House Ways and Means Committee chairman Dave Camp, R-Mich., and Ways and Means Oversight Subcommittee chairman Charles Boustany, Jr., R-La., have written a letter to the advocacy group Democracy 21 asking it to provide all communications with the former director of the Internal Revenue Service’s Exempt Organizations unit, Lois Lerner, including emails.
They are specifically seeking emails regarding applications for tax-exempt status by Crossroads GPS, a group co-founded by Karl Rove, the architect behind George W. Bush’s gubernatorial and presidential campaigns, which provided crucial funding to Republican candidates during the 2010 and 2012 elections. However, Democracy 21 president Fred Wertheimer said he doubted there were any emails between his group and Lerner, but said there was a public letter, which his group will provide to the congressmen.
“We’ll comply with their request,” he told Accounting Today on Wednesday.
When asked if his group would provide emails to the committee investigators, he asked, “What emails?” Asked about whether there were other communications, Wertheimer said, “Whatever communications we had, we’ll provide.”
“Look, we’ll have to go through our files,” he added. “I think we will find very little communication.”
Asked if there was any communication about Crossroads GPS with the IRS, Wertheimer admitted that his group had sent a letter, which it made public. “We sent a public letter in October 2010, which they’re aware of, to the IRS, to the commissioner, and to Lerner, raising concerns about a group and asking them for an investigation. That was a public letter. I’m sure they have it. We’ll go through our files, but I doubt that we’re going to find anything beyond that communication.”
He declined to comment on his impressions of his group’s dealings with Lerner.
“We’ll go through our files and we’ll comply, but don’t assume there was any email communications beyond the public letter we sent,” he added.
Camp, Boustany and other Republican members of Congress have been pressing the IRS to provide emails and other communications by Lerner, who has asserted her Fifth Amendment right not to answer questions during a pair of congressional hearings probing the extra scrutiny that her group gave to political groups, particularly those affiliated with the Tea Party, when they applied for tax-exempt status under Section 501(c)4 of the Tax Code. That section is supposed to apply to “social welfare” organizations but has also been used by political groups who do not wish to disclose the names of their donors.
Last month, the IRS admitted that it had lost two years’ worth of emails between Lerner and people outside the agency because her laptop computer had crashed in 2011 and technicians at the agency had been unable to recover the files on her hard drive (see IRS Lost 2 Years of Lois Lerner’s Emails with Outsiders).
However, the IRS said it was providing 67,000 emails that Lerner had exchanged with other IRS employees since those had been backed up by the IRS. But Republicans in Congress have also demanded to know more about Lerner’s emails with outsiders, in an effort to find out if Lerner coordinated her unit’s scrutiny of conservative groups with the White House. So far, there has been no evidence of that, but Camp and Boustany have expanded the probe to include liberal groups that had requested the IRS to look into illegal campaign activity by tax-exempt organizations.
They claimed that investigators have found that Lerner corresponded and personally met with representatives of Democracy 21 to discuss certain conservative groups that were subsequently targeted by Lerner and the IRS.
“Our investigation has found close coordination between Democracy 21 and Lerner,” Camp and Boustany said in a statement Wednesday. “Lerner knew no limits—when she received a complaint about a conservative group she took direct and immediate action. Since the IRS has destroyed over two years of Lerner emails, these documents are central to determining the full extent of the IRS’s targeting of conservatives. We expect Democracy 21 will fully cooperate with the Committee so we can get all the facts.”
According to Republicans on the Ways and Means Committee, Democracy 21 and the Campaign Legal Center wrote a complaint to then-IRS Commissioner Douglas Shulman and Lerner regarding conservative group Crossroads GPS on Oct. 5, 2010. Later, on July 27, 2011, they sent a complaint focused on Crossroads and a left-leaning group, Priorities USA. On Dec. 14, 2012, Democracy 21 requested a meeting with Lerner to discuss the petition. According to Boustany and Camp, Lerner’s email traffic indicated that, upon receiving Democracy 21’s request, she targeted only the conservative groups.
The committee’s April 2014 criminal referral of Lerner to the Department of Justice describes Lerner and the IRS’s targeting of conservatives and coordination with Democracy 21. Lerner’s calendar showed a Jan. 4, 2013 meeting with Democracy 21 that was blocked off for 11:00 AM to noon and, based on Lerner’s subsequent actions, Camp and Boustany’s office said it is clear that the meeting went forward as planned.
