[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
HEARING WITH ORGANIZATIONS TARGETED
BY INTERNAL REVENUE SERVICE FOR
THEIR PERSONAL BELIEFS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JUNE 4, 2013
__________
Serial No. 113-FC08
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
DAVE CAMP, Michigan, Chairman
SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin JIM MCDERMOTT, Washington
DEVIN NUNES, California JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
TOM PRICE, Georgia EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida RON KIND, Wisconsin
ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota DANNY DAVIS, Illinois
KENNY MARCHANT, Texas LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio
Jennifer M. Safavian, Staff Director and General Counsel
Janice Mays, Minority Chief Counsel
C O N T E N T S
__________
Page
Advisory of June 4, 2013 announcing the hearing.................. 2
WITNESSES
Dianne Belsom, President, Laurens County Tea Party............... 13
John C. Eastman, Ph.D., Henry Salvatori Professor of Law and
Community Service, Chapman University School of Law; Chairman,
The Claremont Institute's Center for Constitutional
Jurisprudence; and Chairman of the Board, National Organization
for Marriage................................................... 17
Becky Gerritson, President, Wetumpka Tea Party................... 39
Karen L. Kenney, Ph.D., Marriage, Family Therapist, Personal
Development Center Associates, and Member, San Fernando Valley
Patriots....................................................... 28
Kevin S. Kookogey, President and Founder, Linchpins of Liberty:
An American Leadership Development Enterprise.................. 7
Susan Martinek, President, Coalition for Life of Iowa............ 34
HEARING WITH ORGANIZATIONS TARGETED
BY INTERNAL REVENUE SERVICE FOR
THEIR PERSONAL BELIEFS
----------
TUESDAY, JUNE 4, 2013
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC.
The Committee met, pursuant to call, at 10:04 a.m., in Room
1100, Longworth House Office Building, Hon. Dave Camp [Chairman
of the Committee] presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
CONTACT: (202) 225-3625 FOR IMMEDIATE RELEASE
Tuesday, May 28, 2013
No. FC-8
Ways and Means to Hold Hearing with
Organizations Targeted by Internal Revenue
Service for Their Personal Beliefs
Congressman Dave Camp (R-MI), Chairman of the Committee on Ways and
Means, today announced that the Committee will hold a hearing featuring
organizations targeted by the Internal Revenue Service (``IRS'') based
on their personal beliefs. The hearing will take place on Tuesday, June
4, 2013, in Room 1100 of the Longworth House Office Building, beginning
at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
The Committee on Ways and Means has led a 2-year investigation into
whether the IRS treated certain applicants for tax-exempt status
differently on the basis of their personal beliefs. The agency now
admits to the practice, and the Committee is continuing its work to
determine how the practice was established and why it was allowed to
continue.
In announcing the hearing, Chairman Camp said, ``While we now know
that the IRS began targeting individuals based on their personal
beliefs 3 years ago, we still need to know who began this targeting and
why, and we need to understand how individuals were affected by the
IRS' abuse. This hearing will provide a voice to those Americans who
wound up under the IRS' political microscope on the basis of their
beliefs.''
FOCUS OF THE HEARING:
The hearing will focus on organizations that were targeted as part
of the Internal Revenue Service's practice of discriminating against
applicants for tax-exempt status based on their personal beliefs.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit
written comments for the hearing record must follow the appropriate
link on the hearing page of the Committee website and complete the
informational forms. From the Committee homepage, http://
waysandmeans.house.gov, select ``Hearings.'' Select the hearing for
which you would like to submit, and click on the link entitled, ``Click
here to provide a submission for the record.'' Once you have followed
the online instructions, submit all requested information. ATTACH your
submission as a Word document, in compliance with the formatting
requirements listed below, by the close of business on Tuesday, June
18, 2013. Finally, please note that due to the change in House mail
policy, the U.S. Capitol Police will refuse sealed-package deliveries
to all House Office Buildings. For questions, or if you encounter
technical problems, please call (202) 225-3625 or (202) 225-5522.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the
official hearing record. As always, submissions will be included in the
record according to the discretion of the Committee. The Committee will
not alter the content of your submission, but we reserve the right to
format it according to our guidelines. Any submission provided to the
Committee by a witness, any supplementary materials submitted for the
printed record, and any written comments in response to a request for
written comments must conform to the guidelines listed below. Any
submission or supplementary item not in compliance with these
guidelines will not be printed, but will be maintained in the Committee
files for review and use by the Committee.
1. All submissions and supplementary materials must be provided in
Word format and MUST NOT exceed a total of 10 pages, including
attachments. Witnesses and submitters are advised that the Committee
relies on electronic submissions for printing the official hearing
record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental
sheet must accompany each submission listing the name, company,
address, telephone, and fax numbers of each witness.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
Note: All Committee advisories and news releases are available on
the World Wide Web at: http://www.waysandmeans.house.gov/.
Chairman CAMP. Good morning.
The hearing will come to order. We will give the media a
chance to leave.
Good morning. Welcome. Thank you all for being with us
today. Despite nearly 2 years of denials, last month the IRS
finally admitted the truth. Three years ago, the agency began
systematically targeting individuals based on their political
beliefs.
However, what the agency has yet to admit, and what we
still need to find out, is just how widespread this activity
was, who ordered it, and why it began in the first place. Now
let's consider what we do know. In March of 2010, the IRS put
together a target list that ensnared conservative groups and
individuals based solely on their political beliefs.
In May of 2011, the IRS started sending letters threatening
donors to conservative-leaning nonprofits that they could be
liable for gift taxes.
In June of 2011, the Ways and Means Committee initiated an
investigation into those letters and highlighted concerns that
individual taxpayers might be targeted for their political
beliefs.
In June of 2011, the senior leadership in the Washington,
D.C. office of the IRS also became aware that the IRS workers
had been using lists to target groups with names like
``liberty,'' ``Tea Party,'' ``patriots,'' ``9/12,'' or ``make
America a better place to live.''
In March of 2012, the Huffington Post published the
confidential 2008 donor list of the National Organization for
Marriage, a conservative tax-exempt organization.
In July of 2012, the Administration through the Treasury
Department was informed by the Treasury Inspector General of a
TIGTA audit examining the targeting of groups by the IRS.
In May of 2013, the public and Congress were finally told
that this practice had occurred, but only after a scathing
report by the Treasury Inspector General that resulted in
senior IRS officials planting a question about the targeting
activity before the report's release.
And just this weekend, the Wall Street Journal reported
that the IRS gift tax letters that launched this Committee's
initial investigation was, in fact, the result of a
conservative organization and its donors being targeted for
their political beliefs.
Those are the facts we know.
We also know that Americans were affected by the culture of
political intimidation and discrimination that was cultivated
by this targeting. At its core, this investigation is about how
and why the IRS was empowered and allowed to use a broken Tax
Code to abuse individuals based on their beliefs, and seemingly
only based on their beliefs.
And who are these Americans? While their life stories are
different, what they all share in common is that they are
Americans who did what we ask people to do every day: Add their
voice to the dialogue that defines our country. And for
pursuing that passion, for simply exercising their First
Amendment rights, their freedoms of association, expression,
and religion, the IRS singled them out.
Today's witnesses will help this Committee and the American
people better understand just how far off track the IRS has
gone. Their testimony will show that the IRS' practice of
treating certain Americans differently on the basis of their
beliefs was not limited to the discriminatory conduct revealed
by the Treasury Inspector General for Tax Administration's
report, which was released May 14th of this year. Victims
include Tea Party and non-Tea Party groups, 501(c)(3) social
welfare organizations and 501(c)(3) charitable organizations,
including religious organizations. All the witnesses received
onerous and intrusive questionnaires from the IRS agents across
the country. Some even had their confidential information
leaked by the IRS to the media, which can have an impact of
chilling free speech. Information requests to some included
questions that were not only irrelevant but also intimidating,
not to mention a violation of privacy. Those requests included
asking for the following: Copies of all activity on Facebook or
Twitter; resumes of past or present employees; whether past or
present employees or a member of their family plans to run for
office in the future; a list of past or present board members
or members of their family that volunteer at a tax-exempt
organization; information on their interaction with the media;
details regarding the group's relationship with the private
taxpayer; and a list of donors.
The invited witnesses are but a small sample of Americans
who have been treated differently and discriminated against by
their government because of their individual, deeply-held
beliefs. There are many, many more.
And, again, I want to thank personally the witnesses for
being here with us today, for the time you have taken to travel
here, and for sharing your stories and experiences.
While we might not know why this happened, please be
assured that learning firsthand from you about how the IRS used
the Tax Code to intimidate and harass you will help us take the
steps necessary to make sure it never happens again. And I will
now recognize Ranking Member Levin for an opening statement.
Mr. LEVIN. Thank you very much.
At our first hearing and every day since, each of us on a
bipartisan basis have condemned the actions within the IRS
Exempt Organization Division and condemn the actions by the IRS
leadership who failed to accurately and adequately inform
Congress after they had all of the facts of what had occurred
between 2010 and 2012.
We have all said that the singling out by name was wrong.
The President said it was outrageous. The delays of over 13
months in processing applications were wrong. And the fact that
the applications of some organizations have been pending for
over 3 years is inexcusable. The inability to get clear
guidance on how to measure political activity was wrong. And
the burdensome questions and inquiries were totally
inappropriate. The handling of these applications was gross
mismanagement by the IRS Exempt Organization Division.
That is why the day after the report was issued I called
for Acting Commissioner Steve Miller and the Exempt
Organization Division Director Lois Lerner to be replaced.
Since our hearing, progress has been made to address the
malfeasance that occurred within the IRS Exempt Organization
Division and to assure that all the facts come to the surface
and that all identified problems are corrected so that the
confidence of the American people may be restored.
Steve Miller resigned as the IRS Commissioner. The
President appointed Daniel Werfel as the Acting IRS
Commissioner. And Secretary Lew instructed him to immediately
conduct a 30-day review and to implement the recommendations of
the IG report. Lois Lerner, the Director of the Exempt
Organization Division, was placed on administrative leave by
Commissioner Werfel. Commissioner Werfel appointed David Fisher
as the Chief Risk Officer. Mr. Fisher previously served as the
Chief Administrative Officer and Chief Financial Officer at
GAO. And yesterday, he appointed a new Deputy Commissioner and
a Chief of Staff, both with significant managerial and
administrative experience.
To the individuals testifying before us, to each and all of
you, to the organizations they represent, and all the others
who are caught up in this malfeasance, you are owed an apology.
We say to you that each of us is committed to doing our part to
ensure this does not happen again. The IG's report includes a
number of key facts that we should keep in mind today. The IG
determined that the applications of 298 organizations were set
aside for review. One-third of the applications that were set
aside, 96, contained the name ``Tea Party,'' ``9/12,'' or
``patriots,'' while the remaining 202 applications did not. The
IRS released a list of 176 advocacy organizations that have
been approved for tax-exempt status through May 9.
The news organization Tax Analyst did an analysis of the
list released by the IRS. Its conclusion as to the approved
applicants states, ``These organizations are the following: 46
with Tea Party, patriots or 9/12 in their name; 76 other
conservative organizations; 48 nonconservative organizations;
and 6 organizations about which we can make no determination.''
This is not a Democratic or Republican issue. It should not
be. This issue is a direct reflection on highly inappropriate
actions within the IRS Exempt Organization Division and totally
incompetent management within and over that division. The TIGTA
report highlights more problems than the singling out by name.
The report found that IRS employees were screening applications
that had no indications of significant political activities
while closing cases that did have such indication. To qualify
for tax-exempt status as social welfare organizations the Tax
Code provides that an organization must be operated exclusively
for the promotion of social welfare. The regulations, however,
state that an organization will qualify for tax-exempt status
if operated primarily for social welfare purposes. Overall, the
data indicate an emerging use of the ``social welfare''
designation under 501(c)(4) to engage in political activity;
501(c)(4)s spent $92 million in the 2010 election. They spent
$254 million in the 2012 election, the second largest category
of organizations making political expenditures, equal to that
of political parties.
One recommendation--and I close with this--in the TIGTA
report was that the IRS and the Department of Treasury include
guidance on how to measure the primary activity of social
welfare organizations be included for consideration in their
priority guidance plan. We urge them to move with all
deliberate speed to implement this recommendation.
In closing, I want to again on behalf of all of us on the
Democratic side, and I think on behalf of all of us, thank the
witnesses for being here today and for discussing your
experiences. Please be assured as you testify, please be
assured that we take seriously our responsibility to ensure
that Congress gets to the bottom of what happened, that those
responsible are held accountable, and that safeguards are in
place to ensure that this does not happen again.
Thank you.
Chairman CAMP. Thank you, Mr. Levin.
Again, thank you all for being here today. And thank you
for the courage of stepping into the spotlight and giving voice
to the hundreds of individuals who are affected by this
activity. The Committee has received each of your written
statements, and they have been distributed. They will be made
part of the formal hearing record. Each of you will be
recognized for 5 minutes for your oral remarks.
We have a lighting system here. The green light will go
until you have 30 seconds remaining, then there will be a
yellow light, then there will be a red light. After each of you
give your oral statements, we will then move to questioning.
And so the Members will each then have 5 minutes to
question you, and they will be subject to the same lighting
system. So if at times I am cutting them off, it is to make
sure that every Member has an opportunity to have their 5
minutes.
Our first witness is Kevin Kookogey. He is the President
and Founder of Linchpins of Liberty, a nonprofit dedicated to
educating high school and college students about the Nation's
founding documents. He is the father of six children and comes
to us today from Franklin, Tennessee.
Mr. Kookogey, you are now recognized for 5 minutes.
STATEMENT OF KEVIN S. KOOKOGEY, PRESIDENT AND FOUNDER,
LINCHPINS OF LIBERTY: AN AMERICAN LEADERSHIP DEVELOPMENT
ENTERPRISE
Mr. KOOKOGEY. Thank you, Mr. Chairman----
Chairman CAMP. Touch the microphone button, please.
Mr. KOOKOGEY. Thank you, Mr. Chairman. Thank you to the
honorable Members of this Committee.
My name is Kevin Kookogey, and I am President and Founder
of Linchpins of Liberty, which is an American leadership
development enterprise. Our motto is to challenge the
imagination of the rising generation. And we do this by
mentoring high school and college students in conservative
political philosophy. We aim to mentor high school and college
students by teaching them about the great books and about the
foundations of America's moral and constitutional order.
Linchpins of Liberty is one of those little platoons
described by Alexis de Tocqueville, a local institution
intended to act as a check on the power of the State to
moderate the despotism of the majority and to give people a
taste for freedom and the skills to be free.
We are committed to a literary education and moral
convictions that will allow citizens to maintain civil order.
We aim to develop the moral imagination through the teaching of
history. And we believe that God is the measure of all things
and that the soul is the essence of humanity.
Linchpin students learn how the Greeks were unable to
maintain freedom because of their pursuit of private gain at
public expense and their squandering of resources on
extravagance. From Cicero, we learn the necessity of the rule
of law, and we discover that true law is right reason in
agreement with nature, that virtue must not yield to power.
Linchpins of Liberty is also inspired by Augustine, that
great fourth century philosopher of freedom, who wrote that
only in obedience to God do we find perfect liberty. We teach
our students from George Washington's farewell address, where
we discover that religion and morality are indispensable
supports for political prosperity. From Montesquieu, we learn
that positive law must conform to natural law, and that a
republic can only be sustained by the virtue of its citizens.
Linchpins of Liberty recognizes that the state is God
ordained, necessary to protect against foreign enemies, and
that there can be no freedom without the law. But there are
limits to the authority of the State. The government cannot be
a law unto itself, and when the State usurps its legitimate
authority by interfering in the realms of speech, religion,
conscience, family, association, and ideas, we have a duty as
human beings to ourselves and our posterity to oppose and to
protest the State's trespassing its limits.
In order to raise money, I filed an application with the
IRS in January of 2011 seeking to obtain 501(c)(3) status as an
educational organization. As of today, I have been waiting for
29 months without status. In the interim, I lost a $30,000
launch grant from a reputable nonprofit whose Executive
Director advised me that he had never seen such treatment of a
501(c)(3) applicant in his 25 years of making grants.
I also lost and continue to lose multiple thousands of my
own money, and I had to cease any further official activity for
fear the IRS would target me for further harassment. For 2\1/2\
years the IRS has unlawfully delayed and obstructed my
application for determination of tax-exempt status by using
unconstitutional criteria. The types of questions asked by the
IRS included asking me to identify the political affiliation of
my mentors and that I advise the IRS of my political position
on virtually every issue of importance to me. For good measure,
I was asked to identify those whom I train and that I inform
the Federal Government in detail what I am teaching my
students.
Considering that the mission of my organization is devoted
to mentoring young people, some of whom are minors, can you
imagine the reaction of the students' parents were I to turn
over the names of their children to the IRS? And to what end?
Is it not conceivable that I would be sued? Would the IRS
threaten to audit the parents of those students? Yet my failure
to comply with this stunning inquiry would result in the denial
of my application or subject me to perjury.
Moreover, contrary to statements of Lois Lerner, the
targeting of Linchpins was not merely the act of a few agents
in Cincinnati. On December 31, 2011, after numerous and
repeated calls to the IRS which went unreturned, I finally
reached agent Ron Bell in Cincinnati. When I inquired of him as
to why my application was taking so long, he said, ``We have
been waiting on guidance from our superiors as to your
organization and similar organizations. We have now received
that guidance, and you will receive your answer on a first-in,
first-out basis.''
Although Linchpins of Liberty is a 501(c)(3) and not a
(c)(4), like many of the organizations here today, we do share
one common trait with them and that is our ideas. Linchpins of
Liberty exists to defend the cause of ordered liberty. We
reject the expansion of the State beyond its legitimate
authority, and we jealously guard human liberty.
I respectfully urge and appeal to this Committee today,
which is a co-equal branch of the Federal Government, vested
with authority and responsibility to check the power of the
executive branch, I would ask that you act with courage and
moral resolve for, in so doing, you will--the intent is that
you will--sorry, I got my--my time was running there.
Chairman CAMP. You may conclude.
Mr. KOOKOGEY. Thank you. I would ask that you act with the
moral resolve to check the power of the executive branch
because in so doing you will protect, defend, and preserve
human liberty for ourselves and for our posterity. Thank you.
[The prepared statement of Mr. Kookogey follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. Thank you very much, Mr. Kookogey.
Our next witness is Dianne Belsom, the President of the
Laurens County Tea Party in South Carolina.
Ms. Belsom, you are recognized for 5 minutes.
STATEMENT OF DIANNE BELSOM,
PRESIDENT, LAURENS COUNTY TEA PARTY
Ms. BELSOM. Thank you. Thank you for having me today. My
name is Dianne Belsom. I am the President of Laurens County Tea
Party. Laurens County Tea Party is a social welfare
organization that seeks to educate ourselves and our fellow
citizens on various issues pertinent to living in a free
country, and we also work to educate voters by vetting
candidates and by holding candidate forums during election
years. We typically meet once a month and hold an annual rally.
We held our first Tax Day Tea Party Rally in April of 2009, and
then formally organized and incorporated with the State of
South Carolina in March of 2010.
On July 22, 2010, we filed for 501(c)(4) status with the
IRS and paid the application fee of $400. We received a letter
on August 11, 2010, stating that if more information was needed
to process our application we would be contacted within
approximately 90 days. After hearing nothing, I called the IRS
in the summer of 2011, which was a year after I filed, and was
told our case was still pending. But in the meantime, we were
still responsible for filing tax returns, which we have done.
On November 14th, 2011, we received a letter from the IRS
stating that we may be required to file a Form 990-N an e-
postcard. Nothing more was heard until September 6, 2012, when
we received a communication from the IRS requesting extremely
burdensome additional information, which includes the
following: Provide a copy of our articles of incorporation,
which we had sent with our initial application in 2010;
information about all of our committees, including legislative,
educational, and vetting, and how much time and resources are
devoted to these activities. They sent about 20 pages copied
from our website and wanted confirmation that these, in fact,
were from our website. Then they wanted samples from any other
social media sites, including Facebook. They asked for detailed
information about all meetings, rallies, and events, with dates
and names of speakers, agendas, any associated materials, and
if a guest speaker made remarks concerning upcoming elections,
and whether our organization took a view on anything expressed,
and how much time or resources are devoted to these activities.
