Wizard of Broke

A Klan group goes bankrupt

What do increasing numbers of small businesses have in common with one of the factions of the Ku Klux Klan? As of last week: bankruptcy. Said Bill Wilkinson, Imperial Wizard of the Invisible Empire, Knights of the Ku Klux Klan: "Everyone should try Chapter 11."

The Invisible Empire's financial problems began last year when the Internal Revenue Service assessed the Louisiana-based group, one of the largest Klan organizations in the U.S., $8,650 in back taxes, penalties and interest. Last week the Imperial Wizard, in the first formal step required under the federal Chapter 11 bankruptcy law, filed court papers listing the group's assets as about $14,800 and liabilities as $42,019, with the IRS as the largest creditor. The Invisible Empire now has 120 days in which to file a financial reorganization plan with the U.S. District Court in Baton Rouge.

Like other taxpayers who have got into trouble with the IRS, Wilkinson sought to blame his difficulties on a technical mistake. "It was a major bookkeeping error," he explained from his headquarters in Denham Springs, a rural suburb of Baton Rouge. Wilkinson claimed he discovered the error himself while scanning the organization's financial records. He dutifully reported the mistake to the IRS, he said, but it slapped the Klan with hefty penalties anyway. He added, "They were unkind. They put the maximum of everything on us."

The Imperial Wizard sought to strike an upbeat note. "This will not hamper our operations. It preserves our cash flow and freezes our obligation. We will pay all creditors 100% plus interest, and that includes the IRS," declared Wilkinson, whose wife Barbara, the Klan secretary, signed the documents. "But you won't find that bookkeeper around here anymore." This file is automatically generated by a robot program, so viewer discretion is required.