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The Internal Revenue Service (IRS) and the administration have consistently spouted lies and half-truths about the IRS scandal. The latest development in the controversy is that crucial emails have conveniently gone missing – is there any reason to believe that it is, as the administration claims, a mere accident?
Let’s go back to how it all started. On October 19, 2010, just before the midterm elections returned control of the House of Representatives to the Republican Party, Lois Lerner, then the director of the IRS’ Exempt Organizations Unit spoke at Duke University’s Sanford School of Public Policy. Among other things, she said the following:
“What happened last year was the Supreme Court – the law kept getting chipped away, chipped away in the federal election arena. The Supreme Court dealt a huge blow, overturning a 100-year old precedent that basically corporations couldn’t give directly to political campaigns. And everyone is up in arms because they don’t like it. The Federal Election Commission can’t do anything about it. They want the IRS to fix the problem. (..) So everybody is screaming at us right now: ‘Fix it now before the election. Can’t you see how much these people are spending?’ I won’t know until I look at their 990s next year whether they have done more than their primary activity as political or not. So I can’t do anything right now.”
“Ms. Lerner was careful to try and structure the IRS’ targeting in such a way that would not be appear to be a ‘per se political project,’ in her own words” – Stan Veuger
That would change rapidly. In November 2010 the Tea Party movement, riding a wave of popular discontent with president Obama’s overreaching, brought the Republican Party an estimated 3 to 6 million votes and ended Nancy Pelosi’s speakership. Meanwhile, the IRS had sprung into action. Under pressure from the left – not just from the president, with his public complaints about the Supreme Court’s Citizens United decision “striking at our democracy itself,” but also from congressional Democrats, outside groups, and liberal journalists – the tax agency had started scrutinizing application for tax-exempt status from Tea Party and other conservatives in unprecedented ways. This increased level of scrutiny led to such delays in the approval process for these groups that many of them saw their ability to engage in the public debate leading up to the 2012 presidential election undermined entirely.
This effort to keep conservative 501(c)(4) organizations from attempting to prevent president Obama’s reelection was, of course, hidden from the public. Ms. Lerner was careful to try and structure the IRS’ targeting in such a way that would not be appear to be a “per se political project,” in her own words, and denied in meetings with, and letters to, congressional oversight staff in 2012 that conservative groups were treated exceptionally or that the IRS’ ways of evaluating 501(c)(4)s had ever changed. The claims were false, and in May 2013, after president Obama had won reelection by defeating former governor Romney, Ms. Lerner finally revealed some of the truth about the matter: the IRS had indeed knowingly targeted certain conservative groups for additional scrutiny.
Honesty and transparency were still not in sight though. In her response to a planted question from the audience at an American Bar Association tax conference, Ms. Lerner blamed the targeting of conservative groups on “our line people in Cincinnatti.” This has also turned out to be false. It was indeed employees in Cincinnatti who first identified Tea Party applicants as being politically sensitive (a designation triggered, of course, by Democrat fury over their existence) and therefore above their pay grade, but it was IRS officials in Washington D.C. who kept them in limbo for extraordinarily long periods. For example, Ms. Lerner, who described the Tea Party applications as “very dangerous,” ordered a “multi-tier review” of the entire category, thereby prolonging the process in a way that other IRS employees have described as never seen before.
This project was a risky one. Not many things strike at our democracy itself, as the president would say, in a manner that is as worrisome as the government using its monopoly on violence to suppress dissenting views. When you engage in that, making sure no one finds out is key. In July 2011, perhaps to insulate herself and her organization from accusations of political motives in case the truth came out, Ms. Lerner broadened the filtering criteria used to target Tea Party organizations to political advocacy organizations more generally, including a small number of progressive groups, but non-Tea Party groups were never subjected to the same delays and investigations as Tea Party groups were. This once more suggest that obfuscation and dishonesty were central to the IRS’ approach to their targeting practices.
“The president, who feigned outrage initially, has moved on to calling the targeting scheme a ‘phony scandal’ and has shown no interest in pushing for further investigations.” – Stan Veuger
How do we know all this? Well, mostly from painstaking investigations by House Republicans. Do we know everything there is to know? No, it is still not entirely clear who outside the IRS was directly involved in organizing this scheme to target conservative groups. We know that there was significant outside pressure to target them, but we do not know how much of that was channeled through the hierarchical structures of the federal government. Will we ever know? It would be very helpful to see what communications took place between IRS officials and other Democrats. And this is where the missing emails come in.
The president, who feigned outrage initially, has moved on to calling the targeting scheme a “phony scandal” and has shown no interest in pushing for further investigations. House Republicans continue to try and uncover the truth, but have not been able to access emails sent and received by central figures in the case. They are gone, they now tell us, hard drives crashed and tapes were erased.
Should we believe that? Of the 82 IRS employees tied to the targeting operation, 7 had their email disappear, or 8.5%. According to IRS commissioner John Koskinen, the industry standard is 3 to 5%. Under reasonable statistical assumptions, that makes the IRS scandal disappearance rate about as likely as the emails having been eaten by unicorn, with a probability far smaller than 1%. Given the IRS’ track record in this affair, that is way beyond anything that would justify giving the IRS and Lois Lerner the benefit of the doubt, and it casts serious doubts on the administration’s claims that there is nothing to be seen here.
Stan Veuger is an economist at the American Enterprise Institute.
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