Judicial Watch: IRS Documents Reveal Lerner Knew Targeting Criteria of Nonprofit Groups ‘Might Raise Questions’

Documents show Lerner Worried about ‘pitfalls’ of disclosures to Congress 

Documents reveal that Lerner was pressured by both Democrat Sen. Carl Levin and Republican Senator John McCain for IRS action against political advocacy groups

(Washington, DC) – Judicial Watch today released a new batch of Internal Revenue Service (IRS) documents, including an email from former IRS official Lois Lerner in February 2012 asking that a program be set up to “put together some training points to help them [IRS staffers] understand the potential pitfalls” of revealing too much information to Congress.  The documents also contain a Lerner email from 2013 in which she says she is willing to take the blame on some aspects of the scandal.  She also indicates that she “understands why the IRS criteria” leading to the targeting of Tea Party and other opponents of the President Obama “might raise questions.”

The documents were released under court order in one of the Judicial Watch’s ongoing Freedom of Information Act (FOIA) lawsuits about the Obama IRS’ abuses (Judicial Watch v. IRS (No. 1:13-cv-01559)).

Included in the email chain is Lerner’s most extended public discussion thus far of the IRS scandal.  Lerner details her defenses and interactions with TIGTA investigators in a lengthy, rambling email dated January 31, 2013, to TIGTA investigator Troy Paterson:

We feel your folks are being too narrow in their view and have decided that because of the language on the earlier BOLO [Be On the Lookout] list regarding Tea Party, everything that followed was tainted…They also don’t seem to be taking a big picture look at what we have done… When we describe that process, they acknowledge that that approach sounds reasonable, but seem to be saying that reasonableness is overshadowed by the fact that the criteria look bad to folks on the outside, so there is no way we could cure the initial bad impression.

We understand why the criteria might raise questions….So, I’m not sure how they [TIGTA] investigators are looking at we were politically motivated, or what they are looking for with regard to targeting. They didn’t seem to understand the difference between IRS acting in a politically motivated manner and front line staff people using less than stellar judgment. I am willing to take the blame for not having provided sufficient direction initially, which may have resulted in front line staff doing things that appeared to be politically motivated, but I am not on board that anything that occurred here shows that the IRS was politically motivated in the actions taken.

The documents show that Lerner was aware that Treasury Inspector General for Tax Administration (TIGTA) had concerns about the political nature of IRS targeting in February 2013.  Lerner writes colleagues an email forwarding her discussion with a TIGTA official and notes that it “seems like we may very well be in disagreement [with TIGTA] big time. That means we will need to start drafting our arguments.”

On May 14, 2013, a report by TIGTA revealed: “Early in Calendar Year 2010, the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status to (e.g., lists of past and future donors)” and the illegal IRS reviews continued for over 18 months and “delayed processing of targeted groups’ applications” preparing for the 2012 presidential election. It was during this period of time that Lerner emailed former Director of the Office of Rulings and Agreements Holly Paz, attempting to limit information provided by the IRS to Congress about non-profit classifications:

• Thursday, February 16, 2012 1:28 PM– Lois Lerner to Holly Paz:

Subject: Review of Classification Write -Ups

While you were gone, Judy [Kindell – former Lerner advisor] and Sharon [Light – Lerner advisor] had the opportunity to look at some of the write –up from the referral committee and classification folks on cases they had reviewed. We are all a bit concerned about the mention of specific Congress people, practitioners and political parties. Our filed folks are not as sensitive as we are to the fact that anything we write can be public–or at least be seen by Congress. We talked with Nan [Downing – Director of EO Examinations] and she thought it would be great if R & A could put together some training points to help them understand the potential pitfalls, as well as how to think about referrals. As a starting point, Nan has sent up a bunch of papers that I asked Tom Miller [EO technical advisor] to review to provide feedback to Sharon/Judy –or whomever we decide should draft the training.

