The Show Trial of IRS Commissioner John Koskinen
The congressional resolution condemning the longtime public servant breaks with both precedent and decency.
American public-policy wonks have an informal honor roll of model public servants—people who may have gone in and out of government service, but who put country ahead of personal ambition or gain, who care about making government function well, and who are known for their decency and commitment to those goals. I have been privileged to know many of those on the honor roll, including well-known figures like Paul Volcker and Elliott Richardson, and less well-known ones like Chuck Bowsher, Elmer Staats, and Dwight Ink. At a recent celebration of Ink’s career, the 93-year old, who served seven presidents from Eisenhower to Reagan, was asked by a participant to name his model public servant. His answer: John Koskinen.
I don’t know Koskinen well. I met him when he was the deputy director for management at the Office of Management and Budget, one of the key posts filled by those most knowledgeable about how government works and how to make it work better; he took on the role of managing the government’s response to the looming Y2K crisis—a mention of which these days brings quizzical looks, because America did not have a crisis, thanks to Koskinen. But the threat of a massive breakdown in computers across the economy because they were not programmed to handle the transition to a new millennium was real, and could have precipitated disruption in arenas from banking to air travel, and cost many billions.
Koskinen served in the federal government and as deputy mayor of Washington, D.C.; his last post in the federal government, one he assumed at the request of the George W. Bush administration, was as interim CEO and non-executive chairman of Freddie Mac at the time of the housing crisis. Happy in retirement, he was then called by the Obama Administration to serve as commissioner of the Internal Revenue Service—a thankless task at the best of times, but the request came at anything but the best of times.
The IRS had gone for several years with a commissioner held over from the Bush years, had been embattled by allegations of scandal over how the agency had handled classification of non-profits under the 501(c)4 rubric, had seen a brain drain of key tax professionals as its budget got slashed. It has labored with antiquated computers and information systems. No one in their right mind would have wanted the job. Koskinen took it for the reasons that Dwight Ink (and the wonk community) prized when he singled out Koskinen for praise. He did it to make government work better for the American people. And, like most other executive-branch nominees, he had to endure delays and a filibuster before being confirmed in December 2013.
His reward: an irresponsible, unprecedented, and politically motivated attack from Republicans in the House. Under Chairman Jason Chaffetz, the members of the House Oversight and Government Reform Committee just voted on a party-line basis to censure Koskinen, and are moving to impeach him. The censure move includes an attempt to block Koskinen’s government pension from his decades of public service—so add mean-spirited to the adjectives above.
The charges against Koskinen flow from Republican outrage over the way the IRS handled the applications for 501(c)4 status, with a particular animus toward Lois Lerner, the IRS official in charge of non-profit classifications. All of this happened well before Koskinen took the helm of the agency. The committee issued a subpoena in February 2014 for emails to and from Lerner and others in Cincinnati and Washington who made decisions about which groups to scrutinize, barely 8 weeks after Koskinen was sworn in. It was subsequently discovered that career officials in West Virginia erased backup tapes containing many of Lerner’s emails—the IRS inspector general, the same man who hit the agency for politically targeting groups applying for the 501(c)4 designation, found no evidence of nefarious intent, attributing the actions to a misunderstanding about the IRS order to preserve backup tapes. Chaffetz and the committee claim Koskinen learned about the erasure months before he notified the committee; Koskinen says he learned about the problem in April, 2014, and immediately undertook a massive effort to find the emails through other means—locating 24,000 of them by June, and notifying the committee to respond to their subpoena.
The censure resolution claims Koskinen “offered under oath a series of false and misleading statements utterly lacking in honesty and integrity”; the same nonpartisan IG said that Koskinen had been “extraordinarily cooperative” about the investigation. The resolution condemns statements he made to the Senate Finance Committee; its chair, Orrin Hatch said of Koskinen, “We can have our disagreements with him, but that doesn’t mean there’s an impeachable offense, [and] for the most part, he’s been very cooperative with us.”
It is true that in many respects the IRS’s response to the 501(c)4 controversy has been a comedy of errors, from the ham-handed way career employees in Cincinnati tried to cope with the deluge of requests for the status of groups in 2010 to the crash of Lerner’s hard drive and the erasure of the backup tapes. Koskinen appropriately criticized the way the IRS singled out political groups and delayed their applications, and as head of the agency, is appropriately subject to criticism for how the agency performs. It was a major embarrassment to him that he was assured the agency had records it did not in fact have, but as soon as he discovered the reality, he dealt with it swiftly and effectively. But criticism of his and the agency’s performance is one thing—censure and impeachment are very much another.
