“An Untenable Position”: How John Boehner And Republicans Helped Create The IRS Scandal
The political powers the IRS was recently accused of abusing to harass Tea Party groups were given to it against its will by Congress — including some of the agency’s biggest critics today — over 10 years ago, according to documents and a former senior tax official. The revelation, which has been missing in most if not all of the commentary on the scandal, adds a key bit of context to it.
In a half-measure effort to strengthen campaign finance disclosure laws in 2000, Congress put the IRS, effectively for the first time, in the awkward position of having to make judgment calls about whether nonprofit advocacy groups would be required to disclose their donors because too much of their activities crossed the theoretical line between “issues advocacy” and “political campaign intervention.” It’s a messy and inherently subjective business, and something officials did not want to get more involved in, predicting it would lead to exactly the kind of controversy we just witnessed. “The IRS would inevitably be subject to claims of discrimination and political bias for actions taken or not taken,” an internal memo from the Treasury Department’s office of Tax Policy sent in June 2000 and obtained by Salon reads.
“The fuse was lit in 2000 with this law, which put the IRS in an untenable position. It’s almost surprising it didn’t explode on them earlier,” Steven Arkin, a former senior Treasury and IRS official, who proceeded Lois Lerner as the director of rulings and agreements for the IRS’ tax exempt organizations office, told Salon.
The law, a stand-alone bill numbered H.R.4762, had the best of intentions, but backfired thanks to an enormous loophole. After a comprehensive campaign finance bill failed, reformers pushed a narrow bill to increase disclosure of groups organized under section 527 of the tax code. That was reserved for groups primarily involved in electoral politics — but before this law, 527s that didn’t engage in explicit electoral intervention didn’t have to file any paperwork of any kind with the IRS. They incorporated as legal entities in their states, and that was that. No information on donors, expenditures or even their existence needed to be made public. If they did engage in electioneering, they would have to disclose that information to the FEC, but only for each specific activity. Thanks to the lax standards, these groups earned the moniker “Stealth PACs” and became the bane of campaign finance reform advocates.
When lawmakers brought up a bill to force 527 groups to disclose their donors just before Congress was about to go on its July 4 recess in 2000, they made a concession to skeptical Republicans and some Democrats who were looking out for liberal nonprofits: 501(c) groups — business leagues and the so-called social welfare organizations at the center of this year’s IRS controversy — would not be included. This didn’t seem like a big deal at the time, since almost everyone who wanted to meddle in politics organized as a 527 and not a 501(c)4. Both types of groups are tax-exempt, but 527′s had free rein to engage in electoral politics, while 501(c)4′s are limited to spending less than half their money on it. Social welfare and other groups are permitted to engage in unlimited issue advocacy, so long as their efforts to elect or defeat particular candidates were not their “primary” activity.
But former Sen. Russ Feingold, a staunch campaign finance reform advocate, saw what would happen if you cracked down on 527′s and not 501(c)4′s. “By only focusing on disclosure in one type of tax-exempt organization and not on others, we leave open the use of the other type of tax-exempt organizations by those who want to hide their contributions and activity behind the cloak of anonymity that these tax-exempt organizations provide,” Feingold warned on the floor during the Senate’s very short debate. He added that he was concerned that the IRS was “not prepared” to take on this burden, given the administration’s concern.
Sen. John McCain, the Senate sponsor, said that while it would be nice to do all groups, “focusing narrowly on 527 organizations” was necessary to “ensure that the legislation survives a constitutional test.” In the House, Wisconsin Democrat Tom Barrett, acknowledged that “this bill is not perfect” since it exempted social welfare organizations, but said including them might be “poison pill provisions” that would “scuttle this important reform effort.”
The bill passed overwhelmingly in both chambers. In the House, it was 385-39, with the “yay” column including Republican Reps. John Boehner, Dave Camp, Paul Ryan, Jim DeMint and many others who would later make hay of the way the IRS regulated 501(c) groups. Meanwhile, the Senate approved it 92-6, with McCain, Lindsey Graham, Rick Santorum and many others voting in favor. Sen. Mitch McConnell, a longtime opponent of campaign finance reform, voted no, but said, “I recommend to my Republican colleagues that they vote for this bill,” calling it “relatively benign and harmless.”
