Unsurprisingly, as the reigning World Cup champions, soccer is deeply embedded in Argentina's national identity. Players on the national team are praised as heroes by everyone, from die-hard fans to casual observers. Their trophies bring joy and a sense of triumph to a country that has seen much division and gloom in recent decades.

Sadly, recent victories could be the last blaze of a dying fire. Soccer (or as we call it, fútbol) in Argentina is in decline, exploited by nefarious interests—but President Javier Milei has a plan.

Until recently, domestic soccer clubs in Argentina had to be operated as nonprofits. An executive branch decree changed that, allowing clubs to become publicly traded companies. The change may spur lifesaving investment into Argentine soccer.

For fans of Argentina's national team and domestic league, this is good news.

Consider how many players are leaving Argentina to play elsewhere. In 2022, 5,000 Argentines were playing abroad, most of whom were promising players under the age of 20. Even among the 26 players on the World Cup-winning roster, only one came from a club in the Argentine league. The Argentine Football Association (AFA) is worried that players who start their careers overseas will choose not to represent their national team in international competitions. Even Lionel Messi, a dual national, was tempted to play for the Spanish national team before choosing to play for Argentina. AFA lives in constant fear of having a future world champion slip through their fingers.

What's causing this exodus of talent? While part of it is Argentina's general economic malaise, some, including Spanish La Liga President Javier Tebas, point a finger at AFA's narrow-minded refusal to allow private investment in the national soccer market. Tebas has said the Argentine team won the 2022 World Cup "despite AFA" because their players "were forged in European clubs."

Milei's reforms mean international companies could buy and sell teams, or invest in Argentina's striving clubs. An injection of foreign capital would be a boon not just to the clubs who'd be able to improve their capabilities and keep talented players at home, but also to the Argentine economy overall, as clubs expand and create more jobs with their newfound capital.

AFA leaders and some major teams denounced the reforms as a "privatization of football"—and if you know how the clubs currently work, it's easy to understand their resistance. 

In Argentina, soccer clubs are more than just sports teams. A club is like a church, a provider of all manner of cultural and educational services, a place for communities to share, for families to enroll their children and invest in their future—every young player's dream is to go pro and pay back his parents' sacrifice. While the clubs are already private nonprofits—an organizational model they're very defensive about—in reality, they are run by politicians, celebrities, and businessmen who use them to promote their public image. They keep governance opaque, convoluted, and unaccountable, cementing their power by making deals with barra bravas, powerful hooligan organizations that handle their illegal activities and intimidate opponents into silence—both within the clubs and in electoral politics.

Revenue from the domestic soccer league, such as TV rights money, is dispensed in a pyramid scheme with AFA President Claudio Tapia at the top, doling out favors to keep the clubs economically dependent. About 97 percent of clubs have, at some point, been on the brink of bankruptcy. This causes a vicious cycle: Teams in the league can't afford to keep promising players, who leave for foreign teams with deeper pockets, so the teams perform worse and earn less revenue.

In the late 1990s, Racing Club, one of the historic "Big Five" clubs, went bankrupt and was nearly liquidated. AFA authorized a special rescue plan that allowed insolvent clubs to contract private firms as management in exchange for financial salvage, copying previous experiences of successful entrepreneurial partnerships. Despite the plan's limited scope and the familiar cry of "veiled privatization," it performed so well that several clubs started contracting out their assets and are now faring consistently better than the rest. Meanwhile, fans remain involved by exercising oversight over contractors.

In a microcosm of national politics, mafiosos and oligarchs use populist rhetoric to entrench themselves in power, and then call the private sector to bail them out when reality catches up. In soccer, it's catching up again. Investment is still limited, the player pool is shrinking, clubs are chronically indebted and their services are becoming impoverished and exclusionary. Meanwhile, they're still run by a powerful few but lack transparency or efficiency. A country that's practically synonymous with fútbol should be attracting money and talent from all over the world, not scaring it away. A few conglomerates have expressed interest in Milei's reform, but he'll have to get past attempts at judicial obstruction and silencing of internal dissent by the AFA establishment.

Argentina is the birthplace of many stars in soccer history, but its clubs are suffering from economic stagnation. The private sector can help Argentines reclaim their clubs as social spaces and as points of national pride. Milei's reforms are an opportunity for soccer to become part of the nation's economic recovery. The profit motive, social ethics, and political will of those who love the sport can lead to even more glory.

The post In Argentina, the Private Sector May Save Soccer appeared first on Reason.com.

Each year, the Edmondson Community Organization (ECO)—a nonprofit in Baltimore dedicated to revitalizing the city's Midtown-Edmondson area—reviews an obscure list of properties released by the government. The task is to see how many are situated within the organization's neighborhood boundaries. The fewer, the better.

