Federal Judge Threatens to Hold IRS Commissioner, Justice Attorneys in Contempt over Lerner Emails

This has been quite a time for those of us demanding that the Obama IRS be held accountable to the rule of law for its abuse of innocent taxpayers.  Judicial Watch received more documents that expose more Obama administration misconduct and lies in the IRS scandal. Now a federal court judge threatened to hold the IRS Commissioner personally in contempt over the agency’s violation of his court orders.

U.S. District Court Judge Emmet Sullivan recently threatened to hold the Commissioner of the Internal Revenue Service and Justice Department attorneys in contempt of court after the IRS failed to produce status reports and newly recovered emails of Lois Lerner, former director of the Exempt Organizations Unit of the IRS, as he had ordered on July 1, 2015.

During the a status hearing Wednesday, Sullivan warned that the failure to follow his order was serious and that the IRS and Justice Department’s excuses for not following his July 1 order were “indefensible, ridiculous, and absurd.”  He asked the IRS’ Justice Department lawyer Geoffrey Klimas “why didn’t the IRS comply” with his court order and “why shouldn’t the court hold the commissioner of the IRS in contempt?”  Judge Sullivan referenced his contempt findings against Justice Department prosecutors in the prosecution of late Senator Ted Stevens (R-AK) and reminded the Justice Department attorney the court has the ability to detain him for contempt.

Warning he would tolerate no further disregard of his orders, Judge Sullivan said: “If there is further noncompliance, I will haul into court the Commissioner of the Internal Revenue Service to show cause why that person should not be personally held in contempt of court. I can’t make that any clearer.”

To read the transcript of the hearing, which I urge you to do, click here.

After the hearing, Judge Sullivan issued the following “minute order”:

At the July 29, 2015 status hearing, the Government agreed that the Court’s July 1, 2015 oral order from the bench was clear and enforceable.  Nonetheless, the Government reasoned it inappropriate to file a motion for reconsideration until a written order was issued.  As expressed at the hearing, the Government’s reasoning is nonsensical.  Officers of the Court who fail to comply with Court orders will be held in contempt.  Also, in the event of non-compliance with future Court orders, the Commissioner of the IRS and others shall be directed to show cause as to why they should not be held in contempt of Court.  The Court’s July 1, 2015 ruling from the bench stands: (1) the Government shall produce relevant documents every Monday; (2) the Government’s document production shall be accompanied by a status report that indicates (a) whether TIGTA has turned over any new documents to the IRS, (b) if so, the number of documents, and (c) a timeframe for the IRSs production of those documents. Signed by Judge Emmet G. Sullivan on July 29, 2015.

Back during the July 1, 2015, status conference, Sullivan had ordered the IRS to begin producing, every week, the nearly 1,800 newly recovered Lerner emails responsive to Judicial Watch’s Freedom of Information Act (FOIA) request.  Despite the court order, the IRS did not produce any Lerner emails until July 15.  The IRS also failed to provide Judicial Watch weekly status reports of the Lerner email production issues, as also ordered by Sullivan.  Recently, Judge Sullivan ordered sua sponte the parties to appear for a hearing, after Judicial Watch raised concerns about the IRS’ failure to comply with his orders.

The developments come in Judicial Watch’s FOIA lawsuit seeking documents about the Obama IRS’ targeting and harassment of Tea Party and conservative opponents of President Obama (Judicial Watch, Inc. v. Internal Revenue Service (No. 1:13-cv-01559)).  Judicial Watch’s litigation forced the IRS first to claim that Lerner’s emails were supposedly missing and, then, that the emails were on IRS’ back-up systems.

The day before the extraordinary court hearing, Judicial Watch released the first batch (906 pages) of Lerner’s believed-to-be newly recovered emails. The new documents show that Lerner and other top officials in the IRS, including soon-to-be Acting IRS Commissioner Steve Miller, closely monitored and approved the scandalous handling of tax-exempt applications by Tea Party organizations and individuals.  The documents also show that at least one group received an inquiry from the IRS in order to buy time and keep the organization from contacting Congress.

We believe these emails were recovered by the agency’s own internal watchdog – the Treasury Inspector General for Tax Administration (TIGTA).

Lerner sent a November 3, 2011, email documenting her concerns about the failure to process applications in a timely manner:

I’m getting a little nervous about the amount we have on our plate and how we are handling. I know everyone is working hard and juggling, but I am wondering whether the juggling decisions are being made holistically enough. We have only so many resources and things will probably get worse going forward. I worry that decisions about how to use the resources are being made without all the information…Something that may not seem important in Cincinnati, may be crucial in DC. Similarly, DC may be prioritizing its work based on what is sitting in DC when something sitting in Cincinnati should be the focus of DC work.

