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Judicial Watch • More IRS Smoking-Gun Emails

More IRS Smoking-Gun Emails

More IRS Smoking-Gun Emails

APRIL 10, 2015

IRS: Mistakes Were Made
JW Investigation Uncovers Questions about Minneapolis Explosion
Judicial Watch Attacks Racial Spoils System in Supreme Court Brief


IRS: Mistakes Were Made

Judicial Watch has just released a new batch of documents forced out of the Obama IRS that show the Obama administration’s scandalous misuse of the IRS to target Tea Party and other conservatives is not going away.

Included in the new batch of documents is a February 2012 email from Lois Lerner, who was then head of the IRS’ Exempt Organizations Branch, asking that a special program be set up to “put together some training points to help [IRS staffers] understand the potential pitfalls” of revealing too much information to Congress.  We also found a remarkable Lerner email from 2013 in which she says she is willing to take the blame for not having provided sufficient direction to her underlings on how best to investigate the targeted groups, and then conceded that she “understands why the IRS criteria” leading to targeting of Tea Party groups and other opponents of the President Obama “might raise questions.”

In May 2013, the Treasury Inspector General for Tax Administration (TIGTA) released an audit, however, the IRS had used “inappropriate criteria” to identify potential political cases. “Early in Calendar Year 2010,” the TIGTA wrote, “the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status to (e.g., lists of past and future donors).” The illegal IRS reviews continued for over 18 months and, the TIGTA reported, “delayed processing of targeted groups’ applications” preparing for the 2012 presidential election.

Not so coincidentally, during this period of time, Lerner emailed former Director of the Office of Rulings and Agreements Holly Paz, attempting to limit information provided by the IRS to Congress about non-profit classifications. Here is the exchange:

Thursday, February 16, 2012 1:28 PM– Lois Lerner to Holly Paz:

Subject: Review of Classification Write -Ups

While you were gone, Judy [Kindell – former Lerner advisor] and Sharon [Light – Lerner advisor] had the opportunity to look at some of the write –up from the referral committee and classification folks on cases they had reviewed. We are all a bit concerned about the mention of specific Congress people, practitioners and political parties. Our filed folks are not as sensitive as we are to the fact that anything we write can be public–or at least be seen by Congress. We talked with Nan [Downing – Director of EO Examinations] and she thought it would be great if R & A could put together some training points to help them understand the potential pitfalls, as well as how to think about referrals. As a starting point, Nan has sent up a bunch of papers that I asked Tom Miller [EO technical advisor] to review to provide feedback to Sharon/Judy –or whomever we decide should draft the training.

If there is nothing to hide “on cases” the IRS “reviewed,” then why the sensitivity training on how IRS employees can cover their tracks  from Congress?

So, besides confirming Lerner’s role in making sure Congress had no clue about the Obama IRS targeting effort, we also uncovered Lerner’s most extensive and detailed discussion to date about the IRS scandal.  (Remember, Lerner choose contempt of Congress rather than testifying under oath about the scandal.)  Judicial Watch did what Congress couldn’t.  Lerner reveals much in a January 31, 2013, email to TIGTA investigator Troy Patterson:

We feel your folks are being too narrow in their view and have decided that because of the language on the earlier BOLO [Be On the Lookout] list regarding Tea Party, everything that followed was tainted…They also don’t seem to be taking a big picture look at what we have done… When we describe that process, they acknowledge that that approach sounds reasonable, but seem to be saying that reasonableness is overshadowed by the fact that the criteria look bad to folks on the outside, so there is no way we could cure the initial bad impression.

We understand why the criteria might raise questions….So, I’m not sure how they [TIGTA] investigators are looking at we were politically motivated, or what they are looking for with regard to targeting. They didn’t seem to understand the difference between IRS acting in a politically motivated manner and front line staff people using less than stellar judgment. I am willing to take the blame for not having provided sufficient direction initially, which may have resulted in front line staff doing things that appeared to be politically motivated, but I am not on board that anything that occurred here shows that the IRS was politically motivated in the actions taken.

