Criminal Charges Not Expected in IRS ProbeFBI Investigation Involves Heightened Scrutiny of Conservative Group
By
DEVLIN BARRETT
Updated Jan. 13, 2014 7:25 p.m. ET
WASHINGTON—The Federal Bureau of Investigation doesn't plan to file criminal charges over the Internal Revenue Service's heightened scrutiny of conservative groups, according to law-enforcement officials, a move that likely will only intensify debate over the politically charged scandal.
The officials said investigators didn't find the kind of political bias or "enemy hunting" that would amount to a violation of criminal law. Instead, what emerged during the probe was evidence of a mismanaged bureaucracy enforcing rules about tax-exemption applications it didn't understand, according to the law-enforcement officials.
While the case is still being investigated and could remain open for months, officials familiar with its progress said it is increasingly unlikely any criminal charges will result. That could change, the officials cautioned, if unexpected evidence is discovered that alters their thinking.
With this year's midterm elections heating up, the FBI's decision will feed both parties' stories about why—or whether—the IRS scandal mattered.
Since the outset, Republicans have voiced skepticism that the Obama administration would properly investigate itself. Last week, Rep. Darrell Issa (R., Calif.), chairman of the House Committee on Oversight and Government Reform, challenged the impartiality of a Justice Department prosecutor handling the case because she had made donations to the Obama campaign.
Democrats have maintained there was no criminal wrongdoing on the part of IRS agents, contending that the IRS's intent wasn't to punish or hamstring conservative groups because liberal groups received similar scrutiny of their tax filings.
The investigation was sparked by a report from the Treasury Inspector General for Tax Administration, which concluded that IRS staff, particularly the Determinations Unit based in Cincinnati, used unfair criteria to select groups for scrutiny among those applying for tax-exempt status. The IRS said it was worried that politically active groups were improperly using a portion of the tax code traditionally reserved for nonprofits that weren't primarily political organizations.
Initially, an IRS employee in Cincinnati was asked to search for applications with certain terms in them or ones that had "political sounding' names. That led to the creation of a document called a "Be On the Look Out,' or BOLO, which prompted heightened scrutiny of conservative groups.
About a third of the groups that received such scrutiny had names that included "Tea Party," "Patriots" or "9/12." Agents then directed questions about the group's beliefs, donor lists and other information.
Since the scandal erupted into public view last year, IRS officials maintained that employees made missteps in dealing with a surge of applications for tax-exempt status, prompted by the increasing popularity of the designation among electioneering groups. They denied the agency had intentionally sought to punish any group for its politics.
The criminal probe was launched last May, as Republicans pressed Obama administration officials as to how the targeting of such groups could have lasted for more than a year, beginning in 2010.
As he announced the investigation, Attorney General Eric Holder said the FBI and Justice Department would conduct a thorough probe of actions at the IRS. "Those were, I think, as everyone can agree, if not criminal, they were certainly outrageous and unacceptable,' he said at the time.
The FBI explored a number of possible violations, including those involving statutes within the IRS code that prohibit the misuse or improper disclosure of taxpayer information. Another area being examined was whether any IRS officials lied about what happened and the reasons for it.
The people familiar with the probe wouldn't detail specifically who was interviewed.
By its very nature, the investigation has been freighted with political suspicions. Cleta Mitchell, a lawyer who has represented about a dozen groups that faced such questions by the IRS, said the FBI has yet to contact any of her clients about the issue.
"As far as I can tell, nobody has actually done an investigation. This has been a big, bureaucratic, former-Soviet-Union-type investigation, which means that there was no investigation," she said. "This is a deplorable abuse of the public trust, but I am not surprised."
Last week, James Comey, the head of the FBI, acknowledged the probe continues but declined to say where it was headed. "It's an investigation that we're still working and that's an important one for us," he said.
The scandal, which erupted in the early months of President Barack Obama's second term, forced significant changes at the tax agency and preoccupied Washington for months. The White House forced out the acting IRS commissioner. The agency official who oversaw the work denied wrongdoing and later retired amid disciplinary actions.
The matter also spawned a number of congressional investigations, which are likely to continue despite any determinations made by the FBI or Justice Department.
IRS officials have apologized and promised to make changes to prevent such targeting from happening again. The agency also has proposed a series of rules that would change how 501(c) 4 groups, as they are known, are regulated. |
