Department Of Justice Finds No Basis For Criminal Charges In I.R.S. Scrutiny Of Tea Party Groups

The Department of Justice has informed Congress that its investigation has found no basis for criminal charges arising out of the targeting of conservative organizations by IRS officials evaluating applications for tax-exempt status.

IRS Building

The Justice Department has informed Congress that it will not be pursuing criminal charges against Lois Lerner or any other present or former officials of the Internal Revenue Service over the alleged targeting of conservative organizations who had applied for tax exempt status:

WASHINGTON—The Justice Department won’t charge Lois Lerner, a former Internal Revenue Service official, over Tea Party groups’ applications for tax-exempt status, closing a nearly 2 1/2-year investigation with a determination that IRS officials bungled the matter but committed no crimes.

“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,” Assistant Attorney General Peter Kadzik wrote to Congress on Friday. “But poor management is not a crime.”

The announcement ends a major phase of the IRS controversy, angering Republicans and Tea Party activists who had pressed for prosecutions.

When the matter first erupted, it prompted bipartisan outrage and accusations that the IRS and Obama administration had pursued a vendetta against conservative groups. The truth proved to be more complex, and the investigations appear not to have revealed any direct involvement by White House officials.

Rep. Paul Ryan (R., Wis.), chairman of the House Ways and Means Committee who is poised to become speaker of the House, said the Justice Department’s decision was a “deeply disappointing” response to what he called the “serious and unprecedented actions” taken by Ms. Lerner.

“The American people deserve better than this,” Mr. Ryan said. “Despite the DOJ closing its investigation, the Ways and Means Committee will continue to find answers and hold the IRS accountable for its actions.”

Mark Meckler, a Tea Party leader and president of Citizens for Self Governance, which sued the IRS over the matter, called the decision “a whitewash and miscarriage of justice at the highest levels of law enforcement.”

But Rep. Elijah Cummings (D., Md.) portrayed the issue as one more example of Republican overreach. “Over the past five years, Republicans in the House of Representatives have squandered literally tens of millions of dollars going down all kinds of investigative rabbit holes-IRS, Planned Parenthood, Benghazi-with absolutely no evidence of illegal activity,” he said.

Ms. Lerner’s legal team at Zuckerman Spaeder issued a statement saying they were “gratified but not surprised” by the decision.

“Ms. Lerner is pleased to have this matter finally resolved and looks forward to moving forward with her life,” the statement said.

Ms. Lerner was director of the exempt organizations office at the IRS. On her watch, employees gave extra scrutiny to applications for nonprofit status from Tea Party groups, which were forming in the early years of the Obama administration in response to the president’s policies. In advance of an inspector general’s report, Ms. Lerner disclosed this added scrutiny in May 2013 and the IRS apologized.

The revelation led to the forced resignation of the acting IRS commissioner, Steven Miller, and several other senior officials left as well. Ms. Lerner was suspended and then retired later in 2013.

Ms. Lerner refused to answer questions from lawmakers at congressional hearings, invoking her constitutional right against self-incrimination. She did speak with prosecutors during about 12 hours of questioning, with no promise of immunity, according to the letter.

This entire story broke in the spring of 2013 when it came to light that the IRS office responsible for the the consideration of applications from organizations seeking tax exempt status under 501(c)(4) of the tax code was engaging in what seemed to be suspicious activities regarding applications from conservative organizations. Among other things, the applications from these groups were delayed longer than was typically the case for applications for 501(c)(4) status that were considered by the Cincinnati office over which Lerner had primary responsibility. In many cases, these groups were also being asked to provide evidence to prove that their actions were not explicitly political in nature in ways that were not applied to other groups also applying for 501(c)(4) status. Additionally, it was discovered during investigations by the agency’s own Inspector General that the Cincinnati office had explicitly sought out applications from groups whose names and other information indicated that they affiliated with Tea Party or similar conservative groups. While it is true that there was some similar scrutiny given to some liberal organizations, the overwhelming evidence showed that the main focus of the effort taking place in Cincinnati was on groups on the political right.

