'We're Going to Get Creamed': Lerner Emails Paint Picture of Planning 501(c)(4) Scrutiny
WASHINGTON – A House committee report claims Lois Lerner, who oversaw the Internal Revenue Service’s scrutiny of tea party groups seeking tax-exempt status, lied to Congress about her involvement in the targeting scandal.
The House Oversight and Government Reform Committee released a report Tuesday concluding that Lerner “created unprecedented roadblocks for Tea Party organizations” and “worked surreptitiously to advance new Obama administration regulations that curtail the activities of existing 501(c)(4) organizations.”
In 2011, Lerner directed the manager of the IRS’s Exempt Organizations Technical Unit to subject Tea Party cases to a “multi-tier review” system. She also stated in an email to her staff that the IRS Cincinnati office “should probably not have these cases.”
In one email, Lerner referred to the Tea Party cases as “very dangerous” and suggested the Chief Counsel’s office should be involved in the review process.
In another email, Lerner forwarded an article to Nanette Downing, director of exempt-organization examinations, from the liberal news site Mother Jones about how “dark money” was being used to influence the political process.
The report accuses Lerner of seeking to “convey her agreement with this sentiment publicly” and engaging “in a wholly inappropriate effort to circumvent federal prohibitions in order to publicize her efforts to crack down on a particular Tea Party applicant.”
Lerner expressed concern that the Citizens United vs. Federal Elections ruling would hurt Democratic senators seeking re-election in 2012. In response to an article sent to her by a colleague about Senate Democrats’ complaint to the FEC that political-oriented nonprofits were violating election law, Lerner writes: “Perhaps the [Federal Election Commission] will save the day.”
“The Supreme Court dealt a huge blow, overturning a 100-year old precedent that basically corporations couldn't give directly to political campaigns,” Lerner said at an event sponsored by Duke University’s Sanford School of Public Policy in October 2010. “And everyone is up in arms because they don't like it. The [FEC] can't do anything about it. They want the IRS to fix the problem.”
The report states that Lerner made false statements to committee staff on various occasions.
During a February 2012 briefing, Lerner told committee staff that the criteria for evaluating tax-exempt applications had not changed. According to the Treasury Inspector General for Tax Administration (TIGTA), however, Lerner directed in June 2011 that the criteria used to identify applications be changed.
In another briefing, she told committee staff that the information the IRS was requesting in follow-up letters to conservative groups, including in some cases a complete list of donors and their contributions, was not out of the ordinary. At a later briefing, an IRS official could not identify previous instances in the agency’s history in which the IRS asked groups for this information.
The report includes several emails from Lerner and her colleagues that shed light on her motives for applying stricter oversight to new 501(c)(4) organization applications.
The report highlights an email chain in September 2010 – a few months after the first Tea Party groups had been selected for extra scrutiny – in which Lerner wrote that the IRS should focus on these organizations because of concerns expressed by some media outlets that these nonprofit organizations were being created with the specific purpose to engage in politics.
“We need to have a plan,” she wrote. “We need to be cautious so it isn’t a per se political project. More of a c4 project that will look at levels of lobbying and pol. activity along with exempt activity.”
Lerner also said that she expected these political nonprofit groups to file a court case because they were “itching for a constitutional challenge.” In an email exchange about a Tea Party applicant, Lerner and her colleagues seemed to hope a lawsuit would lead the IRS to release information about this particular organization, despite rules protecting the secrecy of unapproved applications.
The emails paint a picture of IRS officials being aware of the potential political consequences of their actions and the increasing attention on the issue. On several occasions, Lerner received emails from colleagues that focused on the political involvement of tax-exempt conservative groups.
In March 2012, IRS Deputy Division Counsel Janine Cook sent an article to Lerner that discussed the potential congressional investigations and the IRS’s treatment of tax-exempt applicants. Lerner responded by writing: “we’re going to get creamed.”
The emails also show that Lerner was trying to figure out benefit issues in January 2013, including an estimate of the amount in benefits she would receive if she retired in October 2013. Lerner retired in September of that year.
The report mentions her use of a personal email address in violation of IRS policy and accuses her of disclosing confidential taxpayer information.
Lerner has refused to answer lawmakers’ questions twice, invoking her constitutional right not to self-incriminate. The report, however, asserts that Lerner waived her Fifth Amendment rights by reading a statement proclaiming her innocence at a hearing last year.
Rep. Darrell Issa (R-Calif.), the committee chairman, is weighing whether the committee should vote on holding Lerner in contempt of Congress for providing false or misleading information.