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Townhall...
Michelle Malkin
Porkulus: Cash for
Tax Cheats
By Michelle Malkin
When President Obama signed the trillion-dollar stimulus law in 2009,
he proclaimed that he was “keeping the American dream alive in our
time.” The stimulator-in-chief failed to mention that billions would be
spent keeping American tax scammers afloat on our dime.
At a congressional hearing on Tuesday, federal auditors reported on the
latest porkulus spending gone wild. According to a new General
Accounting Office audit conducted over the past year, nearly 4,000
stimulus recipients received $24 billion in Recovery Act funds -- while
owing more than $750 million in unpaid corporate, payroll and other
taxes. Among the tax-cheating federal contractors and grant winners who
raked in stimulus bucks, the Senate Permanent Subcommittee on
Investigations found:
-- Two social services groups with nearly $3 million in unpaid taxes
each received more than $1 million in stimulus awards.
-- One nonprofit organization owed more than $2 million from years of
unpaid payroll taxes, while at the same time its CEO made numerous
trips to a casino. The group was awarded more than $1 million in
stimulus funds.
-- One engineering services firm had a $6 million delinquent tax debt
and was called by the IRS an “extreme case of noncompliance,” yet won a
contract worth more than $100,000.
-- A municipality with a history of late tax filings and five periods
of unpaid payroll taxes worth $1 million received $100,000 in stimulus
money.
-- A health care company that owes more than $1 million in back taxes
and has had federal IRS liens filed against it since the late 1990s
received $100,000 in stimulus funds.
-- One security firm owed $9 million and was repeatedly cited not only
for being uncooperative with the IRS, but also had been nabbed with
frequent labor violations. It also received a stimulus contract worth
more than $100,000.
And this is just the tip of the Cash for Tax Cheats iceberg. The GAO
acknowledged in its report that “the estimated amount of known unpaid
federal taxes we identified is likely understated” because of rampant
underreporting of income and because the analysis did “not include
Recovery Act contract and grant recipients who are noncompliant with or
not subject to Recovery Act reporting requirements.”
The official response of the Obama administration’s stimulus oversight
board? First, the Recovery Accountability and Transparency Board patted
itself on the back for its transparency. Second, the panel dodged
responsibility by sheepishly pointing out that “federal law does not
prohibit tax delinquents from getting government contracts or grants.”
As if the RATs couldn’t have exercised their own common sense to stop
such plundering in the name of job creation themselves?
Even if such a prohibition existed, you can’t count on the IRS to
perform due diligence on behalf of the American taxpayer, either. Last
week, the Treasury Department inspector general found that the tax
police have failed to prevent fraud in the stimulus law’s energy tax
credit program. Some $6 billion in stimulus energy credits for
homeowners have been claimed -- but the inspector general’s audit found
that 30 percent of credit-claimers had no record of homeownership. “I
am troubled by the IRS’s continued failure to develop appropriate
verification methods for distributing Recovery Act credits,” the
Treasury Inspector watchdog said.
Moreover, when the IRS wasn’t falling down on its job policing outside
fraud, its own workers were committing their own stimulus fraud -- by
cheating the system and claiming a first-time homebuyer tax credit
included in the 2008 and 2009 economic stimulus packages. At least 128
IRS employees claimed the credit, according to a recent Treasury
Department audit, yet weren’t first-time buyers or violated other basic
eligibility criteria.
Oklahoma GOP Sen. Tom Coburn, who has doggedly tracked stimulus waste
from Day One, said, “That such a huge amount of the stimulus money went
to known tax cheats should be a wake-up call for Congress.” It should
be about the 20th wake-up call by now. Obama’s notorious slush fund has
redistributed wealth to prison inmates, flaky researchers, social
justice boondoggles, infrastructure to nowhere, foreign companies, dead
people and ghost congressional districts -- not to mention $20 million
in chump change to pay for campaign-style stimulus-hyping road signs
across the country emblazoned with the shovel-ready logo.
And for what?
Unemployment remains near double-digits. Obama economic advisers
Christina Romer and Jared Bernstein infamously vowed the stimulus would
stay below 8 percent. Highway jobs have not materialized. Investor’s
Business Daily notes that a new study by economists Timothy Conley of
the University of Western Ontario and Bill Dupor of Ohio State “found
that despite the influx of all that federal money, highway construction
jobs actually plunged by nearly 70,000 between 2008 and 2010.” Indeed,
the researchers found that the stimulus actually “destroyed or
forestalled” a whopping one million private sector jobs by crowding
them out with make-work public jobs and programs.
Recovery.gov? More like Wreckovery.gov.
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