An inspector general’s report is expected to show the Internal Revenue Service spent about $50 million on conferences for employees between 2010 and 2012. It comes on the heels of three recently released videos showing IRS employees dancing and performing in “Star Trek” and “Gilligan’s Island” spoofs. Yesterday, Danny Werfel made his first appearance on Capitol Hill as acting commissioner of the IRS. He said those activities are “an unfortunate vestige from a prior era.” House Oversight Committee Chairman Darrell Issa has vowed to investigate that, as well as the targeting of conservative groups seeking tax exempt status. Diane and her guests discuss new questions about IRS activities.

Guests

  • Ron Fournier editorial director at National Journal.
  • Maria Cardona Democratic strategist, principal at The Dewey Square Group and founder of Latinovations.
  • Cleta Mitchell attorney at Foley & Lardner LLP and member of the firm’s Political Law Practice, which represents Republican candidates and conservative groups.

Transcript

  • 10:06:55

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Acting IRS Commissioner Danny Werfel testified before Congress yesterday for the first time in his new position. He faced questions on the targeting of conservative groups and on an inspector general's report expected to show the agency spent roughly $50 million on conferences from 2010 to 2012.

  • 10:07:25

    MS. DIANE REHMJoining me to talk about the growing controversies: Atty. Cleta Mitchell, who represents Republican candidates and conservative groups, the National Journal's editorial director Ron Fournier and Democratic strategist Maria Cardona of The Dewey Square Group. I hope you'll join us, 800-433-8850. Send us your email to drshow@wamu.org. Follow us on Facebook or Twitter. And good morning to all of you.

  • 10:08:02

    MS. CLETA MITCHELLGood to be here.

  • 10:08:03

    REHMGood to have see you all. Ron Fournier, let me start with you. What is the inspector general's report expected to say?

  • 10:08:15

    MR. RON FOURNIERThe second one that we're getting this week is supposed to focus narrowly on the issue of a morale and leadership training programs, the kind of programs that the private sector has all the time and spends a whole lot of money on. But it looks really bad and is very bad, public relation-wise, right now, for the IRS to be spending money on dance videos and movie spoofs.

  • 10:08:39

    MR. RON FOURNIERIt really gets to the heart of, you know, how are we spending our money at a time of austerity and really runs against the president's argument that government is something that can serve the people and be efficient and not waste money. So it's much more ancillary, I think, to the major, the other issue, the one that's been bubbling for several weeks which is why is it that the IRS was targeting its conservative groups for audits.

  • 10:09:09

    MR. RON FOURNIERIt's not a matter of whether they were. The question is, why were they doing it? Was it politically motivated, and who was involved? Did it reach in to the campaign of Barack Obama? Did it reach in to the White House? We don't know the answer to that question. Both sides claim they know the answer, we don't.

  • 10:09:26

    REHMAnd what did the acting IRS Commissioner Danny Werfel have to say yesterday on that issue?

  • 10:09:36

    FOURNIERHe promised to help -- to work with Congress, to find out the answer to the key question, who knew, what, when, and promised to clean things up going forward.

  • 10:09:47

    REHMAnd there is the issue of exactly who might have ordered that from or whether it was, indeed, from Washington. Yesterday, during his testimony, Georgia Rep. Tom Graves asked to people, have either of you asked the individuals in Cincinnati who ordered this? Let's hear this clip.

  • 10:10:27

    REP. TOM GRAVESHave either of you asked the individuals in Cincinnati, who ordered this? Who ordered them to use this extra scrutiny to punish or penalize or postpone or deny? Has that question been asked of any employee?

  • 10:10:41

    MR. J. RUSSELL GEORGEYeah. During our audit, congressman, we did pose that question and no one would acknowledge who, if anyone, provided that direction.

  • 10:10:51

    GRAVESSo no one would acknowledge who gave the directive to do this?

  • 10:10:56

    GEORGEThat's correct, in request to our question during the audit phase of this.

  • 10:10:56

    GRAVES(unintelligible) asked. Mm-hmm. Mr. Werfel, are you satisfied with this response from the individuals in Cincinnati? Will you get to the bottom of that?

  • 10:11:04

    MR. DANNY WERFELNo. We have to get to the bottom of that. I completely...

  • 10:11:07

    GRAVESNo matter how high it goes up the chain, you will find out who made this order?

  • 10:11:11

    WERFELWe will uncover every fact.

  • 10:11:13

    REHMAnd the first voice you heard responding to Congressman Tom Graves was that of Inspector General J. Russell George. The second responder was Mr. Werfel who is the acting director of the IRS. Is there any indication that that order to investigate or to set aside those conservative groups requesting 504 -- 501 (c)(4) status did come from Washington?

  • 10:11:55

    FOURNIERThe short answer to your question is no. The appropriate answer is we don't know. The fact of the matter is all this was was an audit in which the inspector general asked people, hey, did you commit a crime? And the people said, no. They weren't under oath. Their records weren't subpoenaed. We haven't looked at their emails. We haven't looked at their phone logs.

  • 10:12:15

    FOURNIERWe haven't called in people from the campaign. We, being our government, whether it's Congress or special prosecutor, haven't called in people from the White House and the campaign under oath and asked what, if any, involvement you had.

  • 10:12:26

    REHMSo, how many...

  • 10:12:27

    FOURNIERWe have not had an investigation yet.

  • 10:12:29

    REHMSo how many more hearings would you expect?

