IRS and Benghazi Scandal Breakthroughs
JULY 10, 2015
Don’t fall off your chair, but this week the Internal Revenue Service (IRS) ignored a court-imposed deadline to produce newly found Lois Lerner’s emails. Lerner is the former director of the agency’s Exempt Organizations Unit who remains at the epicenter of a growing scandal over the tax agency’s targeting of the Tea Party and other conservative groups and citizens.
In a victory for Judicial Watch, U.S. District Court Judge Emmet Sullivan ordered the IRS last week to begin producing, every Monday, nearly 1,800 newly recovered Lois Lerner emails. Judge Sullivan ruled from the bench during a status conference on July 1, 2015. Despite the court order, the IRS failed to produce any Lois Lerner emails this past Monday. The IRS also failed to provide Judicial Watch a status of the Lois Lerner email production issues, as also ordered by Judge Sullivan.
After some back and forth, we’ve agreed to receive the documents next week but I’m not sure how the IRS is going to explain its ignoring his orders to Judge Sullivan.
A report by the Treasury Inspector General for Tax Administration (TIGTA) released just this week on the Lois Lerner email scandal confirms that the IRS failure to timely search its back-up tapes resulted in 24,000 Lois Lerner emails being destroyed. The TIGTA report also confirms that IRS Commissioner John Koskinen delayed informing Congress (and the courts) for months about Lois Lerner’s email issue. (Judge Sullivan ordered the IRS to produce the TIGTA report to chambers the next day for in camera review at the July 1 hearing.)
The TIGTA report details that the Treasury Department also knew about the Lerner email problems for months but made no public disclosure. Other records remain missing, including potentially over 300 IRS hard drives. The office of IRS Chief Counsel William J. Wilkins, an Obama political appointee, oversaw the mishandling of the Lois Lerner email issue.
These developments come in response to your JW’s Freedom of Information Act (FOIA) lawsuit seeking documents about the Obama IRS’ targeting and harassment of Tea Party and conservative opponents of President Obama’s. It was our litigation that forced the IRS first to admit that Lerner’s emails were supposedly missing and, then, that the emails were on IRS back-up systems.
Back in November 2014, the IRS told the court it had failed to search any of the IRS standard computer systems for the “missing” emails of Lerner and other IRS officials.
On February 26, 2015, TIGTA officials testified to the House Oversight and Government Reform Committee that it had received 744 back-up tapes containing emails sent and received by Lerner. This testimony showed that the IRS had falsely declared to Congress, Judge Sullivan and Judicial Watch that Lerner’s emails were irretrievably lost.
Sure enough, TITGA recovered the new Lerner emails from IRS back-up tapes. TIGTA was able to locate the Lois Lerner back-up tapes within one day of requesting them from the IRS.
The Obama IRS’ contempt for the courts and for Congress resulted in a massive destruction of evidence. IRS Commissioner John Koskinen’s and IRS Chief Counsel William J. Wilkins’ resignations are long overdue.
The scandal about the Lerner emails and court obstruction is just for starters. This week, JW made headlines with new documents we forced out of the Department of Justice and IRS. The documents include an extraordinary “DOJ Recap” report detailing an October 2010 meeting between Lois Lerner, Justice Department prosecutors and the FBI to plan for the possible criminal prosecution of targeted nonprofit organizations for alleged illegal political activity. Incredibly, the Obama IRS gave the FBI 21 computer disks, containing 1.25 million pages of confidential IRS returns from 113,000 nonprofit social 501(c)(4) welfare groups – or nearly every 501(c)(4) in the United States – as part of its prosecution effort.
We pried this material loose under court orders in two Judicial Watch Freedom of Information Act (FOIA) lawsuits: Judicial Watch v. Internal Revenue Service and Judicial Watch v. Department of Justice .
