Charities are supposed to advance the public interest, which is why they aren't taxed. But Abramoff, by his own admission, used them to evade taxes, enrich himself and bribe public officials, according to a plea agreement he signed with federal prosecutors in January . . . .
Abramoff's use and misuse of nonprofits played a key role in each of the three counts of his indictment: conspiracy, mail fraud and tax evasion. He admitted evading $1.7 million in income taxes over three years, in part by using nonprofits to conceal personal income from the IRS.
The fast-growing ranks of tax-exempt, nonprofit organizations are tailor-made for operators like Abramoff.The number of tax-exempt groups in the United States has tripled over the last three decades, but nonprofit groups usually pay no tax, so there is little incentive for the IRS to keep an eye on them.
The lack of oversight is especially meaningful in Washington, where trade associations, public-interest groups and grass-roots lobbying organizations all have tax-exempt status under generous IRS rules designed to foster public debate. Members of Congress are also getting into the act and forming their own charities.
The revelations coming out of the Abramoff scandal is all the more reason local prosecutors in Indiana should be taking a closer look at the affairs of Eric Miller and Advance America. As we reported just this last weekend, Miller's non-profit group is currenlty lobbying for the passage of a sales tax break which will benefit the RV industry specifically. Miller received more than a half-million dollars, or 60% of his campaign contributions in his unsuccessful bid for Governor in 2004 from Mahlon Miller, the owner of RV manufacturer Newmar Corp. in Nappanee, Indiana. This raises serious questions about whether Mahlon may also be financing Advance America and using its tax-exempt organization to perform lobbying he would otherwise have to register and report to the state and be prohibited from deducting as a business expense.
We also reported earlier this month about the fact that Eric Miller had told an Indianapolis Star reporter last summer that the six-figure legal retainers Advance America was paying to his law firm were for the work furnished by other members of his law firm for the organization--work which involved "lobbying" within the meaning of Indiana's Lobby Law. Yet Advance America, Miller's law firm and the lawyers furnishing the work did not register and report those lobbying activities as required under the Lobby Law.
And still other reporting we've done shows that the organization, while devoting most of its efforts to lobbying the Indiana General Assembly and local governments, reports but a small fraction of its expenditures for lobbying purposes.
Like with Abramoff, Eric Miller's charity seems to begin at home. He has personally earned well in excess of $1 million courtesy of the tax-exempt Advance America. The issues raised by Advance Indiana are all legitimate matters for public scrutiny. We only hope that someone in the mainstream media will finally figure this out as well.