Tom Fitton's Judicial Watch Weekly Update | February 07, 2014

Weekly Update: JW Takes on Obama IRS

February 7, 2014

JW Accuses IRS of Flouting Federal Rules:  Seeks End to IRS Anti-Tea Party Regs

When it comes to silencing political opposition, the Obama administration often wields a big stick – say, for example, using the Internal Revenue Service (IRS) to block the non-profit applications for organizations deemed too “patriotic.”  Or subjecting these organizations to painful and unnecessary audits.

On other occasions, however, the administration opts for a more subtle approach, tweaking a few words here and there in federal code. (Remember, the president has said he “has a pen” and is not afraid to use it.) But here’s the thing. When it comes to rewriting federal regulations small changes create big problems.

And this is the message JW brought to the Office of Management and Budget (OMB) in a letter requesting that the agency direct the Treasury Department to withdraw a new Internal Revenue Service (IRS) proposal to redefine “political activity” in a way that could place a “substantial … record-keeping and collection of information burden” on more than 100,000 non-profit organizations.

Here’s what the Obama administration attempted to do.

Under a new Notice of Proposed Rulemaking, Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities (NPRM), the Obama IRS seeks, without the approval of Congress, to do the following: Replace the decades-old definition – “participation of intervention in political campaigns on behalf of or in opposition to any candidate for public office” – with a new term – “candidate-related political activity.”

It may seem to some that this slight change in phraseology would yield insignificant results, but this is far from the truth.

As noted by The Daily Caller, “Communications and activities including voter registration drives and publishing voter guides, among others, are now classified as political activity. Grants and donations that 501(c)(4)’s give to other nonprofits are now subject to new record-keeping and increased scrutiny to prevent the money’s use for broadly-defined political activity.”

And then there’s the paperwork.

According to JW, the Paperwork Reduction Act of 1995 (PRA) submission filed by the IRS to support its proposal redefinition “does not analyze the substantial burden this new term will place on nearly all of the more than 100,000 501(c)(4) organizations,” and is therefore “fundamentally flawed.”

(The letter to OMB was signed for Judicial Watch by attorney Alan P. Dye, a recognized national expert in non-profit law and government regulation, of the law firm Webster, Chamberlain & Bean, LLP.)

Let’s discuss some of the “flaws” in the IRS PRA submission as noted in our letter:

• First … the Service [IRS] fails to mention, let alone review and evaluate as required under PRA, the burden of the collection of information arising out of its replacement of long-standing language … The new term … includes several activities … that under the long-standing concept would not be treated as political activity … Although the Service is now proposing to regulate these activities (by limiting their amount), it does not analyze the burden arising from its landscape-changing definition.

• Second, “burden” is broadly defined in the PRA to include all of the “time, effort, or financial resources expended by persons to generate, maintain, or provide information to or for a Federal agency,” including any time or other expenditure needed to review instructions, acquire technology, or search data sources … Yet, the Service has completely ignored these components of burden.

• Third, the new inclusion of volunteer hours imposed an additional layer of recordkeeping and burden upon these non-profit organizations, many of which rely heavily upon local volunteers … Anyone who has worked with volunteers knows that recordkeeping can be notoriously difficult – how many volunteers are going to want to fill out time cards for their service? How many volunteers are going to be turned off from civic engagement due to this paperwork burden?

 

“In short,” the Judicial Watch letter concludes, “the Service has failed to address the collection of information arising out of the NPRM’s new term … Consequently, the Service has not reviewed and evaluated the substantial burden this new term will place on nearly all of the 100,000 501(c) (4) organizations … [W]e respectfully request that the Director disapprove of the collection of information contained in the NPRM ….”

And while this could impact organizations on both sides of the political aisle, according to some members of Congress, given the Tea Party hate-fest ongoing at the IRS, it is clear the Obama administration intended for this policy to hamper conservative organizations disproportionately.

Per CBS News:

The IRS’ proposed changes to requirements for tax-exempt “social welfare” organizations, which would put new limits on their political activity, are the latest attempt by the federal agency to target conservative groups, Republican lawmakers said Tuesday.

The regulations, House Ways and Means Committee Chairman Dave Camp, R-Mich., said in a hearing, were “drafted in a manner, in my view, to shut down tea party groups.”

Rep. Charles Boustany, (R-LA) chairman of the Ways and Means’ oversight subpanel, added “that the new rules would ‘essentially codify the continued targeting of these very same groups’ that were previously targeted,” CBS News reported.

In short: The Obama IRS wants to kill the conservative movement with paperwork and regulation. These new IRS rules violate the law and could, through First Amendment-killing paperwork, freeze millions of patriotic volunteers, from both sides of the political divide.  President Obama and his administration ought to start obeying the law rather than rewriting it.

Stay tuned on this issue.  We will be objecting to these rules directly with the IRS and will be asking you, as part of a massive social media effort, to do the same next week.  The Obama administration, with the urging of its leftist allies, wants to kill the conservative movement with these proposed regulations and other steps.  Judicial Watch won’t stand still for it and neither should you.

Obama Administration Withholds Key Benghazi Emails

Even after a year and a federal lawsuit, the Obama administration is still in full stonewall mode on Benghazi. And JW continues to fight day-in and day-out to get to the truth in one of the most egregious and secretive scandals of the Obama administration.

Documents uncovered by JW show the Obama administration is withholding key emails about the attack on the U.S. consulate in Benghazi in its ongoing cover-up of the deadly scandal. The documents, released in December, include multiple emails, which are heavily redacted, about the controversial Benghazi talking points that falsely portray the attack as being the result of a spontaneous protest.

Do you remember that whopper of a lie peddled by former UN Ambassador Susan Rice and former Secretary of State Hillary Clinton on all those Sunday talk shows? To date, no one has been held to account for this deception.  In fact, President Obama continues to deceive on Benghazi.  Check out the transcript from his Super Bowl interview with Bill O’Reilly.

On October 18, 2012 JW filed a Freedom of Information (FOIA) request with the Department of State seeking information about talking points used to discuss the Benghazi attack that were given to then UN Ambassador Rice and others in the Obama administration. After waiting months for a response, Judicial Watch filed a lawsuit against the State Department on June 21, 2013 in U.S. District Court for the District of Columbia and requested that the State Department be compelled to produce all non-exempt responsive documents.

To date, the State Department has produced two sets of documents, each containing little or no information not previously available to the public.

The first set of documents consisted of 1192 pages of daily press clips from the United States Mission to the United Nations, dated September 12-28. The documents contained nothing beyond published news stories.

The second set of documents, provided to Judicial Watch on December 13, 2013 consists of 67 pages of emails. The majority of the content is redacted, aside from three prepared talking points sent to members of Congress on September 15, 2012, the first containing the administration’s false claim that the attack was “spontaneously inspired:”

• “The currently available information suggests that the demonstrations in Benghazi were spontaneously inspired by the protests at the US Embassy in Cairo and evolved into a direct assault against the US diplomatic post in Benghazi and subsequently its annex.  There are indications that extremists participated in the violent demonstrations.”

• “This assessment may change as additional information is collected and analyzed and as currently available information continues to be evaluated.”

• “The investigation is on-going, and the US Government is working with Libyan authorities to bring justice to those responsible for the deaths of US citizens.”

The Obama administration has withheld the name of the CIA official who distributed these inaccurate talking points, which seemed to have been used to brief Congress.

Now, I ask you. Why would the Obama administration produce dozens of blanked out emails if not to conceal the truth from the American people about its response to the Benghazi attacks? I think it’s clear that administration officials feared the political repercussions should more information detailing their incompetence and deceit be known. Remember, this all took place during the stretch run in the lead up to Election Day 2012.  You can bet our lawyers are considering challenges to this latest Obama secrecy gambit.

Our attorneys and investigators have already found some success by pressing the matter through the courts.

In June, 2013, Judicial Watch obtained the first seven photos from the Department of State depicting the aftermath of the September 11 Benghazi attacks, including: a burned and ransacked building, burned vehicles, and Arabic graffiti with militant Islamist slogans. In November, it obtained additional previously withheld photos, depicting: a car on fire; what appears to be the exterior of a burned out building; ransacked rooms within the building with files and office supplies strewn across the floor; and additional militant Islamist slogans.

Now, photos in hand, we’re after documents and records currently under lock and key inside the Obama administration.

In fact, JW currently has four pending FOIA lawsuits against the Obama administration for documents about the attack, 14 FOIA requests and one Mandatory Declassification Review Request. It has published two in-depth special reports on Benghazi, the last one on the first anniversary of the terrorist attack. [The first Special Report can be accessed here, the second here.]

The Obama administration only releases records it wants to release, or records the courts force it to release. Since there is absolutely zero chance the Obama gang will willingly do the right thing and let the full story of what happened at the U.S. Consulate in Benghazi be told, it is up to us to convince the courts to enforce FOIA law.

Will you help us in this effort?  Please consider making a tax-deductible contribution to support JW’s work, including our Benghazi related investigations and lawsuits.

JW Challenges Obama Administration’s Race-Based Policy

Obsessed with stoking racial division, the Left now promotes dishonest intellectual absurdity that George Orwell would well recognize.

Under the Left’s racial spoils system theory of “disparate impact,” a defendant can be held liable for discrimination for a race-neutral policy that statistically disadvantages a specific minority group even if that negative “impact” was neither foreseen nor intended. In such cases, defendants can be forced to pay for harm caused not by their own actions, but by economic and statistical realities, even if beyond their control.

