by Molly Ivins
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.
May 9, 2000 (http://www.monitor.net/monitor) All Rights Reserved. Contact email@example.com for permission to use in any format.
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