The owners of the properties that do appear have fallen behind on their property taxes and, as a result, are poised to lose their real estate in an annual tax sale conducted by the government. After poring over the list, the ECO knocks on those doors to deliver the queasy news and alert the occupants to what is about to happen.

The issue is one ECO knows intimately. A few years back, the organization accrued a $2,543 property tax debt on its community center. So in 2018, the city sold that lien for $5,115 to a California-based investor, who then foreclosed on and sold the ECO's building for $139,500. In return, the ECO got a check for the difference between its debt and the lien purchase price: $2,572.

In other words, all told, the organization paid six figures to compensate for the $2,543 it owed the government, in what a new federal lawsuit alleges is a pervasive practice in Baltimore that illegally deprives people of their equity in violation of the Fifth Amendment's Taking Clause as the city attempts to satisfy modest tax debts.

Every spring, Baltimore bureaucrats conduct a mass auction online to sell off liens like the ECO's. Sometimes the unlucky debtors have fallen just hundreds of dollars behind on their taxes.

For that, they may lose their property and the vast majority of equity tied up in it. Following an investor's purchase, an owner has a certain period to satisfy the amount of the lien, along with interest and fees, to keep their property. That's a tall order when considering these parties were struggling to pay the original debt, much less the new total, which has since ballooned. In the case that debtors are unsuccessful, the investor has effectively purchased the property for the amount they paid for the lien.

In the ECO's case, that meant an investor bought their building for about 2,600 percent less than what it ultimately sold for. The ECO, in turn, was left with a fraction of what their property was worth.

That Baltimore's process robs property owners of huge chunks of equity is not just a regrettable side effect, the ECO's lawsuit alleges; it's baked into the nature of the city's approach. "The City understands there that there is a finite pot of investor capital available to purchase all the liens," reads the complaint. "This creates a perverse incentive for the City to minimize the winning bids"—a.k.a. to depress prices—"to spread that finite pot across the highest number of liens." 

Some of the moving parts of Baltimore's approach do seem to imply that the government is not merely unconcerned with owners retaining some of their equity but that they are actively seeking to keep bids low. The more glaring examples included in the ECO's suit show that the city charges a high-bid premium that punishes investors making offers above a certain threshold and opts to fulfill the law's advertising requirement in part by listing properties in The Daily Record, a business and legal newspaper that is not targeted at the general community. (The ECO says this violates state law, which stipulates that such a sale must be advertised twice in general-circulation newspapers.)

"There's a limited amount of investor money out there," says Maryland Legal Aid's chief legal and advocacy director Somil Trivedi, who is representing the ECO, "and the city has structured a system to spread that money across as many liens as possible instead of getting as much equity back for their citizens."

The ECO is not alone, according to the suit, but is one of many victims. You don't have to travel far to find others. "In the same tax sale in which a bidder purchased a lien on ECO's building, 68 properties in Midtown-Edmondson were also subject to the tax sale," states its complaint. "The winning bids on those properties totaled only 22% of the assessed value of the properties—a dramatic loss of generational wealth for the owner of each Midtown-Edmondson property that was lost in the sale."

Home equity theft, as it's sometimes called, was once an obscure issue limited to discussion in magazines like this one. But last year it took the national stage when the Supreme Court ruled unanimously in Tyler v. Hennepin County that a local government had violated the Constitution when it seized an elderly woman's condo over a modest tax debt, sold it, and kept the profit. Geraldine Tyler, the plaintiff in that suit, had fallen $2,300 behind on her taxes, which ultimately reached $15,000 after Hennepin County tacked on penalties, interest, and fees. The government then sold the condo for $40,000 and kept the additional $25,000.

While the ECO's situation isn't entirely analogous to Tyler's—the organization was paid something—Baltimore's scheme could still very well be unconstitutional, says Christina M. Martin, a senior attorney at Pacific Legal Foundation who represented Tyler before the Supreme Court. "If the procedure that you're using to sell the property is designed in a totally unreasonable manner, then obviously people are going to still get robbed of more than what they owe," she tells me. "There's a longstanding history of courts overturning sales that have a shocking result like [the ECO's]."

Tyler, in theory, should have put an end to stories like these. But the lawsuit out of Baltimore comes as some other jurisdictions have devised creative ways to comply with the law on its face but not really in practice. After Michigan's Supreme Court ruled the practice unconstitutional, for example, the state passed a convoluted debt collection statute that requires owners to complete a Herculean legal obstacle course to reclaim their equity. It is a difficult course to win.

