Nonprofit Group Linked to Lawmaker Was Funded Mostly by Clients of
Rep. Tom Delay (R-Tex.), a hard-charging partisan with an intimidating reputation, was charged by a Texas prosecutor in a campaign finance probe.
The U.S. Family Network, a public advocacy group that operated in the 1990s
with close ties to Rep. Tom DeLay and claimed to be a nationwide grass-roots
organization, was funded almost entirely by corporations linked to embattled
lobbyist Jack Abramoff, according to tax records and former associates of the
During its five-year existence, the U.S. Family Network raised $2.5 million
but kept its donor list secret. The list, obtained by The Washington Post, shows
that $1 million of its revenue came in a single 1998 check from a now-defunct
London law firm whose former partners would not identify the money's origins.
Two former associates of Edwin A. Buckham, the congressman's former chief of
staff and the organizer of the U.S. Family Network, said Buckham told them the
funds came from Russian oil and gas executives. Abramoff had been working closely
with two such Russian energy executives on their Washington agenda, and the
lobbyist and Buckham had helped organize a 1997 Moscow visit by DeLay (R-Tex.).
The former president of the U.S. Family Network said Buckham told him that
Russians contributed $1 million to the group in 1998 specifically to influence
DeLay's vote on legislation the International Monetary Fund needed to finance
a bailout of the collapsing Russian economy.
A spokesman for DeLay, who is fighting in a Texas state court unrelated charges
of illegal fundraising, denied that the contributions influenced the former
House majority leader's political activities. The Russian energy executives
who worked with Abramoff denied yesterday knowing anything about the million-dollar
London transaction described in tax documents.
Whatever the real motive for the contribution of $1 million -- a sum not prohibited
by law but extraordinary for a small, nonprofit group -- the steady stream of
corporate payments detailed on the donor list makes it clear that Abramoff's
long-standing alliance with DeLay was sealed by a much more extensive web of
financial ties than previously known.
Washington lobbyist Jack Abramoff has been indicted for illegal actions he allegedly took to purchase a fleet of Florida gambling boats from a businessman who was later killed in a gangland-style hit. Other efforts he took to funnel money to support causes of interest to his clients are also being probed.
Records and interviews also illuminate the mixture of influence and illusion
that surrounded the U.S. Family Network. Despite the group's avowed purpose,
records show it did little to promote conservative ideas through grass-roots
advocacy. The money it raised came from businesses with no demonstrated interest
in the conservative "moral fitness" agenda that was the group's professed
In addition to the million-dollar payment involving the London law firm, for
example, half a million dollars was donated to the U.S. Family Network by the
owners of textile companies in the Mariana Islands in the Pacific, according
to the tax records. The textile owners -- with Abramoff's help -- solicited
and received DeLay's public commitment to block legislation that would boost
their labor costs, according to Abramoff associates, one of the owners and a
DeLay speech in 1997.
A quarter of a million dollars was donated over two years by the Mississippi
Band of Choctaw Indians, Abramoff's largest lobbying client, which counted DeLay
as an ally in fighting legislation allowing the taxation of its gambling revenue.
The records, other documents and interviews call into question the very purpose
of the U.S. Family Network, which functioned mostly by collecting funds from
domestic and foreign businesses whose interests coincided with DeLay's activities
while he was serving as House majority whip from 1995 to 2002, and as majority
leader from 2002 until the end of September.
After the group was formed in 1996, its director told the Internal Revenue
Service that its goal was to advocate policies favorable for "economic
growth and prosperity, social improvement, moral fitness, and the general well-being
of the United States." DeLay, in a 1999 fundraising letter, called the
group "a powerful nationwide organization dedicated to restoring our government
to citizen control" by mobilizing grass-roots citizen support.
But the records show that the tiny U.S. Family Network, which never had more
than one full-time staff member, spent comparatively little money on public
advocacy or education projects. Although established as a nonprofit organization,
it paid hundreds of thousands of dollars in fees to Buckham and his lobbying
firm, Alexander Strategy Group.
There is no evidence DeLay received a direct financial benefit, but Buckham's
firm employed DeLay's wife, Christine, and paid her a salary of at least $3,200
each month for three of the years the group existed. Richard Cullen, DeLay's
attorney, has said that the pay was compensation for lists Christine DeLay supplied
to Buckham of lawmakers' favorite charities, and that it was appropriate under
House rules and election law.
