Republicans are outraged and calling for congressional hearings (because it isn’t enough that fully one-third of the committees in the Republican-controlled House of Representatives are currently involved in investigations of the Obama White House for one thing or another …) over Cincinnati, Ohio-based Internal Revenue Service workers flagging groups with “tea party” or “patriot” in their names for review between 2010 and 2012. The groups were seeking status as 501(c)4 organizations, designated by the IRS as “social welfare” entities that don’t primarily engage in politics.
Except that the tea party and its various iterations — from the Tea Party Express to the Koch-brothers-funded Americans for Prosperity, engage in lots of politics, most of it aimed squarely at Democrats and the Obama administration.
Likewise, groups like Karl Rove’s American Crossroads and its PAC, Crossroads GPS and the Koch-funded Americans for Prosperity, along with the Tea Party Express (run by Republican political consultants) and liberal groups like Priorities USA are deemed as social welfare organizations, operating “primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements)” as described on the IRS website 501(c)4 section. And despite the fact that in reality, they operate as political PACs in charitable clothing, these groups are permitted under the 501(c)4 rules to raise tens of millions of dollars from anonymous donors, including corporations, without disclosing the funders’ names, and are essentially subsidized by taxpayers.
As a result, “non-profit” groups spent $1 billion in the 2012 election cycle, according to the Center for Public Integrity, based on data from the Center for Responsive Politics, with 70 percent of that spending by conservative groups, opposing Barack Obama’s re-election.
Flood of “Tea Party” groups
The flood of new “Tea Party” groups after the January 2010 Supreme Court’s Citizens United ruling, which opened the floodgates for corporate and labor union spending in politics, meant that the IRS was seeing a lot of applications for tax-exempt 501(c)4 status. The IRS reports the number of groups seeking the designation jumped from 1,500 in 2010 to 3,400 in 2012.
The news that groups with “Tea Party,” “patriot” or “9/12” (based on right wing talk radio host Glenn Beck’s 9/12 project) in the names were singled out for extra scrutiny on their applications has touched off a media frenzy, as outlets on the right in particular, but across the board, are demanding to know, as Joe Klein said on Hardball on Monday, what the White House might have known about the process, “and when did it know it.”
The fact that Doug Shulman, the IRS commissioner until he stepped down in November 2012, is a Republican, who was appointed to the IRS position by George W. Bush, hasn’t stopped the scandal freight train. Nor has the revelation that Lois Lerner, who headed the IRS’s tax-exempt groups unit, ordered her team to “immediately revise” the criteria for groups being scrutinized in July 2011, to remove the specific references to the tea party. (Or the reporting, from the Atlantic, that Democratic members of congress drove the push to scrutinize 501(c)4 applications, as well as the push-back against the extra scrutiny.)
And never mind that some tea party groups themselves, such as the New Hampshire Tea Party Coalition, have pointed the finger at the slew of Republican consultants creating phony groups with the name “tea party” for bringing some of the scrutiny on themselves:
“While we decry the practice of using the IRS to target anyone, we have not been subject to this scrutiny because we as the original movement do not collect/distribute or deal with money,” Jane Aitken of the NHTPC said in an email blast. “Many of the groups in question are GOP PACs founded by GOP consultants calling themselves ‘tea parties.’”
In a related blog post titled “Legitimate Tea Party Groups Have Nothing to Fear From the IRS,” the NHTPC took direct aim at the Tea Party Patriots, Tea Party Express, TheTeaparty.net and Tea Party Nation, saying that those groups “had little or nothing to do with the formation of the legislative tea party movement in 2007.”
Still, words like “abuse of power” and “Nixonian” are being tossed around — with non-existent connections to the White House being speculated about in journalistic circles. Politico’s headlines blared: Acting IRS chief knew of targeting in 2012 … 5 key players in IRS mess … and Scandal politics sweep Capitol Hill! House Speaker John Boehner is said to be “obsessed.”
It’s all very dramatic.
No such drama in 2004
NAACP members and leaders watching the excitement over the IRS’ alleged targeting of Tea Party groups might be wondering where the outrage was in 2004, when the IRS, then during the George W. Bush administration, not only targeted the NAACP for extra scrutiny, they hit them with the tool that has made Americans fear the revenue agency most: an audit.
The NAACP in 2004 was subjected to a two-year investigation by the IRS. Why? As the Baltimore Sun reported in October 2004, just before that year’s presidential election, putting the organization’s tax exempt status as a 501(c)3 entity — a different designation from 501(c)4, but similarly tax exempt — at risk:
The Internal Revenue Service is auditing the NAACP, scrutinizing the nation’s oldest civil rights group after its chairman gave a stinging criticism of the Bush administration in a speech this summer.
Julian Bond’s July 11 comments at the National Association for the Advancement of Colored People’s convention in Philadelphia chastised President Bush for being the first sitting president since Herbert Hoover not to address the group. Bush declined the group’s invitation to speak, while Democratic candidate Sen. John Kerry accepted.
In a letter dated Oct. 8, the IRS Tax Exempt and Government Division informed the NAACP’s national office in Baltimore of the investigation. The letter said the probe was limited to ” … whether or not your organization has intervened in a political campaign. … ”
Bond said yesterday that the audit was “an attempt to silence the NAACP” right before a tight presidential election.