The fallout was not particularly surprising. Two months after the law went into effect, the Washington Post reported that “instead of complying with the new law, a number of groups are instead reconstituting themselves under other provisions of the tax code that do not force them to reveal their donors.” Ben Ginsberg, a prominent GOP election lawyer, told the Post he couldn’t keep up with with his clients’ requests to convert. “We’d be running out of fingers and toes” just to count them all, he said. Claiming to be new groups, they reorganized as 501(c)4′s, which can do basically all the same things the old 527′s did, just under a different section of the tax code. So in the end, Congress swapped out 527 “Stealth PACs” for 501(c)4 “Dark Money” groups.
But while the change seems banal, it effectively transferred oversight of this species in the campaign finance ecology to the IRS, an agency less well equipped to handle delicate political questions than the FEC, which was designed with a bipartisan commission and other features precisely to handle touchy political issues, including fundraising matters impacting members of Congress themselves.
“The proposals to amend the Internal Revenue Code would put the IRS in the position where it, rather than the FEC, must become the “watchdog,” the Treasury Department memo, first reported by Sam Stein at the Huffington Post, warned before the law passed. “Imposition of such a burden on the IRS would be an administrative nightmare for the agency.”
“It never should have been given to the IRS,” said Arkin, the former tax official.
It’s a fitting coda to the IRS scandal that the problem was largely created by the people most outraged by it.
By: Alex Seitz-Wald, Salon, July 11, 2013
“The Farce That Is Darrell Issa”: Just Another Symbol Of Today’s GOP
The only thing that makes Rep. Darrell Issa remotely qualified to chair the House Oversight Committee is his personal familiarity with the investigative process – on the receiving end. The man Republican House Speaker John Boehner put in charge of investigating government wrongdoing was himself indicted for stealing a car, accused of stealing at least one other car, arrested for carrying a concealed weapon, and twice suspected of insurance fraud – and once extensively investigated by authorities for arson, because his former business associates accused him, on the record, of burning down a building to collect the insurance payout.
Democrats love to hate the silly, camera-chasing Issa, who came to power in 2011 promising to put the White House under generalized investigation. But now even some Republicans are happy to criticize Issa too. It’s easy for them to denounce his calling Jay Carney a “paid liar,” as well as his evidence-free claim that the IRS mess was directed from Washington, D.C., while they continue to participate in smearing the White House with non-scandals themselves, nonetheless.
Issa’s extremist idiocy lets “reasonable” Republicans denounce him and/or his rhetoric, while they continue their own ethically, intellectually and politically blinkered crusades against President Obama. Sure, Sen. John McCain says it was wrong to call Carney a “paid liar” – but also on MSNBC’s “Morning Joe,” he compared the IRS mess to Ronald Reagan’s deadly Iran-Contra scandal. Um, no.
Scandal-drunk Sen. Lindsey Graham says Issa went too far when he said the IRS agents who keyword-targeted Tea Party groups “were directly being ordered from Washington.” But he continued to hype the IRS story. “At the end of the day, the IRS scandal really is scary,” he told Fox’s Brian Kilmeade. “How would you like your own government to turn on you?” Is that really what happened, Lindsey Graham? And if so, it happened most brutally to a Democratic group, Emerge America, which had its tax-exempt status revoked.
Of course, McCain and Graham are also the guys who brought us the ultimate non-scandal: Benghazi. Issa’s idiocy lets them retain their role as “statesmen,” gets them invited back on the Sunday shows, and gives the media an excuse to consider them arbiters of what’s politically acceptable – while they’re themselves on the right fringe. Of course it’s guys like Issa who constantly move that standard of what’s politically acceptable to the right.
Honestly, when David Plouffe started raising Issa’s past on ABC’s “This Week,” and then on Twitter, part of me winced. But that’s because I didn’t completely remember Ryan Lizza’s amazing Issa profile in the New Yorker – which was respectful while also documenting Issa’s troubling history with law enforcement – as well as my own life in California during the surreal 2003 recall of Gray Davis (another example of GOP nullification of election results, by any means necessary, usually big money).
Issa financed the recall, and hoped to run for governor himself, but then the Los Angeles Times and other California papers began reporting on his earlier legal troubles. There was particular attention to his indictment for grand theft when he reported his Mercedes stolen after his brother William sold it; William had earlier obtained the right to do so from his brother. The two men had different stories for a while, and authorities believed they’d conspired to sell the car, report a “theft” and collect insurance on it.
