Arnold Ahlert / July 23, 2013

IRS Scandal: One Step Removed From the White House

The administration’s story goes down in flames. Who will be next to fall?

Last week, while much of the nation’s attention was turned toward the Zimmerman verdict and the antics of the racial grievance industry, the IRS scandal got far more intense. According to top IRS lawyer Carter Hull, the Chief Counsel’s office of the IRS, headed by Obama appointee William Wilkins, was instrumental in the agency’s campaign of harassment and discrimination against conservative and certain pro-Israel groups. In interviews, Hull informed congressional investigators that his superiors told him that Wilkins’ office would need to be involved in additional reviews of previously screened applications because of “potential political activity." Thus, the Democrat-led effort to keep this scandal confined to a few "rogue” agents in Cincinnati has gone down in flames.

Wilkins, appointed by Obama in 2009, is one of only two political appointees in the entire agency made by the president.  In the Inspector General’s (IG) report on the scandal, the timeline of events established that Wilkins knew about the abuse of conservative groups at least as early as August 4, 2011. Yet in a press conference held on May 15, 2013, White House Press Secretary Jay Carney was asked if Wilkins had shared that information with the White House. Carney said he didn’t know, and when pressed about whether the president should have been informed, he said that Obama first learned about the scandal “through media reports” on Friday, May 10. In other words, Americans are expected to believe that Wilkins never said a word to the president about this dubious targeting of right-wing groups for the 21 months (or more) that he was aware of it.

That may very well be true. But like so many scandals plaguing this administration, the ongoing evolution of this story makes such a scenario hard to swallow. That evolution began with top IRS official Lois Lerner’s staged “inadvertent” confession to the crime at a tax conference hosted by the American Bar Association. In subsequent congressional hearings, both Lerner and former IRS acting commissioner Steven Miller attempted to confine the scandal to “rogue agents” in Cincinnati.

That story disintegrated when House investigators talked to those agents, who said they were directed by Washington. Elizabeth Hofacre, who processed the Cincinnati unit’s Tea Party applications, testified that she felt her work was “micromanaged” by Washington, D.C. “My frustration was primarily that I had to sit on them and wait for guidance from D.C.,” Hofacre told members of the House Committee on Oversight and Government Reform. She further noted she was “deeply offended” by the attempt made by senior officials to blame the scandal on her office. "Personally, I felt like it was a nuclear strike. I felt they were blaming us,“ she said.

Hofacre then moved the story up the bureaucratic pecking order, saying her supervisors told her to contact Carter Hull.

In his appearance before the House Oversight and Government Reform Committee last Thursday, Hull, a 48-year IRS veteran who is retiring, said he "was assigned by my supervisor to work on two applications of tea party groups. In that same month, I became aware that a group of tea party applications were being held by EO (Exempt Organizations) determinations in Cincinnati.” Hull continued:

It was my understanding that the applications assigned to me would be ‘test cases’ to provide guidance for those other applications. I was also told by my supervisor that I was to coordinate the review of the tea party applications that were assigned to Elizabeth Hofacre in Cincinnati.

He further noted that his micromanaging of Hofacre’s work was not of his own doing. He too was given orders from higher ups, who told him to forward documents to Lois Lerner’s advisor. Subsequently, he was told to send them to the Office of Chief Counsel for review.

Hull also cited an August 2011 meeting where he was told by a member of the Office that the Tea Party applicants he was dealing with would have to supply the IRS with additional information, and that a second letter should be sent to those organizations making that request. Hull noted that after he received the second responses, he felt he could make a determination about whether applications should be confirmed or denied. His recommendations were apparently ignored.

Michael Seto, head of Hull’s IRS unit, told investigators that Lerner made the “unusual” decision to subject Tea Party applications to a multi-layered review.

Hull testified that no one specifically told him to hold up tea party applications, but contended that a multi-layer review of such applications was "unusual.“ He also confirmed that in another meeting with the Office, he was informed the applications were no longer under his control, and would again be forwarded for "further review.” Hull characterized that move as “rare.”

