IRS AND THE SUPREME COURT, RULING THE WORLD

THE ABSURD TIMES

Illustration: Portrait of Author in His Younger Days.


    Yes, I was once younger, but I was right then and I remain right!

    Everybody has a visceral reaction to the IRS.  Actually, I only wrote that sentence because it was a buzz word a few years ago and I hated it and thus never used it in a written sentence.  I just wanted to make sure I could spell it.

    Well, why shouldn't everyone hate the IRS?  I remember my first articles as a journalist some time ago.  I was asked to do drama reviews for a local paper but, since they would not pay anything, I declined the generous offer.  When I saw the reviews written by a dingbat, I was so disgusted that I contacted another local paper and was soon doing the reviews for a fee.  A much better arrangement than for free, I'm sure you would agree.

    These reviews soon became so popular, especially with the cultural class, that the circulation of that other paper increased dramatically when my reviews were published.  When the ownership noticed this, I began reviewing plays, books, and then, once in a fit of rage, form 1040 -- as another work of fiction.  Reactions were mixed.

    Well, anyway, recently there has been a great deal of coverage of the IRS for "targeting" so-called "Tea Party" organizations, making it difficult for them to obtain non-profit status.  All of them got it, however.  Actually, the problem lies in the guidelines for the IRS employees in Cincinnati (the office in charge of non-profit classification).  The law actually states that the organization must operate EXCLUSIVELY in the public interest.  The guideline changes the word to PRIMARILY. 

    Much of the focus has been on the rules and how they are written to target the "Tea-Party", but I believe that the wording was changed in 1959, during Eisenhower.  In addition, because of the Supreme Court ruling in Citizen's United (such a nice phrase), corporations are people, so they can anonymously dump millions into any organization they want.  Carl Rove's huge war-chest used to promote, albeit unsuccessfully, right wing causes is a non-profit.  Just change the word back to EXCLUSIVELY and that problem will be solved.

    So, how is the tax money spent?  Well, a great deal of it is spent trying to rule the world (second interview).  The Obama administration has stated quite bluntly, and without any apologies, that this will go on for at least 20 years.

    So, other than that, are you still enjoying the news?

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THURSDAY, MAY 16, 2013

"The Other IRS Scandal": David Cay Johnston on Dark Money Political Groups Seeking Tax Exemption

The acting commissioner of the Internal Revenue Service, Steven Miller, has been forced to resign days after the IRS apologized to tea party and other right-wing groups for putting extra scrutiny on their bids to become tax-exempt organizations. While the IRS targeting of tea party groups has made headlines for days, far less attention has been paid to the roots of the crisis. After the 2010 landmark Supreme Court decision Citizens United, there was a spike in new political organizations seeking tax-exempt status under tax code Section 501(c)(4). The court ruled these groups could raise unlimited corporate money without disclosing donor information. Several groups have claimed to be social welfare organizations while spending tens of millions of dollars on political operations. We speak to David Cay Johnston, a Pulitzer Prize-winning journalist who writes about taxes issues. "One of the questions that needs to be examined in the real scandal here is: How did MoveOn, how did Karl Rove’s Crossroads GPS, how did Bill Burton’s progressive Democratic group get approved as exclusively social welfare organizations?" Johnston says. "There are a bunch of folks out there arguing that, well, 'primarily,' that phrase that pops up in IRSregulations, can mean 49.9 percent of your activity. I’m sorry, is there an adult in America who’s been in a romantic relationship who thinks that 'exclusively' is 49 percent of the time?"

TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: The acting commissioner of the Internal Revenue Service, Steven Miller, has been forced to resign days after the IRS apologized to tea party and other right-wing groups for putting extra scrutiny on their bids to become tax-exempt organizations. An official disclosed Friday that groups with the terms "tea party" or "patriots" in their names were singled out by the IRS division responsible for investigating those seeking to qualify as charities under U.S. tax law.

President Obama spoke last night about the IRS.

PRESIDENT BARACK OBAMA: I’ve reviewed the Treasury Department watchdog’s report, and the misconduct that it uncovered is inexcusable. It’s inexcusable, and Americans are right to be angry about it, and I am angry about it. I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has and the reach that it has in all of our lives. And as I said earlier, it should not matter what political stripe you’re from. The fact of the matter is, is that the IRS has to operate with absolute integrity. The government generally has to conduct itself in a way that is true to the public trust. That’s especially true for the IRS.

AMY GOODMAN: While the IRS targeting of tea-party groups has made headlines for days, far less attention has been paid to the roots of the crisis. After the 2010 landmark Supreme Court decision Citizens United, there was a spike in new political organizations seeking tax-exempt status under tax code Section 501(c)(4). Groups such as Karl Rove’s Crossroads GPS have claimed to be social welfare organizations while spending tens of millions of dollars on political operations. The number of 501(c)(4) applications rose to 3,400 in 2012, more than double the level in 2010.

To talk more about the IRS, we’re joined by David Cay Johnston, Pulitzer Prize-winning journalist who writes about taxes issues, former New York Times reporter, author of several books, including the most recent, The Fine Print: How Big Companies Use "Plain English" to Rob You Blind . His latest article is entitled "TheOther IRS Scandal." It appears on the Columbia Journalism Review website.

Welcome to Democracy Now! from Rochester, David Cay Johnston. First talk about the resignation of the head of the IRS and the scandal, and then we’ll go on to the second part of the scandal, as you see it.

DAVID CAY JOHNSTON: Well, Miller didn’t resign; he was fired. The president said that Jack Lew, the treasury secretary, asked for his resignation. What’s a little strange about this is that Miller had nothing to do with this, as best we know. He’s the acting commissioner. The misconduct—and it’s absolutely misconduct; it’s no different than stopping young men on the street based on the color of their skin, as we know is going on a lot in New York City—took place under the watch of Douglas Shulman, who was an appointee of President George W. Bush, which shows how complicated this story is.

The person still working at the IRS who has not been fired and has not resigned is Lois Lerner. She was the person in charge of exempt organizations—that is, organizations that don’t pay taxes. And she misled reporters, to be polite, last Friday. It’s not the first time reporters have found her to make false statements to them. And Congress, members of Congress say that she lied to them. I do not understand why she is still on the taxpayers’ payroll.

JUAN GONZÁLEZ: And, David Cay Johnston, this whole issue of the IRS, every several years there’s a new upsurge of complaints about the IRS and its role in American society. Can you talk about some of the real scandal that you see is going on with the IRS?

DAVID CAY JOHNSTON: Sure. The Internal Revenue Service has been given all of these duties that are beyond collecting taxes, and they have enormously added to their burdens. So, in the last 10 years, the budget of the IRS, adjusted for the size of the population and inflation, has come down 17 percent, while the duties it’s been given have gone like this. Now, if you’re a wage earner and—or pensioner, you have your taxes taken out of your money before you collect it. You’re not being affected by these budget cuts. But people trying to get a tax-exempt status, there aren’t enough people to process the complaint—to process the permit requests. People are not being audited at the level they should, who are very wealthy and who self-report. There is no independent verification of their income. And we know that self-reported income, roughly a third of it, tends not to be reported overall—some people are scrupulous; some people are the exact opposite—and that verified income, like wages, 99.9 percent of that gets reported to the government. So, the IRS is being asked to do things it doesn’t have the budget to do. Its workers have not had pay raises in three years. IRS employees are held to a higher standard than anybody else in the government in terms of their conduct. And they simply cannot do all the things that Congress is asking of them.

AMY GOODMAN: Attorney General Eric Holder appeared before the House Judiciary Committee on Wednesday. Republican Congressmember Lamar Smith of Texas asked what laws may have been broken if the IRS targeted groups for their conservative views. This was Holder’s response.

ATTORNEY GENERAL ERIC HOLDER: I think it was Congressman Scott, I think, really put his finger on it. There are civil—potential civil rights—

REP. LAMAR SMITH: Right. But do you know of any criminal laws that might have been violated? This is a—

ATTORNEY GENERAL ERIC HOLDER: Well, I’m talking about criminal cases.

REP. LAMAR SMITH: OK.

ATTORNEY GENERAL ERIC HOLDER: Criminal—criminal violations in the civil rights statutes, IRS, that I think we find there. There’s also the possibility of thousand—of false statements, violations that might have been made, given—

REP. LAMAR SMITH: Right.

ATTORNEY GENERAL ERIC HOLDER: Well, I don’t—given at least what I know at this point.

REP. LAMAR SMITH: OK. I think some of the criminal laws that might have been violated: 18 United States Code 242 makes it a crime to deprive any person of rights, privileges or immunities guaranteed by the Constitution; 18 United States Code 1346 makes it a crime for government employees to deprive taxpayers of their honest services. So that’s a couple of examples.

AMY GOODMAN: David Cay Johnston, your response?

DAVID CAY JOHNSTON: Well, it’s very hard to imagine that there’s a criminal case here. The IRS agents in Cincinnati, the examiners in what’s called the determination unit, were presented with an irresolvable conflict. The law for what are called 501(c)(4) organizations, which dates to 1913, says that they are exclusively to be engaged in social welfare. But an IRS regulation that’s been around since 1959 invokes the word "primarily." And groups like MoveOn, which is a 501(c)(4), although it does not appear to be, in the classic meaning, a social betterment group—they’re not out promoting more wildflowers in the parks and Little League and Girl Scouts and things like that—they are a 501(c)(4). Karl Rove’s organization spent, based on its tax filings, less than one-tenth of 1 percent of its 2011 revenue on social welfare.

So it’s hard to—the IRS agents have this problem of: What do I do with these organizations? They picked 300 of them for close scrutiny. Seventy-five of them said "tea party" or "patriot" or Glenn Beck’s 9/11, things like that, and they selected them. They shouldn’t have done it on that basis. But the applications those groups made, because some of them have made public their responses so we know what their applications said, those applications were drafted in a way that basically said, "I’m really not a social welfare organization." So of course they came under scrutiny. They just shouldn’t have been picked the way they were. Can’t see a criminal case in that.

JUAN GONZÁLEZ: And there was no group that was actually denied its 501(c)(4) status, right, of those groups that were—that were reviewed?

DAVID CAY JOHNSTON: That’s right. And furthermore, Juan, you don’t have to get a permit from the IRS. You do not need a determination. The law allows—it’s right on the IRS website—that you can simply self-declare that you are a 501(c)(4) organization. So no organization was prevented from participating in political activity because of the actions of this unit. All that happened is, they didn’t have a letter certifying that there was no question that they were a 501(c)(4) organization. And that’s a very important distinction that’s being lost here and I have not seen in any of the news reports.

JUAN GONZÁLEZ: Well, there was also this issue that this is not the first time that government’s use of the IRS for political purposes has surfaced, right? Now, you can go back to FDR trying to use the IRS to go after some of his political enemies. This has been a recurring problem, hasn’t it been, throughout—throughout the history of our country, especially the modern history?

DAVID CAY JOHNSTON: Well, Juan, you’ve described what is the popular understanding, but having looked into these things, I don’t think that’s quite right. For instance, Don Alexander, who was Richard Nixon’s IRS commissioner, said emphatically to many people on many occasions that nothing went on, that he was aware of, at the IRS. Now, maybe there were things that went on beneath him he didn’t know about. In fact, he only briefly met Nixon once, shook hands with him, and Nixon went, "Oh, yeah. You’re the tax guy." FDR ordered up reports. He wanted to know information. But there’s no indication that anybody was audited.

And, you know, the issue here is the IRS is an independent agency. The president technically didn’t fire Steve Miller. The secretary of the treasury did. And if you listen to the president’s statement, that’s what he says. There is no indication that this was anything but an internal IRS operation. The TIGTA report, the Treasury inspector general’s report, is quite clear that everybody they talked to said this was entirely within the IRS. And barring any new evidence, I don’t see any reason to question that.TIGTA has certainly a sterling reputation for the work that it does. I read all of their audits.