Again, what your JW has just uncovered shows that the IRS scandal is far from over. We also have email records from Lerner herself in which she admits and then denies her culpability and that of the IRS in the scandal.  There was a lot more going on here than “bonehead decisions in local offices,” as President Obama would have us believe.

Let’s explore further.

The documents obtained by Judicial Watch also include the initial June 2011 email in which Lerner told associates that her computer had crashed and her Blackberry no longer worked. The IRS failed to inform Judicial Watch (and the federal court handling this FOIA litigation) that Lerner’s computer had crashed, and that critical Lerner emails may have been wiped out. Three years later, in June 2014, it buried the information on page 15 of a letter from the IRS to Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Orrin Hatch (R-UT). The Lerner email contained:

Tuesday, June 14, 2011 8:54 AM– Lois Lerner to Williams Grant [IRS spokesman]; Kindell Judith E:

My computer crashed yesterday and my Blackberry doesn’t work in my office so I just saw this. Unfortunately, I am tied up until at least 12 and because Blackberry truncates, I can’t see bottom of email …

This email also discloses the IRS investigations extended beyond mere audits of Tea Party and other groups, and included a separate investigation arm of the IRS, the Review of Operations Unit:

Also, we often use the ROO [Review of Operations Unit] to do initial research (.) Before starting audits–they don’t touch taxpayers, but can look at publicly available info about orgs.

Ironically, it was this very JW lawsuit that resulted in the disclosure of Lerner’s “lost and found” IRS emails.  Indeed, our review of these documents is showing document gaps caused by the Obama IRS’ refusal to search for Lerner’s emails.

And the documents raise questions about the judgement of Senator John McCain (R-AZ).  A May 1, 2013, email exchange between Lois Lerner and other top IRS staffers revealed that she met with select top staffers from the Senate Governmental Affairs Committee in a “marathon” meeting to discuss concerns raised by both Sen. Carl Levin (D-MI) and Sen. McCain that the IRS was not reining in political advocacy groups in response to the Supreme Court’s Citizens United decision.  This occurred 11 days prior to Lerner’s admission, during an American Bar Association meeting, that the IRS had “inappropriately” targeted conservative groups.  These emails show for the first time that those attending this pressure meeting were key aides to McCain, the ranking minority member of the committee:

Wednesday, May 1, 2013 10:26 AM — Lois Lerner to Nikole Flax [Chief of Staff to then-Commissioner Steven Miller] and others:

Yesterday’s marathon went well thanks to “the village.” Glad to have all of you as part of that village.

Wednesday, May 1, 2013 12:23 PM – Sinno Suzanne [IRS Legislative Counsel] to Lerner and others:

I also took notes so I can compare and make sure we captured everything.

The staffers are below.

Laura Stuber (Majority Senior Counsel)

Elise Bean (Majority Staff Director and Majority Chief Counsel)

Kaye Meier (Senior Counsel for Senator Levin)

Henry Kerner (Minority Staff Director and Minority Chief Counsel)

Stephanie Hall (Minority Counsel)

Scott Wittmann (Minority Research Assistant)

The IRS seems to have blacked out the notes of the meeting.  And McCain and Levin said nothing about the meeting at the time.  But, in a press release sent 24 days after the meeting – and 13 days after the IRS scandal had already broken – the two senators claimed to be shocked at the news of the IRS targeting. The press release contained a letter the two senators sent to then-Acting IRS Commissioner Danny Werfel claiming outrage that the subject had not even been broached in their committee staffers’ six-hour marathon meeting.   But one is reminded of Shakespeare’s observation regarding Lady Gertrude’s transparently excessive claims of piety: “Methinks the lady doth protest too much,” because the letter also confirms that Levin (who is now retired) and McCain put pressure on the IRS to control political speech:

On April 30, 2013, Ms. Lerner and seven IRS colleagues spent six-hours being interviewed, on a bipartisan basis, by Subcommittee staff. That interview covered, among other topics, how the IRS determines which groups to review, what actions are taken in connection with the IRS reviews, and how the laws and regulations are used to examine those groups. Ms. Lerner failed to disclose the internal controversy over the search terms used by the Cincinnati office to identify 501(c)(4) groups for further review, the actions taken by that office in reviewing the identified groups, the investigation and imminent findings by the Treasury Department Inspector General for Tax Administration (TIGTA); and TIGTA’s conclusion that the IRS had used inappropriate criteria to target Tea Party and other conservative groups. Ms. Lerner also failed to disclose that she was fully aware of these issues as early as June 2011, and, according to TIGTA, had been personally involved in reviewing questionable actions taken by the Cincinnati office.

Judicial Watch previously forced the release of IRS documents that indicate extensive pressure on the IRS by Senator Levin to shut down conservative-leaning tax-exempt organizations.  Senator McCain has been vociferous in his calls for reining in free and open political discussion. He was one of the chief sponsors of the McCain-Feingold Act, and called the Citizens United decision, which overturned portions of the Act, one of the “worst decisions I have ever seen.”  One might conclude from these documents that McCain was happy to have Levin push the IRS to impose by regulation what the Supreme Court had already ruled to be out of bounds.

Ronald C. Machen, Jr., the Justice Department’s do-nothing, outgoing U.S. Attorney for the District of Columbia, has unsurprisingly announced it would not prosecute Lerner for contempt of Congress. (The Obama Justice Department is a co-conspirator with the IRS – see a good summary on Obama Justice conflicts of interest here.)  Machen is ignoring a law requiring a contempt citation be brought before a grand jury of American citizens.  Incredibly, he cites prosecutorial discretion!  So now Ms. Lerner and the IRS are benefiting from the same abused excuse used by the Obama gang to upend our nation’s immigration laws!

In the meantime, you might want to ask Sen. Mitch McConnell, the Kentucky Republican running the Senate, whether he will tie Obama’s nomination of Loretta Lynch to getting justice for the American people in the Obama IRS scandal.

As I wrote previously, this ought to be a major issue on the nomination fight over Loretta Lynch, Obama’s proposed successor to the disgraced Eric Holder.  Under Justice Department regulations:

The Attorney General, or in cases in which the Attorney General is recused, the Acting Attorney General, will appoint a Special Counsel when he or she determines that criminal investigation of a person or matter is warranted and–(a) That investigation or prosecution of that person or matter by a  United States Attorney’s Office or litigating Division of the Department of Justice would present a conflict of interest for the Department or other extraordinary circumstances; and (b) That under the circumstances, it would be in the public  interest to appoint an outside Special Counsel to assume responsibility for the matter.”

Should Mitch McConnell lead Republicans and Democrats in requiring the appointment of a special counsel for Loretta Lynch (or, actually, a better nominee) to get a vote on the floor of the U.S. Senate?  Let Mr. McConnell and your other Senate representatives know what you think.  You can reach them at 202-224-3121.

We’ll keep on doing what Justice and Congress won’t. There is more to come. We already have several thousand more internal IRS documents under review, several other lawsuits, and more leads that will keep us working at full capacity.  And we will keep you posted!


JW Investigation Uncovers Questions about Minneapolis Explosion

When an explosion occurs in a Muslim neighborhood at a building owned by a person previously implicated as a terrorist financier, one would think that authorities might conduct a thorough investigation.  But the results of an independent Judicial Watch investigation – that required a Freedom of Information Act (FOIA) lawsuit to get key information – shows that authorities dropped the ball on the deadly January 1, 2014, explosion.

At 8:16 a.m. on New Year’s Day in Minneapolis, a building at 516 Cedar Avenue containing a grocery store and several apartments exploded, killing three people and injuring 13. All of the apartments were occupied by single men. Many were hurt while jumping out of the burning building’s windows in order to escape the carnage.

