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Crimes without Penalty: The IRS Scandal Blows Wide Open

Friday, April 18, 2014 8:13

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April 17, 2014 by Arnold Ahlert

A bombshell revelation has brought the IRS scandal to a new level.

Judicial Watch has released internal IRS communications revealing that former Tax Exempt Organizations director Lois Lerner was in contact with the Department of Justice (DOJ) regarding whether it was possible to criminally prosecute tax-exempt groups she believed had “lied” about their political activity. Judicial Watch obtained the documents by successfully filing a Freedom of Information Act (FOIA) lawsuit against the IRS in October 2013, following the agency’s stonewall of four FOIA requests dating back to the previous May.

Contained in those documents is an email exchange between Lerner and Nikole C. Flax, then-Chief of Staff to then-Acting IRS Commissioner Steven T. Miller. On May 8, 2013, Lerner sent the following email to Flax:

“I got a call today from Richard Pilger Director Elections Crimes Branch at DOJ … He wanted to know who at IRS the DOJ folk s [sic] could talk to about Sen. Whitehouse idea at the hearing that DOJ could piece together false statement cases about applicants who “lied” on their 1024s –saying they weren’t planning on doing political activity, and then turning around and making large visible political expenditures. DOJ is feeling like it needs to respond, but want to talk to the right folks at IRS to see whether there are impediments from our side and what, if any damage this might do to IRS programs.

I told him that sounded like we might need several folks from IRS…”

Flax responded the next day:

“I think we should do it – also need to include CI [Criminal Investigation Division], which we can help coordinate. Also, we need to reach out to FEC. Does it make sense to consider including them in this or keep it separate?”

Sen. Sheldon Whitehouse (D-RI) had chaired a hearing on Apr. 9, 2013 in which he discussed the abuse of the 501(c)(4) tax-exempt designation. During that hearing, he made his leftist agenda clear, insisting that “after the Supreme Court opened the floodgates to big money in elections in its disgraceful Citizens United decision, big donors like to use these non-profit entities to launder campaign spending and hide their identities.”

Whitehouse also asked witnesses from DOJ and IRS why they hadn’t prosecuted 501(c)(4) groups who have made false statements about their activities, or donors who have used shell companies to mask their donations to Super PACs. He urged both entities to “put together a criminal case showing a fairly straightforward false statement or a fairly [straightforward] shell corporation disclosure violation.”

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