“They are saying if you criticize the president we are going to take your tax exemption away from you,” he said. “It’s pretty obvious that the complainant was someone who doesn’t believe George Bush should be criticized, and it’s obvious of their response that the IRS believes this, too.”
At the time, the IRS commissioner, Mark Everson, made it very clear why the agency was scrutinizing the NAACP:
In a statement, IRS Commissioner Mark W. Everson said the agency could not comment on activities involving specific tax-exempt organizations, but he rejected Bond’s claims.
“Any suggestion that the IRS has tilted its audit activities for political purposes is repugnant and groundless,” the statement said.
The IRS letter states that Bond’s speech “condemned the administration policies of George W. Bush on education, the economy and the war in Iraq.”
The letter goes on to note that the NAACP’s 501(c)(3) tax-exempt status prohibits “directly or indirectly participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office.”
Two years later, the IRS quietly ended the probe, determining that in fact the NAACP had not violated the terms of its tax-exempt status. The opposite outcome would have seriously limited the nation’s oldest civil rights organization’s fundraising ability, effectively, as Bond said in 2004, silencing them. At the time the probe ended, the Washington Post wrote:
The investigation started Oct. 8, 2004, a month before the election. As the investigation dragged on into the following February, the NAACP announced that it would not continue to cooperate.
Angela Ciccolo, an NAACP lawyer, noted that although Bond’s remarks were made in July 2004, the investigation did not begin until October, just when the NAACP was attempting to register voters. “The timing of the investigation is critical,” she said.
When the investigation started, Bush and the NAACP were locked in a long-running feud that started shortly before the president’s first election victory in 2000.
During that campaign, the NAACP ran television spots featuring the daughter of James Byrd Jr., a black man who was dragged to death behind a pickup truck in Texas in 1998. She criticized Bush, then governor of Texas, for not signing hate-crime legislation.
The rift grew when the NAACP charged that Republicans in Florida stole the 2000 election by turning black voters away from the polls.
Double standard?
Reached for comment by theGrio on Monday, as news of the IRS tea party probes rocketed around the news world, Bond said, “of course there is a racial double standard. Black people audited — no big deal. Overwhelmingly white and racist Tea Party audited? Super outrage!”
Bond said the IRS scandal was taking hold because of the persistence of its messenger. “The Republicans speak with one voice in their outrage; they always seem louder,” he said. “In fact, it is the only thing they do.”
“In 2004 after criticizing Bush administration policies that severely impacted its members and the nation’s most vulnerable citizens, the NAACP was subjected to an audit by the IRS,” said political strategist Angela Rye, who heads IMPACT Strategies in Washington. “The NAACP audit didn’t end for two years. As the IRS reviews its standards for subjecting organizations to additional scrutiny, I hope that its fact-finding mission will begin prior to the last two years and examine practices that impacted organizations serving people of color and other vulnerable communities for decades.”
The NAACP wasn’t the only entity to be targeted by the IRS during the Bush years. A southern California church, All Saints Episcopal, received an IRS warning letter in 2004 over an anti-war sermon delivered by the church’s former rector, and the environmental group Greenpeace was audited by the IRS in 2006 following a complaint by a group called Public Interest Watch, which was largely funded by oil companies.
Also in 2006, the IRS acknowledged hiring a private vendor to collect the party affiliation of voters in 20 states (Alaska, Arkansas, Colorado, Connecticut, Delaware, Florida, Louisiana, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Utah and Wisconsin) and the District of Columbia, which Sen. Patty Murray (D-Wash) called an “outrageous violation of the public trust.”
Tea Party groups, Republican lawmakers, called on IRS to review NAACP’s tax status
Still, the focus on the NAACP, and whether it deserved its tax exempt status, extended beyond the IRS to Republican lawmakers and the Tea Party itself.
As early as December 2000, Republican members of Congress sent letters to the IRS commissioner, Charles O. Rossotti, questioning whether the NAACP should keep its 501(c)3 designation, based on statements from leaders of the group questioning the Supreme Court decision that placed George W. Bush in the White House. Some of those members who wrote to the IRS in 2000, like Maine Sen. Susan Collins, are now calling the alleged targeting of conservative groups by the IRS “absolutely chilling.”
And after the civil rights organization passed a resolution in July 2010 during their annual convention in Kansas City, calling on tea party groups to repudiate racist elements within their organizations, tea partiers and their allies on Capitol Hill reacted angrily, with a group called the St. Louis Tea Party passing a counter-resolution, calling on the IRS to revoke the NAACP’s tax-exempt status.
The current leadership of the NAACP says the group’s past experience with politicization of the IRS makes them sensitive to Republicans’ concerns.
“As an organization targeted by the IRS under the last Bush Administration, we know all too well the capacity for the IRS to abuse its power and the chilling impact that can have,” NAACP President and CEO Benjamin Todd Jealous told theGrio in a statement Tuesday. “The recent allegations of bias, if true, cannot be tolerated in a free society.”
“We are pleased that the president has acknowledged the need for a full and comprehensive investigation,” Jealous said. “If abuse is uncovered, the responsible parties must be held ‘fully accountable’ for their actions. The IRS plays a critical role in our society and must not engage in political discrimination.”
The question is, whether the same outrage applies when it comes to the clear abuse of the charitable designation in the tax code by political groups, or when the targets are not conservatives.
Follow Joy Reid on Twitter at @TheReidReport.