In relat­ed news...:

The New York Times
Ear­ly E‑Mails on Beng­hazi Show Inter­nal Divi­sions

By MARK LANDLER, ERIC SCHMITT and MICHAEL D. SHEAR
Pub­lished: May 15, 2013

WASHINGTON — E‑mails released by the White House on Wednes­day revealed a fierce inter­nal jostling over the government’s offi­cial talk­ing points in the after­math of last September’s attack in Beng­hazi, Libya, not only between the State Depart­ment and the Cen­tral Intel­li­gence Agency, but at the high­est lev­els of the C.I.A.

The 100 pages of e‑mails showed a dis­agree­ment between David H. Petraeus, then the direc­tor of the C.I.A., and his deputy, Michael J. Morell, over how much to dis­close in the talk­ing points, which were used by Susan E. Rice, the ambas­sador to the Unit­ed Nations, in tele­vi­sion appear­ances days after the attack.

Mr. Morell, admin­is­tra­tion offi­cials said, delet­ed a ref­er­ence in the draft ver­sion of the talk­ing points to C.I.A. warn­ings of extrem­ist threats in Libya, which State Depart­ment offi­cials object­ed to because they feared it would reflect bad­ly on them.

Mr. Morell, offi­cials said, act­ed on his own and not in response to pres­sure from the State Depart­ment. But when the final draft of the talk­ing points was sent to Mr. Petraeus, he dis­missed them, say­ing “Frankly, I’d just as soon not use this,” adding that the heav­i­ly scrubbed account would not sat­is­fy the House Demo­c­rat who had request­ed it.

“This is cer­tain­ly not what Vice Chair­man Rup­pers­berg­er was hop­ing to get,” Mr. Petraeus wrote, refer­ring to Rep­re­sen­ta­tive C. A. Dutch Rup­pers­berg­er of Mary­land, the top Demo­c­rat on the House Intel­li­gence Com­mit­tee, which had asked Mr. Petraeus for talk­ing points to use with reporters in dis­cussing the attack on Beng­hazi.

The White House released the e‑mails to reporters after Repub­li­cans seized on snip­pets of the cor­re­spon­dence that became pub­lic on Fri­day to sug­gest that Pres­i­dent Obama’s nation­al secu­ri­ty staff had been com­plic­it in try­ing to alter the talk­ing points for polit­i­cal rea­sons.

While the e‑mails por­trayed White House offi­cials as being sen­si­tive to the con­cerns of the State Depart­ment, they sug­gest that Mr. Obama’s aides most­ly medi­at­ed a bureau­crat­ic tug of war between the State Depart­ment and the C.I.A. over how much to dis­close — all under heavy time con­straints because of the demands from Capi­tol Hill. The e‑mails revealed no new details about the administration’s evolv­ing account of the Sept. 11 attack, which killed four Amer­i­cans, includ­ing Ambas­sador J. Christo­pher Stevens.

“In recent days, these e‑mails have been selec­tive­ly and inac­cu­rate­ly read out to the media,” said a White House spokesman, Eric Schultz. By releas­ing them, he said, the White House had shown that the draft­ing process was “focused on pro­vid­ing the facts as we knew them, based on the best infor­ma­tion avail­able at the time and pro­tect­ing an ongo­ing inves­ti­ga­tion.”

Still, the final ver­sion of the talk­ing points is stripped of mate­r­i­al — includ­ing a ref­er­ence to Libya being awash with weapons and fight­ers that made it a dan­ger­ous envi­ron­ment — which crit­ics say would have raised ques­tions about the State Department’s secu­ri­ty pos­ture.

Repub­li­cans wel­comed the release of the e‑mails, say­ing they con­firmed that the admin­is­tra­tion had air­brushed its account of the attack dur­ing an elec­tion cam­paign. They also said the e‑mails belied the White House’s insis­tence that it had changed only one word in the talk­ing points.

“The seem­ing­ly polit­i­cal nature of the State Department’s con­cerns rais­es ques­tions about the moti­va­tions behind these changes and who at the State Depart­ment was seek­ing them,” said Bren­dan Buck, a spokesman for Speak­er John A. Boehn­er.

...

Note that cur­rent “IRS scan­dal” is also kind of mutu­al­ly exclu­sive from the big­ger, large­ly ignored “IRS scan­dal”:

Con­sor­tium News
Miss­ing the Big­ger IRS ‘Scan­dal’
May 16, 2013

The Wash­ing­ton press corps is in hot pur­suit of “Oba­ma scan­dals,” stam­ped­ing offi­cials into var­i­ous rush­es to judg­ment while miss­ing the big­ger scan­dals under­ly­ing the excite­ment du jour, such as the sys­tem­at­ic abuse of fed­er­al tax-exempt sta­tus for secret polit­i­cal dona­tions, as William Board­man notes.

By Will­liam Board­man

Karl Rove is the real poster boy for the so-called Inter­nal Rev­enue Ser­vice “scan­dal” of mid-lev­el func­tionar­ies tak­ing a clos­er look at appli­ca­tions by polit­i­cal orga­ni­za­tions seek­ing a 501(c)(4) tax sta­tus that makes them not only tax-exempt but pro­tects their donors with anonymi­ty.

That 501(c )(4) is one sweet deal: not only do these orga­ni­za­tions get untrace­able, tax-free mon­ey laun­der­ing for their polit­i­cal activ­i­ties, they get a tax­pay­er sub­sidy to do it. It was not always such: some of these activ­i­ties used to be ille­gal.

Peo­ple work­ing for the Com­mit­tee to Re-Elect the Pres­i­dent (CREEP) – Richard Nixon’s cam­paign orga­ni­za­tion in 1972 – were con­vict­ed of law-break­ing, as were some cor­po­rate donors. CREEP was “ille­gal­ly haul­ing in many mil­lions of dol­lars from cor­po­ra­tions, many of which felt pres­sured into mak­ing con­tri­bu­tions,” wrote Jill Abram­son of the New York Times in a 2010 arti­cle about the rapid­ly chang­ing rules on polit­i­cal con­tri­bu­tions.

“The fund-rais­ing prac­tices that earned peo­ple con­vic­tions in Water­gate — giv­ing direct cor­po­rate mon­ey to a cam­paign and doing so secret­ly — are back in a dif­fer­ent form in 2010. This time around, the cor­po­ra­tions are still giv­ing secret­ly, but legal­ly,” Abram­son wrote.

“This elec­tion year is the first since the Supreme Court’s Cit­i­zens Unit­ed deci­sion, which allows cor­po­ra­tions for the first time to finance ads that direct­ly sup­port or oppose polit­i­cal can­di­dates. And tax laws and loop­holes have per­mit­ted a shad­ow cam­paign net­work of Repub­li­can-lean­ing non­prof­it groups to col­lect a flood of anony­mous dona­tions and spend it wide­ly.”

Indeed, Abram­son not­ed, “Some play­ers shak­ing the cor­po­rate mon­ey trees for non­prof­it groups this year cut their teeth in the Nixon re-elec­tion cam­paign. … There is Fred Malek, a founder of the Amer­i­can Action Net­work, [who] was the White House per­son­nel chief in 1972 and helped dis­pense patron­age for major Nixon donors as well as serv­ing as deputy direc­tor of Creep. … The Amer­i­can Action Net­work shares office space with Amer­i­can Cross­roads, led by Mr. Rove, who also was an active par­tic­i­pant in Nixon’s re-elec­tion as exec­u­tive direc­tor of the Col­lege Repub­li­can Nation­al Com­mit­tee.”

Ear­ly in 2010, Rove found­ed Amer­i­can Cross­roads, a per­fect­ly legal, open­ly polit­i­cal, tax-exempt 527 orga­ni­za­tion, with no lim­its on the amount or source of their con­tri­bu­tions, and no spend­ing lim­its. Despite these free­doms, 527s were still pro­hib­it­ed from open­ly sup­port­ing par­tic­u­lar can­di­dates, and they had to reg­is­ter with the IRS, dis­close donors, and file reports.

The Prob­lem: Some Trans­paren­cy

These 527 orga­ni­za­tions (a broad cat­e­go­ry that includes Super PACs) have been an open cha­rade in the demo­c­ra­t­ic process for years, avoid­ing direct sup­port of can­di­dates while pro­duc­ing mate­r­i­al that could only sup­port their cho­sen can­di­dates. For exam­ple, the 527 orga­ni­za­tion Swift Boat Vet­er­ans for Truth attacked pres­i­den­tial can­di­date John Ker­ry dur­ing the 2004 elec­tion, with­out express­ing direct sup­port for Pres­i­dent George W. Bush.

In June 2010, Karl Rove and Amer­i­can Cross­roads found­ed Cross­roads GPS (Grass­roots Pol­i­cy Strate­gies) that, as a 501(c)(4), had even few­er con­straints. Amer­i­can Cross­roads was one of 1,500 appli­cants for 501(c)(4) sta­tus in 2010. In 2012 there were some 3,400 appli­ca­tions.

