Mississippi's Choctaw Indians Find An Unlikely Ally In a GOP Stalwart
By JIM VANDEHEI Staff Reporter of THE WALL STREET JOURNAL
PHILADELPHIA, Miss. -- Jack Abramoff, a Washington lobbyist, and Phillip Martin, a Choctaw chief, roll along in the chief's Lincoln Town Car toward the fruits of their investment in conservative politics.
Soon, a towering casino complex will rise over the forests that cover this swath of ancient Choctaw land. A 125-acre lake and recreation center are being built nearby. Work on the tribe's third and fourth championship golf courses will begin. Business is booming here, and the tribe credits Mr. Abramoff's full-service plan to win influence in Washington.
Washington is awash in high-end lobbyists, but even by the capital's standards, the money, methods and results in this case are exceptional. Since 1995, the Choctaw tribe has paid Mr. Abramoff's lobbying firm, Preston Gates Ellis & Rouvelas Meeds LLP, more than $7 million. The tribe has flown dozens of lawmakers, editorial writers and scholars to its reservation and funneled millions of dollars at Mr. Abramoff's direction to a network of conservative groups. All told, Mr. Abramoff says the Choctaw and other clients have made more than $10 million in unreported donations to the conservative movement.
Casino Tax on Hold
It has been worth it for the Choctaw. GOP lawmakers have shelved a proposal to tax casino revenue, the tribe's single largest source of income. Legislation has helped expand the Choctaw's tax and regulatory haven in the heart of Mississippi. The Choctaw land, like all reservations, isn't subject to state taxes or stringent regulations, an attractive selling point for corporations. Just last month, the House and Senate approved a bill, without debate, that will turn over thousands of acres of new land to the tribe. Mr. Abramoff accepts only a few clients, and they tend to be obscure, such as the Mariana Islands.
They pay hefty fees: In the first half of 1999 alone, the Choctaw paid Mr. Abramoff's firm $2.3 million -- more than Microsoft Corp. spent to hire 13 entire lobbying shops, and the third-largest payment given to a lobbyist since the government started tracking such numbers in 1996. For these sums, clients don't get the usual team of lobbyists with good connections to lawmakers. Mr. Abramoff says it's better to pay him and his conservative allies with clout in Congress to change the political atmosphere in the client's favor.
That was the approach he adopted after the Republicans in 1994 won control of Congress for the first time in 40 years. Most American Indian tribes historically have turned to Democrats, their longtime allies in Congress. But the Democrats no longer had the political muscle to help them, and the attitude of many Republican lawmakers in 1994 wasn't promising.
The Threat From Gingrich
Newt Gingrich of Georgia, the new House speaker, wanted to tax gaming revenue earned on American Indian land, which would have closed the spigot of money that Chief Martin planned to use to build schools, hospitals and tourist attractions. Many GOP lawmakers wanted American Indians to forfeit some of their sovereignty rights. These include their exemption from being taxed by the federal and state government and from charging a state fuel tax, which lets them sell gas at lower prices than non-Indian outlets.
This was the scene when Mr. Abramoff returned to Washington. He had worked for the Reagan administration, helping to organize anticommunist resistance groups in Jamba, Angola. Reversing his boss's path, he left politics for Hollywood, and spent eight years as a movie producer. "Red Scorpion," his biggest hit, featured Dolph Lundgren as a Soviet killing machine in an Angola-like nation. Mr. Abramoff came back to Washington to work for Preston Gates, the Seattle-based law firm whose most famous partner, Bill Gates's father, has since stepped aside.
Preston Gates, like virtually every firm in town, was frantically searching for conservative talent with connections inside this new GOP majority. Mr. Abramoff signed on, with one condition: He would recruit only clients who could help him wage his ideological crusade as a fervent antitax, free-market conservative.
The Choctaw tribe, one of his first clients, fit the bill. Protecting the tribe's gaming revenue from taxes and preserving its exemption from other state and federal taxes dovetailed with his own conservative agenda. And the Choctaw agreed to his hefty fees: at least $1 million a year for his firm and a commitment to fund lawmakers and conservatives who would do their bidding in Washington. "You have to be willing to do whatever it takes to win," Mr. Abramoff says. "Many don't, especially corporations."
It also suited the times for him to adopt an antitax strategy rather than a pro-Indian one. "The GOP did not understand Indian issues, but they surely knew tax reform," Mr. Abramoff says.
His first stop was Americans for Tax Reform, an influential lobbying organization of 90,000 activists run by Grover Norquist, an old friend. Mr. Norquist helped form a coalition of 500 antitax organizations nationwide to lobby Congress against the proposed bill to tax Indian casino gambling. Citizens Against Government Waste, a conservative budget-watchdog group, and several others also eagerly joined the crusade. Together, they wrote letters to lawmakers, lobbied editorial writers to weigh in and pleaded with activists to assist the Choctaw. The Washington Times, a conservative newspaper, ran an editorial arguing, among other things, that "Republicans should not be in the business of increasing anybody's taxes."
"Jack understands that very little of traditional lobbying matters," says Mr. Norquist. "You change public opinion, then people introduce your bills."
The Choctaw started pumping hundreds of thousands of dollars into ATR and similar groups. Mr. Norquist won't disclose how much, but Mr. Abramoff says the Choctaw have given "several million dollars" to outside groups since 1995, and ATR is a leading recipient.
Although Mr. Abramoff will deal directly with lawmakers when the situation calls for it, he prefers funneling money to the conservative movement because, he says, "that's where I cut my teeth." When he was chairman of the GOP's College Republicans in the early 1980s, his top deputies were Mr. Norquist and Ralph Reed, the former Christian Coalition leader. "We couldn't get people to give us $1 back then."
Another advantage is that politically active tax-exempt organizations such as ATR aren't required to disclose their donors, so it's impossible to discern which groups profited from this campaign. These secretive donations have prompted an outcry from advocates of campaign-finance reform that threatens to close this loophole.
Last Thursday, the Senate overwhelmingly passed a bill that will require "527" political organizations to reveal their major donors. President Clinton vowed to sign the measure into law. The tax-exempt groups, named for section 527 of the U.S. tax code, will have to publicly report how they raise and spend money. But think tanks and activist groups such as ATR, which focus on public-policy issues rather than candidates running for office, won't be covered by the new law.
Some critics express concern that Mr. Abramoff is milking naive clients and secretly employing conservative organizations to do his bidding. "It's unfortunate the only way the Choctaw feel they can have their voice heard here is to have a $1 million price tag on it," says Meredith McGehee of Common Cause, a campaign-finance watchdog group.
But to Chief Martin, 74, it is simply the way the system works. "I'm neither a Republican nor a Democrat, just a tribal leader," says the chief, whose tribe of 8,000 has risen from abject poverty to economic prosperity during his 41-year-reign.
Enlisting Armey and DeLay
In any case, the tribe's investment paid off. In 1995, the GOP Congress voted to kill legislation that would have taxed gaming revenue on Indian land, and it has done so every year since. The proposed tax had been tucked inside the 1995 budget bill that passed the House with strong Republican support. Mr. Abramoff immediately set his sights on the Senate, where he convinced a dozen lawmakers to sign a letter imploring leaders to block the provision in the Senate bill. At the same time, he helped form the antitax coalition, which flooded House lawmakers with a list of reasons to oppose the tax. He also reached out to House Majority Leader Dick Armey and House Whip Tom DeLay, both of Texas and both of whom originally supported the bill. Mr. Abramoff's efforts persuaded them to help remove the tax during final negotiations with the Senate, overriding Mr. Gingrich.
"Although American Indians were for many years identified almost exclusively as part of the Democrat coalition," Mr. DeLay says, that view has changed among many Republicans. "People recognize that Jack Abramoff has been an important part of this transition."
Mr. DeLay, like most Republicans, had essentially ignored the Indians because they were so closely aligned with Democrats and required government funding for high levels of unemployment, welfare assistance, and other social problems. After the conservatives, led by Mr. Abramoff, campaigned to prove that Indians were striving for truly Republican ideals of self-sufficiency and low taxation, Mr. DeLay changed his mind.
Following the GOP's about-face on taxing Indian gaming, the Choctaw were true believers. It meant the tribe could continue with plans for what is now the highly profitable Silver Star Resort & Casino here. The new and latest gambling complex will be right across the street.
