BRANCACCIO: Tonight on NOW...

BUSH: I urge the Senate to promptly confirm Condoleezza Rice as America's 66th Secretary of State.

BRANCACCIO: We investigate two people at the center of power.

What will Condoleezza Rice bring to American diplomacy? And Tom DeLay is probed about a scandal in Texas politics.

EARLE: This is about an organized movement to basically steal an election by using illegal corporate secret donations to political campaigns.

BRANCACCIO: And how did a well-connected lobbyist and his partner squeeze 66 million dollars out of Indian tribes that were trying to make life better for their people?

HISA: They don't care who gets in their way, who they hurt. As long as they get their payday, they're happy.

BRANCACCIO: And there is hope beyond politics as usual.

Two inspiring thinkers look to the values America holds dear.

PASTOR: We need to combine our moral vision with a pragmatic sense that this can be done. In fact, it can be done.

ANNOUNCER: All that tonight on NOW with Bill Moyers and David Brancaccio, the weekly newsmagazine from PBS.

ANNOUNCER: From our studios in New York, Bill Moyers and David Brancaccio.

BRANCACCIO: Welcome to NOW.

Colin Powell made big news twice this week. He announced that he is stepping down as Secretary of State. Then, he pointed world attention at Iran — the one with an "n" next to Iraq — saying it may be developing a missile system to deliver a nuclear bomb. Quote: "I have seen some information that would suggest that they have been actively working on delivery systems. You don't have a weapon until you put it in something that can deliver a weapon."

Frightening, to be sure. But is it true? The world may have a hard time believing him. It's been just 21 months since that same Colin Powell told the world almost the same thing about Iraq. Remember when our Secretary of State went before the United Nations Security Council to make the case for using force against Iraq?

POWELL: The gravity of this moment is matched by the gravity of the threat that Iraq's weapons of mass destruction pose to the world. Let me now turn to those deadly weapons programs and describe why they are real and present dangers to the region and the world."

But those claims eventually proved wrong. Colin Powell had put his personal prestige and the power of his office into a pitch that led America and the world into a war based on bad information.

MOYERS: It's called credibility: the quality of being believed and trusted. Once you cry wolf and it turns out you were only pretending, will anyone take you seriously next time if you say there is a wolf in the woods? That's why surveys and polls show America's credibility in the world has plummeted, including in those Muslim nations whose support is critical to the fight against terrorism.

And it's why the President's nomination this week of Condoleezza Rice as Colin Powell's successor has some experts in Washington and foreign capitals shaking their heads in disbelief. Producer Peter Meryash and I took a look at Dr. Rice's record on two very critical points of credibility.

MOYERS: Recall that in the days and weeks after 9/11, a shocked and grieving people began to ask what government officials had known and when they had known it. In May 2002, at a White House press conference, the President's National Security Adviser tried to quiet the criticism.

RICE: I don't think anybody could have predicted that these people would take an airplane and slam it into the World Trade Center, take another one and slam it into the Pentagon; that they would try to use an airplane as a missile, a hijacked airplane as a missile.

MOYERS: But Condoleezza Rice was wrong.

Had she looked, she could have found in the files of the intelligence community that the attack she deemed unimaginable had, in fact, been imagined repeatedly.

Twelve times in the seven years before 9/11, the CIA reported that hijackers might use airplanes as weapons.

Furthermore, just 3 days after Rice was sworn in, she received a memo written by this man, Richard Clarke. Clarke, who managed counter-terrorism policy on President Clinton's National Security Council, was kept on the job by President Bush.

LEHMAN: Were you told before the summer that there were functioning al Qaeda cells in the United States?

RICE: In the memorandum that Dick Clarke sent me on January 25th, he mentions sleeper cells. There is no mention or recommendation of anything that needs to be done about them.

MOYERS: But that's not the whole story. In the January 25th memo, Clarke had declared an "urgent need" that the "principals," the heads of the CIA, FBI, State and Defense Departments, meet to be briefed on the al Qaeda threat.

That meeting didn't happen until more than 7 months later, one week before 9/11.

But Clarke had also attached to his memo a plan of action to "roll back" Bin Laden.

RICE: We were not presented with a plan.

KERREY: Well, that's not true. It is not…

RICE: We were not presented, we were not presented… we were presented with the…

KERREY: I've heard you say that, Dr. Clarke. If that 25 January 2001 memo was declassified, I don't believe…

RICE: The fact is that what we were presented on January the 25th was a set of ideas…

KERREY: Okay.

RICE: …and a paper, most of which was about what the Clinton administration had done.

MOYERS: To this day, the White House has refused to declassify Clarke's memo. Rice had effectively demoted him, downgraded his office, and informed him he was no longer needed at the meetings of the principals.

Even as the White House took no action, America's electronic eyes and ears picked up new threats all over the world. By April, the "chatter," as the spies call it, was ominous.

On June 25th, 2001, Richard Clarke warned Rice that "six separate intelligence reports showed al Qaeda personnel warning of a pending attack."

Three days later, on June 28th, the CIA informed Clarke that Osama bin Ladin "… will launch a significant terrorist attack…in the coming weeks…" inflicting "…mass casualties against U.S. facilities or interests."

Clarke told Rice al Qaeda planning "…had reached a crescendo."

CIA director George Tenet later testified, "the system was blinking red."

Then, on August 6th, 2001, President Bush, while vacationing at his ranch in Crawford, Texas, received a stark warning in his daily intelligence brief, known as a PDB.

