WASHINGTON - June 26 - Citizens for Responsibility and Ethics in Washington (CREW) today supplemented its existing Internal Revenue Services (IRS) complaint against Americans for Tax Reform (ATR), and Americans for Tax Reform Foundation (ATR Foundation), conservative, non-profit organizations led by right-wing activist Grover Norquist. The supplemental information was derived from the June 22 Senate Committee on Indian Affairs report, "Gimme Five" -- Investigation of Tribal Lobbying Matters. The original complaint had asked the IRS to investigate activities by Norquist's groups which may violate IRS regulations and require a revocation of their tax- exempt status.
The complaint, sent March 14, alleged that Norquist used either or both ATR and ATR Foundation as commercial enterprises by laundering money derived from Indian casino clients of former lobbyist and convicted felon Jack Abramoff. The casinos made contributions to ATR, which then skimmed a fee off the top before passing the money on to former Christian activist Ralph Reed and other anti-gambling activists. In this way, Norquist, Reed and Abramoff were able to disguise the fact that the money used to fund anti-gambling activities was generated through Indian gambling. The point of the anti-gambling campaigns was to prevent competition to the Indian casinos.
Reed originally denied knowing the funds came from Indian casinos, but during hearings held by the Senate Indian Affairs Committee, Sen. John McCain (R-Ariz.) released numerous e-mails clearly demonstrating that Reed did, in fact, know where the money came from. The e-mails show that Reed and Norquist worked with Abramoff to create the anti-gambling campaigns and to develop the scheme to hide the origins of the money.
The complaint also alleged that the money ATR received from the Indian casinos constitutes taxable business income because ATR was providing services unrelated to its tax-exempt purpose: to increase public awareness about the size and regulations of government and rally support for lower taxes and smaller government. Charging a fee for serving as a pass-through for money used to finance anti-gambling campaigns bears no relation to ATR's stated tax-exempt purpose.
Finally, the complaint alleged that ATR violated IRS public disclosure requirements by refusing to provide a copy of its application for tax-exempt status when requested to do so.
In CREW's supplemental letter to its complaint, the Committee confirmed that as early as May 20, 1999, Norquist expressed to Abramoff his interest in gaining access to money from the Mississippi Band of Choctaw Indians tribe to fill a "$75K hole in (ATR's) budget." This was followed up by a $325,000 payment to ATR from the Choctaw in late 1999. ATR, in turn, sent $300,000 of this payment to Citizens Against Legalized Lottery, and kept $25,000 for its services.
"This new evidence from the Senate Indian Affairs report confirms and expands upon CREW's original complaint which alleged that Mr. Norquist was violating his organizations' tax-exempt status by operating as a commercial enterprise," Melanie Sloan, executive director of CREW, said today. "By allowing ATR to be used as a pass-through for funds generated by Indian casinos, Mr. Norquist was able to assist his friend Ralph Reed in Mr. Reed's anti-gambling efforts, while making a tidy profit for his tax- exempt organization. Mr. Norquist should be held accountable for his illegal activities. The IRS should immediately launch an investigation."
The IRS complaint and supplemental letter, including e-mails and all other exhibits, are available at http://www.citizensforethics.org.
To view the release/letter on CREW Web site, go to: http://www.citizensforethics.org/press/newsrelease.php?view=136