The Intimidation Game (14 page)

The numbers and facts themselves were damning, and important to establishing from the get-go—and from a neutral source—that the IRS had behaved atrociously. At the same time, George's reluctance to go beyond a basic audit—his failure to investigate who drove the affair, or the role politics played—kept the field open for the left to make up its own narrative.

Because George traded drafts with the IRS, the agency by April knew it would no longer be able to hide what had been going on. It decided to get out ahead of TIGTA and announce the news itself. Lerner's ultimate apology wasn't some hastily concocted affair, but the culmination of weeks of plotting at the highest levels of the IRS and Treasury Department.

And it was aimed at minimizing fallout. Steven Miller, the now acting IRS commissioner, headed up that discussion, debating possible venues with his advisers throughout April. One possibility was a Georgetown University forum where Lerner was scheduled to speak on April 25; the IRS went so far as to draft her remarks. The proposal shot up the ranks at Treasury, where Obama appointees (for unknown reasons) nixed the idea.

Miller considered several other May events before settling on the ABA panel on May 10. This idea, too, was run by the chief of staff to Treasury Secretary Tim Geithner. When no objections came, Miller handed Lerner handwritten talking points he'd crafted for her to use at the event.

Miller played his part, using a closed-door session at the ABA event on May 9—the day before the big apology—to hint at the news and to blame the IRS's actions on “dumb” moves by staff and the “wave of cash” that had followed
Citizens United
.

Lerner meanwhile sought out a friendly tax attorney, Celia Roady, to deliver a planted question from the audience. And so on May 10, 2013—more than three years after the first conservative applications were segregated out and subjected to hostile treatment by the most powerful government on the planet—Lerner dropped the bomb. “So our line people in Cincinnati who handled the applications did what we call centralization of these cases. They centralized work on these in one particular group.…However, in these cases, the way they did the centralization was not so fine. Instead of referring to the cases as advocacy cases, they actually used case names on this list. They used names like Tea Party or Patriot and they selected cases simply because the applications had those names in the title. That was wrong, that was absolutely incorrect, insensitive, and inappropriate—that's not how we go about selecting cases for further review.”

Within minutes of Lerner's talk, Washington went batshit. Cable news channels exploded, e-mails flew, staffers scrambled to write up statements. Some professed shock, some incredulity. But the overriding emotion was fury.

Congress was furious. “Lerner, and all the way up the chain—they sat here for a year and lied to us,” recalls Ohio Republican Jim Jordan, who spearheaded the IRS investigation at the House Oversight Committee. “Flat. Out. Lied. And then dumped this apology, like it was no big deal.” Republicans like Jordan immediately understood that not only was the IRS admitting to a crime, but to an elaborate cover-up—one that had involved duping the people's elected representatives. Speaker John Boehner summed up the general view when he asked, “My question isn't about who's going to resign. My question is who's going to jail over this scandal?”

TIGTA's office was furious. It had spent a year on its audit, meticulously working to put together a straightforward report, giving the IRS every courtesy, and the agency had messed with the release. It had gone public before George could even get the final clearances for his report. The inspector general would later testify that he'd never seen a situation in which the IRS had leaked the contents of a report before it had been made public.

President Obama feigned fury. “The misconduct…is inexcusable. It's inexcusable, and Americans are right to be angry about it, and I am angry about it,” he said. “I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has and the reach that it has into all of our lives.”

Other Democrats joined in proclaiming righteous indignation. Missouri senator Claire McCaskill claimed, “We should not only fire the head of the IRS…we've got to go down the line and find every single person who had anything to do with this and make sure that they are removed from the IRS and the word goes out that this is unacceptable.” West Virginia senator Joe Manchin railed that the IRS actions were “un-American.” Montana senator Max Baucus, who'd first requested that the IRS investigate groups, suddenly decided that this was an “outrageous abuse of power.”

Commentators were furious. NBC's Tom Brokaw declared, “It's time for action.” ABC's Terry Moran called it a “truly Nixonian abuse of power by the Obama administration.” Even liberal pundits were unhappy. MSNBC's Rachel Maddow, who rarely misses a chance to compare conservatives to devil's spawn, worried about the misuse of IRS power and said the unequal scrutiny put on conservative groups hadn't been fair. Comedy Central's Jon Stewart, in a moment of sincerity, slammed the Obama administration for its lack of “managerial competence.”

Cincinnati was furious. Following Lerner's apology, Cindy Thomas whipped off a vicious e-mail to her and Paz, in which she declared that Cincinnati hadn't been just thrown under the bus, it'd been “hit by a convoy of Mack trucks.”

