Remember Ken Lay?
He’s the former Enron CEO whom state Attorney General Bill Lockyer told The Wall Street Journal he wanted locked in a prison cell with a tattooed inmate named “Spike.” He’s not there yet. At least, the lights were on last week at his 33rd-floor, $7 million condo in Houston’s River Oaks — even if he hasn’t been seen at his Galveston Bay beach house. Both places offer better accommodations than he’ll find if he ends up at the Bastrop federal detention center, where white, white-collar guys do their time in Texas. Lay’s days might be numbered. Prosecutors are working their way up the corporate food chain, and Lay’s the last big potato to be peeled.
President Bush would like to forget Ken Lay. He’s been airbrushed out of the Bush transition team, where he helped President-elect Bush shape a national energy policy. (Try to find his name on the White House Web site.) But his name can’t be stricken from the roster of Bush Pioneers. The Pioneers are the most successful fund-raising operation in the history of politics, says Craig McDonald, who runs an Austin-based nonprofit that tracks political money. Lay was an original Pioneer, one of hundreds of dedicated fund-raisers who pledge to raise $100,000 for the Bush presidential campaign. In fact, Lay was a pioneer among the Pioneers. He raised more than $750,000 for Bush’s gubernatorial and presidential campaigns.
The Pioneers came into being in 1999. Bush was governor of Texas. Condi Rice and former Secretary of State George Schultz were at the Governor’s Mansion home-schooling Bush on foreign-policy issues — an evident failure considering what he has done in Iraq and failed to do in Israel and the Palestinian territories. (One spring afternoon I bumped into a dyspeptic Schultz leaving a tutoring session with the governor, and the man looked like he carried the weight of the entire world on his stomach.) While the foreign-policy wonks were tutoring the candidate, Karl Rove and Donnie Evans (a Midland oil-patch buddy with whom Bush had found Jesus in a men’s Bible study group) directed the fund-raising operation. Rove has always said the first race to be won is “the money primary,” which he decided to wrap up early so Bush would look like the inevitable winner of the Republican nomination. Evans, the chair of the fund-raising committee and now secretary of commerce, called a meeting of three other Bush associates in Midland. Together they came up with the idea of the Pioneers. The group might have been more accurately named “the Deputies,” because what Bush fund-raising chair Evans did was deputize hundreds of individuals, giving each of them the authority to raise money in the name of the Bush campaign.
Each pioneer would raise $100,000, for which they would get in return a modest reward: the right to purchase a pair of special Lone Star cuff links. (And perhaps an ambassadorship, a change in a specific public policy or, as in Ken Lay’s particular case, the authority to fire the chairman of the Federal Energy Regulation Commission, name his replacement and a commissioner to fill another seat, and secure a promise that energy prices would not be capped in states such as California. Much of this is laid out in a Washington Post investigative series.) The Pioneers increased fund-raising exponentially, fostering the sky-is-the-limit approach that brought in $41 million for Bush’s two campaigns for governor. Here in Texas, any individual can give any amount as long as it is disclosed to the Texas Ethics Commission. In elections for federal office, individuals were limited to $1,000 per person per candidate. (The maximum has since been raised to $2,000.) The plan Evans and company put together in Midland was the perfect mechanism to beat the $1,000 contribution limit. The big guys with the big Rolodexes are no longer limited to bundling $1,000 contributions of a few family members and friends. They get on the phone, raise 100 $1,000 contributions, and mail in the checks.
The program was spectacularly successful, helping Bush raise $98.3 million for the 2000 primary (compared to $49.5 million Al Gore raised in the same period). This year the Bush funding operation is breaking its own records. The 208 Rangers and 303 Pioneers identified by McDonald at Texans for Public Justice have accounted for at least $72.4 million of the $200 million already raised by Bush. There’s more to come as others sign on at about 50 a month. And there’s more than can be detected by reading contribution-disclosure forms. According to McDonald, some donors have raised $350,000 to $400,000. You won’t find that information at the Federal Election Commission. McDonald obtained it because as director of Texans for Public Justice, he was an expert witness in the McCain-Feingold lawsuit the Supreme Court decided last year. Nor are the contributions of the Pioneers who don’t make their quota counted, so donors who raise $90,000 do not appear.
