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Judicial Watch has
released more blockbuster documents from the Internal
Revenue Service (IRS) that confirm that the IRS used donor lists of tax-exempt
organizations to target those donors for audits. The documents also show that
IRS officials specifically highlighted how the U.S. Chamber of Commerce may come
under "high scrutiny" from the IRS. We forced these records out through
a Freedom of
Information lawsuit seeking documents about the selection of individuals
and organizations for audits, based application information and donor lists
submitted by Tea Party and other 501(c)(4) tax-exempt
organizations.
In a
letter dated
September 28, 2010, then-Democrat Senate Finance Committee Chairman Max
Baucus (D-MT) informs then-IRS Commissioner Douglas Shulman: "I request that you
and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations ..." In
reply, in a letter dated February 17, 2011, Shulman writes: "In the work plan of
the Exempt Organizations Division, we announced that beginning in FY2011, we are
increasing our focus on section 501(c)(4), (5) and (6)
organizations."
Sure enough, in 2010,
after receiving Baucus' letter, the IRS
considered the issue of auditing donors to 501(c)(4)
organizations, alleging that a 35 percent gift tax would be due on donations in
excess of $13,000. The documents show that the IRS wanted to cross-check donor
lists from 501(c)(4) organizations against gift tax filings and commence audits
against taxpayers based on this information.
A gift tax on
contributions to 501(c)(4)s was considered by most to be a dead letter since the
IRS had never enforced the rule after the Supreme Court ruled that such taxes
violated the First Amendment. The documents show that the IRS had not enforced
the gift tax since 1982.
But then, in February
2011, at least five
donors of an unnamed organization were audited.
The documents show
that Crossroads GPS, associated with Republican Karl Rove, was
specifically
referenced by IRS officials in the context of applying the gift
tax. On April 20, IRS attorney Lorraine Gardner emails a 501(c)(4)
donor
list to former Branch Chief in the IRS' Office of the
Chief Counsel James Hogan. Later, this information is apparently shared with IRS
Estate Gift and Policy Manager Lisa Piehl while Gardner seeks "information about
any of the donors."
One of the most
disturbing bits of information pulled from the documents concerns the U.S.
Chamber of Commerce, which sometimes works to support the free-enterprise system
in the face of heavy-handed regulatory policies.
Emails to and from
Lorraine Gardner point to a bias against the Chamber. An IRS official (whose
name is redacted) emails Gardner on May
13, 2011, a leftist blog post responding to the IRS targeting
of political and other activities of 501(c)(4), (5) and (6) organizations: "The
U.S. Chamber of Commerce is a 501(c)(6) organization and may find itself under
high scrutiny. One can only hope."
The subject line of
the email highlights this anti-Chamber of Commerce comment: "we are making
headlines notice the end regarding 501(c)(6) applicability enjoy." This
critical comment is forwarded to other IRS officials and shows up attached to
another Gardner IRS
email chain with the subject line "re: 501(c)(4)" that
discusses a pending decision about a tax-exempt
entity.
In early May, once
the media began reporting on the IRS audits of donors, IRS officials
reacted
quickly. One official acknowledges the issue
"is a
biggy" when a reporter from The New York Times contacts the IRS on
May 9.
On May 13, 2011,
former IRS Director of Legislative Affairs Floyd Williams discusses compliance
with "interest" from Capitol Hill: "Not surprisingly, interest on the hill is
picking up on this issue ... with Majority Leader Reid's office, has suggested
the possibility of a briefing for the Senate Finance Committee staff on general
issues related to section 501(c)(4) organizations. I think we should do it as
interest is likely to grow as we get closer to
elections."
Later that day,
then-Director of the Exempt Organizations Lois Lerner weighs in with an
email that confirms that she supported the gift tax
audits. Lerner acknowledges that "the courts have said specifically that
contributions to 527 political
organizations are not subject to the gift tax-nothing that I'm aware of that
about contributions to organizations that are not political organizations."
Section 501(c)(4) organizations are not "political organizations." [Emphasis in
original]
Lerner's involvement
and support for the new gift tax contradicts the IRS
statement to the media at the time that audits were not part of
a "broader effort looking at donations 501(c)(4)'s." In July 2011, the IRS
retreated after a public uproar and soon-to-be Acting IRS Commissioner
Steven Miller
directed that "examination resources should not be expended on
this issue" and that all audits of taxpayers "relating to the application of
gift taxes" to 501(c)(4) organizations "should be
closed."
By the way, we had
filed a separate
lawsuit for records about targeting of individuals for audit
in November 2013. In that litigation, the IRS had refused to search any email
systems, including Lerner's records. A federal court ruled the IRS' search was
sufficient and dismissed the lawsuit earlier this month. So it took another
lawsuit to get this new info from the IRS!
