Originally published on Forbes.com.
Big milestone over at the Tax Prof yesterday. The IRS Scandal, a day by day chronicle, has hit 1,000. The event is marked by a an article in The College Fix titled – “The IRS Scandal, Day 1000: Every single day for nearly three years prof chronicles IRS scandal”-. I was most pleased with this passage referring to Day 883
It’s the day it was suggested in Forbes that his blog had “jumped the shark.”
That suggestion. That was I. That was me. That was the author of this blog.
The Ever Enlarging Scandal
My objections to the day by day scandal narrative is that the string has often been maintained by stories that barely have a tenuous relationship to what I call the “core scandal” – delays and excessive questioning in the handling of tax-exempt applications of Tea Party and similar groups. My choice for the shark jumping day was Day 880 which was a story about Ben Carson calling for the IRS to immediately revoke the exempt status of the Council on American-Islamic Relations because of its statement about his candidacy.
I invested quite a bit of lifespan into examining the day by day coverage here and here and reached a couple of conclusions. The coverage is thorough and well balanced. It is a valuable resources if you want to trace the chronology. As time goes on, there is quite a bit of filler, as items that have no connection to the core scandal are introduced. For example on the ominous Day 666, we got a discussion of those damned e-mails of Hillary Clinton that Bernie Sanders doesn’t want to talk about anymore.
Much as I hate to assign required reading during tax season, I’m going to say that anybody who wants to have a reasonably well-informed opinion about how scandalous the IRS scandal is should read the pithily titled – Bipartisan Investigative Report on the IRS Processing of 501(c)(3) and 501(c)(4) Applications for Tax-Exempt Status Submitted by “Political Advocacy” Organizations From 2010-2013 -. It is a chore as you have to download four adobe documents. From that report you get an agreed set of facts, which is the bipartisan part and then two narratives that draw from the same facts.
What Scandal Believers Would Like
What the scandal true believers really yearn for is absolute proof of President Obama ordering his IRS hit squad to go after conservatives. A tape of a conversation like this would be just the thing:
President Obama: Minion. Come here and attend. Tell me about these strange people with tricorner hats who call themselves the Tea Party.Minion: Well excellency they seek to educate the people that the Founding Fathers wished the federal government to be carefully limited in its power.Obama: Founding Fathers? You mean the African enslaving slaughterers of indigenous people whom my liberal professors taught me to despise?Minion: The same excellency.Obama: I could see that this teaching would be highly dangerous to my master plan to turn America into a cradle to grave welfare state. How can we best smite these Tea Party people in a subtle and devious manner?Minion: Our prime minion in the IRS, Lois Lerner, who has taken the oath of silence, can harass them by delaying their exempt status applicationsObama: Make it so
Instead they are left with a tone at the top argument in which the President’s statements about Citizens United and untraced money flooding into politics was a kind of dog whistle signal to go after conservatives.
Who Is Keeping The Scandal Going?
I’m just coming off reading Jane Mayer’s – Dark Money – The Hidden History of the Billionaires Behind the Rise of the Radical Right. It is rather disturbing. The story is one of extremely wealthy people essentially weaponizing philanthropy to roll back not just the Great Society and the New Deal, but even the Progressive Era. Their success in moving us to the right can be seen by the occasional Teddy Roosevelt meme you will see on Facebook which will sound Leftist. Oddly enough one of the roots of the whole thing is a not that common tax technique – the charitable lead trust, which is how ownership of Koch Industries was passed to the current generation.
Tax avoidance was thus the original impetus for the Koch brothers’ extraordinary philanthropy. As David Koch later explained, “So for 20 years, I had to give away all that income, and I sort of got into it”.
The other fascinating player in the drama is Richard Mellon Scaife whose Scaife Foundation funded the Heritage Foundation. It is a long complicated story, which I can’t get into here, other than to note two items of interest.
Two lines of litigation that keep churning out new material for the day by day IRS scandal are NorCal Tea Party Patriots v IRS, which seeks damages for the delays and abusive inquiries, and FOIA requests by Judicial Watch. The NorCal litigation is being funded by Citizens for Self Governance, which appears to have Koch connections. If you look at the 2014 Form 990 of the Sarah Scaife Foundation, to which Richard Scaife gave $364 million in 2014, you will find $225,000 being given to Judicial Watch for general operating support.
Was Lois Lerner Right?
Much of the coverage of the Tea Party scandal is taking snippets from the vast document dumps and making a big deal out of them – things like Lois Lerner wondering if somebody should investigate Bristol Palin. If you really dig into the stuff, you can understand how there is material there to construct a variety of narratives.
In one of the narratives. you could write Lois Lerner as a tragic flawed hero, who saw great wrong being done, but was unable to get anyone to act. She tried to get Justice interested in prosecuting people for lying on their exempt applications and got nowhere. The gift tax initiative went nowhere (although I’m not sure she was that involved in that one). And then there is this batch of exempt applications. She knows they are up to no good and here she has leverage. She can slow them down by not doing something, which is a lot easier than doing something. Instead of accomplishing something in stemming the flow of dark money, Lois Lerner ends up crippling the IRS, which is fine with libertarian billionaires. They don’t want the IRS to do its job at all.
The narrative that seems most plausible to me is Lois Lerner as the Agent From Hell. AFH is my term for a certain type of IRS agent that I have thankfully only encountered a couple of times in my career. AFH is not that technically astute, but AFH is dogged. And AFH is certain that your client is up to no good. AFH just hasn’t quite figured out what that no good is. That was Lois Lerner and the Tea Party applications, only she had to do her work through minions. Lois Lerner was passionate about the dark money issue and nobody else seemed to care. So she tortured her line agents to get them to torture bewildered applicants who were already pumped up on conspiracy theories. A perfect storm of bureaucratic bumbling coming across as brilliantly subtle conspiracy.
On To The Next Millenium
And of course the brilliantly subtle conspiracy is the narrative that works best for those still interested in the scandal, so that is what will tend to predominate in the day by day as we move along. There will be no limits on spending this campaign season and the optimist in me is thinking that it might not matter that much, as people become more aware of what is going on. If it is unclear who is putting out a certain message, the source will be inferred from its content. As Abraham Lincoln may have actually said:
You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.