Committee to DOJ: IRS Official Denied Conservative Groups ‘Due Process and Equal Protection’

By Terence P. Jeffrey | April 9, 2014 | 2:43pm EDT

Lois Lerner, who served as director of the IRS Exempt Organizations Division. (AP Photo)

( - Lois Lerner, who was director of the Internal Revenue Service’s Exempt Organizations Division, used her position in the IRS to deny conservative groups their constitutionally protected rights to due process and equal protection of the law, the House Ways and Means committee alleged today in what the committee called a “criminal referral letter” sent to Attorney General Eric Holder.

The committee approved the referral on a 23 to 14 vote that broke along party lines.

The letter presents information the committee says “tends to show intentional wrongdoing, including targeting specific taxpayer groups for adverse treatment, making misleading statements to law enforcement, and the possible disclosure of confidential taxpayer information.”

“During the course of its investigation, the Committee has obtained information that reveals that former IRS Exempt Organizations Division (EO) Director Lois G. Lerner, while acting in her official capacity, may have violated one or more criminal statutes,” said the committee’s letter to Holder.

First, said the committee, “Lerner used her position to improperly influence agency action against only conservative organizations, denying these groups due process and equal protection rights under the law guaranteed by the U.S. Constitution, in apparent violation of 18 U.S.C. 242.

Second, said the committee, “Lerner impeded official investigations by providing misleading statements in response to questions from the Treasury Inspector General for Tax Administration (TIGTA), in apparent violation of 18 U.S.C. 1001.”

Third, said the committee, “Lerner risked exposing, and may have actually disclosed, confidential taxpayer information, in apparent violation of IRC 6103 by using her personal email to conduct official business.”

“These findings, supported by the evidence described below, suggest that Lerner may have violated multiple criminal statutes,” said the letter.

One group targeted by Lerner’s actions, according to the committee’s letter, was Crossroads Grassroots Policy Strategies, a 501(c)(4) founded with the help of Karl Rove, who had served as President George W. Bush’s top political adviser.

According to a timeline published by the committee, Obama adviser David Axelrod had been publicly critical of Crossroads and Assistant Senate Majority Leader Dick Durbin (D.-Ill.) had called for an IRS investigation of the group before it attracted Lerner’s attention inside the IRS.

Assistant Senate Majority Leader Dick Durbin (D.-Ill)(AP Photo)

The committee points out that on Oct. 12, 2010, Sen. Durbin sent a letter to IRS Commissioner Douglas Shulman urging the IRS to investigate Crossroads GPS. The text of the letter is publicly posted on Durbin’s Senate website.

“I write to urge the Internal Revenue Service to examine the purpose and primary activities of several 501( c)(4) organizations that appear to be in violation of the law,” Durbin wrote in this letter. “One organization whose activities appear to be inconsistent with its tax status is Crossroads GPS, organized as a ( c)(4) entity in June. The group has spent nearly $20 million on television advertising specific to Senate campaigns this year.”

“I ask that IRS quickly examine the tax status of Crossroads GPS and other ( c)(4) organizations that are directing millions of dollars into political advertising, and respond with your findings as soon as possible,” said Durbin.

According to the committee’s letter to Holder, Lerner also was aware of complaints that a group called Democracy 21 had made concerning Crossroad GPS.

“Those complaints chiefly focus on Crossroads Grassroots Policy Strategies (Crossroads) and other right-leaning groups, but also cite left-leaning groups such as Priorities USA,” said the letter.

“On October 5, 2010, just two weeks before her remarks at Duke University, Fred Wertheimer of Democracy 21 and Gerald Hebert of the Campaign Legal Center (CLC) wrote to then-Commissioner [Douglas] Shulman and Lerner to, ‘Request for IRS investigation to determine whether “Crossroads GPS” is operating in violation of tax status,’” said the committee’s letter. “Later, on July 27, 2011, Democracy 21 and CLC sent the IRS a self-styled, ‘Petition for Rulemaking On Campaign Activities by Section 501( c)(4) organizations,’ in which they raised concerns about the political campaign activities of 501( c)(4) exempt organizations, including Crossroads and Priorities USA. Finally, on Dec. 14, 2012, Democracy 21 requested a meeting with Lerner to discuss its July 27, 2011 petition.”

