I’ve written often on the surreal world of “structuring” law, in which keeping bank deposits or withdrawals below a reporting threshold is a federal crime whether or not you are aware of the structuring law and whether or not the underlying money flow is for or from any illegal activity or intended to evade any law. Of particular interest, I’ve written about who can get away with structuring (Eliot Spitzer) and who can’t (you). The law, along with a separate charge of lying to federal investigators, appears to have tripped up former U.S. House of Representatives Speaker Dennis (“Denny”) Hastert in what a federal indictment suggests were hush money payments over misconduct before he arrived in Congress. I’m quoted in Francine Kiefer’s coverage for the Christian Science Monitor. More commentary: Ken White, Popehat.
Nicholas Quinn Rosenkranz on the significance of the IRS having targeted for unfavorable scrutiny “organizations involved in….educating on the Constitution and the Bill of Rights.” [Volokh Conspiracy] “Presidents have always sought to push against the constitutional limits of their power; but never have they targeted those who merely teach about such limits.”
“Who is protected by patient privacy laws? Hint: not patients.” [Stewart Baker, Volokh]
Former Utah Attorneys General John Swallow and Mark Shurtleff were arrested Thursday on a combined 23 counts arising from a series of episodes in which the two men are said to have accepted cash and favors from persons with business dealings with their offices; Swallow is also accused of destroying and falsifying evidence to cover up dealings with a now-deceased entrepreneur from whom he had allegedly accepted $17,000 in gold coins. The two men, both Republicans, say they are innocent and expect to be vindicated. The Salt Lake Tribune’s coverage saves the Harry Reid angle for paragraph 19; the Las Vegas Review Journal gives it more attention, emphasizing Reid’s strong denial of any wrongdoing. Unrelated but also depressing: a former New Mexico AG and a penny stock.
Also: Meanwhile in Pennsylvania, officials have placed plaques beneath portraits of four lawmakers in the state capitol with details of their eventual criminal convictions. I have more details in a Cato post.
- Congress responds to Veterans Administration health care scandal by throwing huge new sums at care [Nicole Kaeding, Chris Edwards, Cato] “Every Senior V.A. Executive Was Rated ‘Fully Successful’ or Better Over 4 Years.” [NYT via Instapundit] “VA Hospitals aren’t included on the federal government’s Hospital Compare web site” [White Coat]
- Canadian judge quashes as vexatious suit over non-admission to medical school [Winnipeg Free Press]
- Brain-damaged child cases: “14.5 Million Reasons Physicians Practice Defensive Medicine” [White Coat, Cleveland] “North Carolina Jury Deadlocks in John Edwards’ Malpractice Trial Against Doctor” [Insurance Journal, emergency medicine]
- “Medical Licensing in the States: Some Room for Agreement — and Reform” [Charles Hughes, Cato]
- “NY Launches Statewide Med Mal Settlement Program” [NYDN via TortsProf]
- “Unlucky Strike: Private Health and the Science, Law and Politics of Smoking” [John Steddon and David Boaz, Cato program] Here’s the long-awaited segue to complete prohibition: British Medical Association recommends banning tobacco permanently for persons born after 2000 [WaPo]
- Sneaky: California ballot language undoing MICRA liability limits “buried in an initiative titled The Troy and Alana Pack Patient Safety Act of 2014.” [Yul Ejnes, KevinMD]
- As Brooklyn changes, so do its juries: “more sophisticated people… they don’t believe [plaintiffs] should be awarded millions of dollars for nothing.” [NY Post quoting plaintiff’s lawyer Charen Kim]
- Richard Epstein: Massachusetts buffer zone statute “should have been upheld, not struck down” [Hoover Institution, earlier on McCullen v. Coakley, my related comment]
- “Runners” as in client-chasing for injury work: “Arkansas AG Files Suit Against Chiropractic ‘Runners'” [AP]
- Fox, henhouse: 2012 law says local transit agencies must sit on boards helping set their own funding [Randal O’Toole, Cato]
- No-good, terrible, really bad idea: occupational licensure for software professionals [Ira Stoll]
- More proliferation of legally required video surveillance [Volokh; guns, cellphone sales]
- How do you expect the IRS to back up headquarters emails when we throttle its IT budget down to a mere $2.4 billion? [Chris Edwards, Cato]
Some figures on the left have aggressively sought to dismiss the seriousness of the renewed IRS scandal. Rep. Lloyd Doggett (D-Tex.) captured this mood at one recent Capitol Hill hearing when he suggested that after voicing suspicions that the loss of emails might not be accidental, his GOP colleagues might go on next to quiz the Service’s leadership about the president’s birth certificate and space aliens in Roswell, N.M. It’s not a “serious inquiry,” Rep. Doggett said: “I believe it’s an endless conspiracy theory here.”
And yet many Americans who do not believe in space aliens do question the IRS’s account of what has happened. While we covered the story a year ago as well as more recently, this might make a good time to recapitulate why.
