X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Troubles continue for Greenberg Traurig’s Washington, D.C., office in the wake of a furor over fees that were charged to Native American gaming clients. On Oct.11, the firm said lobbying partner Kevin Ring had exited the firm. The announcement came just as information surfaced about payments made to Ring by one of the players at the center of the controversy. In 2002, Ring accepted $135,000 from Capitol Campaign Strategies LLC, the public relations firm owned by Michael Scanlon. Scanlon — along with ex-Greenberg lobbyist Jack Abramoff — is the subject of Senate and federal law enforcement probes into millions of dollars in fees collected from Native American clients and the alleged manipulation of tribal elections for Abramoff’s and Scanlon’s financial gain. Meanwhile, new details have come to light about the complex nature of Abramoff’s business dealings. Abramoff, who resigned from Greenberg in March, has as many as 10 companies registered in his name or to his home address in Silver Spring, Md. It’s not clear what type of business all of Abramoff’s companies conduct. But property and public financial records, as well as documents released by the Senate, show that some of the companies collected checks from clients and Scanlon and owned some of Abramoff’s assets, most notably his home. The payments to Ring were revealed in financial documents provided to Influence, Legal Times‘ sister publication on the business of lobbying, by a source close to the investigations. The source, who spoke on the condition of anonymity, said the payments were meant as referral fees for business sent to Scanlon. Another Greenberg Traurig lobbying partner, Michael Smith, received $20,000 from Scanlon’s firm in 2002, the documents reveal. Greenberg, in a statement released late on Oct. 11, said Smith was staying with the firm. Ring’s departure is just the latest in a series of blows to Greenberg’s government relations practice. In March, Abramoff — the firm’s top lobbying rainmaker — left as his business dealings with Scanlon were made public. Members of the lobbying team close to Abramoff soon exited as well, with most landing at Cassidy & Associates. Greenberg turned over e-mails and other documents relating to Abramoff to comply with Senate subpoenas. The firm also hired a lawyer to conduct an internal investigation. Ring declined comment, but his attorney, Richard Hibey, a partner with Miller & Chevalier, said on Oct. 11, “Kevin has taken all the necessary steps for the return of the money. It’s being effected as we speak.” Hibey said Ring started the process of returning the money seven to eight months ago and added that the recipient most certainly will not be Scanlon or anyone else with Capitol Campaign Strategies. But Hibey declined to say whom the recipient or recipients would be. Hibey also said that Ring resigned from the firm. Jill Perry, a spokeswoman from Greenberg, said in a written statement simply that Ring “is no longer with the firm” and said she could not comment further. As for Smith, Perry said in the statement, “Facts that have emerged regarding Michael Smith have been considered as part of our investigation, and he remains a shareholder in good standing with the firm.” Perry added: “We have been engaged in an intensive internal investigation and have taken such actions as we have deemed appropriate.” Perry declined to answer questions about whether the firm had a policy regarding referral fees paid to its partners and other professionals, or what its policies are on other sources of outside income. Joe Reeder, the Greenberg partner in charge of the mid-Atlantic region, referred all questions to Perry. GREENBERG PRAISED Greenberg Traurig has been praised by members of the Senate Select Committee on Indian Affairs for cooperating with its investigation into Abramoff and Scanlon. The firm was portrayed by senators as a victim at the committee’s Sept. 29 hearing on the Abramoff affair. “Credible law firms were taken advantage of,” said Sen. Tim Johnson, D-S.D. But given Abramoff’s high-profile business ventures and the newly uncovered payments from Scanlon to the other two Greenberg partners, questions remain about how a firm with hundreds of legal and lobbying professionals would have been unable to see what was going on with Abramoff. It’s also unclear whether Greenberg will be able to use ignorance of Abramoff’s activities as a defense against investigations and possible litigation — especially now that other employees have been connected to Scanlon’s firm. Most of Abramoff’s businesses are limited liability companies with few public reporting requirements. The information for this article was gleaned from what public records do exist: registrations filed with the state of Maryland, publicly available credit filings required under the Uniform Commercial Code, Internal Revenue Service records, and e-mails and other documents released by Senate investigators. Some of Abramoff’s ventures are clearer than others, such as his restaurant companies, LIVSAR and Archives. The Capital Athletic Foundation, a group to which some of Abramoff’s Native American tribal clients donated, helped fund the Jewish preparatory school founded by Abramoff, according to several news accounts. Yet others, like Yamohu LLC and SVJA LLC, remain a mystery. Abramoff’s spokesman, Peter Mirijanian, did not respond to questions about the nature of each of the businesses. Whatever their purpose, some of the businesses controlled by Abramoff handled large amounts of cash. E-mails, checks and other documents released by the Senate Indian Affairs Committee — many of them subpoenaed from Greenberg — show Abramoff and Scanlon collecting tens of millions of dollars and shuffling the money through their foundations and side businesses. The transactions, Senate investigators contend, were designed to blur just how much cash was being collected and where it was coming from. According to documents released by the Senate, one Maryland-based limited liability company, Kaygold, received numerous checks from Scanlon’s Capitol Campaign Strategies — including checks for more than $1 million. One such check written on Sept. 12, 2002, was in the amount of $2,266,250. In a July 9, 2002, e-mail exchange released by the Senate, Abramoff writes to Scanlon: “Subject: Did we get a CCS check for Kaygold today? … How much is?” Scanlon’s reply: “800k.” Scanlon has been subpoenaed by the Senate, but he has declined to show up on the grounds that the subpoena was not valid because it was improperly served. Scanlon is represented by Stephen Braga of the D.C. office of Baker Botts. Braga declined comment on any of the allegations concerning Scanlon, citing the pending federal investigation into the matter. BUSINESS TROUBLES Abramoff’s business dealings outside lobbying have not always been successful. The most notable problems stem from Abramoff’s ill-fated investment in SunCruz, a Florida casino company. Awash in legal tangles with the estate of the company’s former owner, SunCruz declared bankruptcy, and Abramoff relinquished his 35 percent stake in the company. In June, Abramoff sued Adam Kidan, one of his partners in the venture, claiming he was forced into signing a personal guarantee that left him responsible for $60 million in loans used to purchase the company, according to The Miami Herald. The newspaper said Wells Fargo Foothill and Citadel Equity Fund have asked a federal judge to force Abramoff to pay up. Abramoff wants the obligation voided. The case is still pending. The number of companies owned by Abramoff proliferated as the SunCruz deal collapsed. From June 2001 to June 2003, Abramoff established seven companies: Yamohu LLC; Sports Suites LLC; Archives LLC; Kaygold LLC; LIVSAR Enterprises LLC; SVJA LLC; and Beis Avrohom Chaim Inc., which is registered as a nonprofit corporation. In addition, Abramoff established the Capital Athletic Foundation LLC in 2000 and the Abramoff Family Fund LP in 1999. Yet another company, founded in 1997, DL/JA LLC, owns Abramoff’s home in Silver Spring, Md. James McNair, a Patton Boggs trusts and estates lawyer who is not involved in the Abramoff matter, says it’s not uncommon for property owners to purchase real estate through an LLC. Doing so can save on taxes, McNair says. Setting up various LLCs and other businesses is also a way of protecting assets, McNair says. Some developers, for example, set up each of their properties under a different limited liability company, so that if one property becomes the subject of a judgment, it won’t affect the other holdings. “By creating separate limited liability companies, you can create firewalls and limit liability,” McNair says. Having a home owned by an LLC means that possible creditors would have limited access to the assets owned by the company.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.