Emails Show Lerner, DOJ Pondered Prosecuting Tax-Exempt Groups

April 16, 2014 - 3:05 PM

Lois Lerner, former IRS Director of Exempt Organizations, may have entangled in the Department of Justice in the latest string of emails obtained through a Freedom of Information Act by Judicial Watch.  In those emails, we see plans to involve the DOJ in pursuing legal action against groups that "lied" about their political activities, according to Judicial Watch.

Lerner sent an email on May 8, 2013 to Nikole C. Flax, who was former-Acting IRS Commissioner Steven T. Miller's chief of staff, laying the groundwork:

I got a call today from Richard Pilger Director Elections Crimes Branch at DOJ. I know him from contacts from my days there. He wanted to know who at IRS the DOJ folk s 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. I am out of town all next week, so wanted to reach out and see who you think would be right for such a meeting and also hand this off to Nan  as contact person if things need to happen while I am gone -

Flax replied on May 9, 2013.

"I think we should do it - also need to include CI [Criminal Investigation Division], which we can help coordinate. Also, we need to reach out to FEC. Does it make sense to consider including them in this or keep it separate?"

Judicial Watch also noted that around this time Lerner had "'handed off" scheduling the issue to Senior Technical Adviser, Attorney Nancy Marks, who was then supposed to set up the meeting with the DOJ.  Lerner also decided that it would be DOJ's decision as to whether representatives from the Federal Election Commission would attend."

Also:

Democratic Rhode Island Senator Sheldon Whitehouse had held a hearing on April 9during which, "in questioning the witnesses from DOJ and IRS, Whitehouse asked why they have not prosecuted 501(c) (4) groups that have seemingly made false statements about their political activities."  Lerner described the impetus for this hearing in a March 27, 2013, email to top IRS staff:

As I mentioned yesterday - there are several groups of folks from the FEC world that are pushing tax fraud prosecution for c4s who report they are not conducting political activity when they are (or these folks think they are). One is my ex-boss Larry Noble (former General Counsel at the FEC), who is now president of Americans for Campaign Reform. This is their latest push to shut these down. One IRS prosecution would make an impact and they wouldn't feel so comfortable doing the stuff.

So, don't be fooled about how this is being articulated - it is ALL about 501(c)(4) orgs and political activity

But in an email sent a few minutes earlier, Lerner acknowledged prosecutions would evidently be at odds with the law:

Whether there was a false statement or fraud regarding an [sic] description of an alleged political expenditure that doesn't say vote for or vote against is not realistic under current law. Everyone is looking for a magic bullet or scapegoat - there isn't one. The law in this area is just hard.

This development comes after it was discovered that Lerner had allegedly shared True The Vote's tax information with members of Rep. Elijah Cummings' staff. Rep. Cummings had denied his staff had any contact with IRS about the group.