BEN-VENISTE: There was nothing reassuring, was there, in that PDB?

RICE: Certainly not.

MOYERS: Two CIA analysts involved in drafting the PDB told the 9/11 Commission they wanted to make clear that the threat of a bin Ladin attack in the United States was current and serious.

BEN-VENISTE: The President was in Crawford, Texas, at the time he received the PDB. You were not with him, correct?

RICE: That's correct. I was not at Crawford, but the President and I were in contact, and I might have even been, though I can't remember, with him by video link during that time. The President was told this is historical information. I'm told he was told this is historical information. And there was nothing actionable in this.

MOYERS: But what Rice dismissed as "historical information" was in fact far more than that. It was part of an unfolding pattern of terrorist activity leading to 9/11.

BEN-VENISTE: Isn't it a fact, Dr. Rice, that the August 6th PDB warned against possible attacks in this country? And I ask you whether you recall the title of that PDB.

RICE: I believe the title was "Bin Laden Determined to Attack Inside the United States." Now, the PDB…

BEN-VENISTE: Thank you.

RICE: No, Mr. Ben-Veniste, you…

BEN-VENISTE: I will get into the…

RICE: I would like to finish my point here.

BEN-VENISTE: I didn't know there was a point.

RICE: Given that you asked me whether or not it warned of attacks…

BEN-VENISTE: I asked you what the title was.

RICE: What the August 6th PDB said, and perhaps I should read it to you…

BEN-VENISTE: We would be happy to have it declassified in full at this time, including its title.

MOYERS: Two days after Rice's testimony and after the Commission's most heated showdown with the Bush administration over access to classified information, the PDB that had been delivered to the President in Texas was released.

It had indeed informed the President that, quote: "bin Laden told followers he wanted to retaliate in Washington."

It had told the President that FBI information, quote, "indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York."

And it had informed the President of reports that quote: "a group of bin Ladin supporters are in the U.S. planning attacks."

But the President stayed at his Texas ranch for 23 more days. His National Security Adviser did not convene a cabinet-level meeting to discuss the urgent warnings.

ROEMER: Not once do the principals ever sit down. You, in your job description as the National Security Adviser, the Secretary of State, the Secretary of Defense, the President of the United States and meet solely on terrorism to discuss, in the spring and the summer, when these threats are coming in, when you've known since the transition that al Qaeda cells are in the United States, when, as the PDB said on August 6th, "Bin Laden Determined to Attack the United States."

RICE: The PDB does not say the United States is going to be attacked. It says bin Laden would like to attack the United States. I don't think you, frankly, had to have that report to know that bin Laden would like to attack the United States. The threat reporting… the threat reporting…

ROEMER: So why aren't you doing something about that earlier than August 6th, then?

MOYERS: It all added up to a pattern of ineptness. But despite her missteps leading up to 9/11, Rice was kept in charge of the national security team and would play a key role as the administration prepared its case for war against Iraq.

Time and again, top officials told the American public that Saddam Hussein had weapons of mass destruction.

CHENEY [8/26/02]: Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction. There is no doubt that he is amassing them to use against our friends, against our allies, and against us.

MOYERS: Rice had a particularly dire warning.

RICE [9/8/02]: The problem here is that there will always be some uncertainty about how quickly he can acquire nuclear weapons. But we don't want the smoking gun to be a mushroom cloud.

MOYERS: A crucial part of the administration's case was the accusation that Iraq had acquired aluminum tubes needed to build nuclear weapons.

BUSH [10/7/02]: Iraq has attempted to purchase high-strength aluminum tubes and other equipment needed for gas centrifuges, which are used to enrich uranium for nuclear weapons.

MOYERS: This was the closest the administration ever came to a smoking gun, probably the most significant evidence presented in the lead-up to war.

It was leaked to the NEW YORK TIMES which quoted government officials saying "it was the intelligence agencies' unanimous view" that the tubes "are used to make…centrifuges" that will enrich uranium for nuclear weapons.

The paper quoted one senior but un-named official as saying, "the best technical experts and nuclear scientists…supported [that] assessment."

Vice President Dick Cheney hailed the tubes as "irrefutable evidence" that Saddam has "…once again set up and reconstituted his program…" to build a nuclear weapon.

And Condoleezza Rice? She said the tubes "…are only really suited for nuclear weapons programs."

The President drove the message home in his State of the Union address.

BUSH [1/28/03]: Our intelligence sources tell us that he has attempted to purchase high-strength aluminum tubes suitable for nuclear weapons production.

MOYERS: But in fact, the government's foremost nuclear experts at the Department of Energy disputed the White House position.

After their technical analysis, the best experts on the subject concluded the tubes were "poorly suited for use in gas centrifuges" needed to make nuclear weapons and as a result they found "unpersuasive the arguments that they are intended for that purpose."

And just last month, it was revealed that long before the war started, Condoleezza Rice had known about the dispute.

The NEW YORK TIMES broke the story and Rice was asked about it on ABC News.

RICE [on THIS WEEK]: At the time, I knew that there was a dispute. I actually didn't really know the nature of the dispute. We learned that, I learned that later.

THIELMANN: It is incredible to me that the President's National Security Adviser would not at least satisfy herself in understanding the broad dimensions of a very vigorous dispute inside the U.S. government on the most important evidence behind an allegation about the most important category of weapons of mass destruction.

