AUSTIN -- Now that we've recovered from Janet Reno's assault on the Branch
Floridians, let's see if we can't get just a bit of attention for some
outrageous cases of robbery. As usual, our friends with the white collars
and the quick calculators are outrobbing the stick-up artists at the Jiffy
Mart by a wide margin.
Violent crime keeps dropping, but the National White Collar Crime Center
says that one in three households is now victimized by white-collar crime.
This genteel robbery has increased 10 percent to 20 percent in the last five
years. The Securities and Exchange Commission, which goes after investment
fraud, reports a 20 percent jump in complaints from 1995 to 1999.
The Internet is an especially rich source of rip-offs, so you cutting-edge
netizens need to follow the oldest rule in the book: If it sounds too good
to be true, it is.
But of course what interests me most is legal crime, the rip-offs about
which absolutely nothing can be done -- often because Our Elected
Representatives have been bought off by the system of legalized bribery that
runs American politics.
Here's a little beauty that the feds HAVE tried to stop; it's an especially
noxious case because it's done in the name of charity.
The Wall Street Journal did a lovely expose last week on the National
Heritage Foundation of Falls Church, Va. Here's the drill: Donors entrust
their money to this outfit, which sets up individual accounts that are like
foundations, but at the fraction of the cost in lawyers' fees, etc. The
donors then get an immediate tax deduction for their gifts and are
encouraged to use the money in their accounts to pay themselves and their
families salaries and expenses for running the charity.
Is this great, or what? The guy who runs the outfit, J.T. Houk, cheerfully
describes himself as a disciple of "charitable entrepreneurship" and decries
what he calls "the charity poverty syndrome," which is to say that he thinks
volunteers should be paid.
In the case of Houk himself, he says he makes about $12,000 a year and his
wife, son and daughter-in-law, all "paid volunteers," make about $166,000
total. It also covers his travel expenses to Palm Beach, where he maintains
an office.
In 1998, National Heritage took in about $128 million in revenue and
disbursed $3 million to outside charities, according to tax records. The
people who put their money into this scam claim to be supporting some of the
most cockamamie "charities" you ever heard off. Houk has about 4,000
"charitable investors."
The IRS sued Houk back in 1982 over a similar outfit he was running while
teaching in the economics department of Jerry Falwell's Liberty University.
That outfit ousted Houk and changed its name. But in 1994, Houk started the
National Heritage Foundation, which preaches against the evils of big
government and in support of other right-wing tenets.
According to The New York Times, "Besides getting a cut of the fees levied
on donors' accounts, financial planners who generate a lot of business for
National Heritage have also been rewarded occasionally by having foundations
set up in their own names at National Heritage's expense. Planners may also
use foundations to pay themselves for raising funds for charity."
Ain't that a beaut? Good luck to all you suckers still paying taxes out
there. Too bad you didn't think of paid volunteers.
Another "aggressively entrepreneurial" bunch is the pharmacy benefit
managers, an interesting outgrowth of HMOs.
Pharmacy benefit managers, or PBMs (just what you needed -- more initials
in your life), are the folks who handle the paperwork on drug prescriptions
for 200 million Americans. In theory, they get discounts from pharmacists
and drug manufacturers for employer health plans and Medicare HMOs.
President Clinton wants to include these happy campers in efforts to get
drug benefits for everyone on Medicare. This is because all you folks who
believe in the evils of big government didn't want "socialized medicine" to
take over, so Harry and Louise convinced you that if private enterprise
wasn't allowed to run the health-care system, you wouldn't -- gasp -- be
able to choose your own doctor anymore. Just like you can't with HMOs.
But now the Justice Department is investigating possible kickbacks by the
PBMs, lawsuits are pending, state regulators are alarmed, and it turns out
that the PBMs aren't even saving money for the HMOs.
Remember when we used to think you shouldn't cheat the system because the
IRS would always get you in the end, the way it did Al Capone? Ah, but our
ever-so-charming Republican Congress, always preaching against the evils of
Big Government, fixed that with its 1998 hearings accusing the IRS of
abusing innocent citizens, outrageous conduct, jack-booted thugism and all
that good stuff. Remember those pathetic tales from poor picked-upon
citizens and all the Republican congressmen in a giant snit (what a profile
in political courage -- as though anyone has ever liked a tax man).
And perhaps you didn't catch it -- it didn't get nearly as much publicity
as all those heart-rendering (as they say in the Lege) tales during the
congressional hearings -- but after a long investigation by the General
Accounting Office, it turns out that the IRS had not committed any abuses or
conducted vendettas or misused its power to investigate.
The GAO findings were backed up by an independent study conducted by
federal law enforcement officials led by William Webster, former head of
both the FBI and the CIA. Their 3,000-page report found no evidence of
"overly aggressive or unnecessary use of force."
Of course, coverage of those reports got about two inches in the papers
compared to acres devoted to the hearings where the "terrified" had their
voices electronically altered.
However, the happy result of the Republican hearings was a new law to make
the IRS "customer-friendly." The result is that audits are down, actions
against those who fail to pay are down, liens against tax cheats' property
are down by 98 percent, and audits of the rich, who give to Republicans, are
down. Audits of the working and middle class are up, and there's that much
more the rest of us have to pay.
Molly Ivins is a columnist for the Fort Worth Star-Telegram. To find out more about Molly Ivins and read features by other Creators Syndicate writers
and cartoonists, visit the Creators Syndicate web page at www.creators.com.
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