"You give me $850,000, and I'm going to know who gave me that so I can
give them a big ol' kiss."
Atlanta Journal-Constitution
5/18/05
Tribe cash fed Ralph Reed's Alabama fight
By ALAN JUDD, JIM GALLOWAY
Ralph Reed delivered what was expected as a consultant to two Alabama
anti-gambling campaigns: victories over proposals for a state lottery
and video poker, and donations totaling $1.15 million.
But Reed didn't tell the campaign organizations - and, he insists, he
didn't know - that the money came from a Mississippi Indian tribe
trying to protect its casinos from competition.
The money's path to the Christian Coalition of Alabama and another
anti-lottery group echoes Reed's entanglement in a scandal surrounding
Washington lobbyist Jack Abramoff and Indian casino money in Texas.
In that case, Abramoff hired Reed in 1999 to build public support for
closing the Tigua tribe's casino in El Paso. The casino closed in 2002.
Immediately afterward, Abramoff, who had kept his role secret, offered
to help the Tiguas reopen the casino - for $4 million, according to
Senate testimony.
Reed has said he was unaware that he was being paid with money from
rival tribes.
In Alabama, leaders of the anti-gambling groups said Reed was the
conduit for contributions from a group headed by anti-tax activist
Grover Norquist, who has said the money originated with the Mississippi
tribe. The Alabama organizations said Reed had repeatedly told them the
money was not tainted by ties to gambling interests.
Who misled whom?
Reed says Abramoff, who is facing investigations by two Senate
committees and the U.S. Justice Department in the Texas casino scheme,
arranged for contributions to one of the Alabama anti-gambling groups
and assured him it did not come from gambling interests. The groups
told Reed they would not accept money linked to gambling.
Reed has not been accused of any wrongdoing in Alabama or in Texas,
where his efforts to close one tribe's casino were surreptitiously
funded by rival tribes. But as he launches his first campaign for
elective office - the Republican nomination for Georgia's lieutenant
governor - the longtime political operative's activities have come
under increased scrutiny.
Most of the $1.15 million - from Norquist's Washington-based anti-tax
group Americans for Tax Reform - wound up in the hands of Reed's
Atlanta-based consulting firm, Century Strategies Inc., which ran the
anti-gambling campaigns.
"We just turned around and wrote out the check to them," John Giles of
Montgomery, president of the Alabama Christian Coalition, which
accepted $850,000, said this week.
Both the Christian Coalition and Citizens Against Legalized Lottery, a
Birmingham-based group that led the successful fight against a state
lottery proposal in 1999, say they repeatedly pressed Reed and his
employees to vouch for the purity of the cash.
"The ground rules pretty much were set in stone from Day One," said Jim
Cooper, the anti-lottery group's chairman. "Absolutely, they [Reed's
employees] knew our position on it. We were in a war. We were very
careful."
The Christian Coalition of Alabama has launched an internal
investigation. Reed is a former leader of the national Christian
Coalition but has no formal ties to the Alabama group.
Reed spokeswoman Lisa Baron said this week that Reed was unaware of the
source of the money. Any blame, she said, rests with Abramoff, the
Washington lobbyist.
"From the very beginning of this work, we understood that the
anti-gambling activists would be funded by a coalition of groups
opposed to an expansion of gambling," Baron said in a statement. "We
were also sensitive to the fact that many members of the group,
including the Christian Coalition of Alabama, did not want to accept
contributions from gaming activity."
The law firm where Abramoff worked told Reed the money for the
Christian Coalition didn't come from gambling sources, Baron said, and
"we passed those assurances on."
A spokesman for Abramoff's lawyer declined to comment.
Multiple assurances
Through Baron, Reed said for the first time that his anti-gambling work
in Alabama was part of a larger operation organized by Abramoff in
which Reed helped close the Tigua casino in Texas. Reed was paid $4.2
million for that three-year campaign - money that has been traced to
rival tribes with casinos of their own. Reed has said he didn't know
where that money came from, either.
The Alabama contributions - but not Reed's role - came to light last
week in a report in The Boston Globe.
The newspaper reported that Americans for Tax Reform wrote a check in
1999 for $300,000 to Citizens Against Legalized Lottery in Birmingham.
Months later, the group wrote three checks totaling $850,000 to the
Christian Coalition of Alabama. Both groups this week acknowledged
receiving the money.
