for his clients, including breaching his own religion just for personal gain. It is ironic, somehow lost on Abramoff, that the same man who refused to dine with his hero Reagan at the White House in 1982 because the meal was not kosher, was now regularly working on the Sabbath for clients who made their money from gambling (both sins); all the while donating large sums of money to open Jewish schools and Kosher restaurants in Washington. Perhaps the charity was done to assuage his guilt. Abramoff never says.

Abramoff concludes his account by arguing that the ‘system’ caused him to do what he did and that the solution is to ban all politicians from accepting any sinecure at all, such as box seats to Red Sox games. Surely that entirely misses the point. Abramoff himself regularly recounted tales of ways in which he dodged campaign finance laws. Similar creative thinkers will also find their way around new laws too.

One solution-not proposed by Mr Abramoff-would be to pay politicians more. Singapore is famous for the moral hygiene of its officials primarily because it pays them so well from the public purse.

His college contemporaries, Messrs Santorum and Norquist, have in different ways made a lasting and positive contribution to the conservative cause in American politics, so it is disingenuous of Abramoff to claim that ‘the system’ is entirely to blame. Abramoff chose his path. But if the system is to blame in any way, then surely it is because the American government has become so bloated and interventionist that it has enhanced the opportunity for corruption. Where else in the world would you have 400 Indian tribes individually jockeying for gaming rights with the decision often entirely in the hands of a state governor? Big government will inevitably tempt influence-peddlers.

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