They wanted to know how much time or resources were devoted to
vetting candidates.
The IRS noted that our website had a lot of videos of
candidates running for local office. They wanted to know what
offices the candidates were running for, which was stated in
the videos; a list of all candidates for these offices; and an
explanation for those who didn't participate; copies of any
written materials, including invitations to the candidates,
copies of any introductory statements made by us, and copies of
all questions asked of the candidates, whether the interviews
were edited, a list of which interviews were posted on our
website, an explanation for any not posted, and the percentage
of time and resources devoted to this.
As regards a candidate forum we held, more questions were
asked, including the date and elective offices for which it was
held, a list of candidates and explanations for those who
didn't participate, copies of opening remarks from us, who
asked the questions, copies of all questions asked, copies of
written materials, including invites to candidates and
advertising, whether the videos posted were edited, and the
percentage of time and resources devoted to this activity. Then
they also asked for a list of expenses for the past 3 years,
including any amounts expended in support of any candidate for
Federal, State, or local public office, which I might add is
zero.
Since I was already aware that the IRS was targeting Tea
Party groups, I immediately contacted the ACLJ, and they agreed
to represent us at no charge. Nevertheless, in order to comply
with this information request, it took hours of time, stress,
and aggravation. By the end of December, we had filed the
requested information with the IRS. Then, on January 31st,
2013, we received a request for more information which
included, again, a request for the articles of incorporation,
copies of emails sent out on issues we deal with, plus copies
from our Facebook group. Through emails sent out to our group
members, I provided quite a few of those. I provided copies of
free and paid ads placed in papers, pictures submitted to local
papers, press releases, and materials for distribution. We
complied with these demands on March 5th, 2013. It is now June
4th, 2013, so nearly 3 years have passed and, to date, we have
still heard nothing.
I would like to note that our group is a small-time
operation with very little money, and this represents a
complete waste of time by the IRS in terms of any money they
would collect if we were not tax-exempt. Furthermore, nearly 3
years in waiting for an answer is totally unacceptable. The IRS
needs to be fully investigated and held accountable for its
incompetence, harassment, and targeting of conservative groups.
Thank you.
[The prepared statement of Ms. Belsom follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. Thank you, Ms. Belsom.
Our next witness is Dr. John Eastman, Chairman of National
Organization for Marriage and a Professor at Chapman University
School of Law.
And, Dr. Eastman, you are recognized for 5 minutes.
STATEMENT OF JOHN C. EASTMAN, PH.D., HENRY SALVATORI PROFESSOR
OF LAW AND COMMUNITY SERVICE, CHAPMAN UNIVERSITY SCHOOL OF LAW;
CHAIRMAN, THE CLAREMONT INSTITUTE'S CENTER FOR CONSTITUTIONAL
JURISPRUDENCE; AND CHAIRMAN OF THE BOARD, NATIONAL ORGANIZATION
FOR MARRIAGE
Mr. EASTMAN. Mr. Chairman, thank you very much. And to all
Members of the Committee, thank you for taking these issues so
seriously. I am the Chairman of the Center for Constitutional
Jurisprudence, a public interest law firm affiliated with the
Claremont Institute, and I am also on the Board of Directors of
the Act Right Legal Foundation, which serves as co-counsel for
True the Vote. The Act Right Legal Foundation filed a lawsuit
just last week on their slow-walking by the IRS and their
501(c)(4) status.
But I am here today in my capacity as Chairman of the Board
of the National Organization for Marriage. Because the
egregious conduct taken against that organization, which had
its 501(c)(4) status conferred back in 2008, kind of takes us
to a different level.
In March of 2012, the confidential portions of our 990 tax
returns, including Schedule B, which is our list of major
donors and their home addresses, appeared on the website of the
Human Rights Campaign, our principal political opponent in the
nationwide fight over traditional marriage. The copy of our tax
returns and our list of donors that was posted there were
redacted. Our computer forensic people were able to unlayer the
redactions from that PDF file and discovered that the original
document that was posted there had originated from within the
IRS. It had internal IRS stamps that are placed on every
document the IRS receives that are electronically filed with
the IRS and placed on those documents by that computer system.
We don't have copies of the documents with those IRS stamps on
them; those only exist within the IRS. And yet this was posted
on the website of the Human Rights Campaign.
You can imagine our shock and disgust over this. We
jealously guard our donors, as almost any other nonprofit does,
particularly on the issues that we deal with, which are so
contentious that our donors, once they are identified, are
harassed and intimidated and chilled away from supporting the
cause that we advance. This is unacceptable conduct in our
democracy.
We immediately requested an investigation from the
Treasury's Inspector General for Tax Administration Office as
well as the Department of Justice. The second request to the
Department of Justice was filed because these are felonies that
were committed against the National Organization for Marriage.
It is a felony, punishable by a $5,000 fine and up to 5 years
in Federal prison, for the illegal disclosure, the unauthorized
disclosure of one's confidential tax returns.
We are a nonprofit. But that part of our tax return is as
confidential as your individual 1040 forms. The TIGTA initially
investigated us to try to determine whether somebody from
within our own ranks had disclosed our confidential tax
returns. And when we pointed out we didn't have a copy of the
version of our tax returns that had that IRS stamp on it, that
was the last we heard of the investigation. That was last
summer of 2012.
We then began filing a series of Freedom of Information Act
requests with TIGTA and with the IRS to try to ascertain some
of the information that had been discovered during any
investigation that had been had there. We were stonewalled in
those Freedom of Information Act requests. The IRS told us that
any documents they had would have been under the Inspector
General's jurisdiction, so they couldn't disclose them to us.
When we pointed out we didn't ask for what was over at TIGTA,
we asked for what was in the files of the IRS, their second
response to us was, ``Well, we've already answered your
request; we don't answer things twice.''
Most stunningly, on May 3rd of this year, in followup to a
Privacy Act request, where we asked for the specific
information that Federal law allows us to request when there
has been an investigation into disclosure of our tax returns,
the Inspector General's Office told us that the identity of the
source of this felony against us was itself protected tax
return information that they could not disclose to us. I ask
you to think about the irony of that.
There are a couple of things it seems to me that this
Committee could look at to help cure this problem. First,
clarify that it is not the case that the prohibition against
disclosure of our tax returns shields the culprit who committed
that felony.
Second, we have no ability to bring a criminal prosecution
for these felonies on our own, and yet the Department of
Justice has not done so. There is a civil penalty provision
that is available, but we can only bring a suit against the
United States for $1 thousand per the one disclosure, not the
hundreds of thousands of disclosures that were done by the
Human Rights Campaign when they posted this on their website. I
would like to see a clarification of that provision that would
hold the people, the individual IRS official as well as their
colluders that are nongovernment employees, civilly liable to
the taxpayers whose tax returns they illegally disclosed.
And, finally, I think because the investigation has yielded
nothing of importance to us, I would ask this Committee to
consider subpoenaing the folks at the Human Rights Campaign.
Find out who posted it on the website, find out who introduced
the redactions and hid the IRS information. Find out who
received it from the IRS. And, most importantly, find out who
from the IRS disclosed this information. The head of the Human
Rights Campaign had recently been named the National Cochair of
the Obama Reelection Campaign. This just smells, and I hope
this Committee gets to the bottom of it. Thank you for allowing
me to testify.
[The prepared statement of Mr. Eastman follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. Thank you, Dr. Eastman.
Our next witness is Dr. Karen Kenney, member of the San
Fernando Valley Patriots. Dr. Kenney is a licensed
psychotherapist practicing in Southern California. And among
her work, Dr. Kenney assists returning veterans who suffer from
post-traumatic stress disorder.
Dr. Kenney, you are recognized for 5 minutes.
STATEMENT OF KAREN L. KENNEY, PH.D., MARRIAGE, FAMILY
THERAPIST, PERSONAL DEVELOPMENT CENTER ASSOCIATES, AND MEMBER,
SAN FERNANDO VALLEY PATRIOTS
Ms. KENNEY. Thank you, Mr. Chairman.
John Adams knew that facts are stubborn things. In this
district, facts are hidden under the mantle of office. They get
used as tools or weapons, but they wait for us. We must seek
them with the lamp of truth and put them into words.
But you and I speak different languages in this Republic.
You speak the language of power, of pen, purse, and gavel. I
speak American grassroots, the language of liberty, through
providence, property, and civic virtue.
We seldom speak together about the rule of law, unless it
is ignored or violated. Now is such a time.
I have a story that bridges the distance between my State
of California and this Capitol. What I say here must be said
here. Pilgrims brought to this continent a lamp of liberty,
guided here by the pursuit of life within the words of Moses
and Christ. They persevered for righteous freedom. We sit here
in the shadows of Washington, Jefferson and Lincoln. We visit
here memorials to those who fell in service to this country.
They persevered for righteous power. The spirit of patriots
living and dead grants me the right to be here. It is my duty
as an American citizen to speak here today.
In October 2010, the San Fernando Valley Patriots, a not-
for-profit corporation in California, applied with the Internal
Revenue Service for a 501(c)(4) status as a tax-exempt social
welfare organization. We were then and remain a Tea Party
group, affiliated with the national Tea Party Patriots. We
heard nothing until February 2012, when I received a packet
from the IRS Exempt Organizations Office in Cincinnati, Ohio,
which included a questionnaire with 35 items divided into 80
sub-points of inquiry. A cover letter indicated that we had 20
days to comply without penalty, including penalties of perjury
for failure to answer all questions with the facts that are
true, correct, and complete.
Generally, the questions were a demand that read like the
chill- ing words from the 1950s: ``Are you now or have you ever
been . . . ?'' The IRS sought documentation of our meetings,
rallies, events, or candidate forums that included video and
audio transcriptions, notes, copies of all handouts, the
political parties of speakers, and an issues list. The IRS
sought identifying information on employees, data on volunteers
and members, plus Employer Identification Numbers on businesses
with which we associate. These are our donors. They have names:
Mike, the printer, who gave us a discount on handbills; Dee,
the beauty consultant, who donated posters for our tax day
rallies; and Greg, the electrician, who made a stand for our 9/
11 banner out of pipes and wires.
The IRS sought EINs and details on our association with
tax-exempt organizations. These are our teachers. They have
names: the Heritage Foundation, Freedom Works, and the National
Center for Constitutional Studies, where we learn American
history; the Tea Party Patriots, where we learn grassroots
skills; and the West Valley Food Pantry, our charity.
The IRS sought details of communications with our
legislators. Even in Southern California, that is protected
free speech.
My personal favorite was question No. 33, which, in
relation to protests, asked for a listing of our ``committed
violations of local ordinances, breaches of public order or
arrests,'' then requested details on how we conduct or promote
illegal activities.
I think the IRS needs to fix its labeling machine. We are
the San Fernando Valley Patriots, not Occupy Oakland. I stopped
the costly and exhausting IRS process in July 2012. We survive
on my credit card and donations in our cake tin. Like patriots
before us, we persevere.
The voice of the Republic resides in our citizens, not in
the tongue of government. More must grasp that self-evident
truth. This dialogue is about the jackboot of tyranny upon the
field of our founding documents. To whisper the letters I-R-S
strikes a shrill note on Main Street, USA, but when this
behemoth tramples upon America's grassroots, few hear the
snapping sounds.
Now more people listen, but few who know the truth speak.
This moment reflects a reality of governance in America. This
time we came to you. In time, you will come home to us. This
time we came for truth. In time, the lies will fall.
Vox populi, vox dei, the voice of the people is the voice
of God, is irresistible but different in America. Our voice
belongs to the free individual, not to the collective mob. Our
voice is best heard when power kneels, then whispers to
liberty, ``strength.'' And when liberty stands under heaven and
shouts to power, ``freedom.''
Thank you.
[The prepared statement of Ms. Kenney follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. Thank you, Dr. Kenney.
Our next witness is Ms. Susan Martinek, President of the
Coalition for Life of Iowa. Until her recent retirement, Ms.
Martinek was Founder and Manager of Seams Easy, a clothing
alteration company.
Ms. Martinek, you are recognized for 5 minutes.
STATEMENT OF SUSAN MARTINEK,
PRESIDENT, COALITION FOR LIFE OF IOWA
Ms. MARTINEK. Good morning. I am Sue Martinek, President of
Coalition for Life of Iowa, based in Cedar Rapids, Iowa.
Coalition for Life of Iowa is a grassroots, low-budget, public
charity founded in 2004 to provide prayer, education, and
related activities about the sanctity of life from conception
to natural death. Throughout our history, we have organized and
sponsored educational forums and engaged in peaceful, prayer
activities.
In 2008, we sought 501(c)(3) tax-exempt recognition from
the IRS by filing a complete IRS Form 1023 application. I speak
today so that what happened to us, the IRS' demonstrated
harassment, improper questions, and intolerance toward our
message, may not happen to others. The IRS' questions centered
on our educational and potential political activities, our
prayer groups, and our signage.
On April 27, 2009, IRS Agent Ms. Richards, out of the
Cincin-
nati office, sent me a letter asking about our educational
forums, whether we were trying to influence legislation or
influence political campaigns. We had already answered ``no''
on the IRS Form 1023 application. I responded May 14th,
answering all her questions fully. In the subsequent weeks, IRS
Agent Richards contacted me by telephone a few times, asking
more questions about our activities. Some questions I asked her
she was unable to answer and would put me on hold and check
with her superior or superiors.
In June of 2009, Ms. Richards told me verbally that we
needed to send in a letter with the entire board's signatures
stating that, under penalty of perjury, we would not picket,
protest, or organize groups to picket and protest outside of
Planned Parenthood. Upon receiving such a letter, she indicated
that the IRS would allow our application to go through.
So we sent a followup letter to the IRS specifically
requesting where in Form 1023 or elsewhere it stated that we
could not protest at Planned Parenthood. The IRS never answered
our question. Instead, the IRS continued questioning us.
On June 22, 2009, IRS Agent Richards sent us additional
written requests as follows: Please explain how all of your
activities, including the prayer meetings held outside of
Planned Parenthood, are considered educational, as defined
under 501(c)(3). Organizations exempt under 501(c)(3) may
present opinions with scientific or medical facts. Please
explain in detail the activities at the prayer meetings. Also,
please provide the percentage of time your organization spends
on prayer groups as compared with the other activities of the
organization. Please explain in detail the signs that are being
held up outside of Planned Parenthood and explain how they are
considered educational.
When we met at our next board meeting, we were all
disappointed with the IRS' requests. We had worked so hard to
get the application correct. We had a local attorney skilled
with this process helping us. We understood that we could hold
up signs with educational information about abortion and the
sanctity of life without the IRS questioning their validity.
We never thought we would have to defend our prayer
activities. As Christians, we knew we needed to pray for a
better solution to unplanned pregnancy than abortion. Why not
at the source?
Personally, I wondered, who fights the IRS? What would the
repercussions be? Would there even be a hope to win? Since we
focused on educational forums and not picketing or protesting,
some board members were willing to sign the requested letter.
But others refused to sign a statement that unfairly restricted
First Amendment rights.
We had very little funds. One board member suggested we
contact the Thomas More Society, a public interest law firm.
They help the little guy--that was us--with legal problems.
They took our case and found us an attorney that specializes in
this area.
Fortunately, with their help, and after we submitted a
lengthy letter detailing the law and our constitutional rights,
the IRS granted us tax-exempt status, just 1 week after our
attorney, Sally Wagenmaker, sent in that letter to IRS Agent
Richards. No more mention was made of any IRS-required board
statement about protesting and picketing outside of Planned
Parenthood.
We were fortunate, but not all are. Our story has a happy
ending. Donors can claim charitable tax deductions for their
contributions. With their help, we can carry out our
educational and religious activities to promote respect for
human life, such as the March for Life and 40 Days for Life
campaigns. Coalition for Life of Iowa seeks to save lives, help
others, and improve our community. May our story of the IRS'
overreaching spur reform of its practices, better treatment of
our charitable institutions, and continued protection of First
Amendment right freedoms. Thank you for letting me tell our
story.
[The prepared statement of Ms. Martinek follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. Thank you, Ms. Martinek.
Our final witness is Becky Gerritson, President of the
Wetumpka Tea Party in Alabama.
Ms. Gerritson, you are recognized for 5 minutes.
STATEMENT OF BECKY GERRITSON,
PRESIDENT, WETUMPKA TEA PARTY
Ms. GERRITSON. Good morning. Thank you for inviting me to
be here today. I would like to begin with a brief statement. I
know that you are primarily interested in hearing about the
abuses of the Internal Revenue Service. But I believe it is
critically important that you understand just not what these
abuses were but what exactly the IRS was trying to stifle.
In order to paint a clear picture, I need to explain how
the Wetumpka Tea Party came into being. My husband and I had
never been involved in politics before 2008. We have always
been patriotic and deeply proud of our country. We have always
felt that the United States is the greatest country in the
world.
In September 2008, when we had our first $700 billion
bailout, we, along with millions of Americans, were very
concerned. That bailout was confirmation that our government
was out of control. But just a few months later, in January
2009, we learned that our government was going to spend another
$787 billion. That money went to foreign nations, failing
banks, and unproductive industries. We were worried, and we
knew we had to do something to sound the alarm. We knew the
government had gone far beyond its habitual deficit spending.
The government was mortgaging America's future. And we knew
that Washington wasn't going to stop by itself.
In the spring of 2009, we learned that others were
organizing Tea Party events around the Nation to educate and
empower concerned citizens who believed their government was
out of control. So we made our plans. My husband and I filled
out a permit to meet at a local park in our small town. My
daughter and I walked through neighborhoods handing out flyers
for our April 15th event. When the day arrived, we were blown
away by the large crowd. A few politicians came also, but they
didn't speak. We wanted to give ordinary citizens the chance to
speak their concerns.
Our event had no party affiliation. I could not tell you if
the attendees were Republicans, Democrats or Independents. It
didn't matter. The only political notion expressed was one that
we collectively felt, that our representative government had
failed us. And that was the birth of the Wetumpka Tea Party.
There are no dues, no price for membership. Our events are
mostly educational. Whatever expenses are incurred are paid
from donations--by donations and tee shirt sales.
In Wetumpka, we are patriotic Americans. We peacefully
assemble. We petition our government. We exercise the right to
free speech. And we don't understand why the government tried
to stop us. I am not here as a serf or a vassal. I am not
begging my lords for mercy. I am a born-free American woman,
wife, mother, and citizen. And I am telling my government that
you have forgotten your place. It is not your responsibility to
look out for my well-being and to monitor my speech. It is not
your right to assert an agenda. Your post--the posts that you
occupy exist to preserve American liberty. You have sworn to
perform that duty, and you have faltered. The abuses I will
discuss today occurred on your watch. And it is your
responsibility to make sure it doesn't happen again.
Here are the facts of my case. We applied for a 501(c)(4)
in October 2010. Our $850 application fee was cashed 7 days
later. We received a letter from Robert Choi dated November 2,
2010, stating that our application and our user fee payment had
been received. It also stated that we should be expecting to
hear from someone within 90 days.
However, the IRS did not initiate any contact with us for
another 459 days. That was when I received a letter from the
Cincinnati office, dated February 3rd, 2012. That letter stated
that they could not process our application until we completed
the enclosed questionnaire, which requested approximately 90
pieces of additional information about our organization.
The questionnaire stated that if the additional information
was not returned by February 24th, our case would be closed.
The demands for information in the questionnaire shocked me, as
someone who loves liberty and the First Amendment. I was asked
to hand over my donor list, including the amounts that they
gave and the dates on which they gave them. The 501(c)(4)
organizations do not have to disclose donor information. I knew
that. Why didn't they?
Among the demands that I found alarming and inappropri-
ate were: They wanted me to identify all of my volunteers. They
wanted to know if any of our donors or volunteers had run or
would be running for office in the near future. Remember, this
was the 2012 election cycle. They wanted us to identify the
office they would be running for. They wanted us to provide
detailed contents of all speeches ever given, the names of our
speakers, and their credentials. They wanted copies of written
communications and contents of all other forms of
communications to any legislative body, including my own
Representative.
I was very uncomfortable with these questions, as you can
imagine, and my husband and I discussed forfeiting our
application. However, within days of reading through these
questions, we knew we were being targeted because fellow Tea
Party organizers across this Nation were getting the same types
of letters and questionnaires. That was when we decided to seek
legal counsel.
