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The IRS Outrage

Behind the Obama administration's sham inquiry.

By From the March 2014 issue

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What did Tom Perez know and when did he know it? That’s one of the questions congressional investigators were asking as they probed what increasingly looked like a whitewash of the Internal Revenue Service scandal. Perez, now secretary of labor, was formerly head of the Department of Justice’s Civil Rights Division, where his key aide Barbara K. Bosserman was chosen to head up the DOJ’s investigation of the IRS. Many Republicans suspect the investigation is aimed not at finding the truth about abuses at the tax agency, but rather at sweeping any wrongdoing—including the deliberate targeting of Tea Party groups—under the rug and shielding President Obama from blame.

The choice of Bosserman to lead the IRS investigation made headlines in January when it was revealed that the career DOJ lawyer had contributed thousands of dollars to Obama’s presidential campaign and the Democratic National Committee. That obviously raised red flags with Republicans—Rep. Darrell Issa called it a “startling conflict of interest”—but perhaps the more important question was, why Bosserman?

“It’s very odd,” one source familiar with the congressional investigation said of Bosserman’s selection for the job. “Out of 10,000 attorneys at the Department of Justice, why was she chosen?”

Bosserman’s background is as a trial attorney prosecuting such civil-rights cases as that of a Michigan man who in 2006 burned a cross in a black family’s yard. Exposure of abuses by the IRS led to the resignations of three agency officials in 2013, and those abuses may have been civil rights violations in some sense of the word, but Bosserman’s appointment was suspicious. Why would someone with no previous experience in tax law or government corruption be selected to lead the IRS investigation? During a January hearing of the House Oversight and Government Reform Committee, Rep. Jim Jordan raised that question with the Justice Department’s Inspector General, Michael Horowitz. In his 12 years of DOJ experience under three different administrations, did Horowitz “ever recall the civil rights division investigating tax law matters?” Jordan asked.

“I don’t recall that during my time,” Horowitz answered.

The selection of Bosserman was unprecedented, in other words, but the whole IRS scandal is in many ways unprecedented. Beginning in 2010, agency officials deliberately targeted for extra scrutiny the non-profit applications of Tea Party groups. Any new group that included certain terms in its name—including “Tea Party” and “patriot”—as well as any that mentioned their purpose as related to issues of taxes, debt, or educating the public about the Constitution, were automatically flagged. Dozens of conservative groups thus had their applications for 501(c) status effectively put on hold for up to two years. Activists complained that they were asked to fill out intrusive questionnaires that sought information about the groups’ activities—information that the IRS was, in fact, prohibited from asking about. One pro-life group was asked to “explain in detail” the activities conducted at its prayer meetings. At the time, none of the affected groups knew what was happening behind the scenes at the IRS, but the pattern of delayed applications was obvious. 

When members of Congress raised complaints, however, officials claimed ignorance. During a congressional hearing in March 2012, IRS Commissioner Douglas Shulman was asked directly by Louisiana Rep. Charles Boustany about “recent press allegations that the IRS is targeting certain Tea Party groups.” Shulman answered, “I can give you assurances…there’s absolutely no targeting.” Shulman testified under oath that what the groups were complaining about was just the “normal back-and-forth” of the application process. His testimony was subsequently proven false: For more than two years, there was a “BOLO” (be on the lookout) list that clearly targeted Tea Party groups and, as early as April 2010, a “Sensitive Case Report” about the applications had been sent to Lois Lerner, the IRS executive in charge of tax-exempt groups. Shulman subsequently claimed that at the time of that testimony he had been ignorant of what was going on inside his agency, but it’s clear that less than two months later, in May 2012, the IRS commissioner was briefed by the Treasury Department’s Inspector General for Tax Administration on the targeting of Tea Party groups.

This is the point where seemingly political motivations become difficult to ignore. In March 2012, Shulman was asked in sworn testimony about this scandal and denied any knowledge of it. Even if we stipulate that this denial was honest, Shulman clearly knew the truth by May 2012, six months before Obama came up for re-election. Obviously, if the truth about political targeting of the president’s enemies had become public at that point, it might have impacted the election campaign. Instead, somehow the truth was hushed up for months until May 2013, when Lois Lerner herself publicly admitted that Tea Party groups had indeed been targeted.

Immediately after Lerner’s admission, Shulman’s successor, acting IRS commissioner Steven Miller, tried to blame the whole thing on “rogue” employees in the agency’s Cincinnati office, an excuse that was quickly demonstrated as false. Obama denounced the abusive targeting as intolerable, promised to “hold the responsible parties accountable,” and said his administration “would work with Congress” on its investigations. Attorney General Eric Holder condemned the IRS’s actions as “outrageous and unacceptable” and announced that he had asked the FBI to investigate whether any laws had been broken. But the promised administration cooperation with congressional investigators never happened. Letters from Issa and other members of Congress seeking information were ignored, and more than six months passed before Bosserman was identified as the Justice official in charge of the investigation.

