New Documents Reveal DOJ, IRS, FBI Plan to Seek Criminal Charges of Obama Opponents

[Ryan Ruck]

Started a new thread on this since it goes beyond simply denying groups tax benefits.

New Documents Reveal DOJ, IRS, and FBI Plan to Seek Criminal Charges of Obama Opponents

July 7, 2015

Judicial Watch today released new Department of Justice (DOJ) and Internal Revenue Service (IRS) documents that include an official “DOJ Recap” report detailing an October 2010 meeting between Lois Lerner, DOJ officials and the FBI to plan for the possible criminal prosecution of targeted nonprofit organizations for alleged illegal political activity.

The newly obtained records also reveal that the Obama DOJ wanted IRS employees who were going to testify to Congress to turn over documents to the DOJ before giving them to Congress. Records also detail how the Obama IRS gave the FBI 21 computer disks, containing 1.25 million pages of confidential IRS returns from 113,000 nonprofit social 501(c)(4) welfare groups – or nearly every 501(c)(4) in the United States – as part of its prosecution effort. According to a letter from then-House Oversight Committee Chairman Darrell Issa (R-CA) to IRS Commissioner John Koskinen, “This revelation likely means that the IRS – including possibly Lois Lerner – violated federal tax law by transmitting this information to the Justice Department.”

The documents were produced subsequent to court orders in two Judicial Watch Freedom of Information Act (FOIA) lawsuits: Judicial Watch v. Internal Revenue Service (No. 1:14-cv-1956) and Judicial Watch v. Department of Justice (No. 1:14-cv-1239).

The new IRS documents include a October 11, 2010 “DOJ Recap” memo sent by IRS Exempt Organizations Tax Law Specialist Siri Buller to Lerner and other top IRS officials explaining an October 8 meeting with representatives from the Department of Justice Criminal Division’s Public Integrity Section and “one representative from the FBI” to discuss the possible criminal prosecution of nonprofit organizations for alleged political activity:

On October 8, 2010, Lois Lerner, Joe Urban [IRS Technical Advisor, TEGE], Judy Kindell [top aide to Lerner], Justin Lowe [Technical Advisor to the Commissioner of Tax-Exempt and Government Entities], and Siri Buller met with the section chief and other attorneys from the Department of Justice Criminal Division’s Public Integrity Section, and one representative from the FBI, to discuss recent attention to the political activity of exempt organizations.

The section’s attorneys expressed concern that certain section 501(c) organizations are actually political committees “posing” as if they are not subject to FEC law, and therefore may be subject to criminal liability. The attorneys mentioned several possible theories to bring criminal charges under FEC law. In response, Lois and Judy eloquently explained the following points:

• Under section 7805(b), we may only revoke or modify an organization’s exemption retroactively if it omitted or misstated a material fact or operated in a manner materially different from that originally represented.
• If we do not have these misrepresentations, the organization may rely on our determination it is exempt. However, the likelihood of revocation is diminished by the fact that section 501(c)(4)-(c)(6) organizations are not required to apply for recognition of exemption.
• We discussed the hypothetical situation of a section 501(c)(4) organization that declares itself exempt as a social welfare organization, but at the end of the taxable year has in fact functioned as a political organization. Judy explained that such an organization, in order to be in compliance, would simply file Form 1120-POL and paying tax at the highest corporate rate.

Lois stated that although we do not believe that organizations which are subject to a civil audit subsequently receive any type of immunity from a criminal investigation, she will refer them to individuals from CI who can better answer that question. She explained that we are legally required to separate the civil and criminal aspects of any examination and that while we do not have EO law experts in CI, our FIU agents are experienced in coordinating with CI.

The attorneys asked whether a change in the law is necessary, and whether a three-way partnership among DOJ, the FEC, and the IRS is possible to prevent prohibited activity by these organizations. Lois listed a number of obstacles to the attorneys’ theories:

[REDACTED]

She pointed to Revenue Ruling 2004-6, which was drafted in light of the electioneering communication rules before they were litigated.

