Michael Scanlon, president of Capitol Campaign Strategies, takes the fifth at the witness table at a Senate Committee on Indian Affairs Oversight Hearing on Nov. 17, 2004. (AP Photo/Gerald Herbert)

Scanlon Seeks High Court Permission to Renege on $20M Restitution to Indian Nations

Gale Courey Toensing
5/3/12

The former partner-in-crime of convicted Republican lobbyist Jack Abramoff is asking the highest court in the country for permission to renege on his commitment to pay around $20 million in restitution to the Indian nations he ripped off.

Michael Scanlon filed a petition with the U.S. Supreme Court April 19, asking for a review of a unanimous ruling by a three-judge panel of the Court of Appeals for the District of Columbia that said neither the trial judge or the appellate court could change the sentence handed down to Scanlon, who pleaded guilty in November 2005 to conspiracy involving bribery, wire fraud and “honest services fraud” and entered into a plea bargaining agreement with the Justice Department before he was sentenced.

Scanlon and Abramoff were at the center of one of the worst corruption scandals ever to hit Washington – an influence-peddling rampage that brought down presidential appointees at the highest levels of government, members of Congress, congressional staffers, a bogus “nonprofit environmental” organization that lobbied for corporate interests, and others. Abramoff and Scanlon stole more than $82 million from six tribes between 2001 and 2003, according to the investigative report “Gimme Five,” issued by the Senate Committee on Indian Affairs. The report found that Abramoff persuaded his tribal clients to hire Scanlon at exorbitant fees for “grassroots support” or access to high public officials, and that Scanlon then kicked back half of the money to Abramoff.

In his plea bargaining deal, Scanlon’s attorneys sought no prison time, pointing out his “extraordinary cooperation” that helped the Justice Department prosecutors convict 21 other people—including Abramoff himself. Scanlon even aided efforts in a Texas money laundering case in which former Republican Congressman Tom DeLay was convicted in November 2010 of money-laundering charges in a state trial, five years after his indictment forced him to resign as majority leader in the House of Representatives. (Former DeLay aide Tony Rudy was recently sentenced to five months in a halfway house and three years of probation for his role in conspiring with Abramoff and others to accept a stream of gifts when Rudy was a staffer and to offer gifts to public officials when he became a lobbyist – all in exchange for legislative favors.)

Scanlon was sentenced by federal district court Judge Ellen Huvelle in February 2011 to a 20-month prison term and $20 million restitution to the victims who he and Abramoff ripped off.

When Scanlon entered his guilty plea, “honest services fraud” included a broad range of activities, including non-disclosure of conflicts of interest. Since Scanlon pleaded guilty to those charges, the Supreme Court 2010 ruling in Skilling v. United States narrowed the scope of criminal liability under the “honest services” law of the federal wire and mail fraud statutes. (Jeffrey Skilling was the Enron CEO who was convicted of 19 corruption charges including honest services fraud.) Under the new pro-corporate decision, individuals can be convicted of honest services fraud only if they have committed bribery or received kickbacks. Scanlon is hoping to take advantage of the new ruling to avoid having to pay restitution to the nations.

Scanlon’s lawyer, Stephen Braga, asked the appeals court in November 2011 to allow Scanlon to amend the plea bargaining deal he had made with the government, according to the Blog of Legal Times. Braga argued that the U.S. Supreme Court Skilling ruling in June 2010 should allow Scanlon to get off the hook for the “honest services” fraud charge against him. Braga makes the same argument in his lengthy case law-citing, appendices-filled petition, and more. In this round-about argument, for example, he says outright that Scanlon had no ethical responsibilities toward the nations regarding the honest services law, but implies it: “At the time of (Scanlon’s) plea, the Government’s fiduciary duty theory underlying the honest services component of Scanlon’s plea was not based upon any duty that Abramoff owed to his clients as an employee of law firm GT (Greenberg Traurig, Abramoff’s employer at the time). Abramoff was not a lawyer, he was simply a lobbyist, and accordingly there was no mention at the time of Scanlon’s plea of any fiduciary duty arising from legal ethics rules,” Braga writes. “Instead, the Government’s fiduciary duty theory that tribal clients who had hired Abramoff more than once were, by virtue of such repeat hiring [emphasis in the petition], relying upon an ongoing relationship of factual trust and confidence with Abramoff which gave rise to his fiduciary duty to provide them with his ‘honest services.’”

Braga argues, among other things, that Scanlon, who pleaded guilty and plea bargained his sentence “is subject to a criminal conviction based in part on a charge which appears to be unconstitutional.” He says that the district court and appeals court assertion that they do not have the authority to change the sentence that Scanlon plea-bargained for “makes no sense … Justice demands better than this anomaly of judicial power; fundamental fairness requires a level playing field, a two-way street,” Braga writes in his conclusion. “We humbly ask this court to correct the ‘complete miscarriage of justice’ in this case.”

Immediate reactions to the news that Scanlon has appealed to the Supreme Court ranged from the amused to the comical. “Everyone gets their day in court, but he's had more than a few,” said Matthew Fletcher (Grand Traverse Band of Ottawa and Chippewa Indians), law professor and director of the Indigenous Law & Policy Center at Michigan State University. “This isn't going anywhere as far as I can tell. He's trying to piggyback on Jeffrey Skilling's (of Enron fame/infamy) case. This case is a classic ‘uncertworthy’ petition, meaning that it's such a narrow question as to not come up much at all, or ever again. Basically, he's in the super-small class of people that had plea agreements with the government that had not yet been approved by the court when the Supreme Court decided Skilling's case, and he wants to amend his plea to conform to the better law for him (arguably) under that case. He may be the only person in the world to whom this scenario applies. Cert denied.”

Tom Rodgers (Blackfeet Nation), of the Washington-based Carlyle Consulting lobbyist firm specializing in tribal issues and the main whistle-blower in the Abramoff case, said, “What? This guy? That blows my mind.” After reflecting for a moment, Rodgers said,

“Michael Scanlon continues his graduate work in narcissism and self-deception.”

You need to be logged in in order to post comments
Please use the log in option at the bottom of this page