From a plain blog about politics: Ignore the Twitter News Cycle on Scandals

In the interest of tying the IRS scandal into as many aspect of this class as possible, here's a post wondering what the effects of twitter are on our approach to the scandal. We - or at least some - may over or underestimate its importance based on the slant given it by the narrative it contains.

This raises a question thatstudents who are thinking about looking at scandals historically might want to take into consideration: Do some scandals take off or die simply because of the nature of the media at a specific monet in time?

Giving the bureaucracy a break

A lot of what seems silly makes sense the closer one looks.

Legislative criticism of the bureaucracy may be misplaced, or simply politically motivated:

. . . members of Congress love picking through federal grants to find dubious-sounding research funded by the National Institutes of Health or other agencies. In a report titled “The National Science Foundation: Under the Microscope,” Republican Senator Tom Coburn of Oklahoma promised to identify “over $3 billion in mismanagement at NSF.” Mostly, the report just mocks research that, superficially, sounds amusing.

Coburn takes gleeful aim at scientists who’ve been running shrimp on treadmills. According to the scientists, the treadmills cost about $1,000 out of a half-million-dollar grant. The point is to determine whether ocean bacteria are weakening shrimp populations, a development that would tip the entire food chain into chaos. Coburn’s attack is particularly dangerous, because it encourages government researchers to conduct science that sounds good rather than science that does good.

It looks like the workings of the bureaucracy will occupy much of our time this mini 3, so expect more along this vein.

Seven Myths about Keynesian Economics

From the Fiscal Times, something to sock away for our look at economic policymaking soon enough.

An inside look at the Cincinnati IRS office at the heat of the storm.

The NYT takes a peek at how the processing of 501(C)(4) applications transpired. Again, it allows for a good peak inside the bureaucracy:

While there are still many gaps in the story of how the I.R.S. scandal happened, interviews with current and former employees and with lawyers who dealt with them, along with a review of I.R.S. documents, paint a more muddled picture of an understaffed Cincinnati outpost that was alienated from the broader I.R.S. culture and given little direction.

Overseen by a revolving cast of midlevel managers, stalled by miscommunication with I.R.S. lawyers and executives in Washington and confused about the rules they were enforcing, the Cincinnati specialists flagged virtually every application with Tea Party in its name. But their review went beyond conservative groups: more than 400 organizations came under scrutiny, including at least two dozen liberal-leaning ones and some that were seemingly apolitical.

Over three years, as the office struggled with a growing caseload of advocacy groups seeking tax exemptions, responsibility for the cases moved from one group of specialists to another, and the Determinations Unit, which handles all nonprofit applications, was reorganized. One batch of cases sat ignored for months. Few if any of the employees were experts on tax law, contributing to waves of questionnaires about groups’ political activity and donors that top officials acknowledge were improper.

“The I.R.S. is pretty dysfunctional to begin with, and this case brought all those dysfunctions to their worst,” said Paul Streckfus, a former I.R.S. employee who runs a newsletter devoted to tax-exempt organizations. “People were coming and going, asking for advice and not getting it, and sometimes forgetting the cases existed.”

Some people with expertise weigh in on 501(C)(4)'s

For students, some helpful info from the Dish.

CBO's Updated Budget Projections: Fiscal Years 2013-1023

The Congressional Budget Office revises the estimates it made 4 months ago. The deficit is projected to stabilize as a percentage of GDP - in the next few years - around 21%. Wonkblog comments here.

The Fiscal Times argues that Congress could have prevented the IRS crisis by providing clear guidelines about what is and is not a 501(c)(4) organization

This is a common observation. Congress provides broad directives about how to addres a problem, and writes this into law. But it leaves the nitty gritty detail work to the bureaucracy which then uses its rulemaking power to clarify how the law will be implemented.

The cynical reason is that it allows members of Congress to both avoid the tough decisions and allows them to avoid blame for any negative consequences of the implementation of the law.

So this is not a new story, simple the latest manifestation of a common phenomenon. It's called blame avoidance:

“We would not be at this point – this would not have happened – were the IRS to have interpreted the law more strictly, instead of creating this netherworld of, ‘Is it political or isn’t it?’ and not be clear about what the bright lines are,” she said.

Lawmakers, however, have refused to create a checklist, a set of criteria, or a minimum set of standards an organization must meet to be designated a 501(c)(4) – leaving it instead to IRS officials to essentially make it up as they go along.

“It’s done on an ad hoc basis and under very vague standards, and that’s part of the problem,” Jan Baran, a prominent Republican campaigns and election lawyer at the D.C. –based Wiley Rein firm, told The Fiscal Times.

These conditions allowed IRS employees to target GOP groups with names that included Tea Party, patriots, and 9/12 for 18 months, according to the report this week. But it’s Republicans who have pushed back against changing regulations that would force additional disclosure by non-profits, arguing among other things that it would be an abridgement of free speech .

State voter laws

Here's an overview of four types of voter laws being considered in state legislatures and the partisan battles over each. Support depends on whether one's interests are helped by expanding or suppressing voter turnout.

1 - voter ID
2 - same day registration
3 - early voting
4 - online registration

Damage Control

The Obama Administration tries to contain three separate scandals with three separate actions yesterday

1 - Benghazi emails were released.
2 - The internim IRS commissioner was fired.
3 -  Media Shield laws were proposed.

We'll try to determine their effectiveness soon.

And since Obama is interested, James Carville offered unsolicited advice on how to address them.

Don’t let opponents lump all three issues into one, big scandal.

“They’re not related,” said Carville on MSNBC Thursday. Benghazi is “a scam, it’s not a scandal. Ambassador Pickering and Admiral Mullen have already thoroughly investigated this.”

The IRS controversy is another matter, he said, one with “legitimate questions.”

“I think the president needs to get ahead of it,” advised Carville. “Probably put a new person in there, find out what happened, and report to the American people.”

President Obama on Thursday appointed Daniel Werfel as acting-IRS commissioner, after requesting and accepting Steven Miller’s resignation Wednesday. In a press release, Obama said that Werfel “has the experience and management ability necessary to lead the agency at this important time.”

As for the AP probe, Carville rejected Republican Sen. Marco Rubio’s assertion that the sweeping subpoena of journalists’ phone records represented a White House “culture of intimidation.”

“It was an overly broad subpoena that was given power by a political appointee,” said Carville. “I have no idea what Sen. Rubio actually is talking about.”

Above all, Carville recommended keeping this week’s finger-pointing and inflammatory rhetoric in perspective and under control.

“Remember that the earth is warm, that the economy is growing, that the deficit is shrinking, that the healthcare costs are flattening out, that Benghazi was nothing,” he said.

Battleground Texas might be making Texas Republicans nervous

After neglecting Texas for a couple decades, the national Democratic Party sees an an oppotunity to turn Texas blue. The organization is called Battleground Texas and it includes people instrumental in Obama's campaigns.

They see the rise of the Latino population in the state - and the group's traditional adherence to the Democratic Party - as giving them a democgraphic edge over Republicans.

From an NYT analysis:

Texas is ripe for realignment. Insofar as demographics count, Texas is on a path to first turn purple and then blue. The question is when. Whites are already a minority of the state’s population, 44.8 percent, down from 52.4 percent in 2000; blacks are at 12.2 percent, slightly up from 12.0 percent; Hispanics are at 38.1 percent, up from 32.0 percent; with Asian-Americans, Native Americans, and others making up the remaining 4.9 percent. Whites are teetering at just over 50 percent of Texans eligible to vote; according to demographic projections, they will become a minority of voting age citizens in 2016.

What makes Texas such an inviting target for Democratic organizers is that Hispanic turnout in the state is strikingly low, 38.8 percent of those eligible to vote, compared to the national average of 48 percent.

Even if Latino turnout in Texas increases to the national average, Democrats will be unable to win statewide in the short term, but the long term they may well.

What is an inspector general?

Revelations of the IRS investigation of Tea Party groups' tax exempt status stemmed from the IRS's inspector general.

So what is an inspector general?

It is an office in many executive agencies - the Office of Inspector General - charged with " identifying, auditing, and investigating fraud, waste, abuse, and mismanagement within the parent agency." The position was established in the Inspector General Act of 1978, and after an initial 12 offices were created, positions were established in multiple agencies and departments.

Click here to link to the Treasury Inspector General for Tax Administration. And here's ablurb from their site:

The Treasury Inspector General for Tax Administration (TIGTA) was established under the IRS Restructuring and Reform Act of 1998 to provide independent oversight of IRS activities. TIGTA promotes the economy, efficiency, and effectiveness in the administration of the internal revenue laws. It is also committed to the prevention and detection of fraud, waste, and abuse within the IRS and related entities.

