The IRS Loses Lerner's Emails
And other news that the Beltway press corps won't cover.
WSJ Editorial, June 13, 2014
The IRS—remember those jaunty folks?—announced Friday that it can't find two years of emails from Lois Lerner to the Departments of Justice or Treasury. And none to the White House or Democrats on Capitol Hill. An agency spokesman blames a computer crash.
Never underestimate government incompetence, but how convenient. The former IRS Director of Exempt Organizations was at the center of the IRS targeting of conservative groups and still won't testify before Congress. Now we'll never know whose orders she was following, or what directions she was giving. If the Reagan White House had ever offered up this excuse, John Dingell would have held the entire government in contempt.
The suspicion that this is willful obstruction of Congress is all the more warranted because this week we also learned that the IRS, days before the 2010 election, shipped a 1.1 million page database about tax-exempt groups to the FBI. Why? New emails turned up by Darrell Issa's House Oversight Committee show Department of Justice officials worked with Ms. Lerner to investigate groups critical of President Obama.
How out of bounds was this data dump? Consider the usual procedure. The IRS is charged with granting tax-exempt status to social-welfare organizations that spend less than 50% of their resources on politics. If the IRS believes a group has violated those rules, it can assign an agent to investigate and revoke its tax-exempt status. This routinely happens and isn't a criminal offense.
U.S. Director of Exempt Organizations for the Internal Revenue Service Lois Lerner Reuters
Ms. Lerner, by contrast, shipped a database of 12,000 nonprofit tax returns to the FBI, the investigating agency for Justice's Criminal Division. The IRS, in other words, was inviting Justice to engage in a fishing expedition, and inviting people not even licensed to fish in that pond. The Criminal Division (rather than the Tax Division) investigates and prosecutes under the Internal Revenue Code only when the crimes involve IRS personnel.
The Criminal Division knows this, which explains why the emails show that Ms. Lerner was meeting to discuss the possibility of using different statutes, specifically campaign-finance laws, to prosecute nonprofits. A separate email from September 2010 shows Jack Smith, the head of Justice's Public Integrity Unit (part of the Criminal Division) musing over whether Justice might instead "ever charge a 371" against nonprofits. A "371" refers to a section of the U.S. Code that allows prosecutors to broadly claim a conspiracy to defraud the U.S. You know, conspiracies like exercising the right to free political speech.
The IRS has admitted that this database included confidential taxpayer information—including donor details—for at least 33 nonprofits. The IRS claims this was inadvertent, and Justice says neither it nor the FBI used any information for any "investigative purpose." This blasé attitude is astonishing given the law on confidential taxpayer information was created to prevent federal agencies from misusing the information. News of this release alone ought to cause IRS heads to roll.
The latest revelations are a further refutation of Ms. Lerner's claim that the IRS targeting trickled up from underlings in the Cincinnati office. And they strongly add to the evidence that the IRS and Justice were motivated to target by the frequent calls for action by the Obama Administration and Congressional Democrats.
One email from September 21, 2010 shows Sarah Hall Ingram, a senior IRS official, thanking the IRS media team for their work with a New York Times NYT -2.44% reporter on an article about nonprofits in elections. "I do think it came out pretty well," she writes, in an email that was also sent to Ms. Lerner. "The 'secret donor' theme will continue—see Obama salvo and today's [radio interview with House Democratic Rep. Chris Van Hollen ]."
Several nonprofit groups have recently filed complaints with the Senate Ethics Committee against nine Democratic Senators for improperly interfering with the IRS. It's one thing for Senators to ask an agency about the status of a rule or investigation. But it is extraordinary for Illinois's Dick Durbin to demand that tax authorities punish specific conservative organizations, or for Michigan's Carl Levin to order the IRS to hand over confidential nonprofit tax information.
And it's no surprise to learn that Justice's renewed interest in investigating nonprofits in early 2013 immediately followed a hearing by Rhode Island Sen. Sheldon Whitehouse in which he dragged in officials from Justice and the IRS and demanded action.
It somehow took a year for the IRS to locate these Lerner exchanges with Justice, though they were clearly subject to Mr. Issa's original subpoenas. The Oversight Committee had to subpoena Justice to obtain them, and it only knew to do that after it was tipped to the correspondence by discoveries from the watchdog group Judicial Watch. Justice continues to drag its feet in offering up witnesses and documents. And now we have the two years of emails that have simply vanished into the government ether.
New IRS Commissioner John Koskinen promised to cooperate with Congress. But either he is being undermined by his staff, or he's aiding the agency's stonewalling. And now that we know that Justice was canoodling with Ms. Lerner, its own dilatory investigation becomes easier to understand. Or maybe that was a computer crash too.