A Year Later, Still No Scandal at the IRS, But Plenty of Wasted Time and Effort (and Money)

-- Posted by Neil H. Buchanan

Last year at this time, while I was on a gig as a visiting professor in Austria, news broke back home about a HUGE SCANDAL involving the IRS.  Using the power of the interwebs, I closely followed the media circus, and within a week of the emergence of the story, it was already blindingly obvious that there was nothing especially noteworthy about the whole affair.

My first blog post about the non-scandal scandal was published a year ago tomorrow.  This was quickly followed by a Verdict column, with an accompanying Dorf on Law post.  Barely a month after the story broke, I was back in the U.S., and the idea that there was a scandal was essentially over, as I summarized in another Verdict column, and a Dorf on Law post carrying the title: "The IRS Non-Scandal Scandal Collapses on Itself."

But House Republicans simply would not let go.  Even today, incredibly, they are still trying to drag out the non-scandal scandal.  As reluctant as I am to write anything further about this completely contrived political show trial, at this one-year mark I decided to write the equivalent of the old Saturday Night Live fake-news joke: "Generalissimo Francisco Franco is Still Dead."

A quick review might be helpful.  The IRS had been using non-lawyer employees in its Cincinnati office to review applications from groups who requested special nonprofit status as Section 501(c)(4) organizations.  To qualify for that status, the law requires that such a group be "operated exclusively for the promotion of social welfare."  The IRS had long interpreted "exclusively" to mean that less than 50% of a group's funds be spent on political activities, meaning that the law had already been stretched in a very generous manner, to allow more organizations to qualify as 501(c)(4)'s than would have been able to qualify under a natural reading of the law.

The suspicion that something scandalous might have been happening at the IRS broke into the news when an inspector general's report said that the Cincinnati staffers had used search terms like "tea party" and "patriot" as part of their triage operation.  We found out later that words like "progressive" and "occupy" had also been used, but by that point, it had become common for news outlets to say that "conservative groups had been targeted by the IRS," and similarly explosive descriptions.

Even though the initial report said that this was entirely a matter of errors by low-level employees, and that the mid-level IRS lawyer who found out about it had fixed the problem, the scandal-mongers decided that this was all a big plot by the IRS, as directly ordered by the Obama Administration, to punish Tea Party groups.  That there was no meaningful consequence, and no political advantage for President Obama, for any group to receive extra scrutiny in the 501(c)(4) process was also brushed aside.

In the immediate aftermath of the screaming headlines, the Obama people forced the IRS's acting commissioner to resign, after which they ran for the hills.  As I noted at the time, late-night comedians acted as if something big was going on, and even some liberal groups, like The Progressive magazine, strangely jumped on the scandal bandwagon.

As I noted above, however, it was obvious by mid-June that there was nothing to the story.  What has happened during the past year?  The IRS has been forced to respond to endless Republican demands for documents and testimony, using staff time and agency resources at a total estimated cost of over $14 million so far -- all in an environment in which a bipartisan budget deal was cutting over $500 million from the IRS's budget (almost a 5 percent cut, even as the agency's responsibilities are being increased).

The Republicans' claim all along has been that an investigation is necessary, to make sure that there really is nothing more to this story.  Of course, the people who have been most vocal about the non-scandal scandal have said all along that they simply will not believe that a lack of evidence implies a lack of culpability.  Despite their tenacity,  even a Fox News show last month found Chris Wallace telling a House Republican that the whole thing adds up to nothing.

The Republican diehards' last gasp is to try to force testimony from Lois Lerner, the long-since-fired mid-level IRS employee who initially reported what had happened in Cincinnati.  When Wallace asked if there was "any evidence, after a year of investigation," that this is an actual scandal, his Republican guest's response was that, no, there is no evidence, but that is because Lerner refuses to talk.  The House then voted along party lines to hold Lerner in contempt, with Speaker Boehner saying that the House would refer the contempt charge to Attorney General Eric Holder.  And of course, when Holder fails to drag Lerner in chains before the House of Representatives, the Speaker can then insinuate that the Obama people are protecting their hatchet woman.

The problem is that we have never been told why anyone thinks that Lerner has information that could shed light on potential evil-doings by the White House.  Lerner took the Fifth Amendment last year, after Boehner and others talked about charging her criminally.  As Wallace pointed out, the House could grant her immunity, and she could sing like a bird.  The problem, from the Republicans' standpoint, is that she almost certainly has no song to sing.

Investigators tend to focus on potential witnesses on the basis of corroborating evidence, or on leads that suggest that a witness could provide probative information.  Typically, one will hear prosecutors say things like, "We believe that Big Mike will be able to testify as to the location of the bodies that his gang dismembered and buried."  Here, House Republicans are simply saying, "We don't know what she hasn't told us, so we're going to keep asking."

Happily, at this point only the House Republicans and their most committed activists seem to care.  Certainly, continuing to victimize Lois Lerner is not going to get the attention of the media or the public at large.  Republicans keep hoping that something, anything, will turn up, but they are getting even less traction on this story than they are getting on the insane Benghazi investigation, where Republicans last week considered it hugely important to release an email showing that the Obama Administration had discussed how best to present the story on the Sunday talk shows.  (Gasp!)

Republicans keep saying that they just need time to get to the bottom of the story.  But as Fox's Wallace put it: "You’ve had a year sir.  You’ve had a year.”  Unfortunately, they show every intention of making it two.