The IRS Scandal Blows Wide Open

Posted By Arnold Ahlert On April 17, 2014 @ 12:55 am In Daily Mailer,FrontPage | No Comments

A bombshell revelation has brought the IRS scandal to a new level. Judicial Watch has released internal IRS communications revealing that former Tax Exempt Organizations director Lois Lerner was in contact with the Department of Justice (DOJ) regarding whether it was possible to criminally prosecute tax-exempt groups she believed had “lied” about their political activity. Judicial Watch obtained the documents by successfully filing a Freedom of Information Act (FOIA) lawsuit against the IRS in October 2013, following the agency’s stonewall of four FOIA requests dating back to the previous May.

Contained in those documents is an email exchange between Lerner and Nikole C. Flax, then-Chief of Staff to then-Acting IRS Commissioner Steven T. Miller. On May 8, 2013, Lerner sent the following email to Flax:

“I got a call today from Richard Pilger Director Elections Crimes Branch at DOJ … He wanted to know who at IRS the DOJ folk s [sic] could talk to about Sen. Whitehouse idea at the hearing that DOJ could piece together false statement cases about applicants who “lied” on their 1024s –saying they weren’t planning on doing political activity, and then turning around and making large visible political expenditures. DOJ is feeling like it needs to respond, but want to talk to the right folks at IRS to see whether there are impediments from our side and what, if any damage this might do to IRS programs.
I told him that sounded like we might need several folks from IRS…”

Flax responded the next day:

“I think we should do it – also need to include CI [Criminal Investigation Division], which we can help coordinate. Also, we need to reach out to FEC. Does it make sense to consider including them in this or keep it separate?”

Sen. Sheldon Whitehouse (D-RI) had chaired a hearing on Apr. 9, 2013 in which he discussed the abuse of the 501(c)(4) tax-exempt designation. During that hearing, he made his leftist agenda clear, insisting that “after the Supreme Court opened the floodgates to big money in elections in its disgraceful Citizens United decision, big donors like to use these non-profit entities to launder campaign spending and hide their identities.”

Whitehouse also asked witnesses from DOJ and IRS why they hadn’t prosecuted 501(c)(4) groups who have made false statements about their activities, or donors who have used shell companies to mask their donations to Super PACs. He urged both entities to “put together a criminal case showing a fairly straightforward false statement or a fairly [straightforward] shell corporation disclosure violation.”

In a March 27, 2013 email to a top staffer at the IRS, Lerner revealed the impetus behind that meeting:

“As I mentioned yesterday — there are several groups of folks from the FEC world that are pushing tax fraud prosecution for c4s who report they are not conducting political activity when they are (or these folks think they are). One is my ex-boss Larry Noble (former General Counsel at the FEC), who is now president of Americans for Campaign Reform. This is their latest push to shut these down. One IRS prosecution would make an impact and they wouldn’t feel so comfortable doing the stuff.
So, don’t be fooled about how this is being articulated – it is ALL about 501(c)(4) orgs and political activity”

An IRS prosecution for the sake of “impact” sounds remarkably like a show trial, but the fact that Lerner advocated such an idea is not surprising. She too had nothing but contempt for Citizens United, a reality she made clear during a 2010 speech at Duke University. At the time she insisted the Supreme Court “dealt a huge blow, overturning a 100-year-old precedent that basically corporations couldn’t give directly to political campaigns.”

Apparently Lerner knew such a prosecution might be at odds with the law. Minutes before sending the above email she sent this one:

“Whether there was a false statement or fraud regarding an [sic] description of an alleged political expenditure that doesn’t say vote for or vote against is not realistic under current law. Everyone is looking for a magic bullet or scapegoat — there isn’t one. The law in this area is just hard.”

Just as damning are a trio of emails that show Lerner working to tamp down the emerging IRS scandal. They are important because all of them were sent before her May 10, 2013 speech attempting to blame the entire debacle on “low level” IRS employees in Cincinnati:

• May 1, 2013: After receiving an email from an assistant showing that 501(c)(4) applications had increased from 1591 in 2010 to 3398 in 2012 , Lerner wrote back, “Looks to me like 2010-2012 doubled too. Oh well – thanks.”