Accord­ing to the Inter­nal Rev­enue Code passed by Con­gress, 501(c)(4) sta­tus is reserved for “civic leagues or orga­ni­za­tions not orga­nized for prof­it but oper­at­ed exclu­sive­ly for the pro­mo­tion of social wel­fare” [empha­sis added]. In 1959, dur­ing the Eisen­how­er admin­is­tra­tion, the IRS decid­ed to ignore the let­ter of the law, and wrote rules for 501(c)(4) orga­ni­za­tions requir­ing only that they be pri­mar­i­ly for the pro­mo­tion of social wel­fare.

The dif­fer­ence between “exclu­sive­ly” and “pri­mar­i­ly” cre­at­ed a loop­hole even a non-lawyer could exploit, but it became most use­ful to $100 mil­lion out­fits like Amer­i­can Cross­roads only after the Supreme Court, with its Jan­u­ary 2010, 5–4 deci­sion in Cit­i­zens Unit­ed (558 US 310), opened the Amer­i­can polit­i­cal process to vir­tu­al­ly any mon­ey from any source, with almost no duty to dis­close any­thing.

Sim­i­lar­ly, the emer­gence of 527 orga­ni­za­tions derived from anoth­er Supreme Court deci­sion, Buck­ley v Valeo (424 US 1) in Jan­u­ary 1976, rep­re­sent­ing the court’s push­back against fed­er­al elec­tion laws passed by Con­gress to address some of the recent Water­gate abus­es. Issued as an anony­mous deci­sion “by the court” (with two, oppos­ing dis­sents), Buck­ley effec­tive­ly gave mon­ey the same legal stand­ing as speech, com­plete with First Amend­ment pro­tec­tion, albeit with some restric­tions. Cit­i­zens Unit­ed effec­tive­ly removed those restric­tions.

Since 2010, the IRS has faced an unex­pect­ed flood of appli­ca­tions for 501(c )(4) sta­tus from essen­tial­ly polit­i­cal orga­ni­za­tions of all stripes, but espe­cial­ly from con­ser­v­a­tive orga­ni­za­tions. It’s hard to find any­one who argues that the IRS respond­ed prop­er­ly or effec­tive­ly to this exi­gency, but it’s even hard­er to find any­thing but exe­crable report­ing on it either, although there is some good work (by Chris Hayes, Lawrence O’Donnell, Jef­frey Toobin, among oth­ers).

Ear­ly report­ing by the Asso­ci­at­ed Press on May 11 took the sto­ry off the rails in the first sen­tence by claim­ing that IRS “agents were tar­get­ing tea par­ty groups as ear­ly as 2011,” attribut­ing the claim to a par­tial draft of a leaked report, and then repeat­ing the claim in the next sen­tence. The New York Time sto­ry the same day start­ed with a mis­lead­ing ref­er­ence to “overzeal­ous audits.”

The sto­ry got so dis­tort­ed and detached from real­i­ty that even Pres­i­dent Barack Oba­ma in his May 13 remarks didn’t have much of a han­dle on it.

The Real­i­ty of 501(c )(4) Scams

The first step toward under­stand­ing this IRS sto­ry is to real­ize that the issue of 501(c )(4) orga­ni­za­tions car­ry­ing out polit­i­cal activ­i­ties – which should be ille­gal under fed­er­al law – is a real prob­lem and is wide­ly rec­og­nized.

Sen­a­tors Carl Levin, D‑Michigan, and John McCain, R‑Arizona, who co-chair an IRS over­sight com­mit­tee, released a state­ment on May 13, say­ing in part: “The Per­ma­nent Sub­com­mit­tee on Inves­ti­ga­tions has been for sev­er­al months exam­in­ing on a bipar­ti­san basis whether the IRS has ade­quate­ly enforced rules regard­ing the extent to which tax exempt non­prof­it 501(c)(4) groups engage in par­ti­san pol­i­tics. [empha­sis added]

“We had ten­ta­tive­ly planned a hear­ing on that issue for June. After Friday’s announce­ment that the IRS, to the extent it has been enforc­ing the law, may have done so in ways that sin­gled out some groups for spe­cial scruti­ny, we have deter­mined that the sub­com­mit­tee should inves­ti­gate that addi­tion­al issue as well. As a result, we have decid­ed to delay our hear­ing in order to exam­ine this issue care­ful­ly.”

In oth­er words, the subcommittee’s con­cern was lax IRS enforce­ment against a per­ceived abuse of the tax code, and this con­cern is real­i­ty-based, even though McCain is quot­ed as talk­ing about “audits” of tea par­ty groups – which is not part of the real­i­ty of this issue. There were no audits. There was an evolv­ing and almost com­i­cal­ly inef­fec­tu­al effort by the IRS to sort out 501(c)(4) appli­ca­tions to reduce the num­ber of polit­i­cal orga­ni­za­tions seek­ing tax shel­ter as “social wel­fare” orga­ni­za­tions.

By May 14, the basic real­i­ty of IRS behav­ior dur­ing 2010–2012, while it was still direct­ed by a Bush appointee, still had not emerged. The direc­tor of the tax-exempt divi­sion of IRS said that about 300 appli­ca­tions for 501(c )(4) sta­tus were giv­en spe­cial scruti­ny, and of those about 75 were for “tea par­ty” or sim­i­lar­ly tagged orga­ni­za­tions.

The IRS has not indi­cat­ed who made the oth­er 225 appli­ca­tions that got spe­cial atten­tion, but they were appar­ent­ly not con­ser­v­a­tive or tea par­ty-like groups. Accord­ing to the IRS, not one of the appli­ca­tions was denied. Accord­ing to the head of the Ken­tucky 9/12 Project, his group refused to answer IRS ques­tions and was approved any­way.

...

The cur­rent state of the IRS “scan­dal”:

IRS Chief: Inap­pro­pri­ate Screen­ing Includ­ed Search Terms ‘Pro­gres­sive,’ ‘Occu­py,’ ‘Israel’
ALAN FRAM June 24, 2013, 3:19 PM

WASHINGTON (AP) — The Inter­nal Rev­enue Service’s screen­ing of groups seek­ing tax-exempt sta­tus was broad­er and last­ed longer than has been pre­vi­ous­ly dis­closed, the new head of the agency said Mon­day.

An inter­nal IRS doc­u­ment obtained by The Asso­ci­at­ed Press said that besides “tea par­ty,” lists used by screen­ers to pick groups for close exam­i­na­tion also includ­ed the terms “Israel,” ”Pro­gres­sive” and “Occu­py.” The doc­u­ment said an inves­ti­ga­tion into why spe­cif­ic terms were includ­ed was still under­way.

In a con­fer­ence call with reporters, Dan­ny Wer­fel said that after becom­ing act­ing IRS chief last month, he dis­cov­ered wide-rang­ing and improp­er terms on the lists and said screen­ers were still using them. He did not spec­i­fy what terms were on the lists, but said he sus­pend­ed the use of all such lists imme­di­ate­ly.

“There was a wide-rang­ing set of cat­e­gories and cas­es that spanned a broad spec­trum” on the lists, Wer­fel said. He added that his aides found those lists con­tained “inap­pro­pri­ate cri­te­ria that was in use.”

Werfel’s com­ments sug­gest the IRS may have been tar­get­ing groups oth­er than tea par­ty and oth­er con­ser­v­a­tive orga­ni­za­tions for tough exam­i­na­tions to see if they qual­i­fy. The agency has been under fire since last month for tar­get­ing those groups.

His com­ments also indi­cate that the use of inap­pro­pri­ate terms on such lists last­ed longer than has been revealed pre­vi­ous­ly. A report last month by a Trea­sury Depart­ment inspec­tor gen­er­al said agency offi­cials abol­ished tar­get­ing of con­ser­v­a­tive groups with those lists in May 2012.

..

Huh:

Bloomberg
IRS Inspec­tor Gen­er­al Dis­turbed by Doc­u­ments He Lacked
By Richard Rubin — Jul 18, 2013 3:22 PM CT

The Inter­nal Rev­enue Service’s inspec­tor gen­er­al told Con­gress he’s “dis­turbed” that he didn’t receive until this month a July 2010 doc­u­ment that men­tioned scruti­ny of “pro­gres­sive” non­prof­it groups.

“I am very dis­turbed that these doc­u­ments were not pro­vid­ed to our audi­tors at the out­set, and we are cur­rent­ly review­ing this issue,” J. Rus­sell George told the House Over­sight and Gov­ern­ment Reform Com­mit­tee. “I’m con­cerned that there may be addi­tion­al pieces of infor­ma­tion that we don’t have.”