Congress, or at least the majority in Congress, often has deep disagreements with top executive officials over their official conduct. Sometimes that has resulted in a sense of Congress resolution, or a preamble to a measure, calling for the official’s resignation, a symbolic expression of frustration or disapproval. But it is exceedingly rare for public officials to face censure, much less impeachment. The latter has been reserved for judges or, historically, presidents (two) or Cabinet officers (one, 140 years ago.) The causes—the “high crimes and misdemeanors”—usually involve corruption or treason. The charges against Koskinen, that he delayed for weeks a response to a congressional subpoena, fall galaxies away from any previous, or any reasonable, definition of high crimes and misdemeanors, and represent an unprecedented overreach.
A little history is in order here, starting with the overheated and distorted criticism of the IRS and 501(c)4s. The IRS has under the law 29 separate categories classifying non-profit organizations, from religious and educational institutions and charities through business organizations and chambers of commerce, to cemeteries, credit unions, black-lung trusts, and veterans organizations. 501(c)3 is the category for charities, religious, and educational institutions, which can engage in no political or lobbying activities. 501(c)4 allows some lobbying and political work, but the category is for organizations that operate “exclusively as social welfare organizations” engaged in promoting the public good, with their net monies used for charitable, educational, or recreational purposes.
So how can groups like Crossroads GPS, the Karl Rove-crafted 501(c)4 that has poured millions upon millions into campaign ads in the past several election cycles, qualify? The answer, given the plain language of the law, is that they should not. The appropriate ISR classification for groups like Crossroads GPS is under section 527 of the IRS Code, for political organizations. So why opt instead for 501(c)4 status? Because 527s have to disclose their donors—and 501(c)4s do not. Bingo!
To be sure, the ability of sham social-welfare organizations like Crossroads GPS to apply for 501(c)4 status stemmed from a bureaucratic decision by the IRS decades ago to redefine “exclusively” as “primarily,” a step taken to give a tiny bit of flexibility and discretion to the agency. But as dark money proliferated in the aftermath of Citizens United, campaign-finance lawyers pushing the envelope of the law decided that they could use a standard of 50 percent of the organizations’ funds going for social welfare to meet the standard of “primarily,” knowing that an understaffed and beleaguered agency would probably not intervene.
In 2010, the IRS was hit with a veritable flood of applications for 501(c)4 status, overwhelming its resources. Career employees, seeking to separate real social-welfare organizations from those that were political ones, developed a set of keywords and terms, including many conservative and some (but fewer) liberal ones, in part because the lion’s share of the applications came from conservative groups. The terms included “Tea Party.” Why? A Tea Party organization—built around the term “party”—was openly political in nature, a clear 527 group, not exclusively or even primarily a social-welfare organization.
No question, the IRS officials handling this application process were naïve and ham-handed, and they inappropriately left many organizations, whether they should have qualified or not, twisting in the wind for months or years. But the problem itself stemmed from an illegitimate effort by many political consultants and their consiglieres to evade disclosure.
The Republican reaction to the IRS bungling was a clever and sustained effort to use the hated agency as a way to mobilize an angry constituency on the right, to enhance turnout in subsequent elections, and to raise money. The effort already succeeded at intimidating the agency—including Koskinen—from developing a new clear and appropriate standard, a bright line test, for achieving 501(c)4 designation, and even got the IRS, in a move that defies the law and common sense, to accept Crossroads GPS as a social-welfare organization.
There is a broader motive here, coming from radical forces that want to blow up all of government as we know it. Intimidating, undermining, and destroying the IRS’s capacity to carry out its role, to collect all the tax money that’s owed, to starve government, makes all agencies perform more poorly, and leads to a backlash against government. The poor service that results from cutting personnel also alienates taxpayers, frustrates their efforts to keep up with tax law, and makes it easier to evade the law.
As the veteran journalist Ted Gup pointed out in The Nation, the IRS budget has been cut by about $1 billion from its 2010 level, in inflation-adjusted terms, forcing the agency to eliminate some 13,000 people, and meaning that, at the height of last year’s tax-filing season, 90 percent of calls to the helpline went unanswered. An agency that used to have high morale and one of the best bureaucratic cultures, stressing excellence, is now embattled and demoralized. The budget cuts mean much less ability to conduct audits or find fraud, and reduce the government’s revenues by many billions each year, adding to deficits and debt.
In the McCarthy era, a prime symbol of witch hunts was the House Un-American Activities Committee (HUAC,) which used and misused congressional power to intimidate and punish witnesses and smear many individuals. It was abolished in 1975. Last week, former Speaker Newt Gingrich called for a new HUAC. If it were created, it would start with a contemporary role model.
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