IRS Scandal Spreads to DOJ

Katie Pavlich reports that newly released IRS emails prove that former IRS honcho Lois Lerner contacted the U.S. Department of Justice about prosecuting some tax exempt groups in May 2013. The emails have been released per a Judicial Watch FOIA.

Lerner wrote the email shortly before an inspector general's report would make the IRS abuse of conservative groups public. Lerner got ahead of that by apologizing for the abuse via a planted question in a conference call with the American Bar Association.

Lerner emailed the IRS commissioner's office about the DOJ on May 8, 2013 -- just two days before she disclosed the abuse scandal -- asking DOJ whether groups could be criminally prosecuted for "lying" on their tax exempt request forms.

"I got a call today from Richard Pilger Director Elections Crimes Branch at DOJ," Lerner wrote on May 8 to Nikole Flax, chief of staff to former IRS Commissioner Steven Miller. "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."

Flax responded in email: "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?"

Flax worked for acting IRS Commissioner Steven Miller. Miller would testify under oath on May 17, 2013 that an "increased workload" was to blame for the abuse. His own chief of staff, at least, knew that that was not true.

By the time of Lerner and Flax's emails, the abuse had been going on since 2012. Lerner, at least, knew all about it. In these emails, Lerner was seeking to escalate it into criminal prosecutions, based on the wishes of a Democrat senator, and on her communications with the Department of Justice.

Let's back up to March 27, 2013. Lerner emailed staff about an upcoming Senate hearing.

"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," she wrote to IRS staff. "So, don't be fooled about how this is being articulated – it is ALL about 501(c)(4) orgs and political activity."

On April 9, 2013, Sen. Sheldon Whitehouse used a Senate Judiciary Committee Hearing to ask DOJ witnesses why some conservative groups were not being prosecuted. He accused those groups of "lying" on their tax exempt status forms.

After that, Lerner and DOJ communicated about going forward with prosecutions. Only the impending disclosure of the scheme by the IRS inspector general put a stop to that, and got Lerner to disclose the scandal ahead of the IG. If the IG had not been about to go public, the abuse would not only have continued, it would have gone criminal.

We now have a sitting Democrat congressman, Elijah Cummings, a sitting Democrat senator, Sheldon Whitehouse, the Federal Elections Commission, the U.S. Department of Justice, and the Internal Revenue Service all implicated in the scandal. Flax's involvement puts the abuse squarely into the IRS commissioner's office. But it takes an entity above all of those agencies to coordinate their actions. That entity can only be the White House.