  • 10:12:33

    FOURNIERWell, the Republicans have a vested political interest in having dozens and dozens and dozens of hearings. So I imagine it's gonna be a long, hot summer. I think the American public -- I don't know. They don't need a specific number, but they do need a real investigation that doesn't assume that this goes to the White House in the campaign and doesn't assume that it doesn't go to White House in the campaign. It just follows the facts where they go.

  • 10:12:57

    REHMRon Fournier of the National Journal. And turning to you, Cleta Mitchell, tell us what happened to the organization that you represent.

  • 10:13:09

    MITCHELLWell, which -- I mean, I will just tell you very simply that I've been doing this kind of work for many years where we -- I represent organizations who seek exempt status, and I put together a background where it shows that prior to the spring of 2010, it would take somewhere between three months to six months to receive a letter of approval, maybe one round of questions related to the application.

  • 10:13:37

    MITCHELLWhat changed in 2010 is -- and I knew something was going on in 2010 because I have at least one organization that applied for exempt status in October of 2009 and still have not received a letter from the IRS. We've been through multiple agents, multiple questions, and that was never assigned to Cincinnati. It is an organization that lobbied against Obamacare, and it is still -- it was assigned to Washington from day one.

  • 10:14:05

    MITCHELLAnd I must respectfully disagree with what Mr. Fournier just said because the answer is yes, we absolutely do know. We have testimony. I have the letter that I wrote in November of 2008 to our assigned agent for one of my clients in Cincinnati, memorializing that he had told me in October of 2011 that -- I mean, the letter I wrote was Nov. 8 of 2011. He told me in October of 2011, and then I memorialize it in my letter to him that while everything would be submitted to him that there was a task force in Washington that was reviewing this application. So we know.

  • 10:14:43

    MITCHELLAnd we know that Congressman Issa said on Sunday that in the -- in his government oversight committees interviews with some of the IRS agents in Cincinnati that they were directing -- being directed by Washington and that the IRS office in Washington was really in charge of reviewing these applications. So we already do know for a fact that it was not confined to Cincinnati. It was not confined to a couple of rouge employees in Cincinnati. That Washington office of the IRS was definitely involved.

  • 10:15:18

    MITCHELLI know that from my own personal experiences. And it isn't in the past tense because there are still many applications pending that have now been pending, some of them, for more than two years.

  • 10:15:28

    REHMAll right. Ron Fournier.

  • 10:15:29

    FOURNIERJust to clear up our language here and our definitions, what is not clear is whether or not somebody in Barack Obama's re-election campaign or the White House directed or knew of these allegations. If that turns out to be correct, the president is in deep, deep water. But we don't know that yet. There are suggestions, people saying they believe that there was direction from the IRS in Washington, which would be severe but less severe than if it came out of the White House or out of the campaign. That has not been proven yet beyond a reasonable doubt. It is...

  • 10:16:03

    MS. MARIA CARDONAWell, how...

  • 10:16:04

    REHMHold on. Hold on, please.

  • 10:16:05

    FOURNIERThat -- we do need a full investigation. I'm not saying it's not possible, but I'm saying we need a full investigation that is more than, in all due respect, Rep. Issa saying there are indications that there's definitely something happening in Washington.

  • 10:16:17

    REHMAll right. Maria Cardona, is there any indication that liberal groups were also targeted by the IRS?

  • 10:16:27

    CARDONAYes. Absolutely there are, Diane, in fact three of them in particular: one called Emerge America, one called Progress Texas, one called Clean Elections Texas.

  • 10:16:36

    REHMDuring what years?

  • 10:16:37

    CARDONAThis was in the same timeframe, between 2010 and, you know, somewhere mid-2011. And the fact of the matter is, Diane, that one of these groups -- I believe it was Emerge America -- actually had their application denied by the IRS, which is something that has not happened to any of the conservative groups that are complaining about targeting. So these are the facts. And Ron is absolutely right. You cannot use innuendo and then jump to thinking though the White House is involved here.

  • 10:17:09

    CARDONAThat, in fact, takes away the credibility of the Republicans who are actually investigating this. And it does -- it continues to do damage to the credibility of the government here.

  • 10:17:20

    REHMAll right. I want...

  • 10:17:21

    CARDONAAnd it doesn't do Republicans any good.

  • 10:17:23

    REHMI want to quote from what Darrell Issa said on CNN's "State of the Union" on Sunday. He said, "The reason Lois Lerner tried to take the Fifth Amendment when called to testify before Congress is not because there is a rogue in Cincinnati. It's because this is a problem coordinated in all likelihood right out of Washington headquarters. And we're getting to proving it."

  • 10:17:58

    FOURNIERWe're getting to proving it.

  • 10:18:00

    REHMGetting to proving it. "The administration is still trying to say there are a few rouge agents in Cincinnati when in fact the indication is they were directly being ordered from Washington."

  • 10:18:17

    FOURNIERI called that yesterday smeared with caveats. Make an accusation but then give yourself a little bit of wiggle room. Let me push back though a little bit on Maria. I don't think Democrats really wanna be in a position where they're mitigating -- trying to mitigate the impact from this by saying some liberal groups also were audited. There was not a pernicious and calculated effort to target liberal groups the way there was Republicans. The numbers don't add up. And the way it went about it wasn't the same.

  • 10:18:44

    CARDONAYou're absolutely right, Ron. I was responding to Diane's question.

  • 10:18:44

    REHMRon Fournier, he is editorial director at the National Journal. Short break. Right back.