George’s May 14 audit, show­ing the IRS sin­gled out Tea Par­ty groups that sought tax-exempt sta­tus, sparked a con­tro­ver­sy that has cost IRS exec­u­tives their jobs and led to a crim­i­nal inves­ti­ga­tion. Democ­rats have crit­i­cized George for fail­ing to dis­close that Repub­li­can-lean­ing groups weren’t the only ones that received extra scruti­ny.

The inquiries into the IRS have become increas­ing­ly par­ti­san as Repub­li­cans con­tin­ue their pur­suit of Wash­ing­ton-based IRS offi­cials who were involved in the review process.

‘Unan­swered Ques­tion’

“The big unan­swered ques­tion of all these hear­ings is why. Why were these groups tar­get­ed,” said Rep­re­sen­ta­tive Scott Des­Jar­lais, a Ten­nessee Repub­li­can. “There does seem to be some­body who doesn’t want the truth to come out.”

Democ­rats have argued that the ini­tial insin­u­a­tions by Repub­li­cans of a polit­i­cal con­spir­a­cy have proved to be untrue.

The doc­u­ments that were the focus of George’s com­ments today include a pre­sen­ta­tion that lumped pro­gres­sives with Tea Par­ty groups and meet­ing min­utes that said pro­gres­sives weren’t Tea Par­ty groups.

George said he doesn’t have com­plete find­ings on how pro­gres­sive groups were scru­ti­nized.

He said in his tes­ti­mo­ny that IRS offi­cials were the ones who said they had focused on Tea Par­ty groups for poten­tial imper­mis­si­ble polit­i­cal involve­ment and not pro­gres­sive groups iden­ti­fied in anoth­er part of a Be on the Look­out, or BOLO, doc­u­ment.

“We focused our audit on the BOLO entries shown in this doc­u­ment pre­cise­ly because the IRS rep­re­sent­ed that these were the cri­te­ria rel­e­vant to poten­tial polit­i­cal cas­es,” George said.

Pro-Demo­c­rat Groups

George said he had known since May 20 that there were BOLO list­ings that had includ­ed Demo­c­ra­t­ic-lean­ing groups. He said he would have writ­ten the audit dif­fer­ent­ly if he had known about that before­hand.

“You know people’s heads would explode if you talked about Tea Par­ty BOLOs and you didn’t men­tion any oth­er ones,” said Rep­re­sen­ta­tive Matthew Cartwright, a Penn­syl­va­nia Demo­c­rat.

George respond­ed to crit­i­cism from Democ­rats that he had blocked the release of cer­tain infor­ma­tion about Demo­c­ra­t­ic-lean­ing groups on the July 2010 doc­u­ment. He said the IRS changed its mind about whether that infor­ma­tion is sub­ject to tax­pay­er-pri­va­cy rules and that the inspec­tor general’s lawyers are review­ing the issue.

George also said that he had been told there was a “smok­ing gun” in e‑mails show­ing the ori­gins of the scruti­ny. That’s why inves­ti­ga­tors looked at 5,500 e‑mails and found no evi­dence of polit­i­cal moti­va­tion.

...

Well it’s nice to see that cleared up...not that it will make it a dif­fer­ence:

House GOP inves­ti­ga­tors say IRS treat­ed con­ser­v­a­tive groups worse than pro­gres­sive ones

By Asso­ci­at­ed Press, Pub­lished: July 30

WASHINGTON — Con­ser­v­a­tive groups seek­ing tax-exempt sta­tus were more close­ly scru­ti­nized by the Inter­nal Rev­enue Ser­vice than their pro­gres­sive coun­ter­parts, accord­ing to a report Tues­day by House Repub­li­can inves­ti­ga­tors.

Tea par­ty and oth­er con­ser­v­a­tive groups were, on aver­age, asked three times as many ques­tions as pro­gres­sive groups, said the report by Repub­li­cans on the House Ways and Means Com­mit­tee. Con­ser­v­a­tive groups were less like­ly to be approved for tax-exempt sta­tus and more like­ly to have their appli­ca­tions delayed, the report said.

...

Con­gres­sion­al inves­ti­ga­tions have so far shown that IRS super­vi­sors in Wash­ing­ton — includ­ing lawyers in the chief counsel’s office — over­saw the pro­cess­ing of tea par­ty appli­ca­tions. But there has been no evi­dence that any­one out­side the IRS direct­ed the tar­get­ing or that agents were polit­i­cal­ly moti­vat­ed.

“The facts are very clear — not only were con­ser­v­a­tive groups tar­get­ed by the IRS, but they received much high­er scruti­ny than pro­gres­sives,” said Rep. Dave Camp, R‑Mich., chair­man of the Ways and Means Com­mit­tee.

“How­ev­er, this is just the tip of the ice­berg,” Camp said. “We have received less than 3 per­cent of the doc­u­ments respon­sive to the inves­ti­ga­tion. So, Con­gress will con­tin­ue to inves­ti­gate how the tar­get­ing began, why it was allowed to con­tin­ue for so long and what the IRS is doing to resolve this. Amer­i­cans deserve to know the full truth.”

The IRS said in a state­ment that 70 agency lawyers are work­ing full-time to review doc­u­ments for con­gres­sion­al inquiries.

“The IRS is aggres­sive­ly respond­ing to the numer­ous data requests we’ve received from Con­gress,” IRS spokes­woman Michelle Eldridge said. “We are doing every­thing we can to ful­ly coop­er­ate with the com­mit­tees, and we strong­ly dis­agree with any sug­ges­tions to the con­trary.”

A report by the IRS inspec­tor gen­er­al said the agency gave extra scruti­ny to 298 groups when they applied for tax exempt sta­tus from the spring of 2010 to the spring of 2012.

A total of 104 appli­ca­tions includ­ed the labels “con­ser­v­a­tive,” ‘’tea par­ty,” ‘’patri­ot” or “9–12” in their names, accord­ing to the Ways and Means report, which is con­sis­tent with the inspec­tor general’s report. Sev­en includ­ed the words “pro­gres­sive” or “progress.”

While pro­cess­ing the appli­ca­tions, IRS agents asked the pro­gres­sive groups an aver­age of 4.7 ques­tions and even­tu­al­ly approved all sev­en appli­ca­tions, accord­ing to the analy­sis by Ways and Means Repub­li­cans. Some pro­gres­sive groups, how­ev­er, com­plained about lengthy delays.

The con­ser­v­a­tive groups were asked an aver­age of 14.9 ques­tions and, as of May 31, only 48 appli­ca­tions had been approved. The oth­er 56 appli­ca­tions were either pend­ing or with­drawn. None was denied.

Rep. Sander Levin of Michi­gan, the top Demo­c­rat on the Ways and Means Com­mit­tee, said the analy­sis omits oth­er lib­er­al or pro­gres­sive groups that don’t have the word “pro­gres­sive” in their names.

“This is a recur­ring prob­lem in this inves­ti­ga­tion — the release of incom­plete infor­ma­tion,” Levin said. “Indeed, that is exact­ly what led to fun­da­men­tal flaws in the (inspec­tor general’s) report.”

Dur­ing the 2010 and 2012 elec­tions, IRS agents sin­gled out groups that had “tea par­ty,” ‘’patri­ots,” and “9–12” in their appli­ca­tions, accord­ing to a May report by IRS inspec­tor gen­er­al J. Rus­sell George. George’s report deter­mined that these groups received extra, some­times bur­den­some scruti­ny that delayed their appli­ca­tions for more than a year.

George’s report did not men­tion pro­gres­sive groups. He told a con­gres­sion­al com­mit­tee this month that, despite a year­long inquiry, the IRS just recent­ly pro­vid­ed him doc­u­ments sug­gest­ing that pro­gres­sive groups may have been tar­get­ed.

...

Imag­ine that...

The Wire
New Doc­u­ments Show the IRS Tar­get­ed ‘Pro­gres­sive’ and ‘Tea Par­ty’ Groups for Extra Scruti­ny
Abby Ohlheis­er
4/23/2014

In an appar­ent con­tra­dic­tion with ear­li­er com­ments made by House Over­sight Com­mit­tee chair Dar­rell Issa, new doc­u­ments obtained through a FOIA request by ThinkProgress show that yes, the IRS tar­get­ed both con­ser­v­a­tive and lib­er­al groups for extra scruti­ny. Accord­ing to ThinkPro­gress’s analy­sis of the heav­i­ly redact­ed “be on the look­out” lists, the IRS may have tar­get­ed a high­er num­ber of pro­gres­sive groups than con­ser­v­a­tive groups over­all.

