Sunday, June 25, 2006

Nonprofit Groups Under Investigation For Assisting Abramoff

Several organizations which operate with the tax benefits of being non-profit groups (perhaps not for much longer, though) are under investigation for laundering cash for disgraced lobbyist Jack Abramoff.

Newly released documents in the Jack Abramoff investigation shed light on how the lobbyist secretly routed his clients' funds through tax-exempt organizations with the acquiescence of those in charge, including prominent conservative activist Grover Norquist.

The federal probe has brought a string of bribery-related charges and plea deals. The possible misuse of tax-exempt groups is also receiving investigators' attention, sources familiar with the matter said.

Among the organizations used by Abramoff was Norquist's Americans for Tax Reform. According to an investigative report on Abramoff's lobbying released last week by the Senate Indian Affairs Committee, Americans for Tax Reform served as a "conduit" for funds that flowed from Abramoff's clients to surreptitiously finance grass-roots lobbying campaigns. As the money passed through, Norquist's organization kept a small cut, e-mails show...

The Senate committee report also details Abramoff's dealings with two others from the College Republicans crowd: Ralph Reed, former Christian Coalition executive director; and Amy Moritz Ridenour, president of the National Center for Public Policy Research, which sponsored a golf trip in 2000 to Scotland for then-Rep. Tom DeLay (R-Tex.).

"Call Ralph re Grover doing pass through," Abramoff wrote in a stark e-mail reminder to himself in 1999, a year in which Norquist moved more than $1 million in Abramoff client money to Reed and Christian anti-gambling groups. Reed was working to defeat lotteries and casinos that would have competed with Abramoff's tribal and Internet gambling clients...

E-mails show that Abramoff also moved client money through a conservative Jewish foundation called Toward Tradition, run by longtime Abramoff friend Rabbi Daniel Lapin. In January 2000, when Reed sent Abramoff an $867,000 invoice to be billed to a Choctaw official, Abramoff responded: "Ok, thanks. Please get me the groups we are using, since I want to give this to her all at once." Reed responded: "Amy, Grover, Lapin and one other I will get you."

Abramoff tapped the same cluster of tax-exempt groups in 2000 to help defeat legislation to ban gambling on the Internet. Abramoff's client, an online gambling services company called eLottery, donated money to ATR, the policy research center and Toward Tradition.

In May 2000, just before a key vote on the anti-gambling bill, the research center paid for the Scotland trip for then-House Majority Whip DeLay. Toward Tradition hired the wife of DeLay aide Tony C. Rudy, who later pleaded guilty to conspiring to corrupt public officials, saying his wife was paid in exchange for his official actions. Lapin has said his hiring of Lisa Rudy was not connected to any eLottery donations...

Tax experts said it is impermissible for a tax-exempt organization to act as a pass-through for money destined for private business purposes.

"It's not a tax-exempt activity to act as a bag man for Jack Abramoff," said Marcus S. Owens, a tax lawyer at Caplin & Drysdale and a former Internal Revenue Service official.

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