Last August, Californian Margie Gray sent an e-mail to President Clinton. It wasn’t “threatening,” she explained to WorldNetDaily, “I just told him how sad it was that parents today are not able to say to their children, ‘Maybe someday you can be president.’” Why not? “Because he was immoral, unethical and dishonest.” He had dishonored the office, she believed.
Less than a month later, Mrs. Gray received a letter from the Internal Revenue Service claiming she owed $3,500 in interest since 1991 due to a “mistake” she had made on her personal income tax return for that year. There was just one problem — the Grays do not file separate returns. She and her husband conferred with a certified public accountant and spoke with an IRS employee on the phone.
“Neither of them could understand why the IRS would be writing to me since we only file jointly,” she said. “There were no mistakes in our return.” The Grays wrote to the IRS in response to the notice, but have not received a reply.
Mrs. Gray suspects she knows why the IRS contacted her. She believes she was selectively targeted not only for her critical note to Clinton but for other political correspondence as well. Since her retirement, the former San Francisco Bay Area businesswoman has become an Internet activist who spends “hours and hours” on the web every day, contacting public officials and urging their opposition to administration policies. For example, to stop the giveaway of the Long Beach Naval Shipyard to China’s COSCO shipping company, “I wrote e-mails to dozens of congressmen about it,” she recalled.
It might be implausible — even unthinkable — that the administration would target a retired lady in California for IRS action if so many other individuals weren’t experiencing similar phenomena.
An exclusive WorldNetDaily survey in July named some 20 non-profit organizations and think-tanks “unfriendly” to the Clinton administration that have faced IRS audits since 1993. These include the National Rifle Association, the National Center for Public Policy, Citizens Against Government Waste, the National Review, American Spectator magazine and the Western Journalism Center, WorldNetDaily’s parent company.
The latter was specifically targeted for “action” in a December 1994 memoradum prepared in the White House counsel’s office and later released to congressional investigators. Later, its 1994 and 1995 tax returns were audited in what field agent Thomas Cederquist, who threatened the group’s tax-exempt status, described as a “political case.” Though the case is now closed and the center’s tax-exempt status secure, the IRS refuses to release to the group its own case file. The center is considering legal action.
Strangely, there have been no reports of groups sympathetic to Clinton’s policies, such as Planned Parenthood or the Brookings Institute, being chosen for audit or threatened with revocation of their 501(c)3 status. In fact, a survey by the Washington Times late last year could not identify a single liberal public policy organization that had been audited during the entire Clinton administration.
According to attorney William Wewer, a specialist in non-profit law, all of the groups singled out have one thing in common — they have challenged the Clinton administration in a “high-profile fashion.”
“Every one of our clients who is under audit has taken on the Clinton administration vigorously, usually through a direct-mail campaign,” says Wewer, who represents about a thousand charities. His observation applies to the other identified groups as well.
But now some are raising the specter of the IRS being used as a political weapon against not just groups, but individuals, as well — people like Margie Gray, outspoken citizens who challenge administration policies or criticize the president himself. Grass-roots critics, an author, a film editor, former White House personnel, board members of groups targeted, even a well-known talk show host — the IRS takes aim at a wide range of targets.
Mrs. Gray’s experience is not unlike that of Patricia Mendoza, who “insulted” Clinton during a campaign stop in Chicago in July of last year. Mrs. Mendoza and her husband, Glenn, were attending a food festival when the president arrived.
“You suck, and those boys died,” Mrs. Mendoza shouted, referring to the June truck-bombing at a U.S. barracks in Saudi Arabia that killed19 American servicemen.
They were escorted away by Secret Service agents. Charges filed against the couple for unruly behavior were later dismissed by a Cook County judge. However, a month following Mrs. Mendoza’s protest shout, Glenn Mendoza received a letter from the regional IRS office in Kansas City saying he owed $200 in back income taxes. The agency demanded immediate payment or his property would be seized.
“We never had any problems with the IRS,” Mr. Mendoza told the press. “We’re not big executive types. I’m not a millionaire. We don’t make enough money to attract the IRS.”
After Mendoza’s attorney telephoned the IRS, the agency said there had been a “computer error” and dropped the case.
Does “computer error” also explain why homemaker Paula Corbin Jones, who is suing President Clinton for sexual harassment, has been targeted for an income tax audit along with her husband, Stephen? The notice from the IRS arrived just five days after the former Arkansas state employee rejected a settlement offer from the White House. The idea that the audit came in retaliation was dismissed by presidential press secretary Mike McCurry as “inconceivable.”
“We do dumb things from time to time,” said McCurry, “But we are not certifiably insane.” McCurry denied the White House has any control over who gets audited.
But Betsy Smith, a spokesperson for the National Audit Defense Network, says it’s “extremely rare” that a family like the Joneses “appears on the IRS radar screen.” Stephen Jones earns less than $40,000 a year; Paula — a full-time mother — is not employed. The network is a group of 1,000 ex-IRS agents who fight against their former employer on behalf of taxpayers undergoing intrusive audits. Paula Jones is their most famous client.
“The Joneses don’t file a complicated return,” Smith said. “They don’t claim a lot of deductions — like car expenses, a home office, or even rent. Yet they were asked for rent receipts. I wouldn’t go so far as to say absolutely that here’s a case of retaliation, let’s just say it’s awfully coincidental.”
Others who have felt the wrath of the IRS include Travelgate figure Billy Dale and attorney Kent Masterson Brown. Dale was audited after he was fired from his job as head of the White House Travel Office so a friend of Bill and Hillary Clinton could be moved into that position.