Basi­cal­ly, the doc­u­ments sup­port a long-held coun­ter­ar­gu­ment to Issa’s the­o­ry of the IRS scan­dal. While Issa has often empha­sized that he believes the IRS exclu­sive­ly tar­get­ed Tea Par­ty groups “because of their polit­i­cal beliefs,” that argu­ment relies heav­i­ly on the fact that the lat­est ver­sion of the so-called BOLO lists pri­mar­i­ly con­tained con­ser­v­a­tive-sound­ing groups. In fact, the IRS also kept and cir­cu­lat­ed his­tor­i­cal ver­sions of that list for con­tin­ued scruti­ny, which were filled with pro­gres­sive key­words, includ­ing med­ical mar­i­jua­na groups and key­words designed to flag groups descend­ed from the now-defunct ACORN. And just to be clear: every­body agrees that the IRS should not have tar­get­ed polit­i­cal groups for extra scruti­ny in this way. What’s at issue are claims that the IRS unique­ly treat­ed con­ser­v­a­tive and Tea Par­ty groups on the basis of polit­i­cal moti­va­tions.

Arguably, ThinkPro­gress’s report implies, the IRS focused on giv­ing extra scruti­ny to groups on the left longer than it did to groups on the right, Issa’s col­leagues across the aisle on the Over­sight Com­mit­tee have long not­ed that Issa has yet to pro­duce evi­dence sup­port­ing his repeat­ed claims that the IRS was act­ing as part of an anti-GOP polit­i­cal con­spir­a­cy. These doc­u­ments, which ThinkProgress notes were also pro­duced for “inves­ti­gat­ing con­gres­sion­al com­mit­tees,” are cer­tain­ly not that evi­dence. Here’s a list of some of the groups that show up on the full BOLO watch lists (view­able here):

* “Pro­gres­sive” groups, espe­cial­ly those with words like “blue” in the name
* “Tea Par­ty” groups
* Not exclu­sive­ly edu­ca­tion­al “med­ical mar­i­jua­na” groups
* Groups believed to be “suc­ces­sors to ACORN”
* “Open source soft­ware” orga­ni­za­tions
* “Green ener­gy” orga­ni­za­tions
* “Occu­pied ter­ri­to­ry” advo­ca­cy orga­ni­za­tions

On the “emerg­ing” sec­tion on one of the dis­trib­uted lists, the BOLO lists con­tains this down­right bipar­ti­san warn­ing:

Polit­i­cal action type orga­ni­za­tions involved in limiting/expanding gov­ern­ment, edu­cat­ing on the con­sti­tu­tion and bill of rights, Social eco­nom­ic reform/movement

Any­way, Issa already has a response to that non-spe­cif­ic lan­guage. The polit­i­cal watch list lan­guage was “changed to broad­er ‘polit­i­cal advo­ca­cy orga­ni­za­tions,’” he wrote in a com­mit­tee report, adding that he believes “the IRS still intend­ed to iden­ti­fy and sin­gle out Tea Par­ty appli­ca­tions for scruti­ny.” Even though it looks like pro­gres­sive groups may have end­ed up on the watch list before the Tea Par­ty start­ed pop­ping up.

...

Just imag­ine what would the response to this scan­dal would have been if any Tea Par­ty groups had actu­al­ly lost their tax-exempt sta­tus. Just imag­ine...

Score one more for Team Dark Mon­ey: The IRS is just going to rub­ber-stamp appli­ca­tions for tax-exempt sta­tus:

Time
IRS to Rub­ber-Stamp Tax-Exempt Sta­tus for Most Char­i­ties After Scan­dal

Mas­si­mo Cal­abre­si @calabresim

July 13, 2014

IRS head touts “effi­cien­cies,” but some groups fear fraud

Amid ongo­ing con­tro­ver­sy over its scruti­ny of non­prof­its, the Inter­nal Rev­enue Ser­vice has decid­ed it will no longer screen approx­i­mate­ly 80% of the orga­ni­za­tions seek­ing tax-exempt char­i­ta­ble sta­tus each year, a change that will ease the cre­ation of small char­i­ties while doing away with a review intend­ed to counter fraud and pre­vent polit­i­cal and oth­er non­char­i­ta­ble groups from mis­us­ing the tax code.

As of July 1, any group that pays a $400 fee and declares on a three-page online form that it has annu­al income of less than $50,000, total assets of less than $250,000 and is in com­pli­ance with the tax-code require­ments of a char­i­ty will auto­mat­i­cal­ly be allowed to accept dona­tions that are tax-deductible for the donors. Pre­vi­ous­ly the groups had to fill out a detailed 26-page form, sub­mit mul­ti­ple sup­port­ing doc­u­ments and pro­vide a nar­ra­tive descrip­tion of their intend­ed activ­i­ties.

In an inter­view with TIME, IRS com­mis­sion­er John Kosk­i­nen said the change would result in “effi­cien­cies [that] will trans­late into a faster and bet­ter review” of big­ger non­prof­its, while clear­ing a 66,000-application back­log that has result­ed in year­long waits for groups seek­ing to start a char­i­ty. He said the new short form comes with 20 pages of instruc­tions that make clear the require­ments and lim­i­ta­tions of being a char­i­ta­ble orga­ni­za­tion. Kosk­i­nen said that on the new short form, “peo­ple cer­ti­fy that they’ve gone through the instruc­tions” under penal­ty of per­jury.

The IRS reject­ed the idea of the new Form 1023-EZ in 2012, but using an expe­dit­ed process this year, adopt­ed the new pro­ce­dure on the rec­om­men­da­tion of a small team com­posed large­ly of front­line work­ers from the scan­dal-plagued divi­sion of exempt orga­ni­za­tions, accord­ing to the IRS.

Some char­i­ta­ble groups wor­ry the IRS has opened the door to abuse of tax-exempt sta­tus that will under­mine the cred­i­bil­i­ty of legit­i­mate non­prof­its, which are allowed to accept deductible dona­tions under sec­tion 501(c)(3) of the tax code. “The Form 1023-EZ will increase oppor­tu­ni­ty for fraud,” said Alis­sa Hecht Gar­denswartz, pres­i­dent of the Nation­al Asso­ci­a­tion of State Char­i­ty Offi­cials, and will make it hard­er “to pro­tect char­i­ta­ble assets from fraud and abuse and to ensure that char­i­ta­ble assets are used for the pur­pos­es rep­re­sent­ed to the pub­lic.”

Oth­ers wor­ry that char­i­ties, nom­i­nal­ly barred from polit­i­cal activ­i­ty, will come to serve the same pur­pose as the pow­er­ful non­prof­it orga­ni­za­tions known as 501(c)(4)s, whose dona­tions can­not be deduct­ed from tax­es. This could give an added tax ben­e­fit to donors who have recent­ly fun­neled hun­dreds of mil­lions of dol­lars into inde­pen­dent polit­i­cal cam­paign spend­ing. “What we’ll see is the so-called dark polit­i­cal mon­ey that flowed into the ©(4) world is going to begin to flow into the ©(3) world,” says Mar­cus Owens, who was the direc­tor of the exempt-orga­ni­za­tions divi­sion at the IRS from 1990 to 2000, and is now in pri­vate prac­tice at the law firm of Caplin & Drys­dale.

The change will result in approx­i­mate­ly 40,000 to 50,000 few­er ©(3) appli­ca­tions for the exempt-orga­ni­za­tions divi­sion to review each year, Kosk­i­nen says. The divi­sion, whose main office is in Cincin­nati, has been at the cen­ter of the IRS scan­dal over alleged polit­i­cal scruti­ny of right-wing 501(c)(4) groups under then-head Lois Lern­er. That scan­dal cen­ters on short­cuts the office devel­oped to iden­ti­fy ©(4) groups for fur­ther screen­ing, includ­ing screens for groups with the names that sug­gest­ed an asso­ci­a­tion with the Tea Par­ty move­ment.

The cur­rent legal inter­pre­ta­tion of tax reg­u­la­tions allows so-called ©(4)s to engage in polit­i­cal activ­i­ties as long as they don’t spend more than 50% of their mon­ey on pol­i­tics. In the 2010 Cit­i­zens Unit­ed rul­ing by the Supreme Court, those same groups earned the abil­i­ty to buy cam­paign ads in fed­er­al elec­tions, and tax laws allowed them to con­ceal the iden­ti­ty of their donors. Since the rul­ing, the num­ber of appli­ca­tions to become a ©(4) has dou­bled, to around 1,000 per year, Kosk­i­nen says. In the 2012 cam­paign, ©(4)s spent approx­i­mate­ly $300 mil­lion dol­lars on pol­i­tics, accord­ing to the Cen­ter for Respon­sive Pol­i­tics.

