“It’s not true, it’s not true, it’s not true, it’s old news.” Standard Washington crisis management says to deflect and deny political scandals until they can be ignored — preferably without the powerful punished. The guilty have deftly used this strategy in the Internal Revenue Service’s targeting scandal. Fleeting hours of feigned indignation quickly morphed into assigning blame to laws governing nonprofits and, that all-purpose scapegoat, the Supreme Court’s opinion in Citizens United.
Those who cultivated the scandal by pressuring ideological allies inside the IRS shrugged and moved on. Those within the agency lawyered up, pled the Fifth, and moved on. Those defending the IRS in court engaged in unconscionable dilatory tactics that continue today. New faces replaced old and nothing changed. That the government’s most feared agency had blatantly discriminated against the president’s ideological foes was declared history.
But “the past,” as William Faulkner declared, “is never dead. It’s not even past.” The IRS scandal never ended, because the behavior never stopped. More importantly, the structural forces that nurtured it — piqued politicians demanding agencies “do something” in accord with political objectives, and like-minded, eager-to-please career employees manning those agencies — means a repeat is not just predictable, it’s inevitable. In fact, it may already be occurring.
The Turnaround Artist Who Was a Scam Artist
The IRS cover-up began in earnest with John Koskinen. He marred his tenure as IRS head with gross incompetence and perhaps willful obstruction. Yet he has achieved his mission. His middle finger to congressional investigations ensured destroyed evidence, denied justice, and perpetrators walking scot-free.
The administration sold Koskinen as a “turnaround artist” who specializes in stressed institutions. The all-business technocrat, so it went, would cooperate with congressional investigators and restore the tattered agency’s reputation. During his confirmation hearing, he assured as much: “[W]e will be transparent about any problems we run into; and the public and certainly this committee will know about those problems as soon as we do.” Six weeks into the job, opportunity tested Koskinen’s pledge. He failed miserably.
In early February 2014, Koskinen’s lawyer Catharine Duvall and Tom Kane, the IRS official responsible for producing documents, noticed a striking discrepancy. The IRS had 16,000 emails of former IRS tax-exempt official Lois Lerner from the period after April 2011 and “less than 100” prior. They quickly gathered that her computer had crashed, making recovery from that source impossible. While he later tried to massage his awareness, Koskinen knew of the problem at the time:
With regard to when officials at the IRS knew the impact of the hard drive crash, as I have testified several times in the 11 hours of hearings since June 13th, what I was advised and knew in February was that when you took the emails that had already been provided to this committee and other investigators, and, instead of looking at them by search terms, looked at them by date, it was clear that there were fewer emails in the period up through 2011 and subsequently. And there was also, I was told, there had been a problem with Ms. Lerner’s computer.
This crisis demanded leadership of the sort at which Koskinen was supposedly adept. If he was serious and competent, he would have: (i.) notified Congress, (ii.) ensured any back-up tapes were preserved; and (iii.) begun a thorough review of all secondary sources of Lerner’s emails. None of that happened. Instead, the IRS notified the White House and began damage control.
You Mean These Documents?
The IRS kept mum for four months. This period spanned multiple hearings and high-level meetings with congressional staff, some specifically to discuss document production. Even worse, the IRS made no effort to ensure emails were preserved. In fact, 422 backup tapes did exist, with potentially 24,000 of Lerner’s missing emails.
Yet Koskinen’s neglect allowed low-level employees in Martinsburg, West Virginia to destroy the tapes and with them possibly the last chance to unearth the scandal’s roots. Koskinen showed as much interest in preserving other sources of Lerner data as he did the degaussed tapes. Timothy Camus, Treasury’s deputy inspector general for investigations, testified about IRS document-preservation indolence:
Rep. WALBERG. How many potential sources for recovering Lerner’s emails existed for the IRS?
Mr. CAMUS. We believe there were six.
Rep. WALBERG. Namely?
Mr. CAMUS. The hard drive would have been a source, Blackberry source, backup tapes a source, server drives a source, the backup tapes for the server drives, and then finally the loaner lap tops.
