IRS Scandal Is Back
JANUARY 16, 2015
There is a lawsuit that could bring President Obama’s federal healthcare crashing down under the weight of its own lawlessness. A few weeks ago, we filed an amicus brief in support of plaintiffs who are making the plain obvious point to the United States Supreme Court that President Obama (or any other president) should not be permitted to rewrite federal statues in brazen violation of the U.S. Constitution’s separation of powers.
The plaintiffs in David King et. Al. v. Sylvia Burwell are appealing a July ruling by the U.S. Court of Appeals for the Fourth Circuit that found the broad application of Obamacare subsidies were proper and lawful. The suit names the IRS, the Department of Health and Human Services and the U.S. Treasury Department as defendants.
At its heart, the lawsuit is over what words mean and whether the government can, under the logic of Orwellian doublethink, change the meanings of words such as “State.” Under Section 36B of the Affordable Care Act (ACA), otherwise known as Obamacare, tax subsidies are restricted to individuals who purchase health insurance “through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act.” Similar wording occurs in eight other locations throughout the ACA. In establishing the regulations governing the tax subsidies, however, the Obama administration declared that the phrase “Exchange established by the State” refers to state exchanges, regional exchanges, subsidiary exchanges, and a federally-facilitated exchange. In our brief, we argue that the decision by the Internal Revenue Service (IRS) to extend ACA tax credits to individuals purchasing healthcare through federal exchanges “does not harmonize with the clear purpose of Congress” and could jeopardize the balance of powers.
Once again, the fundamental question here is should a president be permitted to ignore federal law? This question was addressed in a critical 2013 decision (In Re Aiken County) from the U.S. Court of Appeals for the District of Columbia, which said that “[u]nder Article II of the Constitution and relevant Supreme Court precedents, the President must follow statutory mandates so long as there is appropriated money available and the President has no constitutional objection to the statute.”
The DC Circuit opinion raised fundamental constitutional concerns about allowing a president to ignore federal law, and JW’s lawyers point to the Supreme Court to this key point from the decision:
It is no overstatement to say that our constitutional system of separation of powers would be significantly altered if we were to allow executive and independent agencies to disregard federal law…Our decision today rests on the constitutional authority of Congress and the respect that the Executive and the Judiciary properly owe to Congress…
So, the stakes are clear. If the Obama administration has its druthers, our constitutional system could be significantly altered to the point where it no longer has any meaning and our elected representatives in Congress no longer have any say in our public policy. Team Obama seeks to replace congressional policy choices about who is eligible to receive refundable tax credits with their own policy preferences. In our constitutional system, this kind of action should be a non-starter. The plain language of the Obamacare law show there is no ambiguity as to what Congress intended, and we highlight that Congress’ decision to:
“provide refundable tax credits only to individuals who purchase health insurance coverage through an Exchange established by one of the states was Congress’ attempt to strongly encourage states to establish Exchanges…Authorizing the receipt of refundable tax credits to individuals who purchase health insurance through an Exchange established by the federal government would not incentivize the states to create Exchanges; quite the opposite in fact. Therefore, the IRS Rule therefore directly contradicts Congress’ policy choice.”
If the Supreme Court rules against the Obama administration, an estimated 87 percent of individuals who enrolled through the Healthcare.gov website could lose their taxpayer-provided subsidies. Insurance on the Obamacare website is unaffordable to most without taxpayer subsidies. That’s why this case could deal a death blow to Obamacare.
Jonathan Gruber, the controversial Massachusetts Institute of Technology economist and Obamacare architect, has helped proponents of the truth. Gruber spilled the beans during a January 18, 2012, presentation at a conference sponsored by Noblis (a non-profit government contractor). It was during this presentation that Gruber confirmed that if states did not set up their own exchanges, the federal government would not give their health care applicants income tax subsidies.
To quote another federal court which looked at this whole corrupt mess and also ruled against Obama’s lawless misuse of the IRS to dole out Obamacare exchange subsidies contrary to law, the Obama administration’s legal position “leads us down a path toward Alice’s Wonderland, where up is down and down is up, and words mean anything.”
Orwell and Lewis Carroll would both recognize and recoil in horror at the abuse of law, logic, and language by the Obama administration. The dishonest despotism of the Obama presidency is now before the Supreme Court. The High Court ought to consult Carroll’s work for how to describe this president’s absurd claim that “State” means “Federal”:
“Contrariwise,’” continued Tweedledee, “if it was so, it might be; and if it were so, it would be; but as it isn’t, it ain’t. That’s logic.”
If “logic” holds any sway with its justices, the Supreme Court will uphold Obamacare against this president’s attack upon it. And in upholding Obamacare, a law based on lies and economic fantasies, the Supreme Court may help hasten its legitimate end.
One awful truth behind the headlines about the Islamic terrorist attack on the offices of the Charlie Hebdo magazine in Paris, France: the United States government could have stopped it. How? By taking off the streets, rather than using as an asset, Anwar al-Aulaqi, the Al Qaeda leader that is the seeming godfather of the Islamic terrorist movement. As the Daily Beast reported yesterday:
…there is now little question that New Mexico-born Anwar al-Awlaki, who was drone-whacked by the Central Intelligence Agency in September 2011, inspired, directed, and probably provided the initial funding for the murderous Jan. 7 attack on the satirical tabloid weekly Charlie Hebdo.
Fox News’ Catherine Herridge, the media leader on the al-Aulaqi scandal reported exclusively:
Said Kouachi, one of the two brothers who massacred the staff at Charlie Hebdo, met with the American cleric Anwar al-Awlaki in 2011 in Yemen at an Al Qaeda camp east of the capital Sana’a, a Yemeni government official briefed on the terrorist investigation told Fox News.
President Obama assassinated al-Awlaki through a drone strike in Yemen on September 30, 2011, the first American ever acknowledged to have been subject to a targeted killing. Problem is the FBI probably had been using this terrorist for years as a source, asset, or confidential informant. Take a quick look at the search results on his name over on JW’s website. The links that pop up ought to horrify and outrage you:
Judicial Watch has forced the release of more information about this al-Aulaqi, it is fair to say, than anyone in the world. Reporting on documents Judicial Watch obtained showing that this terrorist was close enough to the FBI to have called an agent to complain about his press coverage(!), Fox News outlined the scandal thusly:
The documents further support claims that Awlaki, who eventually went overseas and linked up with an Al Qaeda affiliate, worked with the FBI and was likely a U.S. government asset.
“I have little doubt that President Obama assassinated a terrorist that was an asset of the U.S. government,” Judicial Watch President Tom Fitton said.
He added: “There have been so many missed opportunities in getting the bad guys, but it’s one thing to have a bad guy working with you and for you and actually in your custody and then letting them go.”
Fitton questioned whether Obama was even aware of al-Awlaki’s connections to federal law enforcement. “These unanswered questions cast President Obama’s decision to assassinate [al-Awlaki] in a disturbingly different light,” he said.
Fitton claims federal law enforcement had al-Awlaki in their custody, until the FBI let him walk — and in the years before he was killed by a CIA drone in 2011, al-Awlaki pioneered the digital jihad, now being capitalized upon by the Islamic State, or ISIS.
“ISIS took that and ran with it –who knows, maybe if we had gotten al-Awlaki and kept him off the streets and in jail or in prison where he belonged that there would have been a much more slower development of the Internet jihad that we’re all facing worldwide.”
You can look it all up on our site, but as I detailed in one of the links above, your Judicial Watch has provided an ugly roadmap of FBI and other government reckless endangerment that has had deadly consequences:
FBI documents show that al-Aulaqi was tied to the 9/11 terrorist attacks. The FBI listed him as a member of a terrorist organization. The FBI had al-Aulaqi “dead to rights” on federal sex trafficking charges. The FBI refused to enforce an arrest warrant against him for passport fraud. Despite all of this, al-Aulaqi was never detained or prosecuted. And he went on to a leadership role in al Qaeda and other terrorist activities that lead to the deaths of Americans.
This is a scandal that spans both the Bush and Obama administrations. Unfortunately, the president we now have is ignoring the lessons of al-Alwaki. His frenzied efforts to release, in contravention of law, as many terrorists as possible are bound to set up more situations similar to al-Alwaki. Senator Lindsey Graham (S-SC) suggests that Obama is “delusional” in releasing these terrorists.
This Islamist terrorist threat is being exacerbated by a national security establishment that tries to hide the truth about terrorists working for it, by a White House that can’t manage to utter the phrase “radical Islam,” and by a corrupted Washington that can’t bother to rein in a president who releases terrorists who are almost certain to kill more innocents.
