The American Civil Liberties Union slammed the proposal in a twenty-six-page comment, saying it “threatens to discourage or sterilize an enormous amount of political discourse in America.” It astutely noted that the rules opened the door to even more of the sort of political targeting that had caused the scandal. The NAACP pointed out in its comment that most of its work fighting racial discrimination “would be illegal under the proposed regulation.” Even the mighty Service Employees International Union wrote in to oppose the rule. It had been spared this round of regulating, but it worried that the speech restrictions might have a snowball effect that would ultimately roll up organized labor.
Brad Smith’s group, the Center for Competitive Politics, quickly pointed out that the rule was in fact a twofer for the left. It largely barred conservative social-welfare groups from engaging in political speech. Those groups that wanted to continue actively doing so would have to register as 527 organizations with the Federal Election Commission. Which would require them to…disclose their donors. Which would then tee those donors up for retribution. Game, set, and match. As the center’s Allen Dickerson testified in front of Congress, “The reason 501(c)(4)s do not disclose their donors is because Congress said so. When the Internal Revenue Code was passed, it created criminal penalties for the unauthorized disclosure of the donors to these organizations. And the reason for that is that it has always been understood that 501(c)(4)s are the beating heart of civil society. These are the organizations, like the NRA and the Sierra Club, which go out there and take unpopular positions and move the national debate and make this a vibrant and functioning democracy. Requiring unpopular organizations to give up their donor list to public scrutiny is not only contrary to Congress’s intention in the Internal Revenue Code, it is contrary to constitutional law.”
The commentators might as well have been beating their heads against a wall. The White House had dropped this rule in the dead of night, acting like it was just one more little regulation, just a small effort to provide a bit of “clarity” to IRS rules. In fact the (c)(4) regulation had become the greatest priority of the Obama administration. This became clear in December, as Congress and the White House brawled over an omnibus bill to continue funding the government. The fight was high-stakes; if funding legislation wasn’t passed by Congress and signed by Obama before year’s end, the government would shut down.
The administration had a long wish list of dollar priorities: more money for the International Monetary Fund, money for the president’s newly proposed pre-kindergarten program, more funding for Obamacare. Republicans later told me that House Appropriations chairman Hal Rogers wanted only two things in return: protection for groups that morally opposed Obamacare’s contraception coverage requirements, and language that would put a hold on the IRS rule.
Democrats wouldn’t budge on the IRS. They were willing to throw over everything else the president wanted, so long as they kept the IRS crackdown on conservative speech. “They were willing to shut down the entire government for this,” says Fitton. “The entire government. That tells you how important it was to the left.” Faced with a shutdown scenario, and worried about getting blamed for it, the GOP retreated, and the rule continued.
By the end of the IRS’s public comment period for the rule, in February 2014, the agency was nonetheless sitting on 150,000 public statements. “I’m told if you take all the comments on all the Treasury and IRS regulations for the last seven years, double that number, you are close to the number of comments we have on this single regulation,” Koskinen later admitted. An analysis by the Center for Competitive Politics found that 87 percent of the comments opposed the rule outright, and 94 percent opposed it in whole or part.
And yet Koskinen became the rule’s biggest advocate, sullenly refusing to budge in the face of overwhelming opposition. Jordan found himself so frustrated that at one meeting with the commissioner he says he spat out, “What was this, like a quid pro quo? We’ll nominate you if you continue the rule, no matter what?”
The only reason the rule isn’t in effect today is that the White House miscalculated. Liberals had convinced themselves the IRS was a linchpin to retaining the Senate in the 2014 midterms. As The Hill reported in February, “Senate Democrats facing tough elections this year want the Internal Revenue Service to play a more aggressive role in regulating outside groups expected to spend millions of dollars on their races.” But the White House hadn’t counted on much of its base—groups that would be crucial to supporting its candidates in November—revolting over its rule.
The White House was worried the rule would backfire. Koskinen got new marching orders, and in April 2014 he announced that the agency was pulling the rule, for now, and updating it based on comments. He suggested it wouldn’t be reissued before the end of the year. Conservatives were nonetheless worried enough about it that the Republican Congress in December 2015 inserted a ban on the rule into the year-end spending bill.
* * *
Three years on from the public outing of its abuse, the IRS continues to operate as it did on May 10, 2013—the day of Lerner’s admission. Little has changed. The agency is just as dysfunctional; the administration is just as determined to use it to target its political opponents. Nobody has been held accountable.
The House Ways and Means Committee in April 2014 sent a letter to the Justice Department outlining its case for why Lerner should face criminal prosecution. It provided documents showing at least three different ways in which Lerner criminally violated statutes. One, she helped to target only conservative organizations, thereby robbing them of equal protection and due process. Two, she may have impeded TIGTA’s investigation by giving misleading statements. Three, she risked exposing (and may have exposed) confidential taxpayer information by using her personal e-mail address to conduct official business. The Justice Department never responded. In October 2015, it closed its IRS investigation, with no charges.