On March 6th, 2012, we retained the counsel of the American
Center for Law and Justice, and they represented us in this
matter. Two weeks later, I received a letter from Lois Lerner,
dated March 16th, 2012, asking that I provide the previously
requested information. Four months later, we received a letter,
dated July 9, 2012, stating that we had been approved to
receive our tax exemption. This was 635 days after we applied.
In conclusion, the Wetumpka Tea Party filled out a complete
application. Our organization fell within the boundaries of
receiving a 501(c)(4) status, yet our application was singled
out solely because we had ``Tea Party'' in our name. Government
agents made invasive and excessive demands for information they
were not entitled to.
Congressman Camp and Members of this Committee, this was
not an accident. This was a willful act of intimidation to
discourage a point of view. What the government did to our
little group in Wetumpka, Alabama, is un-American. It wasn't a
matter of firing or arresting individuals. The individuals who
sought to intimidate us were acting as they thought they should
in a government culture that has little respect for its
citizens. Many of the agents and agencies of the Federal
Government do not understand that they are servants of the
people. They think they are our masters, and they are mistaken.
I am not interested in scoring political points. I want to
protect and preserve the America that I grew up in, the America
that people crossed oceans and risked their lives to become a
part of. And I am terrified it is slipping away. Thank you.
[The prepared statement of Ms. Gerritson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. Thank you very much. Thank you, Ms.
Gerritson.
Thank you all for your testimony. We will now move to the
question-and-answer period of the hearing. And I will begin.
On May 17th, we heard from the Inspector General that the
IRS had targeted certain Americans on the basis of their
personal beliefs, that they were subject to extraordinary
delays and inappropriate, at best, and unlawful, at worst,
questions. I know, for example, Mr. Kookogey, and Ms. Kenney,
you were both asked to provide a list of all the issues that
are important to your organization and to indicate your
position on each issue.
Ms. Martinek, you were asked about prayer meetings,
including how they are considered educational as defined under
501(c)(3), and you were asked to explain in detail the
activities at these prayer meetings, and the percentage of time
your organization spends on prayer meetings.
I would like to ask the panel to elaborate. Are the
Inspector General's report findings consistent with your
experience of targeting, delay, and intimidation?
Mr. Kookogey, I will start with you.
Mr. KOOKOGEY. Yes, I would say that the Inspector General's
report findings are consistent. I don't think the Inspector
General's report, however, is deep enough yet. I think we have
more evidence among us, and not only among this panel but among
other parties and organizations, that goes much deeper. I think
the IG has just scratched the surface.
Chairman CAMP. All right.
Ms. Belsom.
Ms. BELSOM. I didn't actually read the Inspector General's
report. So what exactly was your question?
Chairman CAMP. Well, just if those things I mentioned, were
those consistent with your experience?
Ms. BELSOM. You know, I think that this certainly seemed
like a gross overreach of the IRS.
Chairman CAMP. All right. Thank you.
Dr. Eastman.
Mr. EASTMAN. You know, our organization doesn't have those
particular problems. But as our story has become more public,
the number of communications I have received seeking legal
counsel have raised a concern that a lot of Americans have
expressed, is this limited to the IRS? The stories about people
having OSHA and ATF and the FBI starting investigations of
their organizations just have American citizens scared to death
of what their government is capable of doing once they have
crossed the threshold that they have crossed here.
It is not just the IRS. This is the beginning of a thread
on a sweater that is just unraveling. And Americans are down
right afraid of what is going on. We have to restore the
credibility of government as a servant of the people rather
than our master, as my colleague said. The number of stories
that I am hearing that indicate those greater concerns I think
is deeply troubling.
Chairman CAMP. All right.
Dr. Kenney.
Ms. KENNEY. In answer to your question, definitely, yes.
Chairman CAMP. All right.
Ms. Martinek.
Ms. MARTINEK. And yes also. They had asked us to please
explain in detail the activities at our prayer meetings, also
please provide the percentage of time your organization spends
on prayer groups as compared with the other activities in our
organization.
Ms. GERRITSON. I would agree with the IG report. But I was
disturbed, on page 20, the IRS listed seven questions that they
deemed inappropriate. However, many of the questions that I was
asked and others were asked, like the contents of our prayers,
some of the organizations that we have been involved with, they
even asked questions about family members. And the questions I
mentioned about running for office, they don't deem those as
inappropriate. So I think we need to go back and look at those
questions because most of them were inappropriate.
Chairman CAMP. And, obviously, getting a letter from a
Federal agency asking for those detailed--those detailed pieces
of information about prayer meetings and these issues about
what your family members are doing had to be disturbing. I read
some of these questions and, obviously, I came to the
conclusion that the IRS felt there was a right and wrong
position on those issues. There was a right and wrong activity
regarding prayer meetings, for example.
What was your impression when you received those questions?
And I will start with you, Ms. Gerritson.
Ms. GERRITSON. Well, like I said, when I received those
questions, I did--I felt defensive, for one thing, because I
felt like that wasn't any of their business. I wasn't going to
identify my volunteers. I was fearful for them. If their name
was going to the IRS, I know they would be scared. The
questions were chilling, I was shocked that I was being asked
those questions.
Chairman CAMP. All right.
Ms. Martinek.
Ms. MARTINEK. The most disturbing thing for us was having
to agree that we would not protest or picket at Planned
Parenthood. And since there was no similar request in the
application, really we had no idea what they were even trying
to control. If we went there in prayer, would that be
considered picketing, protesting? It was very troubling.
Chairman CAMP. All right.
Dr. Kenney.
Ms. KENNEY. I immediately reached my target heart rate when
I opened the envelope. And I had anxiety. And I felt betrayed,
absolutely betrayed.
Chairman CAMP. All right.
Dr. Eastman.
Mr. EASTMAN. When our donors were disclosed, a number of
them called us expressing concern about that. The effort seems
to have been designed to subject our donors to abuse, to
intimidation, to hold them accountable for donating in support
of the cause of traditional marriage, to boycott their
businesses, to target their families and, more significantly
for our purposes, to chill them from donating again so we can
keep up the political fight that we are in the middle of. There
is an unbelievable chilling effect on what happened to us.
Chairman CAMP. Ms. Belsom.
Ms. BELSOM. I think that for our organization the questions
weren't quite as intrusive as some of the other groups, but I
was just overwhelmed by the sheer level of minute detail that
was being requested. And to try to go back and track down this
kind of stuff, it was, you know, very difficult. It was a very
stressful thing, having to go through this.
And, you know, at this point, too, now that I think about
it, I was looking back through--I mean, this is the paperwork,
my files. And when I looked back through all this information
that has been sent into the IRS--and I have heard about these
157 visits, I believe it was, between the head of the IRS and
President Obama--and I am very concerned. It just makes me very
nervous thinking about, was my group being discussed, was our
political activities being discussed, and are we somehow
targeted for this? And it is very chilling.
Chairman CAMP. All right.
Mr. Kookogey.
Mr. KOOKOGEY. Most disturbing to Linchpins of Liberty--keep
in mind that we work with students, some of them minors, 7th-
graders. That the IRS would ask to know the identity of those
students is unbelievably, unconscionably chilling.
Chairman CAMP. At the same hearing that I mentioned earlier
on May 17th, then-Acting Commissioner Steve Miller summed up
the IRS' action as ``horrible customer service.'' Now, I know
that I certainly take a different view of that, as I am sure
many Members of this Committee do. And his quote was, ``I will
admit that. We did. We did horrible customer service. Whether
it was politically motivated or not is a different question.''
I would say, Dr. Eastman, if you had a bank and you
disclosed confidential customer information, would you call
that horrible customer service or would you call that something
else?
Mr. EASTMAN. I would call it a felony, as the Federal law
calls this a felony.
Chairman CAMP. All right.
Mr. EASTMAN. And I would hold the people that committed
those felonies accountable. I would bring indictments. I would
open up civil liability for them for the taxpayers who were
affected. The damages to our donor base are incalculable. And I
would prosecute those people responsible.
Chairman CAMP. All right. Thank you.
Mr. Levin is recognized.
Mr. LEVIN. Well, thank you very much.
Let me just say a few things in response to your testimony.
I do think it is our obligation to get the facts and not deal
in conjecture. Indeed, I think the more we deal with
conjecture, the less likely we are to get the facts.
So let me just say to you, Ms. Martinek, I think we very
much disagree about the work of Planned Parenthood; that is my
guess. But I must say that the question about whether you were
picketing or protesting before a Planned Parenthood is totally
worse than inappropriate. You should not have been asked that.
And as personnel of the IRS are inquired of, I would think that
may be looked in to.
Mr. Eastman, let me just say to you, this issue was raised
at the hearing with the Inspector General, and Mr. Miller
indicated, in response to a question from you, Mr. Chairman,
about the donor list, he said, ``I believe we made a referral
to the Inspector General.''
He was later asked about that, and he said, ``Those two
situations, we went to TIGTA, and I think Mr. George can speak
to what they found--what they found. We made the referrals, and
I believe what they found was that those disclosures were
inadvertent and that there had been discipline in one of those
cases for somebody not following procedures. But I will--I will
obviously let Mr. George speak to that.'' That was his
testimony.
And then our Chairman asked Mr. George about that, and it
would appear from his testimony that it was being investigated
by the Inspector General. And that is all we know about it at
this point, whether it continues to be investigated by the
Inspector General is unknown.
So let me finish. I just want to emphasize, I said in my
opening statement that we also need to look at the larger issue
of 501(c)(4)s, of the statutory language in the regulation and
how, in fact, it is now being utilized.
But I want to finish by just reading the last part of my
opening statement. And we said this to each one of you and to
the American public: ``Please be assured that we take seriously
our responsibility to ensure that Congress gets to the bottom
of what happened, that those responsible are held accountable,
and that safeguards are in place to ensure that this does not
happen again.''
We will do that. We surely on the Democratic side will do
that. I trust on a bipartisan basis we will work together to do
that.
Thank you.
Chairman CAMP. Thank you.
Mr. Johnson is recognized.
Mr. JOHNSON. Thank you, Mr. Chairman. Thanks for holding
this important hearing. The American people want, need, and
deserve to know the truth, and it is our responsibility to
demand it and hold those responsible fully accountable.
I also want to thank the witnesses for sharing your
stories.
Mr. Chairman, I was particularly struck by the testimony by
several of the Tea Party witnesses.
As you know, Mr. Chairman, back in my district it appears
the Allen Area Patriots, who advocate the fiscal
responsibility, the rule of law, and limited government, have
also been a target of the IRS. Back in July 2010, the group
applied for 501(c)(4) status. As of today, that group has yet
to receive a final response. That is absurd. It has been nearly
3 years.
In February 2012, the IRS sent the Allen Area Patriots a
set of 19 questions, including onerous and irrelevant ones
relating to the employment of the group's key officials.
Mr. Chairman, I would like to submit for the record the CBS
DFW news story entitled, ``Two DFW Conservative Groups Targeted
by the IRS.'' And let me just say what it says here. The IRS
wanted a list of all their volunteers, everything they did.
They wanted an accounting of every dollar donated and what it
was spent on. It wanted records of every speaker the group had
ever hosted and flyers they might have handed out.
May I submit that for the record?
Chairman CAMP. Without objection.
[The submission of The Honorable Sam Johnson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Mr. JOHNSON. Thank you.
The pattern of intimidation toward certain Americans is,
quite frankly, in my view, un-American. The bottom line is the
IRS has been used as a political weapon.
You know, Ms. Kenney, I understand you work with veterans
returning from combat with post-traumatic stress disorder. And,
as a veteran, I would like to start off by saying thank you for
doing that.
Ms. Kenney, can you describe your work?
Ms. KENNEY. I work with veterans who have been deployed to
Iraq and Iran--rather, Iraq mostly, the desert communities--and
their families. The toll that deployment takes on the families
is extraordinary.
I work with a therapy dog. I am going to cry. I see people
that are untouched. No one goes up and hugs a soldier unless
they are family. But I have this one guy I see, and he goes,
``Where is my dog?'' He picks the dog up, and the entire
session he pets my dog, Little Lady.
They are on the front lines, and everyone on this panel has
their back. And I hope you do, too.
Mr. JOHNSON. Yes, ma'am. Well, as you know, I was in the
military, and I understand that. Thank you for doing that.
Considering the selfless work you do, did you ever think
you would have to deal with pages and pages and pages of
intruding questions from the IRS?
And when you come home from a day of helping our troops who
protect us every minute of every day, I bet the very last thing
you want to do is deal with onerous questionnaires from the
IRS. Can you talk about the burden of the IRS questions and how
many there were?
Ms. KENNEY. The burden of the questions on me, personally,
was extraordinary. I think I could have bought stock in Kinkos
because there were almost 200 pages of documentations,
leaflets,
and agendas. I have one here. They asked if we had candidates
of pretty much only a certain party.
This is a list of candidates that I invited for one of our
candidate forums, both Democrats and Republicans, back and
forth. I heard nothing from any of the Democratic candidates,
not even an RSVP regret. And some of the Republicans, if they
couldn't come, they sent their presentation, and so did the
Libertarians.
Our group is primarily educational. We have operated as a
501(c)(4). We have done this to get word out on the
Constitution, to get people to be informed about how to vote,
where to go to vote. If you go on our website, you will see
Democrat, Republican, and Libertarian groups in Los Angeles
County listed.
Mr. JOHNSON. How much time did the IRS give you to respond
to those letters?
Ms. KENNEY. Twenty days. That was after the first
interrogatory. There were three questionnaires that were sent.
Mr. JOHNSON. It probably made it impossible for you to
answer those questions, too.
I thank you again for being here, and thank you for the
great work you do to help our veterans. I appreciate you
standing up for them as they stand up for us.
Thank you, Mr. Chairman.
Chairman CAMP. Thank you.
Mr. Rangel.
Mr. RANGEL. Thank you, Mr. Chairman.
And let me thank each and every one of you for making the
effort to come here to point out where our government has let
us down and in helping us to understand the problems
encountered by those people who were directly and adversely
affected so that we can better do our job.
And I don't want to forget, Ms. Kenney--and I hope everyone
that is listening--whatever you can do for the veterans,
whatever anyone can do to help those people who put their lives
at stake and are coming home to joblessness and homelessness, I
want to commend you, as did my colleague, Congressman Johnson,
for what you do and hope that it is encouragement for--
everybody can do something.
Now, with the IRS, most of us know that this is an
experience. A telephone call from the IRS, somehow
historically, it is a very, very uncomfortable feeling. And I
hope all of you would agree that the 90,000 people that work
for the Internal Revenue Service are dedicated, hardworking
civil servants.
But we have found a cancer someplace in Cincinnati, and we
have to find out what caused this so that no Americans would be
subject to the type of bias and discrimination that some of you
and many others who are not here have suffered. And we have to
make certain that it doesn't happen again, but, even more
important, to try to find out just how many people were
contaminated by the presence of those people that have done
this to our country.
Dr. Eastman, I think you would agree that we have to find
criminal intent. We don't know how anyone could do something
like this and just think it was in the ordinary course of
business. But I, as a former Federal prosecutor, and you, as a
doctor and a lawyer and a former clerk to a Member of the
United States Supreme Court, know that--I have been trying to
get this same information that you spoke of in your testimony,
and they said this is all being investigated and, you know,
could lead to a grand jury inquiry. And I think that if you and
I kept in touch with each other, I would be satisfied with you
following whether or not our government is actually pursuing
this investigation in the manner that you as an American can be
proud that this branch of government intends to do the job that
is expected of us.
And so I don't want these hearings to just pass and indict
an Administration but, more importantly, to indict these civil
servants that work every day for the taxpayers.
I want to close, Dr. Eastman, by saying that when it comes
to political support, most people know I am a Democrat to the
marrow of my bones, but what makes our country great is that
everybody wants a better country and loves the country that we
are in. And we need all of these views. Whether you came over
with the Pilgrims or whether you came some other way against
your will, we are here to improve the quality of life in our
country and to be a beacon for democracy for the entire world.
I don't know whether our political system can afford to be
using charitable organizations to get candidates elected. And I
only ask you this as a professor of constitutional law, Dr.
Eastman, and because of the fact that people's identity should
be confidential if it concerns their activity. But if you are a
Democrat, hey, put it out there. If you are a Republican, put
it out there. If you are making contributions, do it and be
proud of it.
But it just sounds, Dr. Eastman, like an undercover thing,
to take an organization that is supposed to be primarily for
the public good and be giving political campaign funds to it.
What is your view, Dr. Eastman, of that?
Chairman CAMP. And, Dr. Eastman, you will have to respond
briefly because time has expired.
Mr. RANGEL. Yes.
Mr. EASTMAN. If you wanted to get rid of all of the tax-
exempt status and create a level playing field that way, that
would be fine. But what is intolerable is to have one set of
rules for one side of the political fight and another set of
rules for the other.
Mr. RANGEL. No, I agree with you on that.
Mr. EASTMAN. And, quite frankly, Representative Rangel,
what is happening to the National Organization for Marriage
donors, the level of intimidation that is going on against them
is starting to rival what went on--the Supreme Court shut down
in NAACP v. Alabama.
There is a reason some people want to have their activities
confidential, and that is so they don't get harassed and
intimidated out of participating in the political process. And
when it rises to the level of NAACP v. Alabama, I think it is
important that we help protect that confidentiality that the
law provides so that people are not chilled away from
exercising their constitutional rights.
Mr. RANGEL. I agree----
Chairman CAMP. Thank you.
Mr. RANGEL [continuing]. Republicans and Democrats----
Chairman CAMP. Time has expired, Mr. Rangel.
Mr. Brady is recognized.
Mr. BRADY. Our first hearing revealed a number of
significant abuses, or potential abuses, of power by the IRS,
including targeting donors and organizations based on their
political belief, leaking private taxpayer information to the
media, to outside groups, perhaps to campaigns, concealing that
program for almost 2 years, and then misleading Congress. Any
thorough, deliberate investigation ought to begin by listening
to the victims of those abuses of power, so thank you all for
being here today.
Ms. Martinek, a small-business owner in the Midwest, Ms.
Gerritson, a housewife and concerned citizen of Alabama, you
two are plenty tough, but how frightening is a government so
powerful that it can target you, an average American citizen,
for simply expressing your constitutional views and wanting to
be engaged in this Republic? How frightening is that power?
Ms. MARTINEK. Well, for me, it was very frightening. I
didn't think we had a hope to even try to stand up to it.
Personally, I thought we would just have to sign the letter and
get our 501(c)(3). If we didn't have the 501(c)(3), you know,
some of our donors maybe wouldn't contribute to us. So it was
power the IRS had over us and over the success of our group by
not granting this.
Fortunately, some of our board members were strong about
it, and they would not give up their First Amendment rights.
And even though we are not about protesting--that is not what
we are even about. We are about education. We are about praying
for an end to abortion. Some of our members, when they are
praying at Planned Parenthood, do like to take a side. But that
is a very small percentage in our organization. Still, we
didn't want to give up the right that we had to be able to do
that.
Fortunately, we had some attorneys that helped us. But if
we didn't have the attorneys, I don't know what would have
happened.
Mr. BRADY. Yeah. Thank you.
Ms. Gerritson.
Ms. GERRITSON. Well, I don't know, it is very hard to put
into words how scary it is when a huge government and a
government agency can come after an individual or a small
organization.
I think what is the most alarming and what is the most
scary is that when you allow the government to go so far and
you don't stop them, they go farther. It is just, pretty soon
we are in tyranny. And it is hard to put into words, but it
looks like that is--you know, but using these agencies as a
weapon against citizens feels scary, and it feels like tyranny.
Mr. BRADY. Yeah. That is exactly what these hearings are
about.
Mr. Eastman, the White House continues to claim that all
this was done by a couple of rogue employees in Cincinnati. Do
you believe the leaking of your personal taxpayer information
was done or contained by a few rogue employees in Cincinnati?
Mr. EASTMAN. No, I don't, Representative Brady.
And let me respond to Representative Levin's comment about
this as being inadvertent. It wasn't inadvertent that somebody
redacted the identifying information that this came from the
IRS.
Mr. BRADY. It was deliberate.
Mr. EASTMAN. It wasn't inadvertent that it was given to our
political opponents. This wasn't somebody dropped a piece of
our tax return out on the sidewalk inadvertently. They
deliberately provided our donor list to the very political
opponents of ours who had been seeking that information for a
long time. If that is inadvertent, the word no longer means
anything.