IRS Program Manager Cindy Thomas of the Cincinnati Exempt Organization office replied to Lerner a few hours later with an email detailing the pressure caused by the IRS’ Washington headquarters failure to move on the “advocacy cases.”  Thomas warned of litigation and admitted that she authorized a letter for more information that was sent to one of the complaining groups to keep it from contacting Congress:

The backlog of work involves advocacy organizations. As of about a month ago, there were 161 of these cases sitting idle and we probably have more by now. The control dates for these cases go back to the end of 2009 and all through 2010. We’ve been waiting for EO in D.C. to get us a guidance/reference document with lessons learned from the c4 and c3 cases they worked and coordinated with Judy Kindell and Counsel. We’re getting calls from POAs wanting to know who has put the halt on working these cases and threatening to contact their Congressional offices.  Just today, I instructed one of my managers to get an additional information letter out to one of these organizations — if nothing else to buy time so he didn’t contact his Congressional Office.  Soon, we’re going to start getting TAO’s [Taxpayer Assistance Orders] from TAS [Taxpayer Advocate Service] or declaratory judgment cases filed —- then, I guess everyone will decide its time to start moving the cases when we have mounds of additional paperwork to process along with the cases (adding even more work for us to do).

Another IRS lawyer responded to Lerner’s email with an admission that IRS’ Washington headquarters’ legal staff had hundreds of cases backlogged.  Michael Seto, who headed the Exempt Organization Technical Unit, acknowledged to Lerner on November 9, 2011, that there were 446 application cases open in the beginning of fiscal year 2012, with many open for more than two years.

The emails also show that Lerner and other top officials of the IRS were aware of complaints about treatment by Tea Party groups.  In response to a February 2012 complaint and request for briefing from Rep. Jim Jordan (R-OH) with the House Oversight and Government Reform Committee about, according to the IRS, a Tea Party organization that applied for exemption about 18 months previously and only “just recently” heard anything about the status of its application:  “When it did finally hear from us, [the IRS] apparently asked some fairly detailed questions and gave the organization a short deadline to respond.”

Miller, who was then-IRS Deputy Commissioner for Service and Enforcement, emailed:  “let me know if it’s a taxpayer I should know about.”  He also complained about the number of emails about the issue, writing:  “Will the emails never stop?”  Miller became Acting Commissioner for the IRS later in the year and was eventually forced out after the Obama IRS scandal became public in May 2013.

Lerner handled the subsequent briefing of Rep. Jordan, and a statement by the IRS in response did not mention backlogs, Tea Party targeting, or Lerner’s own concerns about the nature of the questions the IRS was sending to Tea Party applicants.

Another email shows that Miller delayed “guidelines” for handling the backlogged applications the very week after Lerner’s briefing of Rep. Jordan.  This same email chain, dated February 28, shows that, in a response to a complaint from Sen. Mitch McConnell’s (R-KY) office about Tea Party application delays, Lerner admits:  “this is a very sensitive area.”

Just to review, it was back in May 2013, that the Treasury Inspector General for Tax Administration (TIGTA) released an audit report confirming that the IRS used “inappropriate” criteria to identify Tea Party groups and other conservative organizations that had expressed opposition to the Obama administration’s policy agenda during his re-election bid. In May 2014, Lerner was held in contempt of Congress after refusing to testify at a congressional hearing about the agency’s actions. TIGTA has proven to be a real goldmine for the truth that the IRS has worked to conceal. Earlier this month, TIGTA released another report confirming that the IRS failed to timely search its back-up tapes resulting in 24,000 Lerner emails being destroyed.  The TIGTA report also confirms that IRS Commissioner John Koskinen delayed informing Congress (and the courts) for months about Lerner’s email issue.

Keep in mind that all of these developments come in response to a JW FOIA lawsuit seeking documents about the Obama IRS’ targeting and harassment of Tea Party and conservative opponents of President Obama.

Let’s be clear about what’s happening here.  These recovered Lerner emails had to be dragged out of the Obama IRS, which is still resisting a federal court order requiring disclosure of Lerner’s “lost” emails.  This material shows that the IRS’ cover-up began years ago.  We now have smoking-gun proof that top officials in the Obama IRS unlawfully harassed taxpayers just to keep them from complaining to Congress about IRS’ targeting and abuse.  No wonder the Obama IRS has had such little interest in preserving or finding Lerner’s emails.

I am grateful that Judge Sullivan made it clear that he would personally hold accountable IRS Commissioner Koskinen and Justice Department attorneys for any further contempt of his court orders in our FOIA lawsuit.  The missing and then-the-not-missing Lerner email saga is a stark example of the Obama administration’s contempt for a federal court and the rule of law.  That Obama administration officials would risk jail rather than disclose these Lerner documents shows that the IRS scandal has just gotten a whole lot worse.

Judicial Watch’s legal team, led by Director of Litigation Paul Orfanedes, deserves special kudos here.  Their brilliance and persistence in court, against an army of taxpayer-funded lawyers at the Justice Department and IRS, paid off once again.