Ties to lobbyist raise questions

Top Ehrlich adviser formed company accused of laundering money for Abramoff

September 24, 2005|By David Nitkin and Andrew A. Green | David Nitkin and Andrew A. Green,Sun Reporter

A top adviser to Gov. Robert L. Ehrlich Jr. has become ensnared in the widening investigation of indicted Washington lobbyist Jack Abramoff, with members of the Senate Judiciary Committee raising fresh questions this week about a company formed by the aide that stands accused of laundering money for the lobbyist.

Edward B. Miller, 34, a deputy chief of staff to the governor, founded Grassroots Interactive in spring 2003 with a $10,000 investment, weeks after he began working for the Ehrlich administration, according to financial records he filed with the state and other documents. He sold the firm four months later. The company is now the subject of an investigation by federal authorities for being a front for alleged money-laundering efforts by Abramoff, according to congressional testimony made available this week.

Grassroots Interactive received $2 million from Tyco International, a company at the center of a corporate accounting scandal, after Tyco hired Abramoff as a lobbyist in 2003, a Tyco official testified to the Senate committee in remarks made public this week.

Tyco chief counsel Timothy E. Flanigan, a former White House lawyer nominated by President Bush to be deputy U.S. attorney general, said Abramoff's law firm, Greenberg Traurig, has determined that much of the money Tyco paid to Grassroots was misspent.

"Specifically, Greenberg Traurig advised Tyco that Mr. Abramoff caused Tyco's payments to Grassroots Interactive, LLC to be forwarded to a Greenberg Traurig trust account and, from there, ultimately to entities controlled by Mr. Abramoff," wrote Flanigan. "Greenberg Traurig informed Tyco that the funds diverted to the entities controlled by Mr. Abramoff were not used in furtherance of lobbying efforts on behalf of Tyco."

Miller did not respond to a message yesterday asking him to discuss his work with Grassroots Interactive.

His lawyer, Aron Raskas of Baltimore, also did not answer messages left at his home and office. Grassroots received a subpoena last year from a federal grand jury investigating Abramoff's work on behalf of Indian tribes and other matters.

Ehrlich spokesman Henry Fawell said the governor is aware that Miller has been contacted by investigators, and said the deputy chief of staff has been "extremely helpful" to them. "He is a valued member of our team who has been assisting in the investigation for more than a year," Fawell said.

According to Flanigan's testimony, Abramoff directed Tyco to sign contracts with Grassroots Interactive totaling $1.5 million during the time that state documents show Miller owned the company.

Flanigan testified that Tyco hired the company as part of an effort to stop legislation that would have eliminated tax advantages it enjoyed as an offshore company. He said that the payments came in two contracts, one for work in spring 2003 and one for work in summer and fall of that year.

Miller founded the firm in May 2003 and divested himself from it in September of that year, state records show.

An attorney and former member of Piper Rudnick LLP, Miller is a key member of Ehrlich's inner circle and involved in many high-level decisions.

Like Ehrlich, Miller is a graduate of the Gilman School in Baltimore, and he developed a relationship with the governor while interning in Ehrlich's congressional office. He grew up in the same Baltimore County neighborhood as Ken Mehlman, the Bush campaign manager and head of the Republican National Committee. Miller has been mentioned as a potential candidate for Congress in the 3rd District.

An Orthodox Jew, Miller has been instrumental in Ehrlich's fundraising in that community.

Miller was hired as the chief of staff of the state Department of Business and Economic Development, a Cabinet agency, in April 2003. In January 2004, Ehrlich brought him into the governor's office as deputy chief of staff.

Miller's connections to Ehrlich and Abramoff have been seized upon by Democratic Party operatives who are preparing for the 2006 governor's race. Operatives have been circulating a memorandum that highlights Ehrlich's links to Abramoff and House minority whip Tom DeLay, who took trips paid for by Abramoff's lobbying clients.

Ehrlich was a deputy whip for the Republican caucus when he was a congressman, helping DeLay round up votes and maintain party unity.

"This again demonstrates that Ehrlich has very close ties to the Bush administration and the national Republican political machine," said Josh White, political director of the state Democratic Party.

According to state Board of Elections records, Abramoff and his wife, Pamela, contributed a total of $16,000 to Ehrlich during the past two election cycles, the maximum allowable under state law. The Abramoffs donated another $11,750 to various Maryland Republican Party campaign accounts in that time.

Miller said in his state financial disclosure statement that he sold Grassroots to Samuel Hook, who worked with Abramoff at Greenberg Traurig, and reclaimed his initial investment.

Hook's attorney told the Capitol Hill newspaper Roll Call that his client, who has since moved to Israel, had never met Miller.

Senators considering the Flanigan nomination continue to seek answers about Grassroots. On Thursday, Sen. Patrick J. Leahy of Vermont, the senior Democrat on the Judiciary Committee, sent the nominee a fresh batch of questions, including: "How did you first become aware that Grassroots Interactive had allegedly diverted Tyco payments to accounts controlled by Mr. Abramoff?"

david.nitkin@baltsun.com andy.green@baltsun.com

Sun reporter Jennifer Skalka contributed to this article.

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