Scandal! IRS official cites public record

An "exclusive" report about collusion against a conservative group comes up empty

As Brendan Nyhan wrote Thursday for CJR, the elite mainstream press has largely lost interest in the IRS scandal, even as the original narrative—about selective enforcement targeting conservative political groups—has been undermined by the emergence of new facts.

The conservative media, though, hasn’t let the story die, and has been trying to keep that narrative going. And so on Thursday the website of the National Review reported that it had “obtained exclusively” emails showing apparent collusion against a conservative organization between Lois G. Lerner, the disgraced IRS official now on paid leave for mishandling an inquiry into the vetting of applications for tax exemption, and the Federal Elections Commission.

Lerner has made many mistakes throughout this episode. As readers here may know, I would not let Lerner off the phone when she tried to ring-and-run with reporters on May 10, and to the best of my knowledge I was the first columnist to call for her to resign.

In this case, though, the allegations are off-base. The leaked emails—which were not written by, and do not quote, Lerner—show nothing more than an innocuous reference to the public record.

The National Review Online post was written by Eliana Johnson, a reliable and prolific stenographer of leaks from Rep. Darrell Issa, the California Republican with an abysmal record of trying to manufacture scandals. Here’s a portion of it, describing an email sent to Lerner by an unnamed FEC lawyer:

“Several months ago … I spoke with you about the American Future Fund, a 501(c)(4) organization that had submitted an exemption application the IRS [sic],” the FEC attorney wrote Lerner in February 2009. The FEC, which polices violations of campaign-finance laws, is not exempted under Rule 6103, which prohibits the IRS from sharing confidential taxpayer information, but the e-mail indicates Lerner may have provided that information nonetheless: “When we spoke last July, you had told us that the American Future Fund had not received an exemption letter from the IRS,” the FEC attorney wrote.

Missing from this is a simple fact: IRS determination letters granting tax-exempt status are public record. Stating that such a letter has not been issued does not violate the law.

Johnson would know this had she interviewed authorities on this subject or read the IRS Manual or the Exempt Organizations topic paper on the issues, available here.

American Future Fund was incorporated in Iowa in 2007, its Form 990 tax return shows, and in 2008 it collected $7,480,516, facts that are public record.

From its 990 we can conclude that its 501(c)(4) application was gratuitous since the law allows c4 organizations to operate without a determination letter, as the 2009 dates on the email indicate American Future Fund did. The publicly available IRS Business Master file on nonprofits shows that American Future Fund’s ruling date—when it was determined to have qualified for nonprofit status—was October 2008.

Its founder is a former aide to Rick Santorum, according to a resource page compiled by the Center for Public Integrity. And the Fund promotes what it says are free market ideas, though as others have reported its backers include some of the biggest subsidy seekers in America, including ethanol and pharmaceutical interests.

The hed on Johnson’s piece—“E-mails Suggest Collusion Between FEC, IRS to Target Conservative Groups”—is also another example of the misuse of the verb target.

To say that the IRS “targeted” applicants is to say that a building inspector is targeting construction projects when checking to make sure the building plans and the actual work comply with the construction safety laws.

But the main takeaway here is that the National Review post violated a couple basic tenets of journalism.

First, as the cliché goes: If your mother says she loves you, check it out. And second, cross-check and keep cross-checking until you understand the facts and, just as important, where to place them in the universe.

Had Johnson taken either of these steps she would have learned that stating what is, or is not, in the public record is neither a violation of the law nor unseemly collusion.

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David Cay Johnston covers fiscal and budget matters for CJR’s United States Project. He is a reporter with 46 years of experience, including 13 at The New York Times; a columnist for Tax Analysts; teaches tax and regulatory law at Syracuse University Law School; and is president of Investigative Reporters & Editors (IRE). Follow him on Twitter @DavidCayJ. Tags: ,