The House on May 7, 2014, in a bipartisan vote, found Lerner in contempt of Congress, for offering testimony (by reading out her statement) yet still refusing to answer questions. The citation went to U.S. Attorney for the District of Columbia Ronald Machen, an Obama appointee. The contempt statute in question explains that the U.S. attorney’s only “duty” “shall be” to “bring the matter before the grand jury for its action.” Machen instead sat on the citation for eleven months. On March 31—the day before he retired from his post—he informed Speaker John Boehner that he’d unilaterally decided not to investigate Lerner. So much for accountability.
The House also on May 7, 2014, passed a bipartisan resolution calling on the Justice Department to appoint a special prosecutor to look into the IRS scandal. Some twenty-six Democrats joined Republicans to demand that Attorney General Eric Holder do something to restore credibility to the agency. Fitton points out that the textbook argument for a special prosecutor is any situation in which Justice has a conflict of interest in an investigation—say, if it had been working with the IRS to go after nonprofits. That call for a special prosecutor has never been answered.
By the end of 2015, Obama had taken to blaming Congress for the IRS targeting of conservatives. In an appearance on The Daily Show, he explained, “You’ve got this back office, and they’re going after the Tea Party. Well, it turned out, no, Congress had passed a crummy law that didn’t give people guidance in terms of what it was they were trying to do. They did it poorly and stupidly. The truth of the matter is that there was not some big conspiracy there. They were trying to sort out conflicting demands.” So much for presidential outrage.
* * *
All stories have endings, but the IRS scandal hasn’t yet reached its last chapters. In many ways, that’s depressing. It’s been three years since Lerner’s admission. We know the contours of the assault, but the details may well already be lost to destroyed IRS hard drives.
Then again, the lack of an ending is also inspiring. Because if there is one noteworthy American quality, it is tena
city. The players in this drama aren’t giving up.
Jordan feels he knows generally what happened. “They saw this coming. The context is 2010. They’d done a bazillion dollars of crazy spending, stimulus, they were doing Obamacare, they saw the wave coming. They realized these groups are organized and focused and ready to vote. Democrats are hounding the IRS after Citizens United to act; Lerner gives a speech at Duke acknowledging she knows they are asking for just that; we have e-mails showing they were working on a (c)(4) project. It was all driven by raw politics and liberal ideology. No mystery there.” While Jordan has changed subcommitees in Congress, he’s still investigating the IRS.
Fitton and his colleagues at Judicial Watch have done more than anyone to pry out damning information here and damning information there, and they’re still doing it. He’s still sitting on a mess of FOIA lawsuits, and still playing cat and mouse with the government. Judicial Watch has recently been attempting to get hold of Justice Department documents that expose the political nature of the Bosserman nonprobe. Justice continues to conveniently say that turning over any documents would compromise its investigation. Fitton’s team of attorneys keep filing.
Mitchell still has clients dealing with the IRS. She’s still involved in the movement, and still just as ripshit. She dialed in not long ago to a Tea Party conference call to answer questions about the IRS regulation. The call also featured a Tea Party member who had been tasked with explaining to the group the ins and outs of interstate health compacts. “And that’s what pisses me off,” says Mitchell. “Here are these American citizens, calling in on a Sunday night, when they might be watching a movie, because they want to understand interstate health compacts. I’d love to know how many officials at the IRS, the ones holding the power to delay and deceive and make everyone jump, understand interstate health compacts.” Mitchell is still litigating.
Engelbrecht finally received her determination approval for True the Vote in September 2013, three years after filing. She received approval for King Street Patriots in December 2013, three and a half years after she first set out on that journey. Jordan calls her the “real hero” of the scandal, “a woman who suffered every form of government assault, and kept pushing to the end.” He remembers saying to her in a committee hearing, “You do know why they were coming after you, right? They were coming after you because you were doing a good job, and making a difference.”
Her voter-rights group work matters more to her now than ever. “I’ve realized this is no longer about Republican or Democrat,” she says. “This is about government versus the people. And at the end of the day, government will not correct itself. And so it has fallen on us, all of us, to speak out. It is on our watch. Otherwise, we are complicit and far worse will fall on our children. Whether or not you feel that the government has dealt you a short straw, you put that aside. You engage. You keep engaging. You be a part of this country.”
Jenny Beth Martin keeps growing the Tea Party movement. The IRS didn’t kill that spirit. At the end of 2014, she had 599 active groups in her network. By the end of 2015, she had more than 700. Hundreds of volunteers every Sunday night call in to webinars to talk about policy and politics and the direction of the country. Hundreds more volunteers call in every Monday to talk about what’s happening on Capitol Hill, and upcoming action. And she notes that the level of involvement these days “is just so much more sophisticated. We have people showing up in big numbers at events. We have people getting involved in campaigns—sometimes even running for office themselves. The level of engagement is maturing. People understand more than ever that they have to stand up.”
She’s still demanding that someone be held accountable. “I to this day have people come up to me across the country. They are holding some letter from the government—maybe from the IRS, maybe from the Census Bureau, maybe something else—and they are shaking,” she says. “They think they are being targeted. Why wouldn’t they? This goes to the foundation of our government, to the trust. There is a crack, it is deep, and it will only widen if someone isn’t held responsible.”