Kent Masterson Brown, was the lawyer who successfully represented the American Association of Physicians and Surgeons that in 1994 sued to open up Hillary Clinton’s secret health care task force. Within a month he received an audit notice. Brown also charges the White House pressured the National Park Service into not reappointing him to a second term on the Gettysburg National Military Park Advisory Commission, an honorary post. Brown, a Civil War buff, was the commission’s first chairman.
Shelly Davis, author of “Unbridled Power” — a hard-hitting expose of IRS policies and actions based on her seven years as historian for the agency — may also be facing an audit. In October, her live-in boyfriend received an IRS letter saying he owes $4,912 in back taxes plus interest on the home they jointly own in Manassas, Virginia. The couple sent a response as requested. Davis feels a great deal will depend on how the agency handles the potentially high-profile case.
“If they’re rational, they’ll send back a nice letter thanking us for our response,” says Davis. “But they could get ugly. I honestly think it’s not targeted, but there’s no way to be sure,” she explains, since the computer probably just “spit out” the notice. “However, since they’ll have to pull my return to match it to (her boyfriend’s) this could be a surreptitious way to get at my return, then back at me,” she says.
Interestingly, the IRS threat to Davis, a self-described lifelong linberal Democrat, followed her decision to serve as a member of the Western Journalism Center’s informal board of advisers.
Also “uncertain” is Walter Gazecki, who edited and helped write the script for the highly acclaimed film documentary, “Waco: The Rules of Engagement,” critical of the administration’s handling of the Branch Davidian debacle.
“It’s possible it (the audit) is just routine,” he says. “My CPA tells me there are standardized reasons for doing an audit, and that I fit a certain profile.”
Nonetheless, it has occurred to Gazecki that the IRS is on a “fishing expedition,” though not for itself.
“I’ve wondered if the IRS is acting as an arm of the FBI to get information about the people who made the film. It wouldn’t surprise me if it were,” he says.
Of all the cases against individuals that WorldNetDaily has examined, one of the most suspicious is that of Jeff Evans, a popular conservative TV talk show host on the U.S. territory of Guam. That’s the island where the Democratic governor, Carl Gutierrez, raised nearly a million dollars for the Democratic National Committee.
Evans was incarcerated in a federal prison for the month of October 1996 — which he sees as an obvious railroading to keep him off the air during the final weeks before the election. The charge? Failure to file an income tax return for three years beginning in 1990.
A Republican, Evans had been an outspoken critic not only of the Gutierrez administration, but of the Clinton White House. Though he was never audited, charges of failure-to-file were filed in federal court in December 1995. The tax bill was supposedly $3,700 for the three years. There was no question Evans had paid taxes — $37,000 had been taken from his paycheck during the years in question. At issue was whether he had filed his returns to avoid paying a few thousand dollars more than was withheld. He claims he did file but lost the actual forms during a move.
“The burden of proof was on me,” he says.
The case “dragged on” until May 1996, when Evans was persuaded to plead guilty and agree to a plea bargain since fighting the charges “hardly seemed worth the effort.” Sentencing was set for Sept. 13.
“Three years probation, a few hundred hours of community service, a fine, no prison time — it didn’t seem all that big a deal,” he recalls. “I wouldn’t be sent to jail for $3,700 in taxes that I didn’t even owe.”
As Evans tells it, “When the judge read ‘confined for 30 days,’ I just sort of got numb — this wasn’t going the way it was supposed to. My attorney’s chin dropped down to his chest. There were open mouths all over the courtroom. Nobody could believe what they had just seen and heard.”
On Oct. 3 — shackled at the ankles and wrists — Evans was transported by air from Guam International Airport to Honolulu, then to the North Las Vegas Detention Center where he spent almost his entire sentence. This was no “Club Fed,” with tennis courts and TV, Evans explained. This was “a real-life, shove- the-food-under-the-door kind of prison.” Evans found himself sharing a “a two-man cell with a guy that looked like Charles Manson.”
The last nine days of his sentence were spent at the more upscale Nella Penitentiary “where there were doctors, lawyers, politicians — and two other guys doing time for failure to file.”
Asked why he thinks he was targeted, Evans doesn’t mince words.
“The main reason was to get me off the air before the election,” he said. “It didn’t work, because I came back a martyr and the Republicans gained a majority in the Legislature for the first time in 14 years. And my ratings went through the ceiling, because everyone on Guam knew what had happened.”
He does wonder, however, about the extent of White House involvement in all this.
“The governor,” he observes, “has no influence over a federal district judge, so why did the judge get involved? At the time, Governor Gutierrez had just made that $900,000 contribution to the Clinton-Gore campaign. That bought him the 40-minute limo ride with President Clinton, and he was the only governor on the dais with Clinton when he gave his acceptance speech at the Democratic Convention. So, I guess it bought him some access. Was it through that that pressure was put on the judge? I don’t know. But I know that Gutierrez reached out and touched someone in Washington.”
Western Journalism Center board member James Smith, former president of the Washington Star, former publisher of the Sacramento Union and a semi-retired co-founder of the organization, was also audited following the December 1994 White House task memo, though Smith is not convinced he was targeted for political reasons. Recently, another board member resigned saying he feared an audit. At least two major donors to the organization have also found themselves on the receiving end of audits. In addition, consultants used in investigative reporting projects have also been audited.
“The day after his re-election to a second term as president, Clinton told a group of supporters in Arkansas that those who dared question his ethics or criticise his policies were ‘a cancer’ that should be ‘cut out of American politics,’” reminds Joseph Farah, executive director of the Western Journalism Center. “He vowed he’d spend a lot of time in his second term going after his detractors.”
Farah suggests that may be one promise Clinton has kept.