(I personally think the arson investigation was even more damning: An Issa colleague gave investigators vivid detail that indicated his car-alarm factory had been intentionally torched, after Issa increased his insurance from $100,000 to $462,000. “Quite frankly,” Joey Adkins told authorities, “I feel the man set the fire.” But the local fire marshal never determined the fire’s cause.)
In the end, the scrutiny doomed Issa’s chance to run for governor – but his wealth funded the successful recall of Davis. Sure, Issa could continue to hold his House seat in his conservative San Diego district, but a guy as ethically compromised (and as blinkered ideologically) as Issa could never win a statewide election in California – let alone a national one. So he tearfully stepped aside for Arnold Schwarzenegger.
So that’s the guy who’s heading up the House GOP’s investigation into alleged Obama White House “scandals.”
Sen. Chuck Schumer got a lot of attention Monday for telling “Meet the Press’s” David Gregory that Issa’s overreach is setting up a GOP loss in 2014 – just like the impeachment witch hunt against President Clinton set up his party’s historic gain of seats in the 1998 midterms. I hope Schumer’s right. But I find myself taking little comfort even in that uncertain outcome.
Democrats, including myself, like to declare that impeachment didn’t resonate with the American people, who gave Clinton ever-higher approval ratings as the witch hunt continued. And yes, Clinton’s party won seats in the ’98 midterm. But impeachment, and the myriad baseless investigations that preceded it, from Whitewater to Travelgate to alleged Chinese fundraising scandals, preoccupied both the White House and the media, to the detriment of Clinton’s agenda, particularly in his second term. They certainly didn’t help Vice President Al Gore in his campaign to win the presidency.
While I’ve always rejected the claims of some anti-Clinton centrist Democrats that Clinton’s philandering cost Gore the election, there was at least some polling that suggested it hurt Gore with suburban women. Certainly the cloud of scandal – and the stalling of the Clinton-Gore agenda – couldn’t have helped Gore, who won the popular vote and by reliable accounts the electoral vote in a race that shouldn’t have even been as close as it was, given the strength of the economy and the deficits of George W. Bush. I would argue that Clinton’s experience proves GOP scandal-mongering works – and once again, the media let the party get away with it.
I’m happy even some mainstream media pundits are warning that Issa’s overreach could hurt the GOP in 2014. And yet that new rhetorical twist puts the focus on horse race politics, where all of journalism appears most comfortable today. Issa’s extremism may or may not hurt his party at the polls. All I know is it should be hurting him, and the GOP, more with the American people, when they think about what they want in their leaders.
By: Joan Walsh, Editor at Large, Salon, June 4, 2013
“Regrettable Indeed”: John McCain’s Allies In Syria Are Suspected Terrorist’s Who’ve Sworn Allegiance To Al Qaeda
A couple of weeks ago, Sen. John McCain (R-Ariz.) was stressing his position for U.S. policy in Syria: the senator wants the U.S. to provide Syrian rebels with extensive support, including “heavy weapons.” ABC’s Martha Raddatz reminded the senator that some of these Syrian rebels are terrorist who’ve sworn their allegiance to al Qaeda.
McCain said it’s a “legitimate” question, but he wants to support them anyway. After all, he said, “there aren’t that many” terrorists among the Syrian rebels he wants to give “heavy weapons” to.
Just two weeks later, McCain quietly traveled to Syria, and his office distributed photos from his visit to news organizations. One image, in particular, has generated some unexpected attention.
Senator John McCain’s office is pushing back against reports that while visiting Syria this week he posed in a photo with rebels who kidnapped 11 Lebanese Shi’ite pilgrims.
The photo, released by McCain’s office, shows McCain with a group of rebels. Among them are two men identified in the Lebanese press as Mohamed Nour and Abu Ibrahim, two of the kidnappers of the group from Lebanon.
McCain’s office insists the senator was not aware that he’d met with Nour and Ibrahim — if they are, in fact, the men in the photograph — and they had not been identified as such during his trip. The spokesperson added that if McCain had unknowingly met with kidnappers, “that is regrettable.”
It is, indeed.