Some of the U.S. Family Network's revenue was used to pay for radio ads attacking
vulnerable Democratic lawmakers in 1999; other funds were used to finance the
cash purchase of a townhouse three blocks from DeLay's congressional office.
DeLay's associates at the time called it "the Safe House."
DeLay made his own fundraising telephone pitches from the townhouse's second-floor
master suite every few weeks, according to two former associates. Other rooms
in the townhouse were used by Alexander Strategy Group, Buckham's newly formed
lobbying firm, and Americans for a Republican Majority (ARMPAC), DeLay's leadership
They paid modest rent to the U.S. Family Network, which occupied a single small
room in the back.
Graphic - How
Abramoff Spread the Wealth
'Red Flags' on Tax Returns
Nine months before the June 25, 1998, payment of $1 million by the London law
firm James & Sarch Co., as recorded in the tax forms, Buckham and DeLay
were the dinner guests in Moscow of Marina Nevskaya and Alexander Koulakovsky
of the oil firm Naftasib, which in promotional literature counted as its principal
clients the Ministry of Defense and the Ministry of Interior.
Buckham, a graduate of the University of Tennessee, had worked for DeLay since
1995, after serving in other congressional offices and then as executive director
of the Republican Study Committee, a group of fiscally conservative House members.
Their other dining companions were Abramoff and Washington lawyer Julius "Jay"
Kaplan, whose lobbying firms collected $440,000 in 1997 and 1998 from an obscure
Bahamian firm that helped organize and indirectly pay for the DeLay trip, in
conjunction with the Russians. In disclosure forms, the stated purpose of the
lobbying was to promote the policies of the Russian government.
Kaplan and British lawyer David Sarch had worked together previously. (Sarch
died a month before the $1 million was paid.) Buckham's trip with DeLay was
his second to Moscow that year for meetings with Nevskaya and Koulakovsky; on
the earlier one, the DeLay aide attracted media attention by returning through
Paris aboard the Concorde, a $5,500 flight.
Former Abramoff associates and documents in the hands of federal prosecutors
state that Nevskaya and Koulakovsky sought Abramoff's help at the time in securing
various favors from the U.S. government, including congressional earmarks or
federal grants for their modular-home construction firm near Moscow and the
construction of a fossil-fuel plant in Israel. None appears to have been obtained
by their firm.
Former DeLay employees say Koulakovsky and Nevskaya met with him on multiple
occasions. The Russians also frequently used Abramoff's skyboxes at local sports
stadiums -- as did Kaplan, according to sources and a 2001 e-mail Abramoff wrote
to another client.
Three sources familiar with Abramoff's activities on their behalf say that
the two Russians -- who knew the head of the Russian energy giant Gazprom and
had invested heavily in that firm -- partly wanted just to be seen with a prominent
American politician as a way of bolstering their credibility with the Russian
government and their safety on Moscow's streets. The Russian oil and gas business
at the time had a Wild West character, and its executives worried about extortion
and kidnapping threats. The anxieties of Nevskaya and Koulakovsky were not hidden;
like many other business people, they traveled in Moscow with guards armed with
During the DeLays' visit on Aug. 5 to 11, 1997, the congressman met with Nevskaya
and was escorted around Moscow by Koulakovsky, Naftasib's general manager. DeLay
told the House clerk that the trip's sponsor was the National Center for Public
Policy Research, but multiple sources told The Post that his expenses were indirectly
reimbursed by the Russian-connected Bahamian company.
DeLay spokesman Kevin Madden said the principal reason for his Moscow trip
was "to meet with religious leaders there." Nevskaya, in a letter
this spring, said Naftasib's involvement in such trips was meant "to foster
better understanding between our country and the United States" and denied
that the firm was seeking protection through its U.S. contacts.
Nevskaya added in an e-mail yesterday that Naftasib and its officials were
not representing the ministries of defense and interior or any other government
agencies "in connection with meetings or other lobbying activities in Washington
D.C. or Moscow."
A former Abramoff associate said the two executives "wanted to contribute
to DeLay" and clearly had the resources to do it. At one point, Koulakovsky
asked during a dinner in Moscow "what would happen if the DeLays woke up
one morning" and found a luxury car in their front driveway, the former
associate said. They were told the DeLays "would go to jail and you would
go to jail."
The tax form states that the $1 million came by check on June 25, 1998, from
"Nations Corp, James & Sarch co." The Washington Post checked
with the listed executives of Texas and Florida firms that have names similar
to Nations Corp, and they said they had no connection to any such payment.
James & Sarch Co. was dissolved in May 2000, but two former partners said
they recalled hearing the names of the Russians at their office. Asked if the
firm represented them, former partner Philip McGuirk at first said "it
may ring a bell," but later he faxed a statement that he could say no more
because confidentiality practices prevent him "from disclosing any information
regarding the affairs of a client (or former client)."
Nevskaya said in the e-mail yesterday, however, that "neither Naftasib
nor the principals you mentioned have ever been represented by a London law
firm that you name as James & Sarch Co." She also said that Naftasib
and its principals did not pay $1 million to the firm, and denied knowing about
Two former Buckham associates said that he told them years ago not only that
the $1 million donation was solicited from Russian oil and gas executives, but
also that the initial plan was for the donation to be made via a delivery of
cash to be picked up at a Washington area airport.
One of the former associates, a Frederick, Md., pastor named Christopher Geeslin
who served as the U.S. Family Network's director or president from 1998 to 2001,
said Buckham further told him in 1999 that the payment was meant to influence
DeLay's vote in 1998 on legislation that helped make it possible for the IMF
to bail out the faltering Russian economy and the wealthy investors there.
"Ed told me, 'This is the way things work in Washington,' " Geeslin
said. "He said the Russians wanted to give the money first in cash."
Buckham, he said, orchestrated all the group's fundraising and spending and
rarely informed the board about the details. Buckham and his attorney, Laura
Miller, did not reply to repeated requests for comment on this article.
The IMF funding legislation was a contentious issue in 1998. The Russian stock
market fell steeply in April and May, and the government in Moscow announced
on June 18 -- just a week before the $1 million check was sent by the London
law firm -- that it needed $10 billion to $15 billion in new international loans.
House Republican leaders had expressed opposition through that spring to giving
the IMF the money it could use for new bailouts, decrying what they described
as previous destabilizing loans to other countries. The IMF and its Western
funders, meanwhile, were pressing Moscow, as a condition of any loan, to increase
taxes on major domestic oil companies such as Gazprom, which had earlier defaulted
on billions of dollars in tax payments.
On Aug. 18, 1998, the Russian government devalued the ruble and defaulted on
its treasury bills. But DeLay, appearing on "Fox News Sunday" on Aug.
30 of that year, criticized the IMF financing bill, calling the replenishment
of its funds "unfortunate" because the IMF was wrongly insisting on
a Russian tax increase. "They are trying to force Russia to raise taxes
at a time when they ought to be cutting taxes in order to get a loan from the
IMF. That's just outrageous," DeLay said.
In the end, the Russian legislature refused to raise taxes, the IMF agreed
to lend the money anyway, and DeLay voted on Sept. 17, 1998, for a foreign aid
bill containing new funds to replenish the IMF account. DeLay's spokesman said
the lawmaker "makes decisions and sets legislative priorities based on
good policy and what is best for his constituents and the country." He
added: "Mr. DeLay has very firm beliefs, and he fights very hard for them."
Kaplan did not respond to repeated messages, and through a spokesman for lawyer
Abbe Lowell, Abramoff declined to comment.
No legal bar exists to a $1 million donation by a foreign entity to a group
such as the U.S. Family Network, according to Marcus Owens, a Washington lawyer
who directed the IRS's office of tax-exempt organizations from 1990 to 2000
and who reviewed, at The Post's request, the tax returns filed by the U.S. Family
But "a million dollars is a staggering amount of money to come from a
foreign source" because such a donor would not be entitled to claim the
tax deduction allowed for U.S. citizens, Owens said. "Giving large donations
to an organization whose purposes are as ambiguous as these . . . is extraordinary.
I haven't seen that before. It suggests something else is going on.
"There are any number of red flags on these returns."
Hailing Indian Tribe's Hiring of Lobbyists
Buckham and Tony Rudy were the first DeLay staff members to visit the Choctaw
Reservation near Meridian, Miss., where the tribe built a 500-room hotel and
a 90,000-square-foot gambling casino. Their trip from March 25 to 27, 1997,
cost the Choctaws $3,000, according to statements filed with the House clerk.