I realize everyone is very busy, but I’d like you and Tom to get together to work out a reasonable plan for completing the review and reporting back on some of the issues he thinks we’d need to cover. If you need more info, we can talk. Thanks

The documents obtained by Judicial Watch also include the initial June 2011 email in which Lerner told associates that her computer had crashed and her BlackBerry no longer worked. The IRS failed to inform Judicial Watch (and the federal court handling this FOIA litigation) that Lerner’s computer had crashed and may have wiped out critical Lerner emails until three years later in June 2014, when it buried the information on page 15 of a letter from the IRS to Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Orrin Hatch (R-UT). The Lerner email contained the following:

• Tuesday, June 14, 2011 8:54 AM– Lois Lerner to Williams Grant [Grant Williams IRS spokesman]; Kindell Judith E:

My computer crashed yesterday and my Blackberry doesn’t work in my office so I just saw this. Unfortunately, I am tied up until at least 12 and because Blackberry truncates, I can’t see bottom of email …

This email also discloses the IRS investigations extended beyond mere audits of Tea Party and other groups and included a separate investigation arm of the IRS, the Review of Operations Unit:

Also, we often use the ROO [Review of Operations Unit] to do initial research (.) Before starting audits–they don’t touch taxpayers, but can look at publicly available info about orgs.

A May 1, 2013, email exchange between Lois Lerner and other top IRS staffers revealed that 11 days prior to Lerner’s admission in a ABA meeting that the IRS had “inappropriately” targeted conservative groups, she met with select top staffers from the Senate Governmental Affairs Committee in a “marathon” meeting to discuss concerns raised by both Sen. Carl Levin (D-MI) and Sen. John McCain (R-AZ) that the IRS was not reining in political advocacy groups in response to the Supreme Court’s Citizens United decision.  Senator McCain had been the chief sponsor of the McCain-Feingold Act and called the Citizens United decision, which overturned portions of the Act, one of the “worst decisions I have ever seen.” Among those attending the meeting were key aides to the committee minority ranking member, John McCain:

• Wednesday, May 1, 2013 10:26 AM — Lois Lerner to Nikole Flax and others:

Yesterday’s marathon went well thanks to “the village.” Glad to have all of you as part of that village.

• Wednesday, May 1, 2013 12:23 PM – Sinno Suzanne [IRS Legislative Counsel] to Lerner and others:

I also took notes so I can compare and make sure we captured everything.

The staffers are below.

Laura Stuber (Majority Senior Counsel)

Elise Bean (Majority Staff Director and Majority Chief Counsel)

Kaye Meier (Senior Counsel for Senator Levin)

Henry Kerner (Minority Staff Director and Minority Chief Counsel)

Stephanie Hall (Minority Counsel)

Scott Wittmann (Minority Research Assistant)

The IRS seems to have blacked out the notes of the meeting.  In a letter released after the IRS scandal became public, both McCain and Levin acknowledged the pressure they were bringing on the IRS:

On April 30, 2013, Ms. Lerner and seven IRS colleagues spent six-hours being interviewed, on a bipartisan basis, by Subcommittee staff. That interview covered, among other topics, how the IRS determines which groups to review, what actions are taken in connection with the IRS reviews, and how the laws and regulations are used to examine those groups. Ms. Lerner failed to disclose the internal controversy over the search terms used by the Cincinnati office to identify 501(c)(4) groups for further review, the actions taken by that office in reviewing the identified groups, the investigation and imminent findings by the Treasury Department Inspector General for Tax Administration (TIGTA); and TIGTA’s conclusion that the IRS had used inappropriate criteria to target Tea Party and other conservative groups. Ms. Lerner also failed to disclose that she was fully aware of these issues as early as June 2011, and, according to TIGTA, had been personally involved in reviewing questionable actions taken by the Cincinnati office.

Indeed, Judicial Watch previously forced the release of IRS documents that indicate extensive pressure on the IRS by Senator Levin to shut down conservative-leaning tax-exempt organizations.

The new documents include the June 14, 2011, email in which Lerner first claimed “my computer crashed yesterday and my Blackberry doesn’t work in my office ….”  (This lawsuit resulted in the disclosure of Lerner’s “lost and found” IRS emails.)

“These new emails show that the IRS scandal is not over,” said Judicial Watch President Tom Fitton. “These documents point to document gaps caused by the refusal of the Obama IRS to search for Lois Lerner’s emails.  The incredible email from Lois Lerner admitting (and denying) culpability by her and the IRS in the scandal further undermines President Obama’s lie that the IRS scandal was entirely the fault of ‘bonehead decisions in local offices.’”