Not surprisingly, the revelations about how the IRS was handling 501(c)(4) applications from conservative groups ended up becoming the perfect political fodder for a Washington political “scandal.” For conservatives, the fact that what is perhaps the most universally hated agency of the Federal Government was singling out conservative groups for special scrutiny played right into the idea that the Obama Administration was conspiring against them in other ways as well. Within weeks after the story broke, hearings were convened by the House Government Oversight Committee, then headed by Congressman Darrel Issa, and that story had taken on a life of its own. As time when on, though, and the facts came forward it became clear that while what these IRS officials did may have been improper, and that it was right that they were dismissed or resigned, it was entirely unclear if there was any criminal liability. Outside of the Congressional investigation, the Justice Department opened an investigation of its own that was headed by career U.S. Attorneys that had been appointed by Republicans and Democrats. The letter sent to Congress yesterday, which I’ve embedded below, is the end result of that investigation and, for all intents and purposes, the end of any criminal inquiry into the IRS’s actions regarding these conservative organizations.

This is unlikely to be the end of the IRS targeting story, of course. Conservatives are unlikely to accept the conclusions of an Obama Justice Department regarding this matter notwithstanding the fact that the investigation was not handled by political appointees to the department. Indeed, the fact that the Department of Justice has concluded that there are not sufficient facts to warrant a criminal investigation will, in and of itself, likely become part of the claim that there has long been a conspiracy to both hobble the ability conservative organizations to oppose President Obama and the Democrats in the 2012 elections. The problem that this argument runs into, of course, is the fact that in the end the 501(c)(4) applications for nearly all of the organizations that were improperly targeted were ultimately approved. This fact was central to last year’s dismissal of most of the counts of a civil lawsuit against the IRS by one of the groups, with the Judge finding that the fact that the Plaintiffs were eventually granted the tax exempt status they sought, along with the fact that they could not really point to any damages due to the delay, made the lawsuits moot. As with the criminal investigation, the point here is that even though the actions in question may have been improper that doesn’t mean they were illegal under the criminal law or that they gave rise to any civil liability.

This may also not be the end of the road for former IRS official Lois Lerner. As you may recall, Lerner was among the first witnesses called by Chairman Issa’s committee to testify regarding the targeting scandal. Rather than answer questions, though, Lerner followed her attorney’s advice and asserted her rights under the Fifth Amendment to remain silent. Republicans on the committee and several conservative legal scholars, though, claimed that Lerner had waived her Fifth Amendment rights when she gave an opening statement in which, in general and rather vague terms, she denied and wrongdoing. As I said at the time, this argument seemed to be very weak to paint it in the best light, and that to the extent there was any doubt it should be resolved against the argument that her rights had been waived merely by making an opening statement. Despite this, several days after Lerner testified, the Committee voted on partisan lines that Lerner had waived her rights and then moved forward with a process that seemed designed to force her to testify. Despite several reports that Lerner would testify if granted immunity, the Committee eventually voted to hold Lerner in contempt nearly a year after her original testimony. Earlier this year, the Department of Justice informed Congress that it would decline to prosecute the contempt charge against Lerner because her claims under the Fifth Amendment appeared solid and the argument that she had waived those rights did not appear to have any merit. In theory, Congress could still choose to prosecute Lerner’s contempt civilly on its own in U.S. District Court, though.

Outside of possible future civil claims by conservative groups that were caught up in the targeting effort and possibly future contempt proceedings against Lerner, though, this matter appears to be closed.

Here is a copy of the Department of Justice letter:

DOJ Letter to Congress by Doug Mataconis

FILED UNDER: Congress, Law and the Courts, Taxes, Tea Party, US Politics, , , ,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. michael reynolds says:

    Surely Trey Gowdy, the Mantis Avenger, will investigate. And once again, find nothing.

  2. Hal_10000 says:

    So the conclusion is that Lerner and her colleagues were incompetent rather than conspiratorial. Idiocy is usually the better explanation for government actions than conspiracy (see, e.g, everything the Bush Administration did). But it’s not exactly an exoneration.

