IRS Motion for Discovery and Exhibits
Number of Pages:31
Date Created:September 17, 2014
Date Uploaded to the Library:September 17, 2014
Autogenerated text from PDF
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT COLUMBIA JUDICIAL WATCH, INC. Plaintiff, Civil Action No. 13-1559-EGS INTERNAL REVENUE SERVICE, Defendant.) ____________________________________) PLAINTIFFS MOTION FOR LIMITED DISCOVERY Plaintiff Judicial Watch, Inc. (Judicial Watch), counsel and pursuant the Courts orders July 10, 2014 and August 14, 2014, respectfully moves the Court for order permitting limited discovery. Pursuant LCvR 7(f), Judicial Watch also respectfully requests hearing held this motion. Defendant Internal Revenue Service (the IRS the agency) had two opportunities provide the Court with the information required the July 10, 2014 order and submitted total seven declarations. Despite these two opportunities and multiple declarations, the IRS has failed provide important, material information about how missing e-mails former IRS Exempt Organizations Director Lois Lerners laptop may retrieved from other sources and what efforts the IRS has undertaken identify and obtain the missing emails from these sources. light the IRSs failure provide this important, material information, Judicial Watch respectfully requests that allowed obtain the information through limited discovery. good faith effort resolve this dispute, undersigned counsel requested August 25, 2014 that the IRS supplement its declarations under oath include the material information omitted from the declarations. The agencys counsel represented that the IRS will not so. The parties also met with Magistrate Judge Facciola August 25, 2014 try reach some consensus over the missing records, but these efforts were unsuccessful. Before filing this motion, Judicial Watch asked the agencys counsel September 10, 2014 whether the IRS would consent limited discovery related the missing records and the agencys efforts retrieve them from other, available sources. Attorneys for the IRS represented they were not able provide response the time this motion was filed. MEMORANDUM LAW This litigation presents rare case which revelations about crashed hard drives and missing e-mails, conflicting public reports about backup systems, and material omissions the Court raise serious questions about agencys compliance with FOIA. Limited discovery needed answer these questions. The parties appeared before this Court for status conference July 10, 2014, after alarming news reports indicated that large quantity the records issue this FOIA litigation were missing due alleged hard drive crash Ms. Lerners laptop. Based these reports, was apparent that the IRS had withheld material information from the Court and Plaintiff for months. During the July 10, 2014 status conference, the Court ordered the IRS provide sworn declarations from agency officials describing what happened the laptop which Ms. Lerners e-mails had been stored, how the missing e-mails may retrieved from other sources, and what efforts, any, the IRS had undertaken obtain the missing e-mails from those sources. its ruling, the Court explained: [T]he declaration should also include information that may assist the parties recovering the subject matter the lost e-mails from other sources. think thats highly relevant. there will two main parts, and will the Lois Lerner part, and will be, how get this information thats been lost from other sources, and thats going highly relevant well, and thats also going inform the Court whether theres need for limited discovery.1 July 10, 2014 Status Conference Trans. 38, lines 9-16; Minute Order, pt. The declarations were provided August 10, 2014. The IRS submitted five sworn declarations August 11, 2014. the declarations, the IRS admitted that Ms. Lerners hard drive had been destroyed. However, all five declarations omitted information required Part the Courts order how retrieve the missing e-mails from other sources. Dkt. No. (July 10, 2014 Minute Order); Transcript July 10, 2014 Status Hearing (Trans.) 38, lines 9-15; Minute Order subpart (2). result, the Court sua sponte ordered the IRS August 14, 2014 supplement its declarations August 22, 2014. part its second order, the Court again directed the IRS provide information about how the missing e-mails may retrieved from other sources, such Ms. Lerners BlackBerry, iPhone iPad. August 14, 2014 Minute Order. The second set declarations, submitted the IRS August 22, 2014, also failed address how the missing e-mails could retrieved from other sources and produced Judicial Watch. August 22, 2014 telephone conference, IRS attorneys informed Judicial Watch about the existence electronic data backup system that stores all government records the case catastrophic event.2 The agencys attorneys also asserted that the Treasury 1The parties were also ordered meet and confer with Magistrate Judge Facciola September 10, 2014, discuss how the lost e-mails are retrievable, all, from other sources. Dkt. No. (July 10, 2014 Minute Order); Trans. 39. While Judicial Watch would like able disclose the Court the discussions held between the parties before Judge Facciola, agency attorneys have notified counsel that the IRS takes the position that the meet and confer session was confidential settlement discussion that should not publicly disclosed. 