The October 11, 2010 “DOJ Recap” memo sent by IRS Exempt Organizations Tax Law Specialist Siri Buller to Lerner and other top IRS officials explaining an October 8 meeting with representatives from the Department of Justice Criminal Division’s Public Integrity Section and “one representative from the FBI” to discuss the possible criminal prosecution of nonprofit organizations for alleged political activity:
On October 8, 2010, Lois Lerner, Joe Urban [IRS Technical Advisor, TEGE], Judy Kindell [top aide to Lerner], Justin Lowe [Technical Advisor to the Commissioner of Tax-Exempt and Government Entities], and Siri Buller met with the section chief and other attorneys from the Department of Justice Criminal Division’s Public Integrity Section, and one representative from the FBI, to discuss recent attention to the political activity of exempt organizations.
The section’s attorneys expressed concern that certain section 501(c) organizations are actually political committees “posing” as if they are not subject to FEC law, and therefore may be subject to criminal liability. The attorneys mentioned several possible theories to bring criminal charges under FEC law. In response, Lois and Judy eloquently explained the following points:
- Under section 7805(b), we may only revoke or modify an organization’s exemption retroactively if it omitted or misstated a material fact or operated in a manner materially different from that originally represented.
- If we do not have these misrepresentations, the organization may rely on our determination it is exempt. However, the likelihood of revocation is diminished by the fact that section 501(c)(4)-(c)(6) organizations are not required to apply for recognition of exemption.
- We discussed the hypothetical situation of a section 501(c)(4) organization that declares itself exempt as a social welfare organization, but at the end of the taxable year has in fact functioned as a political organization. Judy explained that such an organization, in order to be in compliance, would simply file Form 1120-POL and paying tax at the highest corporate rate.
Lois stated that although we do not believe that organizations which are subject to a civil audit subsequently receive any type of immunity from a criminal investigation, she will refer them to individuals from CI who can better answer that question. She explained that we are legally required to separate the civil and criminal aspects of any examination and that while we do not have EO law experts in CI, our FIU agents are experienced in coordinating with CI.
The attorneys asked whether a change in the law is necessary, and whether a three-way partnership among DOJ, the FEC, and the IRS is possible to prevent prohibited activity by these organizations. Lois listed a number of obstacles to the attorneys’ theories:
She pointed to Revenue Ruling 2004-6, which was drafted in light of the electioneering communication rules before they were litigated.
Just prior this meeting, the IRS began the process of providing the FBI confidential taxpayer information on nonprofit groups. This resulted in a massive breach. An IRS document confirms the IRS supplied the FBI with 21 disks containing 1.25 million pages of taxpayer records:
FROM: Hamilton David K
SENT: Tuesday, October 5, 2010 2:49 PM
TO: Whittaker Sherry [Director, GE Program Management], Blackwell Robert M
SUBJECT: RE: Question
There are 113,000 C4 returns from January 1, 2007 to now. Assuming they want all pages including redacted ones, that’s 1.25 million pages … If we get started on it right away, before the 10th when the monthly extracts start, we can probably get it done in a week or so….
The Justice Department documents also include a July 16, 2013, email from an undisclosed Justice official to a lawyer for IRS employees asking that the Obama administration get information from congressional witnesses before Congress does:
One last issue. If any of your clients have documents they are providing to Congress that you can (or would like to) provide to us before their testimony, we would be pleased to receive them. We are 6103 authorized and I can connect you with TIGTA to confirm; we would like the unredacted documents.
Why would the Justice Department need to get the documents first? Certainly not to help Congress or inform the American people.
All this shows that the Obama IRS was one of several federal law enforcement agencies misused by President Obama’s administration. The Justice Department and the FBI were used as law enforcement is often used in dictatorships – to try to silence and jail opposition to the dictator.
Americans would never have known anything about this abuse but for Judicial Watch. On April 16, 2014, Judicial Watch forced the IRS to release documents revealing for the first time that Lerner communicated with the DOJ in May 2013 about whether it was possible to launch criminal prosecutions against targeted tax-exempt entities. The documents were obtained due to court order in an October 2013 Judicial Watch FOIA lawsuit filed against the IRS.
