Stealth lobbying continues under the IRS’s radar

On March 22, 2012, Cause of Action  submitted a Freedom of Information Act request to the IRS, seeking information concerning the IRS’ oversight of coalition lobbying, specifically:
•  All documents referring or relating to the tax-exempt status of unincorporated coalitions residing at tax-exempt corporations, including reporting requirements concerning these coalitions’ lobbying activities
•  All documents referring or relating to the disclosure requirements of tax-exempt entities that sponsor or provide resources to a coalition, concerning the coalition’s lobbying and other activities
•  All documents referring or relating to those organizations for which the IRS has:
1.  Conducted a criminal investigation, civil audit, or examination, reviewed whistleblower-informant  claims, found abusive tax schemes and published alerts or abusive tax scheme investor lists concerning coalitions which lobby and/or “stealth” lobbyists from 2004 to the present
2.  For each identified, summarize the subsequent allegations and action by
the IRS, including penalties, fines, reports, memoranda or other assessments made against those investigated coalitions.
3.  Provide any documents reflecting coalitions’ response to any IRS criminal investigation, audit,
examination, whistleblower information claim, alert or publication.

On May 14, Susan Marks-Jensky of the IRS  responded to CoA’s request, stating “I found no documents specifically responsive to your request.”

This response highlights that the IRS has failed to require lobbying coalition’s to report their stealth activities and has refused to conduct oversight over tax-exempt corporations that sponsor coalition lobbying  without disclosing those activities. Moreover, the IRS, despite concerns by Congress and the media, has failed to conduct any investigations of lobbying coalition activities that may be inconsistent with the Internal Revenue Code.

Homeland Security Acting IG: “Carefully reviewing the allegations made” Re: ICE violations of Federal lobbying and appropriations laws

On January 25, 2012, Cause of Action requested that Acting DHS IG, Charles K. Edwards, investigate whether the U.S. Immigration and Customs Enforcement Agency (ICE) violated federal law by obtaining and subsequently disseminating a video that can be traced to Creative America Campaign, Inc. Creative America has demonstrable ties to special-interest groups that regularly use registered  lobbyists to advocate for passage of legislation that, directly or indirectly, is in ICE’s pecuniary interest.  Further, ICE has violated applicable federal law by using money appropriated by an act of Congress to produce sophisticated, self-aggrandizing  videos that amount to nothing more than propaganda. See CoA’s letter here.

On June 1, 2012, IG Edwards stated that the OIG is “carefully reviewing the allegations made” concerning “whether U.S. Immigration and Customs Enforcement (ICE) has violated Federal lobbying or appropriations law.”  See IG Edwards’ response here.




WPEA under the Spotlight: Disclosure of Scientific Censorship

From MSPB Watch, an insight into the WPEA:

WPEA under the Spotlight: Disclosure of Scientific Censorship


WPEA under the Spotlight is a new running feature that will explore the provisions of the Whistleblower Protection Enhancement Act, currently being debated in Congress. This entry covers the disclosure of scientific censorship section of Senate Committee Report No. 112-155, which accompanies S. 743RS.


M. Disclosures of scientific censorship

The Committee has heard concerns that federal employees may be discouraged from, or retaliated against for, disclosing evidence of unlawful or otherwise improper censorship of research, analysis, and other technical information related to scientific research. Although disclosures of such censorship may be protected as a disclosure of a legal violation or of an abuse of authority under the WPA, uncertainty on this specific issue may cause confusion and inhibit disclosure. It is essential that Congress and the public receive accurate data and findings from federal researchers and analysts to inform lawmaking and other public policy decisions.

In order to encourage the reporting of improper censorship, section 110 of S.743 would specifically protect employees who disclose information that the employees reasonably believe is evidence of scientific or technical censorship that may cause gross government waste or mismanagement, or a substantial and specific danger to public health or safety, or that violates the law. This definition of protected disclosures is nearly identical to the general definition of protected disclosures that do not relate to censorship. This is intended to make unmistakably clear that employees are protected for disclosing scientific censorship in the same manner as they are protected for making any other disclosure.

Section by Section Analysis

Section 110—Disclosure of Censorship Related to Research, Analysis, or Technical Information

This section clarifies that an employee is protected from reprisal under the WPA for disclosing information that an employee reasonably believes is evidence of censorship related to research, analysis, or technical information that is or will cause gross government waste or mismanagement, an abuse of authority, a substantial and specific danger to public health or safety, or any violation of law.

