Abramoff's charity scam

Wow. There's some real potential blockbusters in this story.

Capital Athletic Foundation, a charity run by disgraced lobbyist Jack Abramoff now at the center of an influence-peddling investigation on Capitol Hill, told the IRS it gave away more than $330,000 in grants in 2002 to four other charities that say they never received the money.

The largest grant the foundation listed in its 2002 tax filing was for $300,000 to P'TACH of New York, a nonprofit that helps Jewish children with learning disabilities.

"We've never received a $300,000 gift, not in our 28 years," a surprised Rabbi Burton Jaffa, P'TACH's national director, told the Austin American-States- man. "It would have been gone by now. I guess I would have been able to pay some teachers on time."

Federal investigators have not contacted P'TACH about the grant, Jaffa said. Representa- tives of three other nonprofits that supposedly received Capital Athletic money also said they have not been contacted.

The grant-reporting discrepancy raises further questions about Abramoff's use of the foundation's finances as he built one of the most successful and well-connected lobbying practices in Washington. Abramoff's dealings already have led to the indictment of a Bush administration official, a subpoena for a GOP committee chairman and investigations by the Justice Department, Internal Revenue Service and U.S. Senate.

The discrepancy also follows e-mails between Abramoff and members of his lobbying team that say then-House Republican Leader Tom DeLay of Sugar Land wanted to raise money through Capital Athletic for an unspecified purpose. In one of those e-mails, Abramoff announced a $200,000 fundraising goal.

DeLay does not recall making such a request, his lawyer, Richard Cullen, said Wednesday. Capital Athletic's tax return does not indicate whether Abramoff reached his $200,000 goal.

But around the time Capital Athletic's tax form was filed in fall 2003, listing the $300,000 donation P'TACH says it didn't get, a DeLay-created charity called Celebrations for Children was begun with $300,000 in seed money.

Celebrations for Children was a short-lived effort to raise money for children's charities by providing donors with special access to DeLay, plus yacht trips and other enticements, during the 2004 Republican National Convention in New York. Watchdog groups protested, claiming the fundraiser violated a new ban on accumulating unlimited "soft" money, and DeLay dropped it in May 2004.

E-mails and documents released so far in the ongoing investigations do not detail where Capital Athletic's elusive $300,000 went, or if it was money raised at DeLay's behest in possible violation of federal law.

Abramoff, who knows the answers, is not talking.

It gets worse from there, so rather than me quote the whole thing you should just go read it. The key thing to take away is this:

The ultimate answers may be important for DeLay. Federal law prohibits members of Congress from requesting "anything of value" from anyone seeking official action from the House or doing business with the House. Lobbyists in particular should not be solicited, according to an ethics committee memo explaining the House Ethics Manual.

An exchange of e-mails in the summer of 2002 between Abramoff and lobbying partner Tony Rudy, DeLay's former chief of staff, demonstrate that the men were not shy about using DeLay's name to solicit money for Capital Athletic, particularly from Indian tribe clients that had proven lucrative to Abramoff's lobbying practice.

[...]

IRS spokesman Phil Beasley in Dallas, while prohibited from discussing specific cases, said charities that misrepresent tax return information risk losing their nonprofit status.

"Depending on the intent and severity, an organization or individual could find themselves under criminal investigation by the IRS," Beasley said.

Maybe DeLay took an active role in this, and maybe it was just his former staffers trading on his name, I don't know. I'm pretty sure, though, that the prospect of a full-fledged IRS investigation ought to loosen a tongue or two. Stay tuned.

The Stakeholder has some additional background, and a pointer to this report that the the other main front in the DeLay Scandal-Go-Round is reaching into Missouri. Check it out.

UPDATE: Forgot to mention this not-really-related but not-full-post-worthy story about a change in tune from the new House Ethics Committee chair regarding DeLay. "Extraordinary", indeed. Via TAPPED.

Posted by Charles Kuffner on December 15, 2005 to Scandalized! | TrackBack