Are 501(C)(4) "social welfare organizations" pulling a scam on taxpayers? Are the just political organizations that posed as social welfare organizations so they do not have to disclose their donors.

Here's an argument that they are.

Let's take the first part, the IRS employees. When a group files for tax-exempt status, the IRS investigates it, asks it some questions, and determines whether it qualifies under section 501(c)(3) or 501(c)(4). The difference between them is that a 501(c)(3) is supposed to be a genuine charity, like your local food bank or Institute for the Study of Foot Fungus, while a 501(c)(4) is still primarily devoted to "social welfare" but is allowed more leeway to engage in some political activities like lobbying and participation in elections, so long as the political activities make up a minority of its time. The biggest practical difference is that donations to (c)(3) groups are tax-deductible, while donations to (c)(4) groups are not.

But:

The truth is that a great many of the groups that request 501(c)(3) and 501(c)(4) status, of all ideological stripes, are basically pulling a scam on the taxpayers. Maybe that's a bit harsh, but at the very least they're engaged in a charade in which they pretend to be "nonpartisan" when in fact they are very, very partisan. For instance, nobody actually believes that groups like the Center for American Progress on the left or the Heritage Foundation on the right aren't partisan. When there's an election coming, they mobilize substantial resources to influence it. They blog about how the other's side's candidate is a jerk, they issue reports on how his plans will destroy America, and they do all sorts of things whose unambiguous intent is to make the election come out the way they want it to. CAP and Heritage, along with many other organizations like them, are 501(c)(3) charities, meaning as long as they never issue a formal endorsement and are careful to avoid any express advocacy, they can maintain the fiction that they're nonpartisan (keep getting tax-deductible contributions, which are easier to obtain than those that aren't tax-deductible).

Are there clear guidelines for how the IRS should distinguish between political organizations and social welfare organizations?

Apparently not, and that's one of the problems underlying the IRS scandal.

Th determination involves somethign called the facts and circumstances test.

From WSJ's Law Blog:

Tax-exempt groups organized under section 501(c)(4) of the Internal Revenue Code may engage in some political activity, but they must be “primarily engaged” in promoting social welfare.

But deciding what counts as too much political activity is far from an exact science. The IRS is supposed to apply what’s known as a “facts and circumstances” test, basically a souped-up version of “know it when you see it.”

According to an IRS guidance memo from 1995, the IRS is supposed to weigh a myriad of factors like “the amount of funds received from and devoted to particular activities; other resources used in conducting such activities, such as buildings and equipment; the time devoted to activities (by volunteers as well as employees); the manner in which the organization’s activities are conducted; and the purposes furthered by various activities.”

A political educational organization that qualifies for a 501(c)(4) exemption must “conduct its activities in a non-partisan manner.” A group’s philosophy may be consistent with that of a major political party, but that’s OK if its activities are primarily educational.

If “its activities are under the direction of a Board of Directors whose members were appointed by the national committee of a major political party,” that’s a problem, according to the guidance memo. If the group “selects issues to study based on the needs of the party, and receives substantial financial support from the party,” that’s also a red flag.

An “action” group — another type of 501(c)(4) — may engage in political campaign activities if those “activities are not the organization’s primary activity.”

These circumstances make one wonder how any of these groups were granted tax exempt status.

From the Wall Street Journal: The Surprisingly Muddled History of the 501(c)(4) Exemption.

Turmns out we don't know much about the history of the tax exemption for these organizations. The WSJ provides a few hints:

 - The roots trace back a century ago to when Congress enacted the Revenue Act of 1913, also known as the “Underwood Tariff Act,” . . . “The legislative history of the Tariff Act contains no reason or explanation for the exemption. The general belief is that [the] United States Chamber of Commerce pushed for the enactment of exemptions for both civic and commercial nonprofit organizations,”

- Wikipedia: Revenue Act of 1913.

- Over the years, the IRS expanded the exemption into more political territory, allowing 501(c)(4) groups to engage in lobbying and other political activity. The “notion that the section 501(c)(4) social welfare organization category is an appropriate classification for politically active charitable organizations seems to have originated with the IRS in the 1950′s,”

- Four years later, the federal government codified that policy, assigning the label of “action organization” to any legislatively active organization and issuing regulations stating that an action organization can qualify as a social welfare organization under section 501(c)(4). The IRS then loosened the rules on political campaign activity in 1981 with another ruling, which stated: [An] organization may carry on lawful political activities and remain exempt under section 501(c)(4) as long as it is primarily engaged in activities that promote social welfare.