The building was owned by Garad Nor, the owner of a money-transfer company who had initially been implicated as a terrorist financier by the U.S. Treasury Department. According to the Minneapolis Star-Tribune:

But within months of the Sept. 11 attacks, U.S. agents raided and blocked the accounts of five Minneapolis money-transfer operations, including his company Aaran Money Wire Service Inc.

Nor, who also goes by the name Garad Jama, was in Dubai the day he learned through CNN that his name was listed among 62 individuals and organizations that the U.S. government said had helped fund Osama bin Laden.

He returned immediately to defend himself, and nine months later, after he sued several members of then-President George W. Bush’s cabinet, Nor’s name was finally removed from the United Nations list of entities believed to have terrorist ties. The U.S. Treasury Department unfroze his business’ assets.

The apartment building was also adjacent to the Dar Al-Hijrah Islamic Civic Center, a mosque which lists the Muslim Brotherhood as a contact on its website “Links” page.  Immediately after the blast, FBI spokesman Kyle Loven said that the agency was aware of the explosion, “but it would be sheer speculation to theorize what may have occurred here as far as any mosque or any other business in the area.”  Amazingly, within 48 hours, the FBI denied any terrorist activity was associated with the explosion.

Documents separately obtained by Judicial Watch from the State Fire Marshal Division of the Minnesota Department of Public Safety, however, reveal that the explosion apparently was never thoroughly investigated.

In his January 10, 2014, report, Deputy State Fire Marshal Investigator Ronald C. Rahman admitted, “I did not retain any evidentiary artifacts from the scene.” Furthermore, in his concluding report on the case Rahman wrote, “[T]he cause of this incident must be classified as ‘Undeterminable.’”

Before the building’s destruction, G. Schmitz, fire investigator for the Minneapolis Fire Department who was on the scene on the day of the explosion, reported, “The origin of the fire is undetermined.”

Suggestions by some that the fire may have been caused by “some kind of gas leak,” were quickly refuted by Minnesota’s Centerpoint Energy spokeswoman Becca Virden, who stated that they “can detect a gas leak even when you can’t detect it – highly sensitive equipment. They have checked there were no gas leaks reported before and there are no gas leaks in the area now.” Virden added, “We had no natural gas in the area.”

The documents obtained by Judicial Watch from the State Fire Marshal Division of the Minnesota Department of Public Safety substantiate doubts that a gas leak caused the explosion.  Check out these details from a February 28, 2014, supplemental report filed by Deputy State Fire Marshal Rahman:

  • Interview of building occupant Abdi Ali Qobey, who was in apartment #5, on the same floor and across the hall from apartment #2, which blew up: “He was awake and lying in bed at the time of the incident… He did not smell (the odorant of) natural gas.”
  • Interview of building occupant Adani Ali, who was in apartment #1, which was directly involved in the fire: “He did not smell an odor of natural gas.”
  • “In review with Mark Bishop, a private fire investigator with Prairieland Fire and Forensics, who was retained by Centerpoint Energy, on the date of the incident gas company officials tested the odorant in the natural gas and found it to have an appropriate amount. Testing of the soil outside the structure in the area of the natural gas supply piping failed to reveal any fugitive gas in the soil.”

The Obama administration also conspicuously avoided any kind of serious investigation. How do we know?

Documents your JW obtained from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) through a March 12, 2014, FOIA request, reveal that ATF agents were explicitly told not to conduct an investigation of the explosion – after they had already begun preparations for their trip to Minneapolis. In an April 15, 2014, email from a St. Paul ATF group supervisor to a colleague, the supervisor wrote: “Additionally, at the request of the Minneapolis Fire Department, ATF did not respond to this incident.”  Why would the Minneapolis Fire Department make such an unusual request, particularly under such suspicious circumstances?

From here, the story gets even stranger.  An ATF “Report of Investigation” dated January 13, 2014, says that ATF agents “were notified (the document does not say by whom)…that the City of Minneapolis was intending on tearing down the structure prior to a scene examination taking place:”

On January 2, 2014, ATF was in contact with the Minnesota State Fire Marshal’s Office regarding the fire. Additional ATF personnel were also in contact with members of the Minneapolis Police Department. Plans were made to assist with a scene examination on January 3, once the bodies were recovered and the structural integrity was examined.

