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Paul L. Caron
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Thursday, June 19, 2014

The IRS Scandal, Day 406

IRS Logo 2PrawfsBlawg:  IRS: "Sorry, Can't Produce" or a Bad Example of Hiding the Ball?, by Naomi Goodno (Pepperdine):

If this issue arose in federal court, under FRCP 26, parties are required at the outset to submit a "discovery plan" that includes how electronically stored information ("ESI") will be retained and exchanged in order to prevent unnecessary expense and waste. The FRCP requires the parties to take reasonable steps to preserve relevant ESI (a litigation hold) or face possible sanctions. Under Rule 37's so-called safe harbor provision, however, "absent exceptional circumstances, a court may not impose sanctions ... for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system." The IRS is hanging its hat on this safe harbor rule by arguing that, despite a good-faith effort, the emails were lost. Did the IRS, in fact, make a good faith effort?

While there is confusion among the courts on how to apply the good faith standard, there is precedent for a court to monetarily sanction the IRS if the court found that the IRS acted negligently when it lost the emails. The court would also have the authority to issue an adverse inference instruction (inferring that the lost evidence would have negatively impacted the IRS's position), if it determined that the IRS acted grossly negligent or willful.

An important fact which will probably be discussed during the next few hearings is whether the IRS violated its own electronic information retention policy. The IRS was put on notice of the investigation last year, and so had a duty to put a litigation hold on the emails at that time (the very essence of what "good faith" means). It seems that the general IRS retention policy of ESI was six months (although now it is longer), but emails of "official record" had to have a hard copy which would never be deleted. Whether these emails constituted an "official record" is hard to determine since Lerner won't testify to their content.

Even assuming the emails were lost before a litigation hold could be placed (or despite a litigation hold being in place), at the very minimum, it seems "good faith" means that the IRS should have notified Congress in February that it lost the emails. Rule 26 would have required Congress to do so. Indeed, such notice would have brought this issue to the forefront and could have saved a lot of money - the money it apparently has already cost to piece together some of the emails, and the money it will cost as the parties argue over whether the IRS negligently or willfully destroyed evidence. If the IRS had been upfront from the beginning, then subpoenas could have been issued months ago to other agencies who, as employers of the lost email recipients, might have copies of the missing emails.

If this discovery issue had arisen in federal court, the IRS would have likely been subject to monetary sanctions and possibly an adverse inference instruction. Shouldn't the IRS be held to these standards?

The Volokh Conspiracy:  The Missing 18 1/2 Minutes: Presidential Destruction of Incriminating Evidence, by Dave Kopel:

If one can imagine a modern-day President Frank Underwood, the lesson he might draw from the story of the 18 1/2 minute gap is that brazen destruction of highly incriminating evidence is the wisest political strategy. Even when the claim about how the evidence was destroyed was obviously false, there may be enough members of the President’s own party who will continue to look the other way, as long as they are not presented with a smoking gun. President Underwood might remember that Alexander Haig went on to become Secretary of State under Ronald Reagan. President Underwood might also tell the public that, as with Richard Nixon, many of his opponents were cynical partisan zealots. Like the mainstream media, anti-Nixon partisans had paid scant attention when Nixon’s predecessor, Democrat Lyndon Johnson, engaged in many of the same crimes and abuses as did Nixon. By the end of Johnson’s term in 1968, he was getting a lot of criticism from the press and from his own party for the Vietnam War, but not for his domestic violations of the U.S. Constitution and the U.S. Code.

In a two-party system, it is likely that the energy for investigations of a President of one party will come from the other party. Among the heroes of the story are the men like Baker, Richardson, and Ruckelsaus, who at a time when the Constitution was in danger, put the national interest above partisan interest.

Washington Post:  Democrats Should Want a Special Prosecutor for the IRS Scandal, by Ed Rogers:

In light of the Friday announcement that the IRS has lost an “untold” number of e-mails from Lois Lerner and six other IRS employees, it is safe to assume Lerner interrupted her taxpayer-funded retirement to hop on a cocktail table somewhere and do a fistpump. And you can bet there were high-fives at the Justice Department and thinly disguised giggles and thumbs-up at the White House.

The audacity of this takes stonewalling to a whole new level. It used to be that if you wanted to “stonewall,” you would just keep quiet. But this administration’s cronies will plead the fifth, conveniently not find evidence, drag their feet, shrug, cry partisanship and expect people to just get over it. ...

The corrosive effect of this diminishes America’s legal authority and makes for bad politics for the Democrats in November. How can the Democrats defend these “lost” e-mails? Who in a competitive 2014 race can keep a straight face and say they believe this president’s claims? If I were a Democrat, I would take Ways and Means Committee Chairman Dave Camp’s (R-Mich.) good advice and support a special prosecutor. It is the only way for Democrats to put distance between themselves and this grotesque violation of the public trust. 

They say where there’s smoke, there’s fire. Well, this is more than just a little smoke – Washington is choking on it. Democrats should want the political cover of supporting the appointment of a special prosecutor. They will need protection from the guffaws, disgust and outright retribution that will follow this scandal to the ballot box in November.

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Comments

IRS email retention was compromised by inadequate and out-of-date back-up technology, because of funding restrictions by the Republican budget sequestration and, especially, because George Bush spent IRS money on the Iraq war. Anyway, the White House “conducted a search for responsive documents and were unable to identify any communications between Lois Lerner and persons within the [Executive Office of the President] during the requested period,” so that should settle the issue, except for extreme skeptics on a witch hunt for political reasons and because they are racists. If anything, it’s worse for the White House, as the emails would have proven the Administration’s total innocence in alleged political attacks. It's more likely that the emails contained information about illegal activities by the Koch brothers, so they could be the ones behind the erasing. -- This comment has been approved by The Nation, Politico, Vox, MSNBC, CNN, ABC, Jay Carney, and Baghdad Bob.

Posted by: Woody | Jun 19, 2014 9:03:49 AM