WASHINGTON — In his own way, disgraced super-lobbyist Jack Abramoff engaged in many charitable endeavors over the course of his decade-long career as a Washington insider.
There was the time he laundered money through a religious group's accounts to try to bribe a congressional aide. He diverted funds from a youth athletic foundation to bankroll a golf junket for a congressman and to bolster the bank account of his Washington restaurant. He used two other nonprofits to line his own pockets with millions of dollars defrauded from clients.
Charities are supposed to advance the public interest, which is why they aren't taxed. But Abramoff, by his own admission, used them to evade taxes, enrich himself and bribe public officials, according to a plea agreement he signed with federal prosecutors in January.
"One of the most disturbing elements of this whole sordid story is the blatant misuse of charities in a scheme to peddle political influence," said Mark Everson, commissioner of the Internal Revenue Service.
Abramoff's use and misuse of nonprofits played a key role in each of the three counts of his indictment: conspiracy, mail fraud and tax evasion. He admitted evading $1.7 million in income taxes over three years, in part by using nonprofits to conceal personal income from the IRS.
The fast-growing ranks of tax-exempt, nonprofit organizations are tailor-made for operators like Abramoff.
The number of tax-exempt groups in the United States has tripled over the last three decades, but nonprofit groups usually pay no tax, so there is little incentive for the IRS to keep an eye on them.
The lack of oversight is especially meaningful in Washington, where trade associations, public-interest groups and grass-roots lobbying organizations all have tax-exempt status under generous IRS rules designed to foster public debate. Members of Congress are also getting into the act and forming their own charities.
Abramoff and a partner, Michael P.S. Scanlon, a onetime aide to former House Majority Leader Tom DeLay (R-Texas), admitted bilking Indian tribes out of tens of millions of dollars and attempting to bribe public officials. They used a network of charities and other nonprofits -- some existing, some they created -- to forge a full-service influence-peddling operation.
They included:
