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Cause of Action Memos Impugn Obama Transparency Pledge

June 20, 2013 by

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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

 

 

Filed Under: Press Release Tagged With: , , ,

FoxNews.com: Obama administration pledged transparency, but slowed document requests, memos show

June 20, 2013 by

Obama administration pledged transparency, but slowed document requests, memos show

By Judson Berger    Published June 20, 2013

Even as the freshly minted Obama administration was pledging a “new era of open government” in 2009, officials were quietly adding new rules that had the potential to slow down public requests for documents.

Those rules, detailed in memos reviewed by FoxNews.com, could even trip up present-day efforts to dig into the IRS’ practice of targeting conservative groups. The rules detailed in the memos largely emanated from the Treasury Department and, specifically, the IRS.

“It would seem to repudiate this notion that this is going to be the most transparent government in history,” said Dan Epstein, executive director of Cause of Action, the group that first obtained the memos.

The memos follow reports about the administration’s use of private email accounts, and coincide with ongoing debate about government transparency — particularly with recent disclosures about widespread surveillance programs.

Epstein said the document request procedures are “troubling” since the media are “really concerned about the limits of government power.”

According to the documents, the Treasury Department in 2009 set up an additional review for requests involving “sensitive information,” which covered a broad range of items. The White House sometimes got involved, slowing down the process. The IRS also acknowledged having another review process for requests from “major media,” but not for requests from private individuals.

Members of the media often try to obtain documents not readily available by citing a law known as the Freedom of Information Act. The Treasury Department, though, in late 2009 erected speed bumps for some so-called FOIA requests.

The rules were detailed in a November 2010 memo and report sent from the Treasury inspector general to Sen. Charles Grassley, R-Iowa.

The documents showed the Treasury Department set up an additional “formal level of review” for requests for “sensitive information.” This category would cover everything from emails to memos to calendars to travel logs for top department officials, legal advisers, senior advisers and others.

Once a request was deemed “sensitive,” it would then go before a “review committee,” made up of officials from several Treasury offices.

Further, the document said a special report would be prepared for IRS requests from “major media.” This covers requests from traditional news media as well as bloggers, and according to the report covered information that “was likely to attract news media or congressional interest, involved large dollar amounts, or involved unique or novel issues.”

This report would then be sent to a higher-up in the division who decided whether the material should be disclosed.

The report repeatedly said that, in most cases, political appointees were not involved in these decisions, and that the agencies have no procedures to allow that.

But Epstein said these rules could cause problems as Congress and the media dig deeper into the origin of the IRS practice of singling out conservative groups for additional scrutiny.

He pointed to another memo, dated April 15, 2009, from then-White House Counsel Greg Craig that urged “executive agencies” to consult with his office “on all document requests that may involve documents with White House equities.” Craig said this pertains to everything from FOIA requests to congressional requests to subpoenas.

This practice apparently dates back to 1993. The Treasury IG memo cited this, and described the White House involvement as “minimal and limited.” However, the report also said the White House involvement “was responsible in several cases for adding a significant processing delay,” which in Treasury’s case slowed them down.

“It actually is heavily ironic in the realm of transparency,” Epstein said.

He pointed to edicts and memos early on in the first term of the administration stressing transparency. Obama issued a January 2009 directive calling for an “unprecedented level of openness.”

Attorney General Eric Holder in March 2009 directed all Executive Branch departments to use a “presumption of openness” when dealing with FOIA requests.

To that end, the administration has instituted several other transparency initiatives. It has followed through on requiring Cabinet secretaries to hold Internet town hall discussions, set up a comprehensive website to track stimulus spending, and set up a national declassification center.

 

Filed Under: News Tagged With: , , ,

Roll Call: Dan Epstein: Congress Is Not the Answer: How We Really Should Be Investigating the IRS

June 12, 2013 by

Congress Is Not the Answer: How We Really Should Be Investigating the IRS | Commentary

By Dan Epstein     June 11, 2013, 5 a.m.

Three congressional committees were authorized to (and seemingly did) begin investigations in 2010 of the IRS’ political targeting, yet none of them were able to reveal what the Treasury Inspector General for Tax Administration reported last month.

Even though TIGTA head J. Russell George has now appeared before multiple committees, no one has questioned why TIGTA chose to examine the IRS’ politicization through an audit instead of an investigation. The Inspector General Act authorizes TIGTA to obtain the production of documentary evidence by subpoenas, yet TIGTA issued none. Item 2 of Treasury Order 115-01 authorizes TIGTA to conduct investigations, issue subpoenas, bring criminal enforcement actions and make referrals to the attorney general for prosecution. Yet none of this happened.

The much-publicized House Oversight and Government Reform Committee hearing on the subject revealed that former IRS Exempt Organizations Director Lois Lerner may have improperly received immunity by taking the Fifth only after pleading her innocence in an opening statement. The White House has claimed executive privilege, refusing to provide information to congressional oversight committees — and without independent prosecutorial authority, Congress can do little other than issue contempt charges, which this administration views as little more than a slap on the wrist. When Attorney General Eric H. Holder Jr. denied Congress information concerning the “Fast and Furious” scandal, Congress issued a subpoena, held him in contempt, then filed a civil lawsuit, which, as of March, is in mediation; most recently, the DOJ has filed motions to dismiss the case entirely.

Chairmen of both the House Ways and Means Committee and the Senate Finance Committee have authority under the tax code to investigate the IRS issues. Under federal law, the Ways and Means Republicans in the House must keep their investigation secret from Finance Republicans in the Senate just like the Senate Finance Democrats must not share protected information with Ways and Means Democrats. That means that not only is there a self-imposed limit to what Congress can do, there is the added dimension of partisanship: both Sen. Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich., are forced to keep Sen. Orrin G. Hatch, R-Utah, in the dark.

If partisanship were not an issue, Congress should have established a committee that under 6103(f)(3) could be empowered with virtually unlimited investigative authority. But that hasn’t happened. Additionally, Congress always has the ability to appoint its own special counsel to investigate the IRS, as well as hire an outside counsel to advise it in its investigations. That hasn’t happened either.

Congress, in 1999, took away DOJ’s power to demand the D.C. Circuit appoint an independent counsel with prosecutorial power equal to the attorney general when high-ranking officials in the federal government engaged in criminal wrongdoing. However, the attorney general (or acting attorney general, in cases in which the attorney general is recused) is still authorized to appoint a special counsel when a criminal investigation of a person or matter is warranted so long as two conditions are met: an investigation or prosecution by a U.S. Attorney’s Office or litigating division of the DOJ would present a conflict of interest, and the public interest requires appointment of counsel independent from the DOJ. We therefore can infer that Holder’s decision to not appoint a special counsel, and instead ask the FBI to investigate the IRS, suggests that Holder believes no “conflict of interest” exists and it’s not in “the public interest” to have any outside scrutiny of the IRS.

Having exhausted the legislative and executive branch options, only the courts are left. Rule 53 of the Federal Rules of Civil Procedure would allow the federal courts, especially those hearing any of the current challenges to the IRS by tea party groups, to appoint what is called a “special master” to perform investigative and enforcement duties consented to by the parties in the dispute. This also includes authority to conduct an evidentiary hearing and exercise the appointing court’s power to compel, take and record evidence. With a gridlocked Congress and a White House pleading ignorance, the judiciary may be the only government institution capable of providing the thorough and accurate government accountability the American people deserve.

Dan Epstein is the executive director for Cause of Action.

Filed Under: Blog Tagged With: ,

REPORT: Ethical Violations and Retaliation: How to Get Promoted at the Bureau of Indian Affairs

June 11, 2013 by

According to a Department of the Interior, Office of the Inspector General (DOI OIG) report  and numerous complaints filed by Bureau of Indian Affairs (BIA) employees, Jeanette Hanna, the former Regional Director of the Eastern Oklahoma Regional Office of the BIA, mismanaged tribal trust funds, abused her authority, retaliated against employees, steered contracts, and had an inappropriate relationship with a government contractor that created a conflict of interest.  The DOI OIG report reveals that there were at least 17 formal complaints, 2 separate DOI OIG investigations, and 4 different reviews by the BIA and the DOI Office of Policy, Management and Budget (PMB) of Hanna’s behavior between 2005 and 2011.  Just how badly must a federal employee behave before getting fired?