Please educate yourself and then your elected representatives about the results of Judicial Watch’s historic investigation and litigation that have uncovered our government’s reckless mishandling of the al-Alwaki terrorist threat. Let’s work to make sure there are no more al-Alwaki’s being protected by the FBI.
And I can tell you this: Obama may not want to go to France to take a stand against the jihadist threat – but if French law enforcement would like to use our information to figure out how to better protect their citizens, your JW will be on a plane in a heartbeat.
The IRS scandal is just beginning. And Lois Lerner is in the news again as we begin 2015.
She was the director of the Exempt Organizations Unit of the U.S. Internal Revenue Service (IRS) who is at the center of the 2013 IRS scandal. That was the one that involved the outrageous IRS scrutiny of Tea Party groups and other conservative critics of Obama. In May 2013, the Treasury Inspector for Tax Administration released an audit report confirming that the IRS used inappropriate criteria to identify conservative organizations that are not in favor of the administration. In 2014, Lerner was held in contempt of Congress after refusing to testify at a congressional hearing.
We have just released a new batch of IRS documents that include a series of emails between Lerner and then Tax Exempt and Government Entities (TE/GE) Division Deputy Director Joseph H. Grant in which she strongly objected to his planned visited to the agency’s Cincinnati office.
Here’s a brief sample of the exchange between Lerner and Grant:
We just gor an very extensive information request from Imraan [Imraan Khakoo, TE/GE official] –sure looks like op review material. I’m especially concerned that information about pipeline is being asked about … Add to that the fact tha cincinnati is smack dab in the middle of the c4 Congressional inqueries and is about to get a request from TIGTA on all of that, this is NOT a good time to be asking them for anything or to be talking to them about issue in their work. Everyone is stressed to the max and at their wits end, so can we put this off please? [Typos in originals]
It is a visit, not an OP review … I am also interested in the questions Imraan sent to them. Some answers should be readily at hand. Others certainly won’t be … The questions just serve as a framework for a broader conversation about how things are going and what is on our respective minds.
I get that–but timing would be bad if we have to go to Cincy now. So, I will assume we can go over this here as I get the information I’ve already asked for? Thanks.
I think we are in agreement, but just to be sure. I am planning to go to Cincy at the end of the month. I am travelling with Nan Marks and Imraan.
Fine with me–just trying to keep the stress level manageable in Cincinnati–they are pretty freaked. Please don’t ask them about closures, pipelines, wait time for full development cases, or the c4 application letters. I know Imraan is really interested in that stuff in general—I promise to give him info—that just wouldn’t be the best place to ask. Thanks.
It is also worth “noting” that on May 8, 2013, which was just a few days before the IRS scandal broke, then-Acting IRS Commissioner Steven Miller promoted Mr. Grant to TE/GE Commissioner, where he was assigned to “oversee the administration of tax law relating to employee plans, tax-exempt organizations and various government entities.” Miller announced his resignation on May 15, 2013 and Grant announced his retirement the next day.
Another email we’ve obtained that goes back to February 2012 demonstrates that the Exempt Organizations (EO) Technical was deeply involved with advocacy organization applications. An IRS bulletin states “The EO Technical office is located in Washington, DC.”
Here’s the email from and IRS official named Holly Paz that she sent to Lerner.
Lois, EO Determinations noticed an uptick in applications from advocacy organizations early in 2010. The first case was referred to EO Technical in…2010. That case was an application for…status. It closed…2010 when the… At that time, EO Technical requested another…from an…be transferred to EO Technical. Such a case was transferred in…2010. That case also closed…2012 after the… EO Technical also requested an application from a…be transferred from Determinations. A case was transferred in…2010. It is still being developed by EO Technical. To give you a sense of the growth in the number of these cases, in October 2010, we had identified approximately 40 advocacy cases.
That’s your federal government at work. And it’s zeroing in on those of you who are rather keen on the idea of constitutional limited government and advocacy efforts that use to enjoy First Amendment protections. (BTW, there was no uptick in “applications from advocacy organizations” – the number actually declined that year.)
There’s more in this batch, and I encourage you to review more details here.
Our litigation continues and more IRS documents continue to come our way. Be sure to check back here for further details.
Until next week…