• May 2, 2013: Discussing an upcoming conference call with approximately 100 congressional staffers on May 22, Lerner cautions aides, “Need to be careful not to mention sequester/furlough unless asked although can allude to budget and resources restraints.”

• May 2, 2013: In response to an email reminding her about the upcoming conference call with congressional staffers, Lerner responded, “Arrgh – I just saw it. Sharon [White] could skate, but Cindy [Thomas] is the person who could answer that stuff. We need to give them some type of language in the event that type of question comes up” [apparently in reference to earlier email referencing “sensitive issues”].

Emails sent after the speech are equally revealing. One sent on May 10 blows a hole in the left’s contention that IRS targeting was a bipartisan affair:

• May 10, 2013: In an email to an aide responding to a request for information from a Washington Post reporter, Lerner admits that she “can’t confirm that there was anyone on the other side of the political spectrum” who had been targeted by the IRS. She then adds that “The one with the names used were only know [sic] because they have been very loud in the press.”

• May 10, 2013: An email from former Cincinnati program manager Cindy Thomas excoriates Lerner for her comments blaming the aforementioned low level employees. Highlighting the words “low-level workers” in bold-face type each of the seven times she used it in a short email, Thomas asked, “How am I supposed to keep the low-level workers motivated when the public believes they are nothing more than low-level workers and now will have no respect for how they are working cases?” Lerner’s response nearly an hour later was a terse, “I will be back shortly and give you a call.”

• May 15, 2013: In an email from an aide to Lerner, the aide specifically mentions “Tea Party Organizations,” the “Tea Party movement,” and “Tea Party Patriots” as organizations targeted by the IRS.

All of the above indicate a despicable level of strategizing aimed at not merely suppressing the efforts of conservative organizations — but targeting them with criminal prosecution and threatening them with imprisonment. Yet one sentence in the above emails stands out above all the rest. It is the one where Lerner states that “everyone is looking for a magic bullet or scapegoat.”

Who is “everyone”? IRS emails released by the House Oversight Committee reveal staff members working for Rep. Elijah Cummings (D-MD), the Committee’s Democratic Ranking Member, were in contact with the IRS multiple times between 2012 and 2013 regarding True the Vote, a conservative organization that works to prevent vote fraud. We now know the DOJ was in the loop as well. So was Lerner’s former employer, the Federal Elections Commission (FEC). They were given access by the IRS to highly confidential tax information about Tea Party groups, in clear violation of federal law.

Who gave them that access? Lois Lerner in an email chain that began Feb. 3, 2009, when the FEC made its request to her. That revelation also comes courtesy of an FOIA request filed by Judicial Watch.

Judicial Watch President Tom Fitton illuminates the implications of these latest document releases. “These new emails show that the day before she broke the news of the IRS scandal, Lois Lerner was talking to a top Obama Justice Department official about whether the DOJ could prosecute the very same organizations that the IRS had already improperly targeted,” he said. “The IRS emails show Eric Holder’s Department of Justice is now implicated and conflicted in the IRS scandal. No wonder we had to sue in federal court to get these documents.”

Now that it is clear the DOJ is part of the scandal, it becomes clear that they are incapable of handling the investigation of it. Thus, there is only one alternative: an independent prosecutor must be appointed. There is no question that Eric Holder’s March 10, 2014 letter to Sen. Ted Cruz (R-Tex.), saying that “such an appointment is not warranted” because the case does not present a conflict of interest or other extraordinary circumstances, is an utter fraud. Three major government entities—the IRS, the DOJ and the FEC–now known to be involved in the effort to harass right wing groups represents a gargantuan conflict of interest and the epitome of extraordinary circumstances.

The American people must rise up and demand such an appointment. The highest offices in the nation have been exposed colluding to persecute political opponents using any means at their disposal. The American people must do likewise to excise this rot from our most vital institutions.

Freeper Dan (9698) posted: AG Holder cannot stop a civil suit. Also there is a provision for a RICO action in civil law. They should use that....... and name Holder and other officials involved.

FREEPER MOUTON INSIGHTFULLY POSTED: Sue them civilly. Lerner/Cummings using the mails in furtherance of organized criminal activity and obstruction of justice looks like a RICO violation......forfeiture of personal property could be used against them both.

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It's very easy to file a RICO action....anybody can file....how-to's are all over the net.

