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IRS’s Lois Lerner Pleads the Fifth

Posted By Arnold Ahlert On May 23, 2013 @ 12:46 am In Daily Mailer,FrontPage | 41 Comments

Lois Lerner, director of the IRS tax-exempt organization division that targeted conservative groups for extra scrutiny, put in a brief but self-serving appearance before the House Oversight and Government Reform Committee yesterday. “I have not done anything wrong,” she insisted in her opening statement. “I have not broken any laws. I have not violated any IRS rules or regulations. And I have not provided false information to this or any other congressional committee,” she added. After reading that statement, Lerner made it clear that was as far as she was willing to go. “I will not answer any questions or testify today,” she said. Committee Chairman Darrell Issa dismissed her and she left the building.

Just before Lerner got up to leave, Rep. Trey Gowdy (R-SC) raised an objection. “She waived her right to testify by issuing an opening statement,” said Gowdy. “She ought to stay and answer questions.” Rep. Elijah Cummings (D-MD), the committee’s ranking Democrat, countered that assertion. “Unfortunately this is not a federal court and she does has a right,” he said. “And we have to adhere to that.” Issa ultimately agreed with Cummings, and excused Lerner “subject to recall,” adding that he might consider giving her “limited immunity” to testify.

Prior to the beginning of yesterday’s hearings, the Fox News division located in Cincinnati, the alleged epicenter of the scandal, revealed that the IRS’s claim that the scandal is limited to low-level employees “is falling apart.” They obtained an IRS directory that explains the agency’s chain of command, noting that each of the six Cincinnati agents involved — Mitchel Steele, Carly Young, Joseph Herr, Stephen Seok, Liz Hofacre and a woman identified only as Ms. Richards — has both a different manager and, further up the chain, a different territory manager. The purpose of the chain is to prevent rogue agents from acting on their own.

Fox further reveals that a tax-exempt application must be processed within 270 days, or it triggers a system flag, requiring individual agents to maintain monthly status updates on cases until they are resolved. Because more than 300 groups were targeted through the Cincinnati office alone, over a period of 18 months to three years, thousands of flags would have been triggered. According to the IRS directory, a single IRS employee in Cincinnati, Cindy Thomas, the Program Manager of the Tax Exempt Division, would have received all of the flags.

This is where the chain of command gets critical. Only four people are above Thomas: Acting IRS Commissioner Steven Miller, who was “fired” despite the reality he was retiring next month; Joseph Grant, Commissioner of Tax Exempt and Government Entities who has also retired; Lois Lerner, who has invoked her Fifth Amendment privileges; and Holly Paz, Director of Exempt Organizations who was interviewed by the Committee on Tuesday.

Perhaps it’s time to subpoena Cindy Thomas.

Next up at yesterday’s hearing was Deputy Treasury Secretary Neal S. Wolin, who insisted his department knew nothing about the targeting of conservative groups. He pushed the administration’s line that President Obama and Treasury Secretary Jack Lew have “taken decisive action” to address the issues raised in the report by Treasury Inspector General (IG) for Tax Administration J. Russell George. That would be the report that insists the IRS abuse began in March of 2010, a contention debunked by the Thomas More Society, which released a public announcement August 4, 2009 about their involvement with two pro-life groups targeted by the IRS.

The utter disingenuousness of Wolin’s contentions is underscored by another inconvenient reality. A May 14 letter signed by House Ways and Means Committee Chairman Dave Camp and Ranking Member Sander Levin, demanding records of any communications between the IRS and the Treasury department, as well as any between the White House and the IRS, has been ignored. Camp and Levin had given the IRS until May 21 to comply with that demand. They refused to do so, and have not responded to multiple phone and email inquiries made by CNSNews.com.

Back at the House Oversight and Government Reform Committee hearings, both Democrats and Republicans were outraged by the revelation that the IRS was aware its employees were targeting right-wing groups as early as May 2012, but hid that information from Congress. Issa noted that Holly Paz testified to that effect on Tuesday, revealing that an internal investigation conducted by IRS officials ended on May 3. Thus, it was established that the agency was aware of the targeting a full year prior to the release of the IG’s report.

And far more to the point, it was aware six months before the 2012 presidential election.

George was asked if officials at either the Treasury Dept. or the White House directed IRS employees to target conservative groups. He said officials told him “there was no direction from the department itself to those in the determinations unit in Cincinnati, nor their affiliate office in Washington.”

Yet in a critical exchange, George revealed his investigation never probed White House involvement. “[I]n all honestly, we didn’t look at the White House. We didn’t question anyone as to whether or not they’d received any direction from the White House,” he said.

During his testimony, former IRS commissioner Douglas Shulman offered up the kind of rationale that is becoming a recurring theme surrounding this story. Rep. Jackie Speier (D-CA) asked Shulman if he took responsibility for what occurred in Cincinnati. “You know, I don’t take personal responsibility for there being a list with criteria put on it, but I do accept the fact that this did happen on my watch,” he responded. “So you don’t take responsibility, but you recognize the fact that it happened under your watch?” Speier repeated. “Look, I recognize that this happened on my watch and I’m very sorry that this happened while I was at the Internal Revenue Service,” replied Shulman.

