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Abramoff Ties May Jeopardize Nonprofits' Tax Status

Senate Democrats say conservative groups' work with the lobbyist defrauded taxpayers. One target calls the charges politicking.

October 13, 2006|Tom Hamburger | Times Staff Writer

WASHINGTON — Several well-known conservative organizations may have put their tax-exempt status at risk as a result of helping disgraced lobbyist Jack Abramoff and his clients, according to a new report from congressional Democrats.

The report by the minority staff of the Senate Finance Committee concludes that the organizations "appear to have perpetrated a fraud on other taxpayers" by engaging in "what amounted to profit seeking and private benefit behavior inconsistent with their tax-exempt status."

The report reveals new details about the relationship between Abramoff and the leaders of the tax-exempt groups who provided Abramoff clients with introductions to key administration officials and public relations help, and in some cases concealed the source of funds used for advertising campaigns and congressional junkets.

Among the groups highlighted in the report is Americans for Tax Reform, led by Grover Norquist, who has been a major player in building and directing the conservative movement that has dominated U.S. politics for more than a decade.

The report shows e-mails from Abramoff to Norquist asking for help arranging introductions for the lobbyist's clients with Karl Rove.

The e-mails also show that Norquist and his staff -- along with the leaders of other groups -- were encouraged to submit newspaper pieces and news releases, which Abramoff offered to draft, advocating for Abramoff clients. Through a spokesman, Norquist denied any wrongdoing and charged that the report was released by Democrats solely for political purposes.

The report focused on the group Norquist heads, Americans for Tax Reform, and four other organizations: Citizens Against Government Waste, Council of Republicans for Environmental Advocacy, the National Center for Public Policy Research, and Toward Tradition, all of which have had ties to Abramoff.

The report describes a range of behavior by each of the organizations and notes that Abramoff offered each contributions from his clients, though several groups said the promised contributions were neither solicited nor received.

A spokesman for Americans for Tax Reform, John Kartch, dismissed the Senate Democrats' report as "political nonsense." He said Norquist had done nothing improper and charged that the report was distributed deliberately just before the midterm election and the day after news stories appeared questioning financial transactions involving Senate Democratic leader Harry Reid.

The 600-page report recounts some well-known activities, including Abramoff's use of Americans for Tax Reform to hide the fact that Indian tribes with gambling casinos were the source of funds for campaigns opposing state gambling enterprises. But it also included some new details, such as exchanges between Abramoff and Norquist on behalf of corporate clients including Primedia Inc.'s Channel One, an educational network for schools that ran into controversy because its programming included advertising for food and clothing manufacturers.

Abramoff e-mails show him encouraging Norquist and Americans for Tax Reform and other organizations to become active on behalf of his client. In 2000, the Washington Times published a Norquist op-ed piece touting Channel One. His spokesman said the article and other activities on the topic were consistent with long-held beliefs promoting private-sector competition in schools and other government enterprises.

Similarly, the report says that Citizens Against Government Waste had offered statements supporting Channel One when it was under assault for its in-school advertising. In a response to the committee, the organization said that it had not received contributions from Channel One. A subsequent e-mail from Abramoff to an assistant showed that Abramoff was providing tickets to a Crosby, Stills, Nash and Young concert to a top official at Citizens Against Government Waste.

The president of the organization, Tom Schatz, said that his organization's position on Channel One and others in the report had been held for years, long before Abramoff became involved.

The report noted that the Council of Republicans for Environmental Advocacy, co-founded by Italia Federici, Norquist and former Interior Secretary Gale A. Norton, received $250,000 from Abramoff clients, apparently in exchange for its efforts lobbying the Interior Department.

The National Center for Public Policy Research used money from Abramoff clients to pay for travel in 2000 and 2003 to Scotland for members of Congress. The details of that organization's involvement in the trip had come to light previously.

The ranking Democrat on the committee, Sen. Max Baucus of Montana, said he would ask the Justice Department, Treasury Department and Internal Revenue Service to review the findings.

A spokeswoman for Senate Finance Committee Chairman Charles E. Grassley, an Iowa Republican, said that he did not sign the report because he "was seeking a more comprehensive report that looked in depth and across the political spectrum at nonprofit organizations and their involvement with lobbying and politics."

However, Grassley did not use his power to block the report's publication, and he promised to review it closely.

Grassley's focus is "on reforming the system to stop systemic abuse of the tax code," spokeswoman Jill Gerber said. "The problems are widespread and won't be resolved just with Mr. Abramoff going to jail."

Abramoff pleaded guilty in January to conspiring to corrupt public officials and defrauding American Indian tribes that were his clients.

tom.hamburger@latimes.com

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