DeLay, his wife and Susan Hirschman -- Buckham's successor in 1998 as chief
of staff -- were the next to go. Their trip from July 31 to Aug. 2, 1998, was
described on House disclosure forms as a "site review and reservation tour
for charitable event," and the forms said it cost the Choctaws $6,935.
Buckham, who was then a lobbyist, arranged DeLay's trip, which included a visit
to the tribe's golf course to assess it as a possible location for the lawmaker's
annual charity tournament, according to a tribal source. Abramoff told the tribe
he could not accompany DeLay because of a prior commitment, the source said.
One day after the DeLays departed for Washington, the U.S. Family Network registered
an initial $150,000 payment made by the Choctaws, according to its tax return.
The tribe made additional payments to the group totaling $100,000 on "various"
dates the following year, the returns state. The Choctaws separately paid Abramoff
$4.5 million for his lobbying work on their behalf in 1998 and 1999. Abramoff
and his wife contributed $22,000 to DeLay's political campaigns from 1997 to
2000, according to public records.
A former Abramoff associate who is aware of the payments, and who spoke on
the condition of anonymity to protect his clients, said the tribe made contributions
to entities associated with DeLay because DeLay was crucial to the tribe's continuing
fight against legislation to allow the taxation of Indians' gambling revenue.
An attorney for the tribe, Bryant Rogers, said the funds were meant not only
to "get the message out" about the adverse tax law proposals but also
to finance a campaign by Buckham's group within "the conservative base"
against legislation to strip tribes of their control over Indian adoptions.
"This was a group connected to the right-wing Christian movement,"
Rogers said. "This is Ed Buckham's connection."
In March 1999, after the tribe had paid a substantial sum directly to the U.S.
Family Network, Buckham expressed his general gratitude to Abramoff in an e-mail.
"I really appreciate you going to bat for us. Remember it is the first
bit of money that is always the hardest, but means the most," Buckham said,
according to a copy. He added: "Pray for God's wisdom. I really believe
this is supposed to be what we are doing to save our team."
During this period, a fundraising letter on the U.S. Family Network stationery
was sent to residents of Alabama, announcing a petition drive to promote a cause
of interest to Abramoff's Indian gambling clients in Mississippi and Louisiana,
including the Choctaw casino that drew many customers from Alabama: the blocking
of a rival casino proposed by the Poarch Creek Indians on their land in Alabama.
"The American family is under attack from all sides: crime, drugs, pornography,
and one of the least talked about but equally as destructive -- gambling,"
said the group's letter, which was signed by then-Rep. Bob Riley (R), now the
Alabama governor. "We need your help today . . . to prevent the Poarch
Creek Indians from building casinos in Alabama."
Asked about the letter, Rogers said "none of us have seen" it and
"the tribe's contributions have nothing to do with it." A spokesman
for Riley said that he could not recall the circumstances behind the letter,
but that he has long opposed any expansion of gambling in Alabama.
DeLay, meanwhile, saluted Choctaw chief Philip Martin in the Congressional
Record on Jan. 3, 2001, citing "all he has done to further the cause of
freedom." DeLay also attached to his remarks an editorial that hailed the
tribe's gambling income and its "hiring [of] quality lobbyists."
Throughout this period, the U.S. Family Network was paying a monthly fee of
at least $10,000 to Buckham and Alexander Strategy Group for general "consulting,"
according to a former Buckham associate and a copy of the contract. While DeLay's
wife drew a monthly salary from the lobbying firm, she did not work at its offices
in the townhouse on Capitol Hill, according to former Buckham associates.
Neither the House nor the Federal Election Commission bars the payment of corporate
funds to spouses through consulting firms or political action committees, but
the spouses must perform real work for reasonable wages.
"Anytime you [as a congressman] hire your child or spouse, it raises questions
as to whether this is a throwback to the time when people used campaigns and
government jobs to enrich their families," said Larry Noble, executive
director of the Center for Responsive Politics, a nonpartisan watchdog group,
and a former general counsel of the FEC.
Research editor Lucy Shackelford; researchers
Alice Crites, Madonna Lebling, Karl
Evanzz and Meg Smith; and research database
editor Derek Willis contributed to this report.