Treasury Department Inspector General to Look Into IRS Oversight of ACORN, Other Groups

Jake Tapper and Matt Jaffe report:

Treasury Department Inspector General J. Russell George disclosed today that his office is initiating a review of the IRS's oversight of tax-exempt non-profit organizations and "will review internal IRS referral processes with regard to nonprofit fraud investigations."

The Department will also look into "527" organizations which are allowed to advocate for political causes but not for or against candidates or parties. Good government groups complain that 527s, which unlike parties and candidates can receive unlimited funds, are a violation of the spirit if not the letter of campaign finance laws; an example of a 527 is the Swift Boat Veterans for Truth.

Treasury will review IRS oversight of 527s and make sure "that Section 527 political organizations publicly disclose their activities in a complete and timely manner."

The announcement was made in response to a request from Rep. Darrell Issa, R-Calif., and Sen. Susan Collins, R-Maine — the ranking Republicans on the House and Senate government oversight committees — for the Treasury Department and other government agencies to review their ties to ACORN, following undercover videotapes posted at Biggovernment.com showing two young conservative journalists posing as a prostitute and a pimp receiving advice on how to skirt the law from ACORN employees.

You can read the letter HERE.

The IRS and Census Bureau have severed ties to ACORN in recent days, with Inspectors General from the Justice Department and Department of Housing and Urban Development also announcing they are reviewing grants to ACORN.

At a Senate Banking committee hearing today with Treasury official Herb Allison, who oversees TARP funds, Sen. David Vitter, R-Louisiana, asked if there has been any effort within the TARP program to ensure that taxpayer funds don't go to ACORN, since many TARP recipients have contracts with ACORN and its affiliated groups.

"We provided no funding to ACORN, Senator," Allison said. "They did participate in some counseling sessions.  They provided some counseling in the past.  We have no ties to ACORN at this point."

"I don't think you understood my question," Vitter said. "We give billions of dollars to these mega-institutions.  Many of them contract with ACORN.  Has there been any effort to within the TARP program to ensure that those taxpayer dollars that are going to those institutions do not flow to ACORN?"

Allison said Treasury officials would "go back and and consider… your suggestion.  I don't know what these companies have been doing with ACORN."

- Jake Tapper and Matt Jaffe