Those documents contained an email exchange between Lerner and Nikole C. Flax, then-chief of staff to then-Acting IRS Commissioner Steven T. Miller discussing plans to work with the DOJ to prosecute nonprofit groups that “lied” (Lerner’s quotation marks) about political activities. The exchange included a May 8, 2013, email by Lerner:
I got a call today from Richard Pilger Director Elections Crimes Branch at DOJ … He wanted to know who at IRS the DOJ folk s [sic] could talk to about Sen. Whitehouse idea at the hearing that DOJ could piece together false statement cases about applicants who “lied” on their 1024s –saying they weren’t planning on doing political activity, and then turning around and making large visible political expenditures. DOJ is feeling like it needs to respond, but want to talk to the right folks at IRS to see whether there are impediments from our side and what, if any damage this might do to IRS programs. I told him that sounded like we might need several folks from IRS…
The House Oversight Committee followed up on these Judicial Watch disclosures with hearings and interviews of Pilger and his boss, Justice Department Public Integrity Chief Jack Smith. Besides confirming the Justice Department’s 2013 communications with Lerner, Pilger admitted to the committee that Justice officials met with Lerner in October 2010. We then uncovered new details about these meetings in December 2014 showing that it was the Obama Justice Department that initiated outreach to the IRS about prosecuting tax-exempt entities.
Now, these new documents show that the Obama IRS scandal is also an Obama Justice Department and FBI scandal. The FBI and Justice Department worked with Lois Lerner and the IRS to concoct reasons to put President Obama’s opponents in jail before his reelection. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information.
Again, also following Judicial Watch’s lead, the House also found out about the IRS transmittal of the confidential taxpayer information to the FBI. Because of this public disclosure, the FBI was forced to return the 1.25 million pages to the IRS. Why? Because it was likely a crime to have received them. Simply put, the FBI or a Justice Department prosecutor can’t ask for and receive IRS records on thousands of Americans just because the government might want prosecute one taxpayer or one tax exempt organization. The rules and the law are quite specific, as the IRS explains here. The Privacy Act, another law that makes it a crime to misuse certain government files, may also apply.
The New York Post rightly suggests the need for a special prosecutor:
The IRS scandal surfaced years ago — and for all the administration talk of a full investigation, this huge news is only surfacing now, and only thanks to Judicial Watch.
The news of FBI and Justice involvement in the IRS scandal makes the need for some special prosecutor to probe this mess even more obvious.
After all, as Judicial Watch’s Fitton asks: “How can the Justice Department and the FBI investigate the very scandal in which they are implicated?”
“Nothing in the world can take the place of persistence.” That is what President Calvin Coolidge said and that is what we continue to prove here at Judicial Watch, much to the consternation of Hillary Clinton.
We now have information about an email that directly ties Hillary Clinton, for the first time, to the now-debunked Benghazi talking points used by then-U.N. Ambassador Susan Rice to claim that the attack was the result of a “spontaneous protest” gone awry. The Obama State Department fessed up to the existence of this email in a federal court filing. Showing contempt for transparency, the Obama State Department is refusing to divulge the contents of the email, citing a discretionary “deliberative process” privilege.
JW’s legal team filed a Freedom of Information (FOIA) lawsuit in July 2014 seeking records related to the drafting and use of the talking points. The lawsuit sought records specifically from Hillary Clinton and her top State Department staff about the Benghazi talking points scandal:
Copies of any updates and/or talking points given to Ambassador Rice by the White House or any federal agency concerning, regarding, or related to the September 11, 2012 attack on the U.S. consulate in Benghazi, Libya.
Any and all records or communications concerning, regarding, or relating to talking points or updates on the Benghazi attack given to Ambassador Rice by the White House or any federal agency.
The State Department then had to start producing documents and explanations about the reasons behind the withholding of any documents – which led to the July 7 State Department court filing with the astonishing news about the Hillary Clinton Benghazi email.
The State Department supposedly requested government-related emails from former Clinton Chief of Staff Cheryl Mills, Deputy Chief of Staff Huma Abedin, and senior aide Jake Sullivan. Sullivan and Mills provided documents to the State Department responsive to Judicial Watch’s request on June 26. Abedin has yet to comply with the request from the State in Judicial Watch’s case. The Obama gang running the State Department and Justice Department refuse to provide any details about these new documents — which is another scandal. For instance, even though it is known that official State Department business was being conducted, the State Department is also refusing to disclose the email domain names of Clinton’s top aides: Mills, Sullivan and Abedin.
