I hope we get the bottom of this mess at the IRS!!!

I hope we get the bottom of this mess at the IRS!!!

Cleta Mitchell: How to Investigate the IRS

Cleta Mitchell, the attorney who helped expose the tax agency’s abuses, has a road map for identifying the culprits. It doesn’t stop in Cincinnati.


The woman who helped expose IRS abuse of conservative activists has more news to share: The abuse continues, and she sees no evidence that the White House, the IRS or the Justice Department is doing anything to end it. “This is not in the past tense. This is still going on,” says Cleta Mitchell, perhaps the country’s pre-eminent expert on campaign-finance and political tax law.

In 2012, Ms. Mitchell worked to persuade members of Congress that reports of IRS harassment of conservative groups were credible. GOP lawmakers demanded information from the IRS and triggered the internal audit that finally forced the agency last month to acknowledge abuses it had previously denied. Now Ms. Mitchell is determined to end the abuse and identify the culprits.

Don’t bet against her. A partner at elite international law firm Foley and Lardner, Ms. Mitchell is sketching out a road map to uncover the truth and force reform—whether or not the Obama administration cooperates.

So far it looks like the administration will not. Ms. Mitchell represents nine conservative organizations that, beginning around 2010, were subjected to unusual delays, in many cases unlawful demands for information, and in some cases unlawful releases of their confidential data. But she reports that despite filling out the paperwork required by law and regulation, only one of the nine has received the customary IRS approval letter to operate as a tax-exempt group. She says another client received a new letter from the IRS with “very bizarre questions” as recently as three weeks ago.

The Justice Department is allegedly conducting a criminal investigation of the IRS abuse. Has anyone from Justice contacted her or her clients to gather evidence? “Not about this. The FBI’s contacted some tea party leaders about their meetings and who comes to their meetings,” she says. “I guess they viewed the tea party as domestic terrorists.” She is puzzled that the feds aren’t asking about IRS targeting: “You’d think that they would, wouldn’t you?”

Terry Shoffner

They should, and perhaps the Securities and Exchange Commission ought to start a case file as well. Ms. Mitchell says she learned this week that the IRS even intervened in the business dealings of a donor to conservative causes. “There were two public companies that were in the process of trying to do a merger and somehow the IRS stepped in and demanded all this information and said, ‘If you don’t give it to us we’ll stop this merger,’ ” she says. “But I cannot get [the donor] to come forward . . . ‘Look I’ve been through this hassle with the IRS. I don’t need any more.’ People are really afraid and the donors are the most afraid.”

She has heard “a number of reports” of conservative donors “having been audited or hassled,” but she doesn’t have a sense of how many cases there might be. “I hear about them all the time, but so far they’ve been the most reluctant of all to talk.”

Ms. Mitchell, on the other hand, shows no fear as she talks strategy in Foley’s Georgetown office overlooking the Potomac River. Maybe that’s because this Oklahoma native has already overcome her share of daunting challenges.

“I was raised by a single mom. My dad was kind of a no-account,” she says with a chuckle. “But my mother made up for it. She was a very strong woman. Raised six kids.” And she demanded excellence from all of them. After Ms. Mitchell’s first term at the University of Oklahoma, “I made one B and my mother went around telling everyone that I hadn’t done very well but she hoped I’d do better the next semester.” She graduated with high honors and a Phi Beta Kappa key.

Like many of her classmates, she also developed a love for the school’s famed football team and proved to be as demanding about the Sooners as her mother had been about grades. Shortly after the team’s current coach, Bob Stoops, was hired in 1999, she met him at a Washington reception. “You know, coach,” she recalls telling him, “the good thing for you is you only need to win three games a year”—against powerhouses Nebraska, Oklahoma State and Texas. When Mr. Stoops responded that Nebraska wasn’t on the schedule that year, she replied: “Well, lucky you, you only have to win two games.”

These days, winning for her clients doesn’t necessarily mean collecting big damage awards. She says the harassed conservative groups are more focused on getting the truth out and ensuring that the IRS’s appalling conduct is stopped and never repeated. But the lever of potential monetary penalties could be useful in persuading senior government officials to come clean. Ms. Mitchell is hopeful that, even if the Justice Department sits on its hands, a combination of private lawsuits and congressional investigations can help ascertain who gave the order to target conservatives.

She has filed a lawsuit in federal court on behalf of an organization called True the Vote that names the IRS as well as previous and current IRS officials as defendants. She promises more lawsuits, including one on behalf of the National Organization for Marriage that had its documents leaked to its antagonists at the Human Rights Campaign.