Actually, there is no public Pioneer and Ranger list, other than the one Texans for Public Justice posts on its Web site, www.tpj.org. Names of Rangers and Pioneers are embedded in the Bush-Cheney campaign’s monthly fund-raising reports, McDonald said. The campaign insists it keeps no separate list of the big money bundlers. “It’s unbelievable that Karl Rove has lost the most successful fund-raising list in the history of politics,” McDonald said. He argues that anyone who raises more than the legal limit, now at $2,000 per person per candidate, should be required to disclose the full amount raised.
No one expects that to happen soon.
One problem with deputizing so many men (and most of the Pioneers and Rangers are men) is that sooner or later an outlaw like Lay gets into the posse. This year’s sketchiest Pioneer (thus far) is Jack Abramoff. Abramoff’s ideological bloodlines can be traced back to the collegiate Republican organization that gave us the late Lee Atwater, who was the mentor to Bush adviser Karl Rove. And Grover Norquist, the anti-tax advocate who is arguably the most influential conservative in Washington. Unlike Rove, who found his groove in electoral politics, and Norquist, who runs a powerful anti-tax advocacy group he swears will someday make the federal government “so small you can drown it in a bathtub,” Abramoff has been all over the map. He worked with Ralph Reed when he was building the Christian Coalition; helped found the South African International Freedom Foundation, which was dedicated to defending the apartheid regime while waging a public relations war against Nelson Mandela; lobbied against fair wages for workers in sweatshops in the American Marianas; funded and made a bad movie; and owns a Washington, D.C., deli that Henry Waxman says is “not that good.” Abramoff also is a close associate and longtime adviser to House Republican Majority Leader Tom DeLay.
Five years ago, DeLay’s former aide Mike Scanlon joined Abramoff at the Preston, Gates & Ellis law firm, where the two men, trading on DeLay’s name, began a lucrative lobbying practice with four American Indian tribes. By last year, when Scanlon was running his own public relations business and Abramoff had moved to Greenberg Taurig, a K Street lobby shop, the Washington Post reported the two men billed the tribes a staggering $45 million in less than three years. The amount seemed excessive, as there was no major Indian gambling initiative before Congress during that period. (General Motors paid $30 million for contract lobbying at the same time.)
Most of the money ($31 million) went directly to Scanlon, who is not registered as a lobbyist and, unlike Abramoff, does not have to disclose fees and clients. There’s a lot these guys didn’t disclose, so it was left up to the news media to tell their story. First the tiny Daily Town Talk of Alexandria, Louisiana, reported that a local tribe had paid Scanlon $13.7 million for a year’s worth of PR work. Then the Washington Post’s Susan Schmidt started running the numbers and came up with a total of $45 million, with almost $15 million traced to Abramoff. She also reported that one of Scanlon’s two public relations firms is only a mail drop, and that money trails seem to lead back to the older, more established Abramoff. (Scanlon is 33.)
Some of those trails are hard to explain. For example, Scanlon or Abramoff apparently directed the Louisiana Coushattas to contribute $556,000 to the American International Center in Rehoboth Beach, Delaware, which paid Abramoff $1.5 million for lobbying. But for what? When the Post sent a reporter down to check out the institute, it turned out to be a small operation. Actually it’s two men, a former lifeguard and a yoga instructor, both friends of Scanlon. It markets itself on its Web site as “a premier international think tank . . . determined to influence global paradigms in an increasingly complex world.” Whatever that means.
Abramoff is quickly becoming one lonely Pioneer. He was abruptly moved out of his job at Greenberg Taurig, which promises to retain all documents and cooperate with any investigation. He was publicly denounced by Tom DeLay, who warned that anyone trading on his name had better stop it and insisted that Abramoff has never been on his staff. Arizona Senator John McCain has investigators at Senate Indian Affairs poring over Abramoff’s books, and McCain’s investigation forced the Justice Department to send FBI agents out to interview tribal leaders. Scanlon and Abramoff are off the reservation for good, and their political contributions could soon be as radioactive as Enron’s. (Scanlon, who was still paying off his college loans when he left DeLay’s office, contributed $500,000 to the National Republican Governor’s Association in 2002.)
It’s not the billions in volume that Ken Lay was doing. But $45 million is real money. McCain is bothered by the fact that American Indians are living below the poverty level in Arizona while Abramoff and Scanlon are living large in Washington.
Not a word yet from the Pioneer operation, where Abramoff has already hit his $100,000 quota. But as McDonald points out, these guys can be pretty secretive.
Lou Dubose divides his time between Austin and Washington, D.C., where he is working on a Public Affairs book on Tom DeLay, to be released in August.