A Senate panel’s review of interactions between imprisoned former lobbyist Jack Abramoff and a number of tax-exempt organizations had lead the committee to question the groups’ tax status and a portion of the federal Tax Code dealing with unrelated business income taxes.

The investigation began a little over a year ago, after the Senate Committee on Indian Affairs found that a number of tax-exempt organizations were taking contributions from Abramoff and serving as extensions of for-profit lobbying operations.

In September 2005, the Senate Finance Committee subpoenaed Abramoff’s former employers, Greenberg Traurig LLP and Preston Gates LLP, requesting financial documents and records of any correspondence.

In reviewing the materials, Congressional staff discovered that five organizations in particular appeared to be willing to provide services for Abramoff clients in exchange for cash -- Americans for Tax Reform, the National Center for Public Policy Research, Toward Tradition, the Council of Republicans for Environmental Advocacy and? Citizens Against Government Waste. Among the services the report said that the groups provided were:

  • Helping to hide sources of funds by laundering payments and then disbursing funds at Abramoff’s direction;
  • Taking payments in exchange for writing newspaper columns or press releases that portrayed Abramoff’s clients in a favorable light;
  • Introducing Abramoff’s clients to government officials; and,
  • Agreeing to act as a front organization for congressional trips paid for by Abramoff’s clients.

The committee has referred the report to the Department of Treasury, the Internal Revenue Service and the Department of Justice for further review and also recommended that changes be considered for three parts of the Tax Code dealing with unrelated business income tax and expenses and criminal penalties.The full report is available at http://finance.senate.gov/press/Bpress/2005press/prb101206.pdf

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