From the American Prospect: Benghazi Was Neither a Terrorist Attack Nor an Act of Terror

Apparently, "terrorism" has a specific legal meaning and the attack on Benghazi does not fit that definition:

. . . Many awful things are not terrorism. Pearl Harbor wasn't terrorism. Jeffrey Dahmer's murders weren't terrorism. Adam Sandler's Jack and Jill wasn't terrorism. Terrorism is something quite specific: the intentional killing of civilians in order to achieve a political end. It's the "civilian" part that makes it terrorism and not something else. . . .

As it happens, there's a nice succinct definition of terrorism in U.S. law, section 2656f(d) of Title 22 of the United States Code, which reads, "the term 'terrorism' means premeditated, politically motivated violence perpetrated against non-combatant targets by subnational groups or clandestine agents."

So why wasn't Benghazi terrorism? Because the people targeted weren't civilians. As The Wall Street Journal has reported, "The U.S. effort in Benghazi was at its heart a CIA operation, according to officials briefed on the intelligence. Of the more than 30 American officials evacuated from Benghazi following the deadly assault, only seven worked for the State Department. Nearly all the rest worked for the CIA, under diplomatic cover, which was a principal purpose of the consulate, these officials said." CIA officials are not civilians. That doesn't make their deaths any less tragic or painful for their families, but it's the truth. Nor is a CIA outpost a civilian target.

 

Oversight: the Justice Department and the House Judiciary Committee

C-Span covers Holder's testimony before the House Judiciary Committee regarding the investigation of the Associated Press. This is an oversight hearing, so it fits within the context of checks and balances which are designed to keep the branches separated.

Here's a link to the House Judiciary Committee by the way. Two members of the local congressional delegations are on the committee: Republican Ted Poe and Democrat Sheila Jackson-Lee.

Mr. Poe is the Vice-Chair of the committee's Subcommittee on Immigration and Border Security - which makes sense considering the importance of this issue to the local community. Here's a description of the subcommittee:

The Subcommittee on Immigration and Border Security shall have jurisdiction over the following subject matters: immigration and naturalization, border security, admission of refugees, treaties, conventions and international agreements, claims against the United States, Federal charters of incorporation, private immigration and claims bills, nonborder immigration enforcement, other appropriate matters as referred by the Chairman, and relevant oversight.

Ms. Jackson-Lee is also a member of that subcommittee as well as the Subcommittee on Courts, Intellectual Property and the Internet. Mr Poe is a member of that subcommittee as well. And here is a description of it:

The Subcommittee on Courts, Intellectual Property, and the Internet shall have jurisdiction over the following subject matters: Administration of U.S. Courts, Federal Rules of Evidence, Civil and Appellate Procedure, judicial ethics, copyright, patent, trademark law, information technology, other appropriate matters as referred to by the Chairman, and relevant oversight.

For descriptions of standing committees - which we will be covering soon - click here. And for committees in general, click here. And - finally - click here for a description of subcommittees. All of this will be covered in upcoming lectures.






 

Justice Department secretly obtains telephone records of journalists in order to find who leaked classified information to AP reporters.

This story in the Guardian last year about a foiled plot to blow up a jet bound for the US included classified information. The Justice Department subpoenaed the records in order to find the source of the leak, but the AP is now arguing that the investigation is too broad and goes far beyond what is necessary to uncover that specific leak.

Its the latest conflict between a executive branch focus on national security and the secrecy alleged necessary to obtain it, and the media's effort to maintain press freedoms.

For background:

- Under sweeping subpoenas, Justice Department obtained AP phone records in leak investigation.

- Here’s the story the AP suspects led to sweeping Justice Dept. subpoena.

- Justice Dept. Defends Seizure of Phone Records.
- Leak Investigations Are an Assault on the Press, and on Democracy, Too.

- Spying on The Associated Press

The Treasury Department and the IRS

Here's a tiny tiny flowchart of the Treasury Department. See if you can spot the Internal Revenue Service on the bottom left corner. Click here for a larger version, and here for a list of all the bureaus within the Treasury Department. We'll unpack this soon.