"It is the government's choice in the first place to collect property taxes, to decide what regime they want to use to enforce the collection of those property taxes, and so it can't then complain that the regime that it chose to engage in for an amount of money that it chooses to collect is then too difficult to do constitutionally," says Trivedi. "There are lots of jurisdictions around the country that do it differently. Some don't even have tax sales. Some have much longer periods of negotiation and payment plans….Municipalities around the country have figured out ways to collect taxes without doing it unconstitutionally."

The post Baltimore's Tax Sales Are Robbing People of Their Equity appeared first on Reason.com.

Remember when Republicans were against using the tax cops to go after political opponents? Well, they seem to have changed their minds.

House Oversight Committee Chairman James Comer (R–Ky.) has made no secret of his desire to use finance laws against left-leaning activists. A few months ago, he complained that the IRS was going too easy on progressive nonprofits. Now he's found another angle of attack: insinuating that these organizations are part of an anti-Israel conspiracy.

Comer and House Education Committee Chairwoman Virginia Foxx (R–N.C.) are "investigating the sources of funding and financing for groups who are organizing, leading, and participating in pro-Hamas, antisemitic, anti-Israel, and anti-American protests" on college campuses, they announced in a Tuesday letter.

"This investigation relates both to malign influence on college campuses and to the national security implications of such influence on faculty and student organizations," Comer and Foxx wrote.

Foxx objected when the shoe was on the other foot. In 2013, it was revealed that the IRS had been placing extra scrutiny on nonprofits whose paperwork included terms such as tea party and patriot. Foxx wrote an op-ed criticizing the "outrageous" demands for information that IRS investigators had made.

"The problem at the IRS is with more than the search terms it used. Whether conservative or liberal, targeting Americans is wrong," she stated. "The deeper problem is that government's taxing arm ever came to consider itself the arbiter of what constitutes legitimate free speech in the first place."

Asked about Foxx's earlier statements, her spokesman Alex Ives wrote to Reason that "what you are positing amounts to false equivalencies on many levels." He stated that Foxx was seeking to "ensure groups do not have financial ties to designated Foreign Terrorist Organizations," without citing specific examples.

"Do groups on campuses have a right to free speech? Of course," Ives said. "Do they have a right to have their ties to foreign financiers connected to terror organizations to go unscrutinized? Of course not."

The letter from Foxx and Comer demands that the Department of the Treasury provide all Suspicious Activity Reports, or bulletins on potential tax evasion and money laundering, for 20 different organizations. The list includes Students for Justice in Palestine and its sponsor, the WESPAC Foundation. It also names off-campus Muslim and Palestinian-American groups, Jewish peace movements, and many organizations that are not primarily focused on the Israeli-Palestinian conflict.

"This is part of a broader effort to demonize parts of the tax-exempt sector that a part of the Republican Party views as a key target in the war on woke," says Lara Friedman, president of the nonprofit Foundation for Middle East Peace, which has been tracking Congress' stance on the Israeli-Palestinian conflict. "If you make this about supposedly fighting antisemitism, you bring parts of the Democratic Party with you."

Many of the groups listed are big names in progressive philanthropy: George Soros' Open Society Foundations, the Pritzker family's Libra Foundation, the Rockefeller Brothers Fund, and the Bill & Melinda Gates Foundation.

The Rockefeller organization gave several hundreds of thousands of dollars to Jewish Voice for Peace; another Jewish group for Palestinian rights called IfNotNow; the Adalah Justice Project, a Palestinian-American rights group; and Palestine Legal, a legal aid service for pro-Palestinian advocates in America.

"The RBF has had no direct involvement in the campus protests nor have we earmarked funds for them," Rockefeller Brothers Fund spokeswoman Sarah Edkins said in a statement last week. "Some RBF grantees have provided training, messaging, and/or legal support to student protest leaders. The Fund does not direct the activities of any grantee organizations."

Edkins added that the fund "respects Israel's right to exist and supports the right to self-determination for both the Israeli and Palestinian peoples."

The Open Society Foundations also gave several hundreds of thousands of dollars to Jewish Voice for Peace and IfNotNow, according to Rolling Stone. The grant-making network told Politico that it "has funded a broad spectrum of US groups that have advocated for the rights of Palestinians and Israelis and for peaceful resolution to the conflict in Israel."

It's not clear why the Bill & Melinda Gates Foundation and the Libra Foundation wound up on the list. Last week, Politico named them as supporters of pro-Palestinian protests, because of their donations to the Tides Foundation, a clearinghouse for progressive groups that funds Jewish Voice for Peace, IfNotNow, Adalah, and Palestine Legal. But the Gates and Libra donations were earmarked for other causes.

