Miller knew he had a problem, though: Marks’s internal investigation had made that clear. Washington suddenly had new interest in working through Cincinnati’s backlog. IRS headquarters helped create a new system to process the queue, and Miller demanded weekly updates.
Lerner was nonetheless left inexplicably free to continue her war against conservative advocacy groups. She frequently referred them for audits. In May 2012, she forwarded to the manager of the auditing department an article about an “anonymous donor” who had given to the conservative American Action Network. “Let’s talk,” her e-mail read. In June, she forwarded a different article to the same audit manager, this one containing mentions of Americans for Prosperity, Crossroads GPS, and Citizens United.
In January, Lerner forwarded yet another story, in which the left-leaning media outlet ProPublica had fretted about the “dark money” going to five conservative nonprofits. She asked her staff for a meeting on “the status of these applications.” We don’t know what happened in that meeting. But we do know that two of the groups were put in the IRS’s surveillance program, and three were selected for audit. In total, four of the five groups underwent additional scrutiny.
She also remained focused on trapping nonprofits. Congressional Democrats, after all, hadn’t stopped demanding action. In February 2012, just as the first Tea Party interrogatories were mailed across the country, seven Democratic senators sent a letter to the agency demanding an investigation into (c)(4)s. A month later, the same seven repeated the demand.
Lerner was paying attention. In one June e-mail, she cheered on Bauer’s tactic of using FEC complaints to try to force conservative organizations to disclose their donors. She also e-mailed Marks, wanting to “pick” her “brain” about a new inspiration she’d had—a way to speed up the time frame in which the IRS could force social-welfare organizations to file tax data. In July, she directed her team to put together a proposal for how to keep better track of groups receiving anonymous donations. In November, her staff compiled for her a report on the political activities of nonprofits and whether those activities had increased since Citizens United.
Lerner herself had absorbed the view that government needed to blow up anonymity, and then embarrass and intimidate conservative groups out of political participation. All through 2010 and 2011 the IRS kept conservative groups in limbo. The next year was devoted to hounding them for information. In March 2013, those details now in hand, Lerner got ready for a big moment: issuing the first letter denying exempt status to a conservative (c)(4) group.
Denial letters are supposed to be private, and it is up to the group to decide whether to fight the ruling. But Lerner spent precious time strategizing a way to make this first one public by immediately forcing the case to court. Even her staff was taken aback by this idea and tried to dissuade her. She was insistent: “One IRS prosecution would make an impact and they wouldn’t feel so comfortable doing the stuff.” She also harried her staff along: “need to move c4 denials along—really need to get one out of here.”
* * *
Lerner never got to issue her letter. Something—or rather someone—intervened. His name was J. Russell George, who since 2004 had served as the Treasury inspector general for tax administration, a watchdog post nicknamed TIGTA. House Republicans hadn’t been fooled by Lerner’s February performance, and almost immediately reached out to TIGTA to ask for an investigation. He agreed.
George spent a year looking into the scandal, and he deserves credit for bringing it to light. At the same time, his approach to the investigation left a lot to be desired.
For one, he took the highly unusual decision to allow Holly Paz (Lerner’s top deputy) to sit in on every interview with ground-level employees, which had the effect of discouraging many of them from speaking freely. He also decided to update Lerner and other IRS leadership on his progress throughout the entire year, sharing multiple drafts of his report with them. This nod to fairness did not extend to Congress. He never once briefed members on the state of his investigation—an action that surely would have blown the lid off the IRS’s misbehavior. That may be why George didn’t—he figured Congress would break the news and potentially derail his probe. Yet his decision to keep Congress in the dark meant that the IRS was able to continue its targeting throughout 2012 and 2013, and that hundreds of conservative groups remained sidelined in a presidential election.
George’s investigation, despite taking a year, was also light. He never truly grilled employees. He didn’t requisition broad swaths of e-mails, or seek to truly understand how the targeting had evolved. His ultimate report instead read a bit like a statistical analysis—heavy on numbers and facts, light on blame.
The numbers and facts themselves were damning, and important to establishing from the get-go—and from a neutral source—that the IRS had behaved atrociously. At the same time, George’s reluctance to go beyond a basic audit—his failure to investigate who drove the affair, or the role politics played—kept the field open for the left to make up its own narrative.
Because George traded drafts with the IRS, the agency by April knew it would no longer be able to hide what had been going on. It decided to get out ahead of TIGTA and announce the news itself. Lerner’s ultimate apology wasn’t some hastily concocted affair, but the culmination of weeks of plotting at the highest levels of the IRS and Treasury Department.
And it was aimed at minimizing fallout. Steven Miller, the now acting IRS commissioner, headed up that discussion, debating possible venues with his advisers throughout April. One possibility was a Georgetown University forum where Lerner was scheduled to speak on April 25; the IRS went so far as to draft her remarks. The proposal shot up the ranks at Treasury, where Obama appointees (for unknown reasons) nixed the idea.