These documents that we had
to force out of the IRS prove that the agency used donor lists to audit
supporters of organizations engaged in First Amendment-protected lawful
political speech. And the snarky comments about the U.S. Chamber of Commerce
and the obsession with Karl Rove's Crossroads GPS show that the IRS was
targeting critics of the Obama administration.
President Obama
continues to lie about his IRS scandal. He told a comedian the other day that
"there was not some big conspiracy there." Obama also said, "Congress had
passed a crummy law that didn't give people guidance in terms of what it was
they were trying to do. They did it poorly and
stupidly."
How does he know all this?
The Department of Justice and the FBI supposedly are still conducting a criminal
investigation.
The Treasury for
Inspector General for Tax Administration (TIGTA) report exposing the scandal
made no mention of "crummy laws" passed by Congress. Its
audit revealed the IRS had used "inappropriate criteria" to
identify potential political cases. "Early in Calendar Year 2010," TIGTA wrote,
"the IRS began using inappropriate criteria to identify organizations applying
for tax-exempt status to (e.g., lists of past and future donors)." The illegal
IRS reviews continued for more than 18 months and, TIGTA reported, "delayed
processing of targeted groups' applications preparing for the 2012 presidential
election."
And these documents
tell the truth - his IRS hated conservatives and was willing to illegally tax
and audit citizens to shut down opposition to Barack Obama's policies and
reelection.
Obama's IRS falsehood
the other day contained an admission that few picked up on. He said, "You don't
want all this money pouring through non-for-profits but you also want to make
sure that everybody is getting treated fairly." Who doesn't "want all this
money pouring through non-for-profits"? Barack Obama. There is no law
prohibiting money "flowing through non-profits." But he didn't like the idea of
this money being used against his reelection or his policies. So his IRS
targeted these groups and their donors for lawless oppression.
This president and his
administration are out of control.
In September 2014,
another Judicial Watch FOIA lawsuit forced the release of
documents detailing that the IRS sought, obtained and
maintained the names of donors to Tea Party and other conservative groups. IRS
officials acknowledged in these documents that "such information was not
needed." The documents also show that the donor names were being used for a
"secret research project."
Let's review some of
the facts Obama chose to ignore.
The House Ways and
Means Committee announced at a May 7, 2014,
hearing that, after scores of conservative groups provided
donor information "to the IRS, nearly one in ten donors were subject to audit."
In 2011, as many as five
donors to the conservative 501(c)(4) organization Freedom's
Watch were audited, according to the Wall
Street Journal. Bradley Blakeman, Freedom's Watch's former
president, also alleges he was "personally
targeted" by the IRS.
There's more.
In February 2014,
then-Chairman of the Ways and Means Committee Dave Camp (R-MI)
detailed improper IRS
targeting of existing conservative
groups:
Additionally, we now know that the IRS targeted not
only right-leaning applicants, but also right-leaning groups that were already
operating as 501(c)(4)s. At Washington, DC's direction, dozens of groups
operating as 501(c)(4)s were flagged for IRS surveillance, including monitoring
of the groups' activities, websites and any other publicly available
information. Of these groups, 83 percent were right-leaning. And of the groups
the IRS selected for audit, 100 percent were
right-leaning.
Maybe President Obama
can fool a comedian about the IRS scandal, but he isn't fooling Judicial Watch
as we battle his Justice Department and IRS lawyers successfully in court to
hold him accountable for his worse-than-Nixon abuse of the
IRS.
There is a legal
reckoning coming for Hillary Clinton's notorious email practices and policies.
There is too much Judicial Watch legal pressure and too many federal court
judges for the Obama administration and the Clinton gang forever to avoid the
legal consequences of their email shenanigans. For instance, we are pleased to
report that a federal judge has said that the State Department will "have to
answer for" any destruction of Hillary Clinton's email records.
U. S. District Court
Judge Rudolph Contreras made the statement at a July 9, 2015, status
conference concerning a Judicial Watch
Freedom of Information Act lawsuit for records about
the State Department's vetting of then-Secretary of State Hillary Clinton's
potential conflicts of interest. The transcript of the July 9 court hearing is
available
here.
Recall that it was
only four months ago, on March 2, 2015, that The New York Times reported then-Secretary Clinton used at least one
non-"state.gov" email account to conduct official government business during her
entire tenure as the secretary of state. It also was reported that Secretary
Clinton stored these records on a non-U.S. government server at her home in
Chappaqua, New York.
There are nearly 20
federal lawsuits that touch on Mrs. Clinton and her staff's use of secret email
accounts to conduct official government business. In our various FOIA lawsuits,
our lawyers have informed attorneys for the Obama administration that Hillary
Clinton's account and any other secret accounts used by State employees should
be secured, recovered and searched.