  • 10:20:05

    REHMAnd welcome back. We're talking about ongoing investigations into the activities of the IRS both in terms of how they are spending their money. Certainly, some conferences have been showcased because of the amount of money spent on them, but more importantly has been the issue of conservative groups and some liberal groups being targeted by the IRS because of their claims to tax exemption under 501 (c)(4) provision of the tax code.

  • 10:20:53

    REHMAnd here is an email that gets to this question, "Do you think that Congress will require the IRS to follow the letter of the law as it was written decades ago, requiring groups applying for tax-exempt status to be exclusively used for social welfare or to rewrite the law?" Isn't that at the heart of this, Ron?

  • 10:21:29

    FOURNIERIt's a great question and it's exactly right. For years now, the IRS has been acting as a quasi-Congress and has been interpreting that law the way they want. And Congress...

  • 10:21:37

    REHMBecause the Congress did not complete its job there.

  • 10:21:40

    FOURNIERRight. And Congress let it happen. Now, the question is whether or not they fix it is totally political. I think the only way it gets fixed has nothing to do with this scandal or whatever you wanna call it.

  • 10:21:50

    FOURNIERIt has to do with whether or not lawmakers realize that as candidates and as campaigns and as a Democratic or Republican parties, they have ceded control to these outside groups who are using their so-called public welfare status to build micro parties like Karl Rove and the Republican Party and, you know, Democrats -- Harold Dickies has -- have done that on other party.

  • 10:22:10

    FOURNIERYou know, I think what may happen, again, outside of the scandal is candidates already get tired of having their message and their campaigns hijacked by theses outside groups and will actually crack down the system for their own political purpose.

  • 10:22:21

    REHMCleta Mitchell.

  • 10:22:22

    MITCHELLWell, I didn't know we were gonna get into a discussion today about the whole campaign finance regime, and that's a whole different topic. We could spend an hour on that. I am someone who has argued for many years that these campaign finance free speech restrictions that the media and the left seems -- seem to love are in the process of destroying the political parties and creating essentially outside organizations, privatizing political parties. That's a different topic.

  • 10:22:47

    MITCHELLI wanna go back to the topic at hand. The topic at hand is whether the IRS followed the rule of law that has been in place for many years. Look, when you apply for (c)(3) or (c)(4) status, you submit an application to the IRS that has hundreds of questions. And heretofore, the IRS followed the rule of law and reviewed the applications based on the published applications.

  • 10:23:13

    MITCHELLNow, what has happened in this scenario is that the IRS took upon itself to create rather than following an objective standard based on the application duly promulgated and published and to create a whole new set of questions that have been intrusive questions, going well beyond the parameters of the application and creating what is essentially a subjective standard that -- we don't even know what standard they're using to judge or adjudicate these applications.

  • 10:23:43

    REHMIsn't there some confusion about exactly how much of 501 (c)(4) can...

  • 10:23:52

    FOURNIERYes.

  • 10:23:53

    MITCHELLNo. There is no confusion. They...

  • 10:23:55

    REHMExcuse me. Excuse me. When there is no specific definition of what constitutes how much political activity. Give me the wording.

  • 10:24:12

    FOURNIERI'm not sure what it is. I think it's the percentage of public welfare is spent (unintelligible) of wealth.

  • 10:24:16

    MITCHELLIt has to do with your primary purpose.

  • 10:24:19

    REHMRight.

  • 10:24:19

    MITCHELLAnd the primary purpose -- and let me tell you what, Diane. It is...

  • 10:24:20

    REHMSo what is primary?

  • 10:24:21

    MITCHELL...it's a mistake.

  • 10:24:23

    REHMWhat is primary?

  • 10:24:24

    MITCHELLThe...

  • 10:24:24

    REHMIf you have, let's say, 51 percent social work and 49 percent political activity, do you regard that as deserving of tax-exempt status?

  • 10:24:42

    MITCHELLWell, let me just say that that has been the rule. There's no confusion about that.

  • 10:24:46

    REHMHas that been the rule?

  • 10:24:47

    FOURNIERNo.

  • 10:24:47

    MITCHELLYes. That has been the rule. I have been though audits with the IRS.

  • 10:24:49

    FOURNIERIt is -- there's also...

  • 10:24:51

    REHMExcuse me.

  • 10:24:52

    FOURNIER…there's also no clarity over the definition of social...

  • 10:24:53

    MITCHELLThat is...

  • 10:24:54

    FOURNIER...and political welfare. That's in the definition...

  • 10:24:55

    MITCHELLWell, let me...

  • 10:24:56

    FOURNIER...of the beholder.

  • 10:24:57

    REHMOK.

  • 10:24:57

    MITCHELLLook, we could clarify. But if we were to clarify, let me tell you that the campaign finance's zealots would never let us clarify to say that a political expenditure is one which adopts the Supreme Court's language in Buckley v. Valeo in 1976, in which they said that under the First Amendment, citizens have a right to know which speech is going to be regulated and which is not.

  • 10:25:20

    REHMAll right. Maria.

  • 10:25:22

    CARDONASo Cleta is absolutely right that this was something that the IRS put in play without regulations and without the -- following the letter of the law. That is exactly the problem. What hasn't been proven and what there is absolutely no proof of at this moment is that that was -- those actions were guided either from the campaign or from the White House. And what Chairman Issa did over the weekend actually hurt his ability to credibly investigate, which we absolutely need to do.

