Archives for May 2013

FOIA Freak-Out: IRS Wrongly Denies FOIA Request, Comes Unglued Over Media Response


(Photo via Politico and BGA Think Tank)

A little-known provision of the Internal Revenue Code, IRC § 6103(g), allows the President of the United States to request the tax returns of any individual or business he wishes.  Concerned that the President may be asking for tax returns in order to retaliate against opponents of his administration, in March 2012 Cause of Action submitted a FOIA request to the Internal Revenue Service (IRS) seeking records of any presidential requests for these returns.  The IRS denied our request in May, citing a provision that prohibits the release of private tax return information.  Since Cause of Action asked only for any presidential requests for returns, not the returns themselves, we appealed the IRS’s decision.  When the IRS denied our appeal as well, we sued for the documents’ release while also submitting an additional FOIA request seeking communications concerning our original request.

After months of back-and-forth between Cause of Action and the IRS, in October 2012 we were stunned to learn that the documents we’d been requesting since March had never even existed!  According to the IRS Office of Disclosure, since the law’s inception in 1976 no president had ever requested tax returns through § 6103(g).  Why it took the IRS seven months to disclose this important bit of information, plus a bona fide freak-out by IRS Counsel and Disclosure staff, is revealed in the following documents [Large file warning] received by Cause of Action in March 2013.

Take a look at these excerpts from an e-mail between Tax Law/ FOIA Specialists Valerie Barta and Janice Rudolph, dated May 21, 2012:



Ms. Rudolph agreed, concluding that Cause of Action was not privy to information regarding presidential requests for tax returns.  Note that these specialists appeared to operate under the assumption that the records did, in fact, exist.

Cause of Action eventually filed suit on October 2, prompting immediate finger-pointing in the IRS’ FOIA division:


Ms. Barta’s response is telling:


Way to throw a colleague under the bus, Val.  Ms. Barta and Ms. Rudolph both seemingly failed to inform management why they denied Cause of Action’s request or to convey the seriousness with which we threatened to take legal action.  In fact, it appears that the two neglected to conduct a due diligence review of potentially responsive documents, instead relying on poor legal reasoning to prop up their contention that the documents would be exempt from disclosure.  After we filed suit, IRS analyst David Nimmo returned to the issue and made a surprising discovery.

An excerpted e-mail from the afternoon of October 2:


Forgive us for feeling a little miffed that the IRS didn’t research this issue with Counsel before denying both our request and appeal.  And since it took Mr. Nimmo a matter of hours to ascertain that no records existed, what exactly prevented Ms. Barta and Ms. Rudolph from conducting that most basic of searches five months previously?

Counsel’s research soon yielded an answer to whether the denial was done in error.

Senior Technician Reviewer Don Squires on October 3:


Counsel A.M. Gulas:


And Chief of Disclosure Gary Prutsman:


With it now established that the IRS had erred in denying our request, one would expect the agency to confess its mistake and quickly contact us to remedy the situation.  But with journalists now asking questions, the IRS was hesitant to admit it had acted wrongly.  In fact, all the press attention caused a bit of an office-wide freak-out.

Disclosure Chief John Davis responding to our press release and the resulting media inquiries on October 3:


Counsel A.M. Gulas after the Washington Examiner published a piece on October 4:


As the flames climbed higher, IRS firefighters worked to douse the blaze before it consumed their agency’s reputation:



Counsel Sarah Tate came up with a creative way to spin their original denial:


If that explanation sounds largely incomprehensible, that’s because it is.  By this point the IRS was grasping for any justification that would allow them to avoid responsibility for their error.  In the process, they wasted a tremendous amount of employee time and taxpayer dollars defending themselves in a pointless battle they could have easily avoided some months previously.

As we often do, Cause of Action alerted media when we filed our lawsuit against the IRS for refusing to disclose presidential requests for tax returns.  After Politico and the Washington Examiner ran stories, media began questioning the IRS for a response.  Although Cause of Action had been in contact with the IRS regarding our FOIA request and appeal for months, they only revealed that no documents existed to the Washington Examiner and the Washington Free Beacon.  IRS officials apparently do not respect the FOIA process or even the judicial system, but instead will cave to media scrutiny.

After finally receiving written confirmation in late November that no responsive documents existed, Cause of Action dismissed the lawsuit on December 5; by that time, however, the damage had already been done.  Because two FOIA analysts failed to undertake a simple search and instead relied on their own inadequate legal analysis, Cause of Action and the IRS were both forced to spend time and money on needless litigation.  Even after it became clear no records existed, the IRS continued to obsessively protect its reputation rather than admit its error and move forward.  Unfortunately, it appears that one must sue to ensure that IRS analysts conduct searches with the diligence and oversight that FOIA demands.


