Norquist's Hand in the Cookie Jar

It has been long anticipated, at least on this blog, that anti-tax zealot Grover Norquist would eventually be swept up in the whirlwind of corruption surrounding Jack Abramoff. Norquist has repeatedly denied that he was involved in any of Abramoff's shenanigans (at least not as more than an innocent party), but thanks to the magic of e-mail and electronic record-keeping, it seems he wasn't exactly being entirely forthcoming about that:

Among the organizations used by Abramoff was Norquist's Americans for Tax Reform. According to an investigative report on Abramoff's lobbying released last week by the Senate Indian Affairs Committee, Americans for Tax Reform served as a "conduit" for funds that flowed from Abramoff's clients to surreptitiously finance grass-roots lobbying campaigns. As the money passed through, Norquist's organization kept a small cut, e-mails show.

A second group Norquist was involved with, the Council of Republicans for Environmental Advocacy, received about $500,000 in Abramoff client funds; the council's president has told Senate investigators that Abramoff often asked her to lobby a senior Interior Department official on his behalf. The committee report said the Justice Department should further investigate the organization's dealings with the department and its former deputy secretary, J. Steven Griles.

What's the problem here?

Earlier this year, after Abramoff pleaded guilty to conspiring to ply lawmakers with gifts in exchange for favors, IRS Commissioner Mark W. Everson said, "One of the most disturbing elements of this whole sordid story is the blatant misuse of charities in a scheme to peddle political influence."

Tax experts said it is impermissible for a tax-exempt organization to act as a pass-through for money destined for private business purposes. "It's not a
tax-exempt activity to act as a bag man for Jack Abramoff," said Marcus S. Owens, a tax lawyer at Caplin & Drysdale and a former Internal Revenue Service official.

How damning is the evidence?

"Call Ralph re Grover doing pass through," Abramoff wrote in a stark e-mail reminder to himself in 1999, a year in which Norquist moved more than $1 million in Abramoff client money to Reed and Christian anti-gambling groups. Reed was working to defeat lotteries and casinos that would have competed with Abramoff's tribal and Internet gambling clients.

The transactions do get somewhat complicated. As far as I can tell, it amounts to entities such as the Mississippi Choctaw (in one instance) giving the money to Norquist's ATR, who then turned around and gave it to various advocacy groups (including groups working under the general guide of Ralph Reed) after keeping a little off the top for themselves, all at the behest of Abramoff. Apparently Norquist could be a little greedy:

Abramoff, however, grew annoyed at the amount that Norquist took off the top before sending the money on, e-mails show. "Grover kept another $25 k!" Abramoff wrote in a February 2000 note to himself.

But what's $25,000 among friends, right?

Nothing would be more satisfying than to see Norquist, the anti-tax man himself, busted for tax evasion and fraud. The irony would be both rich and sweet. We'll keep you posted.

UPDATE: Norquist might not be vulnerable to tax evasion and/or fraud charges, but he could still be in hot water, according to the blog: "Tax & Business Law Commentary". One of their readers writes:

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.