  3. Glee says:

    In addition to contradicting the earlier facts uncovered by the Justice Department’s own inspector general, the reasoning of the Department of Justice in refusing to bring charges is nonsensical: that intentional targeting of groups containing the words “Tea Party” is not political discrimination because occasionally groups with other words in their title were also targeted. That is as silly as saying that intentional targeting of groups containing the word “progressive” would not be discrimination. Discrimination does not cease to be discrimination merely because the discrimination occasionally reaches beyond one group. See Gomillion v. Lightfoot (Supreme Court racial discrimination ruling rejecting limit to express discrimination); Rosenberger v. University of Virginia (1995) (First Amendment viewpoint discrimination ruling saying that discrimination is illegal even if it reaches a range of views rather than always just one view).

  4. Modulo Myself says:

    The whole thing is disgusting. The only thing the IRS did wrong was to assume groups with Tea Party in their name could be directly involved with electoral politics and thus not eligible for tax-exempt status. Then they fired a few people who probably did not deserve it to placate the type of person who has many views on Obama’s birth certificate.

  5. Paul L. says:

    This fact was central to last year’s dismissal of most of the counts of a civil lawsuit against the IRS by one of the groups, with the Judge finding that the fact that the Plaintiffs were eventually granted the tax exempt status they sought, along with the fact that they could not really point to any damages due to the delay, made the lawsuits moot

    .
    Nice to see Doug left out this little gem in the opinion.
    Reasoning for this (bottom of page 13) since this was done by the Government not a private actor, there is no chance that this will occur again.

    ” . And “where the defendant is a government actor—and not a private litigant—there is less concern about the recurrence of objectionable behavior.” Citizens for Responsibility & Ethics in Wash. v. SEC, 858 F. Supp. 2d 51, 61, 62″

    Of course the IRS is still fighting in court to not release any of the Documents .
    http://www.judicialwatch.org/press-room/press-releases/federal-judge-threatens-to-hold-irs-commissioner-doj-lawyers-in-contempt-of-court-over-lerner/

    I expect this will drag out for 5 more years thanks to DOJ/IRS stonewalling and the Court will dismiss the case because Obama is no longer in the White House like they did for the Clinton IRS targeting.

  6. Tillman says:

    @Hal_10000: Incompetent at what? Best explanation I ever heard for using filters was the IRS is underfunded and it was a bureaucracy’s way of reducing workload/ordering priorities.

    This all started in March 2010, which was smack-dab in the middle of the first fiscal year (2010) in which IRS budgets started being cut. They lost something like 8% of their budget by FY 2013, according to this unsourced aside from a FactCheck article on a conservative ad made in response to this “scandal.”

  7. Tyrell says:

    @Modulo Myself: What needs to be done here is to form an independent commission to investigate this. This would be made up of people from business, legal, and investigators who are not employed by the government; and of course no politicians.
    Too often in the past the government has conducted these “self” investigations and investigations of events outside of government. We have seen these wind up with the same sort of results and conclusions that we see here: a sort of “smoke but no fire” or “errors but nothing to get wound up about” or the “don’t make a mouse out of a molehill”. Much of the real findings are filed away, to be kept classified . Any physical evidence is crated away and stored in some forgotten warehouse out in Maryland or Virginia. Things disappear, can’t be found, and documents are faked, forged, manufactured, altered, and edited. We have seen it before and we will see it again. Just look at the official government “investigations” of the assassinations of the ’60’s.

  8. gVOR08 says:

    it became clear that while what these IRS officials did may have been improper, and that it was right that they were dismissed or resigned

    Say what? Are you really wanting to say that it’s OK that the GOP character assassination machine can single out federal employees and get them fired on the basis of unsubstantiated accusations and innuendo?

  9. michael reynolds says:

    @Tyrell:
    Great, then we can set up an outside, independent commission to look into the abuse of power by Trey Gowdy and the House Republicans who have wasted 5 million taxpayer dollars to run a partisan, political with hunt. They have used the power of government to try and destroy a political candidate of the other party.

