The Smearing of J. Russell George

by Eliana Johnson
House Democrats have turned their ire toward the IRS inspector general.

The inspector general who in May exposed the Internal Revenue Service’s targeting of tea-party groups last week found himself, in a bizarre twist, defending his integrity before Congress.

“They don’t know I was a page at the 1980 Democratic National Convention,” J. Russell George said in an unusually emotional moment at the latest committee hearing on the targeting scandal. “They” are House Democrats who, for almost a month, have accused George of manufacturing the scandal to score political points. “They don’t know that I was a founder of the Howard University College Democrats,” the soft-spoken IG said in an effort to demonstrate his impartiality. “Yes, you know, I saw the light and joined Bob Dole’s staff during college,” he admitted, but insisted he has never allowed “personal or political views to affect decisions.”

Democrats in Congress are suggesting otherwise, and the assault on George is the latest chapter in a scandal whose investigation has become a bitter political battleground. When IRS officials fingered a couple of rogue agents as the culprits of the political discrimination, Democrats and Republicans alike issued their condemnations. But as congressional investigators have traced culpability to senior levels of the agency — last week, to the former head of the IRS’s Exempt Organizations Unit, Lois Lerner, one of her senior advisers, and lawyers in the chief counsel’s office — Democrats have increasingly turned their ire away from the tax-collection agency and toward the IG.

George, who previously served as a staffer in the White House and on the House Oversight Committee, is acutely aware that some grief comes with the territory. “When I was doing my due diligence, sir, by talking to some of the first IGs, you know, who were appointed by Jimmy Carter and then later fired by Ronald Reagan,” he told Congress last week, “they said to me, do not take this job. They say, if you’re perceived to be too aggressive, the administration is angry at you; if you’re perceived to be not aggressive enough, Congress is angry at you.”

The Harvard Law graduate has received praise for his doggedness in a relatively thankless post. “Frankly, we can’t keep up with J. Russell George,” wrote Accounting Today, which included him on its list of “Top 100 People” in 2011 and 2012. “His IRS watchdog’s countless carefully analyzed reports and recommendations delve into every aspect of the tax agency’s operations — even to the point of recently analyzing the effectiveness of the other IRS watchdog, the Taxpayer Advocate.” George’s investigations, for example, turned up evidence that nearly 50,000 prison inmates claimed tax refunds in 2010, though they reported no wage information, and that foreign workers, many of them illegal immigrants, had improperly claimed nearly $7 billion in child tax credits between 2004 and 2007.  

Democrats are not happy with the results of George’s latest probe. Led by Michigan’s Sander Levin and Maryland’s Elijah Cummings, and assisted by the IRS’s acting administrator, Danny Werfel, whom President Obama appointed to clean up the agency in the wake of the targeting scandal, Democrats have accused George of concealing evidence that the IRS targeted liberal groups along with conservative ones. First came Werfel’s announcement last month that the targeting was broader than initially disclosed. Then came Levin’s release of 14 “Be On the Lookout” lists that included the term “Progressive,” which he cited as definitive proof that George’s report and the congressional investigations it spurred are grievously flawed. Enter Cummings, who earlier this month released IRS training materials instructing agents to scrutinize the applications of both liberal and conservative organizations and a February 2012 BOLO list flagging groups affiliated with the Occupy Wall Street movement. “It is unclear why Mr. George did not disclose that IRS employees added a new BOLO entry for Occupy groups in 2012,” Cummings said, arguing that it raises “serious questions” about his initial report.

Democrats at Thursday’s hearing piled on, with Representative Eleanor Holmes Norton charging that if George “were born even yesterday” he would have investigated the targeting of “Occupy” groups, and Pennsylvania’s Matt Cartwright demanding, “What do you think we’re doing here?” “You knew people’s heads would explode if you talked about tea-party BOLOs, and you didn’t mention any other ones,” Cartwright fumed.

The accusations contradict the obvious facts: The 14 BOLO lists Levin released, though they contain the term “Progressive,” instruct IRS screeners to treat the applications of progressive organizations differently from those of tea-party groups. In George’s words, the “Progressive” entry “did not include instructions on how to refer cases that met the criteria,” whereas tea-party cases were automatically sent to higher-ups in the agency for coordination with Washington, D.C. The “Occupy” entry to which Cummings refers instructs screeners to send cases to the same group processing tea-party applications. The head of that group, though, told Congress that when she received applications from liberal groups, she sent them back to “general inventory.” George on Thursday told the House panel that, of the 298 cases scrutinized for political activity, zero fell under the “Occupy” rubric. The “Progressive” and “Occupy” listings may be problematic — it is not clear why the terms were added to the list — but the political activity of liberal groups simply was not put under the microscope.

In advancing this narrative, Democratic lawmakers have succeeded in distorting the issue beyond recognition. George’s audit was limited to the IRS’s scrutiny of cases on the bases of their political activity. IRS agents are supposed to examine applications for potential political involvement — 501(c)(4) groups are prohibited from devoting more than 50 percent of their efforts to political activity — but the IG found that the agency’s process for identifying groups likely to engage in political activity served only as a means of identifying conservative groups. “IRS staff at multiple levels concurred with our analysis, citing ‘Tea Party,’ ‘Patriot,’ and ‘9/12,’ and certain policy positions as the criteria the IRS used to select potential political cases,” George told lawmakers. By using terms associated with the tea-party movement as a proxy for all political activity, the IRS ensured that applications of many liberal groups whose activities should have received scrutiny got a free pass.

Thus, of the 298 “political” cases referred to IRS higher-ups between May 2010 and May 2012, 96 applications included “Tea Party,” “9/12,” or “Patriots” in their names. Others contained terms like “liberty,” “freedom,” and “make America a better place to live.” Six included the terms “Progress” or “Progressive” in their names. Zero included the term “Occupy.” And while 30 percent of progressive cases were deemed “political,” every tea-party case received the designation, and the subsequent scrutiny.

The numbers evince a deeply flawed screening process. While many groups whose applications indicated they were engaging in political activity received no scrutiny from the IRS, others were thrown under the microscope without cause. Of the 298 political cases, “31 percent of them had no evidence in the file of political campaign intervention and perhaps should not have been looked at,” the deputy inspector general for audit, Gregory Kutz, told Congress. Conversely, nearly 30 percent of the cases that weren’t scrutinized “statistically should have actually been included in the political review,” he said. We now know that senior IRS officials were involved in ensuring that the screening process rooted out not political cases per se, but largely conservative ones.

In the midst of a major scandal, another scandal is emerging: the smearing of an IG for rank political reasons. “This is the most unprecedented example I have ever experienced, not only as an inspector general, but as a former member of this very committee staff for almost 25 years, and being a former White House staffer,” George told Republican representative Scott DesJarlais. “I’ve not — I’ve never experienced anything like this, sir.”

— Eliana Johnson is media editor of National Review Online.