H.Res. 565, Calling on Attorney General Eric H. Holder Jr., to appoint a special counsel to investigate the targeting of conservative nonprofit groups by the Internal Revenue Service

H.Res. 565

Calling on Attorney General Eric H. Holder Jr., to appoint a special counsel to investigate the targeting of conservative nonprofit groups by the Internal Revenue Service

Sponsor
Rep. Jim Jordan

Committee
Judiciary

Date
May 7, 2014 (113th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Wednesday, May 7, 2014, the House will begin consideration of H.Res. 565, Calling on Attorney General Eric H. Holder Jr., to appoint a special counsel to investigate the targeting of conservative nonprofit groups by the Internal Revenue Service, under a closed rule.  H.Res. 565 was introduced by Rep. Jim Jordan (R-OH) on May 2, 2014 and was referred to the House Judiciary Committee.

Bill Summary

H.Res. 565 expresses the sense of the House of Representatives that Attorney General Eric Holder should appoint a Special Counsel to investigate the IRS’s targeting of conservative nonprofit advocacy groups.

Background

In February of 2010, the IRS began targeting conservative nonprofit groups for additional scrutiny when they applied for tax exempt status.[1]  In September of 2010, Lois Lerner, Director of the Exempt Organizations Division, initiated a project to examine the political activity of 501(c)(4) organizations.[2]  Just one month later, Lerner noted publicly that “everybody” had been demanding that the IRS address the issue created by the Supreme Court decision in Citizens United, which held that the government could not limit election-related independent expenditures.[3]  Lerner created a multi-tier review process for Tea Party tax-exempt applicants, which involved her senior advisor and the IRS Chief Counsel’s office. [4]  According to the House Ways and Means Committee, 83% of the applications delayed and selected for additional scrutiny were from right-leaning organizations.[5]  Additionally, of the groups that were inappropriately required to divulge confidential donor lists, 89% were right leaning.[6]

In March of 2012, IRS Commissioner Douglas Shulman testified before the House Ways and Means Committee that there was “absolutely no targeting” of Tea Party groups applying for tax exempt status.[7]  A month later, Lois Lerner said the information requests had been done “in the ordinary course of the application process.”[8]

Yet in May of 2013, a report issued by the Treasury Inspector General for Tax Administration (TIGTA) found that from 2010 until 2012, the IRS had systematically singled out applicants for extra scrutiny based on the use of certain phrases like “Tea Party” and “Patriots.”[9]  The groups were subjected to burdensome, lengthy information requests that resulted in years of delay.  Following the report’s release, Lerner apologized for the IRS’s targeting of conservative groups.[10]  Attorney General Holder committed the Department of Justice (DOJ) to conduct a “dispassionate” investigation and said he would hold accountable anyone who had broken the law.[11]  According to Holder, the DOJ investigation includes both the Public Integrity Section and the Civil Rights Division, which has a history of politicization.[12]  Barbara Bosserman, a Civil Rights Division attorney involved in the investigation, donated substantial funds to both President Obama’s campaigns and to the Democratic National Committee.[13]  Additionally, since May of 2013, DOJ and the FBI have refused to cooperate with congressional oversight of the investigation into the IRS targeting of conservative groups.[14]

In April of 2014, the House Ways and Means Committee referred Lerner to DOJ for criminal prosecution.[15]  The Committee found that Lerner had used her position to improperly influence agency action, targeting conservative groups while ignoring similar liberal-leaning tax-exempt applicants.  Additionally, Lerner may have disclosed confidential taxpayer information in violation of the Internal Revenue Code.[16]  Yet President Obama, in February of 2014, said there was “not even a smidgen of corruption” in connection with the IRS targeting.[17]

Regulations authorizing the Attorney General to appoint a Special Counsel were promulgated in 1999, when the law providing for appointment of “independent counsels” temporarily expired.[18]  The Code of Federal Register requires the Attorney General to appoint a Special Counsel when it is determined that: 1) a criminal investigation is warranted; 2) investigation or prosecution by a U.S. Attorney’s Office or a litigating division of DOJ would present a conflict of interest; and 3) under the circumstances, it would be in the public interest to appoint an outside Special Counsel take responsibility for the matter.[19]  The Attorney General has discretion to determine whether the criteria have been met; however, congressional hearings and investigations “may bring to light information and facts which may contribute to the public pressure on the Administration or the Attorney General to appoint [one].[20]  For example, legislation in recent Congresses has been introduced calling for a Special Counsel to investigate Operation Fast and Furious, leaks of classified information, and the organization ACORN.  The most recent appointment of a Special Counsel was in 2003, when “Attorney General Ashcroft recused himself from the investigation of the leak of the identity of a CIA agent, and Deputy Attorney General Comey named U.S. Attorney Patrick Fitzgerald to be special counsel ‘with all the authority of the Attorney General’ to pursue that matter.”[21]

In light of statements by the Administration and DOJ officials in connection with the IRS targeting activity; efforts to undermine congressional investigation; and involvement of an Obama campaign donor in the DOJ investigation, H.Res. 565 expresses the sense of the House of Representatives that a Special Counsel should be appointed.

________________
[1] H.Res. 565.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] Id.
[15] Id.
[16] Id.
[17] Id.
[18] Jack Maskell, Independent Counsels, Special Prosecutors, Special Counsels, and the Role of Congress, Congressional Research Service (June 20, 2013) at Summary.
[19] H.Res. 565. See http://www.gpo.gov/fdsys/pkg/CFR-2010-title28-vol2/pdf/CFR-2010-title28-vol2-sec600-1.pdf.
[20] CRS Report at 1.
[21] Id. at Summary.

Cost

A CBO estimate is currently unavailable.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.