But no one was more furious than the Tea Partiers themselves and their advocates. Mitchell processed, with mounting fury, the lengths to which the IRS had gone to hide all this and then attempted to make it a “nonstory” by chucking it out on a Friday. “All I could think was, ‘Don't issue a damn apology. Issue my clients a letter of determination.'”

It'd be a very long time before that happened.

To this day, many Washington politicians will insist that we still don't have the full story on the IRS debacle. That's true, to the extent that we're still missing relevant e-mails and testimony. Then again, the key to unraveling any good mystery is identifying the motive, the crime, and the cover-up.

We know the crime—the targeting of conservative applications.

We now know the motive. The Obama administration wanted to silence conservative groups before they could harm Democrats in elections. Not all Americans noticed it, but that motive was on vivid display for years. Through most of 2009 and 2010, Democrats publicly seethed with frustration over these groups; it was their top concern.

Thanks to several years of investigation, we also now know the cover-up. The very Democrats who pushed the IRS to act would, when caught, peddle a tale based on lies and misdirection. The country was told that the IRS had been hit by a flood of social-welfare applications that overwhelmed the system; that “low-level” employees were confused by a murky law; that liberal groups had also been caught in the snare; that conservative organizations were taking advantage of tax laws; that the Washington IRS had stepped in to remedy the problems. Not a bit of it was remotely true. The effort the left put into covering up what really happened is the most damning evidence of the crime.

Here's what we do know, three years out from Lerner's apology. We know a Democratic Party, worried by the backlash to its policies, and terrified by the Supreme Court's blessing of freer speech, focused all its attention on silencing its political opponents.

We know its message was directed at an IRS that was already primed—by ideology and bureaucracy—to isolate and harass and delay the work of groups opposed to Obama.

We know that agency had already been captured by Obama acolytes, who were shifting it into an enforcer of administration policies on speech and health care.

We know the system the IRS set up was designed to capture only conservative groups, and to keep them on ice until the agency could find a way to shut them down entirely.

We know top officials contemplated other means of quieting its opposition, including a Justice Department plan for criminal prosecutions.

We know administration officials were fully briefed about IRS targeting in the run-up to the 2012 election, and kept it secret. We know that they were successful, and the effort helped to keep Obama in office and the Senate in Democratic hands.

We know that those officials then plotted a way to keep the news under the radar. We know that when it finally came out, they lied to Congress. And we know that all this went on for twenty-seven months, and swept up conservative groups that ranged from high-profile players to the Karen Kenneys of the world.

Congressman Jim Jordan
was in his Ohio district, on the way to a speech, when Lerner spilled her beans. He'd known something was coming; TIGTA had given his office a heads-up that his IRS audit would go public soon, though Jordan didn't know what was in it. He saw the name of his chief counsel, Chris Hixon, show up on the phone. “I hit the button and all he said was, ‘Shit, it's true.'”

Jordan's first emotion: anger, and on a lot of levels. He'd won Ohio's 4th Congressional District in 2006, bucking the anti-GOP wave of that year. The 4th is Ohio's most conservative district, and Jordan's a perfect fit. He's principled, tough, in touch, and in tune with his conservative grassroots. A lot of that connection came from his years in the Ohio General Assembly and Senate. But he also has a strong affinity for the Tea Party groups and their beliefs; he and his wife homeschooled their kids, they're pro-family, anti–big government.

So he'd been tight with groups like the Sidney Shelby County Liberty Group, and highly visible conservative leaders like Tom Zawistowski, who ran the Portage County TEA Party. Those groups and others flooded Jordan's phone lines in the wake of their February 2012 IRS letters. The congressman was concerned, but also unsure of what to make of the interrogatories. “Was it just some mistake at the IRS, was it illegal, was it something in between?” he remembers. “At the time, it was hard to know.”

Now he had heard from Lerner herself that it was far worse than anyone could have guessed. It had been a vast and orchestrated targeting campaign. That made Jordan boil.

“There's plenty to be unhappy about with government. But this—this is the most fundamental right we have,” says Jordan, who in an interview two years later still looks dangerous even talking about it. “I don't mean for this to sound apple pie, but this is the
First Amendment
—it is freedom of religion, freedom of assembly, and freedom of association. But of all those, the one the Founders stressed most was freedom of speech—and of that, political speech is the most important. It's your most fundamental right to criticize your government. It does not get more basic than that.”

What equally upset Jordan was the mismatch—an overpowered, “cavalier,” and “arrogant” federal beast, going after the little folk. “The people they were targeting are good, honest, regular American families. They are regular people, like my mom and dad, who are doing something so basic—caring about this country. We are raised to care about this country, to speak out. It's just that basic. I get mad even now just thinking about it.”

Jordan's a former NCAA wrestling champion and Division I wrestling coach, still looks like one, and he does an honest mad face. He's sat on the House Oversight Committee since he was first elected, and is intense about his duty to oversee the executive branch.

