Perhaps by design, the IG report released yesterday cloaks some pretty shocking revelations in mind-numbing bureaucratese. Interestingly, it seeks to blame a pattern of obvious partisan abuse on "ineffective management" and "ineffective oversight by management." Although admissions of government incompetence generally have some truth behind them, here, it seems that the IG deliberately chose the most innocuous version of events to put forward as the truth, and demonstrates a willingness to suspend disbelief about some pretty startling admissions of ignorance and targeting. Notwithstanding the timelines provided in the report, there are significant holes especially regarding who knew what about the targeting, and when.
There's nothing in there about the targeting of individuals, as I noted last night.
There's nothing in there about who leaked documents to the media (which I wrote about here).
There's nothing in there about how an Obama relection campaign chairman came to possess confidential information he used to attack Mitt Romney.
What the report reveals -- more than anything else -- is that it's a starting point for some sharp inquiry by Congress, raising more questions than it answers. Some of the issues that might profitably be addressed are as follows:
1. The report's highlight page states that the wrongful IRS activity at issue was a result of "ineffective management." Has there ever been an example of similar activity in the past by low-level employees that "managers" needed to stop? What was it? By whom? How was it stopped? By whom?
2. On page 3, the report notes that "During the 2012 election cycle, some members of Congress raised concerns about selective enforcement." What were these members told? What investigation had been done internally -- and by whom -- before members like Orrin Hatch were assured that their concerns were baseless?This goes to whether members of Congress were deliberately lied to -- and by whom -- and whether their concerns were even taken seriously in the first place.
3. Also on page 3, the report states that some members of Congress asked the IRS to investigate whether existing 501(c)(4)'s were engaged in improper campaign activity. In other words, some members were urging greater scrutiny of 501(c)(4)'s. What members were these? Whom did they contact at the IRS? What were they told, and by whom? It would be interesting to know whether any former staffers of these members participated in the wrongdoing. What's more, if top officials were responsive to these requests, it might suggest where direction for the targeting came from.
4. On page 5, the report states that "The Determinations Unit developed and used inappropriate criteria to identify applications from organizations with the words Tea Party in their names." Who headed the Determinations Unit? Who was part of the Unit? Did any members of the Unit raise contemperaneous objections to the improper criteria? If so, how were those objections addressed and by whom?
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5. Footnote 13 on page 5 notes that "until July 2011, the Rulings and Agreements office [NB: located in Washington, DC!] referred to these cases as Tea Party cases. Afterwards, the EO function [Exempt Organizations function] referred to these cases as advocacy cases." Who headed the Rulings and Agreements office? Was any impropriety detected in the fact that cases reflecting a particular viewpoint (Tea Party) received a designation reflecting that viewpoint? How did the designation come to be changed and by whom? For how long was the Rulings and Agreements office aware that there was a "Tea Party" category of cases? When did the EO become aware of the designation, and was any other action or investigation undertaken when the terminology was changed?
6. Page 5 of the report notes that the IG "identified some organizations' applications with evidence of significant political campaign intervention that were not forwarded to the team of specialists for processing but should have been. We also identified applications that were forwarded to the team of specialists but did not have indications of significant political campaign intervention. All applications that were forwarded to the team of specialists experienced substantial delays in processing." What were the applications that were not forwarded for futher review but should have been? (Were these all left-leaning groups?) What were the applications that were incorrectly forwarded and therefore delayed? Were these all right-leaning groups? Goes to issue of whether incompetence and "managerial ineffectiveness" or deliberate malfeasance occurred.
7. On pages 5-6, there is a significant redaction, followed by the sentence "Soon thereafter, according to the IRS, a Determinations Unit Specialist was asked to search for applications with Tea Party, Patriots or 9/12 in the organization's name as well as other 'political-sounding' names." Nice use of the passive construction, but who exactly instructed the Determinations Unit Specialist to make this search and why?
8. On page 6, it states "In June of 2010, the Determinations Unit began training its specialists on issues to be aware of, including Tea Party cases." What other issues was the unit to "be aware of"? Who at the Unit initiated the training? Who else knew about or order the training? Did any member of the unit (or anyone else) flag such training as inappropriate, and if so, whom?
9. On page 6, the report reads "EO function officials stated that Determinations Unit specialists intepreted the general criteria in the BOLO ["Be on the lookout"] listing and developed expanded criteria for identifying potential political cases." The attached footnote states that "during interviews" the IG "could not specifically determine who had been involved in creating the criteria." It was later "clarified" that the "expanded criteria were a compilation of" various unit "specialists' responses on how they were identifying Tea Party cases." Who compiled these criteria? Who were the Determinations Unit specialists? When the EO Director "raised concerns," why was this issue kept secret and under whose directive? Something is amiss here.
10. On page 7, the IG states that "we asked the Acting Commissioner, Tax Exempt and Government Entities Division; the Director, EO; and Determinations Unit personnel if the criteria were influenced by any individual or organization outside the IRS." All said no , "Instead, the Determinations Unit developed and implemented inappropriate criteria in part due to insufficient oversight provided by management." (emphasis added). Obviously, further inquiry is warranted. If the criteria was developed "in part" due to insufficient oversight, what is the other "part" of how it was developed? With whom (inside and outside the IRS) did they discuss the criteria? Who ARE these people, anyway? Are they career officials or political appointees? What are their partisan backgrounds?
11. On page 7, it states "only first-line management approved references to the Tea Party in the BOLO listing criteria before it was implemented." Fine, but who else KNEW about the references, even if they didn't approve them, and when did they have that knowledge? Apparently, at some point, the Rulings and Agreement Office became aware (see #5 above). When did that happen, and how?
