House Oversight Committee Releases Damning Report About Lerner And IRS Scandal

I wonder if Rep. Cummings still believes the IRS scandal investigation is a "kangaroo court" meant to disparage the administration. The House Committee on Oversight and Government Reform released this morning a 141-page staff report, "Lois Lerner's Involvement in the IRS Targeting of Tax-Exempt Organizations." (Embedded below).

“In the wake of Ms. Lerner’s refusal to testify and answer questions, this report offers detailed evidence about steps she took to crack down on organizations that exercised their Constitutional rights to free political speech,” said Chairman Issa. “She involved herself in efforts to apply unprecedented scrutiny to new applicants, existing organizations, and to write new rules after President Obama and other prominent Democrats expressed outrage at the Supreme Court’s Citizens United decision. Finally, the report presents evidence that Ms. Lerner misled Congress about targeting and her own conduct.”

Some of the highlights include:

• Lerner broke IRS rules by mishandling taxpayer information: While Lerner told Congress under oath, “I have not violated any IRS rules or regulations,” e-mails show Lerner handled protected 6103 taxpayer information in her nonofficial e-mail account. In a November 2013 letter from Daniel Werfel, Werfel notes, “We do not permit IRS officials to send taxpayer information to their personal email addresses. An IRS employee should not send taxpayer information to his or her personal email address in any form, including redacted.” – p. 33

• Concern Citizens United hurting Democrats: Lerner believed the Executive Branch needed to take steps to undermine the Supreme Court’s Citizens United decision. A senior advisor to Lerner e-mailed her an article about allegations that unknown conservative donors were influencing U.S. Senate races. The article explained how outside money was making it increasingly difficult for Democrats to remain in the majority in the Senate. Lerner replied: “Perhaps the FEC will save the day.” – p. 21

• Citizens United created pressure for IRS to “fix the problem”: According to Lerner: “The Supreme Court dealt a huge blow, overturning a 100-year old precedent that basically corporations couldn’t give directly to political campaigns. And everyone is up in arms because they don’t like it. The Federal Election Commission can’t do anything about it. They want the IRS to fix the problem.” – p. 20

• “Multi-Tier Review”: Lerner personally directed that Tea Party cases go through a “multi-tier review.” An IRS employee testified that Lerner “sent [him an] e-mail saying that when these cases need to go through multi-tier review and they will eventually have to go to [Judy Kindell, Lerner’s senior technical advisor] and the Chief Counsel’s office.” A D.C. IRS employee said this level of scrutiny had no precedent. – p. 24-25

• Head of the IRS Cincinnati office’s testimony refutes Lois Lerner and President Obama’s O’Reilly interview assertion that this was all about a “local office”: “[Y]es, there were mistakes made by folks in Cincinnati as well [as] D.C. but the D.C. office is the one who delayed the processing of the cases.” – p. 44

• Tea Party “itching for a Constitutional challenge:” Lerner and her colleagues, after being under public pressure from President Obama and other Democrats, engaged in an e-mail exchange about how they could showcase their scrutiny of a Tea Party applicant for public disclosure, despite rules protecting the secrecy of unapproved applications. The conversation turned to the possibility of a court case – if a Tea Party applicant would challenge the IRS ruling. On this, Ms. Lerner opined, Tea Party groups would litigate because they are “itching for a Constitutional challenge.” – p. 41

• Lerner discusses political scrutiny that isn’t “per se political:” In one e-mail exchange that began with a discussion of an article noting, “organizations woven by the fabulously rich and hugely influential Koch brothers,” Lerner told colleagues, “we do need a c4 project next year.” While she initially says, “my object is not to look for political activity,” later in the exchange she acknowledges that it will examine political activity. “We need to be cautious so it isn’t a per se political project. More a c4 project that will look at levels of lobbying and pol. Activity along with exempt activity.” – p. 17

• Lerner planned to retire in October all along: While House Democrats have pushed that Lerner was forced out by the IRS as a result of the TIGTA report; new e-mails indicate that Lerner had planned an October retirement long before TIGTA released its report. Her paid leave amounted to a paid vacation preceding her retirement – it does not appear that the IRS penalized her in any way for her conduct. – p. 40-41

• Despite knowing about improper scrutiny, Lerner had IRS blame victims: An IRS document bearing Lerner’s signature shows that in March 2012, despite knowing about improper scrutiny at that time, Lerner reviewed and signed off on a response to Congress that blamed applicants for heightened scrutiny. “[T]he IRS contacts the organization and solicits additional information when the organization does not provide sufficient information in response to the questions on the Form 1024 or if issues are raised by the application …. The revenue agent uses sound reasoning based on tax law training and his or her experience to review the application and identify the additional information needed to make a proper determination of the organization’s exempt status.” – p. 36

At the very least this information proves that additional investigation is necessary, despite what Rep. Cummings believes.

Lerner Report1 by Jeffrey Dunetz