Much of that mon­ey was spent attempt­ing to moti­vate vot­ers by adver­tis­ing posi­tions on spe­cif­ic issues that divide can­di­dates. Owens, the for­mer IRS offi­cial, says such activ­i­ty can be cast under the mis­sion of a ©(3) devot­ed to edu­ca­tion­al, reli­gious or oth­er per­mit­ted activ­i­ties, open­ing the pos­si­bil­i­ty of deductible dark mon­ey. “The can­di­date links to the issue, and then the tax-exempt organization’s job is to find the vot­ers and make sure they know the mes­sage and hear it loud and clear up to elec­tion day,” says Owens. “That’s what the ©(4)s were doing, but that kind of activ­i­ty could be just as eas­i­ly in a ©(3), but it would have the added advan­tage of hav­ing tax deductibil­i­ty attached to it,” Owens says.

...

While char­i­ty groups agree the old process for receiv­ing tax-exempt sta­tus was too cum­ber­some, they and oth­ers wor­ry that now orga­ni­za­tions with no true char­i­ta­ble pur­pose will seek to become char­i­ties. “It’s eas­i­er to get tax-exempt sta­tus under 1023-EZ than it is to get a library card,” says Tim Delaney, pres­i­dent and CEO of the Coun­cil of Non­prof­its. As a result, Delaney says, bad actors “will be able to oper­ate in the name of the char­i­ty, and the IRS will nev­er be the wis­er because they’re not look­ing at the under­ly­ing doc­u­men­ta­tion.”

Kosk­i­nen says such wor­ries are overblown. “There’s a faith that if some­one has been forced to do more paper­work they’re going to be less nefar­i­ous,” he says. He says that to pre­vent poten­tial abuse, the IRS will take sam­ples of appli­ca­tions to see what per­cent­age are being filled out incor­rect­ly, and will mon­i­tor the num­ber of appli­ca­tions to see if it spikes sus­pi­cious­ly as a result of the new rules.

Owens says the IRS may not be able to dif­fer­en­ti­ate between tru­ly small char­i­ties and those that know­ing­ly plan to grow beyond $50,000 in annu­al income. “I haven’t seen any mech­a­nism where the IRS would be legal­ly able to go after an orga­ni­za­tion that applied with­in the EZ process but then for­tune shined on them,” Owens says. He also says that because of out­dat­ed soft­ware, the IRS won’t be able to track active char­i­ties back from its mas­ter file to their orig­i­nat­ing doc­u­ments. An IRS offi­cial speak­ing on back­ground acknowl­edged the soft­ware prob­lem.

Char­i­ties com­plain that the change was made with lit­tle con­sul­ta­tion from their rep­re­sen­ta­tive lob­by­ing orga­ni­za­tions. The IRS sped its enact­ment this year by rout­ing the change through the White House’s Office of Man­age­ment and Bud­get for pub­lic com­ment under the Paper­work Reduc­tion Act, rather than through the nor­mal pub­lic-com­ment process at the IRS, non­prof­it offi­cials con­tend. “I just wish the IRS had used a more inclu­sive process from the begin­ning,” says Delaney of the Coun­cil of Non­prof­its.

The IRS stud­ied a sim­pli­fied tax-exempt form in 2012 but reject­ed the idea. The group that looked at the idea, made up of out­side lawyers and experts in tax-exempt orga­ni­za­tions, said that fill­ing out the longer form forced groups to bet­ter under­stand the require­ments of being a char­i­ty. The group said it “may also be eas­i­er to embez­zle from a small char­i­ty,” so they should be sub­ject to more, not less, over­sight.

When char­i­ties are con­cerned that you’re being a lit­tle too char­i­ta­ble in accept­ing the self-declared char­i­ta­ble sta­tus of any ran­dom group out there, you might actu­al­ly be a lit­tle too char­i­ta­ble.

Bet­ter luck next time! Or not:

GOP­er Issa’s Probe Fails To Link IRS Scan­dal To White House
By STEPHEN OHLEMACHER
Pub­lished­De­cem­ber 23, 2014, 1:17 PM EST

WASHINGTON (AP) — A House Repub­li­can inves­ti­ga­tion faults senior IRS offi­cials in the mis­treat­ment of con­ser­v­a­tive groups that applied for tax-exempt sta­tus, but could find no link to the White House, accord­ing to a report released Tues­day.

The probe isn’t over, although inves­ti­ga­tors have reviewed 1.3 mil­lion pages of doc­u­ments and inter­viewed 52 offi­cials. The report, how­ev­er, marks the end of Rep. Dar­ryl Issa’s tenure lead­ing the inves­ti­ga­tion.

Issa, a Repub­li­can from Cal­i­for­nia, is step­ping down as chair­man of the House Over­sight Com­mit­tee because of term lim­its. Issa has repeat­ed­ly clashed with the White House and con­gres­sion­al Democ­rats over the way the IRS treat­ed tea par­ty and oth­er con­ser­v­a­tive groups.

Rep. Jason Chaf­fetz, R‑Utah, will take over the com­mit­tee in Jan­u­ary. Chaf­fetz has said his approach to the com­mit­tee will be less con­fronta­tion­al.

The report does not absolve any­one from blame. Instead, it com­plains that the IRS and the White House have not ful­ly coop­er­at­ed with the inves­ti­ga­tion.

“The White House­’s obstruc­tion not only vio­lat­ed the pres­i­den­t’s promise of coop­er­a­tion, but it affect­ed the com­mit­tee’s fact-find­ing oblig­a­tions,” the report said.

An IRS spokesman said the agency had no com­ment.

Rep. Eli­jah Cum­mings of Mary­land, the top Demo­c­rat on the Over­sight Com­mit­tee, said Issa did not share the report with Democ­rats before releas­ing it, “bypass­ing the nor­mal con­gres­sion­al vet­ting process designed to dis­tin­guish fact from fic­tion.”

“It is reveal­ing that the Repub­li­cans, yet again, are leak­ing cher­ry-picked excerpts of doc­u­ments to sup­port their pre­con­ceived polit­i­cal nar­ra­tive with­out allow­ing com­mit­tee mem­bers to even see their con­clu­sions or vote on them first,” Cum­mings said in a state­ment.

The report says con­ser­v­a­tive groups were giv­en improp­er scruti­ny for more than two years from 2010 to 2012. It says senior IRS offi­cials cov­ered up the mis­con­duct and mis­led Con­gress about it.

The report specif­i­cal­ly faults eight senior IRS lead­ers who “were in a posi­tion to pre­vent or to stop the IRS’s tar­get­ing of con­ser­v­a­tive appli­cants.”

The eight include for­mer Com­mis­sion­er Dou­glas Shul­man, for­mer act­ing Com­mis­sion­er Steven Miller, and Lois Lern­er, who used to head the divi­sion that process­es appli­ca­tions for tax-exempt sta­tus.

“Each of these lead­ers could have and should have done more to pre­vent the IRS’s tar­get­ing of con­ser­v­a­tive tax-exempt appli­cants,” the report said.

Both Shul­man and Miller told Con­gress last year that they first learned that con­ser­v­a­tive groups were being sin­gled out for addi­tion­al scruti­ny in the spring of 2012.

They said they put a stop to it and coop­er­at­ed with a review by the agen­cy’s inspec­tor gen­er­al, who issued a report about a year lat­er. Dur­ing that year, Shul­man and Miller were repeat­ed­ly asked by mem­bers of Con­gress about the treat­ment of con­ser­v­a­tive groups by the IRS. But at con­gres­sion­al hear­ings and in let­ters, they did­n’t reveal any­thing.

Shul­man’s term as com­mis­sion­er end­ed before the con­tro­ver­sy came to light in May 2013. Pres­i­dent Barack Oba­ma forced Miller to resign short­ly after Lern­er pub­licly acknowl­edged that con­ser­v­a­tive groups had been mis­treat­ed.

Lern­er, who has become a cen­tral fig­ure in sev­er­al con­gres­sion­al inves­ti­ga­tions, was forced to retire about a year ago. She has refused to tes­ti­fy before Con­gress, though her lawyer said she has coop­er­at­ed with an inves­ti­ga­tion by the Jus­tice Depart­ment.

In a brief state­ment to Issa’s com­mit­tee, Lern­er said she had done noth­ing wrong.

The IRS told Con­gress in June that it had lost an unknown num­ber of emails to and from Lern­er when her com­put­er hard dri­ve crashed in 2011. The agen­cy’s inspec­tor gen­er­al is try­ing to retrieve them from old com­put­er tapes.

The IG’s office told Con­gress in Novem­ber that inves­ti­ga­tors have retrieved some data that may con­tain emails, but the agency released no details.

Oth­er Lern­er emails pro­duced by the IRS show that Lern­er had dis­cus­sions with Jus­tice Depart­ment offi­cials about con­cerns over tax-exempt groups get­ting involved in pol­i­tics. But so far, inves­ti­ga­tors have not released any doc­u­ments show­ing that any­one out­side the IRS direct­ed the agency to mis­treat con­ser­v­a­tive groups or even knew it was going on.

Con­gres­sion­al inves­ti­ga­tors were hop­ing Lern­er’s lost emails would shed light on the mat­ter.

...

