Case Study #5
Abramoff: Lobbying Congress
On March 29, 2006, former lobbyist Jack Abramoff was sentenced to six years in federal prison after pleading guilty to mail fraud, tax evasion, and conspiracy to bribe public officials. Key to Abramoffs conviction were his lobbying efforts that began in the 1990s on behalf of Native American tribes seeking to establish gambling on reservations.
In 1996, Abramoff began working for the Mississippi Band of Choctaw Indians. With the help of Republican tax reform advocate Grover Norquist, and his political advocacy group Americans for Tax Reform, Abramoff defeated a Congressional bill that would have taxed Native American casinos. Texas Representative and House Majority Whip Tom DeLay also played a major role in the bills defeat. DeLay pushed the agenda of Abramoffs lobbying clients in exchange for favors from Abramoff.
In 1999, Abramoff similarly lobbied to defeat a bill in the Alabama State Legislature that would have allowed casino-style games on dog racing tracks. This bill would have created competition for his clients casino businesses. Republican political activist Ralph Reed, and his political consulting firm Century Strategies, aided the effort by leading a grassroots campaign that rallied Alabama-based Christian organizations to oppose the bill.
As Abramoffs successes grew, his clients, political contacts, and influence expanded. He hired aides and former staff of members of Congress. In 2001, Abramoff began working with Congressman DeLays former communications director, Michael Scanlon, who had formed his own public affairs consulting firm, Capitol Campaign Strategies. The Coushatta Tribe of Louisiana hired Abramoff and Capitol Campaign Strategies to help them renegotiate their gambling agreement with the State of Louisiana. Abramoff, however, did not disclose to the tribe that, in addition to his own consulting fees, he also received a portion of the fees paid to Scanlons firm.
In an effort to protect his Coushatta clients in Louisiana from competition by a new casino near Houston, Texas, Abramoff successfully lobbied for a state gambling ban in Texas between 2001 and 2002. Incidental to this ban was the closure of a casino in El Paso, Texas, owned by the Tigua Tribal Nation. The Tigua were another one of Abramoffs casino clients.
Later in 2002, Abramoff made a pitch to the Tigua to work to oppose the ban for which he had previously lobbied successfully. With the Tiguas money, Abramoff took Ohio Representative Bob Ney and his staff on a golfing trip to Scotland. Abramoff hoped to convince Ney and his colleagues to slip a provision into an election-reform bill that would grant the Tigua gaming rights. Abramoffs efforts did not pay off, and the deal he sought fell through, but he did not inform the Tigua of this outcome. Rather, Abramoff continued to give the Tigua hope for the provisions success, while also continuing to charge them for his and Scanlons services. And, in their email exchanges, Abramoff and Scanlon often mocked their tribal clients as morons and monkeys.
Throughout the course of their work with Native American tribes, Abramoff and Scanlon charged upwards of $66 million. The Coushatta paid over $30 million to protect their casino and to stop competing casinos in Texas. The Tigua paid $4.2 million to try to continue operating their casino in Texas. Abramoff has stated that he donated much of the money he made to charities, schools, and causes he believed in. But he also spent millions of dollars on activities or contributions in connection with politicians and campaigns he sought to influence. Furthermore, he evaded taxes by funneling money through nonprofit organizations with which he partnered.
After his conviction in 2006, Abramoff cooperated in the investigation of his relationships with Congress members, including aides, business associates, government officials, and lawmakers. Representatives DeLay and Ney both stepped down from their positions in Congress. DeLay, who had risen to the rank of House Majority Leader, was charged with money laundering and conspiracy of funneling corporate contributions to state candidates. Ney plead guilty to conspiracy to commit fraud and making false statements. In exchange for gifts, lavish trips, and political donations from Abramoff, DeLay and Ney had used their positions in Congress to grant favors to Abramoffs clients and lobbying team. Abramoff served three and a half years of a six-year prison term. He was released on December 3, 2010.
Since his release, Abramoff has spoken out against corruption in politics. He has stated that he believed himself to be a moral lobbyist and has apologized for his actions. In a 2011 interview, he said, Whats legal in this system is the problem, and in his memoir, he wrote, Unfortunately, I was a miniature version of that system. But not everyone perceived his redemption as a genuine effort. Tigua tribal leaders said his apologies were too little, too late. Rick Hill, former chairman of the Oneida Nation of Wisconsin, stated, You look at Jackthough he took money from my elders and our kids, and now he comes here, and he gets to prop himself up, and its an acceptable part of [Washington] D.C. culture. He wouldnt stand a minute on the reservation.