Mr. BRADY. Got it.
Ms. Belsom, concerned citizen of South Carolina; Mr.
Kookogey, in addition to being an attorney, you teach civics
classes. Did either of you believe that this could happen in
America? Did you ever imagine that the government could target
you like this?
Ms. BELSOM. That wasn't something I was thinking about. You
know, I thought we lived in a free republic. But, honestly, I
feel that our country has turned a corner into tyranny, and I
honestly have lost sleep over just being in fear of what our
government might do next.
Mr. KOOKOGEY. In my situation, actually, we teach about
this very thing. The irony is that it is happening right under
our noses. So it is a good lesson for my students, albeit a
frightening one.
Mr. BRADY. It is probably one you didn't include in your
lesson plan originally, being targeted by the IRS for your
political beliefs.
Mr. KOOKOGEY. We did not.
Mr. BRADY. We have a lot to do in this investigation. It is
going to be thorough, it is going to be deliberate. It is very
important we hear from you, so thank you all for being here
today.
Mr. Chairman.
Chairman CAMP. Thank you.
Mr. McDermott.
Mr. MCDERMOTT. Thank you, Mr. Chairman.
Freedom of speech is no doubt one of our most important
fundamental rights. It is unacceptable in every way for a
government agency to unfairly scrutinize any organization
because of their political affiliations. The IRS has
unequivocally made a mistake here. I am sorry your
organizations were singled out like this. And while I think it
is a case of foolish account management and dangerously chosen
shortcuts, I will not hesitate to say the IRS was wrong.
But as I listen to this discussion, I would like to remind
everyone what we are talking about here. None of your
organizations were kept from organizing or silenced. We are
talking about whether or not the American taxpayers will
subsidize your work. We are talking about a tax break. If you
didn't come in and ask for this tax break, you would have never
had a question asked of you. You could go out there and say
anything you want in the world.
And I get the feeling that many of you and my Republican
colleagues just don't believe--believe you should be free from
political targeting, but that you should be free from any
scrutiny at all. The purpose of a (c)(3) or (c)(4) tax
exemption is to enable easier promotion of public good, not
political work.
It is the responsibility of the IRS to determine which
groups are choosing the correct exempt status and which are
trying to manipulate the system to avoid taxes and hide
political organizations and campaign donors. Without oversight,
a status meant for charities becomes a machine for political
money laundering.
If you think that is farfetched, you ought to speak to
Speaker Gingrich. Speaker Gingrich in 1997 was fined $300,000
by the Ethics Committee of the House of Representatives for
funneling money from the ALF, the Abraham Lincoln Opportunity
Fund, into GOPAC, of which he was Chairman, to promote the
takeover of the House and arouse Republican activists. Now,
that is what happens when you don't ask questions.
Each of your groups is highly political. From opposing the
President's healthcare reform, to abortion restrictions, to gay
marriage, you are all entrenched in some of the most
controversial political issues in the country. And with your
applications, you are asking the American public to pay for
that work.
Many of you host and endorse candidates. The line between
permitted political activities and nonpermitted political
activity can be very fine. And it is important that the
taxpayers--the taxpayers--know which side you fall on. If there
were an organization promoting taxpayer funding for abortions,
wouldn't you want to know what they were using that political
money for or what candidates they were backing? What about a
group that wanted to promote voting without ID? Or what if in
the midst of--a few years ago, there was an increase of
communist candidates in this country and new communist clubs
wanted to be tax-exempt. Wouldn't you want to be sure that the
self-declared tax-free classification of those groups was
correct?
The mistake here was that the staff organizing the
organizations used the names of the organizations rather than
the work they do and asked improper questions to figure that
out. It is clearly wrong. It was inept, stupid, and a whole lot
of other things.
But let's not get lost. During the Bush Administration,
liberals were targeted without any concern by Mr. Issa or
anyone else on this Committee. Republicans are looking for a
conspiracy where there isn't one.
Mr. Issa says he can feel it in his gut that someone has
broken the law. Well, you just ask yourself which is more
likely, that midlevel employees overwhelmed by four times as
many applications as before made stupid, irresponsible
shortcuts or that there is an Administration-wide plot to take
down community organizers?
Let's not forget, this happened under an IRS Commissioner
appointed by George Bush and was investigated by a Republican
Inspector General.
What happened to you was unfair. It was unfair and
incredibly inconvenient. But it was a mistake. Our job is to
make sure it never happens again. I haven't heard a single word
here about what questions you think we ought to be able to ask
you about your tax-exempt requests.
Anything else, like the circus that is happening in the
Oversight Committee or here, is simply political theater. It is
diverting attention from what we ought to be doing on this
Committee, which is rewriting the law if it is wrong.
Chairman CAMP. All right. Thank you. Time has expired.
Mr. Ryan is recognized.
Mr. RYAN. I am going to deviate from my original question
in response to what I just heard.
Mr. MCDERMOTT. Mr. Chairman----
Mr. RYAN. Welcome to Washington.
Chairman CAMP. The Committee will be in order.
Mr. Ryan has the time.
Mr. RYAN. We heard ``Gingrich.'' We heard ``Bush.'' We had
the former IRS Commissioner Shulman, who knew about the
political targeting long before Congress was told. It seems
implied that the organizations were responsible for the
targeting because they chose to apply for tax-exempt status. So
you are to blame I guess is the message here.
Do you think that you were targeted based upon your
political beliefs, your religious beliefs, or just because you
chose to apply?
Ms. GERRITSON. We were targeted based on our beliefs, our
views.
Mr. RYAN. We had the Acting Commissioner Miller here a
couple of weeks ago, and we asked him, were groups with the
word ``organizing'' or ``progressive'' in their name, were they
targeted? The answer was no.
We do know for a--this is one of the facts we now know:
People were singled out because of their beliefs.
Going back to my original line here. Mr. Kookogey, you are
at 29 months.
Mr. KOOKOGEY. Twenty-nine months and counting.
Mr. RYAN. And counting. You haven't been approved yet.
Mr. KOOKOGEY. I have not been approved.
Mr. RYAN. You have been asked, one of your inquiries, there
were 90 questions asking you to provide a list of your members
and donors, the political affiliation of your mentors, and your
political position on virtually every issue important to you.
Mr. KOOKOGEY. Yes, sir.
Mr. RYAN. You are teaching Montesquieu, Cicero, Augustine,
de Tocqueville, Washington. And it is 29 months and waiting,
right?
Mr. KOOKOGEY. Yes, sir.
Mr. RYAN. Okay.
Mr. Eastman, I want to get this one nailed down--Dr.
Eastman, excuse me. You have proof that the IRS, an individual
or a group of individuals at the IRS committed a felony, you
have proof of
this, and nothing has occurred to seek or find justice. Is that
correct?
Mr. EASTMAN. That is correct. Federal law requires that we
be notified if there is an indictment brought. We have not
been. Federal law allows us to request information about the
status of the investigation, whether it has been productive or
unproductive, and any action taken. We were refused any answer
to that request, as well. We have identified that this document
came from within the IRS.
Mr. RYAN. So your donors are confidential; that is
protected by law. You have proof that the IRS leaked your
confidential donor information to a group that opposes your
point of view, and your donors were harassed as a result of
that. Is that correct?
Mr. EASTMAN. Yes.
Mr. RYAN. All right.
Ms. Martinek, right next-door in Iowa--I work with groups
very similar to what you do in Iowa. The IRS told you that if
your board signed a letter saying that they would no longer
picket or protest on behalf of the pro-life movement at Planned
Parenthood, that then they could receive their tax-exempt
status. Is that correct?
Ms. MARTINEK. That is correct.
Mr. RYAN. So surrender your First Amendment rights, and
then we might approve your application.
Ms. MARTINEK. That is correct. She said it was ready to go
through, everything was in order, and as soon as they received
that letter, the application would go through.
Mr. RYAN. We have not heard any testimony that this is
happening to groups that have the opposite views. So to suggest
that these citizens are to blame for applying, I don't
understand how one can make that conclusion.
I yield.
Chairman CAMP. Thank you.
Mr. Lewis is recognized.
Mr. LEWIS. Thank you, Mr. Chairman.
I thank each of you for being here. I notice the makeup of
the panel is half and half from the South and other parts of
the country. I grew up in Alabama, went to school in Tennessee,
I now live in Georgia, but I am happy to see people from other
parts of the country.
No organization or individual, whether progressive or
conservative, deserves the type of treatment that you received
or experienced. The targeting of groups applying for tax-exempt
status based solely on political views is completely
unacceptable. It is a disservice to the American people.
But let me be clear: It is also a disservice to apply a
partisan lens to an issue that concerns all Americans. Since
the days of the Bush Administration, groups with very political
leanings have been scrutinized. Every single person in this
room knows this.
We must be honest with ourselves and with each other. This
has nothing to do with red versus blue. In fact, for the past
10 years, all of the IRS Commissioners have been Republican
appointees, appointed by President George Bush.
Between 2004 and 2006, many liberal groups, including the
NAACP, a progressive church, and an environmental group, were
targeted by the Bush Administration. Where was the outrage
then? Where was the sense of righteous indignation?
As Members of this Committee, we must exercise our
oversight role with the honesty and fairness that the American
people expect and deserve.
As we sit here today, let us also remember that the IRS has
many good, hardworking employees who do a great job enforcing
the Tax Code. We must not let the actions of a misguided few
poison the reputation of the entire agency. If anything, we
must come together to find a bipartisan solution to a
bipartisan problem.
Again, I want to thank each of you for taking the time,
coming here, especially coming from Wetumpka, Alabama, not too
far from Montgomery and from Troy, where I grew up--it is a
great distance. And, again, thank you for being here.
And thank you, Mr. Chairman. And I yield back my time.
Chairman CAMP. Thank you.
Mr. Nunes is recognized.
Mr. NUNES. Thank you, Mr. Chairman.
Mr. Kookogey, among the IRS agents who demanded answers to
many intrusive questions, you received a letter with those
demands from Ms. Lois Lerner in Washington, D.C.; is that
correct?
Mr. KOOKOGEY. Yes, sir.
Mr. NUNES. Ms. Gerritson, you also received a letter from
Ms. Lerner?
Ms. GERRITSON. Yes, sir.
Mr. NUNES. And, Ms. Kenney, you received a letter from Lois
Lerner, no?
Ms. KENNEY. It is in the materials I gave to the Committee,
yes.
Mr. NUNES. Okay.
Did anyone else receive letters from Lois Lerner? Okay.
So, Mr. Chairman, we have three witnesses here who received
letters from Lois Lerner. Last week, or 2 weeks ago, Mr. Miller
suggested that this was just confined to Cincinnati. Obviously,
we have conflicting statements there between what Mr. Miller
said and what actually happened, and I think we need to get to
the bottom of that.
Mr. Eastman, can you name the Treasury Inspector General
for Tax Administration officials whom you discussed your case
with?
Mr. EASTMAN. Not off the top of my head, but I can provide
that to the Committee after the hearing.
Mr. NUNES. Okay. If you can provide those after the
hearing, I would appreciate it.
Do you know if the leak of your tax information that
included your organization's donors, did it come from
Washington, D.C., or Cincinnati, or do you know?
Mr. EASTMAN. I don't have any reason to believe that it
came from Cincinnati. Our filing office is out in Utah, and the
Washington office is who we have been dealing with.
Mr. NUNES. Okay.
Mr. Chairman, I think we should try to figure out where--
perhaps the Inspector General has that information, which would
speed up this process on this investigation of where this
information was leaked from. Because, obviously, that would
dispel the Cincinnati narrative that is out there.
Ms. Martinek, the IRS agent who handled your case was Ms.
Richards?
Ms. MARTINEK. That is correct.
Mr. NUNES. Does Ms. Richards have a first name?
Ms. MARTINEK. She never gave her first name.
Mr. NUNES. Okay. Did you correspond with any other IRS
agents about your case?
Ms. MARTINEK. I did not, but our attorney, Sally
Wagenmaker, did.
Mr. NUNES. Okay. Could you provide the names of who she
corresponded with to this Committee?
Ms. MARTINEK. Yes.
Mr. NUNES. Did Ms. Richards ever indicate she was
discussing your case or seeking guidance from anyone else at
the IRS?
Ms. MARTINEK. Yes, she did, a couple of times. She put me
on hold, and then said, I must check with my supervisors.
Mr. NUNES. So you don't know the name.
Ms. MARTINEK. She never gave me a name.
Mr. NUNES. Were they in Cincinnati or somewhere else?
Ms. MARTINEK. I don't know that.
Mr. NUNES. You don't know. Okay.
Ms. Belsom, you were contacted by Mr. Joseph Herr?
Ms. BELSOM. Yes.
Mr. NUNES. And did you correspond with any other agents
about your case?
Ms. BELSOM. No.
Mr. NUNES. Just Mr. Herr?
Ms. BELSOM. Yes.
Mr. NUNES. Did Mr. Herr ever indicate that he was talking
to someone else within the agency?
Ms. BELSOM. I didn't speak to him on the phone, we just had
the initial letter. Then I contacted the ACLJ, and they dealt
with him.
Mr. NUNES. Okay. So you don't know if it came from
Washington or Cincinnati.
Ms. BELSOM. Well, he is in the--the address he gave on the
letter he sent that he signed, it said Cincinnati.
Mr. NUNES. Cincinnati. Okay.
Mr. Chairman, in light of today's testimony, I think that
we should bring these--at least Mr. Herr, Mr. Steele, Ms. Faye
Ng, and Ms. Richards, who doesn't have a first name, we should
try to figure out who these people are and, I think, bring them
before the Committee or at least conduct interviews with these
folks.
I also remain concerned about Ms. Lerner, who pled the
Fifth but has said she didn't do anything wrong. We should
probably try to get her before this Committee, and also her
colleague, Mr. Joseph Grant, who was promoted just weeks before
and then resigned immediately. I think they could maybe shed
some light on who violated the constitutional rights of these
witnesses and many rights of many Americans.
And I will yield back.
Chairman CAMP. All right. Thank you.
Mr. Neal is recognized.
Mr. NEAL. Thank you, Mr. Chairman. And thanks for calling
today's hearing.
What we have heard today and what we have heard in previous
hearings is certainly very troubling. The IRS touches every
American, and it is critical that Americans should trust the
IRS and not be intimidated or be afraid of the IRS. These
reports, including today's testimony, of targeting by the IRS
of organizations based on their political views, religion, or
opposition to the Administration's policies is certainly
unacceptable.
I am also troubled by the mismanagement of the IRS in
handling tax-exemption applications and the lack of oversight
of the screening process. Acting Commissioner Miller last week,
based on questioning that I had offered, highlighted a case of
one of my constituents who followed the advice of the IRS, only
to be penalized a few years later. Americans certainly should
be able to rely on the advice of the IRS without punishment.
The inconsistencies in information and failure by the IRS
to provide Congress with information in its oversight role
certainly is unacceptable, as well. It is unbelievable to me
that Lois Lerner testified before this Committee just a few
days before her apology at the ABA conference without informing
the Committee as to what she was going to say at the ABA
conference. That demonstrated a lack of regard for our role.
So I appreciate very much, Mr. Chairman, your hearing and
calling it today. We need to get to the bottom of these
problems and work together to identify solutions on what I hope
will be a bipartisan basis.
But we can't forget something here that is even more
egregious than some of the actions of the IRS, and that is the
underlying problem: 501(c)(4)s are engaged in political
activity.
After Citizens United, the IRS was flooded with
applications from groups seeking 501(c)(4) status. Why was
that? In large part, it is because the super PACs must disclose
their donors, which 501(c)(4)s do not.
That is not meant as a political statement. Both
conservative and liberal groups have taken advantage of the
lack of transparency of 501(c)(4) status, and it is equally
troubling in both cases. In reference to Mr. Ryan's statement
earlier, there were Democratic groups that were targeted.
Previous testimony indicated that. And that should be noted, as
well.
So I hope, Mr. Chairman, that you are going to include a
thorough review of 501(c)(4) status as we seek to address the
issue.
Now, Ms. Kenney, just a question. I appreciate very much
your work with veterans, including the fact that there are
1,700,000 new veterans. That number is probably going to reach
2 million, as you know.
Now, you did, in your opening testimony, indicate that you
have an invitation that you extend to a wide range of groups
and candidates. But you also indicated that Democrats did not
attend based upon the invitation that you have extended. Why do
you think that would be?
Ms. KENNEY. I have no idea.
Mr. NEAL. Okay.
That is the end of my questioning, Mr. Chairman. Thank you.
Chairman CAMP. Thank you.
Mr. Tiberi is recognized.
Mr. TIBERI. Thank you, Mr. Chairman, for providing this
hearing today and the outstanding witnesses. The testimony has
been breathtaking.
And I would like to remind all the Members of the Committee
that this is far beyond 501(c)(4) status. Mr. Chairman, you may
recall the gentleman that I introduced who was in the audience
at the last hearing, Justin Binik-Thomas, question number 26.
And I would like to work with you to submit some information on
that particular case. Congresswoman Schmidt was his
representative, and she submitted--suburban Cincinnati--to the
IRS questions regarding why Mr. Thomas was question number 26
on a 501(c)(3) application for a suburban Cincinnati
organization. To this day, they have not received their status,
and to this day, this American doesn't know why he was question
number 26. And so I would like to work with you, Mr. Chairman,
on trying to get answers to both of those questions.
I was shocked to find out on Friday, with a question from a
lawyer in my district, about another matter dealing with the
IRS. This lawyer represents an organization that is a taxable
nonprofit, a taxable nonprofit. They filed their first tax
return with the IRS in February of this year, Mr. Chairman. The
organization's name was We the People Convention, Inc. in Ohio.
They received a letter from the IRS on April 30th, and it
says, ``Dear taxpayer. On February 21st, we received your Form
1120 for the tax period shown above. We are sorry we cannot
process your return as filed. Our records indicate the above-
named account, We the People, is a political corporation. And,
thus, as a political corporation, you are required to file Form
1120-POL and file for tax-exempt status.''
The IRS had no information other than the name ``We the
People'' for an organization that wanted to pay taxes, and
their return was rejected in April of this year, Mr. Chairman.
The lawyer wrote back to the IRS--by the way, not the Tax-
Exempt Division, another division within the IRS, Input
Corrections Operation within the IRS. And the letter from the
lawyer says, ``This organization was formed as a nonprofit
corporation in Ohio in February of 2011. The stated purpose of
the entity is a coming together of Ohio citizens for the
purpose of sharing knowledge, experience, information, and
ideas about the governance of our State, as well as for any
lawful purposes. The activities of the organization are focused
upon planning and holding an annual meeting to discuss civic
and social welfare. The organization is not involved in any
activities designed to directly or indirectly influence the
outcome of any election. Thus, the organization does not meet
the statutory test as an entity that can claim tax-exempt
status under IRC Section 527 and has not attempted to claim
such status.''
Mr. Chairman, we are only scratching the surface of where
this goes. Not a tax-exempt organization, this organization is
a taxable nonprofit. So for the Members of this Committee who
think that this is about just tax-exempt status--which, by the
way, is legal--this shows that we are only scratching the
surface, Mr. Chairman.
I appreciate your leadership on this. The testimony is
fabulous. My mom and dad came to America, crossed the Atlantic.
And I have to tell you, ladies and gentlemen, this is shocking
to me.
I yield back.
Chairman CAMP. All right.
Mr. Doggett.
Mr. DOGGETT. Thank you, Mr. Chairman.
Thank you for your testimony today.
The last hearing that we had on this subject featured as
the lead witness the Inspector General of the Internal Revenue
Service, a career Republican who had worked for two Republican
Senators, who was appointed by President George W. Bush, and
who had broad investigative powers.
He identified wrongdoing at the IRS. I agree with his
findings, agree that whether it is one of these organizations,
any of the 298 applications that Mr. Levin identified from his
report that were set aside, 96 of them appearing to be of
perhaps a political orientation like the groups that are here
today and perhaps one like Progress Texas in my hometown, which
received a similar letter and has very dissimilar political
beliefs from those expressed here today, whatever the political
beliefs, the Inspector General is right: Folks should never
have to worry about whether the tax collector is looking at
their political beliefs or activities in making a decision.