CoA Finds More Evidence in USGS Documents that Interior Sec.Was Misinformed in Decision to Deny DBOC Permit

FOR IMMEDIATE RELEASE                                                                                                       

May 13, 2013

 Cause of Action Finds More Evidence in USGS Documents that the Interior Secretary Was Misinformed in His Decision to Deny DBOC Permit 


WASHINGTON – Today Cause of Action (CoA), a government accountability organization, released internal email communications from the United States Geological Survey (USGS) regarding the monitoring of harbor seals at Drakes Estero. Cause of Action obtained these documents via a Freedom of Information Act (FOIA) request sent in December 2012 concerning the integrity of the National Park Service’s (NPS) protection of marine mammals.

A USGS assessment of harbor seal activity at Drakes Bay Oyster Company (DBOC), which occupies some of the Estero, was used to support an NPS conclusion that a continuation of DBOC’s Special Use Permit would have long-term adverse impacts on harbor seals. DBOC is now engaged in a lawsuit against the Department of Interior following then-Secretary of the Interior Ken Salazar’s decision to not renew the Special Use Permit and, in effect, shutting down of the small, family-run farm. Cause of Action had reason to believe that the information upon which NPS relied was a misrepresentation of science, and that Sec. Salazar may have based his decision about the Special Use Permit on this false information.

The FOIA production from USGS reveals in internal agency emails:

  • Then-Secretary Ken Salazar and the Department of the Interior pressured USGS for the harbor seal monitoring information to inform the Secretary on his decision regarding DBOC.
  • The USGS assessment was considered of very high priority to inform the Secretary’s decision.
  • Two Assistant Secretaries (Castle and Jacobson) were apparently briefed on the USGS assessment to inform the Secretary for his decision whether to renew the permit.

The full production can be viewed here.

Cause of Action: IRS Is At Risk of Conspiracy

FOR IMMEDIATE RELEASE                                                                                                 

May 10, 2013


Cause of Action: IRS Is At Risk of Conspiracy

WASHINGTON – Cause of Action (CoA), a government accountability organization, today called for transparency and accountability in light of reports that IRS official Lois Lerner admitted that the “Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status,” according to the Associated Press.

Executive Director of Cause of Action, Dan Epstein responded:

“Cause of Action has spent over a year investigating how the IRS monitors tax-exempt groups and what type of access the President has to individuals’ and businesses’ tax return information. As a new 501 (c)(3)  organization, we know firsthand that this IRS office in Cincinnati processes a high volume of, if not all, tax-exempt applications, and therefore this is not a low-level office in terms of accountability in regard to tax-exempt applications. In light of the alleged confessions by the IRS employees of singling out different non-profit groups for review on the basis of political beliefs, the IRS is at risk of being guilty of conspiracy. The IRS has admitted that some undisclosed number of its employees conspired to target taxpayers based solely on their political views, and then subjected them to differential standards of review, all apparently to injure, oppress, threaten or intimidate their members.

We call on Congress, the Department of Justice, and the U.S. Attorney’s Office for the Southern District of Ohio to take seriously these claims of what can at the least be called misconduct and at the worst constitutes a violation of law by taxpayer-funded government employees.

The politicization of federal agencies must not be allowed to stand, the full matter of facts must come to light, and the leadership of the IRS must answer for this incredulous behavior that has betrayed the trust of the American people.”

To see more information on Cause of Action’s work investigating the IRS, click here.


Thomas Perez: Justice belabored

Thomas Perez: Justice belabored

By Dan Epstein, executive director, Cause of Action – 05/09/13 06:56 PM ET

On April 12, the Office of Special Counsel announced it was investigating allegations that B. Todd Jones, nominee to lead the DOJ’s Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), had retaliated against whistle-blowers at the U.S. Attorney’s Office in Minnesota, where he concurrently served as U.S. Attorney.  But the U.S. Attorney’s Office in Minnesota, the DOJ, and concerns about whistle-blower protection are not just appetizers for corruption in Washington – they make up a main course that is about to become the meal ticket for a Cabinet appointee.

According to a recent Congressional report, Thomas Perez, current nominee for Secretary of Labor, struck a deal in early February 2012 with the City of St. Paul, Minnesota, in which St. Paul withdrew a Supreme Court appeal in a case involving the Fair Housing Act (FCA) as the DOJ declined intervention in two legal complaints against St. Paul.

The Congressional report states that Perez, current Assistant Attorney General for the DOJ’s Civil Rights Division, “sought, facilitated, and consummated this deal” that concerns three cases all involving minorities, housing, and the City of St. Paul.

On May 19, 2009, Frederick Newell, an African-American, brought a False Claims Act (FCA) case against the city of St. Paul for falsely certifying compliance with federal law in order to receive over $50 million in Housing and Urban Development (HUD) funds.  On October 4, 2011, DOJ’s commercial litigation branch recommended intervention in the case, U.S. ex rel. Newell v. City of St. Paul, Minnesota, and on October 7, 2011, HUD agreed.  On October 25, 2011, Assistant U.S. Attorney Greg Booker signed and forwarded the memo approving the DOJ’s intervention in Newell to Acting Associate Attorney General Tony West for final approval.

