-Caveat Lector-
National Review Online-11/02/00 3:15 p.m.
Politicization of the IRS
A Clinton legacy?
By John Berlau, Washington Correspondent for Investor’s Business Daily
As the Clinton administration winds down and federal
investigators close the books on its many scandals, one major
controversy appears never to have stopped. Groups and individuals
critical of the administration are still receiving a surprising
number of suspicious visits from the Internal Revenue Service.
In March of this year, a report from Congress's Joint Committee
on Taxation found "no credible evidence" that the IRS had
targeted Clinton's opponents for audits. But less than two months
later, the nursing home owned by Clinton's alleged rape victim,
Juanita Broaddrick, received a fresh audit from the agency.
Broaddrick joined a long list of other women who were audited by
the agency after coming forward against Clinton.
When Clinton was running for president in 1992, Gennifer Flowers
told the media about her affair with him. In 1993, right after
Clinton was elected, she received an audit. Paula Jones got her
audit notice one week after she refused to settle her
sexual-harassment lawsuit against Clinton. Former Miss America
Elizabeth Ward Gracen was also audited shortly after she claimed
she had an affair with Clinton. According to WorldNetDaily,
Gracen said she was warned by an anonymous caller that the IRS
would visit her if she came forward. And, in another incredible
"coincidence," Katherine Prudhomme, who grilled Gore in New
Hampshire last winter about his feelings about Broaddrick, found
out from the IRS just hours before she spoke at a rally in August
in front of Hillary Clinton's New York headquarters that she owed
$1,500 in back taxes. Prudhomme said this was confusion, based on
money that should have been classified as tax-exempt. (The IRS
told Prudhomme a week ago that it was dropping the case.)
Another hard-hitting Clinton critic, Bill O'Reilly of Fox News's
The O'Reilly Factor, said he has been audited three years in a
row ever since he began hosting the show. O'Reilly said he didn't
know if the audit was political, but noted that he had never been
audited before in his 25-year career, even when he was making a
lucrative salary as co-host of Inside Edition. "I have never set
up any kind of depreciation, or trust funds or any of that,"
O'Reilly said. "I basically pay, so it struck me as unusual."
David and Amy Ridenour, who head the National Center for Public
Policy Research, also find it unusual that they recently received
their second audit in four years. The National Center is critical
of the Clinton administration's policies on environmental issues
and also criticized Hillarycare in 1994. "Twice in the Clinton
administration seems like more than just a little coincidence,
inasmuch as we had a clean bill of health a few years ago," David
Ridenour said. "If they're doing this randomly, we sure are
coming up pretty frequently in the random audits." Amy Ridenour
recalled that when she asked the IRS agent in the first audit why
the group was being audited, he said, "You must have made someone
mad."
And two conservative groups that were audited in 1996 still have
not found closure. Both the Heritage Foundation and Citizens
Against Government Waste sent out a fundraising letter signed by
presidential candidate Bob Dole that year. Soon after then-Rep.
David Skaggs (D-Colo.) complained on the House floor that the
groups were engaging in possibly illegal political activity, they
were audited. And the audits continue today.
Heritage Foundation vice president and treasurer John Von Kannon
said the IRS had okayed fundraising letters of this type for
Heritage twice before. He thought there would be no problem in
1996, because "this is the politician endorsing us, it's not us
endorsing the politician," he said. After more than four years,
Von Kannon says all he wants from the IRS is a final ruling. "Our
concern is to get this audit behind us," he said. "Tell us what
the rules are and we will follow them."
Leslie Paige, vice president of CAGW, expresses similar
frustration. "It's cost tens of thousands of dollars and multiple
hours to comply with their wishes," Paige said. "This has gone on
for [more than] three years now with no resolution."
It's true that at least some of the conservative groups may not
have been targeted because of their political viewpoints. NR, for
instance, may have been picked out in the mid 90s because it
suddenly showed a profit for the first time in 40 years. "We
think that raised a flag of some kind," said Jack Fowler, NR's
associate publisher. "We don't discount that there was malicious
intention to go after conservative organizations, we just don't
know that we come under that general attack."
But in at least one case, there is now clear evidence an IRS
audit stemmed from the White House. In 1996, the Western
Journalism Center, a conservative group that had raised questions
about the death of Vincent Foster, found itself subject to an IRS
audit, right after being listed earlier in the year in the White
House's now-infamous "enemies list" report, the "Communication
Stream of Conspiracy Commerce." Shortly after WJC founder Joseph
Farah went public with the audits of his and other conservative
groups, the IRS closed the audit and ruled in favor of the WJC.
Three years later, through a Freedom of Information Act request,
Farah received documents from the Treasury Department's inspector
general that confirmed what he had suspected all along: that the
audit began with a White House referral. The Treasury report
states that the White House had forwarded the agency a letter to
the president from Paul Venze, a Beverly Hills resident who
expressed concern that the tax-exempt WJC was trying to hurt the
president. Reached at home, Venze declined comment.
Many things about the audit's origins are still a mystery. "There
is no indication as to how the taxpayer's letter was routed from
the White House to the IRS," the Treasury report stated. The
report also found that "it is common practice for the White House
to send bundles of documents to the IRS without a cover sheet."
White House spokesman Jake Siewert said that letters to the White
House are routinely forwarded to agencies that handle the subject
matter. Siewert said the letters are forwarded with "a form
letter that basically says, 'This letter came to our office but
is more appropriately directed to you. Take whatever action is or
is not appropriate.' …You basically treat it like it was sent to
the wrong address."
But Siewert's explanation raises its own questions. The Treasury
report said that Venze's letter expressed anger at the WJC. But
it did not say that he asked for a tax audit or mentioned the
IRS. Plus, should the White House forward every grievance to the
IRS, regardless of the facts?
"If the White House's policy is that every piece of
correspondence they get is referred, then what's to prevent the
White House from having all kinds of political operatives from
sending them leads like this that can then be tracked down by
their bureaucratic watchdogs in the IRS?" asked Farah.
And though the Joint Committee on Taxation did not find any
wrongdoing at the IRS, it did find two instances where Clinton
and Gore officials may have tried to misuse the agency. The
committee report noted a 1997 "nonroutine" contact in which Vice
President Gore's aides tried to obtain "the status of certain
forms filed by members of a tax-exempt organization."
In 1995, a Treasury Department official was "alleged to have made
a 1995 inquiry to IRS employees" on the tax-exempt status of a
group under review by the IRS. "These types of contacts lend
credence to the allegation that the administration does intervene
in IRS matters pertaining to specific taxpayers," the committee
concluded.
The IRS apparently rebuffed the administration in these
instances, and the committee could not find "credible evidence"
that any groups "were selected for examination based on their
political views." But that may be because the evidence had
disappeared. Until mid 1998, the IRS had a practice of destroying
documents once the audits were closed, the committee found.
So we may never have definitive proof that conservative groups
and Clinton critics were targeted for audits. But one thing's for
sure: If individuals on Nixon's "enemies list" had received as
many "random" audits as Clinton opponents and conservative groups
have under this administration, the media would have been asking
a lot more questions. Jerome Zeifman, chief counsel for the
Democratic-controlled House Judiciary Committee during the
Watergate hearings, commented, "My impression is the [Clinton
administration's] misuse of the IRS for those kinds of purposes
is at least if great if not more great than in the Nixon
administration."
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FROM THE DESK OF:
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