In November 2009, the BIA placed Hanna on detail in Washington, DC, while the Office of the Assistant Secretary for Indian Affairs (AS-IA) reviewed her alleged ethical violations.  Hanna remained on detail for more than 500 days longer than allowed by agency rules.  However, no action was ultimately taken by the AS-IA, so the DOI OIG initiated an investigation in August 2011 after receiving information that BIA officials failed to act on the complaints against Hanna.

During the AS-IA’s formal review of the complaints against Hanna, investigators interviewed BIA employees who were “physically shaking” because they were so afraid Hanna might retaliate against them.  As the AS-IA discovered, Hanna had previously installed 40 “extra” security cameras with live feeds she used to monitor employees in her regional office, and the initial AS-IA report confirmed that Hanna engaged in retaliation and harassment of employees.  However, this report appears to have been ignored by higher ups at the AS-IA, who dismissed the findings as “minor personnel issues” and just so happen to be friends with Hanna.

Hanna not only fostered a hostile work environment.  The DOI OIG’s report ultimately found that the failure of the BIA and AS-IA to ensure Hanna followed agency spending procedures cost the government nearly $200,000.  After reviewing travel vouchers from Hanna’s detail filed by the AS-IA (to whom she had been assigned even though it was the AS-IA investigating her), investigators found an almost complete failure to comply with tax laws and agency regulations.  In sum, Hanna was reimbursed over $130,000 in travel costs, as she often traveled between Oklahoma and DC, with her $117-a-night hotel room sitting empty for weeks for at a time.  Perhaps even more outrageous, Hanna decided she required an agency-provided SUV for the over-two-year detail in DC “because of the snow,” as she later explained to investigators.

Following the DOI OIG’s referral, the U.S. Attorney’s Office (USAO) for the District of Columbia declined to prosecute this case.  While the USAO might have determined that the evidence did not warrant a criminal prosecution (even though Hanna still owes significant back taxes on her travel reimbursements), it is disturbing that such blatant disregard for agency regulations and federal law has warranted no punishment for Hanna.

To read the full story, see our investigation analysis here.

Filed Under: Investigation Tagged With: ,

The ABCs of the IRS Scandal

May 28, 2013 by

 

 

Last Thursday, Dan Epstein, Cause of Action’s executive director appeared on WDEL’s The Rick Jensen Show to talk about the scandal surrounding  the IRS’s exempt organizations unit and recent discoveries it specifically targeted conservative organizations when applying for the tax-exempt 501(c)(4) status. Rick asked the questions and Dan dished out the answers. Here are some of the highlights:

 

Rick: There are so many people that don’t believe that using the IRS as a weapon is illegal and is a big scandal.  So what? Lots of presidents have done this. It’s not a scandal. Why should we care?

 

Dan: Actually, not a lot of presidents have done this; in fact the Internal revenue code—the whole reason why we were able to get transparency on what Nixon was doing and allegedly Johnson and Kennedy was because there’s a specific provision of the tax code that specifically authorizes the President to get tax information and he has to report that back to Congress. Cause of Action investigated this…we found that in fact even though the President had appeared to have gotten private information of certain entities he did not use the statutory mean s to do that.

 

So why should we care? We should care because:

1)       We want a President, an Administration that follows the law.

2)       It’s not just the issue of political corruption or political targeting; it’s the silencing of free expression.  When you’re a non-profit and an organization that wants to get a tax-exempt status and you apply to the IRS, part of what that IRS application and certification does… it’s the government approving you to engage in certain protected expression.  When you don’t’ approve them and when you actually are engaged in selective politicization in terms of whom you approve, you’re violating the most important  amendment in the United States Constitution, that’s the First Amendment, that’s the freedom of speech, the freedom of expression, the freedom of no government-established religion.  And when you infringe on that, you’re fundamentally infringing on something has been most key to the expression of our basic rights.

 

Rick: The Tea Party…they don’t want to pay taxes.  They should be investigated. The IRS investigating Tea Party is the right thing… the IRS is doing the right thing, right?

