Bloomberg News

House Holds Lois Lerner in Contempt for IRS Probe Silence

May 08, 2014

Former IRS official Lois Lerner

Lois Lerner, former director of the Internal Revenue Service's exempt organizations office. Photographer: Pete Marovich/Bloomberg

The U.S. House of Representatives voted to hold a former Internal Revenue Service official in contempt of Congress yesterday for refusing to answer questions about her role in scrutinizing Tea Party groups.

The case of Lois Lerner, the former director of exempt organizations at the tax agency, will be referred to the U.S. attorney in Washington for potential prosecution. The House also voted yesterday to ask Attorney General Eric Holder to appoint a special prosecutor to investigate the IRS.

The votes came three days before the one-year anniversary of Lerner’s disclosure of the agency’s actions against Tea Party groups. At least five investigations are continuing, and the tax agency’s attempt to revamp the rules governing nonprofits’ political activity is mired in criticism and won’t take effect until after the 2014 election.

Republicans are making the IRS a symbol of government overreach and have continued pressing forward with the controversy, which animates the party’s base. Appointing a special counsel and voting on a contempt finding for Lerner, they say, are necessary to get to the bottom of the matter.

“Let there be no mistake,” Representative Lee Terry, a Nebraska Republican, said on the House floor yesterday. “We wouldn’t be here today if Ms. Lerner hadn’t conducted her own partisan witch hunt.”

Wouldn’t Answer

Lerner told the House Oversight and Government Reform Committee in May 2013 that she had done nothing wrong in the IRS’s focus on the limited-government Tea Party groups. She then refused to answer questions, invoking her constitutional right against self-incrimination.

Republicans say she waived her right to silence by making the statements proclaiming her innocence.

The vote to hold Lerner in contempt was 231-187, with six Democrats joining Republicans in favor and no Republicans opposing the resolution.

The House adopted, 250-168, a separate resolution asking Holder to appoint a special counsel to investigate the IRS. Twenty-six Democrats joined Republicans in voting for that measure.

Lerner’s attorney, William Taylor, said in an e-mailed statement yesterday that she didn’t waive her right to refuse to testify and that the vote has nothing to do with the law.

“Its only purpose is to keep the baseless IRS ‘conspiracy’ alive through the mid-term elections,” he said.

Democrats compared the proceedings to Senator Joseph McCarthy’s investigations of Communist influence in the U.S. government in the early 1950s.

‘Political Nonsense’

“They do not want to talk about the issues that matter to people,” said Representative Jim McGovern, a Massachusetts Democrat. “This is what they’re left with -- sad little scraps of political nonsense that they keep trying to peddle as leadership.”

Lerner’s office was responsible for determining whether groups were too political to qualify for tax-exempt status under section 501(c)(4) of the U.S. tax code. Those groups, which don’t have to disclose their donors, can’t have politics as their primary purpose.

The IRS will provide the House Ways and Means Committee with all of Lerner’s e-mails covering January 2009 through May 2013, the committee said today, a step that Chairman Dave Camp said was “critical” to the investigation.

The IRS inspector general, J. Russell George, whose report last May documented the treatment of Tea Party groups, said the case isn’t closed.

“It’s too premature to come to any conclusive finding as to what happened here,” he told a Senate subcommittee April 30.

Forced Out

A lack of conclusions hasn’t stopped some actions. The acting IRS commissioner, Steve Miller, was forced out of his job, Lerner retired and several other senior IRS executives left their posts. Most of the groups’ stalled applications for non-profit status have been resolved.

The tax agency’s public standing has dropped. The percentage of Americans who support more IRS funding for enforcement declined to 55 percent from 62 percent, according to a survey conducted by the IRS Oversight Board.

A year of hearings and investigations has produced some facts each side is using to make its case.

‘Calling’ Shots

“This was not something that was a few rogue employees in Cincinnati as Lois Lerner said the first day that she acknowledged that this was going on,” said Cleta Mitchell, a Republican lawyer at Foley & Lardner LLP in Washington who has represented some of the groups involved. “We’ve learned that it was Washington who was calling those shots.”

Democrats emphasize their own set of facts. They say nothing indicates that anyone outside the IRS was involved in developing or applying the criteria to select groups for scrutiny.

The IRS also gave special attention to some Democratic-leaning groups, though it’s unclear whether they received the same scrutiny as the Tea Party groups.

The job of picking up the pieces at the IRS now falls to John Koskinen, the new commissioner, whose career history includes turnaround jobs in Washington, D.C., and Freddie Mac.

Koskinen has emphasized openness and said that rebuilding trust in the tax agency will require showing that it can enforce the law in an evenhanded way. That may take time.

“I don’t know exactly what he can do,” said George Yin, a tax law professor at the University of Virginia and a former chief of staff of the congressional Joint Committee on Taxation. “I think it’s going to take more than simply his assurance to the American people.”

The resolution on the contempt citation is H. Res. 574, and the resolution seeking appointment of a special counsel is H. Res. 565.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net Laurie Asseo


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