The People Vs. Barack Obama

by Ben Shapiro

  The IRS got into the act early, too. Unearthed emails between Lois Lerner, the director of the exempt-organizations division, and a Federal Elections Commission lawyer demonstrated nefarious connections between the two organizations in pursuit of Obama-friendly objectives. The FEC lawyer wrote to Lerner in February 2009: “Several months ago . . . I spoke with you about the American Future Fund, a 501(c)(4) organization that had submitted an exemption application the IRS [sic]. . . .When we spoke last July, you had told us that the American Future Fund had not received an exemption letter from the IRS.” Such correspondence appeared to break the law, since the FEC was not supposed to have confidential IRS information. The FEC was, at the time, investigating the American Future Fund based on a complaint from the Minnesota Democratic Farmer Labor Party. Based on the IRS information, the FEC recommended prosecution. Nonetheless, the FEC commissioners recommended unanimously that the case be dropped.

  That was not the last time the FEC attorney contacted the IRS. He also asked about the American Issues Project: “I was also wondering if you could tell me whether the IRS had issued an exemption letter to a group called the American Issues Project? The group also appears to be the successor of two other organizations, Citizens for the Republic and Avenger, Inc.”45

  The correspondence between the FEC and the IRS represented the tip of the iceberg. Things were about to get much worse for conservative nonprofit applicants.

  CLIMATE OF RETALIATION

  With the 2010 congressional elections approaching, the Obama administration recognized trouble for Democrats. Polling data showed that Republicans were headed for historic victories in Congress, and historic momentum leading into the presidential election of 2012. Democrats were especially worried about the input of conservative social welfare 501(c)(4) groups on the election cycle in the aftermath of the 2010 Supreme Court decision Citizens United v. Federal Election Commission. President Obama hated the decision so much that he lied about it in front of the Supreme Court justices in his 2010 State of the Union address. “Last week, the Supreme Court reversed a century of law to open the floodgates for special interests—including foreign companies—to spend without limit in our elections,” Obama said as Justice Samuel Alito quietly shook his head at the lie. “Well, I don’t think American elections should be bankrolled by America’s most powerful interests, and worse, by foreign entities. They should be decided by the American people, and that’s why I’m urging Democrats and Republicans to pass a bill that helps to right this wrong.”46

  Hatred for conservative nonprofits became a central part of the Obama administration’s 2010 and 2012 electoral efforts. That hatred seeped down to the IRS, which, as we’ll see, soon picked up the Obama administration’s signal and began targeting just those entities the Obama campaign wanted to see targeted.

  In August 2010, an Obama administration official, Austan Goolsbee, told reporters in a background briefing that Koch Industries—the company owned by the conservative Koch brothers, long a bugaboo of the Obama team—was one of many “multibillion-dollar businesses that are structured as partnerships in ways that allow them to avoid paying sizable corporate taxes.” Senator Charles Grassley (R-IA) immediately fired back, pointing out that such revelations violated tax confidentiality. The White House then said that it was all a big mistake: “The official’s statement was not based on any review of tax filings and we will not use this example in the future.”47

  The Treasury Department launched an investigation. But the results of that investigation have never been released. Unless the Treasury Department tosses the prosecution to the Department of Justice, it will remain secret.48

  But that wasn’t the end of the story. In October, Republican congressmen warned that the IRS could be auditing conservative groups for political purposes. Senator Max Baucus (D-MT) actually requested an IRS review into political activities of particular tax-exempt groups, “chill[ing] the legitimate exercise of First Amendment rights,” according to Senators Orrin Hatch (R-UT) and Jon Kyl (R-AZ). Baucus’s requested IRS review would have targeted “major” tax-exempt organizations, which he said were used as “political pawns” by “political campaigns and powerful individuals.”