The IRS grants 501 (c)(4) nonprofit status (less favorable than (c)(3) status, which affords charitable tax deductibility to donors) to a wide array of “social welfare” organizations, many, like the ACLU, with a definite ideological valence. In recent years the status has been sought and obtained by groups whose missions are closely related to campaign and electoral politics, most notably Organizing for America, whose role on the national scene is to support President Obama’s messaging. Not surprisingly this has excited controversy about whether the eligibility rules for (c)(4) status are being drawn in the right place. Most advocates however profess to believe that whatever the right set of rules, they should apply alike to both sides in our political life.
By March 2012 the Associated Press was reporting on a flurry of bizarre and seemingly unprecedented IRS demands that some (c)(4) applicants of a right-of-center valence provide extraordinarily burdensome and intrusive documentation of their activities — things like copies of all books and literature distributed to participants, transcripts of leaders’ radio appearances and live speeches, printouts of all Facebook and Twitter output, and so forth, along with donor lists and names of family members. The Service was also delaying groups’ approval for long periods, in fact seemingly indefinitely, without explanation or a firm denial that could be appealed to a court. Defenders of the agency subsequently put out a search for left-of-center groups that might have run into similar treatment, and although they did manage to turn up a few tales of bureaucratic red tape and rigmarole, they were unable to come up with anything remotely comparable.
IRS nonprofit chief Lois Lerner at first denied any targeting, then sought to blame rogue employees at the IRS Cincinnati office for it. But emails soon emerged clearly indicating guidance by high-level IRS managers in Washington. Lerner then declined to testify, asserting her Fifth Amendment privilege against admissions exposing herself to criminal liability.
Through the ensuing scandal, there was little hard proof that Lerner and other IRS insiders had coordinated the targeting with political actors outside the agency — on Capitol Hill, say, or in party organizations, or the White House — although a number of details on the record, such as frequent White House visits by agency insiders and coordination with outside figures on press messaging, made for suggestive circumstantial evidence. To establish that political operatives or officials outside the agency were aware of targeting at the time, or even perhaps instigated or directed it, would be to blow the scandal wide-open, perhaps threatening the careers of well-known public figures. If any email documentation of such coordination is to be found, it would most likely be in the “external” (outside the agency) emails of Lois Lerner and other key players in the IRS targeting effort.
Those are the same emails that have now mysteriously vanished due to a reported crash of Lerner’s computer, a crash that happened ten days after the House Ways & Means Committee wrote her to inquire about (c)(4) tax exemption denials*. Emails of six other key IRS employees are also said to have vanished in a series of coincidental crashes.
This week, as if to confirm that shabby treatment of politically disliked adversaries was not unheard-of at the Lerner-era IRS, the agency agreed to pay $50,000 to the National Organization for Marriage over an episode in which persons unknown leaked its confidential return and donor list to its ideological adversary, the Human Rights Campaign, which proceeded to have it published. And the Ways & Means Committee has just released an email indicating that when an invitation intended for a Congressional opponent wound up by mistake in the hands of Lois Lerner, her immediate reaction was to wonder whether it might be used to generate an IRS investigation embarrassing to him.
After all these revelations, is it really those who distrust the agency’s leadership whose gullibility should be compared to that of flying saucer cultists? Or is are the credulous true believers the ones who insist that the latest jaw-dropping revelations from the Service are sure to have an innocent explanation, though the earlier ones did not? (cross-posted, with minor changes, at Cato at Liberty)
*An earlier version of this post described the letter to Lerner as being about targeting; Glenn Kessler at the Washington Post has disputed whether that is an accurate way to describe the contents of the letter, which concerned a plan to audit conservative (c)(4) donors. Ian Tuttle responds to Kessler here.
I’ve got an update on the fast-developing scandal of evidence destruction at the IRS in my new Cato post (earlier). If not for reading Kim Strassel and her colleagues at the Wall Street Journal, I might not have learned that Lois Lerner’s emails got wiped from her hard drive by forces unknown about 10 days after the letter arrived from House Ways & Means inquiring into targeting of political opponents.
Since the new round of disclosures in the IRS scandal broke a week ago, the WSJ has shown itself willing to dig in a way that many other prestige press institutions have not. “People used to ask how Watergate might have turned out if the press had sided with Nixon instead of against him. Thanks to the work of Strassel and her WSJ colleagues, let’s hope we never find out.”
The Economist covers the story in this commentary. Our tag on evidence spoliation and document retention — lawyers among our readers will be familiar with how very seriously these concepts are taken in the world of litigation — is here.
Welcome readers: Glenn Reynolds/Instapundit.
Paul Caron at the justly admired TaxProf blog has been patiently documenting the IRS scandal since the start and his daily link roundups are now as relevant as they have ever been. More: CNN, John Hinderaker/PowerLine, A. Barton Hinkle (finger of responsibility points at Congress), Peter Suderman. Earlier here, etc.
Update: IRS said on Tuesday that computer crashes swallowed without a trace the emails of several other employees central to the nonprofit-targeting probe, and admitted it waited months to tell congressional investigators that it did not expect to produce Lois Lerner’s emails.