McCain’s office went on to tell BuzzFeed that it “would be ludicrous to suggest that the Senator in any way condones the kidnapping of Lebanese Shia pilgrims or has any communication with those responsible. Senator McCain condemns such heinous actions in the strongest possible terms.”
And to be clear, I don’t think anyone has suggested McCain is somehow sympathetic towards kidnappers. Rather, the point is the senator is eager to provide extensive resources to Syrian rebels, but he may not fully appreciate who his new allies are.
McCain added some additional thoughts on the subject last night.
When [Anderson Cooper] asked McCain how weapons would be prevented from falling into the hands of extremists, the senator said extremist fighters compose a small fraction of Syria’s rebel forces: 7,000 pro-al Qaeda fighters from the al-Nusra front among some 100,000 insurgents.
“Every single day, more and more extremists flow in … but they still do not make up a sizable portion,” McCain told Cooper. “We can identify who these people are. We can help the right people.”
Maybe, maybe not. But whether McCain can say with certainty who the “right people” are is very much in doubt.
By: Steve Benen, The Maddow Blog, May 30, 2013
“Bleed Until Bankruptcy”: Top Senate Republicans Want To Keep Playing Into Al Qaeda’s Strategy
Back in 2004, in a video addressed to the American people, Al Qaeda leader Osama bin Laden described his “bleed until bankruptcy” strategy. “All that we have to do is to send two Mujahedin to the farthest point east to raise a piece of cloth on which is written al-Qaeda in order to make the generals race there to cause America to suffer human economic and political losses without their achieving for it anything of note other than some benefits to their private companies,” bin Laden taunted. “So we are continuing this policy in bleeding America to the point of bankruptcy.”
The twin goals of this strategy were to drain the U.S. of resources by baiting it into expensive, open-ended military interventions like those in Iraq and Afghanistan, with the resulting anger over those interventions causing more people to join Al Qaeda’s cause.
I was reminded of that by these specific remarks from President Obama’s speech on counterterrorism yesterday:
The AUMF is now nearly twelve years old. The Afghan War is coming to an end. Core al Qaeda is a shell of its former self. Groups like AQAP [Al Qaeda in the Arabian Peninsula] must be dealt with, but in the years to come, not every collection of thugs that labels themselves al Qaeda will pose a credible threat to the United States. Unless we discipline our thinking and our actions, we may be drawn into more wars we don’t need to fight, or continue to grant Presidents unbound powers more suited for traditional armed conflicts between nation states. So I look forward to engaging Congress and the American people in efforts to refine, and ultimately repeal, the AUMF’s mandate. And I will not sign laws designed to expand this mandate further. Our systematic effort to dismantle terrorist organizations must continue. But this war, like all wars, must end. That’s what history advises. That’s what our democracy demands.
There was a lot to chew on in the president’s speech, and obviously we’ll have to wait and see how much weight the president actually puts behind some of the reforms he suggested, but I think this core passage represents another important shift away from the rhetorical construct of a “Global War on Terror.”
Meanwhile, on the other end of Pennsylvania Avenue, four of the Senate’s leading hawks — Republican Senators John McCain (AZ), Lindsey Graham (SC), Saxby Chambliss (GA) and Kelly Ayotte (NH) — responded as you might expect to the prospect of the loss of that rhetorical construct, which has proven extremely politically beneficial to hawks over the last decade.
“I believe we are still in a long, drawn-out conflict with Al Qaeda. To somehow argue that Al Qaeda is ‘on the run’ comes from a degree of unreality that, to me, is really incredible,” said McCain, adding: “Al Qaeda’s ‘on the run’ is expanding all over the Middle East from Mali to Yemen and all places in between and to somehow think that we can bring the authorization of the use of military force to a complete closure contradicts the reality of the facts on the ground. Al Qaeda will be with us for a long time.”
“The President’s speech today will be viewed by terrorists as a victory,” Chambliss declared.
Graham took the chance to ding the president on Iraq: “Iraq is a country that went through hell, was inside the 10-yard line, the surge did work and it’s falling apart because the president chose not to leave any American soldiers behind when 10,000 or 12,000 would have made a difference.”
Leaving aside why Graham thinks 10,000 or 12,000 U.S. troops would have made a difference in Iraq when over 100,000 couldn’t stop it from descending into civil war in 2006 (not to mention the tension between claiming to support democracy in Iraq while bashing the president for not working harder to circumvent democracy in Iraq in order to keep U.S. troops there), it’s remarkable that these Congressional leaders essentially want America to keep playing into Al Qaeda’s “bleed until bankruptcy” strategy.
