The IRS Scandal, Day 898

Wall Street Journal, Obama’s Lobbying of the FBI Flouts the Law: President Obama Is Signaling to Any Willing Listener in the FBI What Action He Wants the FBI to Take:

President Obama’s recent comments in his “60 Minutes” interview about the Hillary Clinton email scandal remind me of his 2010-11 comments about right-wing PACs, which led Lois Lerner to deny fair and equal treatment to conservative PACs. Just by making the comment, President Obama is signaling to any willing listener in the FBI what action he wants the FBI to take. Let’s hope that there is no “Lois Lerner” figure in a position to follow the president’s instructions, and instead that the FBI will proceed in accordance with independent efforts to fulfill its legitimate duties and not subvert those duties to a desired political outcome.

Letter From Peter J. Kadzik (Assistant Attorney General) to Bob Goodlatte (Chair, House Judiciary Committee) and John Conyers, Jr. (Ranking Member, House Judiciary Committee), Oct. 23, 2015:

We write to inform you about the Department of Justice's criminal investigation into whether any IRS officials committed crimes in connection with the handling of tax-exemption applications filed by Tea Party and ideologically similar organizations. Consistent with statements from the Department of Justice (the Department) throughout the investigation, we are pleased to provide additional information regarding this matter now that we have concluded our investigation. In recognition of not only our commitment to provide such information in this case, but also the Committee's interest in this particular matter, we now provide a short summary of our investigative findings.

In collaboration with the FBI and Treasury Inspector General for Tax Administration (TIGTA), the Department's Criminal and Civil Rights Divisions conducted an exhaustive probe. We conducted more than 100 witness interviews, collected more than one million pages of IRS documents, analyzed almost 500 tax-exemption applications, examined the role and potential culpability of scores of IRS employees, and considered the applicability of civil rights, tax administration, and obstruction statutes.  Our investigation uncovered substantial evidence of mismanagement, poor judgment, and institutional inertia, leading to the belief by many tax­ exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime. We found no evidence that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives that would support a criminal prosecution. We also found no evidence that any official involved in the handling of tax-exempt applications or IRS leadership attempted to obstruct justice.  Based on the evidence developed in this investigation and the recommendation of experienced career prosecutors and supervising attorneys at the Department, we are closing our investigation and will not seek any criminal charges.

Throughout the investigation, not a single IRS employee reported any allegation, concern, or suspicion that the handling of tax-exempt applications-or any other IRS function­ was motivated by political bias, discriminatory intent, or corruption. Among these witnesses were several IRS employees who were critical of Ms. Lerner’s and other officials’ leadership, as well as others who volunteered to us that they are politically conservative. Moreover, both TIGTA and the IRS’s Whistleblower Office confirmed that neither has received internal complaints from IRS employees alleging that officials’ handling of tax-exempt applications was motivated by political or other discriminatory bias. ...

The Department searched exhaustively for evidence that any IRS employee deliberately targeted an applicant or group of applicants for scrutiny, delay, denial, or other adverse treatment because of their viewpoint. Intentional viewpoint discrimination may violate civil rights statutes, which criminalize acting under color of law to willfully deprive a person of rights protected by the Constitution or federal law. See 18 U.S.C. §§ 241, 242. Intentional viewpoint discrimination may also violate criminal tax statutes that prohibit IRS employees from committing willful oppression under color of law, for example by deliberately failing to perform official duties with the intent of defeating the due administration of revenue laws, or by corruptly impeding or obstructing the administration of the Tax Code. See 26 U.S.C. §§ 7214(a)(l ), 7214(a)(3), 7212(a). These statutes require proof beyond a reasonable doubt that an IRS official specifically intended to violate the Constitution, Tax Code, or another federal law.

As applied to this case, a criminal prosecution under any of these statutes would require proof that an IRS official intentionally discriminated against an applicant based upon viewpoint. It would be insufficient to prove only that IRS employees used inappropriate criteria to coordinate the review of applications, acted in ways that resulted in the delay of the processing applications, or disproportionately subjected some applicants to burdensome or unnecessary questions. Instead, we would have to prove that such actions were undertaken for the very purpose of harassing or harming applicants. Proof that an IRS employee acted in good faith would be a complete defense to a criminal charge; and proof that an IRS employee acted because of mistake, bad judgment, ignorance, inertia, or even negligence would be insufficient to support a criminal charge.