Others point to the American political system, and see Abramoff as a symptom of broader corruption. Investigative journalist Susan Schmidt stated, Abramoff couldnt have flourished if this system, itself, was not corrupt, where the need for moneythe members of Congress and their need for moneyis so voracious and so huge that they dont have their guard up. California Representative Dana Rohrabacher said, What Jack had been doing was what had been done before. People should pay more attention to the fact that we have got some enormous special interests in this country who are having incredible influences on policy.
In his memoir, Abramoff reflected on personal and professional reform: Regardless of my rationalizations, I was the one who didnt disclose to my clients that there was a conflict of interest I wasnt the devil that the media were so quick to create, but neither was I the saint I always hoped to become. I decided that, in order to move myself close to the angels, I would take what happened in my life, try to learn from it, and use it to educate others.
Students will have to identify and analyze the above ethical dilemma. Write a 750 1000 word, double-spaced paper, and APA style.
Students are expected to identify the key stakeholders, discussion of the implications of the ethical dilemma, and answer the case study questions. Each paper should have the following sections: Introduction of the case The ethical dilemma Stakeholders Questions Conclusions References
1. Abramoff had an established set of morals in his personal life, and was deeply religious. He believed he was a moral lobbyist who fought hard on behalf of his clients, and he donated much of his proceeds to worthy causes. Do you think the blame of his lobbying tactics primarily lies with Abramoff individually, or with the system within which he operated? Explain.
2. To what degree do you think individuals have a responsibility to act ethically within a corrupt system? How would an individual act ethically in this context?
3. Lobbying is a high-pressure, high-stakes business. Although lobbyists typically try to fly below the radar-screen, sometimes their business is high-profile as well. How might these situational factors affect lobbyists ability to act ethically?
4. Why do you think Abramoff and his associates would mock clients who were paying them millions of dollars? How does one rationalize or explain such behavior?
5. Since his release from prison, Abramoff has advocated for political reform, but many do not see his efforts as genuine. Do you agree with the view that Abramoff is a morally bankrupt felon who has no business advocating reform? Or do you agree with the view that Abramoff is a fallible human in a unique position to help us learn from his moral mistakes and reform a broken system? Explain.
6. Many politicians who received contributions from Abramoff or his clients donated portions of the funds they received to charity. Only a small fraction of politicians donated the money to Native American tribes. Do you think politicians who received these funds had a moral obligation to donate their money to Native American tribes? Why or why not? Do you have a different opinion of those who did donate to Native American tribes versus those who didnt? Explain.
7. How many basic ethics and behavioral ethics concepts can you identify at work in this case study? Explain and discuss their significance.
Investigating Abramoff Special Report
Capitol Punishment: The Hard Truth about Washington Corruption from Americas Most Notorious Lobbyist
How a Lobbyist Stacked the Deck
A Jackpot From Indian Gaming Tribes
Jack Abramoff Confronted by Native American Tribes
For Ex-Lobbyist Abramoff, a Multimedia Effort at Redemption
Abramoff and 4 Others Sued by Tribe Over Casino Closing http://www.nytimes.com/2006/07/13/us/13tribe.html?rref=collection%2Ftimestopic%2FAbramoff%2 C%20Jack
Abramoff Effect: The Smell of Casino Money
The Fast Rise and Steep Fall of Jack Abramoff
Trial Money Linked to GOP Fundraising
Operation Open Doors http://www.washingtonpost.com/wp-dyn/articles/A30123-2004Dec2.html A Lobbyist in Full
Lobbyists, Clients Undeterred by Scandal http://www.washingtonpost.com/wp-dyn/content/article/2005/06/25/AR2005062500983_pf.html
Lawrence Lessig interviews Jack Abramoff
Casino Jack and the United States of Money
Heist: Superlobbyist Jack Abramoff, His Republican Allies, and the Buying of Washington
Author: Ethics Unwrapped Staff McCombs School of Business The University of Texas at Austin
Modified Case study from McCombs School of Business, The University of Texas Austin
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