  The New York Times reported that despite that chilling effect, Democrats were intent on shutting down political opposition from the nonprofit world: “As the November elections approach, Democrats have complained that well-financed conservative groups, including the Chamber of Commerce, Crossroads GPS, Americans for Prosperity, and Americans for Job Security—have improperly exploited gaps in federal tax and campaign finance law to finance attacks on Democratic candidates.”49

  Complaints were filed against the Chamber of Congress; members of the Obama administration, pressed forward by groups like Think-Progress, began implying that foreign funding stood behind the Chamber. “Just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations,” Obama said. He continued, “[G]roups that receive foreign money are spending huge sums to influence American elections, and they won’t tell you where the money for their ads come from.” There was no evidence of any such foreign funding. Nonetheless, Obama directly attacked several conservative nonprofits, claiming they violated tax law: “the American people deserve to know who’s trying to sway their elections. . . . It could be the oil industry, the insurance industry, Wall Street—you’ll never know. Their lips are sealed, but the floodgates are open. And almost every one of them is run by Republican operatives, even though they’re posing as nonprofit, nonpolitical groups, with names like Americans for Prosperity, or the Committee for Truth in Politics.”50

  The IRS heard about all of this. In October 2010, Lois Lerner, the head of the tax-exempt section of the IRS, told Duke University’s Sanford School of Public Policy that “everyone is up in arms because they don’t like” the rise of 501(c)(4)s. She said, “[E]verybody is screaming at us right now, ‘Fix it now before the election. Can’t you see how much these people are spending.’ ” She vowed to look at the tax forms of specified groups the following year.51 In November 2011, IRS commissioner Douglas H. Shulman said the IRS would focus on “tax-return preparers who have been identified as high risk.”52

  That was just the beginning of the assault. In March 2012, seven senators—Chuck Schumer (D-NY), Michael Bennet (D-CO), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Tom Udall (D-NM), Jeanne Shaheen (D-NH), and Al Franken (D-MN)—wrote a letter to the IRS urging political scrutiny for nonprofit groups, particularly 501(c)(4) “social welfare” organizations. “We urge the IRS to take these steps immediately to prevent abuse of the tax code by political groups focused on federal election activities. But if the IRS is unable to issue administrative guidance in this area then we plan to introduce legislation to accomplish these important changes,” the letter said. It was sent to IRS commissioner Shulman.53

  “The shadowy attack ads we see every day should be brought into the light,” said Bennet. “The largest contributors should stand by the ads they’ve paid for, the voters should know who’s behind these ads, and these super PACs should not be allowed to abuse our tax code by masquerading as nonprofit charities.” Jay Sekulow of the American Center for Law and Justice shot back, “This is obviously a coordinated effort by the IRS to stifle these Tea Party and Tea Party–affiliated groups, and to stifle free speech activities. It’s as onerous as what they did to the NAACP in the 1950s, and I plan to make that point.” The New York Times commented, “Into that charged atmosphere, the I.R.S. is heightening its own push to ensure that nonprofits are sticking to their primary role as social welfare groups, an effort that began gingerly in 2011.” The IRS eventually answered the Democrats, saying it would “review organizations to ensure that they have classified themselves correctly and that they are complying with applicable rules.” The Times reported one group, specifically, as claiming discrimination: the Kentucky 9/12 Project, originally founded after Glenn Beck launched his 9/12 project.54 Th
e complaints, however, came from across the country.

  As Democrats pushed forward with their IRS pressure, Shulman visited the White House, again and again and again. Between January 2009 and November 2012, he visited the White House 157 times.55 During the period 132 different congresspeople contacted Shulman about problems with tax exemptions; there were forty-two news stories about it. Shulman later testified that he had not researched the issue at all at the time;56 he also said that his only truly memorable visit was the White House Easter Egg Roll, although he believed that a huge number of the visits centered on the implementation of Obamacare.57 Called in March 2012 before Congress to discuss the complaints about IRS scrutiny, Shulman was grilled by Representative Charles Boustany (R-LA), who asked about letters he’d received from constituents about the IRS. “Can you give us assurances that the IRS is not targeting particular groups based on political leanings?” Boustany asked. Shulman answered unequivocally: “First, let me start by saying, yes, I can give you assurances. As you know, we pride ourselves on being a non-political, non-partisan organization. . . . There is absolutely no targeting. This is the kind of back-and-forth that happens when people apply for 501(c)(4) status.”58

