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Former Top McCain Staffer Urged Lois Lerner to Audit Non-Profits 'Until It Becomes Financially Ruinous'

Sen. Carl Levin, D-Mich., left, talks with Sen. John McCain, R-Ariz.,

Senator John McCain's former staff director in 2013 urged top IRS officials -- including then-director of exempt organizations Lois Lerner -- to “audit so many [501 (c)(4) groups] that it becomes financially ruinous,” internal IRS documents obtained by Judicial Watch reveal. Lerner, for her part, said that it was "her job to oversee it all.”

Henry Kerner, who is currently special counsel for the United States Office of Special Counsel (OSC), made the shocking suggestion during an April 30, 2013, meeting between Kerner, Lerner, and other high-ranking IRS officials.

During the “marathon” meeting, Lerner and other IRS officials met with top staffers from the Senate Governmental Affairs Committee to discuss concerns raised by both Sen. Carl Levin (D-Mich.) and Sen. John McCain (R-Ariz.) that the IRS was not doing enough to rein in political advocacy groups in the wake of  the Supreme Court’s Citizens United decision.

McCain, who had been the chief sponsor of the McCain-Feingold Act, reviled the Citizens United decision because it overturned portions of the Act. He called it one of the “worst decisions I have ever seen.”

In addition to Kerner and Lerner, the April 30 meeting included Steve Miller, then chief of staff to IRS commissioner Nikole Flax and other IRS officials.

Judicial Watch has previously reported on the 2013 meeting, although the IRS had previously redacted key portions of the notes of the meeting.

From the now unredacted notes:

Henry Kerner asked how to get to the abuse of organizations claiming section 501 (c)(4) but designed to be primarily political. Lois Lerner said the system works, but not in real time. Henry Kerner noted that these organizations don’t disclose donors. Lois Lerner said that if they don’t meet the requirements, we can come in and revoke, but it doesn’t happen timely. Nan Marks said if the concern is that organizations engaging in this activity don’t disclose donors, then the system doesn’t work. Henry Kerner said that maybe the solution is to audit so many that it is financially ruinous. Nikole noted that we have budget constraints. Elise Bean suggested using the list of organizations that made independent expenditures. Lois Lerner said that it is her job to oversee it all, not just political campaign activity.

Following Judicial Watch's 2015 report on the 2013 meeting, Senator McCain issued a statement decrying “false reports claiming that his office was somehow involved in IRS targeting of conservative groups.”

On May 10, 2013, ten days after the meeting, Lerner admitted that the IRS had a policy of improperly and deliberately delaying applications for tax-exempt status from conservative non-profit groups. Lerner only made the admission to preempt the Treasury inspector general's impending report confirming the targeting.