NRO’s eye on debt and deficits . . . by Kevin D. Williamson.

The Stimulus Rip-Off Gets Even Worse


Pres. Barack Obama’s stimulus is a bit like an Easter egg: It was first experienced as a brightly colored bauble intended to signify a new beginning, then it got lost somewhere along the way, and now it’s stinking so badly that we have to revisit the issue.

One can always tell what the Obama administration is not taking seriously — it’s the stuff it puts Joe Biden in charge of. Biden’s in charge of meeting with congressional leaders to identify deficit-reduction measures, for one thing, but, before that, he was put in charge of stimulus oversight. You remember: “Don’t mess with Joe,” and all that rot. While Joe was being messed with, billions of dollars in stimulus contracts went to deadbeats who owe a total of three-quarters of a billion dollars in taxes. It would have been no surprise if one or two tax scofflaws had sneaked by — even by the ever-watchful Joe Biden — but, in fact, it was more than one or two, or three or four, or a few hundred: 3,700 firms awarded stimulus contracts owe taxes — $757 million worth.

If you’re like me, the first thing you wondered was: Which firms? And how much money did their executives donate, and to which politicians? Which leads me to the worst part of the scandal: The Government Accountability Office (bitterly ironic name if ever there was one) is refusing to release the names of the miscreants. GAO argues that, because it is a tax matter, they cannot make the names public. So much for the most transparent administration in American history.

This is not simply a tax matter. It is, presumably, a law-enforcement matter, potentially a criminal matter, and unquestionably a matter of government accountability. Insofar as this subject is concerned, the GAO is helping the Obama administration to evade accountability rather than take it up.

Interestingly, several of these deadbeat contractors are nonprofits, community organizers of a sort. (Which? Don’t ask GAO.) Here’s what GAO has to say about one of these organizations:

• Nonprofit organization primarily owes payroll taxes from the mid to late 2000s. Nonprofit organization did not make any federal tax deposits for several periods.

• On multiple occasions, the nonprofit organization defaulted on installment agreements with IRS. IRS records also indicated that the nonprofit organization may have submitted an offer in compromise to delay IRS collection efforts.

• An executive was assessed a TFRP [trust fund recovery penalty]. IRS records indicated that this executive was responsible for numerous questionable business expenses. In addition, the executive had numerous transactions with casinos totaling hundreds of thousand [SIC] of dollars each year. IRS records also indicated that IRS assessed a TFRP on this executive for another entity that went defunct.

• IRS records indicated that the nonprofit organization failed to meet employee payroll obligations on numerous occasions in the late 2000s.

• According to one executive, the nonprofit received millions of dollars in government grants.

• IRS filed federal tax liens against this organization.

Lots of financial transactions with casinos, dodgy expense-account activity, questionable business practices, deadbeat executive — and millions in government grants: but GAO is not saying who.

Oddly, government isn’t always so close-lipped about tax investigations. I happen to know that the kabbalah center favored by Madonna is under tax investigation. How did I come across that top-secret information? It was in the newspaper. If memory serves, the IRS wasn’t exactly secretive about tormenting the Christian Coalition back in the day. But these deadbeats get shielded.

We spent more trying to stimulate our economy out of recession than we spent on the Iraq and Afghanistan wars combined, and the American Recovery and Reinvestment Act was a big piece of that. It was an obvious rip-off from Day One, and the rip-off is looking worse the closer it is studied. That this rip-off enriched tax cheats makes it a double rip-off, perpetrated by an administration with a famous tax cheat in the cabinet.

Release the names, and let’s see who’s connected to whom and how.

— Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.

Tags: General Shenanigans


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