Miller considered several other May events before settling on the ABA panel on May 10. This idea, too, was run by the chief of staff to Treasury Secretary Tim Geithner. When no objections came, Miller handed Lerner handwritten talking points he’d crafted for her to use at the event.
Miller played his part, using a closed-door session at the ABA event on May 9—the day before the big apology—to hint at the news and to blame the IRS’s actions on “dumb” moves by staff and the “wave of cash” that had followed Citizens United.
Lerner meanwhile sought out a friendly tax attorney, Celia Roady, to deliver a planted question from the audience. And so on May 10, 2013—more than three years after the first conservative applications were segregated out and subjected to hostile treatment by the most powerful government on the planet—Lerner dropped the bomb. “So our line people in Cincinnati who handled the applications did what we call centralization of these cases. They centralized work on these in one particular group.…However, in these cases, the way they did the centralization was not so fine. Instead of referring to the cases as advocacy cases, they actually used case names on this list. They used names like Tea Party or Patriot and they selected cases simply because the applications had those names in the title. That was wrong, that was absolutely incorrect, insensitive, and inappropriate—that’s not how we go about selecting cases for further review.”
* * *
Within minutes of Lerner’s talk, Washington went batshit. Cable news channels exploded, e-mails flew, staffers scrambled to write up statements. Some professed shock, some incredulity. But the overriding emotion was fury.
Congress was furious. “Lerner, and all the way up the chain—they sat here for a year and lied to us,” recalls Ohio Republican Jim Jordan, who spearheaded the IRS investigation at the House Oversight Committee. “Flat. Out. Lied. And then dumped this apology, like it was no big deal.” Republicans like Jordan immediately understood that not only was the IRS admitting to a crime, but to an elaborate cover-up—one that had involved duping the people’s elected representatives. Speaker John Boehner summed up the general view when he asked, “My question isn’t about who’s going to resign. My question is who’s going to jail over this
scandal?”
TIGTA’s office was furious. It had spent a year on its audit, meticulously working to put together a straightforward report, giving the IRS every courtesy, and the agency had messed with the release. It had gone public before George could even get the final clearances for his report. The inspector general would later testify that he’d never seen a situation in which the IRS had leaked the contents of a report before it had been made public.
President Obama feigned fury. “The misconduct…is inexcusable. It’s inexcusable, and Americans are right to be angry about it, and I am angry about it,” he 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.”
Other Democrats joined in proclaiming righteous indignation. Missouri senator Claire McCaskill claimed, “We should not only fire the head of the IRS…we’ve got to go down the line and find every single person who had anything to do with this and make sure that they are removed from the IRS and the word goes out that this is unacceptable.” West Virginia senator Joe Manchin railed that the IRS actions were “un-American.” Montana senator Max Baucus, who’d first requested that the IRS investigate groups, suddenly decided that this was an “outrageous abuse of power.”
Commentators were furious. NBC’s Tom Brokaw declared, “It’s time for action.” ABC’s Terry Moran called it a “truly Nixonian abuse of power by the Obama administration.” Even liberal pundits were unhappy. MSNBC’s Rachel Maddow, who rarely misses a chance to compare conservatives to devil’s spawn, worried about the misuse of IRS power and said the unequal scrutiny put on conservative groups hadn’t been fair. Comedy Central’s Jon Stewart, in a moment of sincerity, slammed the Obama administration for its lack of “managerial competence.”
Cincinnati was furious. Following Lerner’s apology, Cindy Thomas whipped off a vicious e-mail to her and Paz, in which she declared that Cincinnati hadn’t been just thrown under the bus, it’d been “hit by a convoy of Mack trucks.”
But no one was more furious than the Tea Partiers themselves and their advocates. Mitchell processed, with mounting fury, the lengths to which the IRS had gone to hide all this and then attempted to make it a “nonstory” by chucking it out on a Friday. “All I could think was, ‘Don’t issue a damn apology. Issue my clients a letter of determination.’”
It’d be a very long time before that happened.
* * *
To this day, many Washington politicians will insist that we still don’t have the full story on the IRS debacle. That’s true, to the extent that we’re still missing relevant e-mails and testimony. Then again, the key to unraveling any good mystery is identifying the motive, the crime, and the cover-up.
We know the crime—the targeting of conservative applications.
We now know the motive. The Obama administration wanted to silence conservative groups before they could harm Democrats in elections. Not all Americans noticed it, but that motive was on vivid display for years. Through most of 2009 and 2010, Democrats publicly seethed with frustration over these groups; it was their top concern.
Thanks to several years of investigation, we also now know the cover-up. The very Democrats who pushed the IRS to act would, when caught, peddle a tale based on lies and misdirection. The country was told that the IRS had been hit by a flood of social-welfare applications that overwhelmed the system; that “low-level” employees were confused by a murky law; that liberal groups had also been caught in the snare; that conservative organizations were taking advantage of tax laws; that the Washington IRS had stepped in to remedy the problems. Not a bit of it was remotely true. The effort the left put into covering up what really happened is the most damning evidence of the crime.