  • 10:25:54

    CARDONAAnd I agree 100 percent with Ron and with Cleta here that we actually have to get to the bottom of this. Democrats agree with that. President Obama agrees with that. He wants to work hand in hand with Congress. But when you have Darrell Issa essentially making the accusations that he did on the weekend, that's, you know, if he was a TV show, he would have jumped the shark. You know, it takes away credibility.

  • 10:26:13

    REHMAll right. Here's an example: Emerge America, which trained women to run for office, was granted 501 (c)(4) status in 2006, but -- and I'm quoting from The New York Times here, "Its status was revoked in 2012. Training people how to run for office is not in itself partisan activity. But the IRS determined that the group trained only Democratic women and was operated to benefit one party." So is that not an example of reading that law carefully?

  • 10:27:01

    MITCHELLIt is. But one of the things you have to know about that case is that that was their primary purpose. That's one of the reasons that they lost their tax-exempt status because their primary purpose was training Democratic women candidates. So if they had had a major purpose of something else and that was only a small part, they may have been able to escape it. But let me go back to another...

  • 10:27:23

    REHMAll right.

  • 10:27:23

    FOURNIERCould I just jump in?

  • 10:27:24

    MITCHELLBut let me finish one...

  • 10:27:25

    REHMAll right. Hold on one second. Want to read you another and this was, "The CVFC, a veterans' group, and it first applied for IRS recognition in early 2010, stated it did not plan to spend any money on politics. The group, whose full name is in its application, was CVFC 501 (c)(4), listed an address shared with a political organization called Combat Veterans for Congress PAC."

  • 10:28:10

    REHM"CVFC told the IRS it planned to email veterans about ways in which they may engage in government and provide social welfare programs to assist combat veterans to get involved in government. But later in 2010, as it awaited a ruling, the organization spent close to $8,000 on radio ads backing Michael Crimmins, a Republican, former Marine, for a House seat in San Diego and therefore was denied."

  • 10:28:56

    REHMSo you've got organizations on both sides of the aisle attempting to use this 501 (c)(4) status, changing perhaps their initial focus and creating a different focus.

  • 10:29:16

    FOURNIERThe fact of the matter is the preponderance of these groups under a layman's understanding are doing political activity. Some of these groups have been denied status largely because they weren't as candid, or they were more candid than a lot of the other groups. If -- and the legislating that's being done here that's determining whether or not these groups are -- what rules these groups have to play under are ironically bureaucrats, are the same government that Republicans are so opposed to. It's not our Congress that has legislated this activity.

  • 10:29:47

    REHMWhy not?

  • 10:29:48

    FOURNIERWell, because our Congress is dysfunctional neither party can get its act together, and they'd rather turn their heads than fix the problem.

  • 10:29:53

    CARDONADiane, I also think it merits mentioning because it's always good to put all these things into perspective. You know, Cleta mentioned that something happened in 2010. Absolutely something happened in 2010. What happened in 2010 was the Supreme Court decision, Citizens United, that actually allowed the preponderance of these groups to start applying for this tax-exempt status.

  • 10:30:12

    CARDONAThe folks at the IRS found themselves inundated. Is that an excuse? Absolutely not. But, again, to put things into perspective, that is the change that happened in 2010, and they started needing to find a way to take a look at these groups to make sure that if they granted tax-exempt status, which is a huge privilege and is a huge responsibility, that it is actually done in the right way. They screwed up.

  • 10:30:34

    REHMCleta.

  • 10:30:35

    MITCHELLI don't think that the facts bear out that there was a surge after Citizens United. It is like saying that there is a surge in college graduates without jobs because of Mother's Day. Just because something happens in same proximity of time doesn't mean that they are -- there's a cause-effect relationship. But here's what...

  • 10:30:55

    FOURNIERWell, I can say I talked to a lot of people who are running those groups who said they've done it because of Citizens United.

  • 10:30:56

    REHMHold on. Hold on. Let her finish.

  • 10:31:00

    MITCHELLMost of these organizations are mom-and-pop organizations who have candidate -- they had candidate forums. They wanted to be involved in the fight against Obamacare and the fight against government spending. That is not political. That is permissible. That is 100 percent permissible and does not count as political for a 501 (c)(4). And let me just say one other thing. There are 501 (c)(3) organizations that have been denied their tax-exempt status.

  • 10:31:30

    MITCHELLOne of my clients, through the vote, I mean, we have sued the IRS to force them to grant our tax-exempt status. And all this organization does is train poll watchers and try to organize people to ensure the integrity of elections. They are a completely nonpartisan organization, but they were targeted as part of the conservative targeting. So I don't wanna get away -- the narrative in Washington among, unfortunately, a lot of the media and liberal Democrats is that somehow this is Citizens United's fault.

  • 10:32:00

    MITCHELLThis is a campaign finance problem. This is a 501 (c)(4) political problem. That's not true. Let us go back to the basic fact that conservative organizations were targeted, and many of them, more than 200 -- I mean, more 100 of them are still awaiting applications to either be granted or denied. I'd be more than happy for them to issue a denial. Then we could go to court.

  • 10:32:22

    REHMAll right. And Maria.

  • 10:32:24

    CARDONASo if, you know, you wanna talk about organizations being targeted, then let's go back to 2004 when the NAACP was targeted after the head of the NAACP, Julian Bond, made a speech complaining that George W. Bush had not come to his conference. After that, the IRS, under George Bush, targeted the NAACP for "political activity." So it happens on both sides, Diane.