Just prior this meeting, the IRS began the process of providing the FBI confidential taxpayer information on nonprofit groups. An IRS document confirms the IRS supplied the FBI with 21 disks containing 1.25 million pages of taxpayer records:

FROM: Hamilton David K

SENT: Tuesday, October 5, 2010 2:49 PM

TO: Whittaker Sherry [Director, GE Program Management], Blackwell Robert M

SUBJECT: RE: Question

There are 113,000 C4 returns from January 1, 2007 to now. Assuming they want all pages including redacted ones, that’s 1.25 million pages … If we get started on it right away, before the 10th when the monthly extracts start, we can probably get it done in a week or so….

The DOJ documents also include a July 16, 2013, email from an undisclosed Justice Department official to a lawyer for IRS employees asking that the Obama administration get information from congressional witnesses before Congress does:

One last issue. If any of your clients have documents they are providing to Congress that you can (or would like to) provide to us before their testimony, we would be pleased to receive them. We are 6103 authorized and I can connect you with TIGTA to confirm; we would like the unredacted documents.

“These new documents show that the Obama IRS scandal is also an Obama DOJ and FBI scandal,” said Judicial Watch President Tom Fitton. “The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his reelection. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information. How can the Justice Department and FBI investigate the very scandal in which they are implicated?”


On April 16, 2014, Judicial Watch forced the IRS to release documents revealing for the first time that Lerner communicated with the DOJ in May 2013 about whether it was possible to launch criminal prosecutions against targeted tax-exempt entities. The documents were obtained due to court order in an October 2013 Judicial Watch FOIA lawsuit filed against the IRS.

Those documents contained an email exchange between Lerner and Nikole C. Flax, then-chief of staff to then-Acting IRS Commissioner Steven T. Miller discussing plans to work with the DOJ to prosecute nonprofit groups that “lied” (Lerner’s quotation marks) about political activities. The exchange included a May 8, 2013, email by Lerner:

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…

Democratic Rhode Island Senator Sheldon Whitehouse held a hearing on April 9, 2013, during which, “in questioning the witnesses from the DOJ and IRS, Whitehouse asked why they have not prosecuted 501(c)(4) groups that have seemingly made false statements about their political activities…”

The House Oversight Committee followed up on these Judicial Watch disclosures with hearings and interviews of Pilger and his boss, DOJ Public Integrity Chief Jack Smith. Besides confirming the DOJ’s 2013 communications with Lerner, Pilger admitted to the committee that DOJ officials met with Lerner in October 2010. Judicial Watch obtained new documents about these meetings in December 2014 showing the Obama DOJ initiated outreach to the IRS about prosecuting tax-exempt entities.

Following Judicial Watch’s lead, the House also found out about the IRS transmittal of the confidential taxpayer information to the FBI. Because of this public disclosure, the FBI was forced to return the 1.25 million pages to the IRS.

[MinutemanCO]

Wow. We are just that close to becoming a full blown communist nation with secret service agents coming to take those away who are in opposition to the beloved leader. They will never be seen again.

[Ryan Ruck]

Yeah, we're not far off from banana republic territory. We just have better fast food service...

[Ryan Ruck]

Wow. We are just that close to becoming a full blown communist nation with secret service agents coming to take those away who are in opposition to the beloved leader. They will never be seen again.

You were saying MMCO?

Dem Judge Orders Psych Counseling For D'Souza

Clinton appointee ignores physicians, orders more treatment for Dinesh

July 13, 2015

At a hearing Monday in Manhattan in which he ruled filmmaker Dinesh D’Souza must continue community service for four more years, U.S. District Judge Richard M. Berman said he considers D’Souza’s violation of federal campaign-finance laws to be evidence of a psychological problem and ordered further counseling.

D’Souza’s defense counsel Benjamin Brafman provided evidence to the court that the psychiatrist D’Souza was ordered to see found no indication of depression or reason for medication. In addition, the psychologist D’Souza subsequently consulted provided a written statement concluding there was no need to continue the consultation, because D’Souza was psychologically normal and well adjusted.

But Judge Berman, who was appointed by Bill Clinton, disagreed, effectively overruling the judgment of the two licensed psychological counselors the U.S. probation department had approved as part of D’Souza’s criminal sentence.

“I only insisted on psychological counseling as part of Mr. D’Souza’s sentence because I wanted to be helpful,” the judge explained. “I am requiring Mr. D’Souza to see a new psychological counselor and to continue the weekly psychological consultation not as part of his punishment or to be retributive.