Jewish Voice for Peace says that the congressional letter is "inaccurate, dangerous and a desperate attempt by right-wing legislators to criminalize public protest. These legislators are falsely and libelously smearing tens of thousands of students as antisemitic, simply because they are protesting the use of their tuition dollars in the massacres of Palestinian families."

Two of the groups listed in the letter, American Muslims for Palestine (AMP) and the Council on American-Islamic Relations, also offered statements to Reason. The Libra Foundation declined to comment, and the Gates Foundation pointed to its comments to Politico. None of the other groups responded to emails asking for comment.

"AMP looks forward to demonstrating in any jurisdiction that it operates wholly within the laws of the United States, compliant with all laws and regulations governing U.S. nonprofit entities," the organization's attorney Christina Jump says. "AMP operates completely within the United States, raises funds completely within the United States, and utilizes those donations completely within the United States to support its mission of educating American Muslims and the American public on the rich history and culture of Palestine."

Edward Ahmed Mitchell, deputy director of the Council on American-Islamic Relations, says that the letter "reads like a bad impersonation of Joseph McCarthy. Instead of advancing the goals of a foreign government by pursuing witch hunts against the American people, Rep. Foxx, Rep. Comer and other genocide-enablers in Congress should focus on washing the blood of over 30,000 slaughtered Palestinian civilians off their hands."

Republicans are not the only ones trying to bring the U.S. tax code into the Israeli-Palestinian conflict. In New York, some Democrats are trying to strip away nonprofit status from organizations that operate in Israeli settlements in the Palestinian territories. New York–based nonprofits have raised money to buy drones for settler militias and to maintain a military academy in a West Bank settlement.

The House Ways and Means Committee held a hearing in November 2023 on the "nexus" between campus protests and "terror financing." Soon after, the House passed a bill allowing the secretary of the treasury to shut down nonprofits based on vague insinuations of terrorist support. Last week, 15 Republican senators called on the IRS to revoke the nonprofit status of any organization that supported Students for Justice in Palestine.

Friedman, the Foundation for Middle East Peace president, believes that the congressional letter is more likely to have a "chilling effect" on nonprofits than to turn up any real evidence of illegal activity.

"It's partly a fishing expedition," she says. "And by lodging an accusation, they hope to paint a picture in the mind of the public."

The post Congressional Republicans Launch 'Fishing Expedition' Against Progressive, Jewish, and Palestinian Nonprofits appeared first on Reason.com.

ST. LOUIS—Rich LaPlume, 58, cracks his knuckles and leans back against a chipped door frame in the basement of St. Lazare House—a St. Louis community home for homeless youth with a history of mental illness. Taped to the wall behind him is a series of brightly colored motivational posters, with slogans like "I AM A FIGHTER" and "BELIEVE IN YOURSELF."

"When you're homeless and are dealing with a mental health condition, you lack so much more than a home," he tells me. "It's so hard to get on your feet, and you need so much support. And for so long, this population has been invisible. That's a problem." Around 30 percent of homeless individuals nationwide suffer from a mental health condition—a statistic St. Lazare aims to combat.

Yet LaPlume has problems of his own to worry about. As director of St. Lazare House, he has spent six years overseeing the full financial process of running the home, including the renewal of contracts and leases, the coordination with mental health care providers, and the allocation of grant money. Thanks to LaPlume and his team's programming, over 60 youth have been given a new life free from chronic homelessness.

But despite all of his hard work, as of this November, St. Lazare House is $155,000 in debt.

The problem, LaPlume tells me, isn't St. Lazare's, which by all measures is an exceptional success—offering stable housing to homeless St. Louisans, plus free mental health care and life coaching, all while maintaining nearly a 100 percent retention rate of its residents. Rather, the problem lies with the St. Louis office of the U.S. Department of Housing and Urban Development (HUD), which failed to process St. Lazare's grant renewal in time for its upcoming fiscal year, which started May 1, 2023. Since then, St. Lazare has been forced to pile up thousands in debt while awaiting reimbursement from the city, which the HUD office could not guarantee it would provide.

But the city failed to renew St. Lazare's annual contract in time. The deadline for renewal from the city was November 1, but due to even more bureaucratic backlogging, St. Lazare's contract wasn't ready. Until they received their contract back from the city, St. Lazare couldn't apply for reimbursement for the lost grant money, and were left to fall deeper into debt while they waited. Just recently, they were informed the reimbursement money wasn't coming.

Left without essential funding, St. Lazare has been forced to rely on savings to pay their lease. LaPlume laments, "It is because of the city of St. Louis that we are able to exist. And yet, St. Louis is our own worst partner."

