Italia Federici to plead guilty in Abramoff probe

Wednesday, June 6, 2007

An associate of former Interior Secretary Gale Norton was charged on Wednesday with tax evasion and obstructing the Senate Indian Affairs Committee.

Italia Federici, the president of a Republican environmental group that was founded by Norton, has agreed to plead guilty to the two counts at a hearing on Friday. She plans to cooperate with federal prosecutors as they continue to probe the dealings of convicted lobbyist Jack Abramoff, whose criminal network spanned members of Congress, Congressional aides and Bush administration officials.

Norton has not been implicated in the probe. After she joined the administration in January 2001, she cut ties to the Council of Republicans for Environmental Advocacy and has said she only maintained social contacts with Federici.

But Norton's top deputy -- J. Steven Griles -- pleaded guilty to lying to the Senate committee about his relationship with Abramoff. He is set to be sentenced later this month, with prosecutors recommending up to 10 months in prison.

Federici, who was dating Griles at the time, played a key role in the affair. She introduced Griles to Abramoff shortly before Griles was nominated to the second-in-command post at the Interior Department in March 2001.

"You definitely made another friend," Federici wrote Abramoff in an e-mail after the meeting.

Federici then acted as a "conduit" between Abramoff and Griles, according to the charge of information filed in court by the Department of Justice. She relayed Abramoff's concerns about gaming, land-into-trust, federal recognition and other tribal matters to Griles, prosecutors said.

In exchange, Federici was enriched through CREA by taking out cash withdrawals from the group's bank account and failing to file federal tax returns, according to the charge. "Shortly thereafter, Abramoff, personally and through his clients, became a substantial contributor to CREA," the document stated.

"In fact, from in or about March 2001, through in or about May 2003, Abramoff and his clients donated approximately $500,000 to CREA," prosecutors said. The contributions from the Coushatta Tribe of Louisiana, the Saginaw Chippewa Tribe of Michigan, the Tigua Tribe of Texas and the Meskwaki Tribe of Iowa made up the bulk of the group's income during that time.

When CREA's role in the controversy surfaced, the Senate committee interviewed Federici and called her to testify. But she misled investigators about her relationship with Griles and Abramoff, prosecutors said.

Federici "knowingly and intentionally made a series of materially false and fictitious declarations to, and withheld material information from, Senators and Senate investigators in response to questions about the extent to which she, Abramoff, and Griles communicated about issues pending before DOI that directly affected Abramoff's clients while Griles served as DOI Deputy Secretary," the information stated.

Federici voluntarily submitted to the October 7, 2005, closed-door interview with Senate investigators and was due to appear at a November 2, 2005, public hearing at which Griles testified. But due to what Federici described as a mix-up, she failed to attend despite being subpoenaed by the committee.

She finally appeared on November 17, 2005, and was particularly combative with Sen. John McCain (R-Arizona), who was chairman of the committee and oversaw its investigation of Abramoff, and threatened to hold Federici in contempt of Congress.

"If you chose to take the Fifth Amendment, that is your right," McCain told her. "Otherwise, answer the questions. Okay? That is the last time I am going to warn you about it."

After completing the investigation, the committee released a report detailing Abramoff's schemes and included a section on Federici and CREA. But the panel was unable to determine whether Federici had committed any wrongdoing.

Within months, however, Griles came under scrutiny for his role in the scandal. He had resigned from DOi in December 2004 and formed a lobbying firm with at least two tribal clients -- the Quapaw of Oklahoma and the Colville of Washington. Both tribes fired him as news of his pending conviction surfaced.

Griles finally pleaded guilty to lying to Congress in March. Shortly afterward, Federici was reported to be the next target in a probe that has netted 11 guilty pleas or convictions, including one from a Republican member of Congress and another from a White House official who used to lobby for tribal gaming interests.

Relevant Documents:
US v. Federici (June 6, 2007)

Senate Indian Affairs Committee Abramoff Report:
“GIMME FIVE”— INVESTIGATION OF TRIBAL LOBBYING MATTERS (June 2006)

Exhibits:
Pre-2001 | 2001 | 2002 | 2003 | 2004 | Undated | Finance