During this
particular court hearing, Judicial Watch attorney Chris Fedeli raised the
concerns JW had about the preservation of records, especially email records that
were not part of the 55,000 records Clinton turned over to the State Department
last year. Apparently, Fedeli struck the right
note.
In response, Judge
Contreras said he was also
"concerned" about the preservation of these
records:
If documents are destroyed between now and August 17,
the government will have to answer for that, and, you know, if they don't want
to do anything out of the ordinary to preserve between now and then, they can
make that choice. I will allow them to make that choice, but they will answer
for it, if something happens.
After a Justice
Department lawyer attempted to assure him that the administration was asking for
government records from former State Department employees, Judge Contreras
questioned the State Department's position that it had no legal obligation to
take additional steps to obtain other government records in the custody of Mrs.
Clinton and other former officials who used her special email
system:
[I]t is to state the obvious that this is not an
ordinary case, and everyone should be working to make sure that whatever
documents exist today remain in existence.
Judge Contreras also
voiced concerns regarding the State Department's refusal to provide any
information about the Clinton email issue:
But I am a little bit mystified that the government is
not more forthcoming in just answering questions that will help this case
proceed on a systematic basis, and on a basis that will allow everyone to get
the answers that will eventually help resolve these
cases...
This one court
hearing shows that Hillary Clinton and her co-conspirators in the State
Department will have to account for each and every email on Hillary Clinton's
notorious email system. That's encouraging. It's become clear now to the public
at large that Hillary Clinton has been telling fairy tales about the missing
emails that are beginning to unravel. "Nothing Mrs. Clinton has said so far on
the subject is correct," The Wall Street Journal's Kimberly Strassel has
charitably observed.
Again, the reckoning
is coming.
The court also seemed
to reject the Obama administration's contention that responding to Judicial
Watch's lawsuit in a timely way would derail its compliance with Judge
Contreras'
order in another lawsuit (Leopold v. U.S. Department of
State, (15-00123)) requiring that the 55,000 pages of Clinton email records be
searched and produced under FOIA by January
2016:
My order in Leopold was based on numbers and
percentages. To the extent that documents from that universe are produced in
this case, they qualify for the numbers in Leopold, don't they? So that they're
not mutually exclusive from a resource standpoint, are
they?
The judge then said
his "inclination is to have a search done of the Clinton e-mail database that's
digitized and searchable for this relatively narrow, in my view, relatively
narrow request."
A separate and
ongoing Judicial Watch
lawsuit forced the disclosure last year of documents that
provided a road map for over 200
conflict-of-interest rulings that led to $48
million for the Clinton Foundation and other Clinton-connected entities during
Hillary Clinton's tenure as secretary of state. Previously disclosed documents
in this lawsuit, for example, raise questions about funds Clinton accepted from
entities linked to Saudi Arabia, China and Iran, among others. Judicial Watch
and The Washington Examiner partnered
in the first story to
break the Clinton conflicts scandal: "State Department
approved 215 Bill Clinton speeches, controversial consulting deal, worth $48m;
Hillary Clinton's Chief of Staff copied on all
decisions."
You can see why the
State Department and the Clinton operation have been trying to play a
rope-a-dope obstruction game with Judicial Watch, courts and Congress for these
emails. But it won't work.
As I write this, news
is breaking that Hillary Clinton is the subject of a criminal referral to the
Justice Department by two separate inspectors general for an investigation into
her potentially criminal mishandling of hundreds of pages of classified
information on her email system. The New York
Times broke the story (and may
have edited it at the
behest of
the Clinton campaign), but there is no doubt that there is serious criminal
liability for Hillary Clinton. If the Justice Department, the State Department,
or the FBI were all above-board, there would have been
law enforcement
activity many months ago. Now we know that the State
Department resisted
cooperating with the IG investigations. And we can't trust the
Obama Justice Department. The New York
Times tells us that it helping Hillary Clinton's PR effort,
too:
On Thursday night and again Friday morning, the
Justice Department referred to the matter as a "criminal referral" but later on
Friday dropped the word "criminal."
At the Obama
Justice Department, politics always comes first, so it is imperative that no
less than a special counsel be appointed to investigate this matter. Under
Justice Department regulations:
The Attorney General,
or in cases in which the Attorney General is recused, the Acting Attorney
General, will appoint a Special Counsel when he or she determines that criminal
investigation of a person or matter is warranted and-(a) That investigation or
prosecution of that person or matter by a United States Attorney's Office or
litigating Division of the Department of Justice would present a conflict of
interest for the Department or other extraordinary circumstances; and (b) That
under the circumstances, it would be in the public interest to appoint an
outside Special Counsel to assume responsibility for the
matter."
This will be a major
ethical test for new Attorney General Loretta Lynch. In the meantime, we will
continue our pursuit for information and accountability in the courts.