By: Matt Duss, Think Progress, May 24, 2013
“Ted Cruz Against The World”: The Supercilious, Arrogant, Crackpot, Con Man Of The GOP
One bonus for Republicans in the trifecta of pseudo-scandals ensnaring the Obama White House this month is that it distracted the party from its looming civil war. It’s even possible that the Senate immigration reform got as far as it did partly because wingnut radio talkers and Tea Party xenophobes were consumed by their hatred of Obama, and paying less attention to GOP immigration sellouts.
But with the easing of scandal fever on the Potomac, Republicans are back to fighting one another, and the week-long Senate clash between freshman Sen. Ted Cruz and Sen. John McCain over the budget is exposing the yawning gulf within the party once again.
Now that the GOP-dominated House and Democratic-led Senate have passed very different budgets, McCain has tried to argue for the formation of a conference committee that would try to reconcile the two. That might be a thankless, impossible task nowadays, but it’s nonetheless the way Congress has always worked. Democrats agree with McCain, and so do most Republicans.
But Cruz was having none of it, because he insisted sneaky Democrats might use the committee to raise the debt ceiling. He got support from Tea Party allies Mike Lee and Rand Paul, as well as Marco Rubio (trying to claw back the Tea Party credibility he lost by working on immigration reform). McCain reminded Cruz and his friends that their party controls the House. “So we don’t trust the majority party on the other side of the [Capitol] to come to conference and not hold to the fiscal discipline that we want to see happen? Isn’t that a little bit bizarre?”
Here’s where Cruz set himself apart, one man against a corrupt world. He responded to McCain on the Senate floor the next day: “The senior senator from Arizona urged this body to trust the Republicans … Let me be clear, I don’t trust the Republicans. I don’t trust the Democrats and I think a whole lot of Americans likewise don’t trust the Republicans or the Democrats because it is leadership in both parties that has got us into this mess.”
That made the senior senator from Arizona apoplectic. He accused Cruz and friends of trying to “paralyze the process.” He singled out Utah’s Mike Lee, who is not as bright a light as Cruz, for his ignorance of the way Congress works. Lee made the conference committee sound like a political brothel facilitating “backroom deals.” McCain shot back: “How do we reconcile legislation that’s been passed by one body and the other body? That’s what we’ve been doing for a couple hundred years. Perhaps the senator from Utah doesn’t know about that.”
Poor John McCain. He gave the world Sarah Palin, and Palin helped give us Cruz, Lee, Paul and Rubio. Still, Ted Cruz’s self-righteous grandeur puts him in a class by himself. He oozed condescension, openly mocking McCain, declaring that Senate Republicans would side with him on the budget impasse. “I will suggest to my friend from Arizona, there may be more wacko birds in the Senate than is suspected,” a reference to McCain calling Cruz, Paul and Justin Amash “wacko birds” earlier this year.
What’s clear is that we’ve reached a new state of warfare in the normally collegial Senate, where increasingly, a minority faction of the minority party has the power to grind everything to a halt. McCain blasted that point of view Thursday: “It’s not the regular order for a number of senators — a small number, a minority within a minority here — to say they will not agree to go to conference. We’re here to vote, not here to block things,” he said.
That’s clearly Cruz’s plan. Watching the supercilious Cruz mock the sputtering McCain, I was struck by how much he enjoyed preening for the cameras. All senators do, but Cruz stands out, with his proud contempt for Republicans along with Democrats. As he dreams of the White House, with barely five months in the Senate under his belt, look for him to play a leading role in the next debt ceiling battle.
In other news: Michelle Malkin and friends are calling me a racist for referring to Cruz as a “skeezy huckster” on Twitter yesterday as I watched him insult McCain. I admit it wasn’t my most elegant turn of phrase, but I wasn’t aware that “skeezy” or “huckster” were slurs associated with Hispanics/Latinos. Maybe that’s because I don’t travel in the same circles as Malkin. Can you say “projection”?
Still, they weren’t the most artful choice of words. If I had it to do over again, I would call Cruz a “supercilious con man.”
By: Joan Walsh, Editor at Large, Salon, May 24, 2013
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