A former business partner of disgraced lobbyist Jack Abramoff will remain free for several months, and possibly more, after admitting guilt on Monday to a scheme that defrauded tribal clients of
millions of dollars.
At a court appearance in Washington, D.C., Michael Scanlon pleaded guilty to one charge of conspiracy and agreed to pay $19.6 million in restitution to four tribes. He will face between 51 and 61 months in prison when he is finally sentenced.
But as part of the plea agreement with federal prosecutors, Scanlon will remain free in order to cooperate with a widening investigation that threatens members of Congress and the Bush administration. Although he has to submit a $5 million unsecured personal guarantee, he is allowed to travel and leave the country for undisclosed business matters as long as the court is given two weeks' notice.
Scanlon appeared extremely happy with the arrangement. He said little at a press conference after the court hearing, though he smiled continuously as one of his attorneys, Plato Cacheris, offered an apology of sorts.
"He's regretful for what happened to the tribes," said Cacheris one of six attorneys who appeared in court yesterday afternoon. Nothing else was mentioned about the tribes who spent millions
on Scanlon's services from 2000 through 2004.
"For the time being, he's done with politics," Cacheris declared.
There was more interest in Republican members of Congress who have been ensnared in the investigation. One lawmaker, Rep. Bob Ney (R-Ohio), is referred to as "Representative #1" in the charges against Scanlon, who used to work for Rep. Tom DeLay (R-Texas), the deposed House majority leader who is also linked to the scandal.
Cacheris declined to speculate on DeLay or other members of Congress. But along with Stephen Braga, another attorney, Scanlon's legal team noted that he has been cooperating for six months.
The plea deal was the result of those discussions and will give Scanlon a free pass while the FBI, the Interior Department and other federal investigations continue their work. In court, Mary Butler, a Department of Justice attorney, said she couldn't estimate when the probe might be completed.
But U.S. District Judge Ellen Segal Huvelle indicated it would take quite some time. She said it was "too early" to know what developments might take place next, prompting her to schedule a status conference for March 1, 2006.
Huvelle, an appointee of former president Bill Clinton, was extremely detail-oriented during the hearing. She went over nearly every part of Scanlon's agreement, sometimes more than once, as she described the main elements of the conspiracy scheme.
"These acts were to benefit your clients," Huvelle told Scanlon, who stood in front of the bench during his court appearance.
Huvelle told Scanlon that the plea agreement requires him to cooperate "in whatever forum is necessary" to help investigations at the federal, state or local level. It was not clear if he would be required to work with the Senate Indian Affairs Committee, which subpoenaed him for a hearing. But he invoked his constitutional rights and refused to testify.
Sen. John McCain (R-Arizona), the chairman of the committee, has steered clear of lawmakers in his probe. The court papers filed yesterday, however, indicate Ney and at least one other unidentified House member are involved. Ney accepted "things of value" from Scanlon in exchange
for promoting Scanlon's clients, the papers say.
McCain has targeted former Interior deputy secretary J. Steven Griles and a Republican activist with close ties to Interior Secretary Gale Norton. The court papers don't indicate their involvement, though. They only say Ney tried to influence federal agencies on behalf of Scanlon's clients.
Scanlon, 35, ran the Capital Campaign Strategies firm and obtained business from four tribes. Without telling the tribes, he split the profits with Abramoff, who had been hired to lobby for the tribes. The side deal violated federal laws, according to the Department of Justice, and the policy of Abramoff's former law and lobbying firm.
November 2, 2005, Hearing:Senate
Indian Affairs Committee
Witness List / Testimony