Archives for February 2016

Florida Bankers Association: The Supreme Court Must Check IRS Abuse of Discretion

Today, Cause of Action Institute submitted an amicus brief to the U.S. Supreme Court urging it to grant a petition for certiorari to review the D.C. Circuit’s decision in Florida Bankers Association v. Department of the Treasury.  The Court should take the case to ensure that IRS rules are subject to the proper judicial review, a much-needed check on the agency’s rulemaking discretion.

In August 2015, the D.C. Circuit ruled that the Anti-Injunction Act shielded the IRS rule at issue from judicial review.  The Act requires taxpayers to pay taxes first and sue later for a refund if they believe a particular rule is infirm.  The rationale behind this rule is to protect government’s ability to generate a consistent stream of revenue without litigation slowing down that process.  However, the rule at issue in Florida Bankers was simply a reporting requirement and the penalty attached to it is designed to ensure compliance, not generate revenue.  Nonetheless, the IRS argued, and the majority of the divided D.C. Circuit panel agreed, that the Act applied to challenges to the reporting requirement as well.  This argument directly conflicts with a unanimous Supreme Court decision from last term, Direct Marketing Association v. Brohl.

Cause of Action Institute’s amicus brief brought a unique perspective to the question.  We revealed that although judicial review is an important part of constraining agency discretion, it comes at the end of a long rulemaking process and is especially important when an agency, such as the IRS, routinely defies established oversight procedures.  The IRS is notorious for skirting numerous rulemaking procedures that help ensure both accountable and higher-quality rulemaking.

The IRS, for example, evades Executive Order 12,866, which requires agencies to submit significant rules to the White House Office of Information and Regulatory Affairs for pre-publication review.  As Cause of Action Institute informed the Court in its brief, “Over the past ten years, the IRS has submitted only eight rules to OIRA for regulatory review and deemed only one of those rules significant.  Those eight rules are less than one percent of the final rules the IRS published in the Federal Register over the same period.”

In addition to evading pre-publication review, the IRS also flouts the Administrative Procedure Act’s rulemaking requirements.  Cause of Action Institute relied on University of Minnesota Law School Professor Kristin Hickman’s empirical research to show the Court that in “almost ninety-three percent of the cases she surveyed over a three-year period, ‘Treasury claimed explicitly that the rulemaking requirements of APA section 553(b) did not apply.’”

Effective and accountable agency rulemaking requires robust judicial review of agency authority, the process followed in promulgating rules, and the record upon which the rulemaking is based.  Overextension of the Anti-Injunction Act undermines these important principles, and the Supreme Court should grant certiorari and reverse the D.C. Circuit.

Click here to read the amicus brief in its entirely.


Cause of Action Institute Asks Lawmakers To Investigate Ex-State Department Employees’ Use Of Clinton Campaign Email Accounts

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Cause of Action Institute Asks Lawmakers To Investigate Ex-State Department Employees’ Use Of Clinton Campaign Email Accounts


FEBRUARY 17, 2016

WASHINGTON – Cause of Action Institute is calling on Senate Judiciary Chairman Chuck Grassley and House Oversight Chairman Jason Chaffetz to investigate whether federal employees used email accounts from Hillary Clinton’s 2008 presidential campaign to conduct official government business. Cause of Action Institute is also demanding that these committee chairmen determine whether additional communications exist that, in violation of the law, were not preserved.

Our letter to the chairmen follows the recent discovery of documents showing the use of official Clinton campaign email addresses by State Department employees.


“The use of campaign-funded email accounts for government business raises a host of potential compliance issues,” said Cause of Action Institute Executive Director Daniel Epstein. “The American taxpayers deserve to know how Washington uses their money – vigilant oversight is necessary to determine why federal officials had access to and control over campaign email accounts and whether these records should be recovered.”


As part of a Freedom of Information Act lawsuit against the State Department filed on behalf of The Daily Caller, Cause of Action Institute (“CA Institute”) recently obtained documents showing that former Hillary Clinton campaign aide and State Department employee Cheryl Mills emailed Clinton’s former IT staffer, Bryan Pagliano, at his 2008 campaign address,, to inform him that she had lost her personal Blackberry.

A search of the State Department’s FOIA public reading room shows that the agency has produced ten records revealing both Cheryl Mills and another Clinton aide, Huma Abedin, maintained email accounts during their official tenure. The domain belongs to Friends of Hillary, the principal candidate campaign committee of Hillary Clinton during the 2008 presidential campaign.

Because the public has a right to know whether campaign-funded email accounts were used to evade FOIA and federal records laws, CA Institute is calling on Sen. Grassley and Rep. Chaffetz to investigate these and other questions, such as:

  • What other ex-campaign staffers employed at the State Department or elsewhere in the government continued to use their Hillary Clinton campaign email accounts?
  • Does an email exchange between Sec. Clinton and Ms. Mills with the subject line “My candidacy” (found in the State Dep’t FOIA public reading room) implicate a violation of the Hatch Act, which prohibits government employees from using government time and resources to engage in political and campaign activities?
  • Did Sec. Clinton’s 2008 campaign violate the Federal Campaign Election Act by transferring Ms. Mills’s Blackberry or any other communication devices purchased by the campaign to ex-campaign staffers free of charge?

For historical context, in January 2011, the U.S. Office of Special Counsel, which investigates political activities by federal agency officials and employees, found that when George W. Bush White House employees used campaign email accounts to coordinate official government policy and travel, they violated the Hatch Act.

These findings were prompted by a 2007 investigation by Rep. Henry Waxman, then-Chairman of the House Oversight Committee, who found the White House’s use of Republican National Committee and Bush/Cheney ’04 presidential campaign email accounts constituted violations of the Presidential Records Act – the federal recordkeeping requirements for the President that mirrors the Federal Records Act, which binds agencies like the State Department.

Cause of Action Institute is a government oversight group committed to ensuring that federal regulatory decisions are open, honest, and fair.