Congress's investigation into IRS political targeting accelerated Wednesday, with a referral for the criminal prosecution of a former Treasury official and new evidence to back it up. In a letter to Attorney General Eric Holder, House Ways and Means Chairman Dave Camp recommends the Justice Department proceed on three probable criminal actions taken by former director of Exempt Organizations Lois Lerner.
The letter, which was endorsed in a party-line Ways and Means vote Wednesday morning, discloses new evidence suggesting that Ms. Lerner used her position to single out conservative groups for scrutiny not applied to left-leaning groups. Investigators also charge that she misled investigators in her original conversations with the Treasury Inspector General and potentially disclosed confidential taxpayer information by using her personal email address for IRS business.
The most troubling new evidence are documents showing that Ms. Lerner actively corresponded with liberal campaign-finance groups Democracy 21 and the Campaign Legal Center, which had asked the IRS to investigate if conservative groups including Crossroads GPS were violating their tax-exempt status. After personally meeting with the two liberal outfits, Ms. Lerner contacted the director of the Exempt Organizations Examinations Unit in Dallas to ask why Crossroads had not been audited.
"You should know that we are working on a denial of the application," Ms. Lerner wrote in an email. "Please make sure all moves regarding the org are coordinated up here before we do anything." The Cincinnati agent assigned to the case at the time, Joseph Herr, noted on his timesheet, "[b]ased on conference, begin reviewing case information, tax law and draft/template advocacy denial letter, all to think about how best to compose the denial letter."
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House Ways and Means Committee Chairman Rep. Dave Camp (R., Mich.) Associated Press




Mr. Herr had not made any indications in 2012 of an intent to deny the application, nor was any denial recommendation contained in the November 2011 analysis of the group by Exempt Organizations lawyer Hillary Goehausen. Crossroads GPS, which was cofounded by Journal contributor Karl Rove, says it applied for tax-exempt status in 2010 but still hasn't received formal IRS approval.
Ways and Means also discloses that in January 2013 Ms. Lerner asked her staff to examine five conservative groups that the website ProPublica had called "controversial dark money groups," including Americans for Responsible Leadership, Freedom Path, Rightchange.com, America is Not Stupid, and A Better America. Four of those five groups ultimately got the IRS deluxe scrutiny treatment and three were audited.
The new documents also suggest that Ms. Lerner was evasive in her answers when Treasury's Inspector General (Tigta) began investigating complaints of conservative targeting, She told Tigta she didn't learn about the use of tea-party keywords to choose groups for extra review until June 2011, but emails show Ms. Lerner was told about the tea-party cases under review in April and May 2010, only weeks after the process started.
The documents also report that Democracy 21 and the Campaign Legal Center suggested that the IRS consider a rule-making to change the requirements for 501(c)(4) groups. That's exactly what the IRS proposed this year, claiming that it merely wanted to "clarify" the rule to prevent selective scrutiny. The new evidence suggests that the rule-making is instead a continuation of the same project to crack down on the political speech of Administration opponents.
Democrats are objecting that the Ways and Means referral itself improperly discloses confidential taxpayer information. But Section f(4)(a) of Section 6103 of the U.S. Code provides that Ways and Means "shall have the authority . . . to inspect [tax] returns and return information. . . . Any return or return information obtained by or on behalf of such committee pursuant to the provisions of this subsection may be submitted by the committee to the Senate or the House of Representatives, or to both."
The Ways and Means referral perhaps makes too much of Ms. Lerner's personal computer use, but Wednesday's disclosures were closely tailored to disclose only information that illuminates her actions related to the tax-exempt applications. The disclosures are unusual, but Mr. Camp has only taken this step after Ms. Lerner twice refused to testify before Congress, IRS general counsel William Wilkins claimed 80 times that he couldn't recall events, Justice has leaked to the press that it will charge no one, and House Democrats have become obstructionist.
Mr. Holder put Obama donor Barbara Bosserman in charge of the investigation, and in June last year, mere weeks after the targeting came to light, Ranking Ways and Means Democrat Elijah Cummings declared that the "case is solved." President Obama in February upstaged his own Justice Department by announcing that there was not a "smidgen" of corruption, even as the investigation supposedly continues.
Ms. Lerner says she did nothing wrong, and this week we met with her attorney, who told us she declined to testify only because the proceedings were bound to be unfair. But as a senior official in a public agency that wields the power to destroy, she had an obligation to explain what happened and why. We'd still like to hear her defense, but when Congress confronts a stonewalling Administration it has little choice but to tell the public what it has learned so voters can reach their own conclusions.

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