And that's also what “frosted” him about the Lerner admission. Jordan hadn't known what to make of those first, February complaints, but he'd taken them seriously. Within a few weeks he'd called Lerner in front of his staff to answer questions. Jordan's team peppered many more IRS officials with questions in the eighteen months that followed. Every bureaucrat, on every occasion, insisted that there was nothing funny going on. Hixon's call set Jordan to remembering all of them. “When she gave that speech, a lot of Washington was wrapping its head around the fact that this had happened. But I'd already had all this interaction. So I was sitting in Ohio thinking, ‘They lied about this.' And I thought, ‘Game on.'”

Democrats also shouldn't have been surprised by the news. They'd inspired the targeting. They knew that a Democratic administration and Democratic Senate and Democratic House members had called on an IRS staffed with Democratic appointees to go after conservative groups.

They now knew that the IRS had done just that. They knew the nation was outraged. They knew Republicans and the media were asking whether Obama had ordered this, whether we had a new Nixon-era level of political targeting going on. And they knew that this was no time for excuses or partisanship. So Democrats joined Republicans in expressing outrage.

Obama labeled the IRS's actions “inexcusable” and vowed to work “hand in hand” with Congress as it investigated the affair. The president was at pains to say he'd only learned about the targeting from “the same news reports” as the rest of America. White House press spokesman Jay Carney was at even greater pains to note that while the White House had been informed almost a month earlier that something was amiss at the IRS, the president had never been told.

In the Senate, Max Baucus wasn't the only Democrat who had written to demand that the IRS take action against (c)(4) groups, but who now claimed to be outraged that it had done so. There was Oregon's Jeff Merkley, who insisted that “what the IRS did was wrong” and that those “responsible” must be “punished.” There was New Hampshire's Jeanne Shaheen, who claimed that the IRS actions were “completely unacceptable.” And there was New York's Chuck Schumer, who maintained that “heads should roll at the agency.”

Democrats in red and purple states, many of them up for reelection in eighteen months, nearly climbed over each other to produce appropriate levels of outrage. North Carolina's Kay Hagan couldn't believe how “disturbing and troubling” was the news. Arkansas's Mark Pryor took to Twitter, promising he'd “get to the bottom of this so we can fire those responsible & ensure this never happens again.”

And the administration at least put on the appearance of a swift response. Four days after the Lerner event, the Justice Department unveiled a criminal investigation. Five days after the event, the IRS announced that Miller was on his way out as acting commissioner. Six days after the event, Obama appointed Office of Management and Budget controller Danny Werfel to lead the IRS, promising he'd “restore confidence and trust.” Thirteen days after the event, Lerner was placed on administrative leave, having refused to testify before Congress or retire.

And yet it was all a sham.

Democrats created the environment that pressured the IRS to act. The Justice Department investigation never went far. Werfel delayed the congressional probe, and instituted policies designed to further hamper nonprofit activity. Lerner was never fired, prosecuted, or even reprimanded.

Instead, from the moment the scandal broke, the IRS and White House were spinning a yarn—setting a false narrative and minimizing the misdeeds. That yarn started only seven days after the Lerner admission, when Democratic operatives began to spread the story that the IRS had identified two “rogue” Cincinnati employees as the source of the entire problem. The entire Democratic establishment continued to weave what the
National Review
's Rich Lowry would come to term the “Cincinnati Lie.”

Just one week after Lerner's confession, Washington Democratic representative Jim McDermott used his opening statement at a Ways and Means hearing to declare, “There is a difference between stupid mistakes and malicious mistakes,” and all that had happened at the IRS was that a “small group of people in the Cincinnati office screwed up.” Press Secretary Jay Carney ten days after the scandal broke marked it all down to “line employees at the IRS who improperly targeted conservative groups.” James Carville, the go-to Democratic defender on cable TV, wrote the affair off as just “some people in the Cincinnati office.” Of course, even this Democratic telling of the scandal should have caused alarm. The idea that some “rogue” agents in Cincinnati could silence the speech of tens of thousands of Americans—and nobody noticed—is a damning criticism in and of itself.

This early slant would nonetheless prove remarkably effective. Millions of Americans would come to believe the following: that the United States has confusing tax-exempt laws (not true); that a flood of social-welfare and charitable applications overwhelmed that system (not true); that “low-level” and “rogue” agents had stepped out of bounds (not true); and that even liberal groups had been swept up in the harassment (definitely not true). It would take Jordan and other congressional investigators close to two years to unravel what had really happened. By then, not a lot of Americans were paying attention anymore.