The Inspector General had more to say, however, after the
very strong opening statement of our Chairman about what the
report signified. I asked him specifically if he had found any
evidence of the corruption at the IRS, as charged. He said, no,
he had not. I asked, since there was a charge opening our
hearing, whether our tax system is rotten at the core. He
indicated, no, definitely not. I asked him whether there was
any evidence to support from his thorough investigation the
charge of the Chairman that the IRS picks who wins and who
loses in America. He responded, I don't believe that is the
case. I agree with him on those findings, as well.
Indeed, there is a question and a serious problem at the
IRS with regard to the basic issue of which groups in our
country the taxpayers should subsidize. We do not subsidize the
Democratic or the Republican or the Libertarian Party, and we
should not. And we should not subsidize groups that act in a
similar way to promote political activity.
This Congress was very clear on that point, clear on it in
1913 and in repeated recodifications of what is now 501(c)(4).
It said that they must be operated exclusively for the
promotion of social welfare. Only at a later time, through a
regulation, through a rule that seems to have conflict directly
with the clear wording of the statute, did the IRS act to give
itself discretion to explore organizations just like those
before us today.
I think the IRS was wrong here. It did so during the
Administration of President Dwight Eisenhower in 1959, and in
more recent years, particularly after the decision in Citizens
United, suggested that we would have tens of millions, indeed
hundreds of millions, of tax-subsidized money poured in, with
secret, undisclosed contributors, into the election process to
pollute our democracy.
An organization before the last election, Citizens for
Responsibility and Ethics in Washington, petitioned the IRS to
act about this and to go back to the original clear,
unequivocal wording of the statute that had existed since 1913.
The IRS did not respond, except with a ``we'll think about
it''-type letter. The Citizens for Responsibility and Ethics in
Washington has petitioned again this year for the Treasury
Department to act on this matter. I have asked them, as have
other Members of this Congress, to do the same.
I don't believe that the Internal Revenue Service, the
Treasury Department should be providing tax subsidies to
organizations that are not engaged exclusively in social
welfare, whether their name is Progress Texas or the 9-12
Patriots or any other self-styled name they may want to apply
to themselves.
This is the second hearing on this subject in a very short
period of time. We have now had some 37 votes on whether to
repeal the Affordable Care Act. I am sure this is not the last
hearing on this topic, and the two are closely related.
The Internal Revenue Service has an important function to
play in carrying out the provisions of the Affordable Care Act.
It is to assess those working- and middle-class families who
are entitled to receive some premium assistance in acquiring
insurance. And the IRS needs to carry out that job effectively
and fully. The two are directly related: The goal of insuring
that the IRS cannot fulfill its responsibilities.
I yield back.
Chairman CAMP. Thank you.
I will just note for the record that the Inspector General
report was an audit and that the Inspector General indicated
that he would be completing a full investigation of this matter
in the future.
So I will recognize Mr. Reichert for 5 minutes.
Mr. REICHERT. Thank you, Mr. Chairman.
You know, the Supreme Court has already decided this issue.
And some of our friends may disagree with the Supreme Court's
decision, just like some of us on this side of the aisle might
disagree with the Supreme Court's decision on forcing Americans
to buy health insurance, but it is the law of the land.
So let's kind of step back and see where we are. Last week,
or 2 weeks ago, we had a hearing where Mr. George and Mr.
Miller appeared. Mr. Miller accepted the IG's report; he said
he accepted it fully. But on the other hand, he said, I don't
agree with the use of the word ``targeted'' in the report, even
though it was used 16 times.
Mr. Miller would not even agree that certain organizations
and/or individuals were treated differently in this process. He
did, however, say, as the Chairman said, ``We provided poor
customer service.'' ``Poor customer service.''
So I didn't have a lot of time to ask Mr. Miller additional
questions, but--so I am trying to figure this out. Was Mr.
Miller asked to resign by the President of the United States
because he provided poor customer service? Well, if Mr. Miller
provided poor customer service and was asked to resign by the
President, who else provided poor customer service that should
be asked to resign under Mr. Miller, under Ms. Lerner, under
the other names that were brought up, would be my question.
Rather, we know that it was more than poor customer
service, because Mr. Miller goes on to say, well, while it was
just poor customer service, I want to apologize. And then he
came up with excuses. Then he said that, you know, there was
really no intent here to treat anybody differently or wrongly,
there was no--this was an effort by good employees to be
efficient. To be efficient? By asking you hundreds of questions
about your personal lives, that is efficiency? I don't think
so.
And the word ``inadvertent'' was used, as we talked about
Dr. Eastman's release of information, tax information. That is
not inadvertent.
There is more investigation to do. I have said many times
in this forum--most people know that I am a retired police
officer, 33 years as a cop. There are a lot of questions to ask
here.
When I asked Mr. Miller who he spoke to about this to try
to find out who came up with the criteria that all of you had
to respond to, he didn't remember at first but finally gave me
the title of a person that he spoke to. And I finally said,
what is the name of the person? He said it was Nancy Marks.
Did any of you speak with Nancy Marks or receive any
communication at all from Nancy Marks?
Mr. Chairman, I would suggest, along with Mr. Nunes, that
we think about having Nancy Marks appear in front of this panel
to find out what she knew, because Mr. Miller couldn't remember
at all what that conversation was about.
There are other names that have been brought up here today,
and I would just ask if there are any other names from any of
the panelists that are appearing before this Committee today?
Do you have any other names of people that you contacted, that
you have spoken with, that you have received emails from? Could
you provide those?
And I will just start with--say your name one more time for
me.
Mr. KOOKOGEY. Mr. Kookogey.
Mr. REICHERT. Mr. Kookogey. Could you please provide me
with any names that you could think of of people that you have
had communication with?
Mr. KOOKOGEY. Yes. The first agent on my case was Sheila
May Robinson. Then my case was switched to the desk of Mr. Ron
Bell, and he was the one who advised me that he was waiting on
guidance from his superiors as to my organization and other
similar organizations.
It was then passed to Mr. Mitch Steele. And then the most
recent letter, which came as recently as May 6th, was from a
woman whose name I can't pronounce.
Mr. REICHERT. Well, we can get it from you later.
Mr. KOOKOGEY. Thank you.
Mr. REICHERT. Ms. Belsom.
Ms. BELSOM. Joseph Herr was the only one, H-e-r-r.
Mr. REICHERT. Dr. Eastman.
Mr. EASTMAN. Yeah, we had a couple of investigators from
the Inspector General's Office that we have been dealing with,
and I will provide those names to the Committee.
Mr. REICHERT. Ms. Kenney.
Ms. KENNEY. Mitch Steele.
Mr. REICHERT. And other names possibly?
Ms. KENNEY. Holly Paz comes to mind.
Mr. REICHERT. Okay.
Ms. Martinek.
Ms. MARTINEK. I will provide that.
Ms. GERRITSON. Robert Choi. I have an ID number for one of
the workers; I don't have his name.
Mr. REICHERT. Please.
Ms. GERRITSON. Ronald Bell, Stephen Seok, Lois Lerner, and
Holly Paz. And on the last page of my testimony is my timeline,
and all these names are in there, as well as that ID number.
Mr. REICHERT. All right. Thank you.
I yield back.
Chairman CAMP. Thank you.
Mr. Thompson is recognized.
Mr. THOMPSON. Thank you, Mr. Chairman.
And I want to thank all the witnesses for taking your time
to be here. It is important that we figure all of this out.
Ms. Kenney, I want to particularly thank you for your work
with veterans. Being one myself, I appreciate that very, very
much.
And I also wanted to state for the record what I said the
last time we had a hearing on this: I believe that it is
outrageous, it is inappropriate, it is wrong, and we must do
everything that we can do to fix it to make sure that it never
happens again.
Ms. Belsom, you--and I probably won't get it exactly
correct, but you said something along the lines of, this needs
to be investigated, those responsible need to be held
accountable for any targeting of conservative groups. I agree.
But I also believe that any targeting of any group, anybody
that does that needs to be held accountable. It is important--
--
Ms. BELSOM. You are absolutely right.
Mr. THOMPSON. It is important that we hear about these
abuses. However, we all know that it is bad, it is wrong, and
we all know that it must never happen again. We know we need to
fix it.
So, Mr. Chairman, it is time that we stipulate that this is
wrong, that it is abusive, that it needs to--it never should
have happened. And we need to know what we need to do to get it
fixed. We need to make sure that it never happens to
conservative groups, we need to make sure that it never happens
to liberal groups, we need to make sure that it never happens
to any group.
The IG's report said that the Cincinnati staff of the IRS
had questions about the law and how it was to be applied and
that they weren't given adequate guidance nor supervision, even
after they asked for it. That is bad management--at its best,
it is bad management. And I think that the subsequent stories
we have heard about these staff retreats that the IRS has been
taking, I think, bolsters that fact, that there is a huge
problem with bad management in that organization.
But the truth is we share a little bit of that
responsibility. We have oversight over that operation. And we
need to be bearing down to figure out how it is, how in the
world can you even do that stuff without somebody knowing about
it, without somebody recognizing it for what it is? The idea
that you just take your staff and you go off someplace and make
not even a B-rated film to try to build some sort of better
staff arrangements? Not one of us could do that in our office.
This Committee couldn't do that. Why is it that a bureaucracy
can do that?
We have a responsibility in this Committee, and I think we
ought to get to doing our work to make sure that we fix this
problem. We don't need to hear any more witnesses. We know it
was bad. It is terrible what you and everybody else had to go
through. It is terrible when any government entity doesn't do
their job and puts taxpayers through the ringer. Let's get it
fixed, Mr. Chairman.
I yield back the balance of my time.
Chairman CAMP. All right. Thank you.
I will now go two-to-one. Dr. Boustany.
Mr. BOUSTANY. Thank you, Mr. Chairman.
And I want to thank all of you for being here today and
providing your testimony.
Mr. Eastman, how did you find out that your donor list had
been leaked to the IRS?
Mr. EASTMAN. It appeared on a website of the Human Rights
Campaign, which is our principal political opponent.
Mr. BOUSTANY. So somebody in your organization happened to
be looking at that?
Mr. EASTMAN. Somebody called it to our attention. We saw
that. We saw that there were redactions. This was March 30th of
2012. Within a few days, our computer forensic people had been
able to unlayer the redactions, and we saw that it came from
within the IRS itself.
Mr. BOUSTANY. Thank you.
I have on the screen there some documents side-by-side.
These documents were taken, I believe, from the Huffington
Post, and one of them has a redaction. Could you explain what
is going on there?
Mr. EASTMAN. Sure. These are the Schedule B forms attached
to our 990 tax returns. Like all nonprofits, we have to make
public our 990 forms, but the Schedule B, which is the list of
our donors, is as confidential as our private tax returns.
The document on the left with the redaction across the
center is the document that appeared on the website of the
Human Rights Campaign. The document on the right is that same
PDF file but with the redaction layer removed. And you see
across the center diagonally the internal IRS document number
that is affixed by the IRS computer. At the top of the page you
see the language, you know, this is a live tax return from the
internal IRS system, ``For Official Use Only.''
Mr. BOUSTANY. So this was the first time that you became
aware of this, in the Huffington Post. And it was taken from an
adversarial group's website.
Mr. EASTMAN. Yes. The Human Rights Campaign, which is our
chief adversary, posted it on their website. The Huffington
Post and a number of other media outlets then linked to that
illegally disclosed tax return.
Mr. BOUSTANY. So, at that point in time, you then went on
to try to determine what course of action the IRS or Department
of Treasury was going to take; is that correct?
Mr. EASTMAN. That is correct. We filed specific requests
for investigation with the Treasury Inspector General for Tax
Administration. And because there are felony violations at
issue here, we filed a request for investigation with the
Department of Justice Criminal Division, as well.
Mr. BOUSTANY. And you were stonewalled----
Mr. EASTMAN. Well, the investigation--I have the full list
of the TIGTA agents that were involved. They wanted to close
off the possibility that this had just been leaked by somebody
internal to our own organization. I think the evidence, the
document speaks for itself that it came from the IRS. But I
suppose it is possible that somebody might have asked for a
copy of our own tax return back and then went to the trouble of
leaking it. So they wanted to close that door off.
But once that door closed, that was the last we had heard
of the investigation. And, as I said, that was the summer of
2012, almost a year ago.
Mr. BOUSTANY. But that document with the number on there,
the IRS number on there, indicates that this came from the IRS?
Mr. EASTMAN. The IRS' own internal manual specifically says
that that is put on every tax return automatically for any
return that gets electronically filed with the IRS. And it is
not a document that we have in our records, because we of
course filed the clean version. And once it is filed, that is
the document that gets ``For Official Use Only'' placed on it.
Mr. BOUSTANY. And you have not been notified, despite a
FOIA request and other means of action, you have not been
notified as to what recourse or actions are being taken as of
this date?
Mr. EASTMAN. No. In fact, Federal law requires that we be
notified if anybody is charged with the illegal disclosure of
our returns. We have received no such notification.
Our specific requests tied directly to what is authorized
to be disclosed to a taxpayer whose returns were illegally
disclosed: The status of the investigation, the results of it,
whether the investigation remains open or closed, whether our
complaints were substantiated or not substantiated. This is the
language from the regulation itself. We asked for that specific
information, and we were told we could not have it because any
result of their investigation was itself protected taxpayer
information.
Mr. BOUSTANY. Thank you.
I have to say, you know, that Ranking Member Levin
mentioned avoiding speculation, I think, in his opening
statement. And I could say, and it is pretty evident here, that
we have seen egregious abuse, intimidation, certainly
mismanagement, and this cannot be tolerated. It cannot be
tolerated in our system of government. We have to get to the
bottom of this. We have to get to the facts of what happened.
And those responsible will be held accountable under the full--
fully under the law.
And the other thing that we have to do is we have to
restore the checks and balances, which provides the opportunity
for Congress to do legitimate oversight.
And I have to tell you, Mr. Eastman, this is egregious, and
we are going to get to the bottom of it. And the IRS can no
longer withhold this information. We will get it.
Thank you.
Chairman CAMP. Thank you.
Mr. Roskam is recognized.
Mr. ROSKAM. Thank you, Mr. Chairman.
You know, the question before us today is, who decides who
gets to participate in the public square? Is it bureaucrats, or
is it the American people?
I am heartened today. And I know that there is sort of an
ominous feeling about what is going on, but I am actually
heartened by the example of you six who have come forward,
because you know what you did? You kept faith in America. You
kept faith. And no matter how big the swells were, no matter
how big the storm cloud was, no matter how overwhelming the
feeling was, you were faithful. And God bless you for being
faithful.
And we are here in a country where some of us, we are
trying to reach out now, and we are all in this together, and
we are trying to say, look, this is a great country that we
have, and it is worth celebrating, it is worth defending, it is
worth articulating these founding values. And I am so deeply
appreciative of your willingness to keep faith when it was
overwhelming.
But, look, history is filled with this story. And it always
works out well when those who are entrusted with
responsibility--that is us--listen to the complaints of the
public, sort out fact from fiction, and then do our work. And I
am telling you what? Based on your faithfulness, I think this
comes to a very good end.
Now, let me tell you a story. An unrelated Federal agency,
the Federal Election Commission, intervened unfairly in a 1996
election for the United States Senate in the State of Illinois.
A friend of mine, former law partner, was the Republican
nominee, Al Salvi. He was falsely accused of breaking Federal
law. The Federal Election Commission sued him; the case was
dismissed. The Federal Election Commission tried to manipulate
him into paying an outrageous fine. The Federal Election
Commission kept losing and losing and losing.
Finally, Al says, ``I would like to speak to the person
with authority in this case, because surely if they understood
the facts, they would dismiss this case.'' The person at the
other end of the phone in charge of enforcement at the time
said, ``We will dismiss this case if you pledge to never run
for office again.'' The person at the other end of that phone
was Lois Lerner. In the words of my son Steve, ``I'm just
saying.''
Now, Ms. Martinek, as we are listening and we hear about
these First Amendment rights of yours, cumulatively, that have
been trampled, there is something particularly egregious, I
think, about the first of our first freedoms--that is, our
freedom to worship, our freedom to avoid government compulsion
as it relates to matters of faith. And what you have described
is the long arm of the Federal Government coming in to you,
coming in to your organization, and essentially telling you,
we'll tell you what to think, we'll tell you how to pray.
Heaven help us. Heaven help us.
This Congress opens on a daily basis in prayer. Moments
ago, this place opened in prayer. We have prayer groups that
are honeycombed throughout the Capitol praying for God's mercy
for this country, praying for wisdom, praying for strength,
praying for clarity. And we have a Federal agency that comes in
and tries to get into your business? It is an outrage.
And so what you are sensing today from those of us on this
Committee is a sense of real clarity about what is going on.
This is not about ambiguity in the law. This is not about any
such thing. This is about abuse of power.
And so what you have done--and I thank you for doing this--
what you have done is you have lit a lamp and you have clanged
a bell and you have rallied people around you to make this
right. And so I know I speak for many on this Committee, we
will get this right.
I yield back.
Chairman CAMP. Thank you.
Mr. Blumenauer is recognized.
Mr. BLUMENAUER. Thank you, Mr. Chairman.
And I, too, appreciate the patience of the witnesses coming
today and telling their stories.
I think we are all united in denouncing the treatment that
you were accorded and especially the disclosure of confidential
tax information. And I am looking forward to the Committee
moving forward, as I think everybody has expressed, to get to
the bottom of it.
I appreciate our colleague, Mr. Thompson, talking about the
Committee doing its job, figuring out what we do going forward.
But part of what is coming clear to me is that there is a
fundamental flaw in the way that we have allowed a clear
statute to be modified by a regulation that invites abuse. It
puts bureaucrats in a position where they can legitimately
start probing around these questions, and I think that is
inappropriate.
Part of the problem I see is illustrated by part of Dr.
Eastman's testimony, where he talks about his chief adversary
in their political struggles, the Human Rights Campaign. That
doesn't sound, I mean, at least in my mind, when we are engaged
in promoting the common good and general welfare, then somehow
we are talking about being political adversaries.
The National Organization for Marriage was established in
2007 to pass a proposition in California to stop our gay and
lesbian citizens from marrying the person they love.
``Promoting social welfare.''
An internal National Organization of Marriage document last
year stated the organization seeks ``to drive a wedge'' between
gays and blacks by promoting ``African-American spokespeople
for marriage,'' thus provoking same-sex marriage supporters
into ``denouncing these spokesmen and -women as bigots,'' and
to interrupt the assimilation of Latinos into ``dominant Anglo
culture'' by making the stance against same-sex marriage a
``key badge of Latino identity.'' And none of this has been
denied by the National Organization for Marriage.
It has called for portraying President Obama as a ``social
radical'' and seeking to cast same-sex marriage in a negative
light, connecting it to issues like pornography. Social
welfare? I think not.
It is everybody's right to participate in politics, and
well you should. But I think having organizations parading as
being social welfare organizations and then being involved in
the political combat harkens back to why the statute 100 years
ago said that they were prohibited and why I wholeheartedly
agree with my colleague, Mr. Doggett, saying we ought to stop
this regulation interpretation from 1959 that invites people to
raise vast sums of money and keep it secret and to engage in
political activity, and some of it, I think, not necessarily
promoting the social welfare of our country.
Everybody ought to play by the same rules. We ought to go
back to the original intent. We ought to eliminate
opportunities for bureaucrats in the Internal Revenue Service
making these judgments about whether it is primarily social
welfare or not. It shouldn't be involved with politics at all.
And until, I think, we do our job as a Committee to
reinstate that original intent, that we overrule that
regulation, we won't be doing our job completely. Rout out the
problems, find out who leaked confidential information, make
sure that this is administered properly down in the ranks of
the IRS. But let's stop this charade of pretending that these
are social welfare organizations and admit that they are
political, treat them as such, and play by the same rules that
everybody on the Committee plays by when we are involved in
politics.
Thank you, and I yield back.
Chairman CAMP. Thank you.
Dr. Price.
Mr. PRICE. Thank you, Mr. Chairman. And I want to thank you
so very much for continuing this evaluation of what has been
described during this hearing today as ``chilling,''
``shocking,'' ``fearful,'' ``felt betrayed,''
``unconscionable,'' ``unbelievable,'' ``frightening,''
``intimidating,'' ``using the government as a weapon against
the citizens.''
You know, sometimes when we walk out of the Capitol in the
evening, we have some significant emotion about something that
has just occurred during the course of that day. I am going to
walk out today saddened--saddened that we find ourselves in a
situation where our government is in activity with its citizens
that results in those adjectives, in those descriptions.