According to the committee’s letter to Holder that meeting did take place.

“Lerner quickly organized a meeting for Democracy 21, not only with herself, but also with the Office of Chief Counsel and the Office of Tax Policy at the Department of the Treasury for January 4, 2014,” says the referral letter.

The letter goes on to say: “Before or soon after the meeting, Lerner apparently contacted Tom Miller (EO Technical) to ask about the status of Crossroads (whether the group had been audited or selected for an audit) because he replied by email at 1:55 PM that same day that the group had twice been before the Political Action Review Committee (PARC), in November 2010 and June 2011, but was not selected for audit.

“Following Tom Miller’s response,” the committee's letter says, “Lerner sent an email to Nanette Downing, the Director of the EO Examinations Unit in Dallas, TX, demanding to know why Crossroads had not been audited.”

House Ways and Means Chairman Dave Camp (R.-Mich.)(AP Photo)

The letter states: “On the following Monday, January 7, 2013, Lerner sent a follow-up email to Downing which states, ‘As I said, we are working on the denial for the [Crossroads] 1024, so I need to think about whether to open an exam. I think yes, but let me cogitate a bit on it.’ Interviews of IRS personnel and a review of Crossroads file shows that Lerner was in fact actively seeking to ensure denial of the group.”

Rep. Sander Levin (D.-Mich.), the ranking member of the committee, objected to the referral letter.

"It now seems clear that Republican members of the Ways and Means Committee have decided that they do not want to be left behind in the Republican campaign to declare this is a scandal and keep ti going until November," Levin said in an opening statement that was posted on his website. "Making this committee an arm of any Campaign Committee does a deep disservice to the proud traditions and legacy of this Committee."

Levin noted that the Department of Justice is already investigating the IRS matter. "Today, you are asking the members of this Committee to approve a letter urging the Justice Department to pursue a criminal investigation of Lois Lerner," said Levin. "One that is already ongoing. One that her lawyers have indicated she has already been interviewed as part of."

The fact that the IRS was targeting Tea Party and conservative groups for heightened scrutiny of their applications for tax exempt status was first revealed in an audit report released on May 14 of last year by the Treasury Inspector General for Tax Administration (TIGTA). Holder said on that same day that he had ordered an investigation of the matter.

On the following day, President Obama said: “I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has and the reach that it has into all of our lives.”

On May 22, 2013, Lerner appeared at a House Oversight and Government Reform Committee hearing on the matter. She said: “I have not done anything wrong. I have not broken any laws, I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee,” She then took the Fifth Amendment.

This March, Lerner appeared in the Oversight Committee again, and again invoked the Fifth Amendment.

On Jan. 8, 2014, Oversight Chairman Darrell Issa and Regulatory Affairs Subcommittee Chairman Jim Jordan sent a letter to Holder in which they stated that they had determined that Barbara Bosserman--a lawyer in DOJ’s Civil Rights Division and a campaign contributor to President Obama--was leading DOJ’s investigation of the IRS’s targeting of conservative groups. Issa and Jordan itemized in this letter to Holder $6,750 in contributions Bosserman had made to Obama’s campaign committees and to the Democratic National Committee.

On Jan. 22, Sen. Ted Cruz (R.-Tex.) wrote to Holder, citing Bosserman’s political contributions to Obama and the DNC, and asking him to name a special counsel to investigate the IRS’s targeting of conservative groups.

“It strains credulity to say that, out of the over 114,000 employees at the Department of Justice, the only possible choice to lead the investigation was a major political donor to President Obama,” Cruz wrote Holder. “This, on its face, is a significant conflict of interest.”

On May 10, Principal Deputy Assistant Attorney General Peter J. Kadzik wrote back to Cruz informing him that Holder had rejected his call for appointment of a special counsel.

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