    And then let’s take a closer look at the billions George W. Bush squandered in Iraq, dumping piles of money on friendly contractors and endless corrupt plans that inevitably put money in the hands of our own enemies.

    You want a culture of endless witch hunts? Fine, bring it on, pal, because your side is ass-deep in incompetence and corruption and I’d love to see it all dragged out in the open.

  10. DrDaveT says:

    @Modulo Myself:

    The only thing the IRS did wrong was to assume groups with Tea Party in their name could be directly involved with electoral politics and thus not eligible for tax-exempt status.

    No, you’re still overstating what they did. They didn’t assume that groups with “Tea Party” in the name were primarily political; they merely recognized that groups with “Tea Party” in the name were more likely to be primarily political, and prioritized them for a closer look.

    Overlooked in this whole foofaraw is that the Cincinnati office was basically right — those groups were much more likely to be political action organizations posing as eligible social action organizations. The IRS was doing their job correctly and efficiently, given the woeful ongoing underfunding of their assigned (by Congress) job. If the burden of that fell disproportionately on Republican organizations, it’s because Republican organizations were disproportionately trying to evade the applicable laws.

  11. David M says:

    The lack of charges does illustrate again how little corruption there has been in the Obama administration, which was a nice change for the better. Now I know the GOP can’t actually acknowledge this fact, but it’s why they keep trying to make scandals out of nothing.

  12. Paul L. says:

    @gVOR08:

    GOP character assassination machine can single out federal employees and get them fired on the basis of unsubstantiated accusations and innuendo?

    The following were not fired
    DOJ prosecutors manufacture evidence against Sen. Ted Stevens.
    DOJ and ATF supervisors allowed Guns to walk to Mexico and lied about it.
    DEA agents lock up Daniel Chong unmonitored in a holding cell for five days .
    Rogue EPA Agent Pleads Guilty to Obstructing Justice

    Progessive like you of course support these actions.

  13. Paul L. says:

    @michael reynolds:

    abuse of power by Trey Gowdy and the House Republicans who have wasted 5 million taxpayer dollars to run a partisan, political with hunt.

    You approve of these or repealing 42 U.S. Code § 1983

    Vidrine was awarded $1.6 million in damages for his malicious prosecution, Phillips signed a plea agreement with federal prosecutors in which he pleaded guilty to perjury and obstruction of justice.

    Daniel Chong, forgotten in DEA cell, settles suit for $4.1 million

  14. David M says:

    @Paul L.:

    That’s kind of the point I was making. First, Stevens was convicted in 2008, so that’s difficult to blame on the Obama administration. Secondly, those other items don’t actually involve members of the administration in any meaningful sense.

  15. Just 'nutha ig'rant cracker says:

    @DrDaveT:

    it’s because Republican organizations were disproportionately trying to evade the applicable laws.

    No, that argument is only for explaining why why blacks are jailed disproportionately to whites. It’s not for this situation at all.

  16. Tyrell says:

    @michael reynolds: That would be great. I have no problem with the investigations you propose. But we both know it won’t happen, at least for generations. If they still keeping classified information about a 1940’s military operation in Antarctica then they are not about to investigate military operations of ten years ago.

  17. Bob@Youngstown says:

    @Tyrell:

    If they still keeping classified information about a 1940’s …..

    The 1950 US census won’t be available for access until 2022.

    There still remains some semblance of privacy. But you seem to be suggesting that fishing expeditions (through tax records) ought to be sanctioned for political purposes?

  18. HarvardLaw92 says:

    @Glee:

    No. We’re addressing voluntary applications for tax exempt status. The most that applicants have a right to expect is that their applications will be approved or denied on the basis of the same acceptability criteria as any other application. They do not have a right to expect that they will be more or less likely to be subjected to additional scrutiny in the process of making that determination.

