Greenberg Traurig Escapes Jack Abramoff’s Nemesis by Biding it’s Time and Letting the Scandal Subside

Out of Abramoff’s ashes
His scandal-tarred law firm rises again as a powerhouse.

JAN 23, 2015 | REPUBLISHED BY LIT: JUN 13, 2021

A decade after being tarred by scandal, Jack Abramoff’s old law firm is staging a Beltway comeback.

Legal giant Greenberg Traurig was not prosecuted in connection with Abramoff’s schemes, but the downfall of its fedora-wearing star lobbyist left the South Florida-based firm in the Washington wilderness. Abramoff and nearly two dozen other conspirators headed to prison or pleaded guilty to bilking Indian tribes or other misdeeds, while Greenberg saw its federal lobbying revenue quickly drop by half.

But more than a decade later, Greenberg is aggressively reengaging in Washington.

The firm recently lured a number of veteran lobbyists, named a new head of government relations and announced expansion plans.

In 2014, it brought on more than 30 new federal lobbying clients and reported billing nearly $5.4 million in lobbying revenue — up from $3.9 million in 2013.

“They are back from the near-dead, no doubt about it,”

said Ivan Adler, a legal and lobbying industry headhunter at the McCormick Group.

“They are now totally relevant in government relations as far as law firms. It’s simply a function of time, and there has been enough time that has gone by where the Abramoff stuff is now irrelevant.”

Greenberg CEO Richard Rosenbaum acknowledged the damage Abramoff did to the firm but said it has moved on.

“It’s amazing what one person in a law firm this big can do in three years,”

Rosenbaum said.

“While I’ll never be proud of the fact that he was at the firm, I will tell you that once it happened I am proud of how we handled it.”

But the firm still has a way to go on the road to recovery. Last year’s lobbying revenue was far below the $25.5 million it raked in during the height of the Abramoff era in 2003, when National Journal ranked Greenberg among the 10 largest lobbying practices.

After that peak, the firm lost more than 70 lobbying clients in the year Abramoff was dismissed.

And not everybody is sold on Greenberg’s return to grace. One head of a Washington government relations practice, who declined to comment for attribution about a competitor, described Greenberg’s re-engagement as a “desperate move by a firm desperate to get back in the game.”

Ethics watchdogs also continue to be wary of Greenberg writ large.

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“It isn’t just Jack Abramoff,”

said Public Citizen’s Craig Holman, referencing other legal problems the firm has had over the years.

“It bothers me that Greenberg would continue making quite a presence here on Capitol Hill as a lobbying firm.”

Time will tell if Greenberg can return to prominence inside the Beltway, but its moves show how Washington players recast themselves after scandals for second, third and fourth acts.

Abramoff has also tried to reinvent himself. After serving more than three years in prison on a variety of charges, including influence peddling and bank fraud, he has attempted to paint himself as a reformer by writing a book, giving speeches across the country and appearing on “60 Minutes” to warn that “the system hasn’t been cleaned up at all.” (He declined to comment for this article.)

The Abramoff scandal rocked official Washington, eventually helping bring down House Majority Leader Tom DeLay (R-Texas), the most powerful man on Capitol Hill. Former Rep. Bob Ney (R-Ohio) went to prison for criminal conspiracy and making false statements, and several other lawmakers saw their careers cut short. Bush administration officials, including the No. 2 leader in the Interior Department, which oversees Native American tribes, pleaded guilty to crimes like obstruction of justice.

The scandal also created momentum for a major lobbying reform bill and aided Democrats in taking back the House in 2006.

Justice Department officials considered bringing charges against Greenberg but declined to prosecute after the firm cooperated with the probe. Sen. John McCain (R-Ariz.), who headed the Senate’s investigation of the scandal, praised the firm for being forthright.

“I know this chapter in the firm’s history is embarrassing and painful in many ways,” McCain said at a 2005 hearing, “but I want the record to reflect that consistent with their professional obligations, Greenberg Traurig and its counsel have always been responsive to the committee’s requests; always made themselves available to answer questions; and have always conducted themselves with dignity and professionalism in these trying circumstances.”

