Baucus, now investigating IRS, urged IRS to target conservative groups in 2010Democratic Montana Senator Max Baucus is leading an investigation into why the Internal Revenue Service targeted conservative nonprofit groups for extra scrutiny despite the fact that Baucus once wrote a letter urging the IRS to do exactly that.
Baucus, chairman of the Senate Finance Committee, will head the committee’s investigation into the IRS, which apologized Friday for targeting groups with the terms “Tea Party” and “Patriot” in their titles for extra scrutiny of their nonprofit status as early as 2011.
However, Baucus once wrote a letter requesting that the IRS engage in that very conduct.
Baucus wrote a letter to then-IRS commissioner Douglas Shulman dated September 28, 2010 urging the IRS to investigative nonprofit conservative groups during the Tea Party-dominated 2010 midterm elections.
“With hundreds of millions of dollars being spent in election contests by tax-exempt entities, it is time to take a fresh look at current practices and how they comport with the Internal Revenue Code’s rules for nonprofits,” Baucus wrote in the letter.
“I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations involved in political campaign activity to examine whether they are operated for the organization’s intended tax exempt purpose and to ensure that political campaign activity is not the organization’s primary activity,” Baucus wrote in the letter.
“The tax exemption given to non-profit organizations comes with a responsibility to serve the public interest and Congress has an obligation to exercise the vigorous oversight necessary to ensure they do,” Baucus said in a 2010 statement accompanying his letter.
Though Baucus identified 501 (c) (5) groups — or labor unions — as worthy of investigation, the only organizations cited in his request were conservative, pro-Republican groups.
Baucus specifically named Americans for Job Security, which is described as a “pro-Republican organization,” as a specific target for the IRS to investigate.
Crossroads GPS, co-founded by Karl Rove, and American Action Network, chaired by former Republican senator Norm Coleman, were also cited in press coverage related to Baucus’ letter as pro-Republican groups helping to elect GOP congressional candidates in 2010.
Those organizations appeared in a September 16, 2010 TIME article by writer Michael Crowley titled, “The New GOP Money Stampede.” Baucus cited that piece in his letter to the IRS.
Whatever the fallout might be from such a conflict of interest, Baucus won’t be around too much longer to deal with it.
He’s already announced his retirement from the Senate, and won’t run for re-election in 2014.
A Baucus spokesperson did not immediately return a request for comment.
Sen. Max Baucus asked IRS in 2010 to investigate 501(c) groups, letter shows
By Robert Romano
Senate Finance Committee Chairman Max Baucus (D-MT) in a 2010 letter requested that then-Internal Revenue Service (IRS) Commissioner Douglas Shulman deeply investigate 501(c) non-profit political organizations.
The letter called on Shulman to “survey major 501(c)(4), (c)(5) and (c)(6) organizations involved in political campaign activity to examine whether they are operated for the organization’s intended tax exempt purpose and to ensure that political campaign activity is not the organization’s primary activity” and to “to determine whether they are acting as conduits for major donors advancing their own private interests regarding legislation or political campaigns, or are providing major donors with excess benefits.”
In his own letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, Americans for Limited Government President Nathan Mehrens noted, “Considering the invasive questions the IRS was asking the targeted organizations, it appears that Sen. Baucus got exactly what he asked for, which was a witch-hunt.”
Baucus’ letter also instructed Shulman that “Possible violation of tax laws should be identified as you conduct this study. Please report back to the Finance Committee as soon as possible with your findings and recommended actions regarding this matter.”
Baucus specifically referenced a Sept. 16, 2010 Time article, “The New GOP Money Stampede” reporting that “Democrats fear [what] could be a $300 million Republican spending blitz this year.” The story detailed allegations that local tea party groups were actually “shadow Republican groups formed by longtime party officials.” The article referenced the tea party, but also American Crossroads, American Action Network, and the U.S. Chamber of Commerce as forming a wider campaign front for the 2010 Republican election campaign effort, financed “in the form of secret undisclosed contributions.”
Baucus also referenced “a group transforming itself into a non-profit under 501(c)(4) of the tax code,” ensuring, as the Time article put it, that the group would “not have to publicly disclose any information about its donors.” That “group” Baucus referenced was actually Crossroads GPS.
“The Time article Baucus so prominently referenced was all about the financing of Republican election efforts and right of center political and advocacy organizations,” Mehrens noted in his letter, adding, “It did not scrutinize any left-wing groups. Nor did Baucus include in his letter to Shulman any footnotes to articles that detailed Democrat campaign activities or left of center groups. The implicit task was to investigate the political right from start to finish. And that’s exactly what the IRS did.”
Yesterday, Baucus issued a statement suggesting “Targeting groups based on their political views is not only inappropriate but it is intolerable, promising a “full investigation into this matter by the Senate Finance Committee.”
But that is not possible, Mehrens said, considering Baucus’ letter to Shulman. “Senate Democrats were complicit in the IRS scandal targeting the tea party and other groups, per Baucus’ explicit letter to Shulman. The Senate majority must therefore recuse itself from any ensuing investigation in order to ensure that the public’s trust in the inquiry’s findings is not tainted.”
The only good option, Mehrens wrote, was for Senate leaders to call on Attorney General Eric Holder to appoint a special counsel to prosecute the case. “Just as the Senate majority cannot be trusted to investigate its own complicity in this affair, neither can the Obama Administration.”
He concluded, “These targeted attacks by the IRS were not about restoring ‘transparency’ to our political process, they were a part of a brazen partisan assault using the instrumentalities of the state to harass political opponents and stifle dissent to achieve a partisan end. It is beyond Nixonian in its flagrant disregard for the rule of law. Only a special counsel can get to the bottom of this.”
Mehrens joined others, including the Republican Governors Association, who today also demanded a special prosecutor be appointed.
Robert Romano is the Senior Editor of Americans for Limited Government.