ATF personnel made plans to be at the scene of the fire on the morning of January 3 in an effort to determine the cause of the explosion and ensuing fire. ATF personnel were notified on the afternoon of January 2 that the City of Minneapolis was intending on tearing down the structure prior to a scene examination taking place. They (not identified) believed the fire was related to a natural gas leak in the building. The building was torn down and was then turned over to insurance representatives.

Even a novice sleuth would agree that it’s pretty hard to conduct any meaningful investigation when the possible crime scene and evidence it contains is destroyed.

So what’s going on here?

Why is there such reticence on the part of those who are charged with protecting public safety?

We are taking steps to find out.  We want to see what, if anything, has been done to seriously investigate an explosion that remains highly suspicious. To this end, we filed a Freedom of Information Act (FOIA) lawsuit against the Department of Justice (DOJ) to obtain records regarding the FBI’s response to the January 1, 2014, explosion of an apartment building.

The lawsuit, filed after the DOJ failed to respond our FOIA request to the FBI, asks for:

Any and all records regarding, concerning or related to the investigation of the January 1, 2014 explosion and fire at the Cedar-Riverside apartment complex in Minneapolis, Minnesota, based on searches of the FBI’s Electronic Case File system, Central Records System and Electronic Surveillance records, as well as any cross-referenced files concerning the explosion and fire.

Our investigation has raised questions about this explosion and why state and federal officials were so quick to close this case, tear down the building and leave the community without answers about what really happened in Minneapolis. The local Somali community there has provided many recruits for ISIS, so there is urgency to resolving this case.

This building explosion and the building owner’s links to both Somalia and to terrorist financing should sound alarm bells.

The official explanation that the explosion was due to a natural gas leak doesn’t bear scrutiny.

The FBI’s and Justice Department’s stonewall, which is forcing us to go to federal court, suggests these agencies have something to hide.


Judicial Watch Attacks Racial Spoils System in Supreme Court Brief

For years now, the U.S. Supreme Court has suggested that so-called affirmative action programs that result in racial quotas and such are a no-go. But, at the same time, the High Court has left some confusing and disturbing wiggle room that would allow race to be a factor as part some of nebulous effort to achieve “diversity.”

In higher education especially, admissions officials must avoid using race as the primary determining factor in admissions. This brings us to the historic Fisher v. University of Texas litigation, which may be headed back to the U.S. Supreme Court. We have joined with the Allied Educational Foundation (AEF) to once again file an amici curiae brief with the Court in support of Abigail Fisher, a Texas resident who was denied admission to the University of Texas at Austin (UT) in 2008 based upon its racial preference policies.

In 2008, Fisher and her former co-plaintiff, Rachel Multer Michalewicz, filed suit against UT, alleging that the university had violated the Equal Protection Clause of the 14th Amendment.  In January 2011, after the U.S. Appeals Court for the Fifth Circuit ruled in favor of UT, Fisher appealed the decision to the U.S. Supreme Court. In a June 2013, 7-1 ruling, the high court vacated the Fifth Circuit’s ruling and ordered it to review the case again. In his majority opinion, Justice Anthony Kennedy wrote:

Strict scrutiny does not permit a court to accept a school’s assertion that its admissions process uses race in a permissible way without a court giving close analysis to the evidence of how the process works in practice …

Your JW has been part of this debate for some time. In fact, we partnered with AEF on an amici brief in support of Fisher prior to her Supreme Court victory.

Despite the 7-1 Supreme Court ruling, a divided Fifth Circuit three-judge panel again upheld the UT race-based admissions policies in a 2-1 decision issued in July 2014. The Fifth Circuit panel suggested that colleges and universities “may use race and ethnicity not only in pursuit of an undefined ‘critical mass’ of diversity, but also ‘in its search for holistic diversity.’”

