More ACORN News: Illegal use of Funds

More bad news for the Democratic Parties Favorite community organizing group, ACORN.  While Harry Reid continues to get heat at home for refusing to allow Senate hearings on ACORN, Senator Grassley had his staff do a little investigation of their own. According to the Capital Research Center, Grassley (R-Iowa), asked the IRS to probe ACORN – and asked that the group be dropped from the Combined Federal Campaign (a charitable program for government workers). This is not the first time the Senator has gone after the ACORN criminal enterprise, in 2006 he asked the IRS to investigate ACORN for voter fraud.

Yesterday Grassley sent a letter to the IRS Commissioner Douglas H. Shulman and another   letter to John Berry, Director of the U.S. Office of Personnel Management asking for an investigation. Both letters are available here.

At the same time Grassley released documents that show leaders of ACORN community  transferred several million dollars in charitable and government money meant for the poor to parts of the group that have political and sometimes profit-making missions.

Grassley's documents indicate that ACORN's tax-exempt groups along with its tangled web of allied organizations used more than half their charitable and public money in 2006 to pay other ACORN affiliates. Grassley called the transactions a "big shell game" and said donors may be surprised by how the Association of Community Organizations for Reform Now, known for helping the poor obtain housing and health care, was spending their money. He urged the Internal Revenue Service to take a closer look.

In the letter to Berry, he asks that the ACORN Institute “and any other ACORN affiliates, particularly any of those reviewed by my staff, be prohibited from participating in the CFC. The acts perpetrated by ACORN employees were impermissible and should not be supported with CFC dollars.”

CFC refers to the Combined Federal Campaign, which bills itself as “the world’s largest and most successful annual workplace charity campaign.” CFC is a federally administered program that channels donations from federal civilian, postal and military employees into causes deemed worthwhile. It is unclear how much money the ACORN network receives through CFC.

In his letter to Shulman at the IRS, Grassley wrote that he was “encouraged” that IRS “severed all ties” with ACORN. “Aside from the pervasive issues pertaining to several allegations of voter fraud, the recently released investigative videos are very troubling. These videos reveal ACORN employees and/or volunteers offering tax advice specifically to further clearly illegal activities such as prostitution and human trafficking.”

Please provide the number of returns prepared at ACORN tax clinics for the last five years. Does the IRS intend to review these returns for accuracy? Please confirm that IRS will terminate its relationship with all organizations in the ACORN family, particularly those reviewed by my staff. Does the IRS intend to renew its relationship with ACORN after ACORN completes its internal review?

Grassley is referring to the IRS announcement yesterday that it dropped ACORN from its Volunteer Income Tax Preparation (VITA) program, a volunteer tax assistance program through which around 3 million low- and moderate-income tax filers received free advice this year. ACORN provided help on approximately 25,000 returns, the IRS said yesterday.

Grassley also wrote “[i]t is disturbing that many of the organizations in the ACORN “family” may not actually meet the definition of related for 990 reporting purposes, even though ACORN deems them to be part of the ‘family.’” A “990” is an IRS Form 990 which is a nonprofit organization’s annual tax return.

To Understand what a form 990 is I have uploaded the ACORN Housing 990 from 2007 and you can acess it by clicking here. Among the things you can find out from it are a group's large contributors and dispersements.

What may foreshadow a future demand for a forensic audit of ACORN, the senator also asks what procedures the IRS follows when “auditing organizations like this where the movement of money appears to be a shell game.” He asks, “Do IRS audit procedures require auditors to follow the money trail to or from a charitable organization to determine whether that money is being used for impermissible activities, including electioneering and promoting illegal acts?

Finally, Grassley suggests ACORN might be a massive criminal conspiracy. He wrote:

Given what looks like a shell game perpetrated by the ACORN tax-exempt entities appears to be no different than that conducted by the charities involved in the Jack Abramoff scandal, how have IRS rules, regulations, reporting requirements and enforcement actions changed in response to the Abramoff abuses?

Looks like the Noose is continuing to tighten round the neck of this criminal enterprise, but while these investigations are great, what is really needed is an independent investigation by an independent prosecutor so the FULL story is told.