Second, Jack Abramoff. Channel One's main Washington lobbyist, has quit, and is now under investigation by a federal grand jury, according to the Washington Post. This is very bad for Channel One, because it desperately needs political influence to keep its contracts with the federal government. Here's yesterday's Washngton Post update on the Abramoff saga.

http://www.washingtonpost.com/wp-dyn/articles/A17529-2005Feb11.html

Abramoff Ex-Firm Settles With Tribe; Former Lobbyist Was Paid Millions on Both Sides of Casino Issue
by Susan Schmidt

A Texas Indian tribe that paid $4.2 million to two Washington consultants for help reopening its casino -- while unaware that the same consultants had quietly worked to shut the casino down -- has reached a settlement with the law firm Greenberg Traurig, which employed one of the men.

Representatives of the Tigua tribe of El Paso said yesterday that they negotiated a confidential financial settlement with Greenberg Traurig in January. As part of the arrangement, they said, Greenberg Traurig will have the authority to pursue claims on the tribe's behalf against its former employee Jack Abramoff and public relations consultant Michael Scanlon.

Abramoff, formerly a prominent Republican lobbyist, and Scanlon secretly worked with conservative religious activist Ralph Reed to help persuade the state of Texas to shut down the Tigua casino in 2002, and then they persuaded the tribe to pay them to lobby Congress to reopen it, according to e-mails obtained by government investigators last fall.

Federal authorities are investigating possible fraud and public corruption in connection with Abramoff and Scanlon's dealings with the Tiguas and other tribes. The two collected at least $82 million in lobbying and public relations fees from half a dozen tribes. Abramoff also directed the tribes to donate more than $3.5 million to members of Congress, according to tribal records and Federal Election Commission documents.

Attorneys for Scanlon and Abramoff said they were surprised yesterday by the settlement. "If its terms are as described by the Tigua representative," said Scanlon's lawyer, Stephen L. Braga, "it's a most unusual posture for Greenberg Traurig to put itself in, and we would have to see how it plays out in court."

"Without seeing the settlement, Mr. Abramoff can have no comment," said a spokesman for Abramoff's lawyer, Abbe D. Lowell. "But it would be an odd legal arrangement for the firm to be able to sue one of its former employees on behalf of a tribe it did not represent and does not stand in the shoes of."

Scanlon, Abramoff and Greenberg Traurig are defendants in a $32 million suit alleging fraud and negligence filed by the Louisiana Coushattas tribe. Joe Kendall, attorney for the Coushattas, yesterday called Greenberg Traurig's position in the Tigua settlement "the mother of all conflicts of interest."

By becoming lawyers for the Tigua, Greenberg Traurig could limit any inquiry by the tribe into whether the firm had knowledge or involvement in Abramoff's activities with the Tiguas.

Jill Perry, a spokeswoman for Greenberg Traurig, confirmed the existence of the settlement and that the tribe had given Greenberg the right to pursue claims against Abramoff, its former partner. Perry said she had no comment about assertions that the terms of the deal represented a conflict of interest for the firm.

Greenberg Traurig pressured Abramoff to resign from the firm last year when his fees and financial arrangements were disclosed in a Washington Post report. The firm said at the time it was unaware of certain personal financial transactions by Abramoff, but it has declined to provide details of what Abramoff told his partners about his dealings with Scanlon and the tribes.

According to tribal officials, documents obtained by The Washington Post and testimony before the Senate Indian Affairs Committee, Abramoff signed on as a lobbyist for wealthy gaming tribes, then would advise the Indians to hire Scanlon's public relations firm for millions of dollars. Scanlon would then share some of those fees with Abramoff without the tribe's knowledge, according to documents the Senate uncovered.

In the case of the Tigua tribe, e-mails from Abramoff's computer turned over to Senate investigators showed Scanlon's firm was paid $4.2 million by the Tiguas, and that he then wrote a check for $2.1 million to Kay Gold LLC, a company formed by Abramoff. Abramoff told the tribe in an e-mail that Greenberg Traurig would work on getting legislation passed "on a pro bono basis" but then expected to be retained as lobbyists for between "$125,000 and $175,000 per month." Greenberg Traurig never registered as a lobbyist for the tribe.

Greenberg Traurig has said it is cooperating in the federal and congressional probes. It has been conducting an internal investigation of Abramoff's dealings for the past year and has hired Williams & Connolly, the law firm that negotiated the Tiguas settlement.