D’Souza has become known for his two popular films critical of President Obama. “2016: Obama’s America” was released during the 2012 presidential campaign and “America: Imagine the World Without Her” came out in July 2014, ahead of the midterm elections.

“I’m not singling out Mr. D’Souza to pick on him,” Berman said at the hearing Monday. “A requirement for psychological counseling often comes up in my hearings in cases where I find it hard to understand why someone did what they did.”

WND reported that at the Sept. 23, 2014, sentencing hearing, Berman said he could not understand how someone of D’Souza’s intelligence, with credentials that include college president, could do something so stupid as to violate federal campaign contribution laws. D’Souza was at the pinnacle of his career, writing bestselling non-fiction books and producing popular feature films.

As WND reported, after pleading guilty to campaign-finance violations, D’Souza was sentenced in September to eight months in a work-release center, five years of probation, a $30,000 fine and community service. He pleaded guilty in May 2014 to arranging “straw donors” to contribute $10,000 to the failed 2012 U.S. Senate campaign of Wendy Long, a college friend.

On May 31, he was released from nightly detention at a work-release center in San Diego after eight months. During that time, in fulfillment of his community service requirement, he taught English once a week to Spanish-speaking applicants for American citizenship. Berman ruled Monday he must continue for another four years the community-service portion of his sentence.

In his eight months of nightly confinement, he found time to sign a contract with HarperCollins and begin writing a new book to follow his 2014 New York Times bestseller, “America.” He also started the process of financing his next feature film, scheduled for the 2016 presidential campaign. And he’s designed a sequel to his highly profitable 2014 feature film, “America: Imagine the World Without Her.”

Berman explained at the hearing Monday that his social-work training combined with his psychology major has made him sensitive to psychological issues in the criminal cases he hears.

“You have to understand, I have a background in social work with a psychology major,” Berman explained. “I’m sensitive to mental health issues in the criminal cases I hear, and I do not want to end psychological counseling at this time in Mr. D’Souza’s case.”

Brafman countered that it was not fair to require someone like D’Souza to continue psychological counseling as part of his sentence when the doctors D’Souza has seen so far believe he does not need to continue the psychological counseling.

“Applying your argument to white-collar crimes,” Brafman continued, “why wouldn’t all white-collar criminals need psychological counseling?”

Berman countered that 85 percent of all criminal defendants who appear before him argue they don’t need psychological counseling or drug therapy, among other rehabilitative interventions.

‘A colossal failure of introspection’

“What I’m reading in the psychological case notes is compatible with my own impressions,” Berman continued. “The psychological case notes indicate that while Mr. D’Souza is highly intelligent, he has remarkably little insight into his own motivations, that he is not introspective or insightful, but that he tends to see his own actions in an overly positive manner.

“I consider the original crime in this case is an insight issue,” Berman continued. “That Mr. D’Souza committed this crime involves a colossal failure of insight and introspection. The case notes also say Mr. D’Souza has weaknesses in controlling his own impulses and that he is prone to anger in reaction to criticism.”

The judge noted the psychologists “chart indicates Mr. D’Souza tends to deny problems, that he lacks insight into his own behavior, that he is arrogant and intolerant of the feelings of others, while projecting an overly positive image of himself.”

“Therefore, I am ordering Mr. D’Souza to continue psychological counseling with another therapist,” said Berman.

“Therapy is more of an art than a science, and a new therapist may be what is needed in this case,” he said.

Berman ruled the sentencing requirement for weekly psychological counseling would be re-examined at the next sentencing review hearing, scheduled for Oct. 8 at 11:30 a.m. in his Manhattan courtroom.

Five years of teaching English required

As WND reported Monday, Berman ruled that D’Souza’s sentence requiring him to spend eight hours per week teaching English to Spanish-speaking students applying for U.S. citizenship was meant to be coterminous with his “supervised release,” or parole.

“I’m certain I would never have imposed a community service requirement to end with the community detention,” Berman said, rejecting an argument Brafman made that the original sentencing order was ambiguous.