If you'd like to see
how irrelevant and out of touch the typical D.C. debate about
"amnesty" for illegal aliens
can be, I suggest you watch this video of a Senate
Judiciary Committee hearing this week. American citizens told of loved ones who
were murdered by illegal aliens thanks to lawless state and national "sanctuary
policies." I attended that hearing in person, so I can tell you it that it will
make you both upset and angry.
Judicial Watch was at
the hearing because it included the testimony of our client Brian McCann, who
did his part earlier to jolt the political class back to reality. McCann is a
lifelong resident of Chicago. We are representing him in
his lawsuit against
Cook County Sheriff Thomas J. Dart. The suit
challenges the sheriff's refusal to cooperate with federal immigration officials
or honor immigration detainers issued by U.S. Immigration and Customs
Enforcement (ICE) for criminal aliens.
McCann's written
testimony, which is available in
full here, brings home the enormous human tragedy attached to
illegal immigration and the dangers of open, unsecured borders. Mr. McCann told
the committee members about how his brother, William "Denny" McCann, was run
over and killed in June 2011 by an unlawfully present criminal alien who had
just completed a two-year term of probation for a 2009 DUI conviction. The
alien, Saul Chavez, was charged with felony aggravated driving under the
influence, but was released by Dart from a Cook County jail in November 2011
despite an ICE immigration detainer. At the time, ICE issued detainers when it
learned that criminal aliens are being held by state or local law enforcement
officials. The detainers required the criminal aliens be held for an additional
48 hours to enable ICE to take custody of them before they are released. At the
time, Cook County jails had released as many as 1,000 criminal aliens sought by
ICE in the previous 18 months. We continue this legal fight. Just last month we
filed a petition for
review with the Illinois
Supreme Court.
Denny McCann's killer
is believed to have fled to Mexico. As Brian McCann recounted to the Senate
committee:
Denny was crossing Kedzie Avenue on a marked crosswalk
four years ago and was violently struck by a drunk driver who dragged Denny
under his car for a block in an attempt to flee before Denny died. The family
was notified by the Chicago Police and the killer was placed into custody and
charged with aggravated DUI causing death. Two days later ICE issued a detainer
because the young man was an illegal alien with a prior felony. The family was
assured by the Cook County prosecutor that the defendant would not be allowed to
post bail and be released. Three months later the Cook County Board passed the
ordinance that effectively requires the sheriff to ignore detainers. During the
intervening weeks after Denny's violent death, Cook County President Toni
Preckwinkle and former mayoral candidate and Commissioner Jesus Garcia pushed
for the ordinance and rammed it through on September 7, 2011. Two months later
the killer made bail and absconded to Mexico.
As if Denny McCann's
death was not painful enough for the family, they also had to endure learning
that if our government had simply enforced the law, the illegal alien who killed
his brother would not be running loose. Here is how Mr. McCann tells
it:
Perhaps the most disturbing aspect of this whole
ordeal was that we also learned that this illegal alien was prosecuted for
another felony two years earlier and ICE was never notified then. He was removed
from probation February 2011 and four months later killed Denny. In short, Denny
would be alive today and enjoying the birth of a new granddaughter born two
weeks ago if the Cook County criminal justice system that included the county
board did its job. I received confirmation that he is indeed in Mexico from the
FBI and is currently driving a truck. I had to prevail on my congressman to get
the FBI to cooperate with my request for information and action. I have not
heard from the Bureau in over six months.
Of course, the Obama
administration has run away from any serious enforcement of our immigration laws
and no longer routinely issues detainers requiring that local police hold
illegal alien criminals:
Because ICE no longer routinely issues detainers we
are no longer challenging [Sherriff Thomas] Dart's refusal to honor them.
However, we continue to challenge the Sheriff's policy of prohibiting and
restricting communications and the exchanging of information with ICE officials
about a person's citizenship or immigration status. Now under PEP
(Priority Enforcement
Program) even if ICE requests that Cook County notify them of
the impending release of a deportable criminal alien, Cook County would not
comply. I find this unacceptable and will fight this policy in the courts until
the end. I remain very concerned that the current immigration enforcement
policies seem to encourage jurisdictions like Cook County and San Francisco to
continue their noncooperation policies.
The
other
victims who testified that day also told harrowing stories
and demanded action.
President Obama's
response was to
threaten to
veto any legislation that would withhold federal monies from states or
localities that continued sanctuary policies that put the public safety at risk.
And a report out of The New York Times confirmed what we've been
highlight for years - that Obama has stopped deporting almost every illegal
alien. The story confirms as many as 87 percent of
illegals won't be subject to deportation under Obama's
unlawful sanctuary/amnesty policies.
As are doing for fine Americans like Brian McCann,
Judicial Watch will continue to investigate, litigate and educate. We promise to
continue to expose this assault on the rule of law, the public safety, and our
nation's sovereignty. |
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