  • 10:32:49

    REHMAll right.

  • 10:32:49

    CARDONADoes that make it right? Absolutely not. Let's get to the facts.

  • 10:32:52

    REHMYou're listening to "The Diane Rehm Show." Let's open the phones now, 800-433-8850, first to St. Louis, Mo. Good morning, Wanda.

  • 10:33:07

    WANDAGood morning, Diane. Thank you for taking my call.

  • 10:33:09

    REHMSurely.

  • 10:33:10

    WANDAMy call just -- my question just for your panel really goes to the heart of it. I don't understand why the special interest groups who are looking for a tax-exempt status wouldn't be scrutinized very carefully. I think that if, as one of your panel members says, conservatives have been overly scrutinized, I don't think that she's proven that. But you can't say that and then say, well, all of this is not coming as a result of an increase in special interest groups that support Republican agendas.

  • 10:33:47

    WANDAI just think that all of them that are gonna receive tax-exempt status need to be looked at very carefully. And honestly, I'd love to see it go back to if you're not doing something for the public at large, you need to just pay your taxes and keep your secrets and go on your way.

  • 10:34:04

    REHMAll right. And the fact of the matter is that many of these 501 (c)(4) organizations have as their primary goal to keep their donors secret, they do not have to reveal names. Isn't that correct?

  • 10:34:24

    MITCHELLWell, you know, I keep wondering why people keep saying that. That's not a goal, is to be able to keep donors secret. But...

  • 10:34:30

    REHMBut is it not the fact?

  • 10:34:32

    MITCHELLThey disclose their donors to the IRS. But if they make certain political expenditures, and if donors give to a (c)(4) to make those expenditures, under many states laws and certainly under federal law, the donors to those expenditures have to be publicly disclosed to the FEC or to a state campaign finance agency.

  • 10:34:52

    REHMAll right. And Ron Fournier.

  • 10:34:53

    FOURNIERBut not to the public. The fact is I work with a lot of Republicans and Democrats who are involved in these groups, who came out of traditional political campaigns and are moving into these new political campaigns. And many of them have told me that they launched these groups because of Citizens United. Again, that doesn't excuse the abuse and the targeting of the right, but the fact is many of them are taking advantage of that ruling.

  • 10:35:18

    FOURNIERAnd also the fact is they do realize that one of the benefits of having these groups is that you can keep your donors secret from the public, which makes it easier to raise a lot of money because the fact is these big money donors don't wanna know where they're putting their bets.

  • 10:35:35

    CARDONAThe bottom line, Diane, is that this law, the way that the IRS has set up these tax-exempt organizations and the Citizens United decision have allowed for "front groups" to be set up whose primary focus is political activity, but they can hide behind "social welfare organizations" because of the way the law is written. And that happens on both sides, liberals and conservatives.

  • 10:36:00

    REHMAnd what I'd love to have if you have it in front of you, Cleta, is a clear definition of the differences between a 501 (c)(3) and a 501 (c)(4).

  • 10:36:17

    MITCHELLA 501 (c)(3) is a charitable and educational -- there -- there's -- but for our purposes, a charitable and educational organization. Contributions to such an entity are tax-deductible to the donors, and those organizations are strictly prohibited from spending one penny on any kind of political activity. Now, for a 501 (c)(4), that is an -- it's called a social welfare organization. Those are essentially what we know of as grass roots lobbying groups on the right and the left. The NRA, the National Rifle Association, is a...

  • 10:36:50

    REHMHas 501 (c)(4) status.

  • 10:36:50

    MITCHELL...is a 501 (c)(4), so is the Sierra Club that -- you know, NARAL. All the grass roots lobbying organizations are social welfare organizations.

  • 10:37:03

    REHMAnd the rule is?

  • 10:37:05

    MITCHELLAnd the rule is that as long as they -- the...

  • 10:37:09

    REHMPrimary.

  • 10:37:10

    MITCHELL…majority of their program expenditures are made for a purpose which are nonpolitical, which are in support of their exempt purpose, then they are permitted to make some minor political expenditures.

  • 10:37:25

    REHMCleta Mitchell, she's an attorney, a member of the firm Foley & Lardner. She represents Republican candidates and conservative groups. Short break here. More of your calls when we come back.

  • 10:40:04

    REHMAnd welcome back. We are talking about the IRS, questions raised about its activities, its granting or refusal to grant status to 501 (c)(4) groups for tax exempt status, if their activities are seen as primarily political versus social welfare. Here's an e-mail from Susan, who says, "The real IRS scandal is that these groups, regardless of political persuasion, got (c)(4) status to begin with. (c)(4) organizations should be social welfare groups, not partisan lobbyist. No group -- left, right or middle -- should be able to hide behind this status." What do you think of that, Cleta?

  • 10:41:08

    MITCHELLWell, I think that citizens have the right in this country, under the First Amendment, to associate with light-minded others and to engage in lobbying for issues that they support. The Supreme Court has said that it is very difficult to -- there's a continuum, and it's difficult to separate and to know the exact point at which you have a separation between support of issues versus of candidates. That's why the Supreme Court issued that bright line so many years ago that has since been smudged.

  • 10:41:43

    REHMAnd is that why the Congress doesn't wanna get into this mess?