  THE TARGETING THAT WASN’T

  The same month Shulman denied political targeting of Obama’s political adversaries, IRS employees in Cincinnati suddenly began focusing with laser eyes on nonprofit groups—conservative nonprofit groups in particular. One Cincinnati IRS employee told the House Oversight Committee that in March 2010 he or she became aware of applications referencing the Tea Party or conservatism. Early that month, said the witness, an IRS supervisor mandated extra checks with regard to similar applications. “He told me that Washington, D.C., wanted some cases,” the witness told the committee. Seven cases were referred to Washington, D.C. “As an agent,” the witness stated, “we are controlled by many, many people. We have to submit many, many reports. So the chance of two agents being rogue and doing things like that could never happen.” Tea Party application requests, the witness stated, came from the top. Another witness said that the IRS deliberately “was not processing these applications fairly and timely.”59 That alone would be enough to violate Internal Revenue Code regulations against political targeting.

  But that was just the beginning. In May 2010, the Determinations Unit came up with what it called the “Be on the Look Out” (BOLO) list. By June 2010, IRS agents entered training on Tea Party cases. In July 2010, Determinations Unit management had told its specialists to single out Tea Party applications. The first formal BOLO listing circulated through the IRS in August 2010. The criteria: “Tea Party organizations applying for IRC § 501(c)(3) or IRC § 501(c)(4) status.”60 In February 2011, despite her later protestations to the contrary, Lerner knew about targeting of the Tea Party, and insisted that such cases be sent to Washington, D.C., rather than left in the outlying Cincinnati office. “Tea Party Matter very dangerous,” she wrote in an email. “Counsel and [IRS senior technical adviser] Judy Kindell need to be in on this one. . . . Cincy should probably NOT have these cases.”61

  By July 2011, the BOLO list had expanded to include “Tea Party,” “Patriots,” “9/12 Project,” any organizations concerned about issues like “government spending, government debt or taxes,” organizations looking to “make America a better place to live,” or using any statements in the application criticizing how “the country is being run.” In the understatement of the century, the inspector general of the IRS, J. Russell George, found that the BOLO “gives the appearance that the IRS is not impartial in conducting its mission.”62 Internal IRS documents later showed that during this time, the IRS lawyers in Washington targeted 162 groups by name, specifically worrying about “anti-Obama rhetoric” emanating from some of them. More than 80 percent of the 162 groups were conservative. The IRS suggested they were engaging in “propaganda”—a word that never appears in 501(c)(4) law, and would constitute a subjective characterization by partisan hacks. Patriots of Charleston, for example, found itself singled out by the IRS for “negative Obama commentary.”63

  After the director of exempt organizations, Lois Lerner, found out about the BOLO, the inspector general reported that she “immediately directed the criteria be changed.” A month later, they were indeed changed to focus on more general factors. But in January 2012, the standards were changed back. In May 2012, the director of rulings and agreements, Holly Paz, changed the standards back to normal. But the IRS agents got the hint. During the period May 2010 through May 2012, the inspector general reported, “all cases with Tea Party, Patriots, or 9/12 in their names were forwarded to the team of specialists.” Meanwhile, forty-four cases that should have been flagged were not. Overall, the political cases took “significantly longer than average to process,” effectively ruling many such organizations largely ineffective for the entirety of the 2012 cycle. As of December 2012, 81 percent of political cases had been open longer than a year, with an average of 574 calendar days. As for the IRS’s intrusive and inappropriate questions for nonprofits, those stopped suddenly as soon as media attention became heavy. Of the 170 organizations to which the IRS sent requests for additional information, 58 percent were asked inappropriate questions.64

