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06/20/2013

Cause of Action Memos Impugn Obama Transparency Pledge

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June 20, 2013

Cause of Action Memos Impugn Obama Transparency Pledge

CoA obtains previously unreleased White House Memo detailing undisclosed FOIA policies

WASHINGTON – Cause of Action (CoA), a government accountability organization, today released a previously undisclosed copy of an April 2009 White House memo sent to all Executive Department and Agency General Counsels urging them to run all third-party requests dealing with “White House equities”– including congressional and Freedom of Information Act requests (FOIA)–through the White House Counsel’s office. This memo was sent just months after the President issued his January 2009 Executive Order on FOIA and transparency, and Attorney General Eric Holder’s March 2009 memo on FOIA—both of which were made public. According to the Department of Justice this memo is still in effect.

Additionally, CoA also obtained a previously unreleased copy of a November 2010 Treasury Inspector General report, revealing two concerning aspects of how the IRS and Treasury handle FOIA requests:

  •  The IRS treats “major media” requests as “special review,” therefore applying an additional layer of scrutiny and slowing down the FOIA  process.
  • The White House may have reviewed Treasury Department FOIA productions and claimed privileges before documents were released to the requestor.

 

Dan Epstein, Cause of Action’s executive director, commented on the consequences of these findings:

“We are concerned that the President’s transparency pledges and removal of the Office of Political Affairs may have all been a charade to not only politicize the Freedom of Information Act but to use the White House legal office to politicize the executive branch. The White House is not an agency subject to FOIA and should have no control over the FOIA process. The White House policy violates the intent of FOIA, which requires that federal agencies promptly respond to requests.  The broad claim for documents relating to “White House equities” is unprecedented.

How are we to trust an Administration that has gone after the press and politicized the nation’s most important tool for knowing what its government is up to?”

Related Documents:

White House Memo 

Treasury Inspector General Report

 

 

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06/20/2013

Cause of Action Sues IRS for Records of Communications between the White House and IRS

FOR IMMEDIATE RELEASE                                                                                   CONTACT:      

June 20, 2013                                                                                     Jamie Morris, 202-499-2425

 

Cause of Action Sues IRS for Records of Communications between

the White House and IRS

IRS refuses to reveal whether the White House has improperly received individuals’ tax return information

WASHINGTON – Cause of Action (CoA), a government accountability organization, yesterday filed a lawsuit against the Internal Revenue Service (IRS) for its wrongful withholding and redaction of documents involving records of communications between the White House and the IRS. These documents would reveal whether the President requested tax records of individuals and businesses outside the legally permitted process under the tax code.

“While this Administration claims to be the most transparent in American history, it is ultimately unwilling to disclose to the American people whether the President improperly accessed confidential tax information of individuals and companies,” stated Dan Epstein, Cause of Action’s executive director.  “We aren’t asking for the tax records themselves—only the requests. What is the Administration trying to hide?”

CoA filed a Freedom of Information Act (FOIA) request in October 2012 for records of communication between the White House and the IRS concerning taxpayer information, particularly communications that were not made pursuant to 6103(g) of the tax code, which authorizes the President to request any individual’s tax return information from the IRS. On March 4, 2013, the IRS issued its final response—and with it, only partial records, thereby obstructing the path to transparency which American taxpayers were promised. CoA filed suit against the IRS, declaring that the IRS has wrongfully withheld the requested records, directing the IRS to revise its search and provide full records of communications from the White House to the IRS involving requests for tax returns.

The complaint, along with our exhibits, can be found here.

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

 

To schedule an interview with Cause of Action’s Executive Director Dan Epstein,

contact Jamie Morris, jamie.morris@causeofaction.org.

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06/17/2013

Lack of IRS Oversight Lead to Fraud, Money Laundering, and Abuse by Tax-Exempt Groups

FOR IMMEDIATE RELEASE                                                                                                 CONTACT:      

June 17, 2013                                                                                       Jamie Morris, 202-499-2425

 

Lack of IRS Oversight Lead to

 Fraud, Money Laundering, and Abuse by Tax-Exempt Groups

Cause of Action releases investigative report on fiscal sponsorship: “Conprofit: How the IRS’s Failed Oversight Allows Nonprofit Money Laundering”

WASHINGTON – Cause of Action (CoA), a government accountability organization, today released “Conprofit: How the IRS’s Failed Oversight Allows Nonprofit Money Laundering,” a comprehensive report revealing significant loopholes in the tax code which allow nonprofits to engage in corruption, fraud, and money laundering—in some cases with federal funds. In light of these findings, Cause of Action filed a petition for rulemaking with the IRS, asking them to define and set clear parameters for the practice of fiscal sponsorship.

CoA’s fifteen-month long investigation demonstrates how the Internal Revenue Service (IRS)  has consistently lacked oversight and enforcement of its Tax Exempt and Government Entities Division, the same division that has recently come under public, Congressional, and legal scrutiny for allegedly targeting applicants for 501(c)(4) status that hold specific political beliefs. The report reveals how the International Humanities Center (IHC), Christian Community, Inc. (CCI), and Help Is Here, Inc. (HIH), as well as other nonprofits, routinely used the practice of fiscal sponsorship to abuse their tax-exempt status, and in some cases even commit fraud.

“Conprofit: How the IRS’s Failed Enforcement Allows Nonprofit Money Laundering” exposes how these groups subverted the original intent of fiscal sponsorship, which is to create opportunities for charitable projects to start their endeavors under existing nonprofit groups. Instead, “Conprofit: How the IRS’s Failed Oversight Allows Nonprofit Money Laundering” documents fraud, corruption, and money laundering happening under the guise of fiscal sponsorship.

Some of the most egregious examples of fiscal sponsorship abuse:

  • IHC sponsored over 200 projects as a fiscal sponsor then collapsed after funneling almost $1 million in project funding toward its own mismanaged debts.
  • HIH preyed upon projects, improperly seizing funds, refusing to disburse funding to projects, and attempting to wrest control over projects which attempted to leave.
  • CCI posed as a fiscal sponsor for twenty years.  Tax documents, audits, and bank statements were fabricated and over $400,000 in project funding was lost.

 

Cause of Action’s Executive Director Dan Epstein explained the consequences of these findings:

“Cause of Action has exposed yet another layer of mismanagement and lack of oversight at the IRS.  This report exposes how the IRS engaged in selective enforcement, targeting certain 501(c)(3) applicants with additional scrutiny while it has approved the tax-exempt status of charities that have engaged in money laundering and fraud.

 

Significant loopholes in the tax code have opened the door to abuse for organizations to funnel money, fabricate tax documents, and destroy charities by abusing fiscal sponsorship. We now turn to Congress and the IRS to define fiscal sponsorship and remove the ambiguities which have allowed groups such as IHC, CCI, and HIH to exploit and defraud American taxpayers.”

 

Click here to read a full copy of the report.

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Jamie Morris, jamie.morris@causeofaction.org.

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05/21/2013

CoA Applauds Hatch-Baucus Letter to IRS

Cause of Action applauds the joint effort of Ranking Member Hatch and Chairman Baucus of the Senate Finance Committee for seeking the facts from the IRS.

“Targeting applicants for tax-exempt status using political labels threatens to undermine the public’s trust in the IRS,” the letter stated.

Read the full letter here: Hatch-Baucus Letter to IRS

 

 

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05/13/2013

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.

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05/10/2013

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.

 

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05/3/2013

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.

 

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