The scruti­ny delayed sev­er­al hun­dred appli­ca­tions for more than a year, with agents ask­ing some groups inap­pro­pri­ate ques­tions about donors, said the inspec­tor gen­er­al’s report from 2013.

Con­gres­sion­al Democ­rats have main­tained that some lib­er­al groups were mis­treat­ed as well. Issa’s report says lib­er­al groups were not sub­ject­ed to the same lev­el of scruti­ny as con­ser­v­a­tive ones.

“Issa’s report says lib­er­al groups were not sub­ject­ed to the same lev­el of scruti­ny as con­ser­v­a­tive ones.” That’s one way to put it.

So, get­ting back to the IRS non-scan­dal, even if those Tea Par­ty orga­ni­za­tions the IRS was inves­ti­gat­ing real­ly had been secret­ly plan­ning on ille­gal­ly engag­ing in par­ti­san polit­i­cal activ­i­ties, it would­n’t have mat­tered. Because these Scam PACs would have just end­ed up spend­ing almost all the the mon­ey on more fund-rais­ing and legal fees instead:

Politi­co
The rise of ‘scam PACs’

Con­ser­v­a­tives sound alarms about self-deal­ing fundrais­ers.

By Ken­neth P. Vogel

1/26/15 5:35 AM EST

A few hours after a cer­tain for­mer Flori­da gov­er­nor took to Face­book last month to announce he was going to “active­ly explore” a pres­i­den­tial run, a polit­i­cal action com­mit­tee called the Con­ser­v­a­tive Action Fund blast­ed out an email to thou­sands of recip­i­ents urg­ing them to “help us stop Jeb Bush today.”

The email, signed by the PAC’s chair­man, Shaun McCutcheon, plead­ed, “If you are a con­ser­v­a­tive like me who is tired of the spe­cial inter­est, polit­i­cal elites like Jeb Bush run­ning the GOP, then I need your imme­di­ate help to make it clear that Amer­i­can con­ser­v­a­tives reject a Jeb Bush can­di­da­cy.”

...

Note that Shaun McCutcheon is the McCutcheon from McCutcheon v FEC that suc­cess­ful­ly got the indi­vid­ual cap removed on direct dona­tions to fed­er­al can­di­dates and PACs lift­ed.

Con­tin­u­ing...

...

Bush could be per­suad­ed to stay out of the race, McCutcheon’s email assert­ed, if “hun­dreds of thou­sands of con­ser­v­a­tive, grass­roots activists” signed peti­tions by Dec. 19 to be “hand deliv­ered to Jeb Bush in a very pub­lic way” that would pre­sum­ably shame him out of the race. “And after you sign the peti­tion, please make a dona­tion of $5, $15, $25 or more to help us get even more sig­na­tures?” the email con­clud­ed in under­lined bold text embed­ded with a hyper­link that took read­ers to a peti­tion land­ing page that asked for their emails and then their cash.

It was a slick and well-timed cam­paign, tap­ping into the angst of grass-roots con­ser­v­a­tives who are as unhap­py with GOP lead­ers like Sen­ate Major­i­ty Leader Mitch McConnell and Speak­er of the House John Boehn­er as they are with Pres­i­dent Barack Oba­ma and con­gres­sion­al Democ­rats.

And while the PAC’s trea­sur­er told POLITICO that the email got an “extreme­ly pos­i­tive” response in peti­tion sig­na­tures and con­tri­bu­tions, more than one month lat­er the Con­ser­v­a­tive Action Fund had yet to deliv­er any signed peti­tions to Bush. It did, how­ev­er, send out a sim­i­lar email this month urg­ing recip­i­ents to sign a peti­tion to “TELL MITT ROMNEY: SIT 2016 OUT” and then to make a con­tri­bu­tion of “at least $17.76 today” to “help keep our efforts fund­ed.”

The efforts bear some of the hall­marks of a phe­nom­e­non that watch­dogs say is threat­en­ing the integri­ty of the cam­paign fund­ing sys­tem, and that con­ser­v­a­tive lead­ers wor­ry could seri­ous­ly under­mine their inter­ests head­ed into 2016. Since the tea par­ty burst onto the polit­i­cal land­scape in 2009, the con­ser­v­a­tive move­ment has been plagued by an explo­sion of PACs that crit­ics say exist most­ly to pad the pock­ets of the con­sul­tants who run them. Com­bin­ing sophis­ti­cat­ed tar­get­ing tech­niques with fundrais­ing appeals that res­onate deeply among grass-roots activists, they col­lect large piles of small checks that, tak­en togeth­er, add up to enough mon­ey to poten­tial­ly sway a Sen­ate race. But the PACs plow most of their cash back into pay­ments to con­sult­ing firms for addi­tion­al fundrais­ing efforts.

A POLITICO analy­sis of reports filed with the Fed­er­al Elec­tion Com­mis­sion cov­er­ing the 2014 cycle found that 33 PACs that court small donors with tea par­ty-ori­ent­ed email and direct-mail appeals raised $43 mil­lion — 74 per­cent of which came from small donors. The PACs spent only $3 mil­lion on ads and con­tri­bu­tions to boost the long-shot can­di­dates often tout­ed in the appeals, com­pared to $39.5 mil­lion on oper­at­ing expens­es, includ­ing $6 mil­lion to firms owned or man­aged by the oper­a­tives who run the PACs. POLITICO’s list is not all-inclu­sive, and some con­ser­v­a­tives fret that it’s almost impos­si­ble to iden­ti­fy all the groups that are out there, let alone to rein them in.

“These groups have the pulse of the crowd, and they rec­og­nize that they can make a prof­it off the angst of the con­ser­v­a­tive base vot­ers who are look­ing for out­siders,” said the influ­en­tial con­ser­v­a­tive pun­dit Erick Erick­son, who has tak­en it upon him­self to call out PAC oper­a­tors and fundrais­ers he sees as scams. They are “com­plete­ly a drain,” said Erick­son, whose assess­ments of can­di­dates and groups car­ry par­tic­u­lar weight among tea par­ty activists and the Repub­li­cans who court them. “The con­ser­v­a­tive activists feel like they’ve con­tributed to a cause greater than them­selves, but the mon­ey goes to the con­sul­tants, and even­tu­al­ly the activists get burned out and stop giv­ing mon­ey, includ­ing to the legit­i­mate caus­es.”

In the run-up to the 2014 midterm elec­tions, McConnell and Boehn­er tried to mar­gin­al­ize out-of-favor PACs, and McConnell’s allies last week launched an unof­fi­cial­ly endorsed super PAC to go along with one that Boehner’s con­fi­dants formed in 2011, part­ly to stem the flow of cash to com­pet­ing PACs.

That tech­nique has worked well for Democ­rats, who have most­ly avoid­ed the prob­lem, though they also ben­e­fit from the lack of tea par­ty-style insur­gency on their side. That could change if the 2016 Demo­c­ra­t­ic pres­i­den­tial pri­ma­ry inflames deep ide­o­log­i­cal divi­sions with­in the par­ty.

But on the right, this indus­try appears only to be grow­ing, accord­ing to con­ser­v­a­tives who track it close­ly.

A cou­ple of days after receiv­ing the anti-Bush email from the Con­ser­v­a­tive Action Fund, Erick­son took to his Red State blog to lament the trend. “It is a ter­ri­ble blight on the con­ser­v­a­tive move­ment and on the tea par­ty in par­tic­u­lar that the huck­sters have come up to cash in,” he wrote. “From the groups claim­ing to rep­re­sent Ben Car­son to the groups rais­ing mon­ey for Allen West to now a group claim­ing to raise mon­ey to ‘Stop Jeb Bush,’ I think more and more old­er con­ser­v­a­tives are get­ting scammed by con men liv­ing well off oth­er people’s mon­ey. I doubt very much that much, if any, of the mon­ey is going to sup­port these caus­es.”

Such efforts could be par­tic­u­lar­ly dam­ag­ing to Repub­li­can chances in 2016. In recent elec­tions, the party’s nom­i­nees have some­times strug­gled to raise the sort of small dona­tions nec­es­sary to sus­tain their cam­paigns, par­tic­u­lar­ly at the pres­i­den­tial lev­el, where pre­sump­tive nom­i­nees can face a fund­ing gap in the run-up to the con­ven­tion after they’ve tapped all their major donors for the pri­ma­ry but before they’re legal­ly allowed to start spend­ing a sec­ond round of big checks for the gen­er­al elec­tion.

PACs like those that have drawn Erickson’s scorn don’t have to slog through a long cam­paign with repet­i­tive fundrais­ing appeals. They can, and do, quick­ly change focus to keep pace with the scan­dal of the moment — from Beng­hazi to Oba­macare to lib­er­al media bias to Islam­ic extrem­ism. Old PACs asso­ci­at­ed with stale issues or politi­cians are shut­tered, and new ones cre­at­ed to fill the void.

