Sound And Fury About Evolving Scandal At IRS Obscure Questions About Criminality And Karl Rove

Karl Rove

The IRS and its targeting of conservative groups has captured the nation's attention in recent days. But a more important IRS-related story might be flying under the radar.

A series of articles at the public-interest journalism site ProPublica raise questions about whether six "dark money" political groups, all conservative, committed criminal acts in seeking tax-exempt status from the IRS. Among the groups is Karl Rove's Crossroads GPS.

ProPublica published articles in December and January that raised questions about the process political organizations use to seek tax-exempt status as "social welfare" groups.  The issue did not gain major public traction until the IRS acknowledged on May 10 that it targeted tea-party groups to see if they were violating their tax-exempt status.

The resulting storm of national attention obscures a more important issue, according to a report yesterday from Richard Tofel, president of ProPublica. Writes Tofel:

Largely ignored in a public outcry last week—radio rants, Twitter storms, congressional, presidential and prosecutorial posturing--were the following:

Our pieces in December and January raised very serious questions about whether six different “dark money” political groups seeking tax exemption had made false statements on their applications. Those applications are signed under penalty of perjury. If any false statements were made knowingly, the groups— including Karl Rove’s Crossroads GPS —may have committed a crime. There is no indication, however, that either the IRS or the Department of Justice has done anything since January to investigate whether such crimes were indeed committed. The groups in question happen all to be conservative. Not one congressional Republican has, to my knowledge, expressed any concern about this possible criminality.

Gee, Karl Rove involved in criminal activity? Those of us who live in Alabama and have followed the political prosecution of former Democratic Governor Don Siegelman, which almost certainly was orchestrated by Rove while serving in the Bush White House, cannot imagine that.

ProPublica's December article, titled "Karl Rove's Dark Money Group Promised IRS It Would Spent 'Limited" Money On Elections," is particularly illuminating. From that article by reporter Kim Barker:

In a confidential 2010 filing, Crossroads GPS—the dark money group that spent more than $70 million from anonymous donors on the 2012 election—told the Internal Revenue Service that its efforts would focus on public education, research and shaping legislation and policy.

The group's application for recognition as a social welfare nonprofit acknowledged that it would spend money to influence elections, but said "any such activity will be limited in amount, and will not constitute the organization's primary purpose."

So $70 million represents "limited" spending for Crossroads GPS? One can only imagine how much the group would have spent if it had not felt so constrained. From Barker's article:

The tax code allows groups like Crossroads to spend money on political campaigns—and to keep their donors private—as long as their primary purpose is enhancing social welfare.

Crossroads' breakdown of planned activities said it would focus half its efforts on "public education," 30 percent on "activity to influence legislation and policymaking" and 20 percent on "research," including sponsoring "in-depth policy research on significant issues."

This seems at odds with much of what the group has done since filing the application, experts said. Within two months of filing its application, Crossroads spent about $15.5 million on ads telling people to vote against Democrats or for Republicans in the 2010 midterm elections.

"That statement of proposed activities does not seem to align with what they actually did, which was to raise and spend hundreds of millions to influence candidate elections," said Paul S. Ryan, senior counsel for the Campaign Legal Center, who reviewed the group's application at ProPublica's request.

In other words, someone at Crossroads GPS probably lied to the IRS, under penalty of perjury, about the group's purposes. And that, Richard Tofel writes, would constitute a crime.

Does Tofel expect Rove or his associates to be held accountable? It doesn't sound like it. The ProPublica chief seems to think most officials--amid calls for investigations in the wake of this month's revelations--are not serious about IRS issues:

And what of the investigators? Congressional committees leapt into action. The inspector general for the IRS had apparently already investigated. The President demanded another investigation; the Department of Justice said it had commenced a criminal inquiry.

Knowing that such is the way in Washington, we waited at ProPublica for someone to send us a subpoena, show up on our doorstep, or maybe just call. Nothing. Nothing since December 13, when we told the IRS we had these documents they weren’t supposed to have sent us—or since the next day, when we published that fact. Nothing before the inspector general reached his conclusion, nothing before the congressional hearings started televising their demands for answers and their righteous indignation, nothing since.

In point of fact, the investigators would have found out that we have nothing of value to them. But the fact that they didn’t even ask tells you a lot. And it reinforces the point that much of the heat generated last week on this subject is just the latest expression of Washington cynicism and its consequences—that the talk show hosts and their fellow travelers, and the representatives and senators and officials in the executive branch, aren’t really looking for answers here. They’re just putting on a show.