House committee: Obama encouraged IRS to target conservative groups

The House Oversight and Government Reform Committee on Monday released a report that finds President Barack Obama and other top Democrats encouraged the IRS to investigate conservative groups seeking tax exempt status.

The report says this encouragement from the White House shows that the IRS targeting scandal was rooted in politics, and is not the result of lower-level officials, as the Obama administration has claimed.

A House committee report says President Barack Obama encouraged the IRS to target conservative groups, which led to the IRS targeting scandal. Pool/Getty Images

"The committee's investigation shows that as the president generated attention to the issue of nonprofit political speech in 2010, IRS employees followed his public messaging," according to the 77-page report. "With jurisdiction over nonprofits and tax law, IRS employees read and acted upon the news reports.

"In this way, the IRS targeting is – and always has been – rooted in political machinations. Put simply, as the president's political rhetoric drove the national dialogue and shaped public opinion, the IRS received and responded to the political stimuli."

The report finds that Obama's involvement began at his January, 2010 State of the Union speech, in which he criticized the Supreme Court's ruling in the Citizens United case. Democrats said that ruling unfairly unleashed a wave of political spending by corporations, since it struck down limits on political donations by companies.

In the weeks and months following that speech, Obama called conservative groups with tax-exempt status "shadowy" entities with "innocuous" and "benign-sounding" names. Obama also urged a "fix" to the decision, which he said let these groups "pose" as non-profit groups.

The report then details several emails from Lois Lerner, the director of tax exempt organizations at the IRS, who said the IRS needed to take steps to resolve Obama's complaints.

The report cites emails in which Lerner said there was pressure on the IRS to "fix the problem," that "everyone is up in arms" about the Citizens United case. In one email, she wrote that "everybody is screaming at [the IRS] right now: fix it before the election," according to the committee.

"In response to a news article about the Democratic Congressional Campaign Committee's complaint against Americans for Prosperity, Lois Lerner wrote to her boss: 'We won't be able to stay out of this – we need a plan!' " the Committee wrote. "Lerner later initiated a project to examine 501(c)(4) political speech in response to an article in a tax-law journal."

The report says the Justice Department also internalized Obama's rhetoric. It quotes Justice's Public Integrity Section Chief Jack Smith, who cited a New York Times story in late 2010 about non-profits funding campaigns, and said that "this seems egregious to me."

It finds that at Smith's direction, Justice met with Lerner and other IRS employees to examine the issue, and that led to a Justice Department request for information about various non-profit groups.

Just last week, Issa said the IRS appears to have violated the law by handing this information over, in a format that included confidential taxpayer information.

The committee also quoted an email from Lerner in which she mirrors language from Obama and other Democrats about the need to police Crossroads GPS, the group founded by GOP strategist Karl Rove.

Lerner wrote that, "The organization at issue is Crossroads GPS, which is on the top of the list of C4 spenders in the last two elections. It is in the news regularly as an organization that is not really a C4, rather it is only doing political activity – taking in money from large contributors who wish to remain anonymous and funneling it into tight electoral races."

"[T]he causal relationship between this rhetoric and the IRS targeting is clear," Committee Chairman Darrell Issa (R-Calif.) said Monday. "The President declared repeatedly that conservative groups 'posing' as nonprofits with 'benign-sounding' names were 'a threat to our democracy.' The IRS listened and, in turn, it subjected conservative groups to systematic scrutiny and delay."

But beyond simply heeding Obama's warnings, the report found that the IRS worked closely with Democrats on the issue.

"The IRS received tips from Democratic sources about upcoming actions concerning nonprofit political speech, and the IRS even assisted Senator Carl Levin (D-Mich.) in preparing letters to the agency criticizing nonprofit political speech," the committee wrote.