Ms. Mitchell credits attorney Jay Sekulow for his suit on behalf of other conservative organizations and is encouraged by the work of lawmakers like Sen. Orrin Hatch (R., Utah) and Rep. Darrell Issa (R., Calif.). “They’re just getting started to get to the answers. The first round is the IRS dissembling, denying, deflecting. And now hopefully we’re beginning to get to some real information,” she says.

Thus far, senior IRS officials in office when the abuses began have often provided untruthful answers, first by telling Congress in 2012 that the IRS wasn’t targeting President Obama’s ideological opponents and more recently by suggesting that low-level employees were to blame. Sometimes they’ve been unwilling to provide any answers at all, such as when Lois Lerner, the head of the IRS unit overseeing tax-exempt organizations, asserted her Fifth Amendment privilege to avoid self-incrimination, but not before proclaiming her innocence at a congressional hearing.

In the civil lawsuits, government defendants will still enjoy their Fifth Amendment rights, but the truth may come out anyway. Ms. Mitchell notes that “civil discovery is much broader and doesn’t allow for as much opportunity to refuse to answer. There’s a magistrate who is appointed to oversee” and resolve disputes on specific questions. And if a person is forced to answer a question during a deposition, “the perjury statutes apply.”

But even if officials find ways to remain silent, they might not be able to contain the relevant information. Ms. Mitchell adds that “we are most interested in seeing documents,” and that includes emails. Such documents have hardly been examined, because while the IRS’s internal audit recently forced the agency to acknowledge abuses it had previously denied, the inquiry consisted mainly of interviews of staff with a supervisor present.

After denying for a year that IRS employees were targeting conservatives, IRS brass were forced by the imminent release of the audit last month to change their story. But they settled on another inaccurate claim: that the problems centered on a few misguided employees in a Cincinnati office. This was contradicted by a Wall Street Journal report this week that Cincinnati workers were being directed and even “micromanaged” by Washington, according to what one IRS employee told congressional investigators.

“I think the press has done a good job of exposing that it wasn’t just in Cincinnati,” Ms. Mitchell says. “I knew it wasn’t.” One of her clients has been waiting for approval for nonprofit status since 2009, she says, and for all that time the application was being considered in Washington. “I was told by the agent in Cincinnati, ‘Oh well, you send this stuff to us, but we have to send it all to Washington.’ ” She says that some unusual information requests to conservative groups have also come from the IRS office in Ogden, Utah.

She adds: “I just want to know who did what and when, and I want them to issue the letters and I want them to stop targeting and go back to the process” that prevailed before the current era of abuse.

This current era appears to have begun sometime after the 2008 election of Barack Obama as president, though the Obama campaign itself offered something of a preview. As the Journal’s Kimberley A. Strassel has noted, in the summer of 2008 Obama campaign General Counsel Bob Bauer urged the Justice Department’s criminal division to investigate the officers and donors of a group called the American Issues Project after it ran a negative ad about Mr. Obama.

The organization was a client of Ms. Mitchell’s, so she learned firsthand about the tactics of the Obama campaign and Mr. Bauer: “He would send a letter to the Justice Department demanding that my clients be criminally prosecuted for exercising their First Amendment rights. And then I would write a response, and then he’d write another letter, and I’d immediately write a response.”

Mr. Bauer was named White House counsel in late 2009, shortly before the IRS appears to have begun its harassment of conservatives. Now in private practice, he seems like the kind of former official that conservatives might want to question under oath. Could it happen?

“We’d have to find that there was some communication between him and the IRS or something like that,” says Ms. Mitchell. Though much may remain to be discovered, she says, the targeting of conservatives in recent years has been remarkably open: “The communications were all pretty public. That’s one of the things that I don’t think has gotten enough attention, is the use of the IRS as a political tool. There are 17 Democratic senators who will literally sign anything put in front of them going after conservative organizations.”

She is referring to letters sent during the last election cycle by various Democrats urging IRS investigations, some of the letters even referencing specific conservative organizations. But Ms. Mitchell might just as easily mention the many speeches in which Mr. Obama has vilified groups opposing his policies and denounced them as threats to democracy or foreign-backed front groups.

All of this history inspires skepticism that the Obama Justice Department will make the abuse of conservatives a high priority for prosecution. So the job may fall to private attorneys like Cleta Mitchell. If she is intimidated at the prospect of taking on the IRS, she is showing no signs of it. “Where I come from in Oklahoma,” she says, “the wide open spaces are not just geography. It’s a mentality. You can be whatever you’re hoss enough to be.”

Maybe it’s the IRS’s turn to worry.

Mr. Freeman is assistant editor of the Journal’s editorial page.

A version of this article appeared June 8, 2013, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: How to Investigate the IRS.

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