WASHINGTON-Jack Abramoff ordered the wireless firm that won the House in-building wireless infrastructure contract to make payments totaling $50,000 to a tax-exempt group created by the fallen lobbyist instead of charging the company lobbying lawmakers. The revelation was made public as part of Abramoff’s plea agreement with U.S. officials, which comes amid a growing fallout from political scandals that has Congress crafting lobbying-reform legislation and the House looking for new leadership.
MobileAccess Networks, an Israeli firm represented by Abramoff’s former Greenberg Traurig law firm, bettered San Jose-based LGC for a contract valued between $4 million and $9 million to improve cell-phone coverage inside the U.S. House of Representatives. MobileAccess-well regarded in the wireless industry and used by major telecom carriers-also was awarded the Senate in-building wireless contract.
The plea deal said Abramoff created the tax-exempt Capital Athletic Foundation in July 1999, and that he used the entity to evade income taxes. Payments were made by interstate wire transfer or checks involving interstate funds transfers, according to court documents.
It is unclear whether MobileAccess was aware of legal issues associated with its compensation for lobbying. MobileAccess reportedly later paid Greenberg Traurig $240,000 for lobbying.
“We have been assured that neither MobileAccess nor any of its personnel are subjects or targets of the (Abramoff) investigation,” said Douglas Fellman, an outside attorney for MobileAccess.
Lobbying records show Neil Volz, former chief of staff to Rep. Bob Ney (R-Ohio), lobbied for MobileAccess. Ney is chairman of the House Administration Committee. Ney’s name has surfaced prominently in recent months in connection with various investigations of alleged influence peddling.
Indeed, The Washington Times, citing sources close to the Abramoff investigation, said Ney is one of five lawmakers being scrutinized in the ongoing probe. Others named-two with telecom connections-in the Jan. 11 story are Sens. Conrad Burns (R-Mont.) and Byron Dorgan (D-N.D.), Senate Minority Leader Harry Reid (D-Nev.) and Rep. J.D. Hayworth (R-Ariz.).
Congress has responded by promising to better police itself and lobbyists with new restrictions, an effort that is causing angst in telecom lobbying circles.
“I intend to move forward aggressively and quickly to have the House of Representatives address lobbying reform,” said House Speaker Dennis Hastert (R-Ill.). “Over the past several months, I have spoken with many members about the need for such reforms. I have been encouraged by the breadth and boldness of their ideas. Now is the time for action.”
Sens. John McCain (R-Ariz.) and Joe Lieberman (D-Conn.) are also pursuing lobbying-reform measures that lobbyists probably would like even less.
McCain said recent events “have once again proven the need for comprehensive reform of the way business is done in this town. Sen. Lieberman’s leadership and experience will be crucial to the passage of this necessary lobbying-reform legislation and I am honored that he has agreed to work with me on such an important issue. We strongly share the views of most Americans that the system is broken and Congress has a responsibility to fix it.”
Wireless carriers and manufacturers and their trade associations spend millions of dollars annually on lobbying. That is not about to change, regardless of any changes in lobbying laws.
“While there are a lot of bad apples, we are concerned [about lobbying reform],” said Grant Seiffert, executive vice president of the Telecommunications Industry Association. Seiffert, whose group represents telecom manufacturers, said TIA does not want to see changes that could hurt industry’s ability to educate lawmakers and congressional staff about cutting-edge technology with policy implications.
Andrew Kreig, president of the Wireless Communications Association, said he does not believe lobbying-reform legislation would have a direct impact on the wireless Internet group. Kreig said much of WCA advocacy is directed at the Federal Communications Commission, where lobbyists and federal regulators grapple with the details of wireless issues that can be highly complex.
Congress tends to use a broad brush to deal with spectrum and wireless legislation. As such, Kreig said WCA educates members about wireless issues subject to legislation. WCA members typically then decide whether they want to lobby lawmakers on their own.
CTIA, which in past years has spent around $3 million annually on lobbying on behalf of mobile-phone carriers, declined to comment on lobbying-reform efforts on Capitol Hill.
Meantime, Reps. Roy Blunt (R-Mo.) and John Boehner (R-Ohio) are vying to replace Rep. Tom DeLay (R-Texas) as House majority leader. But there is speculation a dark-horse candidate could emerge by the time of the House leadership vote, set for later this month.