Rep. WALBERG. How many of these six did the IRS search?
Mr. CAMUS. We’re not aware that they searched any one in particular. They did — it appears they did look into initially whether or not the hard drive had been destroyed, but they didn’t go much further than that (emphasis added).
Through effort, the inspector general found 1,000 additional emails in just 15 days from these additional sources.
The timing of IRS’s four-month delay is also suspicious. In April 2014, congressional investigators learned Lerner had illegally transferred 1.25 million pages of conservative nonprofit tax returns, including protected donor information, to the FBI and DOJ’s criminal division. Subpoenas to DOJ followed. It produced previously undisclosed Lerner emails.
IRS officials knew the jig was up. Two weeks later, they came clean. In Washington fashion, the IRS revealed the bombshell on the seventh page of the third attachment to a Senate Finance Committee letter. Without this happenstance, there is no telling how long the IRS would have hid the information.
Koskinen has testified, “No one regrets more than I do that this has been the case that keeps on giving. I wish all the information had been out.” Of course, Koskinen, the “turnaround artist,” along with the Department of Justice, has ensured this drip, drip, drip. It’s not true, it’s not true, it’s not true . . .
The People Who Keep Themselves Above the Law
The IRS’s litigation record mirrors its apathy for Congress. In defense of the IRS, the DOJ has vigorously fought to hide the most basic information from victims. One case in the federal Sixth Circuit illustrates the government’s approach. The plaintiffs sought names of groups targeted and the employees responsible. The plaintiffs needed this to certify its “class.”
But despite a court order, DOJ resisted for almost a year. Instead it sought the extraordinary remedy of a mandamus, reserved for the clearest judicial transgressions. The appeals court was not amused: “at every turn the IRS has resisted the plaintiffs’ requests for information regarding the IRS’s treatment of the plaintiff class, eventually to the open frustration of the district court . . . on the record before us the IRS response has been one of continuous resistance.”
The district court described the government’s strategy this way: “I feel like the government is doing everything it possibly can to make this as complicated as it possibly can, to last as long as it possibly can, so that by the time there is a result, nobody is going to care except the plaintiffs.” It’s old news.
A different appeals court in Washington DC also lambasted the IRS for failing to ensure it has actually stopped targeting. According to the IRS’s own documents, it only suspended targeting “until further notice.” The court further stated, “It being plain to the Inspector General, the district court, and this court that the IRS cannot defend its discriminatory conduct on the merits, the governing issue is now whether the controversy is moot.” Mootness is a legal term meaning the plaintiff’s injury has ended, which forecloses judicial remedy. The circuit court remanded the case so groups waiting years for a status decision can finally get one.
No Consequences for Using Government to Abuse Citizens
No IRS official ever suffered for the blatantly unconstitutional and unethical actions. Lerner pled the Fifth and then walked away with a $129,000 bonus and a pension that vests with 34 years of government “service” — she could receive almost $4 million over her lifetime. Koskinen impeachment talk fizzled, neutered by Republican leadership unwilling to stomach the difficult political fight. Even successful litigation will only result in victims getting official nonprofit status or, where a group’s privacy rights were violated, a damage award and perhaps payment of attorney’s fees.
If the training’s goal was to stop IRS harassment of conservatives, it failed.
What the government has done is more training — the cure-all remedy for venal employees. But the IRS treated “back-to-school” with trademark insolence. Retraining was supposed to be multi-faceted. But because of an “oversight,” the IRS didn’t send formal evaluations to employees to monitor the training’s effect.
Once they realized, management decided “informal feedback” sufficed. According to an IG report, “the Learning and Education office did not compile or evaluate case study results completed by students to determine if they learned skills and acquired knowledge as a result of the training.” So the training lacked feedback, and no one bothered to see if it worked.
If the training’s goal was to stop IRS harassment of conservatives, it failed. During its investigation, Congress discovered the IRS was 900 percent more likely to audit donors to targeted Tea Party groups. The same agency that took almost a year to produce a single list and sat on applications through multiple political cycles still gives targeted groups timeframes like 30 days to turn over scores of documents under threat of having to start over.