Bosserman is a career DOJ staffer—a civil servant—but her donations to Democrats indicate her partisan leanings, as does her closeness to Perez, an Obama political appointee. Perez is a Harvard Law alumnus who worked in the Clinton administration under Janet Reno and served as an adviser to the late Ted Kennedy in the 1990s. He went into Maryland politics as a Democrat, winning a seat on the Montgomery County Council representing affluent D.C. suburbanites before making an unsuccessful bid to become Maryland’s attorney general. Perez was chosen as Obama’s assistant attorney general for civil rights at a time when the division was increasingly focused on gay rights, including enforcement of a 2009 law (the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act) that the Obama administration helped push through Congress when Nancy Pelosi’s Democrats still controlled the House. At a speech to a gay-rights celebration in Cleveland, Ohio, three weeks before the 2010 mid-term elections, Perez declared, “The law is remarkable not only because of the new protections it provides, but because it marks the first time that the words, ‘sexual orientation’ and ‘gender identity’ appear in the U.S. Code to protect civil rights.” Bosserman worked closely with Perez to enforce the Obama administration’s gay-rights agenda. In May 2010, when “the nation’s first community conference to discuss implementing and enforcing the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act” convened in Atlanta, Bosserman presented “a legal overview” of the new law. A luncheon panel at the conference featured Perez’s senior counselor Matt Nosanchuk, an activist better known as the Obama administration’s “gay liaison” in the Justice Department.

The gay-rights angle of Bosserman’s work is not incidental to questions about the integrity of her IRS investigation. When the Shepard-Byrd bill was signed into law in October 2009, both Perez and Bosserman attended the bill-signing ceremony at the White House. A DOJ staffer told Fox News it was “extraordinary” for a career staffer like Bosserman to be invited to such an event. Combined with her political contributions to Obama and Democrats, this special treatment of Bosserman raised question marks for Issa and other Republicans on the House Oversight committee. In mid-January, Issa and Jordan sent a five-page letter to Perez that said Bosserman’s “participation in this event…would have to have been approved by you and other senior DOJ leaders” and that her White House visit “furthers the appearance of a conflict of interest and undercuts the integrity of the Administration’s IRS investigation.”

The letter by Issa and Jordan pointed out that Holder announced his investigation of the IRS scandal in May 2013, two months before Perez left DOJ to take the appointment as Labor secretary:

For the first two months of DOJ’s investigation, therefore, you led the Civil Rights Division and oversaw the Division’s work. We would expect that, at a minimum, you would have been consulted about the Division’s involvement in the IRS investigation and the appointment of Ms. Bosserman to lead the investigation. Presumably…you would have played a direct role in managing the work of your attorneys. Given the stated seriousness with which the Department of Justice was taking the IRS targeting allegations, the involvement of the Division you led in the investigation…and your supervision of the attorney tasked with leading the investigation, it is likely that you would have been personally involved in the matter.

Why was Perez’s evident role in choosing Bosserman to lead the investigation potentially so crucial? Because of his proven willingness to stonewall and mislead Congress, as Issa and Jordan’s letter explained: “Your potential role in the Administration’s IRS investigation is troubling in light of your pattern at DOJ of ignoring the rule of law for political benefit.” They cited Perez’s role in a dubious agreement with the city government of St. Paul, Minnesota: “Your quid pro quo manipulated the levers of justice and potentially cost American taxpayers $200 million.” An investigation of Perez’s attempts to conceal the truth about that deal—where the head of the DOJ’s Civil Rights division “used a whistleblower as a bargaining chip” to prevent a case involving liberal “disparate impact” discrimination policies from reaching the Supreme Court—revealed that he had illegally used a private email account to conduct official government business. Perez lied about these e-mails in an interview, and a congressional investigation found Perez “violated the Federal Records Act 35 separate time.” Perez “flatly and repeatedly refused to respond to congressional inquiries” and did not provide the requested emails even after they were subpoenaed by Congress, Issa and Jordan noted in their Jan. 14 letter. “With your history of manipulating justice to achieve your desired results, the Committee is very concerned about your potential role in the initial stages of the Administration’s IRS investigation,” they wrote, giving Perez a Jan. 28 deadline to “provide a full and complete explanation as to the circumstances, decision-making process, and reasons for Ms. Bosserman’s appointment.”

As might have been expected, Jan. 28 came and went without Perez complying. No one in the mainstream press bothered to notice the suspicious circumstances of the Bosserman-Perez connection, and the administration’s stonewalling of a congressional investigation made no headlines in the Washington Post or the New York Times

The media has been complacent,” said Becky Gerritson of the Wetumpka (Alabama) Tea Party, whose group was one of those the IRS targeted. In a telephone interview, Gerritson mentioned that the traffic-related “scandal” involving New Jersey Republican Gov. Chris Christie had gotten 17 times as much major network news coverage in a single 24-hour period as the IRS scandal had received in the previous six months. From July 2013 through early January 2014, ABC, CBS, and NBC had barely two minutes of coverage to IRS scandal, according to the Media Research Center’s Scott Whitlock. 

