Bureaucratic Moneylaundering

by Gail Jarvis

Most of you recently received a W-2 Form from your employer which detailed your income and deductions for the previous year. One of the blocks on the form was captioned "Federal Income Tax Withheld." This is the amount you pay to fund government services. Because such a large amount is "withheld" you would like to think that Congress exercises prudence in its spending, and that it only funds services that are essential; services you approve of.

But the truth is that Congress uses our taxes to fund countless non-essential activities as well as functions we probably would not condone. Furthermore, Congress funds some services in ways that are often disguised. Let me mention just one example that I find particularly inappropriate.

One of the many non-essential services supported by our tax dollars is the Public Broadcasting System (PBS). When it began in the 1960s, it was the only outlet offering so-called "cultural" programs, i.e., the arts, history, children’s programs, etc., so PBS could honestly claim: "If PBS won’t do it, who will?" Of course, today there are several commercial channels carrying this type of programming so PBS’s famous justification for receiving federal funds is no longer valid. But even though its relevance is diminishing, the federal funds PBS receives continue to escalate. In 1969, PBS cost taxpayers only five million dollars, but the organization has a current budget request approaching $400 million!

In addition to government funding, the Federal Communications Commission (FCC) now allows PBS to air commercial messages between programs. This decision represents a radical departure from past rulings because the FCC had always maintained that the Communications Act of 1934 prohibits non-commercial broadcasters from airing advertisements. However, the obliging FCC accepts PBS’s argument that the commercial messages are "value neutral identifications" without a specific product endorsement. PBS uses the slippery euphemism "enhanced underwriter acknowledgments."

But commercial messages following PBS’s children’s programs from sponsors such as Kellogg’s Frosted Flakes, Chuck E. Cheese and Post Alpha-Bits Cereal would seem to be in violation of the Act. However, the FCC has made its questionable decision so PBS now has the best of both worlds – government funding and commercial advertising revenue.

To downplay the size of its taxpayer support, PBS claims that less than one third of its funding is provided by the government. They are referring to the money Congress allocates to the Corporation for Public Broadcasting. But there is also government money obliquely making its way into PBS coffers; what we might call "phantom funding."

In a recent roster of PBS’s largest contributors, those donating amounts from a $100,000 to a million dollars or more, you will find several government agencies; agencies funded by taxpayers. The National Endowment for the Humanities (NEH) is one of the top contributors and, in addition, the NEH also provided funding for Ken Burns' Civil War films as well as other PBS programs.

Among the other large contributors to the Public Broadcasting System are the Department of Education, the Department of Energy and, strangely, the Department of the Army. All three of these departments are funded by taxpayers. So we must ask: Do these government departments have excess funds available that allow them to make contributions to other organizations? Are these proposed contributions included in their budget requests? Approved by Congress?

The National Park Service is another generous contributor to PBS. Like the departments listed above, this government agency also apparently receives more funding than it needs for day to day operations, so it gives money away in the form of donations.

Finally, as incredible as it may seem, you will find the United States Postal Service on PBS’s list of its largest contributors. This is the same Postal Service that claims to be in such desperate financial straits that it must regularly increase the price of postage stamps in order to stay afloat. Nevertheless, our benevolent Postmaster General is able to satisfy his philanthropic urges by donating portions of his department’s funding to the Public Broadcasting System.

These examples of bureaucratic money laundering are just another illustration of how our spendthrift Congress allows our tax dollars to be squandered.

February 7, 2003

Gail Jarvis [send him mail], a CPA living in Beaufort, SC, is an advocate of the voluntary union of states established by the founders.

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