ACORN Skirting Transparancy To Fund Itself With Tax Dollars

ACORN Uses Tax-Exempt Entities to Funnel Money to Itself
by Connie Hair
09/25/2009

ACORN is using a tangled web of tax-exempt organizations to funnel tax money to itself according to a detailed review released last night by Sen. Chuck Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee.
Some or all of them may be nothing more than shell companies used to pass money from the government directly through to ACORN and its affiliates.
“This analysis regarding the vast number of charitable organizations that ACORN set up to funnel money to itself raises questions about whether ACORN used the entities to advance the charitable mission of helping poor people get housing, or whether the entities were used as part of a shell game to funnel charitable funds to a taxable entity,” Grassley said of his report.
“Despite the fact that ACORN set up 42 tax-exempt entities and even housed 31 of them at the same address in New Orleans, ACORN told me three times in 2006 and 2007 that it did not operate as a tax-exempt entity. The public deserves an accounting of ACORN’s conglomerate of tax-exempt organizations given the public dollars involved, both through direct government support and tax-exempt status.”
Grassley also said that the potential abuse of charitable dollars is no different than Jack Abramoff’s use of charities to launder money but on a much larger scale.
From the report:
"Our research indicates that ACORN’s response that it is not tax-exempt is disingenuous and misleading. Millions of charitable dollars from individuals, foundations and federal, state, and local governments flow to ACORN and its related taxable entities from ACORN-affiliated charitable organizations. A memo prepared for ACORN executives, which was provided to us anonymously, confirms the existence of numerous charitable organizations. The memo dated June 19, 2008, details issues regarding governance and commingling of funds, among other things."

The analysis prepared by Grassley’s professional tax staff at the Senate Committee on Finance and posted with supporting documents on their websites: http://finance.senate.gov/ and http://grassley.senate.gov/.
Senate Republicans to Sebelius: Repeal the Gag Order
The entire Republican U.S. Senate leadership yesterday signed a letter informing Secretary of Health and Human Services Kathleen Sebelius that unless and until she rescinds the unconstitutional gag order barring all Medicare insurance providers (except the AARP) from communicating with their customers about the Democrats’ healthcare “reform” legislation, they will slow or halt the confirmation process of her department nominees.
The letter also highlights the fact that HHS had previously held that there is no legal authority to justify prohibiting a health plan “from informing its members of proposed legislation and exhorting them to express their opinions” about it.
The ranking Republican senators on both committees of jurisdiction over the health care legislation also signed on.
From the letter:
As the Supreme Court has repeatedly recognized, our constitutional tradition is one of “a profound commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.” Health plans, of course, have the right to speak on matters of public concern, a fundamental principle that your department, until recently, recognized and respected. Specifically, the Department of Health and Human Services (HHS) had previously noted that there was no legal authority to justify prohibiting a health plan “from informing its members of proposed legislation and exhorting them to express their opinions” about it. In fact, HHS had previously determined that shutting down communication of this sort “would violate basic freedom of speech and other constitutional rights of the Medicare beneficiary as a citizen.”
Jonathan Blum, an acting director at the Center for Medicare and Medicaid Services (CMS) -- part of the bloated HHS bureaucracy -- was apparently responsible for issuing the order late Monday in collusion with his old boss, Sen. Max Baucus (D-Mt.), Chairman of the Senate Finance Committee. Baucus is at the center of the controversy, having earlier this week claimed responsibility in media reports for the free speech ban by CMS.
I asked Senate Republican leader Mitch McConnell (Ky.) at a press conference yesterday about the Baucus-Blum gag order that apparently overlooked the AARP.
“The AARP is by all appearances supporting what the administration is doing,” McConnell said. “The other health insurance plans have some questions. But the core issue is this: you all here are free to write whatever you want to because of the First Amendment to the Constitution. It is outrageous for the government to shut down either individuals or companies expressing themselves about legislation before the Congress. This is a true outrage. And you have not heard the last of this. There will be more chapters, shall I say, in this story.”
And before the end of the day, another page had turned.
The best descriptive line of the day in the health care debate yesterday came from Senate Republican Conference Chairman Lamar Alexander. Medicaid is greatly expanded under the Baucus plan outline being marked up in committee, placing more unfunded mandates on state governments.
“It puts more low income Americans in the largest government-run program we already have -- one which forty percent of doctors won’t serve,” Alexander said. “That means we’ll be giving 70 million low income Americans a ticket to a bus line that only operates 60 percent of the time.”
Clinton Administration HHS Directive
Rep. Dave Camp (R-Mich.), ranking Republican on the House Ways and Means Committee, released the directive issued during the Clinton administration yesterday stating that private health care plans offering Medicare benefits have the right to inform their enrollees about pending legislation.
The Baucus-Blum actions at CMS reversed the long-standing policy by not only barring communications by Medicare Advantage plan private insurers with their customers but CMS also initiated an investigation into Humana, Inc., for informing their customers of Medicare benefit cuts proposed by President Obama and Congressional Democrats.
“The more we uncover about this gag order, the more disturbing it becomes,” Camp said. “The White House is clearly trying to keep seniors from learning the facts about their proposed Medicare cuts. Reversing precedent and abusing the federal government’s regulatory authority to restrict the constitutionally protected flow of information is wrong and unethical. We need to get to the bottom of this and we need to make sure all Americans, and especially seniors, know the facts about what the President and Congressional Democrats’ health care bill will mean for them.”