During the pendency of Newell, on February 18, 2011, Andrew and Harriet Ellis, providers of affordable housing to low income minorities for over thirty years, filed Ellis, et al. v. City of Minneapolis, et al., an FCA case against Minneapolis and St. Paul for falsely certifying to HUD compliance with community development requirements in order to receive over $150 million in federal fair housing funds.

Then there’s Magner v. Gallagher, where, on September 1, 2010, the Eighth Circuit held that St. Paul violated the FCA because its municipal housing code enforcements disproportionately harmed African-Americans.   According to Congressional investigators, this holding buttressed a theory that Perez had used to “secure multimillion dollar settlements,” and when the Supreme Court agreed to hear St. Paul’s appeal on Gallagher in November 2011, this gravy train was threatened. Hearing the case would ultimately expose Perez’s agenda and shine light on the precedent he was setting through his discriminatory and disparate housing approach.

On November 22, 2011, Thomas Fraser, a lawyer representing St. Paul, exchanged e-mails with Perez concerning both Gallagher and Newell.  Notes obtained by Congressional investigators reveal that on a November 28, 2011 call led by Perez, declining intervention in the FCA case was described as “leverage” for getting St. Paul to drop its Supreme Court petition in Gallagher.  That same day, Perez sought DOJ ethics advice concerning whether his settlement with St. Paul in Gallagher, which he disclosed was predicated on an agreement by the government not to intervene in Newell, created any ethics prohibitions.  He asked HUD General Counsel Helen Kanovsky to reconsider HUD’s support, and by November 30, 2011, HUD “changed its mind” recommending declining intervention in Newell.

On February 3, 2012, Perez struck a deal with St. Paul Mayor Christopher Coleman.  By February 9, 2012, Associate Attorney General Tony West formally declined intervention in Newell.  The following day, St. Paul withdrew its Gallagher petition before the Supreme Court.  And on June 18, 2012, the United States notified the U.S. District Court in Minnesota of its decision not to intervene in Ellis.

Thomas Perez thought the Supreme Court would tarnish his political achievements and induced St. Paul to withdraw its petition by pressuring the government to decline intervention in two FCA suits.  Neither Fredrick Newell nor the American taxpayers who funded St. Paul had any say in the adequacy or fairness of Perez’s deal.  An originally slam dunk FCA case – returning millions of dollars to the taxpayers – is now in jeopardy.

The DOJ’s Civil Rights Division was created through the passage of the Civil Rights Act of 1957, established to uphold the civil and constitutional rights of the most vulnerable members of our society.  But as the Congressional report details, Thomas Perez, who today leads the Civil Rights Division and is likely to soon lead the Labor Department, used his political skill and legal acumen to induce a quid pro quo last year that fundamentally disenfranchised those vulnerable members of society he swore to protect.


Dan Epstein is the executive director of Cause of Action, a non-profit, nonpartisan organization advocating for government accountability.

Read more:

Filing of Appeal in NARA Lawsuit

Notice of Appeal

Court Grants HARDI Opportunity to Challenge Department of Energy’s Decision-Making

FOR IMMEDIATE RELEASE                                   

May 3, 2012


Court Grants HARDI Opportunity to Challenge Department of Energy’s Decision-Making

U.S. Court of Appeals for the D.C. Circuit Referred Heating and Air-conditioning Group’s Claims to a Merits Panel for Further Review


WASHINGTON – Cause of Action, the government accountability group fighting against federal agency overreach and abuse, today responded to an order by the U.S. Court of Appeals for the D.C. Circuit regarding its client, Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), and their fight against the Department of Energy (DOE).

Violating both congressional intent and long-standing agency practice, the DOE exceeded its statutory authority when it circumvented required procedural protections to issue a direct final rule that imposes new energy efficiency standards.

“Despite the government’s efforts to prevent our client, Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), from making its case, the U.S. Court of Appeals for the D.C. Circuit has rightly afforded HARDI the opportunity to be heard,” stated Executive Director Dan Epstein of Cause of Action. “By sending this case to a merits panel for further briefing, the D.C. Circuit has given HARDI a chance to explain how the Department of Energy’s abuse of the Direct Final Rule process has real costs on thousands of HVAC distributors and therefore millions of Americans.”

The D.C. Circuit also granted an emergency motion for a stay of a compliance deadline for regional energy conservation standards for certain furnaces.

“We have long believed that this regulation would have a negative impact on the many small businesses in the HVAC industry. The DOE’s abuse of process in establishing the standard is a classic example of why the small business community is frustrated with Washington, stated Jon Melchi, Director of Government Affairs of HARDI.  “We are pleased that we will have an additional opportunity to state our case and protect our members.”

The court document can be found here.