Still, the damage was real. While the firm has more than 1,800 lawyers and lobbyists globally, Abramoff is the one former employee in its D.C. office whom everyone remembers.

Greenberg knew it faced a major crisis in 2004 when accusations surfaced in the media that Abramoff and his business associate Michael Scanlon had bilked Indian tribes out of tens of millions of dollars while on the firm’s payroll. Within weeks, top partners at the firm agreed to unilaterally break ties with Abramoff, and eventually much of his small handpicked team departed.

Rosenbaum said the loss of Abramoff’s sizable book of business did not factor into the decision. “Believe me, we didn’t find out even close to what we eventually knew, but we saw enough — just a few things — that told us he was not a good guy,” he said.

The move was also in the firm’s self-interest given the risk of malpractice claims. Greenberg repaid Abramoff’s tribal clients out of court and refunded lobbying fees to Guam, where prosecutors agreed to drop conspiracy and theft charges against the firm. Guam was the only client that took Greenberg to court.

A small stable of lobbyists remained at the firm, and Greenberg over the next 10 years struggled to rebuild its D.C. practice.

It could still draw some talent, however.

A year after the scandal broke, Rep. Matt Salmon (R-Ariz.) — then a former congressman — joined the firm through its Arizona office. Salmon, who later regained his congressional seat in the 2012 election, said the Abramoff scandal gave him no pause about signing on with the firm.

“I think they were victims just like there were so many other victims,” Salmon said. “He lied to them. He misrepresented how he was doing things and what he was doing to them, so I very much saw them as just another in the long list of victims in his wake.”

Greenberg also conducted an internal review and created an extensive ethics program to try to identify bad actors. In addition to creating a general counsel’s office, the firm added an offsite group of about 40 people dedicated to conflict-of-interest clearance, an internal audit team and an employee ethics training program. The program includes a confidential system for reporting potential unethical behavior.

Greenberg has endured other ethical and legal troubles over the years.

In the 1990s, the firm reached a $77,000 settlement with the government for violating a ban on raising campaign money from foreigners.

The former chairman of the firm’s tax practice resigned from the firm in 2006 in connection with a tax shelter scheme, and that same year, Greenberg paid the Federal Deposit Insurance Corp. $7.6 million to settle claims that it helped cover up executives’ misconduct at its client, Hamilton Bank of Miami.

The firm declined to comment on the previous incidents.

In 2013, the firm’s Washington office made headlines again when allegations of a lobbyist giving market-moving political intelligence to a hedge fund client led to a Securities and Exchange Commission investigation and scrutiny from Sen. Chuck Grassley (R-Iowa).

That investigation continues, and Greenberg said it is cooperating.

“None of our lawyers or lobbyists have been charged with any wrongdoing. Our attorneys did not have or disseminate material, non-public information regarding Medicare rates,”

a spokeswoman said in a statement. She added:

“We have concluded that providing government relations services to an entity in the ‘political intelligence’ area may lead to misunderstanding and unintended use of those services, even when compliant with legal and ethical standards. In 2013, we established a policy to not represent such firms.”

The firm deliberately moved slowly as it tried to recover from the Abramoff affair.

Greenberg said it wasn’t looking to enter into a talent arms race and was concerned it would have to overpay to draw K Streeters to a damaged firm.

“We were going to let things settle down and we were going to wait,”

Rosenbaum said.

“Frankly, it took a little longer than we thought until we really found the right people.”

The right people were a tight-knit group of 13 lobbyists at Dickstein Shapiro, led by Andy Zausner, who had spent more than 20 years at Dickstein. They officially made the jump in July.

When the time finally arrived to hire up in Washington, Greenberg moved swiftly.

“They are a very nimble firm, very centralized as far as leadership,” said Stephen Springer, a legal industry headhunter at Major, Lindsey & Africa. “In the marketplace they have a reputation of being pretty frank about what their struggles are, but they can also communicate what the positives of their culture and what they might provide lateral attorneys.”

Rosenbaum also had an edge. Both Greenberg and Zausner represent the same client, Lorillard Tobacco.