Tuesday, April 15, 2008

Happy Tax Day - Enjoy The Bush Administration's Corruption!

I've railed for a long time about the Bush administration's crony capitalism and about movement conservatives' oft stated desire to "shrink the government so that it can fit in a bathtub and then drown it," as Grover Norquist is fond of saying.

Well here's the prime example of where the movement conservatives' anti-government ideology and their culture of Republican corruption leads. According to today's Washington Post , the IRS has hired private collectors to go after unpaid taxes. The problem is that rather than saving the government money - you remember, contractors and private industry were supposed to do everything better than inefficient government employees and actually save taxpayers' hard earned money - these private contractors will end up costing the government $37,000 more than in house government employees would have cost for doing the same job.
The Internal Revenue Service expects to lose more than $37 million by using private debt collectors to pursue tax scofflaws through a program that has outraged consumers and led to charges on Capitol Hill that the agency is wasting money for work that IRS agents could do more effectively.

Since 2006, the agency has used three companies to go after a $1 billion slice of the nation's unpaid taxes. Despite aggressive collection tactics, the companies have rounded up only $49 million, little more than half of what it has cost the IRS to implement the program. The debt collectors have pocketed commissions of up to 24 percent.

"This program is the hood ornament for incompetence," said Sen. Byron L. Dorgan (D-N.D.), a leading critic who has introduced a bill to stop the program. The measure has 23 co-sponsors, all but one of them Democrats. "It makes no sense at all to be turning over these tax accounts to private tax collectors that end up costing the taxpayers money."
Actually, the good Democratic senator is quite wrong. It makes great sense hiring those inept professional debt collectors instead of federal employees. In fact, it makes dollars and cents to do so. That is, if you are connected to the right Republican lawmakers.
After years of lobbying by the private collection industry, the Republican-controlled Congress created the program in 2004. The goal was to use collection agencies to close the relatively easy cases the IRS said it did not have the staff to handle: instances in which the taxpayer is not disputing the debt and in which the amount owed is relatively modest. Supporters hoped that the program would eventually be expanded to take over more of the agency's debt-collection duties, and the IRS predicts that the program will break even by 2010.

Three firms were awarded contracts: Pioneer Credit Recovery, based in the western New York district represented by Rep. Thomas M. Reynolds (R), who supported the program and recently announced his retirement; the CBE Group of Waterloo, Iowa, the home state of Sen. Charles E. Grassley (R), who helped create the program; and Linebarger Goggan Blair and Sampson, a law firm based in Texas, home to President Bush.

Pioneer Credit employees have given congressional candidates and political action committees $117,450 since 1995, including $16,250 to Reynolds. CBE Group employees have given $9,372 during that period, including $2,500 to Grassley.

Linebarger Goggan, one of the nation's largest collection agencies, has extensive government ties. The firm, its employees and their spouses have given PACs and federal candidates in both parties $423,260 since 1995.

The Austin-based firm was dropped from the program last year for reasons that the IRS declined to make public. Its workload was doled out to the two other companies. Mike Vallandingham, a partner at the firm, said Linebarger Goggan met IRS expectations for collection results and "received high marks for regulatory and procedural accuracy, timeliness and professionalism."

The firm had been under scrutiny since 2002 because of some of its municipal contracts. A partner went to prison in 2002 for conspiring to bribe two San Antonio City Council members. Last year, the city of Mansfield, Tex., ended its contract with Linebarger Goggan after the firm made a $2,000 donation to the mayor a month after he was elected.
The article goes on to describe some of Linebarger Goggan's other missteps elsewhere. For example, this February in Chicago the firm was fired when city officials learned it had paid for a contract officer's vacation.

To make matters worse the firm has run afoul of citizens. the National Taxpayer Advocate has logged 1,500 complaints against Linebarger Goggan for bombarding taxpayers with phone calls, sending notification to the wrong addresses and subjecting taxpayers who don't even owe anything to harrassment.

The article doesn't even go into the background behind this Republican scheme to reward its friends and big donors. But for a long time, the Bush administration has been pushing so-called job competitions under what's known as the FAIR Act. What the FAIR Act does is require federal managers to list some jobs as inherently governmental or commercial, with commercial jobs up for competitive bid. Now there are some jobs that legitimately are commercial and competitive bidding for them is a good idea. Democrats as well as Republicans have supported the FAIR Act. The problem is the Bush administration has pushed it well beyond what it was intended to do because, true to their philosophy, no job is inherently governmental.

So, federal employees find themselves bidding against private contractors to maintain their jobs, often being forced to come up with layoffs of their fellow workers in order to bring in a competitive price. And in the process the administration is forcing them to compromise national security, taxpayer privacy, and cost effectiveness to serve both an ideology and the demands of well connected cronies.

Despite all that, the feds have been successful at keeping the work in house. They actually win 90 percent of these competitions. As everybody now knows, a great deal of the outsourcing of government work has gone to large Republican donors as no-bid contracts with little or no oversight. Everybody is familiar with the outsourcing of the war and reconstruction efforts in Iraq to companies like Bechtel, Haliburton and its subsidiaries, and SAIC. Look how well that's gone for us.

And in 2004, Congress, during the nadir of the Republican pay to play culture of corruption, managed to get one of the most inherently governmental tasks - tax collection - declared a commercial enterprise so they could reward their friends and donors.

Of course, the rich are still getting their tax breaks. That means it's you and me paying for these cronies to bully taxpayers, harrass innocent people, and lose the government $37,000 to boot.

Nice going Brownie. And Tommie DeLay and Jackie Abramoff.


Anonymous said...

The private debt collection process as given to the IRS to implement was flawed from the beginning. The law does not have safeguards written in and was geared to help specific companies by GOP leaders. When the IRS complained about the way the law was written, they were told to just implement the project and stop complaining.

Because of the political heat behind this program, the IRS did not do a good job with implementing the safeguards. They were told of their shortcomings but ignored them for the sake of expediency. After all, the effort was lead by Chuck Grassley, who used to whip on the IRS under the name of "leadership" to prove to his Iowa constituents he was doing something for them.

Private Debt Collection was a disaster from the beginning that was made worse by the GOP political interference.

HOWEVER, this would be less of a problem for the IRS to hire its own debt collectors if there was money to pay for enforcement. Instead, the money that could rebuild the Gulf Coast three-times over, rebuild the nation's crumbling infrastructure, and even strengthen government programs is going down that rat hole known as Iraq.

What a country!!

BTW: I do have an association with the IRS other than as a taxpayer. No, I will not respond to questions or other inquiries. This is my only communications on this matter.

AnonymousIsAWoman said...

I appreciate your taking the risk of communicating. You obviously know what you are talking about.