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Did FEC collude with IRS to target conservatives?

Eliana Johnson finds that Lois Lerner appears to have colluded with an attorney in the Federal Election Commission’s general counsel’s office to influence the record before the FEC’s vote in the case of a conservative non-profit organization. Readers may recall that Lerner, the former head of the IRS’s exempt-organizations division, worked at the FEC from 1986 to 1995, and was known there for aggressive investigation of conservative groups.

Email traffic uncovered by the House Ways and Means Committee indicates that an attorney from the FEC’s enforcement division sought and received tax information about the status of a conservative group, the American Future Fund, before recommending that the commission prosecute it for violations of campaign-finance law. But the IRS is prohibited from sharing confidential taxpayer information, and the FEC is not exempted under that prohibition.

The matter in question stems from a complaint to the FEC from the Minnesota Democratic Farmer Labor Party alleging that the American Future Fund had violated campaign-finance law by engaging in political advocacy without registering as a political-action committee. The American Future Fund responded by telling the commission that it had applied for tax exemption in March of that year and was a “501(c)(4) social-welfare organization that was organized to provide Americans with a conservative and free-market viewpoint and mechanism to communicate and advocate on the issues that most interest and concern them.”

At that point, the emails show, the FEC general counsel’s office contacted Lerner to investigate the group’s tax-exempt status. However, as Eliana explains, the general counsel is prohibited by law from conducting an investigation into an organization before the FEC’s six commissioners have voted to do so.

The email traffic also indicates that Lerner responded to the FEC lawyer with substantive information about the group’s status. This is reflected in the lawyer’s statement to Lerner that “when we spoke last July, you had told us that the American Future Fund had not received an exemption letter from the IRS.”

Eliana describes what happened next:

The FEC general counsel’s office, in its recommendation on the case, apparently didn’t tell the agency’s commissioners about how it had obtained the information about the group’s tax-exempt status. Recommending that the commissioners prosecute the American Future Fund, the general counsel’s office wrote, “According to its response, AFF submitted an application for tax-exempt status to the Internal Revenue Service . . . on March 18, 2008.” The footnote to that sentence reads, “The IRS has not yet issued a determination letter regarding AFF’s application for exempt status. Based on the information from the response and the IRS website, it is likely that the application is still under review.”

In fact, an FEC lawyer knew that the organization had yet to obtain tax-exempt status because Lerner provided the confidential information.

Before the FEC commissioners voted on the general counsel’s recommendation, the FEC lawyer again improperly sought information from Lerner. He asked: “Could you please tell me whether the IRS has since issued an exemption letter to the American Future Fund? Also if the IRS has granted American Future Fund’s exemption, would it be possible for you to send me the publicly available information and documents related to American Future Fund?” It doesn’t seem clear how (or whether) Lerner responded to this request.

Ultimately, the FEC commissioners split on whether to pursue the American Future Fund’s case and voted to close the case.

American Future Fund is not be the only group for which the FEC attorney improperly sought information from Lois Lerner. He also inquired about the tax-exempt status of another conservative organization, the American Issues Project.

The House Ways and Committee has asked for all communications between the IRS and the FEC between 2008 and 2012. Thus, we should get a better sense of how pervasive the FEC-IRS collusion against conservative groups is. But the existence of some collusion seems to be established.

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