The seeds of the IRS targeting of conservative groups were planted by Eric Holder in 2001 when as deputy attorney general under President Bill Clinton he convinced incoming Attorney General John Ashcroft to seize the building of a conservative megachurch, says the church’s retired pastor.
“Our church was taken over by the IRS in 2001 based on the recommendations of Deputy Attorney General Eric Holder to incoming Bush Attorney General John Ashcroft,” said Greg Dixon, former pastor of the Indianapolis Baptist Temple.
“The church was the sacrificial lamb to pave the way for the future targeting of conservative groups. We were among the first victims of the IRS’s targeting of conservatives, long before the news broke earlier this year,” he said.
Evidence that has arisen in the current IRS scandal shows the agency singled out conservative groups for special scrutiny that included asking for the content of members’ prayers and demanding they promise not to protest outside Planned Parenthood clinics or to run for office.
While the IRS initially insisted the targeting was limited to a few rogue employees, evidence now shows that orders came from the top to delay the approval of scores of conservative groups through two election cycles, including the 2012 campaign in which Barack Obama was reelected.
As Congress continues to investigate, Holder is resisting calls to appoint a special counsel. Dixon says he is not surprised by Holder’s refusal and claims that the attorney general’s fingerprints on the IRS abuses actually go back to his days as a Clinton appointee.
In the early days of the George W. Bush administration, Ashcroft ordered federal marshals to move in and remove members of the church after a decade-long tax dispute that resulted in the IRS seizing the property.
At the time, most news outlets reported the story as tax protesters refusing to pay legally owed payroll taxes to the IRS, but Dixon contends the case was more complicated.
He says it centered on the question of whether the church and its property belong to the government or to God.
“The problem was that most pastors believed the government spin that the issue was over taxes,” Dixon said. “As such, they said according to Jesus we had a duty to pay our taxes, but that wasn’t the issue at all. They didn’t see it as a Lordship issue and who is the head of the church.”
The case began in 1994 when the IRS filed suit in the U.S. District Court for the Southern District of Indiana accusing the church of not paying employment taxes. In 1999, Chief Judge Sarah Evans Barker ruled in favor of the IRS and ordered the church to pay $3.6 million in taxes. The case eventually went all the way to the Supreme Court, which refused to hear the case.
While the case was pending before the Supreme Court, Evans ordered U.S. marshals to seize the property on behalf of the IRS. In a final attempt to keep their property, church members holed up in the building for more than two months before the government raided it.
Less than one week into office as attorney general, Ashcroft ordered the seizure of the church, saying in his book “Never Again” he believed the issue was over taxes.
“Christians obey the law and ‘render to Caesar that which belongs to Caesar.’ In other words pay your taxes,” Ashcroft said.
However, Dixon contends the issue was never taxes and that the church agreed individuals should pay taxes. The position of the church was that the pastor and other staff members were servants of God who received their pay based on love offerings and were designated as self-employed, independent contractors.
The staff members sent their self-employment taxes to the government; however, the IRS subsequently returned the money and then claimed the money still was owed. The issue was not over the paying of taxes but over who had to pay them, the church maintained.
After the seizure of the church property, the Justice Department issued a statement saying, “Today’s action concludes a long standing tax evasion case against Rev. Gregory A. Dixon, Gregory J. Dixon, and the church.”
Despite the government’s claim, at no time was the church or any of its pastors charged with tax evasion, which is a criminal offense. Marshal Frank Anderson, who led the raid on the church, told the Indianapolis Star that the issue had nothing to do with a criminal offense but was purely a “civil action.”
“This is how the government brands those people and organizations they target as they attempt to destroy them,” Dixon said.
While the reason for the seizure was purportedly unpaid taxes, events surrounding the sale of the property appear to have had little to do with resolving taxes owed to the federal government. While the property was valued at over $6 million, Barker approved the sale of the property for a scant $1.5 million. In her order dividing the proceeds, only $255,478 went to payment of the church’s tax liabilities.
However, more than 12 years after the seizing of the church by the government, it now appears the incident has had far reaching consequences that may have led to the current scandal surrounding the IRS over its targeting of conservative groups.
On Dec. 5, 2001, Ashcroft gave a speech covered by CNN during the swearing-in of Benigno Reyna, the new head of the U.S. Marshals Service.
Ashcroft recalled that the first Department of Justice operation conducted on his watch was the seizure of the assets “of an organization known as the Indiana (sic) Baptist Temple.”