The training didn’t stop the agency from enforcing a decades-old “policy” of halting work on applicants suing them. The DC appeals court described it thusly: “the IRS is telling the applicants in these cases that ‘we have been violating your rights and not properly processing your applications. You are entitled to have your applications processed. But if you ask for that processing by way of a lawsuit, then you can’t have it.’”
It Isn’t Even Close to Over
It may also just be the start. Evidence suggests targeting will continue and indeed spread — even assuming the IRS henceforth uses objective criteria to approve tax-exempt applications.
It is important to note the structural factors that caused the scandal and assess the likelihood of recurrence. As Kimberly Strassel documents in “The Intimidation Game,” the Citizens United case fueled a cauldron of pressure on federal agencies having regulatory authority over political speech. The president, Senate Democrats including Chuck Schumer, Max Baucus, and Sheldon Whitehouse, and campaign finance reform groups blitzed the federal apparatus to stop uninvited political speech. In a 2010 conference at Duke University Lerner described this pressure:
Everyone is up in arms because they don’t like [Citizens United]. The Federal Election Commission can’t do anything about it so they want the IRS to fix the problem . . . So everybody’s screaming at us right now. Fix it now! Before the election! Can’t you see how much these people are spending . . . I can’t do anything right now.
The IRS got the message and “fixed it.” Yet the same forces “up in arms” over Citizens United are still “screaming.”
Some, like Whitehouse (D-Rhode Island), doubled down with the IRS. Whitehouse, one of the main “screamers,” recently urged the IRS to start targeting conservative “dark money groups” anew and described the scandal thusly: “An under-funded and harried IRS has been unwilling to police the activities of powerful social welfare groups after an effort to separate out new applicants blew up in its face.”
The poor IRS was being pushed around, and powerful nonprofits weren’t being “policed” because of a benign administrative mix-up. That these groups depended on the IRS — which made them wait years, produce scores of documents, and asked them pertinent questions like “what did you pray about” — matters not. Nor, apparently, does it matter that Whitehouse himself was a leading “harrier.” It’s not true, it’s not true . . .
We’ll Use Other Agencies to Target Conservatives
Others moved to new targets, most notably the Securities and Exchange Commission and its chairwoman, Mary Jo White. Sen. Elizabeth Warren (D-MA) has been on the warpath to get White removed as chair. Warren has aimed her quiver at White because the SEC has refused left-wing pressure to force disclosure of corporate support of trade associations.
Whether Warren’s crusade against White bears fruit likely does not matter.
Warren asked the president to replace White as chair so someone with less fortitude could carry out Warren’s political agenda. While admitting such a move would be “uncommon,” Warren views it as critical for “investor protection” — a protection the SEC has never deemed necessary through its history.
Whether corporate America doesn’t already favor most of Warren’s agenda is an open question. But organizations and trade associations that promote heresies like free-market capitalism are funded. Thus the perpetual left-wing outrage machine has enemies that must be identified and subdued.
Whether Warren’s crusade against White bears fruit likely does not matter. Eventually companies that fund free-market nonprofits will be revealed in an illegal transfer to the SEC’s enforcement division a la Lerner, or the IRS will “accidently” make donor lists public like it did with the National Organization for Marriage. Or DOJ’s anti-trust division, or the Environmental Protection Agency, or the hundred other federal agencies with large budgets and career employees who “get the message” from everybody “screaming” will act.
The directive is code hidden in plain sight. No FOIA request will discover it. The next Tea Party scandal is not only coming, it may already be happening. When it does, the charade will begin anew, and no one will pay a price. The only loss will be Americans’ constitutional rights. Once again, it will be old news.
This originally appeared in The Federalist on Novemeber 1, 2016
Paul H. Jossey is a campaign finance attorney and adjunct fellow at the Center for Competitive Politics. Please follow him on Twitter @phjossey