January 04, 2006|By ANDREW A. GREEN | ANDREW A. GREEN,SUN REPORTER
A company founded by Gov. Robert L. Ehrlich Jr.'s deputy chief of staff was central to lobbyist Jack Abramoff's schemes to defraud clients and conceal kickbacks to himself and others, according to federal charges filed yesterday.
A criminal information filed against the lobbyist says Abramoff used Grassroots Interactive, a purported advocacy and public relations firm based in Silver Spring, "to charge clients prices that incorporated huge profit margins for the purpose of generating funds for and concealing kickbacks that would be paid to defendant Abramoff."
The charging document says Abramoff "established a business called GrassRoots Interactive" in May 2003. State business and financial disclosure records show that Ehrlich aide Edward B. Miller was the sole owner of Grassroots from the time he founded it in May 2003 with a $10,000 personal investment until he sold it in September of that year, recouping his initial stake.
Neither Miller nor his attorney has ever said exactly what work Miller did for the company, and federal investigators have never explained his role there.
Miller started work in the Ehrlich administration a few weeks before the sale was finalized.
Miller was not named in the federal document, but the company was subpoenaed in 2004 to testify in the case. Ehrlich and his counsel, Jervis S. Finney, have said that Miller was cooperating with the investigation.
He has repeatedly declined to comment about the company and his connections to Abramoff. Miller's attorney, Aron U. Raskas, was out of the country yesterday and unavailable for comment.
The charges accuse Abramoff of steering clients to Grassroots and other companies but concealing his business relationship with those firms. The document was released as part of a plea agreement with the Justice Department in exchange for Abramoff's cooperation in a widening congressional corruption probe. The other firms are grouped together in the document and referred to by the initials CCS.
Criminal informations are charging documents akin to indictments, but are not handed up by grand juries. They are typically issued as the foundation for plea agreements.
Abramoff pleaded guilty in federal district court in Washington yesterday to conspiracy, mail fraud and tax evasion.
Ehrlich said yesterday that the Abramoff plea would have no effect on Miller or his place in the administration.
"There's nothing there," Ehrlich said in a brief interview early yesterday, before the charging document was widely available. The governor's office declined to revise his statement later in the day.
The governor said he would consider returning contributions Abramoff made to his campaign fund. The lobbyist and his wife gave Ehrlich $16,000 over the past two election cycles, the maximum allowable by law. They donated $11,750 to other Maryland Republican Party accounts during that time.
"I will take a look at it," Ehrlich said.
Several prominent politicians have said they will return contributions from Abramoff, who had deep ties to the Republican leadership of Congress, in particular to Rep. Tom DeLay of Texas, who is under indictment on unrelated campaign finance charges.
House Speaker Dennis Hastert of Illinois said yesterday that he would donate contributions from Abramoff to charity, the Associated Press reported.
The charges against Abramoff say that he established Grassroots, referred to in government documents as GRI, in May 2003 purportedly "to provide grass roots work, public relations services and election campaign support." State business documents make no mention of Abramoff in connection with the business and list Miller as the firm's founder.
Miller was an attorney with the Baltimore firm Piper Rudnik LLP at the time and had previously worked as a political pollster in Washington. Before going to work for the state, Miller sold Grassroots to Samuel Hook, who was an Abramoff associate at his law firm at the time, Greenberg Traurig.
Another Abramoff associate, Michael Scanlon, has also reached a plea agreement with federal authorities. Scanlon was the front man for CCS and has admitted to splitting profits with Abramoff. The charges say Abramoff received 50 percent of the profits obtained through CCS, amounting to millions of dollars.
According to the charges, Abramoff would on occasion "falsely represent to his clients that he had no relationship with, or received no financial benefit from, CCS or GRI, when in fact defendant Abramoff received substantial monetary payments from those entities."
Abramoff's plea agreement, a separate document released yesterday, details one instance in which the lobbyist used Grassroots to defraud a client. It says that on May 2, 2003 - about two weeks before the company was registered with the state - Abramoff sent a business proposal to a manufacturing and services company that Grassroots lobby on the firm's behalf on a tax issue.