Here’s what we do know, three years out from Lerner’s apology. We know a Democratic Party, worried by the backlash to its policies, and terrified by the Supreme Court’s blessing of freer speech, focused all its attention on silencing its political opponents.
We know its message was directed at an IRS that was already primed—by ideology and bureaucracy—to isolate and harass and delay the work of groups opposed to Obama.
We know that agency had already been captured by Obama acolytes, who were shifting it into an enforcer of administration policies on speech and health care.
We know the system the IRS set up was designed to capture only conservative groups, and to keep them on ice until the agency could find a way to shut them down entirely.
We know top officials contemplated other means of quieting its opposition, including a Justice Department plan for criminal prosecutions.
We know administration officials were fully briefed about IRS targeting in the run-up to the 2012 election, and kept it secret. We know that they were successful, and the effort helped to keep Obama in office and the Senate in Democratic hands.
We know that those officials then plotted a way to keep the news under the radar. We know that when it finally came out, they lied to Congress. And we know that all this went on for twenty-seven months, and swept up conservative groups that ranged from high-profile players to the Karen Kenneys of the world.
Chapter 9
Frosted
Congressman Jim Jordan was in his Ohio district, on the way to a speech, when Lerner spilled her beans. He’d known something was coming; TIGTA had given his office a heads-up that his IRS audit would go public soon, though Jordan didn’t know what was in it. He saw the name of his chief counsel, Chris Hixon, show up on the phone. “I hit the button and all he said was, ‘Shit, it’s true.’”
Jordan’s first emotion: anger, and on a lot of levels. He’d won Ohio’s 4th Congressional District in 2006, bucking the anti-GOP wave of that year. The 4th is Ohio’s most conservative district, and Jordan’s a perfect fit. He’s principled, tough, in touch, and in tune with his conservative grassroots. A lot of that connection came from his years in the Ohio General Assembly and Senate. But he also has a strong affinity for the Tea Party groups and their beliefs; he and his wife homeschooled their kids, they’re pro-family, anti–big government.
So he’d been tight with groups like the Sidney Shelby County Liberty Group, and highly visible conservative leaders like Tom Zawistowski, who ran the Portage County TEA Party. Those groups and others flooded Jordan’s phone lines in the wake of their February 2012 IRS letters. The congressman was concerned, but also unsure of what to make of the interrogatories. “Was it just some mistake at the IRS, was it illegal, was it something in between?” he remembers. “At the time, it was hard to know.”
Now he had heard from Lerner herself that it was far worse than anyone could have guessed. It had been a vast and orchestrated targeting campaign. That made Jordan boil.
“There’s plenty to be unhappy about with government. But this—this is the most fundamental right we have,” says Jordan, who in an interview two years later still looks dangerous even talking about it. “I don’t mean for this to sound apple pie, but this is the First Amendment—it is freedom of religion, freedom of assembly, and freedom of association. But of all those, the one the Founders stressed most was freedom of speech—and of that, political speech is the most important. It’s your most fundamental right to criticize your government. It does not get more basic than that.”
What equally upset Jordan was the mismatch—an overpowered, “cavalier,” and “arrogant” federal beast, going after the little folk. “The people they were targeting are good, honest, regular American families. They are regular people, like my mom and dad, who are doing something so basic—caring about this country. We are raised to care about this country, to speak out. It’s just that basic. I get mad even now just thinking about it.”
Jordan’s a former NCAA wrestling champion and Division I wrestling coach, still looks like one, and he does an honest mad face. He’s sat on the House Oversight Committee since he was first elected, and is intense about his duty to oversee the executive branch.
And that
’s also what “frosted” him about the Lerner admission. Jordan hadn’t known what to make of those first, February complaints, but he’d taken them seriously. Within a few weeks he’d called Lerner in front of his staff to answer questions. Jordan’s team peppered many more IRS officials with questions in the eighteen months that followed. Every bureaucrat, on every occasion, insisted that there was nothing funny going on. Hixon’s call set Jordan to remembering all of them. “When she gave that speech, a lot of Washington was wrapping its head around the fact that this had happened. But I’d already had all this interaction. So I was sitting in Ohio thinking, ‘They lied about this.’ And I thought, ‘Game on.’”
* * *
Democrats also shouldn’t have been surprised by the news. They’d inspired the targeting. They knew that a Democratic administration and Democratic Senate and Democratic House members had called on an IRS staffed with Democratic appointees to go after conservative groups.
They now knew that the IRS had done just that. They knew the nation was outraged. They knew Republicans and the media were asking whether Obama had ordered this, whether we had a new Nixon-era level of political targeting going on. And they knew that this was no time for excuses or partisanship. So Democrats joined Republicans in expressing outrage.
Obama labeled the IRS’s actions “inexcusable” and vowed to work “hand in hand” with Congress as it investigated the affair. The president was at pains to say he’d only learned about the targeting from “the same news reports” as the rest of America. White House press spokesman Jay Carney was at even greater pains to note that while the White House had been informed almost a month earlier that something was amiss at the IRS, the president had never been told.
The Intimidation Game Page 14