Lois Lerner Discusses Political Pressure on the IRS in 2010

Newly uncovered video shows Lois Lerner discussing the political pressure that swirled around the IRS in 2010. Lerner says “everyone” was “screaming at” the IRS to stop the flood of money pouring into the 2010 elections through 501(c)(4) groups as a result of Citizens United.

Lerner spoke to a small group at Duke’s Sanford School of Public Policy on October 19, 2010, just two weeks before the wave election that brought the Tea Party and Republicans significant gains in Congress. During her appearance Lerner was asked about the flow of money from corporations to 501(c)(4) groups. “Everyone is up in arms because they don’t like it” Lerner replied, adding “Federal Election Commission can’t do anything about it; they want the IRS to fix the problem.”

Lerner goes on to outline the fact that 501(c)(4) organizations have the right to do “an ad that says vote for Joe Blow” so long as their primary activity is social welfare. However Lerner again emphasizes the political pressure the IRS was under at the time saying, “So everybody is screaming at us right now ‘Fix it now before the election. Can’t you see how much these people are spending?'” Lerner concludes by saying she won’t know if organizations have gone too far in campaigning until she looks at their “990s next year.”

Contrary to Lerner’s statement, everyone did not object to the
Citizens United decision. The pushback was clearly partisan with the most high profile opponent being President Obama himself. Days
after the decision, Obama used his weekly radio address to attack the ruling saying it would “open the floodgates” to special interest advertising in elections.

A few days later Obama castigated the Supreme Court during his State of the Union address. Speaking to a national audience with members of the Court in attendance Obama stated, “Last week the Supreme Court reversed a century of law that I believe will open the floodgates to special interests including foreign corporations to spend without limit in our elections.”

The President’s State of the Union reference to Citizens United ended with a call for Congress to reverse the decision by law. The so-called DISCLOSE act was given strong backing by the President throughout 2010 in an attempt to stop what Democrats saw as a flood of campaign money. The White House blog describes the President “pounding his hand on his pedestal” as he advocated for the act’s passage in the summer of 2010.

Lerner’s statements in late 2010 demonstrate that the IRS was keenly
aware of the political firestorm taking place and demands that her organization do something to stop the flow of money from corporations
to political campaigns. While Lerner is unequivocal that she can do
nothing about the legal political
activity of 501(c)(4) groups, it is a remarkable coincidence that the extra scrutiny given applications by Tea Party and 9/12 groups, which began in March
2010, had the effect of hampering the very activity which she says “everyone” wanted the IRS to stop.

It is also noteworthy that Lois Lerner paraphrases President Obama’s framing of the issue when she says, “the Supreme Court dealt it a huge blow, overturning a hundred year old precedent that said basically corporations can give directly in political campaigns.” Was she aware who was making this political argument she seems to have adopted wholesale?

There is evidence that a political appointee was aware of the targeting of Tea Party groups at the exempt organizations division of the IRS. However, Obama’s high profile pushback on Citizens United in late January 2010 probably insured the IRS would pay attention simply because it insured the topic would be a high profile news story.

TIGTA’s report contains a few key redactions which conceal precisely how the scrutiny of Tea Party groups began. Reading between the lines it seems media attention played a role. Plans by a Tea Party group to create a new 501(c)(4) were featured in stories at the NY Times and NPR just a couple weeks after Obama’s statements about Citizens United. These stories apparently caught the attention of the IRS which regularly monitors news stories to be aware of developing issues. Of course it’s possible the IRS would have caught this regardless, but President Obama’s highlighting of the issue just a couple weeks earlier certainly gave the subject additional news value.

Though the Obama administration initially expressed outrage over the IRS targeting of Tea Party, it has since labeled it a “phony scandal.” Democrats have argued that progressive groups also received scrutiny from the IRS. However these claims of non-partisanship never explain the leak of private information from the IRS to left-leaning Pro-Publica in 2012.

More significantly, IRS data shows that 100 percent of Tea Party applications were scrutinized and that almost no applications were approved for a period of two years. Most were finally cleared in mid 2012
after a letter from Congress inquiring about the hold up finally led to a flurry of approvals.