Thwarting Istook
Soon after the tax vote, Mr. Abramoff applied his growing network of pro-Choctaw Republicans to the task of defeating legislation, introduced by GOP Rep. Ernest Istook of Oklahoma, that would have subjected all tribes to state taxes. Groups such as ATR and Citizens against Government Waste flooded Capitol Hill with letters condemning the bill.
Republicans eventually killed the legislation -- and, as with the gaming-revenue bill, they have every year since. In the process, Rep. DeLay emerged as the tribe's go-to guy in Congress. While Mr. Abramoff discounts the value of individual lawmakers, he recognized the value of the man who counts votes and often controls debates.
Mr. DeLay has received more than $50,000 from Mr. Abramoff and his clients, including the Choctaw. Federal records show that Mr. DeLay has taken only 18 trips in the past five years, but he or members of his staff have visited the Choctaw reservation on four separate occasions and have visited most of Mr. Abramoff's clients. Mr. Abramoff has since hired two of Mr. DeLay's top advisers to work the Choctaw account.
"It's pretty well known that when you hire Jack Abramoff, you get influence with Tom DeLay," says Gary Ruskin of the nonpartisan Congressional Accountability Project. Mr. DeLay regards that comment as "awfully cynical," and he adds: "I give access to all kinds of people -- people who work for me, people who vote for me, people who believe in causes I believe in, and even people who vote against me." According to Mr. Abramoff, Mr. DeLay "has done everything he can" to help the Choctaw. So have others.
"He opened my eyes," says California GOP Rep. Dana Rohrabacher of Mr. Abramoff. "Jack's one of the most effective lobbyists on the Hill. But he does not twist arms; he just shows you how [his position] fits into his larger ideology."
Mr. Abramoff, the father of five, has a deceptively calm demeanor. He never drinks alcohol, and his fitness binges often lead him to lunches of plain lettuce and a triple portion of chicken. He's short and stocky, with thick legs -- he once squatted 540 pounds, setting a California staterecord. His quiet manner and soft voice belie a fiery desire for ideological warfare.
On the Marianas
His philosophy has attracted lucrative clients from the tiny Mariana Islands in the South Pacific to Puerto Rico. Under Mr. Abramoff's watch, Congress has failed every year to impose new immigration and wage standards on the Mariana Islands, a U.S. territory often criticized for its treatment of workers. During this time, he has brought more than 85 lawmakers and staff to the tiny islands, a 24-hour trip from Washington. Conservative organizations from the Cato Institute, a libertarian think tank, to Citizens against Government Waste have played a key role in assisting the Marianas in Washington. Government and business officials from the islands have rewarded Mr. Abramoff with more than $8 million in lobbying fees.
Meanwhile, the Choctaw's conservative ties have continued to pay off. In 1998, Mr. Norquist's group produced a pro-Choctaw book and distributed it to key members of Congress. The book was a head-to-toe evaluation of the Choctaw and argued that they are a self-sufficient, antitax group that fits inside the conservative paradigm. It didn't reveal that the Choctaw help fund ATR.
The Choctaw subsequently received what Democratic Rep. Dale Kildee of Michigan, who heads the Native American Caucus in Congress, called "an unprecedented" exemption from national gaming regulations; the exemption was tucked inside a spending bill that attracted little attention by home-state Republican Sen. Thad Cochran. The Choctaw now are the only tribe allowed to self-regulate their gaming operations. Several months later, the tribe made that big $2.3 million payment to Mr. Abramoff's firm for six months of work.
Beyond the gambling revenue, more conventional business also is booming. With the tribe's special tax status, Chief Martin was able to team up with corporations such as American Greetings Corp., AT&T Corp. and Ford Motor Co., which is building electronic components with the Choctaws. The companies are drawn by lower corporate taxes and more lenient regulations. The Choctaws now employ more than 6,000, making them the third-largest employer in Mississippi. They have created more than 1,000 jobs in the past five years and generate more than $123 million annually in wages.
Chief Martin gives credit to Mr. Abramoff and the lobbyist's way of getting things done in Washington. "We have a right to take part in developing any issue that affects us," the chief says. "It's the American way."