By Bernie Becker - 04/09/14 08:37 PM EDT
The House Ways and Means Committee on Wednesday accused former IRS official Lois Lerner of targeting the prominent GOP group Crossroads GPS and urged the Justice Department to take a fresh look at whether she should be prosecuted.
The rare step by the tax-writing panel comes as congressional Republicans are turning up the heat on the IRS, and a day before Chairman Darrell Issa (R-Calif.) and the House Oversight Committee are expected to vote to hold Lerner in contempt of Congress.
In a referral to Attorney General Eric Holder, Republicans make the case that Lerner took an “aggressive and improper” interest in Crossroads GPS, the group co-founded by Karl Rove that spent tens of millions of dollars in the 2010 and 2012 election cycles.
The committee voted to send that referral to Holder after a session conducted mainly behind closed doors and on a 23-14, party-line vote.
Lerner, who headed an IRS division overseeing exempt organizations, pushed to deny Crossroads GPS’s application for tax-exempt status and to audit the group, Ways and Means Committee Chairman Dave Camp (R-Mich.) says in his letter to Holder.
Lerner showed no such interest in liberal groups, the letter adds, despite concerns by campaign finance reform groups. Ways and Means also alleges that Lerner misled federal investigators about when she first became aware of the IRS’s improper scrutiny of Tea Party groups, and that she recklessly handled confidential taxpayer information.
Camp told reporters after Wednesday’s vote that the committee and Congress needed to stand up to an immensely powerful agency that “can strike the fear of God” into average taxpayers.
“We have to make sure that the signal goes out that this can’t happen again,” Camp told reporters. “If we don’t stand up for people’s constitutional rights on behalf of the American people, who else will?”
The Ways and Means vote was the latest wrinkle in the controversy, now 11 months old, that erupted when Lerner apologized in May 2013 for the IRS’s treatment of Tea Party groups seeking tax-exempt status. The referral could also broaden the congressional investigations, which have largely focused on more grassroots organizations.
Lerner, who has since retired from the IRS, is expected to face another legal headache on Thursday, when Issa begins contempt proceedings. House GOP leaders who said Wednesday that they supported the Ways and Means referral are also on record backing contempt charges.
Issa has said that Lerner, who has twice refused to answer questions in front of the Oversight panel, is the most important figure in his IRS investigation.
Ways and Means Democrats accused Camp and their GOP colleagues of taking a page out of Issa’s playbook and playing politics by releasing taxpayer information.
Rep. Sandy Levin (Mich.), the panel’s top Democrat, said Camp was undermining the panel by making it into “an arm of any campaign committee.” Democrats later said Republicans merely wanted to “promote and protect” GOP moneymen like Rove.
“The way it should have been handled was to simply forward any documentation over there and indicate the full cooperation of the committee,” said Rep. Lloyd Doggett (D-Texas).
Lerner’s attorney, Bill Taylor of Zuckerman Spaeder, called the timing of Wednesday’s vote “odd,” and said he had not heard from the Ways and Means Committee about its referral.
“The committee’s referral affects nothing. The Department of Justice is already investigating the IRS. This is just another attempt by Republicans to vilify Ms. Lerner for political gain,” Taylor said in a statement to reporters.
But Steven Law, Crossroads GPS’s chief executive, said the Ways and Means referral “confirms that there was an organized high-level effort within the IRS to subvert the agency’s own standards and procedures in order to harass law-abiding conservative advocacy groups like Crossroads GPS.”
Law said in a separate statement that the group was still waiting for a final decision from the IRS on its application, which it first asked for in 2010.
The group can continue to operate as tax-exempt until that IRS ruling. Under the current IRS rules, 501(c)(4) groups need to make promoting social welfare their primary purpose. The law says those groups should be exclusively concentrating on social welfare, a difference campaign finance reform organizations believe has been part of the problem.
“It is now apparent that Ms. Lerner was directly and improperly involved in targeting our application, which may explain why we are still awaiting final action on our 501(c)(4) certification,” Law said.
Camp also defended his decision to bring the charges against Lerner public. “If I sent a secret letter to the Department of Justice, I think that would be doing a disservice to the Americans whose constitutional rights are on the line,” he said.
In the documents Ways and Means released Wednesday, Lerner also discusses going after a job at Organizing for Action, the offshoot of Obama’s campaign operation.
“Oh — maybe I can get the DC office job!” she told colleagues in an email, though it’s unclear whether she was joking.
The Ways and Means referral also accuses Lerner of targeting conservative groups outside of Crossroads. In January 2013, Lerner circulated a news article on five groups whose status she wanted to discuss. Three of those groups were eventually audited.
Republicans also suggest Lerner tried to influence the appeals process for exempt organizations whose application was denied, an area outside her jurisdiction.
Plus, GOP lawmakers say that Lerner gave Treasury’s inspector general for tax administration a “half-truth” by not revealing she knew that Tea Party cases were being flagged as far back as 2010.
In all, Ways and Means says the laws that Lerner might have violated are punishable by up to 11 years in prison. But the final decision on whether to prosecute lies with Holder, who has also been held in contempt by House Republicans and has a generally toxic relationship with GOP lawmakers.
Emily Pierce, a Justice Department spokeswoman, would only say Wednesday that “there is already an active, ongoing investigation into the IRS’s handling of applications by tax-exempt organizations.”
“It remains a high priority of the department,” she added.
— Updated at 8:37 p.m.