This isn't just St. Lazare's story. St. Lazare House is one of many nonprofits nationwide suffering from dilatory allocation of federal grant money for the homeless. Most of the funding for homelessness organizations comes from the U.S. Department of Housing and Urban Development's "Continuum of Care" grant program, which allocates funding to states for coordinated housing programs for homeless adults and children. Each year, the federal HUD sends around $3 billion to states in grant funding for distribution to their homelessness organizations.

Yet every year, millions of dollars are sent back.

In 2022, the Office of the Inspector General (OIG) published an audit of Continuum of Care grantee spending levels—examining why, despite skyrocketing national homelessness, large portions of HUD grant money were left unspent. The findings were catastrophic. Between 2017 and 2020, OIG found that $454 million in Continuum of Care funding had gone unspent, or 9 percent of the program's total funding. Of those millions, $257 million had since been recaptured by the federal government during the period of the study. The rest was still missing.

How, amid a pervasive homelessness crisis affecting over half a million Americans, with the power to destroy the livelihood of major cities, can half a billion dollars in funding go unspent?

I ask LaPlume what happened to the missing HUD funds for St. Lazare, and how much the St. Louis city government had lost. His eyes light up: "You won't believe this." He pulls out his phone and dials the number for Shanna Nieweg, a woman he calls his "sister from another mister." Nieweg is the executive director of Horizon Housing Development Company, a homelessness nonprofit just down the street from St. Lazare.

Nieweg picks up immediately, and after a few sentences of prompting from LaPlume, she is rolling off numbers: From 2016 to 2019, the most recent period measured, St. Louis sent back $2.2 million in HUD Continuum of Care funding. This number jumps to roughly $2.7 million when including returned funds for planning grants—a sum greater than the four-year HUD budgets for both St. Lazare and Horizon Housing combined. For a city like St. Louis, with a homeless population of 1,100, the impact of this foregone money would be more than significant.

For community homelessness leaders like Nieweg and LaPlume, this bureaucratic ineptitude is personal. At 11:15 p.m. on October 2, St. Louis police entered a major homeless encampment near City Hall and ordered its residents to either clear out by midnight or be arrested. Images of the scene show armed police entering with flashlights and ordering confused and crying residents out of their tents. "They came in the middle of the night so they wouldn't be seen," LaPlume says. After a heated encounter with activists, the police abandoned the project around 1:30 a.m., telling the residents they could remain for the night. But the city's homelessness workers haven't forgotten.

LaPlume recalls quietly, "It was one of the most inhumane things I've ever seen in my life."

For the city's homelessness leaders, the financial waste and hasty dealings with encampments are a symptom of failed bureaucratic leadership. Even amid hard work and shrewd leadership, the disarray of city grant allocation and contracting can set local homelessness organizations up for failure. The problems in St. Louis, when compared to major West Coast cities like Los Angeles or Seattle, are relatively small: A journalist with the Los Angeles Times found nearly $150 million in federal homelessness funding for Los Angeles was returned from 2015 to 2020, as street camping exploded and the city's homeless population soared to over 40,000.

The investigators in the federal HUD audit probed into how and why federal grant money goes unspent in such massive proportions across the country. Their main finding was a number of issues in the tracking and monitoring of grantee spending. In the absence of clear and well-defined spending procedures for states and localities, they concluded, money is returned—or lost. They also noted the difficulty for grantees in finding affordable housing for their homeless—though affordable housing developers charge city governments with excessive bureaucratic red tape holding them back.

Unlike other agencies jostling for money in Washington, the Department of Housing and Urban Development struggles to spend enough. Halting its efforts at homelessness relief is a crisis of bureaucratic backlogging that withholds grant money from organizations in desperate need—not only setting such organizations up for failure but also forcing their home cities to seek out hasty and underfunded solutions to their housing crises. Funding for HUD is increasing next year by $116 million to cover funding increases for HUD homelessness assistance grants. But until HUD fixes its bureaucracy problem, it's unclear what effect the increase will have.

For now, organizations like St. Lazare that depend on HUD funds as a lifeline have no choice but to plow ahead. Many survive the bureaucratic chaos by working together, as do LaPlume and Nieweg. But even then, there are factors out of their control that threaten to shut them down. I ask LaPlume how he deals with all the uncertainty.

He responds, "We've been dealing with this for all our life. But everyone deserves a place to call a home and a stake in their community. So we're going to fight to keep them housed. No matter what."

The post The Feds Give States Millions To Fix Homelessness, but States Are Sending It Back appeared first on Reason.com.