Berman also rejected Brafman’s argument that a five-year community service requirement to teach English to Spanish-speakers was onerous, taking into account that D’Souza had no prior criminal record and that his crime, while a felony, was committed at a particularly stressful time of his life, while he was in the midst of a difficult divorce settlement.

In previous court appearances, Brafman had argued D’Souza’s crime, while admittedly a felony under federal law, was reflective more of an oversight involving a relatively small sum of money, not indicative of serious criminal malicious intent.

‘A real sentence in every respect’

D’Souza’s attorney, Brafman, argued: “With Mr. D’Souza required to spend one day every week in community service, this sentence is a real impediment to pursuing full-time employment.”

Berman countered: “I intended this to be a real sentence in every respect. Mr. D’Souza pleaded guilty to a felony, and I believe at the time the initial sentence was announced, Mr. D’Souza was relieved he was not facing incarceration.”

Also at issue was D’Souza’s request to travel internationally to visit his 80-year-old mother in India and to visit his daughter at school in London.

Berman ruled that permission to travel internationally would be reconsidered at the Oct. 8 hearing, but D’Souza would be allowed to purchase his air tickets now, with the court assuming the Oct. 8 hearing will find him in full compliance with all aspects of his sentencing requirements.

While D’Souza is under no domestic travel restrictions, he must request court approval to travel internationally, and he is allowed to pick up his passport only 24 hours prior to departure. His passport must be surrendered to federal authorities 24 hours after the completion of his return flight.

Also at issue in the Oct. 8 hearing will be proof D’Souza has completed 416 hours teaching English by the end of September, as required under the mandate that he devote eight hours a week to it.

D’Souza is behind schedule because of difficulties finding an appropriate venue in San Diego.

He told WND in an interview last month that he has enjoyed teaching the English classes.

“I have become very attached to my students,” he said. “There are around 100 of them, in classes ranging from beginner to intermediate to advanced.”

He said many of them have now seen his film, “America,” which he gave to them as a Christmas present.

“They have gotten to know me and my situation,” he said. “And they are now huge fans. If you ran Obama against me with this group, I doubt he would get a single vote.”

[Ryan Ruck]

Judicial Watch: New Documents Show IRS Used Donor Lists to Target Audits

July 22, 2015

Judicial Watch announced today that it has obtained documents from the Internal Revenue Service (IRS) that confirm that the IRS used donor lists to tax-exempt organizations to target those donors for audits. The documents also show IRS officials specifically highlighted how the U.S. Chamber of Commerce may come under “high scrutiny” from the IRS. The IRS produced the records in a Freedom of Information lawsuit seeking documents about selection of individuals for audits, based upon application information and donor lists submitted by Tea Party and other 501(c)(4) tax-exempt organizations (Judicial Watch v. Internal Revenue Service (No. 1:15-cv-00220)).

A letter dated September 28, 2010, then-Democrat Senate Finance Committee Chairman Max Baucus (D-MT) informs then-IRS Commissioner Douglas Shulman: “ I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations …” In reply, in a letter dated February 17, 2011, Shulman writes: “In the work plan of the Exempt Organizations Division, we announced that beginning in FY2011, we are increasing our focus on section 501(c)(4), (5) and (6) organizations.”

In 2010, after receiving Baucus’s letter, the IRS considered the issue of auditing donors to 501(c)(4) organizations, alleging that a 35 percent gift tax would be due on donations in excess of $13,000. The documents show that the IRS wanted to cross-check donor lists from 501(c)(4) organizations against gift tax filings and commence audits against taxpayers based on this information.

A gift tax on contributions to 501(c)(4)’s was considered by most to be a dead letter since the IRS had never enforced the rule after the Supreme Court ruled that such taxes violated the First Amendment. The documents show that the IRS had not enforced the gift tax since 1982.

But then, in February 2011, at least five donors of an unnamed organization were audited.

The documents show that Crossroads GPS, associated with Republican Karl Rove, was specifically referenced by IRS officials in the context of applying the gift tax. Seemingly in response to the Crossroads focus, on April 20, IRS attorney Lorraine Gardner emails a 501(c)(4) donor list to former Branch Chief in the IRS’ Office of the Chief Counsel James Hogan. Later, this information is apparently shared with IRS Estate Gift and Policy Manager Lisa Piehl while Gardner seeks “information about any of the donors.”