12. There is a significant paragraph at the bottom of page 7. Apparently, the Director of Exempt Organizations demanded that the criteria be changed. But "the team of specialists subsequently changed the criteria in January 2012without executive approval" (emphasis added). This screams for investigation. How did this happen? Who exactly was this "team of specialists" and what motivated them to freelance this way -- if, indeed, this is what happened?
13. Three months later, the Director, Rulings and Agreements, learned this criteria had been changed by the team of specialists and required all criteria changes to be approved at the executive level before being implemented. (page 7). How did the R and A director find out about the criteria change? Has such an edict ever been necessary before, and in what circumstances?
14.On page 8, the report states that "Accoding to the Director, Rulings and Agreements, the fact that the team of specialists worked applications that did not involve the Tea Party, Patriots or 9/12 groups demonstrated that the IRS was not politically biased in its identification of applications for processing by the team of specialists. But of course it does no such thing -- and only opens the veracity of the director to question. That's because the IG admits on page 8 (footnote 18) that "we could not determine which potential political cases may have been identified based on an organization's policy positions." This admission alone points out the need for further impartial investigation.
15. Page 8 "All cases wtih Tea Party, Patriots or 9/12 in their names were forwarded to the team of specialists." That is, they were flagged for harassment. This indicates that something more than "ineffective oversight" or "ineffective management" was at work.
16. Page 9 - 141 applications were not appropriately identified as political cases. Were these liberal groups?
17. Page 10 - The report notes that 31% of the 296 applications that had complete documentation and were referred to the "team of specialists" (ie for harassment) showed no "indications of significant political campaign intervention" (i.e., there was no reason to forward them). The EO function officials disagree with the IG's findings on this point, and provided explanations about why they should have been flagged-- but "the case files did not include the specific reason(s) the appllications were selected." So why does the EO function believe they should have been selected?
18. On page 11, the IRS essentially rejects the IG recommendation that procedures be developed to "better document the reason(s) applications are chosen for review by the team of specialists." Instead, the IRS "stated it will review its screening procedures to determine whether, and to what extent, additional documentation can be implemented without having an adverse impact on the timeliness of case processing." While the stated concern about timeliness(!) is commendable, could it be possible the real motive is to maintain some degree of subjectivity in flagging applications?!
19. On page 12, the IG asserts that "Potential political cases took significantly longer than average to process due to ineffective management oversight" (emphasis added). Again, how has this conclusion been reached? Is it based only on the assertions of those interviewed at the IRS? And whose management, specifically?
20. Page 12 also notes a signficant delay in processing potentially political cases [once knwon as Tea Party cases] from 10/10 through 11/11 while the team of specialists waited for assistance from the Technical Unit allegedly to ensure consistency in processing. But the report states that the Exempt Organizations management didn't ensure that a formal process was in place for tracking or monitoring assistance requests. This is a procedural critique, not a substantive one -- but what should really be probed is whether and when requests for assistance were made; by whom; by whom they were received; how they were handled; who knew about them.
21. Page 13 says that in April 2010 the Determinations Unit Program Manager requested a contact in the Technical Unit for help with processing the applications, and a technical unit specialist was assigned to work with the team of determinations specialists. Who was this person, and what kind of assistance was needed? Was it given? And why did the team of specialists stop processing potential political applications in October if they already had the help they had requested? Did this helper simply put in place another way to slow-walk the applications (see #20)?
22. On page 13, the report states that the team of determinations specialists stopped processing potential political applications in October 2010 without closing any, but the Determinations Unit Program Manager thought the cases were being processed. Why did s/he think so? On what basis did s/he reach that conclusion? The IG was informed "later" by "the Director, Rullings and Agreements, that there was a miscommunication about processing the cases." What was this miscommunication? Who was involved in these miscommunications -- with whom, and how? Is there any written record of this "miscommunication"?
23. Draft written guidance from Technical finally came in November 2011 (13 months after Determinations Unit stopped processing the potential political cases) -- but as of the end of February 2013, the guidance had not been finalized because the EO function decided to provide training instead. Who made this decision? It appears that the whole need assistance / need consistency in processing guidelines / provide training instead conveniently allowed the whole process to be pushed past the 2012 elections. Was this in fact the intent?
24. On page 14, the IG states that there "appeared to be some confusion by Determinations Unit specialists and applications on what activities are allowed by IRC 501(c)(4) organizations." The IG attributes this "confusion" to a "lack of specific guidance on how to determine the 'primary activity'" of such an organization. Has there been similar "confusion" in the past? Why was this "confusion" evident only now? 501(c)(4) organizations have been around for some time.
25. The team of specialists were trained about 501(c)(4) organizations in May 2012. Before this, only 2% of 298 applications were approved. Which six were they? After this training, an additional 102 applications were approved by December 2012 (28% involved Tea Party, Patriot or 9/12 organizations). When exactly were these approvals granted? Who were the other approvals? Were the bulk of them after the election, or so close to it that the organization's function was irretrievably compromised?
26. On pages 16-17, the IG again recommends development of publicly available guidance on tax-exempt status involving potentially significant political campaign intervention. And again, the IRS is resisting objective, public standards for making such determinations (see #18 above). Why? Who is in charge of the responses to these recommendations and is resisting transparency and objectivity?
27. On page 18, the report notes that the "Determinations Unit requested donor information from 27 organizations [13 of which had Tea Party, Patriot or 9/12 in their names] that it would be required to make public if the application was approved, even though this information could not be disclosed by the IRS when provided by organizations whose tax-exempt status had been approved." Who in the unit requested this information? Was it given to any other outside groups, like Pro Publica? Which groups were targeted with such requests?
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