MOYERS: Greg Thielmann spent 25 years in the foreign service before retiring in mid-2002. As a member of the State Department's Bureau of Intelligence and Research, he led a team of analysts examining the secret intelligence on Iraq leading up to the war.

I asked him about Rice's assertion that she didn't know the nature of the internal intelligence debate over the aluminum tubes:

THIELMANN: If you don't understand the details of this at least in broad outline, what issues do you understand with regard to justifying a war against Iraq? This was the mother of all intelligence disagreements for this subject. And so she was either irresponsible in not acquainting herself with those broad outlines of the dispute. Or else she's not telling the truth.

MOYERS: After her nomination this week, the WASHINGTON POST cited experts who believe Rice is "one of the weakest National Security Advisers in recent history…" in doing what she was supposed to do "…managing interagency conflicts."

She is also one of the most partisan.

In the recent campaign, in a rare use of a National Security Adviser for partisan purposes, President Bush sent Rice to critical battleground states from Michigan and Washington to Ohio and Florida.

RICE [10/25/04]: When people ask whether Iraq is a part of the war on terror, well, of course. Not only did Saddam support terrorists, not only was he a weapons of mass destruction threat and all those things. But he was a tremendous barrier to change in the Middle East.

MOYERS: And, after one of Rice's campaign-style appearances just before the election, the PITTSBURGH POST-GAZETTE reported she "did not deviate from the misleading contentions" put forth by the Bush-Cheney ticket and that she sought, once again, "to make the non-existent link between 9/11 and the Iraq war."

Her credibility and competence aside, Condoleezza Rice has never wavered in her loyalty to George W. Bush, and this week he rewarded that loyalty by naming her Secretary of State, the highest post in his cabinet.

MOYERS: So we are to have a new Secretary of State who dreadfully misjudged the terrorist threat leading up to 9/11 and then misled America and the world about the case for invading Iraq. As if that's not disturbing enough, look who is succeeding her as the President's National Security Adviser.

His name is Stephen J. Hadley, Rice's alter ego and deputy at the White House. The very same Stephen Hadley who failed to remove from the President's State of the Union message that phony statement about Iraq's search for uranium in Africa, despite having been warned by the CIA that it wouldn't hold up.

The very same Stephen Hadley who in June of this year wrote this article in USA today insisting that Saddam Hussein had links to al Qaeda, despite the finding by the official 9/11 Commission that there was no operational relationship.

And the very same Stephen Hadley who led the White House planning for the post-war period in Iraq, an occupation that can only be described as a debacle.

I'm not making this up; it's all on the record. So instead of putting America's foreign policy in the hands of people who might have restored the country's credibility in the world, the President has turned it over to two of the people who helped to shred it. Both are known first and foremost for loyalty to the official view of reality, no matter the evidence to the contrary.

BRANCACCIO: We now push on toward the heart of darkness in politics, where the buying and selling of power takes place.

If you need something done in Washington, you can't do your own bidding. You need a powerbroker, also known as a lobbyist. There are tens of thousands of them. Many make fabulous fortunes using their connections to influence government rules and laws that can have profound effects on our lives.

For weeks now, correspondent Michele Mitchell and producer Brenda Breslauer have been working on a story that surged into the headlines this week.

It's about the money making side of the business of government and it's not pretty.

CONRAD: This is the most extraordinary pattern of abuse and criminal conduct that's come before this Committee in the entire 18 years I've served here.

MITCHELL: It takes a lot to shock the jaded power players in the nation's capital. But that's exactly what's been happening in an unfolding scandal involving Washington insiders who allegedly bilked Indian tribes out of tens of millions of dollars in lobbying and public relations fees.

CONRAD: I believe there is criminal conduct here and it needs to be pursued, not only by this committee but by law enforcement as well.

MITCHELL: The FBI is investigating and, reportedly, so is a grand jury and five federal agencies. But the story is playing out before the Senate Indian Affairs Committee. At the center of the nine-month investigation are two men: the first is a high-profile Washington lobbyist, Jack Abramoff.

ABRAMOFF: I have no choice but to assert my various constitutional privileges against having to testify.

MITCHELL: The second is Michael Scanlon, a public relations consultant who often worked with Abramoff.

SCANLON: Upon the advice of counsel, I respectively invoke my fifth amendment privileges.

MITCHELL: Neither man is talking but Senate investigators have uncovered a trail of e-mails and documents that show the two are at least ethically challenged, if not criminal, and often outright racist.

CAMPBELL: You and Mr. Scanlon referred to tribes as morons, stupid idiots, monkeys, f-ing troglodytes — which you define as a lower form of existence — and losers.

Do you refer to all of your clients with the same kind of terminology you used for Indians, i.e. hideous monkeys, morons, and so on?

ABRAMOFF: I respectfully invoke the same privileges, sir.

MCCAIN: What sets this tale apart, what makes it truly extraordinary, is the extent and degree of the apparent exploitation and deceit.

MITCHELL: To understand the extent of the scandal, you need to come here to the Tigua Indian reservation in El Paso, Texas. For years, the reservation had high crime and poverty rates. But all that changed in the 1990s when the Tiguas opened a casino. At its peak, it employed 1100 people and pulled in $60 million a year. The new wealth allowed the tribe to be self sustaining and they also gave back to the community.

HERNANDEZ: You could see that money, you could see it being put into good use. It's evident if you see the wellness center, the houses they're building, the education for our kids and the health care.