Emails to and from Lorraine Gardner also suggested bias against the U.S. Chamber of Commerce. An IRS official (whose name is redacted) emails Gardner on May 13, 2011, a blog post responding to the IRS targeting of political and other activities of 501(c)(4), (5) and (6) organizations:

The U.S. Chamber of Commerce is a 501(c)(6) organization and may find itself under high scrutiny. One can only hope.

The subject line of the email highlights this anti-Chamber of Commerce comment: “we are making headlines notice the end regarding 501(c)(6) applicability enjoy.” This critical comment is forwarded to other IRS officials and shows up attached to another Gardner IRS email chain with the subject line “re: 501(c)(4)” that discusses a pending decision about a tax-exempt entity.

In early May, once the media began reporting on the IRS audits of donors, IRS officials reacted quickly. One official acknowledges the issue “is a biggy” when a reporter from The New York Times contacts the IRS on May 9.

On May 13, 2011, former IRS Director of Legislative Affairs Floyd Williams discusses compliance with “interest” from Capitol Hill: “Not surprisingly, interest on the hill is picking up on this issue … with Majority Leader Reid’s office, has suggested the possibility of a briefing for the Senate Finance Committee staff on general issues related to section 501(c)(4) organizations I think we should do it as interest is likely to grow as we get closer to elections.”

Later that day, then-Director of the Exempt Organizations Lois Lerner weighs in with an email that confirms that she supported the gift tax audits. Lerner acknowledges that “the courts have said specifically that contributions to 527 political organizations are not subject to the gift tax–nothing that I’m aware of that about contributions to organizations that are not political organizations.” Section 501(c)(4) organizations are not “political organizations.” [Emphasis in original]

Lerner’s involvement and support for the new gift tax contradicts the IRS statement to the media at the time that audits were not part of a “broader effort looking at donations 501(c)(4)’s.” In July 2011, the IRS retreated and soon-to-be Acting IRS Commissioner Steven Miller directed that “examination resources should not be expended on this issue” and that all audits of taxpayers “relating to the application of gift taxes” to 501(c)(4) organizations “should be closed.”

“These documents that we had to force out of the IRS prove that the agency used donor lists to audit supporters of organizations engaged in First Amendment-protected lawful political speech,” said Judicial Watch President Tom Fitton. “And the snarky comments about the U.S. Chamber of Commerce and the obsession with Karl Rove’s Crossroads GPS show that the IRS was targeting critics of the Obama administration. President Obama may want to continue to lie about his IRS scandal. These documents tell the truth – his IRS hated conservatives and was willing to illegally tax and audit citizens to shut down opposition to Barack Obama’s policies and reelection.”

Judicial Watch had filed a separate lawsuit for records about targeting of individuals for audit in November 2013. In that litigation, the IRS had refused to search any email systems, including Lerner’s records. A federal court ruled the IRS’ search was sufficient and dismissed the lawsuit earlier this month.

In September 2014, another Judicial Watch FOIA lawsuit forced the release of documents detailing that the IRS sought, obtained and maintained the names of donors to Tea Party and other conservative groups. IRS officials acknowledged in these documents that “such information was not needed.” The documents also show that the donor names were being used for a “secret research project.”

The House Ways and Means Committee announced at a May 7, 2014, hearing that, after scores of conservative groups provided donor information “to the IRS, nearly one in ten donors were subject to audit.” In 2011, as many as five donors to the conservative 501(c)(4) organization Freedom’s Watch were audited, according to the Wall Street Journal. Bradley Blakeman, Freedom’s Watch’s former president, also alleges he was “personally targeted” by the IRS.

In February 2014, then-Chairman of the Ways and Means Committee Dave Camp (R-MI) detailed improper IRS targeting of existing conservative groups:

Additionally, we now know that the IRS targeted not only right-leaning applicants, but also right-leaning groups that were already operating as 501(c)(4)s. At Washington, DC’s direction, dozens of groups operating as 501(c)(4)s were flagged for IRS surveillance, including monitoring of the groups’ activities, websites and any other publicly available information. Of these groups, 83 percent were right-leaning. And of the groups the IRS selected for audit, 100 percent were right-leaning.