Let me tell you a story about the insanity of big government.
There’s an “immigrant-rights” organization based in Southern California called Hermandad Mexicana Nacional.
The group’s legal center in Santa Ana is under investigation by California Secretary of State Bill Jones for aiding possible voter fraud in the last election. Orange County District Attorney Michael Capizzi is also investigating the group for its role in registering non-citizens to vote in a contested congressional race between former Rep. Robert K. Dornan and Rep. Loretta Sanchez.
On top of that, the Internal Revenue Service has also launched a probe of the group, according to the Orange County Register.
Nevertheless, last week, the California Department of Education handed Hermandad a check for $1 million to pay for English-language and citizenship classes. The cash is partial payment from a $2.1 million contract denied last December following an audit that showed a number of irregularities in the group’s financial records.
Keep in mind, even though the money is being disbursed by the state of California, these are federal funds — funds that were initially held up because Hermandad did not maintain records of how its money was being spent. In addition, a California Education Department auditor found the group owed hundreds of thousands of dollars in state and federal taxes and was behind on payroll and loan payments.
An independent audit found that in 1995 and 1996, Hermandad did not record and reconcile its bank accounts, did not depreciate its fixed assets, incorrectly recorded certain revenue and expense accounts and did not reconcile salaries to payroll tax returns. The national organization had assets last year of $8.5 million and liabilities of $8.7. IRS records show the legal center had a deficit in 1991-92 of $35,020. That escalated to $51,388 in 1992-93. The following year it rose to $287,624. And in 1994-95, it shot up to $450,715.
“Basically they lost control of those accounts in question, because they had a breach in their internal controls,” explained Jim Balbin, author of the audit by the Los Angeles-based Balbin & Co.
All this raises the question of whether this is the kind of group taxpayers should be supporting to teach classes in good citizenship. Yet, the government seems satisifed.
“Assurances have been agreed to,” said Ted Zimmerman, an Education Department official. “They’ve satisfied enough of those to allow us to release their first two quarter payments for this year.”
After all, it’s not his money. It’s your’s.