Michael Scanlon and the Jack Abramoff Corruption Scandal

Michael Scanlon is the former congressional aide and lobbyist whose partnership with Jack Abramoff produced one of the largest public corruption cases in modern American political history. Working together from 2000 to 2004, Scanlon and Abramoff defrauded six Native American tribes of tens of millions of dollars through grossly inflated consulting fees and a secret kickback arrangement, while also bribing a sitting member of Congress. Scanlon pleaded guilty to conspiracy in November 2005, cooperated extensively with federal prosecutors, and was eventually sentenced to 20 months in federal prison and ordered to pay more than $20 million in restitution.¹

Who Michael Scanlon Was Before the Scheme

Scanlon came to lobbying through Capitol Hill. He had served as communications director for House Majority Leader Tom DeLay² and then worked as an associate of Jack Abramoff at the firm Preston Gates & Ellis, where Abramoff was already representing tribal gaming clients.³ When Abramoff moved to Greenberg Traurig at the end of 2000, Scanlon followed briefly and then went out on his own. By mid-2001 he had formed Capital Campaign Strategies LLC, a grassroots and public relations firm that would become the main vehicle for the fraud.⁴

How the “Gimme Five” Scheme Worked

Inside the operation, Scanlon and Abramoff called their arrangement “Gimme Five,” a nod to the $5 million in annual revenue they aimed to extract from tribal clients and to the 50-50 split of the profits.⁵ The mechanics were simple. Abramoff signed Native American tribes as lobbying clients and then steered them to hire Scanlon’s firm for grassroots work and public relations. Scanlon charged fees with enormous markups and secretly kicked back roughly half of what was left to Abramoff. The tribes never knew the two men were splitting their money.

The Senate Indian Affairs Committee identified six tribes as targets: the Mississippi Band of Choctaw Indians, the Coushatta Tribe of Louisiana, the Saginaw Chippewa Indian Tribe of Michigan, the Agua Caliente Band of Cahuilla Indians, the Ysleta del Sur Pueblo (Tigua) of Texas, and the Pueblo of Sandia of New Mexico. Across roughly three years, those six tribes paid Scanlon’s companies at least $66 million.⁶ Capital Campaign Strategies alone netted about $39.5 million, of which Scanlon kicked back roughly $20 million to Abramoff.¹

The Mississippi Choctaw illustrate the scale. The tribe had been Abramoff’s client since 1995 and followed him from firm to firm. In 2001, Scanlon billed the Choctaw $7.7 million but spent only $1.2 million on actual work; he and Abramoff kept the remaining $6.5 million.⁷ The Tigua paid $4.2 million for services that investigators found were largely never delivered, and in some instances the lobbyists worked against the tribe’s own interests to generate new fees.⁶

Shell Companies and Fake Grassroots Groups

To move money and disguise it as legitimate work, Scanlon ran a network of fronts. The most prominent was the American International Center, a “supposed think tank” near Rehoboth Beach, Delaware, with two local men listed as directors who had no relevant policy background. The Senate investigation found that setting it up had been referred to internally as “A Day at the Beach.”⁵ Tribal money flowed through AIC and back to Abramoff as hidden kickbacks. Scanlon also billed clients through fictitious grassroots groups with names like the Christian Action Network, Concerned Citizens Against Gaming Expansion, and Global Christian Outreach Network, for services that were sometimes never performed.⁴

Bribing Public Officials

A portion of the tribal money went to buying official action. Prosecutors described “a stream of things of value” flowing to public officials in exchange for favorable decisions.⁸ The clearest example was Ohio Congressman Bob Ney.

In exchange for trips, meals at Abramoff’s Washington restaurant Signatures, skybox tickets, and campaign contributions, Ney inserted two statements into the Congressional Record at Scanlon’s specific request in connection with a Florida casino deal, supported legislation that helped their clients, met with tribal representatives, and awarded a House contract to install wireless telephone infrastructure to one of Abramoff’s clients. A 2002 golf trip to St. Andrews, Scotland, cost more than $160,000, and Ney later admitted misrepresenting its cost and purpose on his financial disclosures.⁹

How the Scheme Unraveled

The scandal surfaced in February 2004, when the Washington Post began reporting on the relationship between Abramoff, Scanlon, and the tribes. The Senate Committee on Indian Affairs, under Senator John McCain, opened a formal investigation that produced five hearings and a 1,400-page final report in 2006, unanimously endorsed by the committee.⁶ Scanlon invoked the Fifth Amendment when called to testify.

An unlikely catalyst was Scanlon’s former fiancée, Emily Miller, also a former senior DeLay aide. After Scanlon ended the relationship, Miller cooperated with federal investigators, and her knowledge of his suddenly lavish lifestyle helped prosecutors build their case.¹⁰

Guilty Plea and Cooperation

On November 21, 2005, Scanlon pleaded guilty before U.S. District Judge Ellen Segal Huvelle to a single count of conspiracy to commit bribery, mail fraud, wire fraud, and honest services fraud.⁸ The charge carried a maximum of five years. He agreed to cooperate fully with the federal investigation and to testify against his former partners, including Abramoff.¹¹ He was released on an unsecured $5 million bond while sentencing was deferred so prosecutors could evaluate what he produced.