2The backup system described the IRSs attorneys similar what government experts have identified discussions with Judicial Watchs attorney component the Continuity Government program. This program apparently includes offsite backup system (in addition the agencys regular onsite backup storage systems) created for purposes avoiding loss essential data the event catastrophic event. See also September 2014 letter from House Subcommittee Chairman Jim Jordan, attached Ex. Inspector General for Tax Administration (TIGTA) looking into whether some these backup tapes may include the missing e-mails, but that the IRS would not search these tapes because doing would allegedly too onerous. When Judicial Watch requested that the IRS supplement its declarations include this material information, the IRS refused. Pursuant the Courts orders and instructions the July 10, 2014 status conference, this new information precisely the kind material information that would assist the Court identifying other potential sources for the missing e-mails. also the type information that the Court stated would helpful determine what discovery may appropriate. Trans. 38. date, Judicial Watch has learned that least three different backup systems exist that may contain the missing e-mails. See September 2014 letter from House Subcommittee Chairman Jim Jordan, attached Ex. pp. 1-2. The IRS did not identify any these systems its seven declarations.3 The following summary the piecemeal and often contradictory information made public the IRS date, but omitted from its seven declarations: June 20, 2014, IRS Commissioner John Koskinen testified under oath that the IRS confirmed that backup tapes from 2011 longer exist because they had been recycled pursuant the agencys six-month retention cycle. Id. July 2014, almost one week before the status conference held this Court, IRS Legislative Affairs Director Oursler learned that backup tapes from the six-month retention cycle from 2011 indeed exist. Id. July 17, 2014, IRS Deputy Associate Chief Counsel Thomas Kane testified under oath during transcribed interview before Congress that September 10, 2014, the IRS filed unsworn notice informing the Court that TIGTA has taken possession unidentified number exchange server drives and that the IRS has been informed TIGTA that does not object the IRS resuming its investigation the missing emails. Attached the notice was letter from IRS Legislative Affairs Director Leonard Oursler, dated September 2014, that the IRS submitted Congress. Dkt. No. (Sept. 2014 Notice Internal Revenue Service). The notice just another example the piecemeal and inadequate information provided the IRS response the Courts orders. certain backup recovery tapes from the six-month retention schedule may still exist. Id. August 22, 2014, IRS attorneys admitted Judicial Watch that government-wide backup system exists the event catastrophic event. The IRS attorneys also disclosed that TIGTA was looking several these backup tapes. September 2014, Subcommittee Chairman Jim Jordan reported that 760 exchange server drives from the IRS have been located and may contain least some the missing records. Ex. Based information made public Subcommittee Chairman Jordan, these 760 exchange server drivers are different and distinct from the backup tapes that were allegedly destroyed pursuant the IRSs six-month retention policy. Id. The existence these additional storage systems for IRS records and the IRSs failure disclose these systems the Court deeply troubling. They raise serious questions about the IRSs candor responding the Courts orders and its good faith processing Judicial Watchs FOIA requests. Even more troubling that the IRS appears have knowingly omitted this crucial information from its declarations, two which were submitted IRS Counsel Thomas Kane, who had knowledge least some backup tapes early July 17, 2014. Id., Dkt. Nos. 26-5 (August 11, 2014 Kane Decl.) and 28-2 (August 22, 2014 Kane Decl.). While may possible retrieve Ms. Lerners missing e-mails from alternative sources, the IRS has repeatedly demonstrated unwillingness disclose information about backup systems and other alternative sources for the e-mails. appears unlikely that the IRS will disclose this all-important information unless Judicial Watch able cross-examine and ask probing, follow-up questions knowledgeable agency witnesses. result, limited, focused discovery necessary enable Judicial Watch and the Court obtain this obviously important information. Discovery also necessary identify the universe other missing records responsive Judicial Watchs FOIA requests. addition Ms. Lerners e-mails, Judicial Watchs FOIA requests also seek internal e-mails other IRS officials involved the targeting Tea Party groups, well communications between IRS officials and persons outside the agency regarding the targeting. According various reports, other IRS officials also experienced hard drive crashes, causing their records missing. Once again, the available information conflicting. News reports Friday, September 2014 indicate that records are missing for five other IRS officials involved targeting Tea Party groups. TIGTA, however, has reported that records eight officials are missing. See House Committee Oversight Government Reform Press Release, dated September 2014, attached Ex. see also Ex. fn. This information particularly important since e-mails already produced this litigation e-mails that fueled vigorous and continuing congressional inquiry into Ms. Lerners missing e-mails demonstrate that Ms. Lerner communicated with officials the U.S. Department Justice about prosecuting nonprofit groups that allegedly lied about their political activities seeking tax exempt status. See E-mails from/to Lerner and Flax, May and 2014 (Bates stamped JW1559-00105) and Lerner e-mails TIGTA report, (Bates stamped JW1559-001304 001305), attached Ex. House Committee Oversight and Reform Ltr. Attorney General Eric Holder, dated April 23, 2014, attached Ex. Identifying alternative sources from which Ms. Lerners missing e-mails may retrieved will also help identify alternative sources from which the missing e-mails other IRS officials involved the targeting Tea Party groups may retrieved. http://observer.com/2014/09/will-orange-be-the-new-black-for-irs-chief-lois-lerner (September 2014); http://hosted.ap.org/dynamic/stories/U/US_IRS_LOST_EMAILS?SITE=APSECTION=HOMETEMPLATE=D