Sunday, June 25, 2006

Bag Men

According to Wikipedia:
A bag man (or bagman) is a person designated to collect money in a protection racket. Originally the term only applied to Mafia members collecting for mob bosses, but the term later spread to use in corrupt police precincts where a foot patrolman was the designated "bagman" to pick up and deliver bribes from the local mob(s) to the precinct captain. In many cases, the bagman receives a percentage of the money collected.

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In many cases, the bagman acts as "insulation" to protect higher-ups from exposure or direct prosecution.
It is clear from the report of the Senate Committee on Indian Affairs (the McCain Report) and today's story in the Washington Post that Grover Norquist, Ralph Reed, and Amy Moritz Ridenour were all using their respective non-profit organizations to prevent public disclosure of the lobbying efforts of Jack Abramoff. Marcus S. Owens, a tax lawyer at Caplin & Drysdale and a former Internal Revenue Service official, was quoted in the WaPo article as saying that, "It's not a tax-exempt activity to act as a bag man for Jack Abramoff." However, that's exactly what happened, with the various entities controlled by Norquist, Reed, and Ridenour laundering money from Abramoff and his clients, raking off a "commission" for themselves in the process.

Paul Kiel of TPM Muckraker suggests that Norquist and Reed (and, presumably, Ridenour as well, although her case is somewhat more complex), do not face any potential criminal charges. He states that:
The worst that could happen to Norquist, according to [Melanie Sloan, a former federal prosecutor and the Executive Director of Citizens for Responsibility and Ethics in Washington], would be for the IRS to crack down on ATR. His group would lose its 501(c)3 status. That would result in hefty fines, and his donors would be mighty upset, since their contributions would suddenly become taxable. One of the pillars of the modern conservative movement would be disgraced. Pretty bad. But there's not really a criminal case to make against Norquist. No jail time.
Of course, as I previously noted, in Norquist's case, the lion's share of the money to his operation came through his 501(c)(4) entity, not his 501(c)(3) foundation. Thus, the loss of tax exempt status would not have a major affect on his donors.

I am not nearly as pessimistic as Kiel or Sloan. After all, the improper use of the 501(c)(4) and 501(c)(3) organizations was not incidental, it was part of their basic fabric. Thus, the improper tax reporting was not some minor foot fault, it was intentionally false. And, the returns filed by these organizations are executed under penalties of perjury.

I know little about the requirements concerning lobbying disclosures, but apparently there is no criminal penalty associated with filing a false lobbying report with Congress. See here:
PENALTIES. Whoever knowingly fails: (1) to correct a defective filing within 60 days after notice of such a defect by the Secretary of the Senate or the Clerk of the House; or (2) to comply with any other provision of the Act, may be subject to a civil fine of not more than $50,000.
I have to believe that there must be some criminal sanction triggered by operating a wide conspiracy to hide this information from public disclosure.


Kiel has updated his previous post.
It would appear that if there's a will, there's a way to prosecute Grover Norquist.
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We at TPMm have some current and former federal prosecutors in our readership, who wrote in to disagree with Sloan's analysis.
One, who currently works in the Justice Department, wrote in to say that any material false statement by Norquist in his filing documents with the IRS would be a felony.

And here's another reader, a former federal prosecutor:
If Norquist was running ATR as you describe (or as the Senate report describes), it's virtually inconceivable that he was doing so completely on his own. But if he had even a tacit agreement with at least one other person to make ATR appear eligible for 501(c)(3) status when in fact it was not, then he and that other person conspired to impede the lawful functions of the Internal Revenue Service, which is known to federal prosecutors (like myself, once) as a "Klein conspiracy." It gets you up to five years in prison under section 371 of Title 18 of the United States Code.
Now that's more like it.

1 comment:

Anonymous said...

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