Limited Government: The Fading American Norm

In an April 24, 2012 New York Times Magazine article entitled, “Earth to Ben Bernanke”  Paul Krugman writes, “Bernanke’s big retreat from F.D.R.-like resolve happened way back in 2003, less than a year after he arrived at the Fed. That month, a Fed staff report rejected many of the ideas Bernanke previously supported — and ever since, Bernanke has spoken only of limited responses to the problem of the zero lower bound.”  By “problem of the zero lower bound” Krugman means:

‘Right now, the Fed believes that it’s facing a weak economy and subdued inflation, a situation in which it would ordinarily cut interest rates. The problem is that rates can’t be cut further. When the recession began in 2007, the Fed started slashing short-term interest rates until November 2008, when they bottomed out near zero, where they remain to this day. And that was as far as the Fed could go, because (some narrow technical exceptions aside) interest rates can’t go lower. Investors won’t buy bonds if they can get a better return simply by putting a bunch of $100 bills in a safe. In other words, the Fed hit what’s known in economic jargon as the zero lower bound (or, alternatively, became stuck in a liquidity trap). The tool the Fed usually fights recessions with had reached the limits of its usefulness.’

Krugman’s solution, it appears, is to cut short-term interest rates and print money in the hope of stimulating private borrowing and spending.  And Krugman believes that such intervention requires F.D.R.-like resolve.  According to the Italian philosopher Georgio Agamben, writing on the concept of the state of exception, “from the constitutional standpoint, the New Deal was realized by delegating to the president (through a series of statutes culminating in the National Recovery Act of June 16, 1933) an unlimited power to regulate and control every aspect of the economic life of the country – a fact that is in perfect conformity with the already mentioned parallelism between military and economic emergencies that characterizes the politics of the twentieth century.”  In other words, from a philosophical standpoint, Krugman’s argument is one in which Bernanke should execute the same kind of authority in fixing the economy that a commander-in-chief would exercise in times of war.  Independent of whether Krugman’s solution is ideal from an economic standpoint, from a legal standpoint, Krugman’s rhetoric signals a mentality in which wide-scale economic regulation no longer becomes the kind of executive action taken in exceptional cases but instead the norm of economic policy.

But regulation does not occur in a vacuum;  implicit within, say, the Affordable Care Act is a concomitant institutional aggrandizement of the Department of Health and Human Services as well as the Internal Revenue Service, both of which gain more authority in spending, rulemaking and enforcement.  Indeed the Dodd-Frank regulations entailed the establishment of the Consumer Financial Protection Bureau.  The Troubled Asset Relief Program entailed an Inspector General office and congressional appropriations that funded investigations (the Financial Crisis Inquiry Commission) and, eventually, spending (the Stimulus plan).  Economic intervention through regulation no longer takes place at the margin, or in the exceptional case, but instead has become the norm – one synonymous with administrative aggrandizement and the expansion of executive power. This has enormous consequences for transparency and accountability of the Executive Branch as the bureaucrats of the Federal Reserve or Consumer Financial Protection Bureau are unelected and any check on their spending comes after-the-fact, when policies and regulations have passed and any form of oversight will fail to retroactively remedy the damage regulatory regimes have done to job creation and capital formation in the market.  The American founders conceived of the normal state of American constitutionalism to be one of limited government.  Now this notion has become an exception relegated to the norm of administrative aggrandizement and, worse, overreach in the form of interventionist, enforcement-based (as opposed to cooperative) regulatory schemes and spending buttressed by an unchecked, unaccountable bureaucracy. Such executive power in the United States has been traditionally justified in times of war where martial law becomes a necessity for purposes both exceptional and expedient.  Constitutional rights to due process, habeas review, and the Third Amendment prohibition against the quartering of soldiers in “any house, without the consent of the owner” were seen as permanent limits against executive aggrandizement during times of war where national defense may need to subrogate other rights.  And yet now the bureaucrats and their regulations have become quartered within our savings and wealth.  And without our consent.