Rosa Hernandez served on the tribal committee that oversaw the casino project. Her three sons worked there.

HERNANDEZ: They've cut a lot of the programs. A lot of the programs. A lot of people ended up being unemployed.

MITCHELL: Despite public protest from the tribe and casino workers, in February 2002, a federal court ordered their Speaking Rock casino closed. Without the income from gaming, the Tiguas were faced with losing everything the tribe had achieved. Carlos Hisa is the lieutenant governor of the Tiguas.

HISA: We were so dependent on this casino, this revenue coming in, that we're struggling now.

MITCHELL: To get the casino reopened, the tribe knew it would need help in Washington. And if you need help in Washington, you need a lobbyist. After all, every interest group has one, there are over 30,000 lobbyists in D.C. The Tiguas needed somebody big, somebody powerful, somebody with the right connections… Enter Jack Abramoff.

Abramoff had the heavyweight resume: long-time Republican activist, close to influential Republican leader, Texas congressman Tom DeLay, and a senior director in the lobbying division at one of the largest law firms in Washington. Among his nearly 80 clients were some big name companies like Verizon, Eli Lilly, and Fannie Mae, according to records on file with Congress. Abramoff offered to help the Tiguas for free in exchange for future business. He seemed like he could deliver.

SENCLAIR: There was never a doubt. Never a doubt.

MITCHELL: Arturo Senclair is the governor of the Tigua tribe.

SENCLAIR: He did work for a reputable law firm. One of the top five in the nation. So how can you doubt that this individual isn't doing what he's saying?

MITCHELL: Abramoff wrote to the tribe that he had the connections to fix the "gross indignity perpetrated by the Texas state authorities" and assured the Tiguas he had already lined up "a couple of senators willing to ram this through."

In return, Abramoff asked for two things. First: that the tribe pay $4.2 million in fees to public relations consultant Michael Scanlon, a former communications director for congressman Tom DeLay.

HISA: So we took a chance and we elected to go ahead and move forward on this project and pay $4.2 million for it.

MITCHELL: Did you have the $4.2 million to spare?

HISA: Well not to spare. Those 4.2 million, we could use 'em right now.

MITCHELL: In addition to the $4.2 million fee to Scanlon, Abramoff, a major fundraiser for the Republican party, also advised the tribe that they needed to make $300,000 in political contributions. It all made sense to the Tiguas.

SENCLAIR: How is political game played here within the U.S.? Isn't it done through contributions? Contributions have to be made in certain instances. And when he's a high-profile lobbyist there in Washington, he must know what he's talking about. Otherwise, he wouldn't have the success that he did.

MITCHELL: At this point the tribe's tale takes a Hollywood turn. What the Tigua didn't know was that their well-connected lobbyist Jack Abramoff, the man who had promised to get their casino reopened, had already been using his connections…double dealing the tribe. It turns out that Abramoff and some of his friends had been working behind the scenes to shut down the casino in the first place.

SENCLAIR: I think we were marked.

MITCHELL: They were. What the Tiguas later learned was that Abramoff and Scanlon had been working for a Louisiana tribe with a casino. That tribe hired the men to eliminate potential competition. Part of Abramoff and Scanlon's strategy was to try to stop Indian gaming in Texas by claiming it was in violation of state law. That happened to include the Tiguas. So the men turned to a member of their network of influential and conservative old friends, in this case, the former head of the Christian Coalition, Ralph Reed.

STONE: Ralph was brought in because of his connections with the religious right, which were seen as very helpful in thwarting, you know, gambling in general.

MITCHELL: Journalist Peter Stone has been covering the scandal for the NATIONAL JOURNAL, and has reported on Abramoff's links to Reed.

STONE: And as somebody who had stature with conservatives, he was seen as an effective ally to build support against gambling.

MITCHELL: This year, Reed was the southeast regional chairman of the Bush campaign, turning out the religious right vote. His relationship with Jack Abramoff goes back more than two decades to demonstrations like this one. They met in the early 80's when Abramoff ran the College Republicans National Committee, and Reed was his executive director.

Now Abramoff and Scanlon enlisted Reed to mobilize his troops to work to close the tribal casinos and the e-mails made public in the Senate investigation reveal some of their strategy.

Reed reports, "We did get our pastors riled up last week…. Maybe that helped but who knows."

Abramoff replies, "We should continue to pile on until the place is shuttered."

And they did.

STONE: In the case of the Tiguas, their casino was closed. So Ralph was effective.

MITCHELL: The intrigue is in how he was paid. Reed is an avowed foe of gambling. But, Reed was working for men being paid by a tribe operating a casino in another state. There's no evidence he knew. Reed wouldn't speak to us, but issued a public statement in September saying, "At no time were we retained by nor did we represent any casino or casino company."

Reed could say that because more than $2 million of his fees were channeled through an obscure think tank that Michael Scanlon had opened in this house in Rehoboth Beach, Delaware.

STONE: So it appears that the think tank was a pass-through, or a conduit to help pay Reed. And perhaps protect him from public revelation that he was doing work for an Indian tribe with the casino.

MITCHELL: How many think tanks are located on the beach?

STONE: Well, it's a little odd. And that was one of the delicious parts of the story, learning about this obscure think tank that seemed to have very few employees. In fact, THE POST reported that one of the employees was a former lifeguard, and the other was a former yoga instructor.