Ask Jordan how much time he's spent on the IRS investigation and he laughs out loud—a lot of time. House Oversight chairman Darrell Issa officially walked point on the IRS investigation, but much of the real work came from Jordan, who chaired the Subcommittee on Government Operations. He wasn't the only one digging deep into the IRS mess. Michigan representative Dave Camp's Ways and Means Committee did yeoman's work, as did Utah senator Orrin Hatch. (Oregon senator Ron Wyden, who worked with Hatch on the Senate report, was one of the few Democrats who showed an interest in finding the truth.) But Jordan felt a personal connection to this outrage and personally spearheaded the probe.

That's unusual for a congressman, as even his staff will admit. Jordan is gracious, and continuously gives credit to a dutiful team that diligently pieced together the IRS intimidation game. It ultimately reviewed more than 1.3 million pages of documents from the IRS, Treasury, Justice, the FEC, the IRS Oversight Board, and TIGTA. It sat through close to fifty-five interviews and did the legwork for endless public hearings. “These guys worked their tails off,” says Jordan, noting that a lot of what he'd learn came from telephone briefings with this team.

But his staff in turn love to point out that Jordan was intimately involved—absorbing the information, running down questions, even personally sitting in on interviews to grill witnesses. “These are daylong affairs,” says one of Jordan's aides. “And he'd be there the whole day, asking questions, picking up inconsistencies, going back on points. It's really rare to have a congressman do that. He ran this thing.”

Jordan's memory burned with the meeting his staff had conducted with Lerner just following the February mailout of the IRS letters. “We had a copy of the questions the IRS had sent, and we asked her, ‘Is this standard operating procedure?'” he recalls. “She lied to these guys. She said, ‘This is the normal back-and-forth.'”

Prior to Lerner's announcement, the IRS had been just one thing on Jordan's to-do list; after, it became Jordan's morning, noon, and night focus. His team started from the bottom up. “We began by interviewing the guy who collects the paper in Cincinnati and opens the mail—and we went all the way up to the commissioner. And then on to people at Justice and the Federal Election Commission,” remembers Jordan. He would sit at a desk in the middle of his staff office, one or another member of his group blaring on speakerphone, as the team gamed out areas of inquiry, sorted through inconsistencies, and worked out questions for interviews or hearings.

Jordan's team managed to get in a few weeks of productive work before the barriers started going up.

It took Democrats less than a month to drop all their feigned outrage over the IRS scandal and to move swiftly to accusing Republicans of playing political games. As the days ticked on, the fear they felt over getting blamed for the targeting scandal paled by comparison to that they felt about losing the Senate in the 2014 midterms—or the presidency. They remained as intent as ever on shutting up conservative groups.

Two short weeks after Lerner's admission, senior Senate Democrat Dick Durbin found himself on
Fox News Sunday
being grilled by host Chris Wallace over the letter he'd sent the prior October to the IRS demanding an investigation of conservative groups. Durbin was unapologetic, and suggested that groups deserved the scrutiny. He complained that conservatives like “Karl Rove” at Crossroads were “boasting” about “how much money they were going to raise and beat Democrats.” Durbin couldn't help admitting what he had been trying to accomplish—a culture of fear: “I knew that if they went to investigate this group, every other group would be put on notice.”

Then there was Elijah Cummings, Darrell Issa's Democratic counterpart, the ranking member on the Oversight Committee. Cummings at the first hearing in May expressed his concern over the scandal and his hope for a “bipartisan and thorough investigation.” “Thorough” in Cummings's mind was the space of one month. That's how long it took before he went on national television, in an interview with CNN's Candy Crowley, to declare the case “solved” (it was Cincinnati's fault) and to claim that “if it were me, I would wrap this case up and move on.” At the time of that interview, Congress had interviewed all of five IRS employees.

When Republicans didn't take his advice, Cummings attempted to sabotage the probe. He at one point released a full transcript of one IRS employee interview, giving future witnesses a guide as to what they'd be asked in their own examinations, and allowing them to coordinate testimony. One IRS employee would later admit that prior to his own meeting with Congress, he'd been told by a supervisor to review the transcript Cummings had released.

Then again, Cummings had good reason to make this go away. The investigation would later find that his staff had been in contact with the IRS throughout the targeting scandal, going so far as to leak it information about upcoming congressional actions. In March 2012, soon after Congress started taking an interest in the IRS's actions, one IRS employee wrote to his superiors, “I got some intelligence from a senior Democratic staff member on House Oversight and Government Reform.…[A] hearing in May or June on 501 c 4s may be in the works.”

The biggest “tell” of Democrats' role in the IRS scandal may in fact be their involvement in the elaborate cover-up that followed. The left realized that Republicans very early on were beginning to blow holes in the Cincinnati lie, and Democrats wanted desperately to shut down the discussion.