By Dan Epstein, executive director of Cause of Action

FOIA: U.S. Department of Health and Human Services is in violation of the No FEAR Act of 2002

From MSPB Watch:

“Last week, fellow advocate site made a FOIA request to the Department of Health and Human Services and all of its operating divisions, seeking all No FEAR Act annual reports to Congress since the law’s passage in 2002, as required by section 203 of that law. Now, the following response came back from HHS’ Office of Inspector General, claiming that no such reports can be found:

HHS FOIA 12-0404

Which means that HHS is in violation of the No FEAR Act, and the public won’t get to know how much litigation damages and attorney fees HHS has spent reimbursing meritorious whistleblowers and victims of discrimination.”

Legislation Look: Whistleblower Protection Enhancement Act Introduced in Senate

Currently being considered in the U.S. Senate is a piece of legislation called the Whistleblower Protection Enhancement Act of 2012 which claims to:


“…strengthen the rights of and protections for federal whistleblowers so that they can more effectively help root out waste, fraud, and abuse in the federal government. Whistleblowers play a critical role in keeping our government honest and efficient. Moreover, in a post-9/11 world, we must do our utmost to ensure that those with knowledge of problems at our nation’s airports, borders, law enforcement agencies, and nuclear facilities are able to reveal those problems without fear of retaliation or harassment. Unfortunately, federal whistleblowers have seen their protections diminish in recent years, largely as a result of a series of decisions by the United States Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over many cases brought under the Whistleblower Protection Act (WPA).”


Legislation related to promoting the exposure of waste, fraud, and abuse within the federal government began most prominently in 1978 with the Civil Service Reform Act.  This law created the Office of Special Counsel (OSC) to help encourage disclosure of waste and fraud, as well as the Merit Systems Protection Board (MSPB) to handle causes related to prohibited personnel practices.  This legislation was deemed largely ineffective as individuals still feared retaliation for whistleblower behavior, so Congress passed the Whistleblower Protection Act (WPA) in 1989, which prohibited reprisal against employees who reveal waste, fraud, mismanagement, etc.  The WPA was amended in 1994.


And now, 17 years later, Congress wants to amend it again.


The proposed Whistleblower Enhancement Protection Act, which would cost $24 million to implement over the next five years, was introduced to Congress on April 6, 2011 by 14 Senators: Akaka, Collins, Grassley, Lieberman, Levin, Carper, Leahy, Harkin, Pryor, Landrieu, McCaskill, Tester, Begich, and Cardin.


There are 20 principle amendments proposed in the new version of the Act aimed at bringing clarification and enhancement of protection and rights for whistleblowers.  Among these are revised penalties for retaliatory investigations, as well as a proposal for whistleblowers to have the right to a full hearing.  The legislation would also require the Government Accountability Office (GAO) and MSPB to annually report to Congress the number of whistleblower cases and the outcome of each.  The bill would close the potential loophole that previously designated certain entire agencies exempt from the WPA and would revise previous regulations about the exclusive subject matter of the Federal Circuit.  Additionally, there is a change to the current law which requires the existence of “irrefragable proof” to claim that a public official has violated a law; the new bill states that only “reasonable belief” is needed.  The bill also aims to implement education initiatives to teach employees about their rights against retaliation as well as establish an ombudsman in each OIG office to act as an intermediary between the agency and its employees.



The full text of the bill can be found here.

Federal Agency Accountability: Data Act bill Passes House

We’ve seen in the news that the House recently approved a bill that requires federal agencies and recipients of government money to report their spending online:

“The bill, known as the Data Act, would require government agencies and recipients of federal money to use standardized methods to report their spending. The measure would also establish a Federal Accountability and Spending Transparency Board to collect and post all the information on a single website.”

Given Cause of Action’s work with FOIA requests that demand government transparency, we’re curious to see what happens with the bill. In the meantime, we will continue our efforts to expose federal spending through numerous FOIA requests and investigations.

For example,  CoA filed FOIA requests with 32 government agency offices that sought investigation into how each agency used tax dollars to purchase commemorative items for its employees.  If money is being spent on trinkets that hold no worth for taxpayers, we want to find out. CoA investigated how grant money was possibly being used by state health organizations to lobby officials.  This is an illegal use of tax-payer dollars to sway votes and pass legislation, so we asked the DOJ to investigate.

Cause of Action is staying on top of the transparency issues.  Check back soon to see what else we’ve found.