Thursday, May 16, 2013

The IRS Scandal -- What Does It Mean?

First, an overview of the scandal from the Wall Street Journal:
The IRS scandal has two parts. The first is the obviously deliberate and targeted abuse, harassment and attempted suppression of conservative groups. The second is the auditing of the taxes of political activists. 
In order to suppress conservative groups—at first those with words like "Tea Party" and "Patriot" in their names, then including those that opposed ObamaCare or advanced the second amendment—the IRS demanded donor rolls, membership lists, data on all contributions, names of volunteers, the contents of all speeches made by members, Facebook posts, minutes of all meetings, and copies of all materials handed out at gatherings. Among its questions: What are you thinking about? Did you ever think of running for office? Do you ever contact political figures? What are you reading? One group sent what it was reading: the U.S. Constitution. 
The second part of the scandal is the auditing of political activists who have opposed the administration. The Journal's Kim Strassel reported an Idaho businessman named Frank VanderSloot, who'd donated more than a million dollars to groups supporting Mitt Romney. He found himself last June, for the first time in 30 years, the target of IRS auditors. His wife and his business were also soon audited. Hal Scherz, a Georgia physician, also came to the government's attention. He told ABC News: "It is odd that nothing changed on my tax return and I was never audited until I publicly criticized ObamaCare." Franklin Graham, son of Billy, told Politico he believes his father was targeted. A conservative Catholic academic who has written for these pages faced questions about her meager freelance writing income. Many of these stories will come out, but not as many as there are. People are not only afraid of being audited, they're afraid of saying they were audited. 
All of these IRS actions took place in the years leading up to the 2012 election. They constitute the use of governmental power to intrude on the privacy and shackle the political freedom of American citizens. The purpose, obviously, was to overwhelm and intimidate—to kill the opposition, question by question and audit by audit. 
It is not even remotely possible that all this was an accident, a mistake. Again, only conservative groups were targeted, not liberal. It is not even remotely possible that only one IRS office was involved. Lois Lerner, who oversees tax-exempt groups for the IRS, was the person who finally acknowledged, under pressure of a looming investigative report, some of what the IRS was doing. She told reporters the actions were the work of "frontline people" in Cincinnati. But other offices were involved, including Washington. It is not even remotely possible the actions were the work of just a few agents. This was more systemic. It was an operation. The word was out: Get the Democratic Party's foes. It is not remotely possible nobody in the IRS knew what was going on until very recently. The Washington Post reported efforts to target the conservative groups reached the highest levels of the agency by May 2012—far earlier than the agency had acknowledged. Reuters reported high-level IRS officials, including its chief counsel, knew in August 2011 about the targeting.
Tim Carney, writing at the Washington Examiner, not only gives a good overview of the scandal, but a discussion of why it was able to occur:
Federal officials used the power of the state to intimidate and harass critics of President Obama and the federal government. When the higher levels of the Internal Revenue Service learned that one office was inappropriately targeting Tea Party groups, these officials nevertheless denied it -- until they were forced to fess up.

If you needed another reason to distrust your government and oppose its expansion, the IRS just gave it to you.

Judging by available evidence and an inspector general's report released this week, the story here is not a Nixonian White House using all of government's tools to punish critics.

The story is instead one of government power so great that, even in the hands of nonpolitical career civil servants, politically motivated abuse is inevitable. And the ultimate problem is that our tax code and campaign finance laws put the IRS in the business of policing political speech. Politics inevitably comes into play.
(See also here for a roundup of recent articles).

It's not clear that this was not Nixonian, however. In a story out of Cincinnati, the workers apparently involved there have stated that they were only doing what their superiors told them. Moreover, senior IRS officials new of the partisan treatment in 2011, but did nothing.

The Wall Street Journal article cited above notes that the result will be a lack of trust in the government.
As always it comes down to trust. Do you trust the president's answers when he's pressed on an uncomfortable story? Do you trust his people to be sober and fair-minded as they go about their work? Do you trust the IRS and the Justice Department? You do not.
I think that the consequences reach further than this. This was not merely intimidation of powerful political opponents, as has happened under other corrupt administrations. Rather this was a broad-based attack on grass roots groups and organizers. As Investors Business Daily points out, the IRS:

• Gave preferential treatment to liberal groups. On Tuesday, USA Today reported that while the IRS was hounding conservative groups and holding up their applications for tax-exempt status, it was quickly ushering liberal groups with names like "Progress Florida" and "Missourians Organizing for Reform" through the process. 
USA Today found that in the 27 months after Feb. 2010, the IRS did not approve a single Tea Party application. Over those same months, however, dozens of applications submitted by liberal groups that were engaged in the same type of activities and were seeking the same tax status as the conservative ones sailed through the agency. 
"As applications for conservative groups sat in limbo," USA Today reported, "groups with liberal-sounding names had their applications approved in as little as nine months."
Meanwhile, the IG found that of the 296 applications filed by conservative groups it examined, more than half were still in limbo, with some of them having been on hold for more than three years.
• Made unusual document requests. Not only did the IRS target conservative groups for extra scrutiny, it also asked for massive amounts of information that it couldn't possibly need to determine tax-exempt status. 
Among them: donor names, blog posts, transcripts of radio interviews, resumes of top officers, board minutes and summaries of material passed out at meetings. 
Some groups were asked about connections to other conservative groups or individuals.
The IRS demanded, for example, that the Center for Constitutional Law "explain in detail your organization's involvement with the Tea Party."
... In the end, the IRS managed to put its thumb on the political scale by squelching political activity on the right — some groups report curtailing get-out-the-vote efforts, spending piles of money on legal fees or disbanding altogether in the face of IRS inquisitions. 
And all of it happened during a close and hotly contested presidential election where such mischievousness could make a real difference.
Let me repeat it--this was a broad-based attack on grass roots groups and organizers. It was your government declaring war on you, at least if you were conservative or libertarian. It has breached not only the public trust, but violated the social contract between the government and citizens. It has quashed political speech--the most protected of speech under the First Amendment.

I don't know what the fallout will be. Obviously, there will be a certain amount of political fallout--investigations, resignations, congressional hearings. The media seems to have perked up a bit about this scandal, so it may be a long-term drag on the Obama Administration.

But it also has shown people that the government is corrupt at the bureaucratic level. It has notched up the cultural war to a new level. It will suddenly begin to make sense to a lot more people to not trust the government. And the government will respond by being more heavy-handed and more intrusive.

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