Avoiding the central issue of whether or not a politically motivated
audit constitutes a violation of a group’s civil rights, a federal
appeals court upheld a lower court’s dismissal of the Western Journalism
Center’s lawsuit against Internal Revenue Service agents, saying the
suit was filed after the statute of limitations ran out.
Larry Klayman, general counsel of Judicial Watch and WJC’s legal
representative, strongly disagrees with the court’s analysis and said
his client will continue to fight the legal battle.
“In my view, the reason on the statute of limitations is in error,”
said Klayman. “They didn’t have any precedent. They really invented
Klayman said the correct statute of limitations, which encompasses a
period of one year, began when the audits concluded. The famed attorney
who has filed dozens of lawsuits against the Clinton administration said
he’s basing his assessment of the statute of limitations on a continuing
tort doctrine. A state law, the continuing tort doctrine says the
statute period does not begin to accrue until harmful activity ceases.
9th Circuit Court of Appeals, however, disagreed, saying the statute began accruing in October 1996. At that time, Western Journalism Center founder and CEO of WorldNetDaily.com Joseph Farah wrote an opinion piece published in the Wall Street Journal calling the audit “a smoking gun that proves that the White House is manipulating the IRS for political purposes.” The lawsuit was filed a year-and-a-half later.
The court acknowledges in its
opinion that state law sets the length of a statute of limitations, but it goes on to say in its 3-0 opinion that federal law determines when the period begins.
“I’m disappointed that the 9th Circuit passed on this hot potato of a case with the bogus rationale of a statute-of-limitations problem,” remarked Farah. “The court is deciding that the clock began ticking at an arbitrary point in time — when I went public with my suspicions about the political nature of this audit. It would have been inappropriate and unwise for me to file a lawsuit while the audit was continuing — which it did for approximately seven months after I decried the IRS’ harassment and intimidation of the Western Journalism Center.”
Notably, Circuit Judge Stephen Reinhardt added in his separate but concurring opinion that while he agreed the case had to be dismissed because the statute of limitations period had expired, the lower court erred in dismissing the case on grounds that the availability of alternative remedies made the government exempt from having to pay damages for violations of Constitutional rights.
Pointedly noting that the IRS could indeed be sued for engaging in politically motivated audits, Reinhardt wrote that, under the argument IRS lawyers offered, “the government would be insulated against liability for its attempt to suppress the type of criticism that forms the very core of speech protected by the First Amendment.”
WJC is seeking $10 million for First Amendment violations and damage to its reputation caused by the audits, which in turn served to reduce donations — the organization’s only source of income.
Contradicting the assessment of the case by IRS officials and their Justice Department lawyers, a Treasury Department report states unequivocally and repeatedly that the audit against the Western Journalism Center 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 (former 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.”
The IRS eventually closed the audit case against the WJC, finding no evidence of wrongdoing, and extending the center’s tax-exempt status.
appeal was heard on Oct. 5 by Senior Circuit Judge Melvin Brunetti, Reinhardt and Circuit Judge Pamela Ann Rymer. Klayman said his client will file a petition in the next few weeks for a rehearing with all 11 justices of the en banc panel.
Despite losing its initial appeal, Klayman is optimistic about the overall effects of WJC’s case.
“I think that Western Journalism Center has done the country a great service. It has established a precedent that the Internal Revenue Service is not immune from auditing people for political purposes and that its agents can be held legally accountable,” he said. “This should have a significant chilling effect for future administrations to engage in similar activities.”
Farah echoed Klayman’s sentiments, saying, “Rest assured that Larry Klayman of Judicial Watch, our lead counsel in this case, and I will not rest until we turn over every rock and pursue every avenue of justice — not just for me, not just for the Western Journalism Center, but for every American who might be the next victim of political retribution.”
The Western Journalism Center is a non-profit, tax-exempt organization that sponsors independent investigative reporting projects into government fraud, waste, corruption and abuse. The charity was founded by Joseph Farah, now editor and chief executive officer of WorldNetDaily.com, but is an entirely autonomous company. If you would like to support hard-hitting investigative journalism — the kind that really makes a difference — with your tax-deductible contributions, you can do so by calling 1-800-952-5595, by writing to the center at P.O. Box 2450, Fair Oaks, CA 95628, or by making your donation