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Deja Moo
Location: Olympic Peninsula, WA
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In addition to the information in the link Host posted above, Scanlon and Ney have also been implicated in Abramhoff's SunCruz purchase.
http://www.miami.com/mld/miamiherald...printstory.jsp
Quote:
Posted on Sun, Sep. 25, 2005
CASINO CRUISE INQUIRY
Politician in SunCruz's hot water
The role of an obscure Ohio congressman during negotiations in the sale of Fort Lauderdale-based SunCruz Casinos in 2000 has drawn the attention of federal investigators.
BY JAY WEAVER
jweaver@herald.com
Federal authorities want to know whether an obscure Ohio congressman improperly influenced negotiations in the $147 million SunCruz Casinos deal five years ago as a favor to a politically connected lobbyist and his business partner, according to sources familiar with the investigation.
Rep. Bob Ney, a Republican better known for touting coal shippers in his district, thrust himself into the sensitive sale in March 2000 when he publicly trashed Fort Lauderdale-based SunCruz owner Gus Boulis in Congress.
Sources say investigators want to know whether Ney deliberately sought to handicap Boulis by highlighting his troubles with Florida authorities at a time when the magnate -- pressured by federal prosecutors -- was desperately trying to sell his gambling ships to Washington lobbyist Jack Abramoff and New York businessman Adam Kidan.
In South Florida, Abramoff and Kidan were each charged last month with defrauding lenders of $60 million to purchase SunCruz, which quickly sank into bankruptcy under their ownership.
A spokesman for Ney denied any wrongdoing.
Ney inserted comments into the Congressional Record that condemned Boulis as a ''bad apple'' in the gaming industry -- six months before the sale of his Las Vegas-style gaming vessels in September 2000. One month after the deal closed, Ney inserted more comments into the record that praised Kidan's ``renowned reputation for honesty and integrity.''
He did so at the request of Michael Scanlon, a former communications director to Tom DeLay, a powerful Republican lawmaker from Texas. Scanlon went on to work as a lobbyist with Abramoff and then as a public relations consultant for SunCruz after the sale.
In the midst of the SunCruz negotiations, Ney received thousands of dollars in campaign contributions from Kidan, Abramoff, Abramoff's wife and Scanlon.
Federal prosecutors, along with FBI agents, are trying to determine whether Ney, a 10-year veteran of Congress whose district includes the upper Ohio River, received any other financial benefits in addition to campaign contributions.
According to federal court records, Kidan diverted $310,000 from SunCruz to pay for a luxury sports sky box in the Washington-Baltimore area -- part of Abramoff's GOP fundraising enterprise where he entertained politicians and donors at FedEx Field, MCI Center and Camden Yards.
Abramoff and Scanlon are already targets of a Justice Department investigation into their representation of six Indian tribes that own casinos across the country. They raked in $66 million in lobbying fees from the tribes, who foot most of the bills for the sports sky boxes and possibly other political expenses.
Ney's spokesman said that authorities had not contacted his boss about the SunCruz criminal case or any other Justice Department probe.
''Had he known everything about the background of that individual [Kidan], he wouldn't have done it,'' said Ney's spokesman, Brian Walsh, adding the congressman's campaign committee returned Kidan's $2,000 donations. It's not unusual for U.S. representatives to insert remarks into the Congressional Record, but it's typically done for constituents in their district. What Ney did is uncommon, said Larry Noble, executive director of Center for Responsive Politics, a Washington-based nonpartisan group that tracks money and politics.
''It appears this was not an innocent praising of a constituent,'' Noble said. ``He looks like he's leveraging a business deal. That in and of itself would be problematic. What makes it even more troublesome for Ney is that [Kidan and Abramoff] ran the business into the ground.
''It all gets entangled in this web [amid] a strong sense of scandal,'' he said. ``Ney has to expect to be asked about why he did this.''
The SunCruz case is a political story of strange bedfellows, even by Miami and Washington standards.
`CRUISES TO NOWHERE'
Konstantinos ''Gus'' Boulis, a Greek immigrant who made his first fortune as founder of the Miami Subs chain, ventured into the gambling ''cruises to nowhere'' industry in the 1990s. The SunCruz fleet of 11 ships had 2,300 slot machines and 175 gaming tables and sailed from nine Florida ports and Myrtle Beach, S.C., to international waters.
But Boulis was forced to sell SunCruz in 1999 after federal prosecutors reached a settlement with him on civil charges of violating the Shipping Act because he purchased his fleet before he became a U.S. citizen. Prosecutors kept the settlement a secret so that Boulis could attempt to sell his business at market value.
It didn't remain a secret for very long.
Facing a 36-month deadline, Boulis turned to his maritime lawyer in Washington, Art Dimopoulos, a partner with Abramoff, who led the governmental affairs division at the law firm Preston Gates Ellis. The power broker found Kidan, a businessman whom he got to know as young Republican activists in the 1980s.
Kidan had just sold his Dial-a-Mattress franchise in Washington and was looking to invest an ''eight-figure'' payoff, according to Abramoff. The pair began negotiations with Boulis in January 2000 -- then got a critical assist from Scanlon. He left DeLay's staff that month to work as a public relations consultant and lobbyist for gaming industry clients, among others.
Scanlon asked Ney's office to insert critical comments into the Congressional Record about the SunCruz owner and Ney obliged because of his close relationship with DeLay, according to Ney's spokesman, Walsh.
''He [Ney] didn't have any interaction with Abramoff or Kidan'' regarding the request, Walsh said.
Scanlon, who worked with Abramoff and later as a spokesman for SunCruz, could not be reached for comment.
After Scanlon made his request to Ney's office, the Ohio congressman said he was ''an ardent foe of illegal activity in the gaming industry'' and ``an ardent supporter of consumer rights.''
''I believe that the vast majority of casino owners play by the rules, treat their patrons fairly and provide quality entertainment for individuals and families,'' Ney said in the Congressional Record in March 2000. ``However, there are a few bad apples out there who don't play by the rules and that is just plain wrong. One such example is the case of SunCruz Casinos, based out of Florida.''
He pointed out that then-Attorney General Bob Butterworth reprimanded the company and Boulis for taking illegal bets and not properly paying winnings to their customers.
Three months later, according to court records, Boulis reached a tentative agreement to sell SunCruz to Kidan and Abramoff.
By the end of June 2000, Abramoff, Abramoff's wife, Kidan and Scanlon each gave $1,000 to Ney's political campaign.
One month after the SunCruz sale closed that September, Ney inserted more remarks in the Congressional Record -- this time about Kidan.
''I have come to learn that SunCruz Casinos now finds itself under new ownership and, more importantly, that its new owner has a renowned reputation for honesty and integrity,'' Ney said.
A BAD PREDICTION
Ney predicted that Kidan ``will easily transform SunCruz from a questionable enterprise to an upstanding establishment that the gaming community can be proud of.''
Kidan, Abramoff and their partners ran the business into the ground. The Dania Beach-based company filed for bankruptcy under Chapter 11 on June 22, 2001 -- just nine months after the sale and four months after Boulis himself was gunned down in a still-unsolved, execution-style murder.
Court records show that Kidan paid himself $500,000 as SunCruz's president and spent ''hundreds of thousands of dollars'' on company costs that ''produced questionable or marginal benefits.'' Among them: the sports skybox rental, Kidan's lease of an armored Mercedes-Benz for $207,545.30 and full-time bodyguards.
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"You can't ignore politics, no matter how much you'd like to." Molly Ivins - 1944-2007
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