MITCHELL: So here's where we are: it's February 2002 with the Tigua casino about to close. Abramoff saw a goldmine.

"I'm on the phone with Tigua," he e-mailed Scanlon. "Fire up the jet baby, we're going to El Paso!"

Scanlon replies, "I want all their money!!!" Abramoff e-mails back, "Yawzah!!"

HERNANDEZ: Here you have these, I don't know, well, important people. And they're just making a joke of the whole thing.

MITCHELL: A joke that cost the tribe over four million dollars. And there was one other thing the Tiguas didn't know. According to the Senate investigation, Michael Scanlon was splitting his profits about 50-50 with Jack Abramoff, their supposedly pro-bono lobbyist.

REYES: It paints a pretty ugly, nasty, corrupt picture of power.

MITCHELL: U.S. congressman Sylvestre Reyes represents El Paso, including the Tigua reservation.

REYES: I think Americans Democrats, Republicans, Independents, whatever their political affiliation, will be outraged at the way an Indian tribe was set up, marked, exploited, and shaken down by a corrupt political system.

MITCHELL: But Abramoff and Scanlon did try to use that system to do something for the tribe. They found a sympathetic ear with Ohio Republican Bob Ney, according to this week's Senate hearings. Abramoff asked the Tiguas to contribute $32,000 to the congressman's fundraising committees. The tribe even met with Ney for almost two hours and Ney reportedly was willing to push legislation that would have allowed the Tiguas to reopen their casino. He backed off, he said in a statement, once he realized the provision had no other congressional support.

Ney now says he, too, was "duped" by Abramoff. There's plenty of outrage to go around.

CONRAD: I would say to my colleagues, and I'd say to you, Mr. Abramoff, shame on you. Shame on you.

MITCHELL: It's now clear the Tiguas are only one piece of a very large puzzle. So far Senate investigators have found that six tribes gave at least 66 million dollars worth of business to Scanlon and Abramoff, over three years. That's more than a major corporation like General Electric spent in lobbying during the same period.

STONE: And of that 66 million, we've learned now, at least 21 million went to Scanlon personally, and 21 million went to Abramoff personally. So, they personally did very, very well through this business.

MITCHELL: And just what were Abramoff and Scanlon doing with their money? Well, they bought multimillion dollar homes. Here's Abramoff's in Silver Spring, Maryland and here's a $4.7 million property Scanlon bought on the Delaware shore.

STONE: Few lobbyists in Washington see that kind of money from one client ever in their lifetimes. Virtually nobody sees that kind of money in their lifetime.

MITCHELL: But virtually everyone understands that to get what you want in Washington, you have to pay to play. And while Abramoff and Scanlon stand accused of being corrupt, they are only a small part of the profitable business of influence-peddling in politics.

MCCAIN: Do you have any remorse, Mr. Scanlon?

SCANLON: Unfortunately at this time Senator, I must decline to answer that question based upon my 5th amendment privileges. Hopefully in the future, I'll have an opportunity to do so.

MCCAIN: I don't know how you go to sleep at night really. I would hope your conscience bothers you.

MITCHELL: Simply put, these two men appear to have taken a system ripe for abuse and abused it. And just look at the circles they moved in. Abramoff was a Bush pioneer, meaning he raised over $100,000 for the campaign. His former assistant now works for Karl Rove. That's Michael Scanlon next to his former boss Tom DeLay, the man who's turned fundraising into an art form. And remember, Abramoff also had close ties to the majority leader.

STONE: Part of Jack's m.o. in doing this work for the tribe was as a vehicle to raise money.

MITCHELL: And where was Jack Abramoff sending most of those campaign contributions from the tribes?

STONE: According to campaign finance records that I've seen, somewhere between two-thirds and three-quarters of the funds they gave wound up in Republican coffers.

MITCHELL: Abramoff also had the tribes contribute to various old friends and political allies like Grover Norquist, who runs the anti-tax group Americans for Tax Reform. He has been a friend of Abramoff's since their days in the College Republicans. Norquist's group got $25,000 from one of Abramoff's tribes.

STONE: Jack did very well with the tribes. He talked… convinced them that they ought to give lavishly to both campaign committees. Individual members of Congress. Conservative groups. Couldn't do much better.

MITCHELL: There is an irony to all this wasn't lost as the hearings continued in Washington this week. Abramoff's effectiveness in redistributing the tribes' wealth to his political friends and causes seems beyond dispute. If only he had been as effective on behalf of his clients, the Tiguas. Back in El Paso, their casino remains closed.

HISA: When you're elected to these positions, we sit as a father. Our roles are as a father to the tribe. And when harm is brought upon one of your children, it's the worst thing that can happen. And that's what happened. These individuals harmed our children. The counsel's children, my children.

MITCHELL: Have you spoken to Jack Abramoff or Michael Scanlon since you found out all this information?

SENCLAIR: No I have not.

MITCHELL: Would you like to speak to either one of them?

SENCLAIR: I don't think there's much to say to them. I mean the ever-ending question is, Why would you do this? But you know it's greed, it's basically greed. I doubt that we're ever going to hear, "Hey I'm sorry." I don't think they're that type of individuals to find any remorse within their heart. They're not remorseful. It's all about the dollar.

MOYERS: A perfect picture, that, of how political connections not available to ordinary people are used to build vast personal fortunes.