Predictably, this HUD policy has been challenged in court and JW is right in the thick of this debate. This week, JW joined with the Allied Educational Foundation (AEF) in filing an amicus curiae brief with the U.S. District Court for the District of Columbia in support of the insurance industry lawsuit challenging the HUD policy of enforcing disparate impact liability under the Fair Housing Act (FHA), even in instances where there is no direct evidence of discriminatory intent.

Before we get to JW’s principle legal arguments, however, let’s review what the law actually says about the issues of concern:

As made applicable by section 3603 of this title and except as exempted by sections 3603 (b) and 3607 of this title, it shall be unlawful—

To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

(b) To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.

[Note: The law also makes provisions for people deemed “handicapped” as well.]

Clearly, it is outside the bounds of law, for example, for a realtor to intentionally engage in discrimination against a prospective homebuyer because of their race or color or any of the other qualifiers listed in the law. (Note the words “because of” as we delve into excerpts from JW’s brief which illuminate our legal theory.)

Specifically, Judicial Watch argues that the HUD disparate impact regulation violates both the Administrative Procedures Act (APA) — restricting federal agencies from exceeding the powers given to them by statute — and the Fourteenth Amendment Equal Protection Clause. According to the amicus brief:

I. HUD’s Rule Violates the Administrative Procedures Act

Section 804(a) of the FHA does nothing more than make it unlawful to “refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” The phrase “because of race” conveys the fact that race must be the reason (or at least a reason) for the refusal. Accordingly, under the statute’s plain text, there must be an intent to discriminate against a member of one of the named classes in order for the action to be unlawful. HUD’s interpretation is inconsistent with the plain meaning of the statute, and so the regulation must be stricken.

II. Any Interpretation of the FHA That Would Allow HUD’s Rule Would Violate the Equal Protection Clause

Any interpretation of the FHA Section 804(a) which allows HUD’s regulation would render the FHA unconstitutional … HUD’s interpretation of the FHA would be unlikely to survive strict scrutiny, as the Supreme Court does not view “racial balancing” as a compelling state interest. In fact, the Supreme Court has found quite the opposite: “At the heart of the Constitution’s guarantee of equal protection lies the simple command that the Government must treat citizens as individuals, not as simply components of a racial, religious, sexual or national class.”

Warning that HUD’s “unlawful action poses a serious threat to the rule of law,” ” the Judicial Watch/AEF brief argues:

HUD’s broad, race-based housing regulation is especially harmful because it attempts to further enshrine the intellectually impoverished concept of race into law, and seeks to use the law to perpetuate a culture of racial politics in the housing market, and more broadly, in American public life. Such actions will serve to increase racial polarization and resentment in this country, perpetuating our domestic focus on ‘racial’ issues, and inevitably prolonging the misconception that a person’s ‘race’ is a useful distinction for judging who a person is and what they are entitled to.

As noted by The Weekly Standard, this is not the first court challenge to HUD’s “Disparate Impact” theory, but it might be the first to earn a court judgment: “…twice now since 2011 private parties brought disparate impact claims in cases that reached the Supreme Court and were accepted for review. Both cases presented the same question as the insurers’ associations present now—whether such claims are legitimate under the FHA. And both cases were settled mere weeks before oral argument, paving the way for their withdrawal from the Court.”

And why were they withdrawn and/or settled?

“Both settlements were driven by parties fearful that the Supreme Court would decide that disparate impact claims are not permitted under the FHA,” the Standard explains.

The “parties” responsible for the settlements include the race-baiting former head of the Justice Department’s Civil Rights Division Thomas Perez (See Black Panthers) and liberal organizations like George Soros’s Open Society Foundation. Liberals were afraid their cherished theory would be invalidated and they ducked out of court to avoid it.

Judicial Watch previously has gone to court three times in its efforts to expose and oppose the Obama administration’s controversial “disparate impact” policies.

On November 2, 2012, JW filed a Freedom of Information Act (FOIA) lawsuit against HUD seeking documents relating to possible collusion between the Obama administration and the city of St. Paul, MN, in withdrawing a disparate impact appeal pending before the U.S. Supreme Court.

On September 3, 2013, it filed an amicus brief with the Supreme Court on behalf of the township of Mt. Holly, New Jersey, arguing that the FHA prohibits only disparate treatment, not alleged discriminatory intent.

And on September 24, it filed a Freedom of Information (FOIA) lawsuit  against HUD for all records of communications regarding two disparate impact housing discrimination lawsuits, Magner v. Gallagher and the Township of Mt. Holly v. Mt. Holly Gardens Citizens Association. Mount Holly like Magner, was withdrawn from the Supreme Court docket before arguments could be heard.

The Obama administration wants, in the words of this brief, “to perpetuate a culture of racial politics in the housing market, and more broadly, in American public life.” The Obama administration’s race card is dangerous and detrimental to the basic concept of equal justice under law.  Let’s hope and pray that courts rein this latest example of Obama’s dangerous lawlessness.

Until next week…