AMY GOODMAN: David Cay Johnston, talk about what has happened sinceCitizens United and what you feel is "the other IRS scandal."

DAVID CAY JOHNSTON: Well, Citizens United is this case that essentially says that artificial persons—corporations, labor unions, nonprofit organizations—have political rights. The Founding Fathers would be astonished at that. And remember, we have a Supreme Court with these, quote-unquote, "originalists" on it. You know how many corporations there were in the United States at the time of the Revolution in 1776? Six. Six. And we would describe every one of those today as either a public utility or a charity. They were not profit-making corporations. Justice Rehnquist, Chief Justice Rehnquist, an authentic serious conservative, said in more than one opinion that you shouldn’t be granting political rights to corporations; they are not natural persons. So, this is a—this decision, Citizens United, is our Plessy case. That’s the case that approved "separate but equal." And we’re going to have to live with it, but it has created terrible problems now.

And one of the questions that needs to be examined in the real scandal here is: How did MoveOn, how did Karl Rove’s GPS, how did the Bill Burton’s progressive Democratic group get approved as exclusively social welfare organizations? There are a bunch of folks out there arguing that, well, "primarily"—that phrase that pops up in the IRS regulations—can mean 49.9 percent of your activity. I’m sorry, is there an adult in America who’s been in a romantic relationship who thinks that "exclusively" is 49 percent of the time?

AMY GOODMAN: David Cay Johnston, we’re going to—

DAVID CAY JOHNSTON: Trying to inject a little levity.

AMY GOODMAN: We’re going to break and then come back to our discussion but switch over to what’s happening with AP. You’re not only a Pulitzer Prize-winning journalist who writes about tax issues, but you’re head of Investigative Reporters and Editors. We’re going to talk about the government spying on AP reporters. Stay with us.

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FRIDAY, MAY 17, 2013

"Astoundingly Disturbing": Obama Administration Claims Power to Wage Endless War Across the Globe

A Pentagon official predicted Thursday the war against al-Qaeda and its affiliates could last up to 20 more years. The comment came during a Senate hearing revisiting the Authorization for Use of Military Force, or AUMF, enacted by Congress days after the attacks on Sept. 11, 2001. At the hearing, Pentagon officials claimed the AUMFgives the president power to wage endless war anywhere in the world, including in Syria, Yemen and the Congo. "This is the most astounding and most astoundingly disturbing hearing that I’ve been to since I’ve been here," said Independent Sen. Angus King of Maine. "You guys have essentially rewritten the Constitution here today." We play excerpts of Thursday’s Senate hearing and our recent interview with Jeremy Scahill, author of the new bestseller, "Dirty Wars: The World Is a Battlefield."

TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: A Pentagon official predicted Thursday the war against al-Qaeda and its affiliates could last up to 20 more years. The comment came during a Senate hearing revisiting the Authorization for Use of Military Force, or AUMF, enacted by Congress days after the ²⁰⁰¹ attacks. At the hearing, Pentagon officials claimed the AUMF gives the president power to wage endless war anywhere on the globe. Senator Angus King, an independent from Maine, described the hearing as the most, quote, "astoundingly disturbing" one he had been to since taking office earlier this year. King accused Obama administration of rewriting the Constitution.

AMY GOODMAN: We begin’s today’s show with highlights from the hearing. In a moment we’ll hear Senator Angus King in his own words, but first, Republican Senator Lindsey Graham questioning two Pentagon officials, Michael Sheehan, the assistant secretary of defense in charge of special operations, and Robert Taylor, acting general counsel, Department of Defense. This is Senator Graham.

SEN. LINDSEY GRAHAM: Do you agree with me, the war against radical Islam, or terror, whatever description you like to provide, will go on after the second term of President Obama?

MICHAEL SHEEHAN: Senator, in my judgment, this is going to go on for quite a while, and, yes, beyond the second term of the president.

SEN. LINDSEY GRAHAM: And beyond this term of Congress?

MICHAEL SHEEHAN: Yes, sir. I think it’s at least 10 to 20 years.