Ralph Reed — the former poster boy for the Christian Coalition — is a favorite of the Christian Right in the White House; Abramoff is close to the Republican leader of the House, Tom DeLay; Scanlon is DeLay's former aide.

DeLay is so often under a cloud of scandal that he has to squint when the sun comes out. But not even earlier rebukes by the House Ethics Committee can stay his power. Just look at what happened this week. House Republicans rescinded a rule they enacted a dozen years ago requiring anyone in a leadership position to step down if indicted. Now the Republicans are worried Tom DeLay might indeed be indicted by a Texas grand jury. Could that happen? Here's some background on the case, an excerpt from our report earlier this year by David Brancaccio and producer Bryan Myers.

BRANCACCIO: Ronnie Earle is the District Attorney for Travis County, Texas where the state capital of Austin is located. It's his job to prosecute election irregularities in Texas.

EARLE: This is about an organized movement to basically steal an election by using illegal corporate secret donations to political campaigns.

BRANCACCIO: Earle and his staff are investigating one of Tom DeLay's political action committees called "Texans for a Republican Majority," also known as TRMPAC. TRMPAC was set-up to elect Republicans to the Texas state legislature in a series of key races in the year 2002. TRMPAC's accused of illegally using money from corporations to get those candidates elected.

EARLE: Texas law makes it a felony for corporations and labor unions to make political contributions to campaigns. The punishment is two to ten years in the penitentiary.

BRANCACCIO: Does your investigation extend all the way to the House Majority Leader of the US Congress, Tom DeLay?

EARLE: The investigation extends as far as it needs to go to uncover the truth. That's our job. Whoever is guilty of a crime will be a target.

BRANCACCIO: Craig McDonald runs a watchdog group in Austin that tracks money in politics. He's also done some gumshoe work into the TRMPAC case, and is astonished by what he's found. TRMPAC, working with some other groups, supported several candidates. Together, the money they raised averaged over half a million dollars per candidate. That's six times the cost of a typical state house race in Texas.

MCDONALD: Right now — we think it might only be the tip of the iceberg — but right now, the allegations are that those three sources alone funneled 4.8 million, almost 5 million dollars into the Texas House elections.

BRANCACCIO: Clearly all of that money didn't hurt. Almost all the candidates DeLay's group supported won. And in 2002, for the first time in 130 years, Republicans took control of the Texas legislature.

MCDONALD: We contend they were only successful, or likely only successful, because they funneled millions of dollars of illegal contributions into the campaigns.

BRANCACCIO: So exactly how does McDonald believe DeLay's group broke the law? In Texas, political groups can accept corporate money, but can only spend it on "administrative" expenses to run their organization; they can't spend in on activities to help candidates get elected.

MCDONALD: Administrative expense would be paying the light bill. You can pay the light bill, but you can't pay your pollster. You can pay your accountant who's doing the books, but you cannot pay your political director. You can pay the rent on the telephone on the desk of the administrator, but you can't pay for telephone banks.

BRANCACCIO: But look at what DeLay's group was spending money on. NOW has obtained a copy of TRMPAC's ledgers. It lists repeated expenditures of corporate money, also known as "soft" money, on seemingly forbidden activities. Here are two entries totaling almost $100,000 to a company that did polling and "get out the vote" work. And here is a series of payments to professional fundraisers. One of the fundraisers frequently listed is Coastal Consulting, a company run by Congressman DeLay's daughter.

BRANCACCIO: And look at this brochure DeLay's group sent to pitch corporate donors. It lists Tom DeLay as head of TRMPAC's advisory board and states, quote, "Rather than just paying for overhead, your support will fund a series of productive and innovative activities," such as candidate recruitment, message development, and market research. According to Craig McDonald, a brazen list of just the sort of political activities prohibited by Texas law.

MCDONALD: How do you explain that statement early on, if they didn't know they were bumping up the edge of the law? And we think they did more than bump up to the edge of it, they went over the line.

BRANCACCIO: How far over the line? There are also allegations the group laundered money. Cris Feldman is an attorney who specializes in Texas campaign finance law. He's filed suit on behalf of several of those who lost in the 2002 Texas election. He believes Texans for a Republican Majority found a way to take illegal corporate money and give it to candidates using a middleman — the national Republican Party in Washington, DC.

FELDMAN: What we have here is a check from the Texans for a Republican Majority to the Republican National Committee. What we also know is that this check was initially sent to Washington DC as a blank check, and that one of DeLay's operatives had a meeting with the RNC and then filled in the amounts to be transferred from Texans for a Republican Majority to the RNC. And it was for an amount of $190,000.

BRANCACCIO: Only three weeks after TRMPAC gave that $190,000 to the national Republican Party in Washington, seven candidates in Texas supported by Tom DeLay's group received checks from the party totaling exactly $190,000.

FELDMAN: So $190,000 in soft money went up and $190,000 in seven different checks came back down.

BRANCACCIO: It's quite striking that it's exactly the same amount.

FELDMAN: Yeah.

BRANCACCIO: They say it's a coincidence.

FELDMAN: I think there's a lot of coincidences these days down here.

BRANCACCIO: Earlier this week, when House Republicans voted on the rule change that could allow DeLay, even if indicted, to remain their leader, they denounced District Attorney Ronnie Earle as, quote, a "partisan crackpot." Ronnie Earle, a Democrat, had heard it before.

