Grassley, Issa call for ACORN probe

Grassley also wrote "t is disturbing that many of the organizations in the ACORN "family" may not actually meet the definition of related for 990 reporting purposes, even though ACORN deems them to be part of the ‘family.'" A "990″ is an IRS Form 990 which is a nonprofit organization's annual tax return.

In what may foreshadow a future demand for a forensic audit of ACORN, the senator also asks what procedures the IRS follows when "auditing organizations like this where the movement of money appears to be a shell game." He asks, "Do IRS audit procedures require auditors to follow the money trail to or from a charitable organization to determine whether that money is being used for impermissible activities, including electioneering and promoting illegal acts?"

Finally, Grassley suggests ACORN might be a massive criminal conspiracy. He wrote:

Given what looks like a shell game perpetrated by the ACORN tax-exempt entities appears to be no different than that conducted by the charities involved in the Jack Abramoff scandal, how have IRS rules, regulations, reporting requirements and enforcement actions changed in response to the Abramoff abuses?

Grassley set an Oct. 9 deadline for the IRS to respond.

This is the whole ball of wax right here. If an investigation can show ACORN moving money from its "charitable" organizations into its partisan political arm, that would almost certainly be a trigger for a RICO investigation. It would represent a massive violation of federal law and the conspiracy to carry out such a clandestine operation would almost certainly force the Justice Department to treat the group as a criminal conspiracy to violate federal election statutes.

The problem is that ACORN has made it extraordinarily difficult to conduct any kind of a forensic examination of its tax records. There are literally hundreds of groups,boards, and companies in the ACORN "family" - each with the potential for passing money into the group's political activities. Such an examination could take months if not years to complete.

Meanwhile, Rep. Dan Issa and Senator Susan Collins called for an investigation of ACORN by the Treasury Department's Inspector General.

Vadum again, this time writing in the American Spectator:

Treasury Department Inspector General, J. Russell George agreed to comply with a request submitted by House Committee on Oversight and Government Reform Ranking Member Darrell Issa (R-Calif.) and Senate Committee on Homeland Security and Government Affairs Ranking Member Susan Collins (R-Maine) to conduct a review of the Association of Community Organizations for Reform Now (ACORN) and of the IRS's oversight of nonprofit organizations.

"The lack of an appropriate firewall between ACORN's charitable activities and its political arm has raised significant questions regarding the appropriateness of their status as a taxable nonprofit corporation and their management of federal dollars," Issa said.  "Cutting ties with ACORN is a good first step for the federal government, but since they have been the recipients of taxpayer dollars, we have an obligation to investigate to discover whether or not those dollars were misused in anyway."

"I am heartened by the agreement of the Treasury Department's Inspector General to examine the troubling financial questions that have been raised about ACORN," said Senator Collins. "This is the first step in the right direction toward much-needed transparency. As I've noted before, at a time when so many American families are facing difficult economic situations, it is completely unacceptable that even one penny of taxpayer money be misused. We must bring all agencies and groups that use taxpayer funds into the spotlight of accountability."  

I have no idea how this is going to turn out. It would help, of course, if the media were to start covering the real story - not whether it was "fair" for O'Keefe to carry out his sting of ACORN offices. That story may be important in its own right but should now act as a catalyst for a full blown investigation by the government into the doings of this radical, anti-capitalist group. What they will find when they start turning over rocks will probably not be very pretty. No doubt such an investigation will see politicians who benefited from ACORN's political action getting caught up in such a probe.

Ed Lasky points out:

Grassley makes a good point. If he is correct-and he probably is-about ACORN, the scale of the fraud involving tax exempt funds being used for political purposes-dwarfs the Abramfoff scandal. Where is the media on this issue? Could they be averting their eyes when such corruption involves Democrats who benefit from ACORN's money and get out the vote efforts?

Taxpayers certainly want to know the answer to that question and many others.