His plea agreement described an unnamed “Lobbyist A” and “Representative #1,” later confirmed as Abramoff and Ney, and laid out the facts of the scheme in detail. Within weeks, in January 2006, Abramoff himself pleaded guilty to conspiracy, fraud, and tax evasion.¹²

Sentencing and Restitution

Scanlon’s sentencing was delayed more than five years as he continued to cooperate. On February 11, 2011, Judge Huvelle sentenced him to 20 months in federal prison, three years of supervised release, and 300 hours of community service, and ordered restitution of $20,191,537 to the defrauded tribes.¹³ The sentence fell well below the 51-to-63-month range suggested by federal guidelines, reflecting the value prosecutors placed on his cooperation.

Under the restitution order, $2 million was designated for the Choctaw tribe, roughly $493,000 for the Pueblo of Sandia, and approximately $17.7 million to the law firm Greenberg Traurig, which had already paid other victim tribes.¹⁴

Scanlon later tried to withdraw his guilty plea, arguing that the Supreme Court’s 2010 decision in Skilling v. United States, which narrowed honest services fraud, undermined his conviction. Judge Huvelle denied the motion in November 2010.¹⁵ In April 2012 he petitioned the U.S. Supreme Court to review the case and lift his $20 million restitution obligation; legal observers widely expected the petition to be denied.¹⁶

Who Else Went Down

Scanlon’s cooperation set off a cascade. The Abramoff investigation ultimately produced nearly two dozen convictions of lobbyists, congressional staffers, and government officials.⁶ Jack Abramoff pleaded guilty in January 2006 and received four years for the tribal scheme, plus a separate six-year sentence for a Florida gambling cruise fraud. Rep. Bob Ney pleaded guilty in September 2006 to conspiracy and false statements and was sentenced to 30 months.⁹ Tony Rudy, DeLay’s former deputy chief of staff, pleaded guilty to conspiracy in March 2006.¹² Former Interior Department Deputy Secretary J. Steven Griles was sentenced to 10 months for obstructing the Senate investigation, and former GSA chief of staff David Safavian received one year in prison for obstruction and false statements about his dealings with Abramoff.

The scandal also enveloped Scanlon’s former boss. Two of Tom DeLay’s top former aides, Scanlon and Rudy, pleaded guilty to criminal charges after moving from DeLay’s office into Abramoff’s orbit.² DeLay stepped down as Majority Leader in 2005 and resigned from Congress in June 2006. The Justice Department closed its six-year federal investigation into his ties to Abramoff in 2010 without filing charges.¹⁷

Reforms That Followed

Congress responded with the Honest Leadership and Open Government Act, which President George W. Bush signed on September 14, 2007. The House passed it 411 to 8 and the Senate 83 to 14.⁶ The law doubled the cooling-off period before former members of Congress and senior staff could lobby, from one year to two; banned lobbyist-funded gifts and travel that violated ethics rules; required quarterly rather than semiannual lobbying disclosure filings in a free public database; and restricted the use of private aircraft by federal candidates.¹⁸ It also stripped pension benefits from members of Congress convicted of bribery, racketeering, or fraud.

More than a decade later, after Abramoff was convicted again in 2017 for failing to register as a lobbyist, Congress passed the Justice Against Corruption on K Street Act, signed into law in January 2019. It requires lobbyists to disclose federal convictions for crimes including bribery, fraud, perjury, and money laundering.⁶

1
U.S. Department of Justice. Former Abramoff Business Partner Michael Scanlon Sentenced to 20 Months in Prison
2
Center for Public Integrity. End of DeLay Probe Raises Broader Questions About Justice Dept.
3
The Seattle Times. How Scheming Lobbyist Operated in Seattle Firm
4
GovInfo. Senate Report 109-325
5
U.S. Senate Committee on Indian Affairs. Final Report on the Investigation of Jack Abramoff’s Tribal Lobbying Activities
6
Levin Center at Wayne Law. John McCain and the Abramoff Tribal Lobbying Scandal
7
GovInfo. Senate Committee on Indian Affairs Hearing
8
U.S. Department of Justice. Former Business Partner of Jack Abramoff Pleads Guilty to Corruption Charge
9
U.S. Department of Justice. Former Congressman Robert W. Ney Pleads Guilty to Corruption Charges
10
Houston Chronicle. Yes, Hell Hath No Fury, It Seems, in DeLay
11
CNN. Former DeLay Aide Pleads Guilty to Conspiracy
12
U.S. Department of Justice. Abramoff Sentencing
13
San Francisco Chronicle. Jack Abramoff Case: Michael Scanlon Sentenced
14
National American Rights Fund. Scanlon v. Greenberg Traurig
15
Roll Call. Judge Denies Scanlon’s Attempt to Change Plea
16
Indian Country Today. Scanlon Seeks High Court Permission to Renege on $20M Restitution to Indian Nations
17
The New York Times. No Charges for DeLay in Abramoff Investigation
18
Federal Election Commission. Honest Leadership and Open Government Act of 2007