Norquist, the anti-tax group's president and a leading voice among
conservative activists, was quoted in the Globe as saying a Mississippi
tribe gave him the $1.15 million he passed to the Alabama anti-gambling
organizations. Norquist said the tribe wanted to stifle competition.
In an interview with The Atlanta Journal-Constitution, Norquist
declined to elaborate on the Globe's account. He has refused to
identify the tribe.
But four years ago, Norquist's group accidentally handed a list of its
1999 donors, a supplemental statement on its federal tax return, to
Robert Dreyfuss, a writer for The Nation magazine. The filing, a copy
of which has been obtained by the Journal-Constitution, lists $360,000
from the Mississippi Band of Choctaws. A spokeswoman for the tribe,
which operates two casinos, declined to comment this week.
The Alabama anti-lottery organization had no reason to question the
source of the money Norquist's group donated, said Cooper, the
campaign's chairman.
But Giles, the Alabama president of the Christian Coalition, asked
multiple times about the source of the money, a former Century
Strategies employee said.
"On at least a couple of occasions, John Giles called to ask if I was
absolutely sure there was no gambling money - direct or indirect - in
any money they had received," said John Pudner, then a senior project
manager at Century Strategies. "Giles even told me he wanted to issue a
press release stating this - and I went and asked Ralph to make sure,
and Ralph assured me there was no gambling money involved."
Pudner said he has no reason to believe Reed knew the cash originated
with the tribe.
Both Alabama groups say Reed made no commission from the money he
brought in. Baron, the Reed spokeswoman, said the firm made "no
significant profit" from running both anti-gambling groups' campaigns.
The anti-lottery group paid Reed's firm $1.1 million of the total $1.6
million it raised. Much of the money went to buy air time for
television and radio ads. Baron said Century Strategies received the
"standard" commissions, but declined to say what that percentage was.
The $300,000 check from Americans for Tax Reform - the largest to the
anti-lottery campaign - arrived six days before the Oct. 12, 1999,
lottery referendum. Within five days of receiving the money, the group
wrote three checks to Reed totaling $270,960, records show.
In the case of the Christian Coalition, Giles said three separate
checks from Americans for Tax Reform arrived in the spring of 2000,
while the Alabama Legislature was in session. Lawmakers were
considering a bill to permit video poker machines at the state's
slumping dog tracks.
"Every penny" of the money, Giles said, went to Reed's firm to pay for
campaign consulting, including the mailing of anti-gambling literature.
Some taken on trust
According to Reed's spokeswoman, the donations to the two Alabama
organizations traveled slightly different paths.
For the $300,000 donation to the anti-lottery campaign, Reed dealt
directly with Americans for Tax Reform. Baron, Reed's spokeswoman, said
Reed sought no assurances that the money had no gaming ties because of
Norquist's public stance against state monopolies in gambling.
But for the $850,000 sent to the Christian Coalition of Alabama, Baron
said, Reed went to Abramoff, who obtained the checks from Norquist's
group. Reed's spokeswoman said the guarantees that the money had no
gambling origins were based on what Reed was told by Abramoff, a close
friend for more than 20 years.
Reed already is facing questions in the Texas casino controversy. He
has voluntarily turned over documents from Century Strategies to the
Senate Indian Affairs Committee investigating Abramoff's relationship
with six tribal clients, including the Choctaws in Mississippi.
The probes center on allegations that Abramoff bilked tribal clients
out of millions of dollars in lobbying and public relations fees - and
often pressed them for donations to his favorite political causes.
In the Texas case, and now with the campaigns in Alabama, Reed
maintains his sole purpose had been to halt the expansion of gambling.
In the Tigua campaign, Reed has said he had "no direct knowledge" that
he was being paid with money from rival casinos.
Reed acknowledged that he knew Abramoff's law firm had clients with
gambling interests, but has said, "We were not aware of every specific
client or interest."
In Alabama, supporters of the lottery and video poker proposals have
long accused opponents of relying on money from out-of-state casinos.
The past week's revelations have stirred old arguments, which erupted
in the state House of Representatives as lawmakers concluded their
annual session Monday.
Republicans blocked last-minute efforts to revive a bill requiring
nonprofit groups - such as the Christian Coalition - to disclose the
sources of money they use to buy advertisements to influence
referendums. The sponsor, Rep. Randy Hinshaw, a Democrat from
Huntsville, said he was skeptical that such groups don't know where
their money comes from.
"You give me $850,000," Hinshaw said Tuesday, "and I'm going to know
who gave me that so I can give them a big ol' kiss."
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