I want to echo Mr. Roskam's compliments to you all. Thank
you, thank you, thank you, thank you for your trust and your
faith in our government and in our system.
It is that trust that is being eroded, though. And our
system of government only works if that trust exists. And our
job is to restore that trust. And your involvement today, your
participation today, your participation over the past number of
years will help greatly restore that trust.
One way to do that, by the way, is to institute fundamental
tax reform, have an IRS that isn't powerful. How about an IRS
that just processes a form? How about an IRS that says, you
have identified what you make, you have identified what kind of
exemptions may exist, and this is what you owe? And maybe it is
that simple. Maybe it is that simple.
Dr. Eastman, I am stunned at the----
Mr. EASTMAN. As am I.
Mr. PRICE [continuing]. Magnitude of the disclosure that
you bring before us today. And I am sorry that I wasn't aware
of it, the significance of it before today.
And people have asked you very, very specific questions to
inform the American people and to inform this Committee. I want
to ask you about your donors, your donors being listed
publicly. You mentioned that they were harassed. Put some flesh
on that. What does that mean? How have the donors been
harassed?
Mr. EASTMAN. I can begin with the story of Proposition 8 in
California. And before I get to that, I really have to respond
to the scurrilous things that were said on the other side.
Representative Blumenauer, it is your kind of statements
that have empowered IRS agents to make determinations about
which organizations qualify for the public good and which do
not. The notion that defending traditional marriage doesn't
qualify as a defense of a public good is beyond preposterous.
And how sad it is, Representative Doggett, how sad it is
that efforts to educate about our Constitution have become a
partisan political issue that you think people ought not to get
tax-exempt status for.
Let me go back now to this question.
Beginning in Proposition 8, people's names were disclosed
as donors. Their businesses were boycotted. If there was an
employee at a business, that business was boycotted. They were
harassed, they were assaulted on the streets, their property
was vandalized.
And this has now pervaded across the Nation every time our
donor list gets disclosed to the point that our donors tell us,
we are fearful of giving money to you to help support the cause
that we believe in because our businesses and our families are
at risk.
It is the very reason, as I pointed out with Mr. Lewis,
that NAACP v. Alabama held the constitutional right to keep
people's names and identities confidential when the risk of
intimidation rises to the level that it has.
Mr. PRICE. Dr. Eastman, I would appreciate it if you would
provide for the Committee some of the specifics regarding that.
It is absolutely chilling.
I have a couple other quick questions that I think we can
squeeze in before the end.
Ms. Martinek, in what year did you receive the
questionnaire from the IRS about your prayer gatherings?
Ms. MARTINEK. In 2009.
Mr. PRICE. In 2009.
Ms. Belsom, we are told that the IRS ended their
interrogations in mid-2012, but that isn't your experience, is
it?
Ms. BELSOM. You are talking to me?
Mr. PRICE. Yes.
Ms. BELSOM. Yeah, I mean, we turned in everything on March
5th, I believe, 2013. And we still have----
Mr. PRICE. In 2013.
Ms. BELSOM [continuing]. We have heard nothing since then.
Mr. PRICE. Mr. Chairman, I just make that point, because
the Inspector General said that the challenges occurred between
March of 2010 and ended in mid-2012. Clearly, that is not the
case.
Chairman CAMP. All right. Thank you.
Mr. Buchanan.
Mr. BUCHANAN. Yeah, thank you, Mr. Chairman, for this
important hearing.
And I also want to thank all of our witnesses. I applaud
your leadership in terms of the effort.
All of us have a different background. I was in business 30
years, and came here in 2007. One of the things I have tried to
do is, when I got here, the sense was nobody was listening in
Washington. So I probably as much as anybody here, I know a lot
of our colleagues do it on both sides, I do a lot of town
halls, a lot of meetings, and I started that in 2007.
And I can tell you one thing with a lot of the conservative
groups--and I did go to Tea Party groups. I didn't agree with
anything, and many of the groups didn't want politicians there.
But the bottom line was they were scared to death of what was
going on in this country. I heard a lot of those conversations.
In terms of the debt, the deficit, the stimulus, the TARP, they
felt and I felt we were going broke as a country. And that is
why I applaud what you are doing here today and your leadership
from that standpoint. Because my mindset is, it is very real.
And the year I came in, we had a $130 billion deficit in
2006, 2007, in that period of time. That deficit went up to
$1.3 trillion in 4 years. And I can just tell you, that is what
brought a lot of the energy. There are different issues, but at
the core of a lot of these conservative groups, they can do the
math, and when you go from $8 trillion to $16 trillion quickly
to $20 trillion--and I heard a lot about that. And I,
obviously, as a business guy, know in terms of balancing
budgets; 49 out of 50 Governors have to do it.
People were very concerned, not just about themselves. More
importantly, they were concerned about their children and
grandchildren. Because I represent the State of Florida, and a
lot of people have done well there in my district, and they
were concerned about the next two generations.
Now, that being said, my question is, there is no question
that you were targeted, harassed, humiliated to some extent.
But how did that impede your growth to your organizations in
terms of realizing your full potential when you look at that?
And I want to start out with Mr. Kookogey. You had
mentioned it affected one aspect from your standpoint, it
affected your organization in terms of a donor that could have
contributed but you couldn't get your paperwork put in in time.
But what impacts did it have on all of you in terms of
realizing your full potential as organizations? Can you comment
on that, please?
Mr. KOOKOGEY. Sure. As you noted, we were promised a
$30,000 grant upon achieving status. Because that status has
taken so long, the organization came to us and said, we will
have to move that off the books, and when you get status, you
can reapply.
This organization also added that it was unbelievable, in
his mind, in his 25 years of being an Executive Director of
granting money to all sorts of nonprofits, he had never seen
anything like this. He had never seen any nonprofit that he had
dealt with not get through in 2 or 3 months.
As to the impact, a lot of people know that with a
nonprofit--remember, I am a (c)(3). It is all about
establishing trust. If one credible foundation puts money into
the organization, I can use that then to go to other
organizations and say, this organization has trusted my
organization; will you now contribute? Because I could not get
status, everything effectively stopped.
And since May 2011, I have been dormant, not only out of
the inability to raise money, but out of the abject fear that
the government had a target on my back.
Mr. BUCHANAN. Ms. Belsom, could you just comment? What
impact did it have on keeping you or your organization from
full potential?
Ms. BELSOM. Yeah. I just wanted to make a couple of quick
comments before I answer that.
There seems to be some misconceptions about what a (c)(4)
organization, as far as--I mean, I am totally outraged by the
accusation that we are somehow subsidized by the taxpayers.
People making donations to a (c)(4) organization, that is not a
tax-deductible amount. We are not getting any money from the
taxpayers.
What we are saying is, hey, if we want to have a group of
people pay dues or make a donation that at the end of the year
or whatever, that we are not subject to then pay taxes on that
money again, which has already been taxed when the person
earned it to begin with. So this is a real outrage, to imply
that somehow we are taking money from starving children to fund
our groups.
You know, that being the case, I can't say that this
investigation being ongoing for the past 3 years has really
impeded us because the donations are not tax-deductible. So
people have donated as they saw fit. And we have just operated
as if we were a (c)(4) since it has been pending.
Mr. BUCHANAN. Mr. Eastman, do you want to answer?
Mr. EASTMAN. Yeah, let me put this in context. In the
Proposition 8 fight in California, the opposing sides raised
roughly equivalent amounts of money. But with the disclosure of
donor lists and the intimidation campaign that has been brought
and which has highlighted on the disclosure of our donors to
our (c)(4), the last round of ballot initiatives that were on
the ballot last November, the pro-traditional-marriage side was
outspent by more than $20 million, about four or five to one.
I think the chilling effect that has come from the
intimidation of donors to the cause of traditional marriage is
pervasive and is having real consequences on the outcomes of
elections on that key policy issue that is before the American
people right now.
Chairman CAMP. All right. Time has expired.
Mr. Kind is recognized.
Mr. KIND. Thank you, Mr. Chairman.
I, too, want to thank our witnesses for your testimony here
today. We do appreciate it.
We have a problem on our hands, and hopefully this
Committee will be able to move forward in a bipartisan fashion
to fix it, and fix it as soon as possible. Because if there is
any true rot at the core of our democracy, it is a pervasive
feeling that you are being treated unfairly, you are being
singled out, you are being discriminated against in some
fashion.
Listen, I am a former athlete myself, and I wasn't the
biggest fan of referees on the field, but I knew they played an
important role in the game. You may not always agree with the
call that they make, but they are an essential part. And I
would hope that the answer is as simple as reforming a Tax Code
that has become antiquated and too complex, that it just
becomes a processing unit and nothing else.
But even President Reagan believed in ``trust but verify.''
And let's be honest, if we were all angels, we wouldn't have a
need for government in our lives. But we do need some
verification. And there is some terminology here that I think
the IRS is wrestling with. And I think there is an important
role for this Congress and this Committee to help clarify as we
move forward to ensure this never happens again.
I mean, it is a clear difference between an organization
that is primarily engaged in political activity or one that is
primarily engaged in social welfare. And I think that is what
the IRS is struggling with here. Because the Inspector General
in his report was very clear that he found, based on his
interviews and the preliminary investigation that took place,
there was no partisan or political motivation behind what was
going on.
Now, there are reports that there were progressive groups
that were singled out, as well. We were hoping to be able to
call a witness on our side to be a part of this panel and ask
them to testify. And we could have called someone from Progress
Texas, Chicago News Cooperative, Clean Elections Texas, or, in
addition, we might have called someone from Emerge America and
its affiliates, who had their tax-exempt applications denied or
their tax-exempt status revoked.
In fact, a recent Tax Notes article looked through the 176
IRS-approved advocacy organizations approved through May
2013. They took a look at those that were approved. One hundred
twenty-two of them were conservative organizations; 48 were
nonconservative organizations. For six there wasn't sufficient
information to be able to determine between the two.
But, nevertheless, I think each of you before us today has
a legitimate cause of concern and complaint. And it is going to
be our obligation to do a better job of working with an IRS,
who I also happen to believe is overburdened with a deluge of
tax-exempt applications over the last couple of years. The
Cincinnati office was a very small office of roughly nine
people trying to process all of these applications. And I think
the criteria that they used was clearly wrong, and we need to
look into that, why it was used the way it was. But I think
there is also a question of insufficient resources and
insufficient staff to deal with the deluge of applications that
did come in.
Now, Ms. Kenney, let me ask you whether or not you think it
would be appropriate for an organization that is primarily
engaged in political activity to be able to qualify as a
501(c)(4) organization? Do you think that would be appropriate?
Ms. KENNEY. I think that your question is hypothetical. I
can only speak from my own experience.
Mr. KIND. Well, it is not hypothetical to the IRS, because
this is a determination they have to make.
Ms. KENNEY. But you are asking me.
Mr. KIND. Right. Well, let me ask you this----
Ms. KENNEY. And I can only--sir, I'm trying to----
Mr. KIND. Let me ask you, as a witness here today, do you
in your mind have a clear definition of what is engagement in
social welfare or what is engagement in political activity? Do
you have a clear definition in your mind?
Ms. KENNEY. I can only answer from my own experience since
I am not a lawyer. My experience is we were obeying the law,
and our personal group is about education about the political
process.
Mr. KIND. And I believe you believe that with all your
heart.
Ms. Belsom, let me ask you the same question. Do you have a
clear definition in your mind----
Ms. BELSOM. Yes----
Mr. KIND [continuing]. For what is a political activity or
what is a social welfare activity?
Ms. BELSOM [continuing]. I would be glad to answer that.
You know, I did a Google search of other 501(c)(4)
organizations, and there were groups such as America Votes,
Brady Campaign, California League of Conservation Voters,
Citizens for Tax Justice, Democratic Leadership Council,
Environment California, Gender Rights Maryland, Georgia Right
to Life, Health Care for America Now, National Transgender----
Mr. KIND. But do you have a clear definition in your mind
of what constitutes political activity or what constitutes a
social welfare activity?
Ms. BELSOM. Can you please define ``political'' for me?
Mr. KIND. I am not doing this to single you out or to
criticize you in any way----
Ms. BELSOM. Yes, I know.
Mr. KIND [continuing]. But it highlights a point I am
making, that the definition is very subjective. And when you
have a subjective definition and are asking a Federal agency to
apply their judgment, you are going to get subjective judgments
from it.
And that is why I think, Mr. Chairman, as we move forward,
we need clear, bright-line rules of these activities, of what
is allowed and what isn't allowed. And when you don't have
that, you are going to have instances like this on both sides,
of groups being singled out for additional questions and
additional scrutiny. And then the feeling of unfairness sets
in. And----
Chairman CAMP. Okay. Time has expired.
Mr. KIND [continuing]. At the core, that is really what we
are wrestling with here.
Chairman CAMP. Yes. I do want to note that the Minority was
given the opportunity to call a witness but did not present a
witness that had been affected by taxpayer activity--by IRS
activity. So that is why there is no Minority witness at the
table today.
Mr. KIND. Thank you----
Chairman CAMP. They were given that opportunity. I just
want to make sure the gentleman understood that.
Mr. Schock is recognized.
Mr. SCHOCK. Thank you, Mr. Chairman.
Thank you to the witnesses.
Boy, the American people are being led to believe you guys
are big muscles of political strength that are being subsidized
by taxpayers and have some unfair advantage over, perhaps,
those who share a different belief than you.
So, for the record, perhaps these Tea Party groups might
share. Ms. Belsom, Ms. Kenney, and Ms. Gerritson, could you
tell us roughly what your annual budget is?
Ms. BELSOM. Sure. Let's see. In 2010, our budget was
$2,453.
Mr. SCHOCK. Your budget was $2,453 for the entire year.
Ms. BELSOM. Yes.
Mr. SCHOCK. Okay.
Ms. BELSOM. In 2011, it was $3,371.
Mr. EASTMAN. That is a 50 percent increase.
Ms. BELSOM. And in 2012 we did get a grant from Tea Party
Patriots that enabled us to promote our organization, so we did
have approximately $9,000 that year.
Mr. SCHOCK. Wow, $9,000. Okay.
Ms. Kenney.
Ms. KENNEY. Forgive me for laughing. Our annual budget is
in the negative.
Mr. SCHOCK. Uh-oh. Are you a Democratic organization?
Ms. KENNEY. The first year, we had a minus $1,300. The
second year, I don't remember. That was from legal fees to
actually begin the process of filing for a 501(c)(4) and other
types of activities.
Mr. SCHOCK. So, basically, the harassment and illegal
questions that you were asked caused your organization to
deficit-spend to try to defend its constitutional right and
equal protection under the law?
Ms. KENNEY. Yes, because it also dried up our ability to
have people participate in a structure where they could donate.
Mr. SCHOCK. Thank you.
Ms. Gerritson, how about your budget?
Ms. GERRITSON. Well, I don't have the exact numbers, but I
can tell you that we have less than $5,000 at the end of each
month, roughly. One year, when we took a big bus trip to
Washington, we had $18,000 at one time in the bank, but as soon
as we paid for the bus, that balance went down. But we usually
run under $5,000.
Mr. SCHOCK. So, roughly, you could say it has never been
over $50,000.
Ms. GERRITSON. Oh, goodness, no.
Mr. SCHOCK. So you can understand the outrage by Members of
this Committee for the apparent double standard that Members on
this Committee seem to have for their frustration, outrage,
opposition to groups who seek 501(c)(4) and 501(c)(3) status
who may be on the opposite side of your issues and who we know
have organized and raised far more sums than all of you
collectively.
One group in particular we know about is Organizing for
Action, a group organized by the President's own men, political
advisers, which to date we know has raised in excess of
millions of dollars. And I am just going to read on their
website what they say their mission is: ``Organizing for Action
is a nonprofit organization established to support President
Obama in achieving enactment of his national agenda.''
Now, I would humbly ask my colleagues on the other side of
the aisle, is that political? And why would an organization----
Mr. NEAL. Would the gentleman yield?
Mr. SCHOCK [continuing]. Called Organizing for Action----
Mr. NEAL. Would the gentleman yield?
Mr. SCHOCK. No, I will not.
Mr. NEAL. What did you ask the question for, then?
Mr. SCHOCK. Mr. Neal, go ahead.
Chairman CAMP. The gentleman from Illinois has the time.
Mr. SCHOCK. Go ahead.
Mr. NEAL. Are those names disclosed?
Mr. SCHOCK. Are what names disclosed?
Mr. NEAL. The names of the President's committee. Are the
contributors disclosed?
Mr. SCHOCK. I am not aware of whether they are or----
Mr. NEAL. Let me be on record as saying those names should
be disclosed.
Mr. SCHOCK. Okay. But we are not having a debate about
whether or not we agree with Citizens United. We are not having
a debate about whether or not we want to change 501(c)(3) or
change 501(c)(4) processes. I would submit to you that if that
is your goal, perhaps you should introduce legislation to do
so.
The problem is that this IRS agency has discriminated
against people based on their political views. And for anyone--
--
Mr. MCDERMOTT. Order, Mr. Chairman.
Mr. SCHOCK [continuing]. For anyone to defend----
Chairman CAMP. Regular order.
Mr. SCHOCK [continuing]. This bureaucracy from
discriminating against people----
Chairman CAMP. Will the gentleman suspend?
I will have to ask our guests and the Committee to refrain
from applause and other displays of emotion or attention. We
need to keep decorum in the Committee. So I would respectfully
ask that our Members refrain from clapping and cheering.
Mr. SCHOCK. Thank you, Mr. Chairman.
Chairman CAMP. You may proceed.
Mr. SCHOCK. For anyone to suggest that these individuals'
rights should be limited more so than others' simply because of
their political beliefs is nothing more than discrimination.
There would be clarity if this was an issue of white versus
black, of Jews versus Christians. But because it is
conservative versus liberal, there seems to be some question,
some cloud, some lack of clarity.
And rather than work united in a bipartisan way to rout out
the very cancer that my colleague, Mr. Rangel, described, we
are simply trying to chop off the head of the patient, remove
the Acting Commissioner, and say all is well. We need to get to
the bottom of this, we need to identify the cancer, and this
needs to be removed from this organization.
I yield back.
Chairman CAMP. Mr. Paulsen is recognized.
Mr. PAULSEN. Thank you, Mr. Chairman, also for holding this
hearing.
And I just really want to thank all of you for taking the
time to testify. It is really a tragedy that you have to be
here today. I want to commend you for being here today. You
shouldn't have to be here, no citizen should have to be here
defending their constitutional rights. And, obviously, you have
shared the stories about how your rights have been violated.
And so I just think you are brave. I mean, you are brave
for being here. Listening to the emotion in your testimony is
very real, not just because you are nervous about testifying in
front of a congressional committee, I imagine, but probably in
the back of your mind you probably can't help but be a little
bit angry or even fearful about sticking your neck out a little
bit more and being a target, having a larger target on your
back, potentially.
This is not a mistake by the IRS, as some have mentioned
today. This is not poor customer service, as the Acting
Commissioner Miller testified just a few weeks ago. This abuse
was systemic. And it has been going on for years. And we know
it is systemic because of the number of groups that were
targeted. We know it is systemic because of the number of
individuals that are involved--IRS workers that have been named
as a part of your testimony that we will also be able to
further interview and get information from. And the larger
question now is, who helped direct this activity? And Lois
Lerner is obviously refusing to even answer questions.
Mr. Kookogey, if I could just ask----
Mr. KOOKOGEY. Kookogey.
Mr. PAULSEN. Kookogey. I apologize. If I could just ask you
a question, because you testified that, back in December of
2011, you had made numerous and repeated calls to the IRS which
went unreturned, and then finally you did reach an agent. I
think you said it was Ron Bell.
Mr. KOOKOGEY. Yes.
Mr. PAULSEN. You reached that agent in Cincinnati. You
inquired of him about why the application was taking so long.
And he said he had been waiting for guidance from his
superiors.
Mr. KOOKOGEY. From his superiors.
Mr. PAULSEN. Can you just comment? I mean, who do you think
his superiors would have been? You mentioned it wasn't someone
just down the hall. That is sort of the feeling you got.
Mr. KOOKOGEY. Yes, although he didn't indicate exactly
where it was. And I believe--am I correct that these IRS calls
are recorded? So we could probably find out if he did, indeed,
specify. At least, that is what I remember. Every time I called
the IRS, it said, ``These calls may be recorded.'' So I think
my conversation with Mr. Bell may, indeed, be recorded.