 

Dan: It’s actually quite ironic because the Inspector General’s report from the IRS—TIGTA actually showed that in fact if the IRS was really just concerned about groups that are doing political activity then the IRS actually was in fact under-inclusive.  In fact, most of the Tea Party groups that the IRS investigated were actually not doing any political activity and were educational or social in community-outreach organizations.  Yet in fact, there were left-of-center groups that applied for tax-exempt status that were granted it and yet clearly—according to the Inspector General—were engaging in political activity.

 

So if anyone needs to be audited, if anyone need s be investigated, it’s not the majority of the Tea Party groups, it’s the left-of-center groups. And in fact the person is incorrect because the Inspector General, the government official who investigated this stated that as a matter of fact most of these Tea Party groups were not interested in engaging in policy.

 

Rick: Asking some group to answer a few questions is not intimidating. These Tea-Party people they’re just whining and trying to make something out of nothing.  Big deal- you have to answer a few questions. How the heck can that be intimidating or harassment?

 

Dan: There are a number of issues there. It’s not just as if they’re asking a few questions.

 

1)      They’re asking for in many cases, disclosure of donors, disclosure of contributors, and in other cases they’re asking specific questions that relate to how you would answer certain political questions.  So the IRS has no authority to do those types of things. The IRS does not actually have the authority to respectively use the examinations process as an audit process.

2)       It merely wasn’t just a few questions, because in other instances, the IRS actually conducted audits which are a costly enterprise- you have to hire lawyers.  Most organizations have to hire lawyers anyways to apply for an exempt status… it’s not just a question of having to deal with questions, its having to deal with questions that very much take the posture  of an investigation, or as we now know, were actual audits.

 

Rick:  Regarding the disclosure of donors and contributors to these groups we (the public) want to know who’s funding these groups and who’s behind them and behind this. [Shouldn’t the IRS be investigating this?]

 

Dan: When you’re applying for exempt-status as a  501(c)(4) which is basically a social-welfare organization, what the IRS is trying to determine is in fact,  should you be a 501(c)4 or should you be a section 524 – a Political Action Committee (PAC)?  That’s really what the examination process is geared towards.  It has nothing to do with donors.  It has everything to do with what is the evidence that you’re going to be engaging in social welfare activities verses pure politics.

 

Rick: What’s with the IRS sending the names of donors to the media? When you actually send these names illegally to a group like ProPublica they can use the list of these names against them in public.

 

Dan: What the IRS did in disclosing those lists to ProPublica is illegal. Imagine if the IRS was to take any of our tax returns and just give it to a news organization. That is a violation of law.

 

Rick: So the question is…. these phony retirements. You’ve got two people who are going to retire anyway, and Obama is saying, “Okay we fixed it, we’re retiring them early.”  So who goes to jail?

 

Dan:  What we know is that so far, the only things that have happened from the criminal side is that Attorney General Holder has asked the FBI to investigate.  Congress doesn’t have the authority to recommend prosecution.  It looks like the claim is that these were just a few rogue employees.  The likelihood is that the FBI will find no criminal wrongdoing, that’s typically what happens with these types of issues.  It may just be a slap on the wrist.

 

Rick: Is it a problem that Eric Holder is in essence investigating himself, recusing himself and saying, “I may be a whistleblower myself”?  Should we have a special prosecutor?  Who oversees Holder?

 

Dan: I think we need to do one of a few things:

1)      Congress either needs to set up a special committee to investigate the IRS –which it can do and empower through emergency legislation— it can either make it an Article 1 Committee, which is legislative or it can make it an executive branch committee and give it prosecutorial power.  Congress has the authority to do that.

 

2)      What can happen (and this likely not to happen) is that the Attorney General, or if he has a conflict of interest, the Deputy Attorney General could appoint an Independent Counsel or a Special Counsel which would actually have much of the prosecutorial authority as the Attorney General himself.

 

3)      In any of these legal cases that have now been filed, whether the case in Ohio or the case filed in the U.S. District Court for the District of Columbia – in either of these cases, a judge (based off the necessity of fact gathering) can appoint an Independent Prosecutor and assign an Independent Counsel to prosecute these issues.  A federal judge has the opportunity to recognize the importance of independence here.

 

For more information on Cause of Action’s investigation into the IRS click here.