Yet, it gets even more interesting.
One of the Sullivan documents is an email chain from September 29, 2012, which discussed the talking points, and was originally included in the 55,000 pages of documents Clinton provided to the State Department. The initial email was sent to Clinton’s secret email account and to Mills, while the follow-up was sent by Mills to Sullivan and Deputy Assistant Secretary of State for Strategic Communications Philippe Reines.
Remember what I said earlier about “persistence”? Stay with me; this is where the search for the truth runs into considerable opposition.
An unnamed agency staffer initially determined at an unknown time that a “talking points” email was not relevant to Judicial Watch’s request for emails about the Benghazi “talking points.” The Clinton email then was withheld from Judicial Watch. Confusingly, the State Department told the court this week that “the later message [turned over by Sullivan on June 26] in the email chain, which was not sent to former Secretary Clinton, made it clear that one portion of the earlier message had, indeed, been discussing the talking points given to Ambassador Rice.”
The State Department, nevertheless, is withholding the emails under the “deliberative process” exemption to FOIA disclosure. The “transparent” Obama administration tells the court that the release of Hillary Clinton’s Benghazi email chain “could reasonably be expected to chill the frank deliberations that occur when senior staff are preparing points or other draft remarks for use by senior Department officials in addressing a matter of public controversy.” As I just told one media interviewer, I interpret this to mean “we can’t give out info about the Obama/Clinton Benghazi cover-up because doing so might scare future corrupt politicians from engaging in cover-ups.” (Recall that those now-debunked Benghazi talking points were used by Rice to claim that the attack was the result of a “spontaneous protest.” The Obama administration also sent false talking points about the attack to Congress.)
Despite these revelations, including an acknowledgement that top Clinton aide Huma Abedin may still produce documents, the State Department brazenly requests that the court simply dismiss Judicial Watch’s lawsuit, arguing that it has executed a “reasonable” search of agency records relevant to Judicial Watch’s request.
We have long argued that despite assertions to the contrary, the State Department has not executed a reasonable search of all documents relevant to Judicial Watch’s request. While the agency claims to have searched the 55,000 pages of records turned over by Mrs. Clinton, it has refused to recover and search the records kept by Mrs. Clinton on her “off-campus” email server. Per the Federal Records Act and other federal records laws, the State Department has a responsibility as a federal agency to obtain these records and search them in accordance with Judicial Watch’s FOIA request.
However, the State Department adamantly refuses to provide any information about Hillary Clinton’s mishandling of government records and why it never disclosed to the court or Judicial Watch that it knew Mrs. Clinton had taken these records. The State Department also refuses to take any steps to recover, preserve, and search all the emails on Hillary Clinton’s secret email server, which contains emails from multiple State officials, President Obama, and foreign leaders.
But because of our persistent legal pressure, the American people now have smoking gun proof of Clinton’s involvement in the false Benghazi “talking points” used by U.N. Ambassador Susan Rice. Only the pressure of our litigation exposed this extraordinary revelation and thwarted the State Department’s desperate cover-up of this information. The Obama administration wants to keep this astonishing talking points document secret. While this may serve the interests of Clinton’s political efforts, it is contrary to the rule of law and shows contempt for the people’s right to know.
In the meantime, State’s refusal to search the government records Hillary Clinton and her aides purloined demonstrates the need for intervention from the courts, not the dismissal of lawsuits seeking to preserve, recover, and search these hidden emails. Our efforts here demonstrate that we can’t even trust the State Department to disclose incriminating emails from Hillary Clinton it does have. It is urgent the rule of law be enforced at that rogue agency.
U.S. Ambassador J. Christopher Stevens and U.S. Foreign Service Information Management Officer Sean Smith were both killed in the Benghazi terrorist attack on September 11, 2012. Several hours after the initial assault, a second terrorist attack took place targeting a different compound located just one mile away. Two CIA contractors, Tyrone Woods and Glen Doherty, were killed in this second attack and 10 others were injured. Those four dead men and unheralded injured are mocked by the obstruction we face from Mrs. Clinton and the Obama administration, but those heroes are vindicated when – as happened this week – our persistence uncovers more of the truth.