Political Scandal Touches DM World

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The political scandal surrounding lobbyist Jack Abramoff dipped into the mailing industry last week when an item in his plea agreement mentioned giving money to a politician's senior staff member's wife five years ago to influence legislation regarding Internet gambling and opposing postal rate increases.


The comment sent the postal community buzzing with the rest of Washington wondering what other information will arise from Abramoff's deal with federal officials. Abramoff pleaded guilty last week to three felonies and pledged to cooperate in a criminal probe that's edging closer to former House Majority Leader Tom DeLay.


Court papers released in connection with Abramoff's plea offered these glimpses into his activities: On behalf of clients eager to stop Internet gambling or oppose postal rate increases, he provided things of value including, but not limited to, 10 equal monthly payments totaling $50,000 beginning in June 2000 through a nonprofit entity to the wife of a congressional aide identified as "Staffer A."


That person has been identified in wire reports as Tony Rudy, who was DeLay's deputy chief of staff at the time and who worked with Abramoff after leaving DeLay's team. Abramoff's plea deal, however, never mentions DeLay or any other lawmaker by name.


"The total amount paid to the wife of Staffer A was obtained from clients that would and did benefit from Staffer A's official actions regarding the legislation on internet gambling or opposing postal rate increases," Abramoff's plea agreement said.


In 2000, DeLay was majority whip, the third most powerful position in the House. He replaced fellow Texan Dick Armey as majority leader in 2002.


Abramoff was a lobbyist in 2000 for Preston Gates Ellis Rouvelas & Meeds LLP, which had several clients involved in the direct marketing industry. According to public records compiled by The Center for Public Integrity, Pitney Bowes, Stamford, CT, was Preston Gates' second-largest client from 1998 to 2004, while the Magazine Publishers of America was its sixth-largest client. In that period, Pitney Bowes paid Preston Gates $6.06 million while the MPA paid $1.88 million to do lobbying.


The MPA hired Preston Gates and PR firm Dittus Communications in March 2000 to manage a $10 million, three-year campaign to "fight the recently proposed 15 percent postal rate increase [for Periodical mail] and aggressively pursue much-needed reform of the postal system," according to a press release dated March 23, 2000.


"We conducted an exhaustive search to find the right partners for this effort. Preston Gates and Dittus Communications are prestigious firms and both have impressive track records for delivering results on high-profile public policy issues," MPA president Nina B. Link said in the release, which DM News covered in its April 3, 2000, issue.


The press release also mentioned that Abramoff was among the Preston employees working on the campaign. Abramoff left Preston Gates at the end of 2000.


MPA officials didn't return calls for comment but issued the following statement late Friday: "We can confirm that Jack Abramoff was one of a number of people at Preston Gates who worked on the MPA account. We are deeply disturbed by the recent allegations concerning Abramoff's conduct. We are in the process of looking into the nature of his involvement in Preston Gates' work on behalf of the MPA. "


However, MPA spokesman Howard J. Rubenstein told The Washington Post: "I can confirm that based on direction from Preston Gates, the MPA did make a $25,000 contribution to Toward Tradition in 2000." The MPA directors "had absolutely no knowledge of how the money would be used, and if it turns out that it was used for an improper purpose, they would be, quite frankly, outraged."


According to the Post, the Capitol Hill newspaper Roll Call quoted Tony Rudy on May 1, 2000, as saying "we're planning to do all we can so that the postmaster general sticks to his word" and reduces the rate increase. Other top House and Senate leaders also supported the reduction, the Post said.


Pitney Bowes spokesman Matthew Broder said Pitney's lobbying at the time involved postal reform, not rate changes.


According to the MPA's 2000 annual report, its officers were: chair Cathleen Black, president of Hearst Magazines; vice chair Christopher M. Little, president of Meredith Corp. Publishing Group; secretary Daniel B. Brewster Jr., president/CEO of Gruner + Jahr USA Publishing; and treasurer Gregory G. Coleman, senior vice president of US Magazine Publishing Group and The Reader's Digest Association Inc.


DeLay took an interest in postal affairs in 2000, according to a review of DM News articles written in 2000 and 2001. In October 2000, the Direct Marketing Association said DeLay pushed to have an amendment to an appropriations bill that threatened the postal service's international mail service. The DMA said United Parcel Service was lobbying its congressional allies to have the amendment added. Then-Postmaster General William J. Henderson wrote lawmakers expressing what he said would be disastrous consequences to international postal service if the proposal were passed.


In May 2001, DM News columnist Cary H. Baer wrote that DeLay and other House and Senate leaders wrote letters to the USPS, asking it to hold off on its next rate increase.


Commentators in the mailing industry were reluctant to go on the record to discuss the implications that the scandal might have on direct marketing. Though the postal service is referenced in Abramoff's plea agreement, USPS spokesman Gerald McKiernan said, "We have no evidence that this matter is connected to the postal service or any of its employees, so we have no comment."


A source in the mailing industry said the controversy has people in Washington questioning their contacts with Abramoff.


"He had so many different clients who cut across so many different industries," the source said. "Everyone suddenly is turning around and pulling up their old files, going, 'Did I have anything to do with this guy?' A lot of the folks in the postal community have done work and know some of the good guys over at Preston Gates. They're all asking, 'Was Jack in any of those meetings?'


"This is an outline. Now they're going to start putting meat on the bones of this thing. And with each one of these, we could find out that this was nothing or we could find out that ... people were writing checks for this fund or that fund. Each one could become its own subplot."


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