Nov. 2 (Bloomberg) -- A former top U.S. Interior Department official said lobbyist Jack Abramoff made him a surprise job offer as the agency considered allowing the opening of a casino that would have competed with one run by an Abramoff client.

``It raised alarms with me,'' J. Steven Griles, the former deputy to Interior Secretary Gale Norton, told a Senate panel today of the September 2003 offer. Griles said he immediately turned the offer down and reported it to Interior Department ethics officers. Yet his claim that he never got involved in gaming industry decisions was disputed by Norton's former counsel, who told the panel that Griles took an active interest in this one case.

The focus by the Senate Indian Affairs Committee on the Interior Department reflects a widening probe into Abramoff's dealings with casino-operating tribes. Senator John McCain, the committee chairman, said Abramoff and partner Michael Scanlon took in more than $66 million from the tribes from 2001 to 2004.

Abramoff is also the subject of a Justice Department-led investigation of his lobbying activity, including his contacts with lawmakers such as former House Majority Leader Tom DeLay and with David Safavian, President George W. Bush's former top procurement official. A grand jury indicted Safavian in October on charges of obstruction and making false statements in the investigation. Safavian pleaded not guilty.

Coushattas

Griles said Abramoff, 46, and Fred Baggett, a managing shareholder of Abramoff's former law firm, Greenberg Traurig LLP, made him the job offer. He said that was the only time he met Baggett, who also testified before the committee earlier today.

Abramoff was lobbying for the Coushatta Tribe of Louisiana at the time. E-mails released by the Senate panel show that he wanted the Interior Department, which oversees the Bureau of Indian Affairs, to block a plan by the Jena Band of Choctaw Indians to open a casino that would compete with one run by the Coushattas. The Interior Department gave the initial go-ahead, though the Jena casino has not been built.

DeLay, who stepped down as House majority leader in September after he was indicted on campaign-finance charges in Texas, joined with House Speaker Dennis Hastert, then-Majority Whip Roy Blunt and Chief Deputy Whip Eric Cantor in signing a June 2003 letter to Norton questioning the Jenas' casino.

`Benefited Immensely'

The Coushatta Tribe spent almost $37 million on fees and donations directed by Abramoff and Scanlon, according to McCain's committee.

``Mr. Abramoff and Mr. Scanlon saw the Coushattas as their `money train,''' McCain said.

Abramoff spokesman Andrew Blum said the tribes got their money's worth from the lobbyist.

``His clients benefited immensely from the hard work he and his team did,'' Blum said in an e-mailed statement. ``The fees related to his efforts were more than justified given the cost savings and economic benefit realized by his clients.''

McCain, an Arizona Republican, said he's also looking into whether Abramoff had clients donate to a nonprofit group that Norton helped found, in hopes of winning influence with her.

``Information in the committee's possession indicates that Mr. Abramoff directed at least four of his tribal clients to contribute no less than $250,000 to this organization from 2001 through 2003,'' McCain said, referring to the Council of Republicans for Environmental Advocacy. ``The question is why?''

McCain said the committee has no evidence the group did anything to benefit the tribes. Instead, he said, documents obtained by the committee suggest Abramoff believed that Crea's president, Italia Federici, may have had sway with Norton.

No Norton Link

``There has been no evidence to suggest that Secretary Norton knew of, much less sanctioned, Mr. Abramoff or anyone else using her name in seeking fees and donations from Native Americans,'' McCain said. ``To suggest otherwise based on the current record would do a great disservice to the secretary.''

Though the committee asked Federici to participate in today's hearing, she wasn't able to because of travel commitments, she said in a letter to the committee. McCain said the committee would hold another hearing for her testimony.

Griles's assertion that he played no role in any consideration of the Jena plan was disputed by both Michael Rosetti, Norton's former counsel, and Senator Byron Dorgan of North Dakota, the panel's ranking Democrat. Dorgan said Federici told committee staff members earlier that she had ``many discussions'' with Griles.

``What are we to make of that?'' Dorgan asked Griles. ``It's certainly at odds with your opening statement -- at great odds with it.''

`Outrageous'

Griles said he also had heard that Abramoff claimed to have special access to his office.

``That is outrageous,'' Griles said. ``If he got this money in part by misrepresenting his relationships with me, I am extremely pleased that you are investigating.''

Griles's attorney, Barry Hartman, said his client contacted the Justice Department and offered to help in the probe, though investigators haven't yet taken him up on the offer. ``They said, `we'll call you when we're ready,''' Hartman said. When asked if Griles himself is a target of the investigation, Hartman said, ``not as far as we know.''

Abramoff is facing a separate probe in Florida into whether he and a partner used a fake $23 million wire transfer to secure a loan to buy a cruise line. A grand jury indicted him on charges of fraud and conspiracy in August. He pleaded not guilty.

Abramoff has been ``put into the impossible position of not being able to defend himself in the public arena until the proper authorities have had a chance to review all accusations,'' Blum said.

To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net; Kristin Jensen in Washington kjensen@bloomberg.net.

Last Updated: November 2, 2005 16:40 EST