Members of Congress and officials in the White House have triggered audits of hundreds of tax-exempt groups this decade by lodging complaints with the Internal Revenue Service against political foes, an Associated Press investigation has confirmed.
The evidence of widespread, targeted political abuse by the White House and IRS was first reported by Joseph Farah, editor of WorldNetDaily, in a Wall Street Journal story in October 1996. The Western Journalism Center, the non-profit parent company of WorldNetDaily, was audited that year after conducting investigations into Clinton administration corruption.
The Associated Press reports the political referrals range from citizen letters and newspaper articles to personal demands for investigations. In the case of the Western Journalism Center, a constituent complaint about the group’s work to President Clinton was passed on to the IRS, launching an audit that lasted nine months, cost the organization tens of thousands of dollars and, according to Farah, seriously diminished the ability to raise funds. The group, with the aid of Judicial Watch, is currently suing IRS and White House officials for $10 million.
Farah’s revelations in 1996 precipitated the resignation of IRS Commissioner Margaret Milner Richardson and sparked a congressional investigation that has never been concluded.
In its defense, the IRS claims less than 1 percent of the 6,000 to 10,000 audits of tax-exempt groups each year originate with complaints from lawmakers or the White House. But it will not release any specific information about those audits that could corroborate that claim. The White House forwards about 1,300 constituent letters each year to the IRS, ranging from complaints of wrongdoing to obscure tax questions.
Agency officials told the AP that audit decisions are based solely on evidence of wrongdoing, not on the political stature of the requesters or any positions taken by the group involved.
“We read our mail and deal with the facts appropriately. To ignore the mail is a dereliction of responsibility,” said Marcus Owens, the IRS official who oversees tax-exempt organizations.
Owens said any auditors making a politically motivated decision “would lose their jobs and perhaps would wind up with deeper legal problems.”
However, a lawmaker who sought an audit contends politics does play a role.
Former Rep. David Skaggs, D-Colo., said he referred two conservative organizations to the IRS in 1996 to achieve some “evenhandedness” after House Republicans began a “very concerted assault” on liberal tax-exempt groups. Skaggs referred the Heritage Foundation and Citizens Against Government Waste to the tax agency based on a newspaper report. It said the groups had sent out a mailing signed by GOP presidential candidate Bob Dole, and then had shared the list of respondents with Dole’s campaign. Within two months of Skaggs’ request, both groups found themselves undergoing costly audits that continue today.
“I believed then and I believe now that these were serious possible violations and the appropriate step was to ask the people with the expertise,” Skaggs told the AP. “But it would be incredible to suggest, and I won’t, that there was not a political dimension to these things. Of course there is.”
Critics say the system is ripe for abuse by politicians eager to sic the IRS on enemies. The Landmark Legal Foundation, a conservative legal group, sued the IRS to gain access to requests for audits, and found that requests from Congress and the White House go up in election years.
“The documents show there’s a systematic effort by Congress and the White House to intimidate and silence organizations with whom they disagree,” said Mark Levin, head of Landmark.
The documents also show IRS officials highlight the origins of complaints. The IRS computer tracking system in Washington clearly denotes the name of the politician who referred the matter. And the original letter from the White House or lawmaker is forwarded to the case agent.
Lawmakers’ requests are stamped “expedite” to remind IRS officials they must reply in writing within 15 days. A few requests reviewed by AP were marked with notations such as “hot politically” or “sensitive.”
A quarter century ago, President Nixon tried unsuccessfully to force the IRS to “go after our enemies and not go after our friends.” Today, the practice is more subtle, reports the AP. Members of Congress or the White House usually attach to their referral a letter from a like-minded constituent or a news article alleging wrongdoing.
In the case of the Western Journalism Center, the Clinton White House forwarded a complaint faxed to President Clinton from a supporter in Beverly Hills, Calif., that the Western Journalism Center was engaged in a “vicious media campaign to hurt you.”
The fax didn’t allege any specific tax violations. It simply noted the center was tax-exempt and an “ad needs investigation.” The IRS audited the group, but eventually upheld its tax-exempt status. Treasury Department investigators reviewed the audit and concluded it was proper, though they never interviewed key witnesses including Farah. They said the White House referral was one of several constituent complaints it routinely sent over.
“Citizens often write to the president about issues under the jurisdiction of different federal agencies. We have a choice. We could forward their letters or we can throw them out. We chose to forward them,” White House spokesman James Kennedy said. He said all letters are referred regardless of their political orientation.
Not all requests result in audits. Rep. Henry Waxman, D-Calif., an ally of the president, referred Jerry Falwell, an outspoken critic of Clinton, for investigation based on a constituent complaint in May 1993 that “religious broadcasters are using their tax-exempt status for political purposes.”
Waxman urged the agency to keep his constituent’s “concerns in mind.”
The congressman got a speedy reply, but the IRS didn’t audit Falwell. Five of his organizations had just been audited two years earlier.
For those audited, the experience can be costly. John Von Kannon, vice president and treasurer of the Heritage Foundation, said the audit has cost his organization more than $100,000. He says the group doesn’t believe it did anything wrong.
“We are a conservative organization and there will be some people who don’t like us. That’s life,” Von Kannon said.
Farah, meanwhile, sees the central issue of political audits as far more important than the financial cost to victims.
“This is a dynamic First Amendment concern,” he said. “If groups or individuals can be targeted for political reasons by politicians in Congress or the White House, no one who rocks the boat politically will be safe from political retribution in this country. The fact that this practice can be exposed in such a cavalier manner, without a genuine popular uprising by the American people and the press, illustrates how decadent and corrupt the U.S. political system has become since the time of Nixon, when the people and the press were outraged.”