Our investigation found no evidence that any IRS employee acted with criminal intent. We analyzed the culpability of every IRS employee who played a role in coordinating for review applications or handling them afterwards, from line-level revenue agents and managers in the Cincinnati-based Determinations Unit, to tax law specialists and senior executive officials based in Washington, D.C. Apart from the belief by many tax-exempt applicants affiliated with the Tea Party and similar ideologies that they had been targeted, we found no evidence that any IRS employee intentionally discriminated against these groups based upon their viewpoints. To the contrary, the evidence indicates that the decisions made by IRS employees, though misdirected, were motivated by the desire to treat similar applications consistently and avoid making incorrect decisions. Their plans to treat applications consistently were poorly implemented, due to a combination of ignorance about how to apply section 501(c)(4)'s requirements to organizations engaged in political activity, lack of guidance from subject matter experts about how to make decisions in an area most witnesses described as difficult, and repeated communication and management issues. Moreover, many employees failed to engage in critical thought about the effect their actions (or inactions) would have upon those who applied for tax-exempt status. We found that many IRS employees' failure to give adequate attention to the applications at issue was caused by competing demands on their time and an unwillingness to be held accountable for difficult decisions over sensitive matters. We did not, however, uncover any evidence that any of these employees were motivated by intentional viewpoint discrimination.

The IRS mishandled the processing of tax-exempt applications in a manner that disproportionately impacted applicants affiliated with the Tea Party and similar groups, leaving the appearance that the IRS' s conduct was motivated by political, discriminatory, corrupt, or other inappropriate motive.  However, ineffective management is not a crime.  The Department of Justice's exhaustive probe revealed no evidence that would support a criminal prosecution. What occurred is disquieting and may necessitate corrective action - but it does not warrant criminal prosecution.

We hope this information is helpful. We have made a substantial  effort  to  provide detailed information regarding our findings in this letter, and would be pleased to offer a briefing to address any questions you may have on this matter. Please do not hesitate to contact this office if we may provide additional assistance regarding this or any other matter.

• Americans for Tax Reform, Obama Justice Department Lets Lois Lerner Walk Free
• The Atlantic, No Charges for Lois Lerner
• CNN, DOJ Closes IRS Investigation With No Charges
• Daily Beast, DOJ: No Charges for Former IRS Official Lois Lerner
• Daily Caller, Justice Department Lets Lois Lerner Off The Hook 
• Kelly Phillips Erb (Forbes), DOJ Says No Criminal Charges For Lerner, Others In IRS Scandal, Closes Investigation
• Fiscal Times, Lois Lerner Is Cleared, Sparking Conservative Fury
• Fox News, Justice Department: No Criminal Charges for Lerner, Others in IRS Scandal
• The Hill, DOJ Ends Lois Lerner Probe Without Bringing Charges
• The Hill, Republicans: DOJ Let Lerner 'Off the Hook'
• William Jacobson (Cornell), DOJ – Lois Lerner to Face No Criminal Charges
• New York Times, Justice Dept.: No Criminal Charges for Ex-IRS Official
• Politico, Congressional GOP: Decision Not to Prosecute Lerner Won't Deter Probes
• Reason, DOJ Closes Investigation Into IRS Political Targeting, Won't Charge Lois Lerner
• Peter Reilly (Forbes), No Orange Jumpsuit For Lois Lerner
• Talking Points Memo, Former IRS Official Accused Of Targeting Tea Partiers Will Not Face Charges
• USA Today, DOJ: No Criminal Charges in IRS Tea Party Probe
• Wall Street Journal, U.S. Won’t Prosecute Former IRS Official Lois Lerner
• Washington Examiner, GOP Outraged as Lois Lerner Escapes
• Washington Free Beacon, DOJ: Lois Lerner Will Not Face Criminal Charges in Targeting Scandal
• Washington Post, No Criminal Charges Will be Filed Against Ex-IRS Official Lois Lerner
• Washington Times, Feds Clear IRS, Lois Lerner of Criminal Behavior in Tea Party Scandal
• Robert Wood (Forbes), No Criminal Charges For Lois Lerner (Or Her Emailing Dog). What IRS Targeting?

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