What also happened on Shulman’s watch was pointed out by Rep. Jim Jordan (R-OH), in conjunction with White House visitor logs. The logs revealed that Shulman visited the White House 118 times in 2010 and 2011, during the period when conservative groups were being singled out for greater scrutiny. In an explanation for those visits that will likely strike fear in many Americans, Shulman claims many of them involved determining what the IRS’s role would be in implementing the healthcare bill.

Rep. Matthew Cartwright (D-PA) attempted to provide cover for the IRS, asking George if the doubling of applications after 2010 might have led to the targeting. The answer is irrelevant: the IRS’s own data show no such thing occurred, despite Lois Lerner’s earlier assertion that it did. George was further pressed to explain the basis of the IRS’s targeting. He blamed Lerner. “My response at this stage would be a lack of oversight, a lack of follow-up on the part of Ms. Lerner and the people within her immediate chain of command,” George said.

Later he attempted to rationalize the IRS’s behavior, saying that all of the groups he reviewed in his audit eventually got tax-exempt status. Chairman Issa cut through the obfuscation, noting that “you can actually deny better by not denying, because if you deny, they have a right of appeal,” Issa explained. “If you just let them sit in limbo, they’re screwed. And some are still screwed today.”

Issa’s claim is right on. Many organizations are still awaiting an IRS response regarding their status. A Washington, D.C. law firm that represents some of these groups says that the IRS’s claim that the system was streamlined after 2010 is demonstrably false in light of a massive increase in the amount of information the agency required of the firm’s clients. Like Fox, the firm debunk the “low-level employee” excuse because two of its clients’ applications had been referred to a “special task force” in Washington, DC.

The organization True the Vote, which applied for tax-exempt status in 2010, is still waiting for approval. They have endured three years of delays, during which time they have dealt with four different IRS agents, been subjected to six FBI inquiries, and have submitted thousands of pages of documentation to the agency, all to no avail.

As the afternoon wore on, another Democrat attempted to rescue the IRS, albeit indirectly. Rep. Peter Welch (D-VT) used his time to denounce the “absurd decision” by the Supreme Court in the Citizens United case. He claimed it has brought so much money into the political system that it threatens the ability of Congress to do its job. This absurd notion picks up where former House Speaker Nancy Pelosi (D-CA) left off ten days ago, when she contended broader amounts of political activity — also known as freedom of speech — made it harder for the IRS to do its job. However, it is in fact left-wing groups that dominate the non-profit sector, long before Citizens United, while their highly politicized work is rarely interfered with.

Another key moment in the hearings occurred when Rep. Mark Meadows (R-NC) told George that Holly Paz was present during 36 of 41 interviews conducted during the IRS audit. George contended he was unaware of the total, noting that many of the IRS auditors who produced that information are based outside Washington. This lack of knowledge, coupled with the aforementioned omission of targeted pro-life groups, and the failure to question anyone about possible White House involvement in the scandal, calls the thoroughness of the IG’s investigation into question.

After the hearing, Issa hardened his position with regard to Lerner. “When I asked her her questions from the very beginning, I did so so she could assert her rights prior to any statement,” Issa told Politico. “She chose not to do so–so she waived.” Stan Brand, general counsel for the House of Representatives from 1976 to 1983 disagreed. “I don’t think a brief introductory preface to her formal invocation of the privilege is a waiver,” he said. But Brand introduced the possibility that Lerner’s previous appearances before Congress may constitute a waiver of her Fifth Amendment rights. “Bottom line,” he warned, “I think we will hear no more from Ms. Lerner” unless she is provided immunity.

Thus, Lerner remains in the eye of the storm, which may be precisely the way the Obama administration wants it. As PJ Media’s Brian Preston notes, “several lefty bloggers known to be very close to the Obama White House were in fact meeting in the White House” on Tuesday, after Lerner’s attorney had announced she would be taking the Fifth. Two of them were Journolist veterans Ezra Klein of the Washington Post, and Josh Marshal of Talking Points Memorandum (TPM). In previous columns, Klein contended the IRS scandal was “a mess. But it’s not a mess that implicates the White House, or even senior IRS leadership.” Marshal insisted the scandal was a way for Republicans to reconnect with their base, now that the “touch points” of immigration and gays are no longer as effective as they used to be.

Yesterday, within 30 minutes of each other, Klein released a piece contending “heads should roll at the IRS,” while Marshal insisted Lerner “has to go.” Preston notes the “synchronicity,” of getting “reliably friendly bloggers and columnists on board with a story that focuses attention away from the White House.”

It is more than that. It is also Rule Number 12 in Saul Alinksy’s “Rules for Radicals”: “Pick the target, freeze it, personalize it, and polarize it. Cut off the support network and isolate the target from sympathy.”

As of now, Lois Lerner is the unsympathetic target of the IRS scandal. It behooves Darrell Issa to grant her some sort of immunity for the simplest of reasons: the American public deserves to know how deep the corruption goes within the most powerful agency of government they deal with — and how far it may extend beyond it.

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