Darrell Issa Started His IRS Investigation Because Karl Rove Was Denied Tax Exempt Status

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On Wednesday, the Republican controlled House Oversight and Government Control Committee voted to seek criminal charges against Lois Lerner for contempt of Congress. In other words, the Republicans on the committee know there is no scandal. However, in the name of keeping the theater alive, they’ve got to do something or at least look like they’re doing something. And besides, Lerner’s actions made Darrell Issa look bad on Fox and just made Fox look the same as it usually does.

The odds of this resulting in a prosecution are pretty low. Issa didn’t take the constitutionally necessary steps of overruling Lerner’s Fifth Amendment assertion and he wasn’t “clearly directing her to answer the committee’s questions.”

This doesn’t mean that Lerner is completely in the clear either because there is an ongoing investigation of the IRS’s handling of tax exempt groups and of Lerner’s role in it.

You may remember how Darell Issa embarrassed Fox when he was caught lying about Lerner’s next appearance before the committee. You may also recall that when Lerner waved her rights, Issa took the unprecedented step of shutting down the committee’s hearing without so much as allowing ranking member Elijah Cummings to speak. Issa wasted a year, millions of dollars and thousands of hours in labor desperately seeking an IRS persecution of right wing organizations where none existed.

Based on documents that were also released on Wednesday, and obtained by Pro Publica, the more likely motive for Issa’s obsession was a desire to intimidate the IRS into granting Karl Rove’s Crossroads GPS tax exempt status. Crossroads was, by far, the Republican Party’s biggest source of dark money, giving $90 million to Republican candidates during the 2010 and 2012 elections.

This nexus between the IRS’s intent to deny Crossroads application for tax exemption status and the IRS “scandal” will come as no surprise to PoliticusUSA readers because Sarah Jones wrote about it back in May 2013. In fact, she identified the nexus between the “investigation” and Crossroads in her May 22^nd article on the subject.

By May 28th, Sarah identified the financial interest Republicans had in derailing existing audits of Tea Party groups based on their violations of the rules by engaging in political activities.

Now we have documents to prove that Sarah was correct on both p0ints.

In the application, Crossroads claimed that a small portion (30%) of its resources would be used for “Activity To Influence Legislation and Policy Making” while 20% would be allocated to “research” and 50% of its finances would be used for “education”.

In fact, Crossroads spent $90 million to elect conservative politicians, raising red flags to election watchdog groups. The IRS received 25 referrals or complaints about Crossroads activities.

By January 2013, the IRS was in the process of writing a letter of denial to Crossroads. Between May 13^th and May 17^th 2013, the IRS finished a draft of the letter and it was sent for review. Republicans began screaming IRS “scandal” on May 13^th, 2013.

The documents also show that the IRS planned to deny the applications of 5 other conservative groups that had spent money on elections, after telling the IRS they wouldn’t do so.

Republicans claim that the IRS focused exclusively on conservative groups which only tells part of the story. Most new Liberal counterparts don’t apply to the IRS. In fact, the documents show that the most prominent liberal dark money group, Priorities USA did not apply to the IRS.

In other words, the IRS investigated conservative dark money groups who broke the rules because they broke the rules and because few Liberal dark money groups applied to the IRS. It stands to reason that means conservative groups are therefore more likely to be scrutinized.

This wasn’t about going after conservative groups because they were conservative. Rather, it was about Issa and company trying to intimidate the IRS into breaking the very laws it is supposed to enforce for the benefit of right wing dark money groups.

Image: Talking Points Memo