“It was a Marshals Service assignment. The men and women of this agency worked patiently; they worked professionally with other law enforcement officials, with the media, and with church leaders to resolve some very thorny issues, not the least of those issues was the threat of armed militias and violence.”
However, Dixon says the church went out of its way to avoid such a confrontation.
When the head of the Southern Indiana Regional Militia said it was preparing to move 50 of its members into the area to help defend the church, the church flatly told the militia it would not be allowed to get involved in the issue.
The church issued a statement saying the pastors and congregation of the Indianapolis Baptist Temple “repudiate all efforts of the Southern Indiana militia, under the leadership of Roger and Janice Stalcup, to aid the church in its ongoing struggle for religious liberty.”
“The church is relying totally and completely upon the Sovereign God of Heaven for His protection and safety,” the statement said.
Dixon believes Ashcroft issued the order because of Holder, who was then the deputy attorney general.
“At the time Ashcroft took over, nearly everyone in the Department of Justice was a holdover from the Clinton years,” he said. “One of these holdovers was Deputy Attorney General Eric Holder. Holder and other Clinton officials were the ones who told Ashcroft that we were domestic terrorists and Ashcroft apparently believed him.
“Now Holder is the attorney general himself, and it is no surprise we see the IRS continuing to target conservative groups while Holder refuses to appoint an independent counsel to look into the issue.”
Dixon says that while Holder may have been the one to have persuaded Ashcroft that the church consisted of extreme right-wingers, the Republican Party was able to reap benefits from the seizure.
“The city wanted to build four charter schools on the north, south, east and west side of the city,” Dixon explained. “At one time we had 700 students in our high school and we were competing with the public schools for students. While they will never admit it, they wanted to siphon off our students to get them back into the public school system to obtain state and federal funding.
“After the IRS moved on our property, which consisted of 22 acres of land 10 minutes from downtown Indianapolis, the city saw a chance to use the property for a charter school.”
Following the seizure, the property was sold to Christel House Academy, a charter school for K-9 students. The school was largely financed by Christel DeHaan, a German immigrant who is a strong supporter of the school-choice movement. As part of the sale, the school was given a $140,000 credit for the “reasonable and necessary cost of remediation of the property” to bring it into compliance with state laws.
The Indianapolis Star reported that since 1998, DeHaan has given more than $2.8 million to Republicans, including $130,000 to Tony Bennett, the state’s former Indiana schools chief, who is now at the center of a controversy over the school.
Last week Bennett was forced to resign from his position as Florida education commissioner after the Star reported Christel House Academy had its grade upgraded from a “C” to an “A” despite having poor test scores in Algebra.
“They need to understand that anything less than an ‘A’ for Christel House compromises all of our accountability work,” Bennett wrote in a Sept. 12 email to then-chief of staff Heather Neal, who is currently Gov. Mike Pence’s chief lobbyist.
The emails obtained by the Star show Bennett discussing the legality of changing DeHaan’s grade alone.
Bennett rose to prominence through the help of former Indiana Gov. Mitch Daniels, former Florida Gov. Jeb Bush and a group of Republican donors and leaders, including DeHaan.
In 2012, Bennett overhauled the school ranking system that had been in place since 1998 by assigning schools a ranking of A-F. He was attempting to do the same thing in Florida when the news of Christal House’s grade change forced him to resign from office.
Dixon said that while the sale of the church property may have benefited DeHaan, who then passed on those same benefits to the Republican Party, they may have paid for it in part by their losses in the 2012 elections.
“They have all these scandals going on now, but this thing has been going on for years. We were one of the first victims of the IRS bullying conservative Christian groups,” Dixon said. “We were too small for anyone to care at the time, and it was the Republicans who were behind it. However, now it is the Democrats going after conservatives, which may have affected the reelections of Obama, and the Republicans don’t like it.”
Dixon said it is now seems apparent that the issue of the Indianapolis Baptist Temple resulted in a win for everyone except the church.
“The city got their charter school, the Christal House Foundation got their tax exempt status, the receiver obtained his fee for selling the property, Ashcroft won by being a hero for ordering the raid on the church, and the Republican Party won to the point of nearly $3 million in contributions with still more to come,” Dixon lamented.
“The only people who lost were the members of the church. The judge wouldn’t even let the students stay in the building until the end of the school year in order to allow the seniors to graduate.”