But what I remember him saying was, we have been waiting on
guidance from our superiors as to your organization and similar
organizations. He did not say where it was coming from, but it
was clearly implicit that it wasn't down the hall. Whether it
was from Washington or some other office, he had been waiting a
long time. It wasn't just a matter of putting me on hold and
going to talk to someone else.
Mr. PAULSEN. Right.
And, Ms. Martinek, I believe you made some comment about
conversations with IRS workers who were working with some of
their superiors, as well?
Ms. MARTINEK. That is correct. Ms. Richards did tell me on
at least two different occasions that she would have to put me
on hold and she would check with her superior, or superiors, to
answer the question that I was asking her.
Mr. PAULSEN. Well, your testimony is going to help us get
down to the facts so we can actually figure out who was
directing this targeting.
Ms. Belsom, I was going to ask you a question, because we
did hear from the Inspector General as a part of the audit in
March of 2010. That is apparently when the targeting actually
started and went forward. But we were told by the Acting
Commissioner, Acting Commissioner Miller, that all of that
targeting activity stopped in June of 2012.
Have you continued to receive any correspondence from the
IRS regarding the status of your application----
Ms. BELSOM. No.
Mr. PAULSEN [continuing]. Since June of 2012?
Ms. BELSOM. Yeah, I mean, I didn't get the letter--I mean,
I heard nothing, basically, until September of 2012 when we got
the letter with the whole list of questions.
Mr. PAULSEN. After June of 2012, you have continued to
receive information----
Ms. BELSOM. Right.
Mr. PAULSEN [continuing]. From the IRS regarding the
status.
Ms. BELSOM. Right.
Mr. PAULSEN. Well, Mr. Chairman, the other issue I think
that we will continue to have questions about is the whole
concept of donors, because we have just scratched the surface,
I think. And Dr. Eastman has testified, but I had a
conversation with a donor in my State who has been a
contributor to certain political causes and has been fearful of
stepping out and voicing his concern about some of these
activities, but now he is being more emboldened. And I am
thinking we are going to hear from some more donors down the
road, Mr. Chairman, as this investigation continues.
And I yield back.
Chairman CAMP. Mr. Pascrell.
Mr. PASCRELL. Thank you, Mr. Chairman.
Thank you, Mr. Levin.
I think it is critical that this Committee continue its
investigation into what we all agree--let's make that clear.
There are those on the panel here, apparently--not the panel,
excuse me; thank you, panelists--but on our side of the room
that have tried to divide--some of us have tried to divide us
into, ``Those folks don't really want to clean up the IRS like
we folks do.'' And that is a typical propaganda game, and I
understand it.
I want to stress your attempt at bipartisanship, Mr.
Chairman. I think Democrats and Republicans both recognize that
the IRS flagging applications is wrong. And we have a shared
interest in working with you in a bipartisan way to find out
what really happened and to fix it.
I mean, if we are the problem, if we hadn't clarified what
the tests should be for these organizations, it is not the
organizations, it is we that are at fault, and we need to
change the test to see if that organization qualifies. But you
ask everybody; you don't ask a few. So we agree on that.
We don't need unsubstantiated, politically motivated, and
irresponsible accusations against one another. We have to look
at where the facts are. No one has a God-given right to a tax-
exempt status. And none of the panelists said that they--that
was contrary to that.
The laws governing tax-exempt organizations and 501(c)(4)s
were created by Congress. It is us. If we have been derelict,
then we have to change what the laws are, period. And for us
not to change the law would mean that this could happen with
facility down the road to all kinds of issues and all kinds of
groups advocating those issues.
So I think we need to focus on writing clear rules. And
should it be a test based on how much money you spend? Should
it be time-based? After this debacle, we can't afford not to be
specific.
So I have some questions for the witnesses.
Mr. Eastman, Chairman of the National Organization for
Marriage, I believe, correct, sir?
Mr. EASTMAN. Yes.
Mr. PASCRELL. Why did your organization not choose to
become--and you don't have to answer this, but I am curious.
Why did you choose not to become a 527 organization under the
tax laws?
Mr. EASTMAN. Because that is not what we do under our
organization. When we get particularly involved in political
campaigns or those that support our cause, we set up political
action committees, as is required by the law, and pursue that
route. When we are pursuing purely educational functions, we
use that through our nonprofit educational foundation, a
501(c)(3). And for the activities that the Tax Code sets out as
compliant with 501(c)(4), we operate those activities under the
501(c)(4) organization.
Mr. PASCRELL. You and I both realize that if you are a 527,
if you declare that, if you apply for that, that means your
donors have to be what?
Mr. EASTMAN. As is, a political action committee, and----
Mr. PASCRELL. Right.
Mr. EASTMAN [continuing]. We do disclose those donors. For
nonpolitical activity that we engage in from NOM itself, we
follow the same rules that everybody else follows.
Mr. PASCRELL. And so your organization chose to become a
501(c)(4).
Mr. EASTMAN. This particular one did. That is right.
Mr. PASCRELL. That organization has, like all other
organizations in that particular category, a test to go
through. In other words, when you make an application, you have
to comply with what are some stupid questions; we would both
agree to that. But, in the final analysis, that is information
given to the IRS to determine whether you are eligible for that
exemption. Is----
Mr. EASTMAN. That is correct.
Mr. PASCRELL [continuing]. That correct, sir?
Mr. EASTMAN. Yes.
Mr. PASCRELL. Now, some of the questions are going to go to
that thin line we talked about before, and that is, what is
political and what is not political? And many times that is a
tough question, isn't it?
Mr. EASTMAN. Well, the law oftentimes is clear. And there
is no contention that has ever been made that our activities
under the 501(c)(4) are not appropriate for a 501(c)(4). We
have our 501(c)(4) status----
Mr. PASCRELL. Well, you are an issue-oriented organization.
You have every right to profess what you believe in.
Mr. EASTMAN. That is right, and to have our donors'
confidentiality protected, as the law provides----
Mr. PASCRELL. But isn't there a question, when it gets down
to it--and we agree so far--when you are going to express that
issue, in what you believe in, and doing something overtly to
demonstrate where you feel you are right and where this other
organization, whatever it may be, is wrong? Doesn't it get to
be a question of, is this political or not? I mean, your
politics are different than my politics, and what is political
to you may not be political to me. That is a tough question.
Mr. EASTMAN. I don't think----
Chairman CAMP. If you could answer briefly because time has
expired.
Mr. EASTMAN. I don't think it is tough at all, that when we
engage in the very same activity that the Human Rights Campaign
engages in----
Mr. PASCRELL. I'm not defending--excuse me, sir.
Mr. EASTMAN [continuing]. That our donors are disclosed and
theirs are not. It is a felony, what happened to us. No such
felony occurred against them. And it is not being prosecuted.
Mr. PASCRELL. But, Mr. Eastman----
Chairman CAMP. Thank you. Time has expired.
Mr. PASCRELL [continuing]. No one has inferred----
Chairman CAMP. Mr. Pascrell.
And now we will recognize Mr. Marchant for 5 minutes.
Mr. MARCHANT. Thank you, Mr. Chairman.
I have a letter today that I would like to put in the
record from the Northeast Tarrant Tea Party. Their treasurer is
a gentleman that has been a CPA for 40 years, and his primary
practice was in helping tax-exempt organizations receive their
501(c)(3) or (4).
Chairman CAMP. Okay. Without objection.
[The submission of The Honorable Kenny Marchant follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Mr. MARCHANT. He states in his testimony, which I have
here, that he was subjected exactly to the same scrutiny that
Ms. Belsom was, Ms. Gerritson, and Ms. Kenney.
After 15 months, he received a questionnaire that had 110
questions on it. He states that unequivocally this was the most
complicated questionnaire he had ever received in response and
very quickly ascertained that this organization was being
targeted specifically because of their beliefs.
They were asked questions about True the Vote. They were
asked questions about their affiliation with training sessions.
They were asked for lists of names. All of you have received
very, very similar questions. So it is happening to all of us
in all of our districts.
A year ago about this time, I wrote a letter to the Acting
Commissioner asking if this was actually going on. He wrote a
letter back and said it was not. And then Mr. Joseph Grant
wrote a letter back and said this was not going on. Just as
recently as a few weeks ago, we questioned the Acting
Commissioner, who still said that this was not going on. When
we finally pinned him down on the questions, he basically said,
well, it actually was going on, but you didn't ask the question
the right way. And, basically, they had lawyered up.
So, since then, I would like to walk you through a little
bit of what has happened. And it has happened as a result of
the fact that across the Nation each one of you and each one of
the groups in all of our districts have contacted their
Congressman, and this Committee has began a year ago to act on
this, on this suspicion.
And what this Committee has been subjected to is really a
conspiracy of arrogance. When this Committee swears in
witnesses, we expect them to tell the truth. And when you write
a letter to the IRS Commissioner and he writes you a letter
back and says it is not happening, you have to operate on some
premise of truth. And this Committee has been subjected to
untrue statements, and they have been put in writing.
Commissioner Shulman, retired and resigned. Acting
Commissioner Miller, fired, then retired or resigned. Joseph
Grant, resigned. Lois Lerner, she has taken the Fifth
Amendment, and is now on administrative leave. And just
yesterday, newly named Commissioner, not yet confirmed, Werfel,
his most common answer to the Committee yesterday was he did
not know, he was not aware, and he would have to get back to
them. Now, this Committee has heard a lot of that, especially
from Ms. Lerner, in the last year.
The question I would like to ask each of you is, what do
you think the IRS Commissioner should do once this Committee is
successful in exposing everyone at the IRS that orchestrated
this policy?
Mr. Kookogey.
Mr. KOOKOGEY. I think it is conjecture--I don't think it is
appropriate for me to determine what the IRS Commissioner
should do. I can only speak for what I would like to see done
with regard to the whole matter, and that is to get to the
truth, and if there is criminal activity, that we have the
moral courage to pursue it and not merely to politicize it and
have them say, okay, we will just apologize. Because we, as
taxpayers, if we fail to pay our taxes, we get criminal
penalties. And so it is not acceptable for the IRS to just say,
oh, I am sorry.
Ms. BELSOM. I feel like----
Chairman CAMP. I am going to have to ask everyone to answer
very briefly because we are out of time.
Ms. BELSOM. Okay.
I would like to see a huge transformation of the whole way
taxes are done.
And as far as, you know, I feel like, as a person concerned
in my community, if I want to start an organization and work to
educate citizens and have candidates in to speak and vet
candidates, that sort of thing, I shouldn't need to have to
worry about paying any taxes on money collected from dues. We
are not funding any political candidates.
And I just think--I don't want to be involved with the IRS.
The IRS is a nightmare. And I would like something done to
reduce the average citizen's aggravation in having to deal with
the IRS. We need to get rid of the tax system that we have and
go to something much simpler, like a fair tax.
Chairman CAMP. All right.
Briefly.
Mr. EASTMAN. In addition to the felony charges on our
particular issue, I think you need to hold individuals
responsible and with civil liability to the taxpayers whose
disclosures were done so that they can pursue it even if the
Department of Justice won't.
Ms. KENNEY. The answer is the rule of law must be followed.
And if it is violated, it must be remedied, either civilly or
criminally or both. Thank you.
Chairman CAMP. Thank you.
Ms. MARTINEK. The IRS needs to uniformly process their
applications without offending any of the First Amendment
rights.
Chairman CAMP. All right.
Ms. GERRITSON. I will make it easy and ditto what Mr.
Kookogey said. But just firing a few people will not fix the
problem. Just like Mr. Rangel said, it is a cancer inside the
agency, and it has to be routed out from the bottom up.
Chairman CAMP. All right. Thank you.
Ms. Black is recognized.
Ms. BLACK. Thank you, Mr. Chairman.
And thank all of you for being here today.
Mr. Kookogey, thank you for representing Tennessee. But we
know that we have other groups there, such as the Chattanooga
Tea Party and the Roane County Tea Party, that could likewise
give similar testimony.
So we really appreciate you all being here today.
I think prior to the exposure of what has just most
recently happened in the IRS, if we were to ask the American
people about their impression of the IRS, I think we would hear
the words ``fear,'' ``powerlessness,'' ``intimidation,'' maybe
``distrust.'' And those are words that would have been used
prior to this, but I think what has now happened has confirmed
that.
And it certainly is a sad day for our country, where our
Founding Fathers set up those Bill of Rights to ensure us that
we wouldn't have a government that would intimidate the very
citizens of the country. And so it is a really, really sad time
that we have come to this point where we have actually
confirmed what many people would have said prior to this.
If I could ask the staff to bring up one of the pieces of
information that is in our files here.
Mr. Kookogey, I bring this up because this comes as a
result of a question that was asked of you. And this is
question number 24 on your questionnaire, where they actually
ask you the names of those students that you would be
educating.
Can you give me any thought of why this would be of
particular interest in order to establish your 501(c)(4)
status?
Mr. KOOKOGEY. No, not--it is stunning. It is unbelievable.
I can't give an answer. I have been thinking about it for 29
months, as to why they would want to know the names of 7th-
graders that I am teaching Western civilization, political
philosophy, and the basic theories of economics. Why in the
world would the IRS want to know the names of these students,
but for perhaps intimidation of them and their parents, to
discourage them from being taught under my tutelage.
Ms. BLACK. It is certainly very chilling, something we
wouldn't expect here in the United States. We would be looking
at some communistic countries if we were to think about this
kind of activity.
One of my colleagues said that none of you were silenced.
And what I would like to know--and maybe we can start over here
with you, Ms. Gerritson--do you feel that what was occurring
here in both the intimidation and not getting the status, did
it silence you?
Ms. GERRITSON. Well, obviously, I am here, so, no, it
didn't silence me.
Ms. BLACK. I mean, your group, did the intimidation and not
getting the status silence you in being able to do what your
group was intended to do?
Ms. GERRITSON. Oh, I was going to say I do have members
that have come up to me and that are fearful. They don't want
to write their name on any sign-up form that we may have. I
also have people emailing me that they are getting audited for
the first time ever, and they gave during the campaign. So I
can't put a number on how it has hindered our organization, but
it has because people have told me it has.
Ms. BLACK. Ms. Martinek.
Ms. MARTINEK. We have not been silenced, but if we didn't
have accessibility to the Thomas More Society and attorneys, we
may have been.
Ms. BLACK. So you had some folks there to help you out.
Ms. GERRITSON. And I would agree, had we not had the ACLJ,
we couldn't have fought the government.
Ms. BLACK. Thank you.
Ms. Kenney.
Ms. KENNEY. We are not silenced, but there is a fist and a
hand over our mouth because our educational opportunities to
everything from creating brochures or pamphlets on the
Constitution to buying such things as bookmarks that educate
people about the Constitution, that has been limited, to the
postcards on getting voter information, that has been
constricted because we simply don't have the funds.
Ms. BLACK. Thank you.
Mr. Eastman.
Mr. EASTMAN. You know, my nature is not to be silenced by
anything, but the number one comment I get every time we do
something like this is, ``Thank you for standing up for us; you
must be very brave.'' And I don't think it is brave; I think it
is citizenship duty that we stand up every chance we get.
Ms. BLACK. Ms. Belsom.
Ms. BELSOM. I feel like if we don't speak up now, that time
may be lost. So I am doing my best to speak up. But without the
ACLJ and the knowledge of the other groups being targeted, I
really am not sure what would have happened. There was a time
when I was just ready to say, ``Forget this whole thing.'' It
is very chilling, and I just think that----
Ms. BLACK. My time is running out. The point that I want to
make here, because I know that it is going to come really
quickly, is that your First Amendment rights are being violated
here.
Mr. Kookogey, do you want to just, for the rest of the time
I have left----
Mr. KOOKOGEY. Yes. Whether or not it is chilling, I think
was even evidenced today, because some of the Democrats on this
Committee actually implied that what is social welfare to them
is social welfare. But what might be social welfare to us is
somehow negotiable.
Ms. BLACK. Thank you. I yield back.
Chairman CAMP. Thank you.
Mr. Young is recognized.
Mr. YOUNG. Thank you, Mr. Chairman.
Since the issue of groups being targeted by the IRS has
come to light, I am continually encouraged--everyone I speak
to--to let the facts lead us to wherever they may.
We don't want to draw premature conclusions. Follow the
facts. The more facts we have learned, including in this
hearing, the more concerned I get that there is some organized
effort to stifle conservative political activity.
Given the pattern of intimidation and obstruction we have
seen from the IRS, I at least understand why some are ready to
jump to firm conclusions. But perhaps what is most frustrating
to me is we still need so many answers, answers that we are not
getting from some of the higher ups and from others that
represent us in our Federal Government.
While we wait for those answers, far too many Members of
Congress in polemicists masquerading as journalists suddenly
downplay the gravity of this situation. We hear that time and
again. And then they draw conclusions of their own.
These are conclusions, incidentally, that don't seem to
jive with the facts that we already know. We have heard, for
instance, that the real problem is groups applying for tax-
exempt status that engage in political activity. The problem is
the groups.
But groups of every political persuasion do this; they
apply for this tax-exempt status. So why is it that every Tea
Party group that applied for 501(c)(4) status was targeted? Why
did an approval subsequently take years longer than many of
their progressive counterparts? I want to know. The people want
to know. Why were pro-life groups and groups in support of
traditional marriage targeted but not pro-abortion and marriage
equality groups treated similarly?
It has been more than suggested--suggested here in this
hearing--that this is really about Citizens United and about
501(c)(4) groups and their undisclosed donor lists. I think
some of my colleagues have helped disabuse us of that notion.
But I want to know why were groups filing for 501(c)(3) status,
like some of those here today, asked inappropriate questions
like the content of their prayers? Why were 501(c)(3)
applicants left in limbo if this is about the abuse of
501(c)(4) status?
Lastly, we have heard that this is about organizations
trying to game the system. But if it is about organizations,
why was the IRS so concerned about individual donors to these
organizations? Why in the months prior to a major Federal
election did donor information for conservative groups and
candidates get illegally released by the IRS? We want to know
the answer to that question. Why did donors to conservative
candidates get targeted with threatening communications trying
to suppress their political donations? All of this is extremely
troubling and, of course, we need more answers.
Sadly, those who can tell us the most would rather plead
the Fifth Amendment than help us get to the bottom of these
things. This must never, ever happen again. We need to ensure
that safeguards are in place, as others on both sides of the
aisle have said, so that our executive branch cannot nurture or
give license to a culture or a subculture of intimidation
within our Federal agencies.
And, finally, we need to punish those who violated our
trust. You know, I am looking forward to that day when we do
prosecute, Dr. Eastman, those who are responsible for acts that
may well need to be prosecuted as more facts come in. You
indicate that you already have those facts on hand. Let's hope
that those facts are presented before a court of law and that
proper action is taken.
We have an Indiana Tea Party group that waited for a number
of years for their 501(c)(4) application to be approved. They
decided not to answer the IRS' inappropriate questions. They
finally received a denial of their 501(c)(4) status. However,
just a few days later, after being denied, they were approved.
Curious behavior. I want to know if any of your groups had a
similar situation, where you were approved just days after
being denied.
Mr. KOOKOGEY. No. I am actually still waiting for status
after 29 months.
Ms. BELSOM. I am still waiting after almost 3 years.
Mr. EASTMAN. We were approved prior to 2008.
Ms. KENNEY. I withdrew my application.
Ms. MARTINEK. We were approved 1 week after the request for
a letter was given to us. Once our attorney sent in her letter,
I guess it was 1 week after that that we actually were
approved. So they didn't actually deny us, but they acted very
quickly once we had legal help pointing out their request being
illegal.
Mr. YOUNG. Ms. Gerritson.
Ms. GERRITSON. No. It was 600 and something days, but we
finally were approved. We were never denied.
Mr. YOUNG. Thank you. I yield back.
Chairman CAMP. Thank you.
Mr. Kelly is recognized.
Mr. KELLY. Thank you, Chairman. And I thank you all for
being here.
I went through a similar situation. I was an automobile
dealer. My dad started the business in 1953 after coming back
from the war--a little one-car showroom, but four service bays,
so you can imagine my shock in 2009 when all of a sudden, one
of my franchises was being taken away--not because I didn't
know how to run it, not because we didn't meet the metrics it
requires, because the government made a decision, you know
what, Kelly, you are no longer going to be in business. So I
went through a process and got the dealership back.