    The IRS regularly selects tax returns for heightened scrutiny / audits while allowing others to pass with less. The returns themselves are, however, evaluated according to the same tax laws. This practice does NOT constitute discrimination. It constitutes the IRS doing its job.

  19. DrDaveT says:

    @HarvardLaw92:

    This practice does NOT constitute discrimination. It constitutes the IRS doing its job.

    Indeed — even if the taxpayer does NOT choose to change his name to “Offshore B. Shelter” prior to filing the return…

  20. stonetools says:

    So, it looks like TWO fake scandals died this week. Remember when the IRS scandal was supposed to be Obama’s “Katrina?”

    If this goes on, it looks like the Republicans are going to be completely out of fake scandals to whip up the rubes by primary season time.

  21. Paul L. says:

    @David M:

    Stevens was convicted in 2008, so that’s difficult to blame on the Obama administration.

    The Steven’s prosecutors Joseph Bottini and James Goeke still work for a DOJ and received no punishment for their misconduct.

  22. michael reynolds says:

    @HarvardLaw92:

    The IRS regularly selects tax returns for heightened scrutiny / audits while allowing others to pass with less.

    And may I say, thank God, whew, and touch wood.

  23. John430 says:

    The DOJ under this administration couldn’t find it’s arse using both hands.

    So why did Lois Lerner plead the 5th?

  24. HarvardLaw92 says:

    @John430:

    Because a congressional committee has no prosecutorial powers, but anything said under oath in front of one is fair game to be used against you in any subsequent potential prosecution that may or may not take place. There is no incentive to give testimony to a hostile committee – none – and many potential negatives, so why do it?

    Any remotely competent attorney would have advised her to do exactly what she did.

  25. Tyrell says:

    @stonetools: “fake scandals” : These are being created, scripted, and pushed to divert the public attention away from the important and real issues and events. Notice the so-called “news” networks’ obsession with these sorts of scandals and their determination to push the coverage onto the public, including their opinion, “expert” analysis, and spin onto it. This is also known as propaganda. All the while keeping from the public much more important events, issues, and situations.
    If the “veil” was pulled back even a little, the people would be shocked, surprised, and confused.

  26. Matt says:

    @Tyrell:I would say that’s not propaganda but the inevitable result of news channels that were setup to cover events like 9/11 24/7. When there isn’t some sort of huge catastrophe going on they have to invent one. If there isn’t a controversy going on they lose viewership so they latch on to anything they can. Anything to keep people watching for one second longer.

  27. robz says:

    If the Republicans had really thought that there was something to the IRS “scandal”, they’d have granted Lerner immunity and required her to testify.

  28. al-Ameda says:

    @Tyrell:

    If the “veil” was pulled back even a little, the people would be shocked, surprised, and confused.

    Please, people are now “shocked, surprised, and confused” on a partisan basis.

    When you have many members of one unnamed political party saying that the tragic events of Benghazi is the worst political scandal in American history, then you can see where this is going.

  29. HarvardLaw92 says:

    @robz:

    Another thing we need to rid ourselves of – Congressional grants of immunity. They blatantly violate separation of powers, IMO, and are therefore unconstitutional.

  30. DrDaveT says:

    @HarvardLaw92:

    Another thing we need to rid ourselves of – Congressional grants of immunity.

    I understand your concern about separation of powers, but I don’t see how Congressional investigations could work without it. You can’t give Congress the power to compel testimony without trashing the Fifth Amendment. If they can’t grant immunity, every Congressional investigation would instantly devolve into what is becoming all too common — accusations on one side, and “no comment” on the other.

    (I am particularly pissed off at Congress over their propensity to subpoena people who are forbidden by law to answer their questions, while giving their accusers unlimited time to just make stuff up that nobody is permitted to refute. Pretty much every IRS hearing works out that way, due to the rules Congress wrote in the first place.)

  31. HarvardLaw92 says:

    @DrDaveT:

    I understand the dilemma that it creates, but prosecution is an executive power. The legislative may not usurp it. The fact that it makes it difficult for Congressional committees is immaterial IMO. Unconstitutional is unconstitutional.