Scanlon Could Be Ordered To Pay $20 Million to Tribes and K Street Firm

A U.S. district court judge is poised to order Michael Scanlon, Jack Abramoff’s partner in a wide-ranging lobbying sandal, to cough up more than $20 million to compensate several Indian tribes, as well as Abramoff’s former lobbying firm, for his role in defrauding them.

Scanlon faces sentencing Friday morning, and in the weeks leading up to it, former congressional aides and lobbyists stung by the scandal have griped about the tens of millions of dollars Scanlon has amassed and sunk into extensive real estate holdings in Dewey Beach, Del. and D.C. His attorneys have argued that Scanlon should not have to pay the full $19 million he had agreed to when he pled guilty five years ago because of the extensive damage the scandal has done to his earning potential and his role as a father of two boys.Greenberg Traurig, Abramoff’s old firm, had been forced to compensate several of Abramoff’s former Indian tribe clients for the fraud — to the tune of $17 million, and watchdogs and others worried that Scanlon would ride into the sunset with his real estate holdings and mountains of cash.

In recent weeks, the court has ordered the sale of several of Scanlon’s multi-million dollar properties in Dewey Beach Delaware and D.C. to pay for the restitution and cover his legal expenses, according to court filings. In a proposed ruling submitted by by Greenberg Traurig for the court’s consideration, U.S District Judge Ellen Segal Huvelle would order Scanlon to pay $21 million to the tribes and Greenberg Traurig.

The payments would come in addition to up to two years of jail time government prosecutors are seeking as punishment for Scanlon’s role in an elaborate kickback scheme he and Abramoff orchestrated in which tribes paid Scanlon’s public relations firm or other entities affiliated with Scanlon nearly $72 million in “consulting” fees. Scanlon kicked back nearly $24 million to Abramoff, according to court records.

The practice allowed he and Abramoff to avoid lobbying disclosure rules and sidestepped fees that would have otherwise gone to Greenberg Traurig, Abramoff’s lobbying firm before he was fired after news of the scandal broke.

Even with the court ordered payments, Scanlon still made tens of millions of dollars from his work with Abramoff, and those who have closely followed the scandal for years believe he has squirreled away his assets and will still be a very rich man when he gets out of jail.

That concern was not lost on Greenberg Traurig. Their proposed orders would require allow the government to garnish his wages if he did not pay in full within 60 days of the ruling. The order also notes that whoever is charged with collecting the debt from Scanlon should be aware of “a dispute over the scope and identity of Mr. Scanlon’s assets, including whether or not he transferred properties to his wife (and/or others) in a manner that would constitute a fraudulent transfer avoidable under the Federal Debt Collection Procedure Act.”