But there is something wrong here. There is something
wrong. This is truly a David v. Goliath. I think it is Edmund
Burke that said that all that is necessary for the triumph of
evil is for good men to do nothing.
I thank you for coming here today. And I hope by your
appearing here today that you have encouraged other people
throughout the country to come forward, that you do not have to
be afraid of this government. The fear only exists if you allow
it to continue. Don't let that happen to you.
I traveled through the district last week. I can't tell you
the number of people that came up to me and said, you know
what, I would like to say something, but if you use my name, I
am afraid they are going to come after me. My God, is that what
we have come to?
I was in a Decoration Day--I call it Decoration Day. I know
it is Memorial Day now, but I call it Decoration Day because it
is about decorating the graves of our veterans, our war dead. A
guy by the name of Bill Kumpf came up to me afterwards, and he
said, ``Mr. Kelly, can I talk to you?'' I said, ``Sure, Mr.
Kumpf, what is it?'' He said, ``You know, we were denied our
status. Now, here is the problem with this.'' I said, ``Really,
what happened?'' Well, some kind of certification was the
problem. But here is his fear: He goes, ``But I am wondering
now if it is because this Penn Township Veterans Association is
made up mostly of Republicans, that maybe we are targeted?''
Now, think about that. We have talked about chilling. This is
not chilling. The American people are frozen with fear. We have
gone far beyond being chilling. We have exceeded; we have gone
way over what this government is supposed to be able to do. And
I have to tell you, when I talk to you all and see you here and
understand what it is you are going through, you don't have big
budgets to work with. Somebody was talking about the stall
tactic. That can keep you on the sidelines forever.
Mr. Kookogey, what kind of legal fees have you built up?
Mr. KOOKOGEY. I have my own legal fees because I am an
attorney, so I have done everything quid pro quo. I have done
it all on my own. And the ACLJ represents us obviously as a
nonprofit.
But that does not mean I don't have countless other
expenses. I have been funding, by loans to an organization that
I assumed one day would be granted tax-exempt status,
countless--I mean, $30,000, $40,000, $50,000 of my own money,
just trying to wait
for this day, this inevitable day, that the IRS would grant me
tax-exempt status.
Mr. KELLY. You would get your day in court.
Ms. Belsom, you have built up some costs?
Ms. BELSOM. The ACLJ is representing us for free.
Mr. KELLY. Okay. Dr. Eastman.
Mr. EASTMAN. Hundreds of thousands of dollars in legal fees
we have incurred trying to protect our donors and fight the
nonsense that has been going on against us.
Ms. KENNEY. Meeting costs, legal costs, yes, and other
things to run our group, such as speakers' fees, money to get
the good trainers out and the good organizational people and
spokespeople out, yes.
Mr. KELLY. Ms. Martinek.
Ms. MARTINEK. The Thomas More Society has taken the
responsibility of our financial expenses.
Ms. GERRITSON. And the ACLJ is representing us, so we
haven't had to pay our own costs.
Mr. KELLY. Isn't it incredible what you are going through
to maintain your First Amendment rights? And I will just tell
you, this is not a problem that is in Cincinnati. This is a
problem that is deep in the bowels of this government. And if
there is some point that we cannot stop this culture of fear,
this government-sponsored fear, then we are really coming up
short on what the oath is that we took. And we didn't take it
for the Republican Party. I am so sick of hearing about, oh, it
is about Republicans or Democrats. This is about America. This
is basically who we are. We took an oath of office not to
defend the rights of Republicans or Democrats or Libertarians,
or those that just want to live here and just be left alone; we
took an oath to defend our Constitution.
So I really applaud you for what you are doing today. Do
not give up on this because I think the idea of if you can
stall them long enough, if you can drive their costs high
enough--it cost me $60,000, by the way, in legal fees to get my
dealership back. And I was told by a Member of this Congress,
``Well, the system allowed you to get it back.'' I said, ``Oh,
my goodness. So I was able to get back what the government
stole from me; isn't that a novel idea?''
So thank you for what you are doing. Stay the course. Do
not give up. And please, spread the word to the rest of the
American public: Do not be afraid of this government. It is
only when we fear the government that we lose. This is a
government that is supposed to serve the people; the people are
not supposed to serve it. So keep up the fight. We are with
you, and we have your back.
Thank you, Mr. Chairman.
Chairman CAMP. All right. Thank you.
Mr. Griffin is recognized.
Mr. GRIFFIN. Thank you, Mr. Chairman.
Thank you all so much for being here today. It reminds me
of the somewhat famous quote that a government big enough to
give you everything you need is powerful enough to take
everything you have. That sort of goes to your quote earlier
when you were talking about the government culture that we are
dealing with here.
I think what we have seen described here and in the
previous hearing is a distant, ever-growing, almost unlimited
Federal Government that, in many instances, means well, but is
unresponsive to people that live thousands of miles away. And
the bigger it grows, the less accountable it is. And I think
this is another example of that.
I want to clarify a couple of things. There have been a lot
of facts thrown around, and there are a lot of myths as well.
First of all, there was no surge in 501(c)(4) applications in
2010. We have heard--I know some people get talking points, and
they read them, and they don't really know what they mean. But
the Washington Post and the Atlantic and many others have
reported there was no surge in 501(c)(4) applications in 2010.
It just didn't happen.
And we are not just talking about (c)(4)s, as Mr. Young
pointed out, we are talking about (c)(3)s. I am holding a
lawsuit that relates to Z Street. They are trying to get
organized. They are a pro-Israel group. And I have the
questionnaire that they were sent. The IRS--they were just
trying to get 501(c)(3) status, okay, not (c)(4). The question:
Does your organization support the existence of the land of
Israel? Describe your organization's religious belief system
toward the land of Israel.
It is unbelievable. And you know what is interesting, it is
pointed out here that in the New York Times, a senior State
Department official was talking about some of the charitable
groups active in the Middle East, and he said that the funding
for these groups is a problem because it is unhelpful to the
efforts we are trying to make. Is there a connection? I don't
know. But it is outrageous that they would ask these sorts of
things of groups.
You know, you heard some other Members quote the
investigation of the Inspector General. I would point out, as
some others have, it was an audit. There were no emails
requested, no depositions. It just scratched the surface. And a
lot of people love to cite it. Well, they didn't cite the fact
that it said that conservative groups were targeted. That is
why you are here. It is not a debate over the law. It is the
fact that some groups were given a pass, and some groups
weren't. That is what this is all about. Despite the fact that
some people say, oh, it is about terminology, or we haven't
given them the right terms. Do you really need training to know
that you don't ask Americans what they are praying about? I
mean, seriously, do you really need training to know that you
don't approach a group and try to get a deal that they won't
protest Planned Parenthood? It is unbelievable. If you have to
write that type of stuff in the statute, then we are just out
of luck, folks. That is just common sense.
You know, I think this is another great argument for tax
reform. If you want to reduce the abuse and the power of the
IRS, we need to reduce the complexity of the Tax Code that they
enforce every day.
I would just say, in closing, that I would encourage you to
explore all of your options against this government. I would
encourage you to look at 42 USC 1983, which allows you to sue
when your rights have been violated, particularly your First
Amendment rights. I would just encourage you--obviously, you
have your own lawyers. But when citizens are treated the way
you have been, I think you ought to use every tool that you can
to hold this government accountable. We are going to do our job
here. But this is a Federal Government that agency after agency
after agency is out of control. And I appreciate your being
brave and being here today. Thank you.
Chairman CAMP. Thank you.
Mr. Renacci.
Mr. RENACCI. Thank you, Mr. Chairman.
I wanted to get back and make sure that I thanked every one
of you for being here.
Again, I practiced in the business world for almost 30
years before I came here--I have only been here for 2 years--
and I also had a CPA profession. So I had to sit in front of
those IRS agents with clients, or I had to get the letter from
that individual that you all received from the IRS. And I have
to tell you, it is appalling, not only what I heard in some of
your testimony and what the IRS did, but I have to tell you,
they don't treat--I mean, I sat in many, many situations with
the IRS, and they never seemed to care. I mean, their
timelines, it is amazing how long they made you all wait. It is
just appalling that this government allows that to happen.
One thing that is kind of interesting for me as a business
guy, when I took over a bad business, it would have been the
easiest thing in the world for me to blame the guy who
appointed the manager of the company before I took it over.
Quite frankly, we had to fix the problem and move forward. So
when I hear people say, well, this was a Bush appointee, or
whatever, I always say, isn't it amazing? I mean, we should be
actually talking about how we fix the problems, whoever is
there. And as leaders, we should be taking responsibility to
make sure those problems are fixed.
Now, I have to tell you, we had testimony 2 weeks ago from
Acting Commissioner Miller. He seemed more interested in
providing excuses. I heard him, I don't know how many times,
say, ``I don't know''--and we continue to hear that out of the
agency. Can you imagine if you would have answered your
questions, ``I don't know,'' what would have happened to you? I
mean, I know. I mean, you wouldn't have gotten--of course, you
didn't get very far that quick with answering properly. But I
don't know whether they would have just thrown your application
away. But yet we have the Acting Commissioner in here 2 weeks
ago answering I don't know. And he gave half-hearted apologies.
But I found it appalling and was disturbed with many of his
responses. And I would wonder, as victims of many of these
actions--and I would consider them illegal--do you believe
these actions by the IRS to you were illegal? And I would like
to just hear each one of your thoughts. And I know ``illegal''
is a strong word, but I would like to hear what your thoughts
are.
Mr. KOOKOGEY. Oh, it is absolutely illegal. When the
government uses the IRS for political purposes--remember, this
was part of the Articles of Impeachment in the Nixon
Administration before he resigned--it is a serious matter. And
it is clearly illegal to single us out for disparate treatment
based on our political views.
Ms. BELSOM. Yes, I agree with what he said.
Mr. EASTMAN. Chapter and verse 26 USC section 7213(a)(1)
makes it a felony to disclose confidential tax returns.
Ms. KENNEY. I agree with everyone here. It was illegal. I
think it was immoral. I think it was also very un-American.
Ms. MARTINEK. It is easy for me. Our attorney, Sally
Wagonmaker, said yes, it is very illegal, so----
Ms. GERRITSON. I agree.
Mr. RENACCI. Thank you. I will tell you this; one thing
they will say about me if you go back over my record, I was a
fighter, and I believed in fighting with my clients. So I
appreciate you being here. I appreciate you fighting. Don't
ever quit. And if you ever need someone to stand beside you,
give me a call. I appreciate it.
I yield back.
Chairman CAMP. Thank you.
And last, but not least, Mr. Reed.
Mr. REED. Thank you, Mr. Chairman.
Thank you to the panelists. We are coming to the end here,
and I just wanted to express my sincere thoughts that we stand
with you.
I have heard a bunch of my colleagues talk about how
certain individuals in Washington have been fired as a result
of this. But let's just be clear. Mr. Miller sat right where
you were, Mr. Eastman, and when I asked him a question, he had
not been fired; he had been allowed to retire with full
benefits and was drawing a paycheck, paid for by the American
taxpayer, as he tried to answer my questions--and I say
``tried'' because he wouldn't answer my questions--that
frustrates me, just as I am sure it frustrates you.
Then we hear that Lois Lerner, who has taken the Fifth, is
now allowed to go on vacation--I will call it. That is
accountability in Washington, D.C. That, to me, is
unacceptable.
What I wanted to leave you with today--and Ms. Gerritson,
you said it in your statement, and I appreciate the heartfelt
nature of your statement--is that a lot of people in Washington
forget who they work for. They work for you, not the other way
around. That is the culture of abuse of power that I see in the
IRS.
I want to hear from you how that makes you feel, the fact
that there really hasn't been any accountability as of yet. And
what would you ask us--me specifically, as a Member of this
panel--to do, to make you feel that justice has been served?
Ms. GERRITSON. Well, I think it will take a lot for the
American people to ever trust the IRS just because of the
nature of the agency. The IRS has always been a scary agency.
But what I would ask is, like so many of you have already
committed, to do a full investigation, follow through on every
lead. Don't stop until you get to the bottom of this. We need
to rid this cancer. So just do what it is that you need to do,
and we will be here to hold you accountable to do that.
Mr. REED. Well, I appreciate that because if we don't do
that, one of the things I am concerned about with my colleagues
on the other side of the aisle, if we don't get to the bottom
of it, you have already heard--I listened to the testimony of
each and every one of you. We have already heard the chilling
effect of what the IRS has done. You talked about the fact that
some of your pamphlets I believe weren't produced. Mr. Eastman,
you talked about donors shying away from going on and giving
donations to your organization. That is a chilling effect. And
if we don't hold this community, this city accountable, where
do you think it is going to go? Do you think it is going to get
worse, or do you think it is going to get better? Would you
advise us to just sit silently by and do what so many elected
officials have done before, in my opinion, say, oh, there is a
problem; we have to change the law to make sure it never
happens again? You know what, we need to enforce the law that
is on the book.
You point out the fact that this is a felony, Mr. Eastman--
a felony. That is equivalent to who? Murderers are felons.
Robbers are felons. The law has been declared that we are going
to hold this type of behavior accountable to the level of the
seriousness of a felony, and yet what we have heard so far is,
oh, it was inadvertent; it was a mistake. Does that make you
feel better? Does that make you feel better that that is the
standard that we are going to potentially live with as the
accountability measure for us in Washington?
Mr. EASTMAN. When the claim is so divided and apart from
what we know to be the truth, it doesn't make me feel better at
all.
Mr. REED. I would also just like to--and I want to end with
your words on this. You are the individuals that have stood up
and have come here, and you said you are not going to be
silent. And I applaud that. But how many of your colleagues do
you think are similar to the ones that came up to me during the
week when I was back home working the district that said, Hey,
you know, I want to tell you what happened to me, but don't use
my name? How many do you think are out there? Do any of you
want to hazard a guess as to what that number is?
Ms. Kenney.
Ms. KENNEY. Just last week I had one of our attendees say,
``Please, take my name off the email; I am afraid.''
There is a lot of language here about people going in and
out of the shadows. The citizenship ticket in this particular
place, with this issue, should be the rule of law; nothing
more, nothing less. Please go where these facts lead you.
Mr. REED. Does anyone want to hazard a guess? Do you think
thousands; tens of thousands; hundreds of thousands? There are
300 million plus Americans watching this on TV. Do you think
that many Americans, with the busy lives they have, are going
to say, ``Oh, yeah, that is what I want to do with my free
time?''
Mr. EASTMAN. The prospect of challenging the IRS and having
your last 10 years of tax returns gone through with a fine-
tooth comb is chilling for many Americans. I, for the first
time, bought Audit Defense when I filed my Turbo Tax tax
returns this year. This is scary.
They always say, ``Don't fight city hall.'' But at some
point, you have to stand and fight, or city hall is no longer
what it is supposed to be.
Chairman CAMP. Thank you. Time has expired.
I have been made aware another Member seeks recognition.
Mr. Crowley is recognized.
Mr. CROWLEY. I thank the Chairman.
I am sorry I had to step out for quite a bit. I missed a
few of the statements, and one in particular by one of my
colleagues.
Let me start by saying to the witnesses, each and every one
of you, you are all victims here. You and so many other groups,
conservative and progressive alike, targeted by the IRS are the
victims. And to say otherwise is wrong, and it is not
representative of the Democratic Party as well.
As the Chairman noted in an email he sent out yesterday,
the outrage at what is occurring at the IRS is shared by
Republicans and Democrats alike.
Second, while I welcome the witnesses, I would like to
highlight the fact that the Minority party is typically allowed
to invite one witness to each hearing. We did not invite a
witness to this hearing. That is not because progressive groups
were not targeted by the IRS; they were. In fact, the TIG
report looking into this targeting documented that fact. I
would like to submit for the record this list of dozens of
progressive groups who were inappropriately targeted alongside
Tea Party groups by the IRS.
Chairman CAMP. Without objection.
[The first submission of The Honorable Joe Crowley
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Chairman CAMP. And I would say to Mr. Crowley, as I said to
Mr. Kind earlier, the Minority did not identify any witnesses
that had been targeted by the IRS, but were certainly given the
opportunity to do so.
Mr. CROWLEY. Mr. Chairman, I am still making my statement.
Chairman CAMP. That is correct----
Mr. CROWLEY. So I think I will clarify my point right now,
Mr. Chairman.
Chairman CAMP. You may continue.
Mr. CROWLEY. Rather, instead of making this about
ideological groups, we Democrats want to make this hearing
about the facts and how we prevent this targeting from
happening again.
Whether it be the targeting of progressive or conservative
groups, and everyone else in between, although the members of
the groups testifying today might never vote for me if I was on
their ballot, I want each and every one of them to know, as a
Congress, we collectively represent you.
As many may recall, I asked Lois Lerner of the IRS Tax
Exempt Office about whether the IRS was politically targeting
groups 2 days before she and the IRS came clean to the world
and admitted the agency was in fact screening on ideological
grounds. Many have asked me why I asked Ms. Lerner about this
matter before the public awareness or outrage took place. The
reason is no American should be targeted by the government for
their personal views. And I wanted to get to the bottom of the
rumors that had been circulating for some time that the IRS was
in fact, once again, targeting certain individuals.
Unfortunately, this is not the IRS' first time mixing up
its mission with its personal politics. Starting in 2002 and
2004, under then President Bush, the IRS went after progressive
Christian churches, the NAACP, and environmental groups, and
its actions are as wrong today as they were in 2004. While I
don't recall the same bipartisan outrage existing then as I
believe it does today, it should have. Because no agency has
the right to target or discriminate based on political
ideology.
So I do want to correct the record on a few matters. Some
of my Republican colleagues have been working overtime to try
to paint this as a political conspiracy by the White House.
There is no evidence tying this to the White House. In fact,
the IG's report makes that clear.
At our most recent hearing on this topic, the Treasury
Inspector General, who was appointed by President Bush,
testified that no officials at either the Treasury Department
or the White House were involved or knew of anything about the
targeting. The same Inspector General, under questioning from
Congresswoman Lynn Jenkins, said that he would have questioned
and investigated senior Treasury Department and any Obama
Administration official if he thought they were involved. But,
again, he testified under oath that they were not involved. I
would like to submit the discussion between Ms. Jenkins and the
Treasury Inspector General into the record.
Chairman CAMP. Without objection.
[The second submission of The Honorable Joe Crowley
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Mr. CROWLEY. And it was the same Inspector General who
notified Congressional Republicans, including Chairman Darryl
Issa, of his investigation into political targeting of groups
by the IRS in the summer of 2012, months before the 2012
national elections. I would like to submit the Treasury
Inspector General's letter to Mr. Issa and the RSC Chair Jim
Jordan confirming this investigation into the IRS dated July
11, 2012, into the record.
Chairman CAMP. Without objection.
[The third submission of The Honorable Joe Crowley
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
________________
Mr. CROWLEY. Do you really think that if there was evidence
of political targeting at the highest levels of our government
during an election year, that Members of Congress, like
Chairman Issa, would have sat quietly and not brought this to
the public's attention? I think Chairman Issa's silence speaks
for itself. He did nothing and said nothing because there was
no whistle to blow.
What concerns me is that this is the second chapter in less
than a decade that the IRS has been caught going rogue. They
went rogue in 2002, 2004, when they inappropriately targeted
churches, religious groups, and the NAACP.
Mr. Chairman, I think the record speaks for itself. There
is no smoking gun. What happened to these Americans is
intolerable and ought not to have happened, whether it be
progressive or conservative groups. The actions of the IRS, be
they from a Democratic side or Republican side, a Republican
Administration or a Democratic Administration, should never be
tolerated, never be tolerated.
I yield back the balance of my time.
Chairman CAMP. Thank you.
I want to thank the witnesses for coming forward today. It
is not an easy thing to do to sit through a congressional
hearing and answer questions from a whole variety of
perspectives and Members. But I want to tell you how impressed
I am with the answers that you gave and the quality of your
testimony. I am also impressed with your moral conviction, the
perseverance and the courage you have shown by being here today
and representing so many other Americans who are equally
affected.
You have helped the Committee a great deal, but more
importantly, you have helped the American people a great deal
and you have helped the Nation a great deal, and I thank you
very much for that.
With that, this hearing is adjourned.
[Whereupon, at 1:30 p.m., the Committee was adjourned.]
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