At the time, we joined with AEF to file an amici brief in support of Fisher’s appeal for an en banc (in full) hearing before the Fifth Circuit, arguing that the panel’s ruling had violated the Equal Protection Clause.  But in November 2014, the full Fifth Circuit declined to rehear the case.

In our latest “friend of the court” brief, we argue that race-conscious government activity results in the “further enshrinement of the intellectually impoverished concept of race into law; the perpetuation of a culture of racial and ethnic politics in American public life; and the increase of racial intolerance in American society:”

Ultimately, the only way to treat the illegitimate concept of race is to absolutely prohibit its use as a basis for government decisions affecting individuals or groups of individuals. Conveniently, such a prohibition is precisely what the Constitution already requires.

Our brief also highlights the absurdity of the crude racial classification system at issue:

Students must self-identify their race, but it remains unclear what makes one applicant a “Hispanic or Latino,” an “American Indian or Alaska Native,” an “Asian,” “Black or African American,” a “Native Hawaiian or Pacific Islander,” or simply “White.” UT does not specify whether an applicant must be a “full-blooded” member of his or her self-identified race or ethnic group, or whether 1/2, 1/4, 1/8, 1/16, or even 1/32 is sufficient to be granted or denied the “plus” factor.….Also undefined by UT’s policy is whether the terms “Hispanic” and “Latino” refer to persons of full or partial Spanish ancestry only, or also to persons of other European ancestry.

The court filing also cites research and one federal court ruling that suggests that one’s Hispanic ethnicity is self-defined:

[A]ccording to an April 2012 study by the Pew Hispanic Center, only twenty-four percent (24%) percent of Hispanic adults self-identify by the terms “Hispanic” or “Latino.”  Fifty-one percent (51%) say they self-identify by their family’s country or place of origin, and twenty-one percent (21%) use the term “American” most often to refer to themselves. The study concluded that this “system of ethnic and racial labeling does not fit easily with Latino’s own sense of identity.”  And at least one court has found that the term “Hispanic” is itself nothing more than self-identification:

[W]hether or not a person is an Hispanic is not a biological characteristic but a psychological characteristic as to how one identifies himself or herself. It is not simply whether one has some Spanish ancestry or whether one speaks Spanish as a first language… A person’s surname is not a definite indicator… [W]hether a person is Hispanic in the final analysis depends on whether that person considers himself or herself Hispanic.

****

This definitional problem was highlighted in the controversy over Senator Elizabeth Warren during her 2012 campaign for Senate. Based on nothing more than “family lore” and “high cheekbones,” Ms. Warren claimed, perhaps quite sincerely, that she was 1/32nd Cherokee and therefore a Native American and a minority.  In response, many people predictably expressed doubt that classifying Senator Warren as a “Native American” based on a system of racial self-identification made any sense, much less served a legitimate purpose.

Under UT’s policy, an applicant who, like the Senator, identifies herself as an “American Indian” based on “family lore” and “high cheekbones” would gain a “plus” factor toward admission, but an identical applicant without this same “family lore” or “high cheekbones” (or who was unaware that one of her 32 great-great-great grandparents happened to be Cherokee) would not. Imagine a freshman class at UT comprised of 6,715 Elizabeth Warrens, all identical but for the race or ethnicity of a single great-great-great grandparent.

The absurdity of this arrangement has become evident in the run up to the 2016 presidential campaign.   Consider the recent controversy over Jeb Bush’s “mistakenly” checking “Hispanic” on a voter registration form.   Think about what this means. Jeb Bush, under the UT admissions program now up for potential Supreme Court review, could choose to “self-identify” as Hispanic to gain a “plus factor” in applying to the state run school.  Sen. Warren’s Cherokee heritage and Gov. Bush’s mistake are perfect illustrations of the absurdity of UT’s racial spoils system.

The U.S. Constitution doesn’t allow the government to dole out special benefits based upon divisive definitions of race and ethnicity however defined – mistakenly or not – by the likes of Elizabeth Warren or Jeb Bush.

Until next week …