EARLE: I've been accused of political partisanship by everybody I've ever prosecuted. Since I've been district attorney, I've prosecuted four times as many Democrats as Republicans. But it's a common allegation. This is not about Democrats and Republicans. This is about cops and robbers.

MOYERS: Since that report, three of Tom DeLay's close political associates have been indicted in the case. But all those candidates he had helped elect to the state legislature saw to it that Texas was gerrymandered in time to defeat four Democratic incumbents this month in the congressional races, they add to the Republican majority in the House. So now the party of faith and moral values has laid the groundwork for Tom DeLay to remain majority leader of the House of Representatives, even if indicted for a felony crime.

BRANCACCIO: For those who suspect that politics is a cesspool of self-serving intrigue and corruption, well, our stories in this hour may just convince you that you're absolutely right.

In the face of this you have two choices: stay home and play solitaire or find a way to channel the head of steam that built up among voters to make the world a better place. Democracy is more than politics; it's also about doing what you can close to home.

I got a lesson on that from Angela Glover Blackwell and Manuel Pastor. Blackwell runs a group called Policy Link that pushes for economic and social equality. Manuel Pastor teaches Latin American and Latino Studies at the University of California, Santa Cruz, where he is also Director of the Center for Justice, Tolerance and Community. They've written a book called SEARCHING FOR THE UNCOMMON COMMON GROUND. Some uncommon ground may be needed, at a time when the number of people living in poverty is on the rise in America. My guests had suggestions about how to get cracking.

BLACKWELL: I think this conversation begins from the community level. At the community level, people are more concerned about their neighbors, they're more concerned about the cities and towns and areas where they happen to live. And even though people at the national level who are often engaged in campaigns live in communities, too, I don't think that they're remembering the lessons of community. And so, by starting at the local level, we can begin to build relationships and test out strategies.

In the San Diego region, there are communities called the diamond neighborhoods, it's a very low income area in San Diego. And a few years back, the Jacobs Family Foundation started off by interviewing people who live in the neighborhood to ask what they would want. What people wanted was a grocery store. The residents, the foundation, community based organizations came together and they were able to create a destination near a transit stop where a grocery store, Food For Less, actually is actually the anchor. But there are other small community businesses also in that location. This did several things. It created a community that turned out to be a place where people would choose to live. Not just where they were forced to live.

BRANCACCIO: Now, Manuel, you've also written about this very idea of place being a crucial part of this conversation about social justice in America.

PASTOR: Place matters tremendously. There really is a geography of opportunity in the regional landscapes in which we live. And one finds that if you're in particular neighborhoods, you are disconnected from employment possibilities, you're disconnected from transportation. You may find yourself with some of the worst environmental disamenities as well.

And one of the things that's really striking, for example, is the whole question of environmental justice in the United States, and the fact that hazards tend to be disproportionately in low income and minority neighborhoods. I remember when I first started working on this issue, I told my aunt, Tia Dalia, I said, "Tia, Tia, this is really exciting. I'm going to start to work on this question of environmental racism." And she said, "Oh my gosh, that's wonderful that you're working on that. What is it?"

And I said, "Well, that's the fact that hazards are disproportionately in minority and low income neighborhoods." She looked at me very sadly and she said, "Well, everyone knows that, Manuelito." So there's really, you know, people know this in their bones, that place matters. If they didn't know that places matters, they wouldn't be so desperate to move to the suburbs, where they think there are better schools, more opportunities, et cetera.

BRANCACCIO: Listening to you, it occurs to me that one way to address that is mass transit, public transit. But also, what? Affordable housing in suburbs.

BLACKWELL: Yes. We need affordable housing in suburbs. It absolutely is essential that we provide housing opportunities for people to be able to move to opportunity. And it just doesn't exist. What we have right now, lots of people moving out of low income inner city communities.

And they're moving to the only places they can afford, which turn out to be older suburban communities that are themselves in decline. Because we've actually seen that this isn't just a few places. But from the 1980s to 2000, there was 121 percent increase in the numbers of people living in suburban communities of concentrated poverty. A real problem. Concentrating poverty is a very bad thing. It's bad to be poor. And we all know what it means just not to have enough money to do what you need to do. But when you are poor in a community in which almost everybody else is poor, your life chances are greatly diminished.

Because what that means is that all of the children who go to your school are likely to also be poor and have many needs beyond the usual needs of trying to make sure that you educate children. So it places a huge burden on the school system. It means that you're isolated from natural job networks. And that's how people get jobs: through natural job networks. You know somebody. Say, "Come on down to this place. I know they're hiring."

Or, "There's a good job over there."

BRANCACCIO: Because as you try to break down these barriers, what really stands in the way?

BLACKWELL: We need to push those in power to respond to the important issues of the country. So I am not for just waiting four years and trying again. Education, housing, transportation, health continue to be important issues. And we need to hold the current administration accountable for responding to those.

Privately, people want a more inclusive society and polling has shown that again and again. If you ask people should we provide education for everyone? They will say yes. Should we discriminate in the workplace? People will say no.

Ought we to allow people to be able to live wherever they want? People will say yes. They will say that. But when you then ask them what about busing to deal with education? People recoil. If you say what about affordable housing in your neighborhood? People will recoil. And if you use affirmative action directly to talk about the workplace, people will begin to reject it. What we have failed to do is create a policy narrative that catches the American people where they are.

PASTOR: In the same year that President Bush finally won Florida in a convincing way, the voters in Florida voted for a significant increase in the minimum wage that had been pushed forward by Acorn, an organization of community groups. Which was pressing for economic equity.