Among the more con­sis­tent themes of the PACs — much to the dis­may of the GOP estab­lish­ment — is the tar­get­ing of RINOs (Repub­li­cans in Name Only) and the boost­ing of ide­o­log­i­cal­ly pure Repub­li­can can­di­dates, includ­ing many who stand lit­tle chance of win­ning. A par­tic­u­lar focus is on politi­cians who are mil­i­tary vet­er­ans, tea par­ty activists, African-Amer­i­cans — or all three. Ques­tions about prof­i­teer­ing have swirled around PACs and oper­a­tives who have claimed to be sup­port­ing African-Amer­i­can con­ser­v­a­tives, includ­ing for­mer Rep. Allen West, 2012 pres­i­den­tial can­di­date Her­man Cain, fringe 2016 hope­ful Ben Car­son and two-time unsuc­cess­ful House can­di­date Deb­o­rah Hon­ey­cutt of Geor­gia. And a PAC called the Black Repub­li­can PAC spent less than 1 per­cent of the $700,000 it raised in 2014 on con­tri­bu­tions to can­di­dates or ads sup­port­ing them, accord­ing to gov­ern­ment fil­ings.

While oper­at­ing expens­es some­times include trav­el or salaries for staff involved in get-out-the-vote or oth­er polit­i­cal activ­i­ties, most of the groups POLITICO exam­ined do very lit­tle on-the-ground work, instead spend­ing the major­i­ty of their cash on fundrais­ing such as rent­ing and solic­it­ing from direct-mail and email lists. But defend­ers of the PACs con­tend that their fundrais­ing efforts per­form a valu­able ser­vice for the con­ser­v­a­tive move­ment by mobi­liz­ing the grass-roots base, and that it costs mon­ey to raise mon­ey.

“Direct mail is expen­sive. Phone cam­paigns are expen­sive,” said Dan Backer, who serves as a lawyer, trea­sur­er and strate­gist for the Con­ser­v­a­tive Action Fund and 14 oth­er PACs includ­ed in POLITICO’s analy­sis. “Email is not as free as peo­ple want to pre­tend like it is. It’s real­ly expen­sive. … And there’s a lot of mon­ey that goes into mak­ing these things legal so — I hate to say it — you pay for lawyers,” he added.

...

While var­i­ous watch­dog groups and gov­ern­ment agen­cies eval­u­ate the effi­cien­cy of apo­lit­i­cal char­i­ties — gen­er­al­ly reward­ing those that keep admin­is­tra­tive costs at 25 per­cent or less — there is no sim­i­lar over­sight of polit­i­cal groups.

The FEC, which is tasked with reg­u­lat­ing PACs, last year essen­tial­ly con­ced­ed there was noth­ing it could do to clamp down on prof­i­teer­ing PAC oper­a­tors. It is “not a mat­ter with­in the Commission’s juris­dic­tion,” the agency wrote in dis­miss­ing com­plaints by for­mer Rep. West’s cam­paign against four PACs — includ­ing one run by Macken­zie and anoth­er by Good­win and Kreep — that West accused of defraud­ing donors by rais­ing mon­ey under the false pre­tense that it would be spent in sup­port of his 2012 reelec­tion cam­paign, which he lost nar­row­ly.

While the FEC cit­ed Goodwin’s Repub­li­can Major­i­ty Cam­paign for “less-than-com­plete” dis­claimers mak­ing clear it wasn’t asso­ci­at­ed with West’s cam­paign, the com­mis­sion mere­ly issued a warn­ing. Good­win told POLITICO his PAC did only one fundrais­ing email men­tion­ing West and “any­one could see that we were mak­ing a good-faith effort to com­ply with those [dis­claimer] require­ments.” More gen­er­al­ly, FEC inves­ti­ga­tors con­clud­ed the four PACs, which raised a com­bined $14.3 mil­lion in 2012, “spent very lit­tle of the mon­ey they raised to sup­port West. Rather, the funds appear to have been spent pri­mar­i­ly on addi­tion­al fundrais­ing, much appar­ent­ly to ven­dors in which some Respon­dents’ offi­cers may have held per­son­al finan­cial inter­ests. Also trou­bling are the accounts of donors who mis­tak­en­ly con­tributed funds to some respon­dents while intend­ing to con­tribute direct­ly to West. Nonethe­less, we can­not agree with Com­plainant that this con­duct con­sti­tutes a fraud with­in the reach of the Act or Com­mis­sion reg­u­la­tion.”

FEC Chair­woman Ann Rav­el called the case “frus­trat­ing,” explain­ing to POLITICO that “we looked very care­ful­ly at try­ing to find a way that we could do some­thing about what seemed to be out­right fraud, but it was not with­in our purview. … I think it’s a loop­hole.”

In a lit­tle-noticed report to Con­gress, the FEC last month sug­gest­ed that the rel­e­vant laws in the West case — which per­tain to “fraud­u­lent mis­rep­re­sen­ta­tion” — be strength­ened and expand­ed.

Rav­el explained that “the goal is for there to be over­sight on the Com­mis­sion of mat­ters where it is the cam­paigns them­selves and by exten­sion the donors that are being defraud­ed.”

Such leg­is­la­tion seems unlike­ly, giv­en that one of the few things Con­gress has been able to agree on recent­ly is weak­en­ing cam­paign-finance restric­tions.

...

One of the obvi­ous ques­tions raised by this is whether or not all these Scam PACs could end up being such a seri­ous drain to the GOP’s finances that it harms the GOP’s elec­toral chances, or if the the GOP is going to be so flood­ed with mon­ey from its major donors that the Scam PAC-drain won’t real­ly mat­ter, elec­toral­ly, except to make the small grass-roots donors even more irrel­e­vant and the par­ty even more behold­en to its big-mon­ey base? It’s an obvi­ous ques­tion with an obvi­ous answer.

The Trea­sury Inspec­tor Gen­er­al for Tax Admin­is­tra­tion (TIGTA), a fed­er­al watch­dog agency, fin­ished its review of the IRS-gate pseu­doscan­dal. Recall that it was all start­ed when the Trea­sury depart­ment Inspec­tor Gen­er­al issued a report exam­in­ing the 298 polit­i­cal groups the IRS select­ed for extra scruti­ny (with­hold­ing approval of their tax-exempt sta­tus in the process), and found that not only was the Inter­nal Rev­enue Ser­vice improp­er­ly screen­ing for groups to scru­ti­nize based on the pres­ence of words cer­tain words in the groups’ names, but also report­ed that 96 of the 298 groups had names with “con­ser­v­a­tive,” ‘’tea par­ty,” ‘’patri­ot” or “9–12”. And this let to the GOP-fueled pseu­doscan­dal that this was an instance of a politi­cized IRS tar­get­ing the Oba­ma admin­is­tra­tion’s polit­i­cal oppo­nents, while Democ­rats point­ed to evi­dence of pro­gres­sive groups also receiv­ing extra scruti­ny based on their names and charged that the report was based on selec­tive data.

And, lo and behold, in the new TIGTA report, which looks at IRS data from that same time peri­od (2010–2012), found that 149 pro­gres­sive groups were also tar­get­ed for hav­ing words like “Pro­gres­sive,” “Green Ener­gy,” “Med­ical Mar­i­jua­na”, “Occu­py”, and “Acorn” in their names. Yep, any polit­i­cal group that appeared to be affil­i­at­ed with Acorn, the net­work of com­mu­ni­ty activist groups the right-wing hat­ed for years was tar­get­ed by the IRS for extra scruti­ny. Acorn:

The Wash­ing­ton Post

Lib­er­al groups got IRS scruti­ny, too, inspec­tor gen­er­al finds

By Mike DeBo­nis
Octo­ber 4, 2017 at 7:45 PM

A fed­er­al watch­dog has iden­ti­fied as many as 146 cas­es in which the Inter­nal Rev­enue Ser­vice may have tar­get­ed lib­er­al-lean­ing groups for extra scruti­ny based on their names or polit­i­cal lean­ings, a find­ing that could under­mine claims that con­ser­v­a­tives were unfair­ly tar­get­ed under Pres­i­dent Barack Oba­ma.

The Trea­sury Inspec­tor Gen­er­al for Tax Admin­is­tra­tion (TIGTA) reviewed cas­es between May 2010 and May 2012, around the same peri­od TIGTA pre­vi­ous­ly exam­ined in a 2013 report that fault­ed the IRS for using inap­pro­pri­ate polit­i­cal cri­te­ria to select groups for height­ened scruti­ny.

