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."
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