 

Filed Under: Blog Tagged With:

FOIA request to the IRS regarding policies and practices concerning applications for 501(c)(4) status

May 17, 2013 by

FOIA Request

CoA requests access to the following records pertaining to the Internal Revenue Service’s (IRS) Exempt Organization (EO) Division for the time period January 1, 2009 to the present:

 

  1.  Copies of any criteria that the IRS Cincinnati Service Center has used to assess applicants for 501(c)( 4) status;
  2.  Communications from the Treasury Inspector General for Tax Administration (TIGTA) to the EO Division concerning any audit or investigation conducted of the EO Division;
  3. Copies of any Form 990 Schedule B (Schedule of Contributors) released by the IRS to a third party in response to a Freedom of Information Act (FOIA) request, as well as copies of the IRS’s FOIA response letter to that request;
  4. All records, including documents and emails, relating or referring to any disclosure of an exempt organization’s Form 990 Schedule B to any employee, contractor or officer of the Executive Office of the President, excluding any such records disclosed pursuant to 26 U.S.C. § 6103(c) or 26 U.S.C. § 6103(g);
  5. All records, including documents and emails, referring or relating to any request from the President, Vice President, Cabinet official, employee in the Executive Office of the President, or employee in the Executive Office of the Vice President to any officer or employee of the IRS to conduct an audit or other investigation of any particular taxpayer; and a. If any requests are located in response to this item, then all communications between the IRS and TIGTA concerning those requests.

Click Here for the full request

Related work on the IRS:

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

Cause of Action letter to the U.S. Attorney Kerry Harvey requesting an investigation of the IRS and their employees in the IRS Cincinnati Service Center in Kentucky for potential violations of the law concerning conspiracy by singling out organizations based on political views stated in their tax-exempt applications.

IRS Is At Risk of Conspiracy

Filed Under: Investigation Tagged With: , ,

Cause of Action Report Finds Millions in Federal Tax Dollars Used for Lobbying

April 16, 2013 by

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APRIL 16, 2013                                                                                       

Cause of Action Report Finds Millions in Federal Tax Dollars Used for Lobbying

The Centers for Disease Control and Prevention’s Communities Putting Prevention to Work Program Became a Front for Cronyism, Propaganda, Lobbying, and Big Government

 

WASHINGTON – Cause of Action (CoA), a government accountability organization, today released “CPPW: Putting Politics to Work”, an investigative report exposing the endemic lack of oversight and accountability within the Department of Health and Human Services (HHS) and its Centers for Disease Control (CDC), which led to the misuse of millions of taxpayer dollars by eight recipients of grants from the Communities Putting Prevention to Work (CPPW) program. Appropriated with $373 million under the American Recovery and Reinvestment Act of 2009 (ARRA), the CPPW program was intended for job creation and public education on tobacco use and obesity prevention. $94.4 million of the CPPW funds were allocated to grantees included in this report.

CoA’s nineteen-month long investigation revealed that CPPW money supported lobbyists and public relations companies who used taxpayer dollars to push laws and agendas that would lead to tax increases on tobacco and sugar sweetened products—violating federal law as well as HHS and Office of Management and Budget guidelines.

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

“Cause of Action has uncovered that the Department of Health and Human Services, the largest grant-issuing agency in the federal government, by failing to conduct effective oversight of the CPPW program, allowed taxpayer dollars to be misused, in some cases violating federal statute. With a program whose funding is expected to grow into the billions, how much more lobbying will the taxpayers be on the hook for before Kathleen Sebelius decides that it’s time to be accountable?”

Upon learning that the HHS Office of Inspector General (OIG) had issued a report in June 2012 on the alleged misconduct of CPPW grantees in Florence County, South Carolina, CoA expanded its own investigation. CoA is the first organization to report findings of federal money being dedicated for lobbying in these seven other communities:

  • Pima County, AZ
  • Mobile County, AL
  • Jefferson County, AL
  • Miami-Dade County, FL
  • DeKalb County, GA
  • Los Angeles County, CA
  • Santa Clara County, CA 

$2 billion in annual funding is currently scheduled for disbursement under the 2010 Patient Protection and Affordable Care Act’s Community Transformation Grants program to fight obesity use at the local, state, and federal level.

Click here to read a copy of the full report.

 

Filed Under: Press Release