EFAULTCTIME=2014-09-05-15-47-22 (September 2014) The Internal Revenue Manual contains specific guidelines for ensuring that IRS record retention policies comply with the Federal Records Act. See C.F.R. 1236.10(1). These guidelines provide insight how the missing e-mails should have been retained and where they may now located. They also speak directly the type information required the Courts July 10, 2014 order. Some the relevant provisions are: Internal Revenue Manual, 188.8.131.52.3 (07-08-2011), Emails possible Federal Records. All federal employees and federal contractors are required law preserve records containing adequate and proper documentation the organization, functions, policies, decisions, procedures, and essential transactions the agency. Records must properly stored and preserved, available for retrieval and subject appropriate approved disposition schedules. **** Please note that maintaining copy email its attachments within the IRS email Outlook application does not meet the requirements maintaining official record. Therefore, print and file email and its attachments they are either permanent records they relate specific case. Internal Revenue Manual, 184.108.40.206 (06-01-2010), Security Electronic Records. IRS offices will implement and maintain effective records security program that incorporates the following: Provides for backup and recovery records protect against information loss corruption. Internal Revenue Manual, 220.127.116.11 (3-27-2014), Retention and Disposition Electronic Records. The IRS Records Officer the liaison with NARA and customer organizations for ensuring that electronic records and the related documentation are retained for long needed the IRS. Records created within e-mail systems, which meet the criteria federal record, are subject the same retention periods the paper hard-copy versions. Therefore, these records must retained electronically according the NARA-approved disposition authority printed and associated with the appropriate recordkeeping system. Temporary e-mail records can deleted only when they are eligible for destruction when they have been printed and associated with the appropriate recordkeeping system. Not one the declarations submitted the Court discusses this plainly relevant information. 10. Nor does single one the IRSs declarations speak to: (1) the status the backup tapes the alleged six-month retention schedule; (2) the 760 exchange server drivers; (3) the catastrophic backup system disclosed Judicial Watch the August 22, 2014 telephone conference; (4) whether search being done for records assistants who monitored Ms. Lerners e-mail communications.5 The IRSs unwillingness provide this crucial information information that the IRS was ordered disclose this Court, under oath, more than two months ago demonstrates that the only way the information ever likely provided discovery allowed and Judicial Watch permitted cross-examine agency witnesses knowledgeable about these subjects.6 11. While not ordinary occurrence, discovery FOIA cases permissible. See, e.g., Landmark Legal Found. Envtl. Prot. Agency, 959 Supp. 175 (D.D.C. August 14, 2013) (RCL) (permitting limited discovery address the adequacy the search); Citizens for Responsibility and Ethics Washington Office Admin., No. 07-964 (D.D.C. Feb. 11, 2008) (CKK) (order authorizing jurisdictional discovery FOIA/PRA case); Public Citizen Health Research Group Food and Drug Admin., 997 Supp. 56, (D.D.C. 1998) (RCL) (permitting discovery for investigating the scope the agency search for responsive documents, the agencys indexing procedures, and the like). addition, when there evidence some wrongdoing such material conflict agency affidavits, Long U.S. Dept Justice, Supp. 205 (N.D.N.Y. 1998), limited discovery has been allowed. Citizens for Responsibility Ethics Washington Natl Indian Gaming Commn, 467 Supp. 40, (D.D.C. 2006) (RMC). 12. The unusual circumstances this case plainly warrant limited, focused discovery. order for this case fairly adjudicated, Judicial Watch and the Court require clear and thorough understanding what records are missing, how the missing records can obtained from alternative sources, and what efforts the IRS has has not undertaken obtain the missing records from these other sources. The public interest also demands clear, thorough answers these important questions. Because the IRS has been unwilling provide this information any its seven declarations and because the Court deemed this information highly relevant, Judicial Watch respectfully requests that permitted obtain the information through written discovery and depositions knowledgeable agency witnesses some other, court-directed discovery that the Court deems just and appropriate. WHEREFORE, Judicial Watch respectfully requests that its motion for limited discovery granted. Dated: September 17, 2014 Respectfully submitted, JUDICIAL WATCH, INC. /s/ Ramona Cotca________________ Paul Orfanedes, D.C. Bar No. 429716 Ramona Cotca, D.C. Bar No. 501159 JUDICIAL WATCH, INC. 425 Third Street SW, Suite 800 Washington, 20024 (202) 646-5172 Attorneys for Plaintiff July 19, 2011 e-mail from Lerner Carl Froehlich and Oct. 16, 2012 e-mail from Lerner Troy Paterson, Oct. 2012 (Bates stamped JW1559-003384), attached hereto Ex. Mr. Kanes second declaration identifies BlackBerry used Ms. Lerner that was wiped clean and removed scrap for disposal June 2012, but fails disclose what happened the information stored the device even that second BlackBerry was destroyed during the relevant time period for lost records November 2010. Dkt. No. 28-2 (August 14, 2014 Kane Decl.) This just one more example incomplete information provided the agency and serious allegations destruction information after Congressional inquiries began result information disclosed Judicial Watch this litigation. Ex. see also http://youtu.be/z8PNIfg1fDs.