  • 10:41:48

    FOURNIERWell the issue -- that's a very good email and her issue -- she's not questioning whether or not -- she's not suggesting that we don't have a First Amendment to be able to take part in political activity. That's not the question she asked, Cleta. She doesn't think that as taxpayers, we should be financing and subsidizing people's political activity. And that's where there's a disconnect between us here in Washington and people out there. They think a political activity -- they see it much more broader than it's being defined by the IRS right now.

  • 10:42:15

    REHMMaria.

  • 10:42:16

    CARDONAThat email is absolutely right, and it goes to what I had mentioned earlier, which is it is a privilege to be granted this kind of exemption where you don't have to pay taxes. Everybody in this country has to pay taxes. So being granted an exemption that you don't have to pay taxes is a huge privilege. And you should prove, beyond the shadow of a doubt -- and this, I think, is where we're gonna get down to where the problem is -- that you are doing the country some good in social welfare.

  • 10:42:40

    REHMAll right. To Pittsburgh, Pa. Good morning Richard.

  • 10:42:45

    RICHARDGood morning. Thanks to Chairman Issa. I know Karl Rove is a social worker. Now, how many 501 (c)(4) liberal groups are there, and could we name some? Also, if we can ferret out $50 million of conferences in the IRS, is this criminal? And were they over budget? And also, will we discover the fact eventually that we have a $17 trillion debt?

  • 10:43:14

    REHMAll right, sir. I'll go no further. Maria.

  • 10:43:19

    CARDONASo there is an issue, obviously, with what happened here, and no one is disputing that. And I think that all three of us can agree that we actually do need to get down to what the facts are. And we need to have these investigations. But the problem with what Chairman Issa has done -- and I mentioned this earlier too -- is that he has completely gone overboard.

  • 10:43:40

    CARDONAHe is on this cliff where he is about to completely takeaway the credibility from the Republican Party and from all of the investigative bodies in Congress to actually get down to the facts. When he talks innuendo, when, you know, he's about to have us believe that he saw President Obama running across the grassy knoll for God's sake.

  • 10:44:00

    REHMHe did call White House spokesman Jay Carney a paid liar. That was kind of a strong language.

  • 10:44:11

    FOURNIERThe way I was taught the word liar, you need to know the person's mindset and motive. It's not just giving inappropriate or wrong facts, but its knowing that they're wrong. There is no doubt – and I feel very strongly, very harshly about the White House -- that they keep changing their stories. They're dribbling out information. And Jay Carney has given wrong information on all three of these so-called scandals.

  • 10:44:30

    FOURNIERBut did he knowingly mislead the public? Did he knowingly do it? That would be a lie. To call somebody a liar is about the harshest thing you can do in American public space. I would not do it if I was a member of the public -- member of the Congress.

  • 10:44:41

    REHMCleta, to you. Congressman Issa said, "My gut tells me too many people knew this wrongdoing was going on before the election and at least by some sort of convenient benign neglect allowed it to go on through the election, allowed these groups, these conservative groups, not friends of the president to be disenfranchised through an election." And then he goes on to say, "Now, I'm not making any allegations as to motive that they set out to do it, but certainly, people knew it was happening." How do you respond to that?

  • 10:45:28

    MITCHELLWell I think that's exactly right. And I'm really quite taken aback that you all are assuming that when the facts that have already come out demonstrate that the IRS office in Washington was really calling the shots and well aware of what was going on that somehow that means that we're talking about the White House knowing. I haven't said that, but I know for a fact that the Washington office of the IRS was involved in delaying these applications for (word?)

  • 10:45:59

    REHMHow do you know that?

  • 10:46:00

    MITCHELLBecause my clients -- one of my client's applications that's been pending since 2009 was never in the Cincinnati office. It has always been in the D.C. office.

  • 10:46:09

    REHMBut doesn't everything go through Cincinnati?

  • 10:46:12

    MITCHELLNo. That's what I'm telling you.

  • 10:46:14

    REHMRon Fournier.

  • 10:46:16

    FOURNIERShe may, you know, obviously, she's had a client whose case had been delayed...

  • 10:46:19

    MITCHELLI have more than one.

  • 10:46:19

    FOURNIER...but what she doesn't know -- what we don't know for a fact is if they were delayed as part of this targeting operation. And it was the targeting operation driven out of -- first of all, was it driven out of the IRS office in Washington for political reasons? And secondly, did it go up to the White House in campaign? We just don't know that yet.

  • 10:46:36

    MITCHELLThose are two separate questions.

  • 10:46:37

    FOURNIERSo why don't we wait until we get facts?

  • 10:46:38

    CARDONAAnd the issue is...

  • 10:46:39

    MITCHELLThose are two separate questions.

  • 10:46:40

    CARDONAYou say that the head of the IRS in Washington knew about it. Well, it happens to be that, at the time, the head of the IRS was a Republican appointee. So, again, the point to political motivation here just doesn't go to the facts of what we know right know.

  • 10:46:55

    REHMAll right.

  • 10:46:55

    MITCHELLThat is not true.

  • 10:46:56

    REHMLet...

  • 10:46:56

    MITCHELLI know that more than one of my clients -- I was told by agents in Cincinnati that while we submitted our information to Cincinnati, there was a task force in Washington, in the office of the IRS that was actually calling the shots.

  • 10:47:11

    REHMYou were told that on the telephone.

  • 10:47:11

    CARDONAAnd the head of it was a Republican...

  • 10:47:12

    MITCHELLYes. Yes.

  • 10:47:13

    CARDONA...and the head of it was a Republican appointee.