Before or soon after the meeting, Lerner apparently contacted Tom Miller of the Exempt Organization’s Technical unit to ask about the status of Crossroads (whether the group had been audited or selected for audit) because he replied by email at 1:55 PM, the same day that the group had twice been before the Political Action Review Committee (PARC), in November 2010 and June 2011, but was not selected for audit.
According to Camp and Boustany’s office, Lerner’s interest in Crossroads was not limited to a mere inquiry of the status of the group’s application. Upon learning that Crossroads was not being audited, Lerner contacted her counterpart in the IRS’s audit function to find out why, and coordinate a denial of the group’s application.
Following Miller’s response, Lerner sent an email to Nanette Downing, the director of the Exempt Organizations Examinations Unit in Dallas, demanding to know why Crossroads had not been audited.
“I had a meeting today with an organization that was asking us to consider guidance on the c4 issue,” she wrote. “To get ready for the meeting, I asked for every document that [sic] had sent in over the last several years because I knew they had sent in several referrals. I reviewed the information last night and thought the allegations in the documents were really damning, so wondered why we hadn't done something with the org. The first complaint came in 2010 and there were additional ones in 2011 and 2012...The organization at issue is Crossroads GPS I know the org is now in the ROO—based on allegations sent in this year, but this is an org that was a prime candidate for exam when the referrals and 990s first came in. You should know that we are working on a denial of the application, which may solve the problem because we probably will say it isn’t exempt. Please make sure all moves regarding the org are coordinated up here before we do anything.”
On the following Monday, Jan. 7, 2013, Lerner sent a follow-up email to Downing stating, “As I said, we are working on the denial for the [Crossroads] 1024, so I need to think about whether to open an exam. I think yes, but let me cogitate a bit on it.”
Interviews with IRS personnel and a review of Crossroad’s file indicated to Republicans on the committee that Lerner was seeking to ensure a denial of the group. Lerner’s meeting with Democracy 21 and her subsequent focus on Crossroads translated into a “flurry of work” on the group’s application, according to Republicans on the committee, who claim that Lerner’s plan to deny the Crossroad application is evident from the work log for the Cincinnati-based revenue agent assigned to the case, as after her Jan. 4, 2013 meeting with Democracy 21, the agent took action.
In the seven business days following her meeting, investigators found that revenue agent Joseph Herr logged more time on the application than the entire year preceding. Camp and Boustany’s office claim that the log indicated that Herr was directed to reach a particular result with Crossroads:
On Jan. 4, 2013, Herr noted a conference call with EOT, the Exempt Organizations Technical Division, in D.C., where specific guidance was given to him on “how to best proceed with the [Crossroads] case.” On January 7, this guidance from EOT was described in Herr’s time sheet: “[b]ased on conference begin reviewing case information, tax law, and draft/template advocacy denial letter, all to think about how best to compose the denial letter.”
In the next journal entry from Herr, he noted,“[w]rite-up summary of idea on how I plan to make denial argument and share with Sharon Light, the Special Advisor to EO Director in Washington DC, for her opinion on whether the idea seems valid.”
Nowhere in his 2012 log entries was there any discussion of denial, according to Republicans on the committee. In an analysis of the Crossroads application in November 2011, among many others, EO Technical lawyer Hillary Goehausen made no recommendation for denial.
The committee subsequently learned that the agency was in the process of denying Crossroads’ application for tax-exempt status and selecting them for audit. Judson informed the staff the organization would be receiving a proposed denial letter. An IRS representative separately told the staff that Crossroads had also been selected for audit. Republicans on the committee claimed the evidence shows that without Lerner’s intervention, neither adverse action would have been taken against Crossroads. Camp and Boustany’s office said they have found no record of Lerner pursuing similarly situated left-leaning groups, despite receiving similar public complaints.
Democrats on the committee, however, have pointed to evidence that the Exempt Organizations unit was also giving extra scrutiny to applications from left-leaning groups by using terms such as “Progressive” and “Occupy” on so-called BOLO, short for “Be On the Look-Out,” lists, in addition to filtering applications from groups on the right using terms such as “Tea Party," “Patriot” and “9/12.”
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