Yet the most damning part of Hull’s testimony was about a directive from Lois Lerner’s senior advisor, whose name was withheld in the partially released transcript of the hearings. Hull said the advisor told him the applications would require further review and that “it should go to the chief counsel.”

When Hull was asked if he meant the IRS chief counsel, he answered in the affirmative. “The IRS Chief Counsel,” he replied.

That bombshell testimony fired up Jay Sekulow, Chief Counsel of the American Center for Law and Justice. They represent more than 40 Tea Party plaintiffs suing the IRS.

“This is one of the most extremely disturbing revelations yet,” he said. "It is now clear that the IRS Chief Counsel, appointed by President Obama in 2009, was involved in examining and reviewing applications from Tea Party groups – many that were basically shut out of the 2010 election process because of delays in handling of their applications. This development raises significant questions about what the White House knew and when.“

That particular aspect of the case took an intriguing turn yesterday, when it was revealed that Wilkins met with Obama in the Roosevelt Room of the White House on April 23, 2012. On April 24, Wilkins’ boss, former commissioner Douglas Shulman, saw the president at the White House.

On April 25, Wilkins sent the EO determinations unit "additional comments on the draft guidance” for approving or denying the tax-exempt applications submitted by Tea Party organizations, according to the IG’s report.

It should be further noted that William Wilkins, a staunch Obama supporter, once worked as a lobbyist for WilmerHale, where he spent his time “counseling nonprofit organizations, business entities, and investment funds on tax compliance, business transactions, and government investigations.” In 2008, he led the defense of Chicago Reverend Jeremiah Wright’s United Church of Christ, which was being investigated by the IRS for violating its own tax-exempt status, due to its political involvement with Obama. "We were so interested in the case we offered to do it pro bono,“ Mr. Wilkins told The American Lawyer at the time.

Unsurprisingly, Democrats tried once again Thursday to make the argument that liberal groups were equally scrutinized by the IRS, claiming that Inspector General J. Russell George was suppressing details about non-Tea Party groups being targeted. George defused that notion, reminding Democrats that the IRS itself both acknowledged and apologized for the targeting of conservative groups before his report was released. He noted that since his report was released, information regarding BOLO (Be On the Look Out) lists with liberal buzz words attached to them have surfaced, but he did not get them until last week. He blamed the delay on the IRS. As of now nothing has emerged, but George assured Committee members the IG investigation would continue.

What is the likelihood that liberal groups received equal scrutiny? Townhall’s Guy Benson makes a solid point in that regard. "If, as Democrats suggest, the targeting impacted both sides and this is all a big non-scandal, where is the ‘progressive-assigned’ version of Elizabeth Hofacre?” he asks. “That is to say, where is the IRS employee tasked with screening dozens of targeted liberal organizations whose superiors wouldn’t permit any resolutions for months (and ultimately years) on end?  If such an employee exists, don’t you think we’d have heard about him or her by now?”

Perhaps more remarkable is the reality that most Americans haven’t heard anything about Hull’s stunning revelation, or much about any of the other testimony in this case. Not a single report about Hull’s revelation was broadcast by ABC, CBS, or NBC. Furthermore, the networks’ initially strong interest in the scandal has steadily declined. That decline has continued, even in the face of four damning revelations in the last month alone, every one of which indicate an agency that is corrupt and out of control. These include the IRS's attempt to dole out $70 million in bonuses to IRS employees during the sequester; their fraudulent awarding of a multi-million dollar contract to an IT company whose owner has a “longstanding relationship” with IRS deputy director Gregory Roseman; rampant abuse of IRS-issued credit cards by agency employees; and the improper scrutiny by government officials of confidential tax records of several political candidates and campaign donors – improper scrutiny the Obama Justice Department refuses to prosecute.

Hull’s testimony has taken this scandal to another level. Despite every attempt by the usual suspects in the Democratic Party, along with their media enablers, to kill this story, Hull has pushed it to the highest levels within the IRS – and one step removed from the White House itself. At this rate, it is only a matter of time before the scandal goes even higher.

Arnold Ahlert is a columnist for FrontPage Magazine.

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