  On July 10, 2012, Lois Lerner’s adviser, Sharon Light, sent Lerner a story from National Public Radio complaining about how outside groups were posing a challenge to Democrats seeking to retain their majority in the Senate. In specific, the piece reported that the Democratic Senatorial Campaign Committee was asking the FEC to target Crossroads GPS and Americans for Prosperity. “Perhaps the FEC will save the day,” Lerner replied.65

  Lerner and commissioner of tax-exempt organizations Sarah Hall Ingram also communicated directly with the White House. Much later, in October 2013, documents broke showing that Lerner had communicated confidential IRS information directly to the White House with regard to conservative groups opposing President Obama’s contraception mandate under the Affordable Care Act. The emails, which were given to the House Oversight Committee, were redacted with the note “6103,” a reference to the Internal Revenue Code prohibiting federal employees from disclosure of “any return or return information obtained by him in any manner in connection with his service as such an officer or an employee.”66 Overall, Ingram visited the White House 165 times, 155 of those meetings to hang out with deputy assistant to the president for health policy, Jeanne Lambrew.67

  The Obama IRS also began auditing many of Republican presidential candidate Mitt Romney’s biggest donors. As Obama ran neck and neck with Romney, the Obama campaign distributed a list of eight “wealthy individuals with less-than-reputable records,” suggesting that these Romney backers were dirty capitalists. One of those men was Frank VanderSloot, national cochair of Romney’s finance committee, who gave a pro-Romney super PAC $1 million. Within a week and a half of the Obama hit list hitting the Web, a former staffer on the Senate Permanent Subcommittee on Investigations showed up in Idaho Falls, Idaho, to look for legal records about VanderSloot. Two months later, the IRS announced an audit. One week after that, the Department of Labor began an audit of VanderSloot Farms. Two months after that, the IRS audited yet another VanderSloot company. VanderSloot told Breitbart News, “I’ve been through one audit, maybe, surely not in the last two decades, I’m thinking thirty years ago. Now, to be hit with two IRS audits within a span of two months of each other? And coming right on the heels of the president’s list? Those things just look awful suspicious.”68 VanderSloot wasn’t the only top Romney supporter to meet the IRS’s watchful eye. So did megadonor Sheldon Adelson.69 The Obama campaign singled Adelson out for especially anti-Semitic treatment, accusing him of using “dirty money” in his political donations.70

  That wasn’t all. The IRS also handed confidential files about conservative groups to liberal allies—a blatant violation of Internal Revenue Code, as well as a violation of the Hatch Act, given the attempt to sink conservative groups during electioneering. John Eastman’s Nati
onal Organization for Marriage (NOM) apparently watched in horror as a full list of the organization’s donors leaked to the far-left Human Rights Campaign, which quickly published the list online. The documents revealed that Mitt Romney’s political committee had given NOM cash. Eastman later told Congress that his experts had backtraced the documents posted at the HRC website and found “internal IRS stamps . . . [existing only] within the IRS.” He added, “If that’s inadvertent, the word no longer means anything.”71

  ProPublica, a liberal outlet, received IRS leaks as well. That publication honorably revealed the IRS’s activities within days of the IRS’s bias revelations. According to ProPublica, the group asked the IRS for sixty-seven nonprofit applications; the Cincinnati office, which reviewed the nonprofit applications, promptly sent over applications and supporting documents for thirty-one groups. The turnaround time: thirteen days. Meanwhile, conservative nonprofit applicants waited for years for a response. Nine of those hadn’t been approved, and weren’t supposed to be public. ProPublica then published six of them after redacting financial information. Why would the IRS turn over such documents? ProPublica’s stated mission in the run-up to the 2012 election gibed perfectly with the Obama administration’s: “Before the 2012 election, ProPublica devoted months to showing how dozens of social-welfare nonprofits had misled the IRS about their political activity on their applications and tax returns.” Acting IRS commissioner Steven Miller later testified that the agency handed over the files “inadvertent[ly].”72