  • 10:47:14

    MITCHELLThat has nothing to do with it. He's -- I...

  • 10:47:16

    CARDONAThe head of it was a Republican appointee.

  • 10:47:18

    REHMAll right. Let's take a call...

  • 10:47:18

    MITCHELLSo what?

  • 10:47:18

    CARDONASo, again, we got to get some facts.

  • 10:47:20

    MITCHELLSo what?

  • 10:47:21

    REHMExcuse me. Let's take a call from Chapel Hills, N.C. Good morning, Lewis.

  • 10:47:27

    LEWISGood morning, Diane. You are the reason I listen to public radio, so thank you so much.

  • 10:47:32

    REHMThank you.

  • 10:47:34

    LEWISMy statement -- actually, a gentleman earlier spoke about how can any American trust IRS when it's been divulged recently they spent $50 million on conferences between 2010 and 2012. But I think something came up while I've been listening. What about Nixon's enemy list where the White House was directly responsible for asking the IRS to go after people who Nixon wanted to take down? IRS has been used as a political tool over and over again.

  • 10:48:02

    REHMAnd Herbert, I mean...

  • 10:48:06

    FOURNIERRon Fournier.

  • 10:48:07

    REHMNo. Hoover.

  • 10:48:08

    FOURNIERHerbert Hoover. Yeah. There you go.

  • 10:48:09

    CARDONAHoover. Right. Right, right.

  • 10:48:10

    REHMExactly.

  • 10:48:10

    FOURNIERWell, you know, look, there...

  • 10:48:11

    REHMBlank.

  • 10:48:13

    FOURNIERThere is -- what Nixon did from the Oval Office, ordering the IRS to crack down his enemies was impeachable, and he lost his job over it. If this president did that, the same thing would happen to him. But it is, you know, since when is it mitigating for Democrats to say, you know what, we're not as bad as Nixon or, you know what, we didn't do anything unethical here, we're just incompetent? The problem the president has is this is a really bad thing the IRS did even if it stopped in Cincinnati.

  • 10:48:44

    REHMAbsolutely. Let's go to Cambridge, Mass. Kaykay, (sp?) you're on the air.

  • 10:48:51

    KAYKAYThank you for taking my call, Diane. I think that, you know, one of the things we have to remember is that when the Tea Party erupted, it was when this kind of ex-professor of the Constitution, Mr. Obama, came to power. And they had a very, very -- it was very clear that they were very much against him. They made it very, very clear to everybody. There they were with their signs. It was so personal. It was so Republican.

  • 10:49:18

    KAYKAYAnd then -- so that when the IRS -- these people started to come along and say, oh, we are a social welfare organization, it was -- they had to double check because, look, you know, as it turns out, there were competent Tea Party from Alabama who were sponsoring training for Get Out the Vote initiatives dedicated to the defeat of Obama. This was found out by The New York Times and also the head of the Ohio Liberty Party Coalition. What are were they doing? They were actually organizing members to distribute Mr. Romney's presidential campaign literature.

  • 10:49:48

    KAYKAYSo these people were not exactly innocent. So when they showed up at the IRS with their, you know, I'm pretty nervous. When they showed up with their applications, it became clear that they -- that everybody could look at them and think, well, are they really social welfare organizations or are they not?

  • 10:50:06

    REHMWell, and that is going to be the question. What is going to happen from here on now, Ron?

  • 10:50:15

    FOURNIERWe're gonna have a long, hot summer of hyper-partisan hearings where the Democrats demagogue the Republicans and try to mitigate what is an awful thing the IRS did, and the Republicans demagogue the Democrats and stretch beyond the facts. The public is gonna be appalled and have even less faith in Congress and the White House than they do now.

  • 10:50:37

    CARDONACan I just say that you will not see Democrats at all defending this because you have seen Democrats across the board condemning this 100 percent. And the president has condemned this 100 percent. So Ron is right. This is a problem for the president right now because of perception. But, again, it is becoming a problem for the Republicans because they are trying to make this connection to the White House that as of yet does not exist.

  • 10:51:04

    REHMCleta.

  • 10:51:05

    MITCHELLWhat I want to see happen is I want all the questions to be asked. I want to see the internal emails. I want to see the internal communications. I want to know who in Washington was directing this because I know for a fact that they were being directed from Washington because that has been told to me on more than one occasion in trying to see why my clients' applications have been held up for four and -- three and four years.

  • 10:51:31

    CARDONAAnd this is why we need these investigations without innuendo, so that the American people can have credibility that we're trying to get to the bottom.

  • 10:51:38

    FOURNIERI wonder -- and Democrats are gonna hate me to say this. But I wonder, since we don't trust Congress either side, if what has to happen here as a special prosecutor.

  • 10:51:45

    CARDONAWell, if, you know, there are so many investigations going on, and if we don't get to the bottom of it after that, then let's entertain that question.

  • 10:51:52

    MITCHELLI think that's going on at the moment. Their -- I think that they -- my understanding from the inspector general's testimony yesterday is that they had opened what is known as an investigation. See, before, it's just been an audit. So they didn't have any documents. Supervisors from Washington sat in on the interviews with the employees from Cincinnati.

  • 10:52:11

    MITCHELLAnd so, of course, what are they gonna say when their supervisors are sitting in? Now, I think we're going to see the -- from a number of sources, we're going to actually get to the bottom of it, including the lawsuit that we have filed on behalf of True the Vote because we have named individuals, and we will get discovery, and we will find out even if Congress doesn't.