My observations tell me the scalawags always make a mistake---usually on paper. TTV's atty, Cleta Mitchel needs to get her hands on as many documents as possible.

Mitchel needs to establish RICO's "pattern of organized activites" ---- usually RICO is filed in conjunction w/ other proveable crimes (felonies).

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The IRS Conservative Targeting Scandal involves:

•Targeting Hundreds of conservative groups

•At least 5 pro-Israel groups

•Constitutional-based groups

•Groups that criticized Obama administration

•At least two pro-life groups

•An 83 year-old Nazi concentration camp survivor

•An 180 year-old Baptist paper

•A Texas voting-rights group (Obama has targeted Republican Texas for Dummcrats)

•A Hollywood conservative group targeted and harassed

•Conservative activists and businesses

•At least one conservative Hispanic group

•100% of the 501(c)(4) Groups Audited by IRS Were Conservative.

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The unrepentant, undeterred IRS continued to target groups even after the scandal was exposed. There is NO EVIDENCE that a single liberal group got the same scrutiny.

” Perhaps even if it’s a Dem.”

I work or come in contact with several ultra liberal attorneys, doctors, businessmen and know a few local professors here in California that are NOT happy with what they’re seeing politically; Observations about what they would normally call “Their Side”.

Several of them are circulating chain emails with stories on Bundy, the IRS, the Justice Dept, The TSA, gov’t spending, foreign policy etc where I get to be privy to their comments.

My only comments to them is that they are starting to sound like Tea Partiers (What they accuse me of being).

The music to my ears is that they seem to be as stubborn in wanting to fight these policies as they used to be about fighting (Poor outnumbered) me. There is an attitude change happening.

As I actually know many of these people well, my take is they are all still typical liberal do gooders. But, they are figuring out that something is drastically wrong. They are growing more and more suspicious of what they have blindly supported.

Also interesting is the fact that they are expanding their normal source of gathering information beyond The NYT, the Wash Post etc. and sending links they pull from various sources that are new to them. They’re realizing this is what they have to do to find out what the heck is going on.

When I think back 45 years ago when I was a dumb a$$ liberal myself the straw that broke my belief system was realizing I had been lied to, suckered.

I then realized most conservatives actually did want a fair and just world, cared about the needy and other things but relied on themselves and communities to deal with those issues, not government. Also that redistribution doesn’t work, you need a string military, points I never hesitate to drill into this group.

I gotta say from my perspective I’m startled at what I’m witnessing from my local observation point and can only hope this is happening more widespread then just my circle.

Larry Noble is the Executive Director of the Center for Responsive Politics (see here for Democracy Project’s take on the place Noble and CRP occupy in Pew-funded reform universe). In that capacity he is often heard to decry the long history of FEC ineffectiveness - drawing a salary, btw from unnamed and undisclosed donations. Interesting only because Noble is, well, pretty enthusiastic about disclosure for everyone else. What he fails to remind his audiences is that from 1987 to 2000 Noble was the chief legal eagle at the FEC. In fact, he began working at the agency in 1977.

Noble is a true-believer in Progressive political reform (read: using the power and force of government to restrict and proscribe political activity). We all have political and ideological views, to be sure. Perhaps the more devastating criticism of Noble should be for his complete and utter lack of administrative ability and judgment he displayed while at the Commission.

To add insult to injury, things improved dramatically after Noble’s departure in 2000.

Noble’s questionable leadership and judgment extended to his choices about legal strategy. Noble would pursue radical legal theories, and take on big cases with volumes of discovery (and expense both for respondents at the Commission) where the law was, at best, unsettled. This could have only diverted resources better used in public education and disclosure, and fostered a poor record in the courts. The only justification I can think of for such an approach is if you believe your primary mission as General Counsel is to accumulate more authority for the Commission through investigative and judicial proceedings - far beyond simply enforcing law.

The Noble record in a nutshell: In his 23 years at the Commission he pursued marginal legal theories, resisted extending procedural rights to respondents, and managed the General Counsel’s office into a morass of delayed justice. Since his departure, the FEC is handling more cases; handling them quicker; the backlog of “stale” cases is gone; more and larger fines are levied, all while providing more due process. Marginal court cases are not clogging the litigation calendar.

http://archive.redstate.com/story/2005/8/4/8511/15290

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