Wednesday, March 01, 2006

Abramoff pushed plan to drill for oil in Israel

Established firm with two Russians
By Michael Kranish
Boston Globe
March 1, 2006

WASHINGTON -- Lobbyist Jack Abramoff worked with Russian partners to establish a company that envisioned a high-risk plan to drill for oil in Israel, which he hoped would bring him riches and reshape the Middle East, according to documents and his former lobbying partners.

The oil drilling plan, which has not been reported among Abramoff's many other schemes, casts new light on the scope of the disgraced lobbyist's dealings and the possible reach of the federal investigation into links between his clients, business partners, and members of Congress.

Documents reviewed by the Globe show that in November 2001 Abramoff sought a banker's letter vouching that his newly created company, First Gate Resources, could undertake a $5 million project. The letter was addressed to the then-Israeli oil commissioner.

A former Abramoff lobbying partner, Ronald Platt, said in an interview that he was shown a brochure about First Gate that listed the company officers as Abramoff and two Russian energy company executives of a Moscow firm called Naftasib.

''They supposedly had some kind of technology for determining oil and gas resources, they had discovered vast oil and gas deposits in the Israeli desert, and [Abramoff believed that] if these were exploited it would change the whole dynamic of the Middle East," Platt said.

Abramoff's venture never got off the ground, but the plan provides significant new insights into the lobbyist's ties to Naftasib and its two senior executives.

Federal agents are probing Abramoff's dealings with the Russians as part of the larger investigation into whether he bribed members of Congress into helping his clients and then reaped huge fees and cash for his personal businesses. Federal investigators have sought information about Naftasib's interest in congressional support for Russian projects financed through the International Monetary Fund.

Naftasib executives helped arrange a trip Abramoff took to Moscow in 1997 with former House majority leader Tom DeLay, a close Abramoff friend.

Investigators have been trying to connect the dots on Abramoff's various activities for more than a year. In January, he pleaded guilty to conspiracy, fraud, and tax evasion in connection with his representation of Indian tribes, and agreed to cooperate with federal agents probing members of Congress.

His drilling company was set up in a way that shields the names of its officers. A company called First Gate Resources was set up under Delaware incorporation laws on Feb. 6, 2001, and dissolved in 2004, according to records.

E-mails released by a Senate committee probing Abramoff show that he counted on his Russian partners to write a letter to Israeli officials pledging financial support for his plan to drill for oil. The Russians, Alexander Koulakovsky and Marina Nevskaya, were top executives of the Moscow energy giant Naftasib and were connected to a company that paid $2.1 million in lobbying fees to Abramoff and his partners, according to former Abramoff associates.

Abramoff wrote an e-mail to a lobbying partner on Nov. 4, 2001, with the subject line of ''first gate," saying he needed the letter ''mega fast. This is something Alexander and Marina were supposed to get but have not done so. Our permit in Israel depends on it and we are running short of time."

Abramoff then began looking for an alternative way to vouch for his financial standing.

In one e-mail, Abramoff described himself as ''the principal of First Gate" and told his lobbying partner to have a banker write a letter vouching for him, suggesting that the letter say ''that my companies are well regarded and have integrity, that I have a fine reputation in Washington, D.C., that they believe I have the means and financial backing to undertake a project/transaction in the $5 million range."

When Abramoff's colleague responded via e-mail that a bank might be hesitant to write such a letter for a company that has just been established, Abramoff responded that ''it's really, really important to me to be able to do this." The two then discussed by e-mail putting large sums of money into accounts at the bank to smooth the way for the letter to be written.

Abramoff, an Orthodox Jew who frequently expressed a desire to help Israel, then drafted a letter to be sent by a bank to Yehezkiel Druckman, who was Israel's oil commissioner at the time.

The draft said that ''based on our experience with First Gate Resources Inc. we believe that the company has the means and the financial backing to undertake a project/transaction costing $5 million."

The e-mails do not make clear whether the letter was sent or what happened to Abramoff's dream of finding oil in Israel. Druckman, who is no longer the oil minister, could not be reached for comment.

The Israeli Embassy in Washington said it had no information on the Abramoff effort.

However, an Israeli oil specialist, Philip Mandelker, said that First Gate Resources did try to get a lease for petroleum.

''My understanding is that First Gate Resources had been in contact with the Israeli authorities in about 2001 about the possibility of acquiring petroleum exploration rights," said Mandelker, who works for Zion Oil and Gas, a Texas company with no connection to Abramoff that is looking for oil in Israel.

Mandelker, who has discussed the matter with Israeli officials, said First Gate never got the required permits.

Israel does have significant natural gas resources, but the country imports nearly all of its oil. A report by the US Department of Energy says that about 460 oil wells have been drilled in Israel since the 1940s ''with little success."

But the report quotes Israeli officials as saying that the country could have large oil reserves beneath natural gas fields.

Within weeks of the effort to establish the oil-drilling plan, Abramoff discussed with the same Russian partners a plan to purchase night-vision equipment for settlers in territory occupied by Israel, according to his e-mails.

One e-mail sent to Abramoff on Oct. 15, 2001, says that it will cost $28,000 to purchase the equipment, and is signed by a person identified as ''Vadim, assistant to Mrs. Nevskaya." It is from an e-mail account at ''naftasib.com," the company where Nevskaya worked.

Shortly thereafter, an Abramoff-related group, Capital Athletic Foundation, listed an $18,000 ''donation of thermal imager," suggesting the equipment was bought and sent to the settlers.

A Washington representative of Naftasib declined comment, and Nevskaya did not respond to an e-mail request for comment. An Abramoff spokesman also declined comment.

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