  • 10:52:30

    CARDONAAnd refreshingly, Diane, Danny Werfel has very forthcoming. And, in fact, he's gotten some great reviews from the same Republicans that are carrying on this investigation.

  • 10:52:37

    REHMOK. What about the money spent by the IRS on these conferences, Ron?

  • 10:52:45

    FOURNIERIt's kind of an ancillary issue. But it does go further to undermining the public's faith in how we spend our money, especially during a recession. I also wonder, just looking around the corner, I really got to think this hurts the president's ability to do something that was already going to be awfully and that's implementing health care reform, which needs to be implemented by the IRS that now has even less of credibility with the American public.

  • 10:53:10

    REHMAnd you're listening to "The Diane Rehm Show." Let's go now Anne Arbor, Mich. Good morning, Charlie. You're on the air.

  • 10:53:21

    CHARLIEHi, Diane. Thanks very much.

  • 10:53:22

    REHMSure.

  • 10:53:23

    CHARLIESee, I'm a historian, and I spent a lot of time in documents. And I wanna ask a really basic question to our guests because I hadn't heard anyone talk about it. Our lawyer from -- is contending that the lobbyist groups are mom and pop. And I'll take her word at that. But they are nonetheless, as we've seen, groups that are linked, and putting in these applications is fairly difficult.

  • 10:53:43

    CHARLIESo what I'm wondering is if there's a possibility that there was something in common or shared or even identical language in any number of these applications that raise red flags. And, you know, when I'm grading papers and I see one sentence (unintelligible) and I see it four more times, I don't check.

  • 10:54:00

    CARDONAWell, look, I mean, if one other things that you do when you prepare an application is called a Form 1024 or for a (c)(3), a 1023, there are certain boilerplate language that you actually are suppose to use in order to conform the application to the IRS standards.

  • 10:54:13

    REHMSure. But if the title of an organization has Tea Party or something like that in it, isn't that going to perhaps raise questions?

  • 10:54:28

    MITCHELLWell, that's exactly what they use for the targeting. That's the thing that's so reprehensible. I had one client named the Constitutional Congress. Apparently, if you use the word Constitution in your name or even expanded it subsequently to your purpose that you would be singled out, put in the stack for further review -- Tea Party, patriot, conservative.

  • 10:54:45

    REHMRon.

  • 10:54:47

    FOURNIERWhat the gentleman is raising is a possibility that although this targeting was pernicious and we have to make sure it doesn't happen again, it could have been -- I don't know -- but it possibly could have been benign. That's what he is trying to put forward anyhow. And it's something for us to at least consider.

  • 10:54:59

    FOURNIERI do know that on both sides, there are very few lawyers, like Cleta on the Republican side and very few on the Democratic side, who really understand this law and who everybody kind of goes to to get that boilerplate language, to get that language, to get -- to kind of know how to navigate those waters.

  • 10:55:11

    REHMAll right. And one last comment from Johnson City, Tenn. Thomas, you're on the air.

  • 10:55:19

    THOMASThank you, Diane, for taking my call. You know, to me, the issue should be the record amount of money the Republicans spent on the president's election trying to buy up the country like Karl Rove.

  • 10:55:31

    REHMI don't think so.

  • 10:55:33

    FOURNIERYeah. The greatest fundraiser in the history of mankind is Barack Obama.

  • 10:55:38

    REHMAnd...

  • 10:55:39

    MITCHELLRon is right. I mean -- and, yes, clearly, Karl Rove did raise billions of dollars, and Republicans raised billion dollars to try to beat the president. It didn't work. But I think it does go to this issue of these groups and whether they were actually social welfare groups. And what's interesting is there are -- what they themselves -- call themselves legitimate Tea Party groups who are not happy with the groups that spring up after 2010 because they think they are giving the original Tea Party groups a bad name.

  • 10:56:06

    REHMSo what more could an independent prosecutor do, Ron?

  • 10:56:12

    FOURNIERWhether it's what you call a special prosecutor or somebody independent inside the government, what he or she could do is subpoena every email in the White House and in the campaign….

  • 10:56:22

    REHMAs Cleta says.

  • 10:56:23

    FOURNIER...and in IRS, involving the IRS mentioning the word Tea Party. They could interview all these folks under oath. It's one thing to ask somebody as the auditor did, the inspector general, hey, did you commit a crime? And they say no. It's another thing to do it on the -- in front of a FBI agent. And if you lie to them, you go to jail. So a real criminal investigation doesn't mean we think there's a crime. But the only way you've find out if there is a crime is you launch a real criminal investigation.

  • 10:56:47

    CARDONADiane, I just wanna add -- again, to put things under perspective. As somebody who worked at the INS -- an agency that not a whole people liked at the time -- the majority of IRS agents and folks who worked there are good, dedicated government workers who do wanna do that right thing. So I just think we need to keep that into perspective.

  • 10:57:03

    REHMMaria Cardona, she is a Democrat strategist, principal of The Dewey Square Group, founder of Latinovations. Ron Fournier is editorial director of the National Journal. Cleta Mitchell is an attorney with Foley & Lardner, representing Republican candidates and conservative groups. Thank you all so much.

  • 10:57:33

    CARDONAThank you, Diane.

  • 10:57:33

    FOURNIERThank you.

  • 10:57:34

    REHMAnd thanks for listening. I'm Diane Rehm.

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