BRANCACCIO: Voters in Nevada did the same thing at the time that the state went to George Bush, too, this time around.

PASTOR: And I think there is a reservoir of good will about dealing with these issues. I think that we can't wait four years. We need to point to these local increases in the minimum wage and in the living wage.

We need to point to these examples in communities where communities have come together and secured a community benefits agreement and have been able to get good hiring and good affordable housing out of it. We need to point to the inner ring suburbs that have begun to redesign themselves so that they can capture some of the benefits of regional economic growth.

We need to combine our moral vision with a pragmatic sense that this can be done. In fact, it can be done. One of the reasons why people are so reluctant sometimes to put additional dollars into education is they feel like, gosh, the educational system doesn't work. Additional dollars aren't really going to do it.

There are so many examples where hard-working teachers and parents and principals make schools work even with scarce dollars. We need to lift those up. And we need to, again, replace this bigotry of soft expectations the president talks about with also talking about a bigotry of soft funding. When you don't put the dollars where the needs are, you're not gonna see the needle move on poverty.

BRANCACCIO: But it's dollars. But it's also in every single one of the examples from both of you, it's people participating in the process. It's actually pretty hard in modern America where you might have one, two parents working very hard, working long hours. Sometimes for not much money. And then you expect them also to have this well-rounded civic life in which they're taking on problems against all odds. Are you not asking too much?

PASTOR: I think the participation in the election showed us the yearning that people have for democracy. And I think what we need to do is to build on it to move from elections to actual democratic practice. That engagement on a daily level with the schools that your kids go to, with the city councils, with the local county governments to begin to engage in real democratic practice. The other thing I think that leaders can really help us with is democratic conversation. And what I…

BRANCACCIO: Democratic conversation?

PASTOR: Yes. And what I mean by that is that we're a highly polarized society. And the last election didn't really help in terms of trying to reduce the level of polarization. And the problem with that is that the way that we're gonna get to this uncommon common ground is by being involved in democratic conversation with one another.

Actually not painting the other as some completely separate red or blue person who you could never have a discourse with. I was struck with what Obama said in his speech to the Democratic Convention about how we worship an awesome God in the blue states. And we have gay and lesbian relatives in the red states.

This world is actually very complex. There's actually a lot of goodwill out there. And we need to move beyond the polarized stereotypes to begin to get people engaged in deep conversation with one another

BRANCACCIO: Does this polarization drive you crazy?

BLACKWELL: The talk about it drives me crazy.

BRANCACCIO: And here we've just done it again.

BLACKWELL: I don't think that we're as polarized as we're presenting the American people as being. To think about it, in the last election, 60 percent of people who lived in cities voted for Senator Kerry. That means 40 percent of people who lived in cities voted for President Bush. That in the last election in the small town, small cities, 49 percent voted for President Bush, 49 percent voted for Senator Kerry.

That in each time that you bring, if you take the data and you tear it apart, you'll see that a number of people felt the other way in all instances. Which says that there's a lot of complexity in everything that we're talking about.

And if you look at polling around the attitudes of people around these issues of inclusion, they're much closer together than you would think.

BRANCACCIO: So that's a magic word? When we keep talking about reframing and a new vocabulary? Inclusiveness? Do you think that would have the widest appeal that could help you build the coalition that you seek?

BLACKWELL: I like inclusiveness. I think that that's a word that a lot of people can get behind. But I tell you what I like better. I like creating a society in which all can participate and all can prosper. I think that notion of participation really gets at our belief in democracy.

It sparks us to think about how do we get out there and with whom are we going to join? And prosper is a very good term. Prosper is not definitive in terms of how much I'm gonna prosper and how much you're gonna prosper. But we know that we want a prosperous society. And we want for everybody to be able to gain as we move there. How do we create a society that allows everybody to participate and everybody to prosper? That is an inclusive society.

BRANCACCIO: What sustains you in all this? These are, some fear, intractable problems. And I hear from you that you don't feel they're feel they're intractable. But what really motivates you to push forward on this stuff?

PASTOR: When I see people coming together to move forward at a local level, it tremendously sustains me. When I think about my academic achievements and I think about I have a PhD and I've got books and all that stuff. When I think about really the proudest academic achievement is when I give a talk in a community and someone comes up afterwards and says to me, "I saw myself in your numbers, in your statistics, in the story that you're telling. And I found a place for my story in a larger story of social change." Boy, that really sustains me.

That gives me hope. That keeps me going. And that's the reason for my fundamental optimism despite what we perhaps just saw at the national level.

BRANCACCIO: All right. The book is called SEARCHING FOR THE UNCOMMON COMMON GROUND: NEW DIMENSIONS ON RACE IN AMERICA. Angela Glover Blackwell, Manuel Pastor, thank you very much.

BLACKWELL AND PASTOR: Thank you.

BRANCACCIO: That's it for now. Thanks for joining us. Bill and I will be back next week.

MOYERS: We'll talk to two remarkable women who will be our guests: the legendary Judy Collins and Roya Hakakian, a young Iranian-born author who's written a memoir of adolescence, revolutionary fervor and poetry.

See you then.

BRANCACCIO: Connect to NOW at pbs.org.

Learn about the Tigua tribe and Indian gaming. Find out more about Tom DeLay. How much power does the Secretary of State hold?

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