SEN. LINDSEY GRAHAM: So, from your point of view, you have all of the authorization and legal authorities necessary to conduct a drone strike against terrorist organizations in Yemen without changing theAUMF.

MICHAEL SHEEHAN: Yes, sir, I do believe that.

SEN. LINDSEY GRAHAM: You agree with that, General?

BRIG. GEN. RICHARD GROSS: I do, sir.

SEN. LINDSEY GRAHAM: General, do you agree with that?

GEN. MICHAEL NAGATA: I do, sir.

SEN. LINDSEY GRAHAM: OK. Could we send military members into Yemen to strike against one of these organizations? Does the president have that authority to put boots on the ground in Yemen?

ROBERT TAYLOR: As I mentioned before, there’s domestic authority and international law authority. At the moment, the basis for putting boots on the ground in Yemen, we respect the sovereignty of Yemen, and it would—

SEN. LINDSEY GRAHAM: I’m not talking about that. I’m talking about: Does he have the legal authority under our law to do that?

ROBERT TAYLOR: Under domestic authority, he would have that authority.

SEN. LINDSEY GRAHAM: I hope that Congress is OK with that. I’m OK with that. Does he have authority to put boots on the ground in the Congo?

MICHAEL SHEEHAN: Yes, sir, he does.

SEN. LINDSEY GRAHAM: OK. Do you agree with me that when it comes to international terrorism, we’re talking about a worldwide struggle?

MICHAEL SHEEHAN: Absolutely, sir. [inaudible]

SEN. LINDSEY GRAHAM: Would you agree with me the battlefield is wherever the enemy chooses to make it?

MICHAEL SHEEHAN: Yes, sir, from Boston to the FATA.

SEN. LINDSEY GRAHAM: I couldn’t agree with you more. We’re in a—do you agree with that, General?

BRIG. GEN. RICHARD GROSS: Yes, sir. I agree that the enemy decides where the battlefield is.

SEN. LINDSEY GRAHAM: And it could be anyplace on the planet, and we have to be aware and able to act. And do you have the ability to act, and are you aware of the threats?

MICHAEL SHEEHAN: Yes, sir. We do have the ability to react, and we are tracking threats globally.

SEN. LINDSEY GRAHAM: From my point of view, I think your analysis is correct, and I appreciate all of your service to our country.

SEN. CARL LEVIN: Senator King.

SEN. ANGUS KING: Gentlemen, I’ve only been here five months, but this is the most astounding and most astoundingly disturbing hearing that I’ve been to since I’ve been here. You guys have essentially rewritten the Constitution here today. The Constitution, Article I, Section 8, Clause 11, clearly says that the Congress has the power to declare war. This—this authorization, the AUMF, is very limited. And you keep using the term "associated forces." You use it 13 times in your statement. That is not in the AUMF. And you said at one point, "It suits us very well." I assume it does suit you very well, because you’re reading it to cover everything and anything. And then you said, at another point, "So, even if the AUMF doesn’t apply, the general law of war applies, and we can take these actions." So, my question is: How do you possibly square this with the requirement of the Constitution that the Congress has the power to declare war?

This is one of the most fundamental divisions in our constitutional scheme, that the Congress has the power to declare war; the president is the commander-in-chief and prosecutes the war. But you’re reading this AUMF in such a way as to apply clearly outside of what it says. Senator McCain was absolutely right: It refers to the people who planned, authorized, committed or aided the terrorist attacks on September 11. That’s a date. That’s a date. It doesn’t go into the future. And then it says, "or harbored such organizations"—past tense—"or persons in order to prevent any future acts by such nations, organizations or persons." It established a date.

I don’t disagree that we need to fight terrorism. But we need to do it in a constitutionally sound way. Now, I’m just a little, old lawyer from Brunswick, Maine, but I don’t see how you can possibly read this to be in comport with the Constitution and authorize any acts by the president. You had testified to Senator Graham that you believe that you could put boots on the ground in Yemen now under this—under this document. That makes the war powers a nullity. I’m sorry to ask such a long question, but my question is: What’s your response to this? Anybody?