That ear­li­er report found that 96 groups with names ref­er­enc­ing “Tea Par­ty,” “Patri­ot” or “9/12” were select­ed for inten­sive review, and the House Ways and Means Com­mit­tee lat­er iden­ti­fied anoth­er 152 right-lean­ing groups that were sub­ject­ed to scruti­ny. Those find­ings fueled accu­sa­tions by Repub­li­can law­mak­ers that the Oba­ma admin­is­tra­tion engaged in polit­i­cal­ly moti­vat­ed tar­get­ing of con­ser­v­a­tives.

But Democ­rats have long chal­lenged those claims, argu­ing that lib­er­al-lean­ing groups were giv­en close scruti­ny along­side the con­ser­v­a­tive groups. The 2013 TIGTA report, they argued, was based on selec­tive cri­te­ria that omit­ted numer­ous non­con­ser­v­a­tive groups that were also sub­ject­ed to close IRS review.

The new TIGTA report exam­ines a broad­er range of cri­te­ria used by the IRS at the time, includ­ing groups affil­i­at­ed with the now-defunct Asso­ci­a­tion of Com­mu­ni­ty Orga­ni­za­tions for Reform Now (ACORN), as well as oth­ers ref­er­enc­ing “Pro­gres­sive,” “Green Ener­gy,” “Med­ical Mar­i­jua­na” and “Occu­py.”

Togeth­er, the watch­dog iden­ti­fied 146 cas­es in which the IRS exam­ined left-lean­ing groups for sus­pi­cion of engag­ing in dis­al­lowed polit­i­cal activ­i­ty. Eighty-three of those were defin­i­tive­ly cho­sen for scruti­ny because of the selec­tion cri­te­ria, the inspec­tor gen­er­al found; the report could not defin­i­tive­ly deter­mine how the oth­er cas­es were cho­sen.

The Wash­ing­ton Post reviewed a ver­sion of the TIGTA report dat­ed Sept. 28 that has been cir­cu­lat­ed to var­i­ous law­mak­ers and com­mit­tees on Capi­tol Hill. The full report is set to be released to the pub­lic Thurs­day.

The new report reit­er­ates the inspec­tor general’s ear­li­er crit­i­cism of the IRS review process at the time, call­ing it “inap­pro­pri­ate” to tar­get groups for scruti­ny based on their names rather than on actu­al evi­dence of illic­it polit­i­cal activ­i­ty that would leave them inel­i­gi­ble for tax exemp­tions.

Groups that were select­ed for review wait­ed months — years, in some cas­es — for their appli­ca­tions to be reviewed and were sub­ject­ed to oner­ous and, in some cas­es, improp­er requests for infor­ma­tion on their donors and activ­i­ties.

For instance, IRS per­son­nel were told start­ing in 2010 to watch out for groups that had affil­i­a­tions with ACORN, a nation­al net­work of com­mu­ni­ty-based orga­ni­za­tions that had col­lapsed amid alle­ga­tions of wrong­do­ing by con­ser­v­a­tive activists. Ulti­mate­ly, at least 13 appli­ca­tions for tax exemp­tions were flagged for scruti­ny based on pos­si­ble ACORN ties, and most of those groups wait­ed more than a year for their cas­es to be resolved, the report said — mir­ror­ing many of the alle­ga­tions lev­eled regard­ing con­ser­v­a­tive groups.

The report does not make rec­om­men­da­tions for fur­ther changes to IRS pol­i­cy, not­ing that the agency has “com­plete­ly revamped the process for review­ing tax-exempt appli­ca­tions” since the peri­od in ques­tion.

Oth­er enti­ties have exam­ined the IRS’s han­dling of non­prof­it groups at the time and con­clud­ed that con­ser­v­a­tives were affect­ed dis­pro­por­tion­ate­ly. The Sen­ate Finance Com­mit­tee, for instance, con­clud­ed in 2015 that most of the groups whose appli­ca­tions were giv­en extra scruti­ny were “Tea Par­ty and con­ser­v­a­tive groups” but also acknowl­edged that some left-lean­ing groups “expe­ri­enced lengthy pro­cess­ing delays and inap­pro­pri­ate and bur­den­some requests for infor­ma­tion.”

Four years after the tar­get­ing alle­ga­tions prompt­ed the res­ig­na­tion or retire­ment of three top IRS offi­cials, the con­tro­ver­sy has con­tin­ued to sim­mer in Repub­li­can cir­cles. GOP law­mak­ers ear­li­er this year pressed the Jus­tice Depart­ment under Pres­i­dent Trump to revis­it the mat­ter and pros­e­cute for­mer IRS offi­cial Lois Lern­er, who direct­ed the unit that screened orga­ni­za­tions for tax exemp­tions, for obstruc­tion of jus­tice.

In a let­ter to con­gres­sion­al offi­cials last month, Assis­tant Attor­ney Gen­er­al Stephen Boyd said that the Jus­tice Depart­ment “deter­mined that reopen­ing the crim­i­nal inves­ti­ga­tion would not be appro­pri­ate based on the avail­able evi­dence.” Lern­er has denied any crim­i­nal wrong­do­ing.

House Ways and Means Com­mit­tee Chair­man Kevin Brady (R‑Tex.) lam­bast­ed the deci­sion.

“It sends the mes­sage that the same legal, eth­i­cal, and Con­sti­tu­tion­al stan­dards we all live by do not apply to Wash­ing­ton polit­i­cal appointees — who will now have the green light to tar­get Amer­i­cans for their polit­i­cal beliefs and mis­lead inves­ti­ga­tors with­out ever being held account­able for their law­less­ness,” he said in a Sept. 8 state­ment.

Brady said in a state­ment Wednes­day that the new TIGTA report “rein­forces what gov­ern­ment watch­dogs and con­gres­sion­al inves­ti­ga­tors have con­firmed time and time again: bureau­crats at the IRS, such as Lois Lern­er, arbi­trar­i­ly and hap­haz­ard­ly admin­is­tered the tax code and tar­get­ed tax­pay­ers based on polit­i­cal ide­ol­o­gy.”

He pledged to “con­tin­ue hold­ing the IRS account­able for their actions.”

Rep. Sander M. Levin (D‑Mich.), who served as the top Demo­c­rat on the Ways and Means Com­mit­tee dur­ing the height of the IRS scan­dal, said Wednes­day that the report con­firmed “polit­i­cal manip­u­la­tion by the Repub­li­cans.”

...

———-

“Lib­er­al groups got IRS scruti­ny, too, inspec­tor gen­er­al finds” by Mike DeBo­nis; The Wash­ing­ton Post; 10/04/2017

“The new TIGTA report exam­ines a broad­er range of cri­te­ria used by the IRS at the time, includ­ing groups affil­i­at­ed with the now-defunct Asso­ci­a­tion of Com­mu­ni­ty Orga­ni­za­tions for Reform Now (ACORN), as well as oth­ers ref­er­enc­ing “Pro­gres­sive,” “Green Ener­gy,” “Med­ical Mar­i­jua­na” and “Occu­py.””

That’s right, groups with “Pro­gres­sive”, “Acorn”, or “Occu­py” in their names were sys­tem­at­i­cal­ly select­ed for fur­ther scruti­ny. And of the 149 left-lean­ing groups this report iden­ti­fied as tar­get­ed, 83 were def­i­nite­ly cho­sen due to the word-based selec­tion cri­te­ria the IRS set up:

...
Togeth­er, the watch­dog iden­ti­fied 146 cas­es in which the IRS exam­ined left-lean­ing groups for sus­pi­cion of engag­ing in dis­al­lowed polit­i­cal activ­i­ty. Eighty-three of those were defin­i­tive­ly cho­sen for scruti­ny because of the selec­tion cri­te­ria, the inspec­tor gen­er­al found; the report could not defin­i­tive­ly deter­mine how the oth­er cas­es were cho­sen.
...

And of the 13 Acorn affil­i­at­ed groups that came under scruti­ny most of them had to wait more than a year for their cas­es to be resolved:

...
For instance, IRS per­son­nel were told start­ing in 2010 to watch out for groups that had affil­i­a­tions with ACORN, a nation­al net­work of com­mu­ni­ty-based orga­ni­za­tions that had col­lapsed amid alle­ga­tions of wrong­do­ing by con­ser­v­a­tive activists. Ulti­mate­ly, at least 13 appli­ca­tions for tax exemp­tions were flagged for scruti­ny based on pos­si­ble ACORN ties, and most of those groups wait­ed more than a year for their cas­es to be resolved, the report said — mir­ror­ing many of the alle­ga­tions lev­eled regard­ing con­ser­v­a­tive groups.
...

Keep in mind that Acorn implod­ed in 2010 after James O’Keefe and Bre­it­bart released a doc­tored gotcha video, so there prob­a­bly would be even more pro­gres­sive groups tar­get­ed in the 2010–2012 peri­od under review if Acorn had­n’t been smeared to death by the right-wing Big Lie machine. The same Big Lie machine that will no doubt con­tin­ue nurs­ing this fake IRS-gate wound for years to come regard­less of what’s in this new report.