Yes, There Is Reason to Be Suspicious about the Timing of Lois Lerner’s Hard Drive ‘Crash’

by Ian Tuttle

Over at the Washington Post, fact checker Glenn Kessler has the facts right but the conclusions wrong about “The letter that supposedly led to the crash of Lois Lerner’s hard drive.” Kessler takes as his starting point the following remark from Representative Peter Roskam (R., Ill.) at the June 20, 2014, House Ways and Means Committee hearing on IRS targeting: 

The IRS is not a victim today. And here is [the] fundamental problem. Chairman [Dave] Camp [R., Mich.] sent a letter on this whole issue. And then 10 days later — so think about the duration of 10 days. Ten days is the ability to panic at the IRS, reflect, plan, talk and execute. And there was a crash — 10 days after the chairman’s letter.

Fox News’s Chris Wallace repeated the claim on Sunday, asking Julian Epstein, a former top Democratic House staffer:

Chairman [Dave] Camp, House Ways and Means, asked the IRS about the targeting of conservative groups seeking tax-exempt status. June 13th, just 10 days later, Lerner reports that her hard drive has crashed. . . . How do you explain this apparent coincidence that it is 10 days after Congress starts asking about the e-mails that Lois Lerner says, oh, the hard drive has crashed?

Referring to the letter in question, sent by Camp to then–IRS Commissioner Douglas Shulman on June 3, 2011, Kessler rightly notes that the letter is concerned with “the IRS’s decision to send letters to the donors of [501(c)(4)] organizations that their contributions might be subject to gift taxes,” but he juxtaposes that with the charges against Lois Lerner: “The targeting of conservative advocacy groups applying for 501(c)(4) status.” However, the two are far from distinct, as Kessler claims.

Following its decision in 1982 not to apply the federal gift tax to donations to groups formed under Section 527(e) of the Internal Revenue Code (Revenue Ruling 820-216), the IRS had issued no further guidance, despite many queries, and the provision had gone almost entirely unenforced. The sudden decision in 2011 to examine five taxpayers’ donations to 501(c)(4) organizations predictably raised eyebrows. It was subsequently revealed that the taxpayers in question had all donated (in 2008) to the now-defunct conservative 501(c)(4), Freedom’s Watch. Because of pressure from congressional Republicans, the IRS dropped the audit. It’s difficult to see the episode as anything other than political targeting, albeit against an organization that already had its 501(c)(4) status.

However, Camp was not the only congressman asking questions about the curiously timed enforcement. Two weeks earlier, May 18, 2011, six Republican members of the Senate Finance Committee sent a letter to IRS Commissioner Shulman asking the same question. And their insinuation was unmistakable:

In spite of [501(c)(4) organizations’] legal status and administrative approval, President Obama and his White House staff have made it clear that they view these organizations with deep hostility. The President himself, in a heated political context, referred to certain 501(c)(4) organizations as “a threat to our democracy.” His White House Communications Director, Dan Pfeiffer, charged that the “powerful interests” supporting some of these organizations “are literally buying elections.”

In awarding Roskam three “Pinocchios,” Kessler claims that he “went too far in describing the contents of the letter” as part of “this whole issue,” and makes much of the fact that Camp’s letter does not include the word “conservative.” But it is clear from the senators’ letter what type of groups congressional Republicans were concerned about.

Lois Lerner would almost certainly have had a leading, if behind-the-scenes, role in this incident. Senate sources tell National Review Online that, as the person in charge of tax-exemption organizations (e.g. 501(c)(4) groups), Lerner would have been the person to handle such a letter — and likely would have been charged with drafting the initial response.

Lois Lerner’s position put both the enforcement of gift taxes and the decisions about tax-exempt status in her purview. As members of Congress caught onto suspicious activity with regard to the former, it is not hard to imagine how she might have begun to worry about her below-board role in the latter. This is no proof of a straightforward cause-and-effect relationship between the IRS’s receipt of the letters and Lerner’s mysterious hard-drive crash, but questions ought to linger.

Glenn Kessler handily deconstructs Camp’s letter so as to isolate each fact into a meaningless datum. But taken as a whole — and in congress with the Senate Finance Committee letter that predated it — the facts show that Kessler deserves a couple Pinocchios himself.