April
16, 2014
May
9, 2013, email reveals IRS plans to meet with Department of Justice over
whether to prosecute groups that “lied” about plans for political activity
(Washington, DC)
– Judicial Watch today released a new batch of
internal IRS documents revealing that former IRS official Lois Lerner
communicated with the Department of Justice (DOJ) about whether it was possible
to criminally prosecute certain tax-exempt entities. The documents were obtained as a result of an
October 2013 Judicial Watch Freedom of Information Act (FOIA) lawsuit
filed against the Internal Revenue Service (IRS) after the agency refused to
respond to four FOIA requests dating back to May 2013 (Judicial Watch, Inc. v. Internal Revenue Service (No.
1:13-cv-01559)).
The newly released
IRS documents contain an email exchange between Lerner and Nikole
C. Flax, then-Chief of Staff to then-Acting IRS Commissioner Steven T. Miller
discussing plans to work with the DOJ to
prosecute nonprofit groups that “lied” (Lerner’s quotation marks) about
political activities. The exchange
includes the following:
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 …
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?
Lerner then “handed off”
scheduling the issue to Senior Technical Adviser, Attorney Nancy Marks, who was
then supposed to set up the meeting with the DOJ. Lerner also decided that it would be DOJ’s
decision as to whether representatives from the Federal Election Commission
would attend.
Democratic Rhode
Island Senator Sheldon Whitehouse had held
a hearing on April 9 during which, “in questioning the witnesses from DOJ
and IRS, Whitehouse asked why they have not prosecuted 501(c)(4)
groups that have seemingly made false statements about their political
activities.” Lerner described the
impetus for this hearing in a March 27, 2013, email
to top IRS staff:
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.
But in an email
sent a few minutes earlier, Lerner acknowledged prosecutions would evidently be
at odds with the law:
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.
The documents also
include email exchanges showing that before Lerner’s May 10, 2013, speech
to the American Bar Association blaming “low-level” employees in Cincinnati for
targeting tax-exempt organizations, the IRS Exempt Organizations division
was scrambling to defuse the emerging targeting scandal:
The new documents
obtained by Judicial Watch also include emails exchanged after Lerner’s May 10
ABA speech:
The Judicial Watch
FOIA requests came on the heels of an explosive May 14, 2013, Treasury
Inspector General report revealing that the IRS
had singled out groups with conservative-sounding terms such as “patriot” and
“Tea Party” in their titles when applying for tax-exempt status. The IG probe determined that “Early in
Calendar Year 2010, the IRS began using inappropriate criteria to identify
organizations applying for tax-exempt status to (e.g., lists of past and future donors).” According to the report, the illegal IRS
reviews continued for more than 18 months and “delayed processing of targeted
groups’ applications” preparing for the 2012 presidential election.
Lerner, who headed
the IRS division that handles applications for tax-exempt status, refused to
testify at a May 2013 hearing before Rep. Darrell Issa’s
(R-CA) House Oversight Committee, demanding immunity concerning her role in the
targeting scandal. Lerner retired from
the IRS with full benefits on September 23 after an internal investigation
found she was guilty of “neglect of duties” and was going to call for her
ouster, according
to news reports. On April 9, 2014,
the Ways and Means Committee referred Lois Lerner to the DOJ for criminal
prosecution. On April 10, 2014, the
House Oversight Committee voted to hold Lerner in contempt
of Congress.
“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,” said Judicial Watch President Tom Fitton. “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.”