“Media bias is alive and well,” said Gerritson, whose emotional testimony to the House Ways and Means Committee was a highlight of the June 2013 hearings on the scandal. Gerritson told how, after applying for 501(c)4 status in October 2010, she was told to expect a response in 90 days. Instead, 15 months went by before she received a letter in February 2012 requesting that she supply detailed information, including the names of donors to her group. This demand was followed a month later by another letter signed by Lerner requesting that she supply the information. “This was not an accident,” Gerritson told the committee. “This is a willful act of intimidation intended to discourage a point of view. What the government did to our little group in Wetumpka, Alabama is un-American.”

Gerritson’s group is one of 41 plaintiffs in a civil lawsuit against IRS officials filed last year by the American Center for Law and Justice (ACLJ), which argues Obama and congressional Democrats helped encourage the targeting of Tea Party groups. “We now know that President Obama through his public comments initiated actions that resulted in the unlawful targeting of our clients,” ACLJ president Jay Sekulow said last October. “Congressional Democrats along with the media created a climate of hostility…”

Perhaps the most egregious example of that “climate of hostility” was the illegal release of donor information from the National Organization for Marriage (NOM). Congressional investigators say the source of that leak was an IRS staffer in Lerner’s Exempt Organizations Division. NOM opposes the legalization of same-sex marriage and the IRS leaker, who cannot be named because of confidentiality laws, provided NOM’s donor information to a gay activist, who then gave it to NOM’s arch-enemy, the pro-gay Human Rights Campaign. The illegal IRS leak led to news stories in 2012 identifying GOP presidential candidate Mitt Romney as a donor to the conservative group. NOM filed its own lawsuit against the IRS in October, and pointed out that former HRC president Joe Solmonese served as co-chairman of Obama’s re-election campaign. “This is a federal crime,” NOM president Brian Brown said. “Worse, the confidential information contained in the illegally leaked documents included the identity of dozens of our major donors and the HRC used this confidential donor information to harass our donors. This is a chilling set of circumstances that should ring alarm bells across the nation.”

None of those alarm bells were ringing in the newsrooms of liberal organizations like CBS News. For nearly six months beginning in late July 2013, CBS utterly ignored the IRS scandal. Then in January, a few days after the revelation of Bosserman’s donations to Democrats, unnamed “law enforcement officials” told the Wall Street Journal’s Devlin Barrett that the FBI “doesn’t plan to file criminal charges over the Internal Revenue Service’s heightened scrutiny of conservative groups,” reportedly because “investigators didn’t find the kind of political bias…that would amount to a violation of criminal law.” According to Barrett, the FBI found only “a mismanaged bureaucracy enforcing rules about tax-exemption applications it didn’t understand.” This report was the first information about the IRS scandal in nearly six months that CBS deemed newsworthy, and Norah O’Donnell quickly summarized it on her CBS This Morning broadcast: No criminal charges! No “proof of political bias”!

That news was shocking to Gerritson. “I have never been contacted [by investigators],” the Tea Party activist said. “For them to say ‘nothing to see here,’ when they haven’t talked to the victims—I’m just appalled.”

Similarly appalled was Texas Senator Ted Cruz, who called for the appointment of a special prosecutor and pointed out during a Jan. 29 hearing that no one had yet been charged with a crime in the scandal despite clear indication of illegal actions by IRS officials. Eric Holder was the witness in that Senate Judiciary Committee hearing, and the attorney general said: “I don’t have any basis to believe that the people who engaged in this investigation are doing so in a way other than investigations are normally done.” Recalling how both Holder and Obama had expressed outrage when the IRS scandal first became public, Cruz answered: “I would say a lot of American citizens have a basis to believe it, given 282 days have passed and no one has been indicted, 280 days have passed and many, if not all, of the victims have not even been interviewed, 280 days have passed and apparently the anger and outrage that both the president and you expressed has utterly disappeared.”

After that hearing, Cruz lamented how the media, instead of trying to “hold the administration accountable,” were instead acting as a “palace guard” for Obama. And indeed, the contrast with how journalists probed scandals in previous administrations is shocking. Woodward and Bernstein once became famous for exposing wrongdoing in the Nixon administration, but their would-be heirs are now looking the other way in deference to a president they adore. 

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About the Author

Robert Stacy McCain is co-author (with Lynn Vincent) of Donkey Cons: Sex, Crime, and Corruption in the Democratic Party (Nelson Current). He blogs at The Other McCain.