The Internal Revenue Service and the Justice Department are
withholding evidence crucial to a $10 million civil suit alleging the
tax agency audited the Western Journalism Center at the behest of the
White House in 1996, says Judicial Watch chairman Larry Klayman.
Two years after the Western Journalism Center, parent company of
WorldNetDaily.com Inc., filed a Freedom of Information Act request for
its case file in a 1996 Internal Revenue Service audit initiated in the
White House, the IRS and Justice Department claim they cannot find any
more documents relevant to the case.
However, a Treasury Department report obtained by the center through
a separate FOIA request shows investigators found documents in the case
file not yet produced by the IRS or Justice Department. Among those
documents is a letter sent from the White House to IRS officials
suggesting an audit of the center was in order. A Justice Department
brief filed in a summary judgment motion in a $10 million lawsuit
against IRS and other government officials by Judicial Watch on behalf
of the center suggests these documents are no longer part of the case
file, though attorneys left open the possibility that additional
documents might be discovered.
“The Internal Revenue Service will accordingly release such
additional documents from such files as may be deemed responsive,” said
the Justice Department brief filed with the U.S. District Court in
Washington July 12. “If documents subject to exemption are located, the
same will be identified and the Service will move to amend its answers
to assert any appropriate affirmative defenses as soon as processing is
No such document discoveries have yet been reported.
Klayman and Joseph Farah, founder of the center and editor of
WorldNetDaily.com, believe the government is simply stalling and burying
documents knowing they support the allegations of a political audit
orchestrated by the White House.
The Western Journalism Center is one of dozens of tax-exempt
organizations targeted for IRS audit after criticizing President
Clinton. Farah first exposed what appeared to be a pattern of political
audits three years ago. The revelations were followed quickly by the
resignation of IRS Commissioner Margaret Milner Richardson, a close
personal friend and political confidante of Bill and Hillary Clinton,
and the launching of a congressional probe by Rep. Bill Archer, R-Texas,
chairman of the House Ways and Means Committee and co-chairman of the
Joint Committee on Taxation.
A heavily redacted 1997 Treasury Department report titled,
“Questionable Exempt Organization Examination Activity,” was released
July 6 to Farah’s news organization following three years of FOIA
filings and appeals for such information. Contradicting IRS officials
and their Justice Department lawyers in two suits pending against the
agency by the center and its legal counsel, the Treasury report states
unequivocally and repeatedly that the audit began with a letter
forwarded from the White House to the IRS.
“The audit originated from a taxpayer who faxed a letter to the White
House expressing his concern over a one-page advertisement paid for by
WCJ (Western Center for Journalism) that asked for contributions to
investigate (White House deputy counsel Vincent) Foster’s death,”
explained the official Treasury Department report. “The fax was
forwarded to the EO (Exempt Organizations) National Office and then to
the respective Key District Office for appropriate actions.”
Klayman believes criminal contempt citations may be in order after
reviewing the Treasury Department document.
“The Treasury report shows there was a direct chain of events
beginning with that fax in the White House — just as I suspected all
along but could never conclusively prove until now,” said Farah. “This
is why the IRS has steadfastly refused to provide us with our own case
file, as it is required to do under the law. Had officials coughed up
the file, they would have hanged themselves and provided us with a
Long before the IRS audit of 1996, the White House had taken critical
notice of the activities of the center. A White House counsel’s memo,
written by Jane Sherburne in December 1994, lists the center as a major
concern with regard to its coverage of the Foster story. In 1995, the
White House counsel’s office, in conjunction with the Democratic
National Committee, produced and distributed at taxpayer expense a
331-page report called, “Communication Stream of Conspiracy Commerce,”
in which it was alleged that the center was directing a vast,
international media plot to discredit President Clinton.
“This new evidence, clearly suppressed by the administration until
after a favorable ruling by a Superior Court judge, provides the smoking
gun we were hoping to find in the discovery process,” said Klayman. “I
am confident this new revelation demonstrating the government
systematically concealed the truth will persuade the courts to permit
this case to proceed to trial and give us the opportunity to expose and
punish these abuses of power.”
Farah said he believes there may even be more documentation
embarrassing to the IRS and the White House that is being systematically
withheld from the center.
“We didn’t know about this Treasury Department report,” said Farah.
“We didn’t know about the letter forwarded from the White House to the
IRS. There is a strong likelihood that there are more documents we don’t
know about that would complete this picture. We don’t intend to stop
demanding them until the full story of White House and IRS complicity is