Karen Kenney gave up on her application in 2012. But she too has never wavered in her belief that her group matters and needs to keep on. “There are reasons why each of us are here,” she says, “and even if I don’t know the exact purpose, I’m going to have some meaning. And they can’t stop millions of Americans who feel the same way.” After withdrawing her application to become tax-exempt, Kenney went through the process of filing to pay IRS taxes. It was at that point that she experienced the ultimate eye-opener. “Turns out we make so little money that we don’t owe federal taxes anyway. We don’t make enough. So we did all this. We went through this whole process to be tax-exempt, and we have zero liability to the feds. Can you believe that?”
(One of God’s little jokes. God, I do love your little jokes. Really, I do.)
The Albuquerque Tea Party—the organization started by a West Point grad and Army Cavalry veteran, the group the IRS funneled aside as the “test case” in 2010—it hasn’t given up on obtaining tax-exempt status.
It’s been six years.
Chapter 12
Waiting for Disco
In the summer of 2008, Don McGahn arrived at his first day of work, and the security guard nodded a familiar hello. McGahn had been coming to this little building for years, always as a visitor. Now the guard scanned McGahn’s new ID and gave him a look. “Wait, you’re one of the new ones,” the confused guard mumbled. McGahn shrugged: “Guess I’m official now,” he said. “Do you have any idea where I’m supposed to go?” The guard shrugged himself, and offered, “Guessing you go straight to the top floor.”
McGahn did go straight to the top floor, because that’s where the chairman of the Federal Election Commission sits, and McGahn was now that guy. The political lawyer had visited the FEC’s nondescript headquarters on E Street hundreds of times, always to defend a conservative politician or political group that had been dragged in front of the commissioners on some charge or another. He’d been a frequent witness in front of Congress and the FEC—usually along with Bob Bauer—testifying about McCain-Feingold rulemakings, trying to preserve free speech. George W. Bush had noticed, and the administration finally convinced McGahn to work from the inside. So back he went to the building, only this time with an office.
And a weird place it was. “It was such a different culture; it had an entirely different point of reference,” says McGahn, who at the time had just turned forty years old. A fraternity-like feel permeated the bureaucracy, complete with its own language, and a smug belief in purpose. When McGahn was appointed, the FEC hadn’t had enough confirmed commissioners to function in months, and the staff had taken over the joint. “All these people kept coming up and saying, ‘We’re so happy to have you join us,’” he remembers. “And I’d tilt my head and think, ‘I’m not sure what you mean. I’m not joining you. That’s not how it works. I was appointed to be a commissioner. And I don’t own a rubber stamp.’”
McGahn would serve what FEC observers say was one of the more consequential tenures in the agency’s forty-year history. He’d reform procedures, drag FEC proceedings into the daylight, and help put the accountable people back in charge. And in the process, he’d realize—and expose—that the IRS wasn’t the only part of the Obama administration that was going after conservatives. The intimidation was happening government-wide, including at an independent, bipartisan agency that had been purposefully designed to stay above politics.
* * *
The Federal Election Commission is one of the Watergate reforms, created in 1975. It exists to enforce campaign finance laws: the Federal Election Campaign Act, McCain-Feingold, and plenty more. Most “independent” agencies in Washington have five board members, a majority (three) of which belong to the president’s party. Congress, in a rare moment of wisdom, realized that the FEC needed strict political balance. The agency sits six commissioners—three Republicans and three Democrats. And the law re
quires that at least four members vote affirmatively to take any action.
This frustrates the left and campaign finance believers, who feel that the FEC ought to begin from the assumption that money in politics is a bad thing. They have long been frustrated that some Republican FEC commissioners stand up for free speech and often do not approve action against election players. That’s one reason why this community turned to the IRS—out of frustration with the FEC. Lerner had referenced that in her speech at Duke in October 2010: “Everybody is up in arms [about the flood of money to 501(c)(4) groups].” The “Federal Election Commission can’t do anything about it; they want the IRS to fix the problem,” she said candidly.
The left also hates that the law puts all the power of the agency in the commissioners’ hands. The FEC is, after all, staffed with bunches of lawyers and bureaucrats who were all drawn to the agency out of a desire to get money out of politics. They are primed to make new regulations, go after political actors, and tamp down on speech.
Yet what good are those bunches of bureaucrats when Congress really did put the commissioners in charge? When the FEC receives a complaint, for instance, it falls to the general counsel’s office to first issue a report on the merits of any alleged finance violation. The commissioners then look, and vote on whether there is “reason to believe” a violation occurred. Staff is barred from conducting investigations or proceeding further without this green light. Staff is barred from liaising with law enforcement. Staff is barred from digging into or harassing the accused in complaints.
The FEC bureaucracy chafes under these restrictions, and over the years its response was to begin ignoring the law and slowly take over the agency. An early ringleader in this effort was none other than Lerner, who in her time at the FEC had pursued groups like the Christian Coalition. Lerner kept her ties to her old FEC haunt even when she moved to the tax agency. She remained a key contact for an FEC bureaucracy that shared her desire to stomp out speech.
The Intimidation Game Page 19
