ABCs of IRS Mess; Justice Dept. Is Tainted Too

First published in the New York Post, January 29, 2015

At her confirmation hearings Wednesday, Loretta Lynch said she’s only “generally aware” of the Justice Department’s investigation of IRS targeting of conservative groups.

As a service for our likely new attorney general, here’s a primer on why so many in Congress want a special counsel in the IRS case.

Under federal rules, the attorney general appoints a special counsel “when he or she determines that criminal investigation of a person or matter . . . would present a conflict of interest for the Department or other extraordinary circumstances.”

In this case, there’s both.

On May 14, 2013, the Treasury Department’s Inspector General reported that the IRS had “used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions.”

Responding to the public outcry, Attorney General Eric Holder announced, “I have ordered an investigation to be begun. The FBI is coordinating with the Justice Department to see if any laws were broken.”

Problem is, Justice had long been interested in IRS investigations of tax-exempt groups.

Back in October 2010, the head of Justice’s Election Crimes Branch, Richard Pilger, met with IRS Exempt Organizations Director Lois Lerner — the woman at the center of the affair.

As Pilger later told House investigators, the meeting came at the request of Jack Smith, the director of Justice’s powerful Public Integrity Section.

It was one month before the 2010 midterm elections. The Tea Party was on the rise. Democrats were arguing that the Supreme Court’s decision in Citizens United that January had unleashed a torrent of campaign spending.

Within weeks of the Citizens United ruling, according to the Treasury IG’s report, a Cincinnati-based IRS unit under Lerner’s direction began searching for tax-exemption requests involving the words “Tea Party” and other “political sounding names.”

So Lerner had been at work for months when she met with Pilger that October 2010. He told investigators that the meeting was to explore being “more vigilant to the opportunities from more crime” in the tax-exempt organizations area.

Lerner’s agenda was clear. Days after the meeting with Pilger, she addressed the Citizens United decision in a talk at Duke University.

“They want the IRS to fix the problem,” Lerner said. “So everybody is screaming at us right now: ‘Fix it before the [2010 midterm] election. Can’t you see how much these people are spending?’”

The October 2010 events are significant. They establish high-level Justice Department interest in IRS targeting of conservative groups.

The events also set a partisan political context to the Justice and IRS actions: Everyone — meaning, everyone in liberal Democratic circles — is screaming at us right now to fix Citizens United.

Three years later, Pilger and Lerner were still at it. In a May 2013 e-mail uncovered by Judicial Watch, Lerner discussed with a colleague a call from Pilger on the thoughts of Sen. Sheldon Whitehouse (D-RI) about building “false-statement cases” against tax-exempt groups.

Whitehouse’s “idea,” Lerner wrote, was “that DoJ could piece together false-statement cases about applicants who ‘lied’ on their [tax-exempt applications].” She added, “DoJ is feeling like it needs to respond.”

Smith and Pilger aren’t the only Justice Department officials with conflicts of interest in the IRS case.

Another sign that Justice has a conflict of interest here is the woman tapped to lead its IRS investigation: Barbara Bosserman of the department’s Civil Rights Division. She has no apparent experience in cases where high-level political wrongdoing is at issue.

And she gave almost $7,000 to President Obama’s political campaigns and the Democratic National Committee. In 2009, according to Fox News, she attended a White House event hosted by the president.

Then there’s Andrew Strelka. Working in Justice’s Tax Division, he represented the IRS in two civil cases related to the targeting of tax-exempt groups, including a Freedom of Information battle with Judicial Watch. And before Justice, he worked for the IRS in Lois Lerner’s Exempt Organizations division.

“I cherished my time in the EO family,” Strelka e-mailed Lerner, “and I owe a big thanks to you for hiring me.”

Strelka’s ties to Lerner were so strong that both Treasury and Justice interviewed him in their IRS probes. But when he was defending the IRS in targeting matters, he failed to disclose to the judge or opposing counsel his ties to the IRS and Lerner.

The involvement of Smith, Pilger, Bosserman and Strelka all point to conflicts of interest for the Justice Department in the case.

Lynch should also weigh the statements of President Obama.

In December 2013, he waved off concerns about IRS pressure on his political opponents, saying a “bureaucratic . . . list” drawn up in “an office in Cincinnati” was the cause of Tea Party targeting. The next February, he said on Fox News that there was “not even a smidgen of corruption” in the IRS targeting affair.

In fact, we still don’t know how far up the political food chain the malfeasance goes. Among other things, investigators are still pouring through tens of thousands of e-mails uncovered months after the IRS had insisted they were lost.

But we do know the Justice Department investigation has been compromised, not least by the president announcing its conclusions before the probe is complete.

Lynch should move fast to restore an aura of independence and impartiality to the investigation by turning it over to a special counsel.