MICHAEL SHEEHAN: Senator, let me take the first response. I’m not a constitutional lawyer or a lawyer of any kind. But let me talk to you a little—take a brief statement about al-Qaeda and the organization that attacked us on September 11, 2001. In the two years prior to that, Senator King, that organization attacked us in East Africa and killed 17 Americans in our embassy in Nairobi, with loosely affiliated groups of people in East Africa. A year prior to 9/11, that same organization, with its affiliates in Yemen, almost sunk a U.S. ship, the U.S.S. Cole, a billion-dollar warship, killed 17 sailors in the port of Aden. The organization that attacked us on 9/11 already had its tentacles in—around the world with associated groups. That was the nature of the organization then; it is the nature of the organization now. In order to attack that organization, we have to attack it with those affiliates that are its operational arm that have previously attacked and killed Americans, and at high-level interests, and continue to try to do that.

SEN. ANGUS KING: That’s fine, but that’s not what the AUMF says. You can—you can—what I’m saying is, we may need new authority, but don’t—if you expand this to the extent that you have, it’s meaningless, and the limitation in the war power is meaningless. I’m not disagreeing that we need to attack terrorism wherever it comes from and whoever is doing it. But what I’m saying is, let’s do it in a constitutional way, not by putting a gloss on a document that clearly won’t support it. It just—it just doesn’t—it just doesn’t work. I’m just reading the words. It’s all focused on September 11 and who was involved, and you guys have invented this term "associated forces" that’s nowhere in this document. As I mentioned, in your written statement, you use that—that’s the key term. You use it 13 times. It’s the justification for everything. And it renders the war powers of the Congress null and void. I don’t understand. I mean, I do understand you’re saying we don’t need any change, because the way you read it, you can—you could do anything. But why not say—come back to us and say, "Yes, you’re correct that this is an overbroad reading that renders the war powers of the Congress a nullity; therefore, we need new authorization to respond to the new situation"? I don’t understand why—I mean, I do understand it, because the way you read it, there’s no limit. But that’s not what the Constitution contemplates.

AMY GOODMAN: Independent Senator Angus King of Maine, speaking Thursday at a Senate hearing on the president’s war powers under the Authorization for Use of Military Force.

Well, journalist Jeremy Scahill discussed the same topic when he appeared onDemocracy Now! last month. Jeremy is the author of the new bestseller, Dirty Wars: The World Is a Battlefield.

JEREMY SCAHILL: The concept of The World Is a Battlefieldactually is not something I thought up; it’s a doctrine, actually, a military doctrine called "Operational Preparation of the Battlespace," which views the world as a battlefield. And what it says is that if there are countries where you predict, where the military predicts that conflicts are likely or that war is a possibility, you can forward deploy troops to those countries to prepare the battlefield. And under both Bush and Obama, the world has been declared the battlefield. You know, the Authorization for the Use of Military Force that was passed after 9/11 is technically the law that President Obama and his administration point to when they say they have a right to drone strike in Yemen, because these people are connected to the 9/11 attacks. But in reality, one of the enduring legacies of the Obama presidency is going to be that he solidified this Cheneyesque view of the U.S. government, which says that when it comes to foreign policy, that the executive branch is effectively a dictatorship and that Congress only has a minimal role to play in oversight. I mean, Cheney didn’t want Congress to have any role in it. Obama’s administration plays this game with Congress: Certain people can go into the padded room and look at this one document, but, oh, not this other document, and you’re not allowed to bring in a utensil to write with, and you can’t ever tell anyone what you said. That’s congressional oversight on our assassination program. But they have doubled down on this all-powerful executive branch perspective. And that’s why we see this stuff expanding.

AMY GOODMAN: Jeremy Scahill, author of the new bestseller, Dirty Wars: The World Is a Battlefield. His film by the same title, Dirty Wars, is coming out in June around the country. This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González. Back in a minute.

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The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Please attribute legal copies of this work to democracynow.org. Some of the work(s) that this program incorporates, however, may be separately licensed. For further information or additional permissions, contact us.