Obama’s Stonewall Tactics: A Case Study

The Obama administration has proved to be the least transparent in our modern history. To an unprecedented degree, the administration is staffed by scofflaws who flout their legal obligations. When confronted with requests for information, let alone actual investigations, Obama’s habitual response is to stonewall. This strategy has been remarkably successful in avoiding accountability, in part because legal processes are so slow.

We have seen this pattern dozens of times. One instance, which is highlighted by a federal court order issued on Friday, illustrates how the administration has operated from the beginning of Obama’s term in office.

The story, which we have written about several times, begins in August 2010. Austin Goolsbee, who directed Obama’s Economic Recovery Advisory Board and later chaired his Council of Economic Advisers, delivered a press briefing in which he discussed corporate income taxes. He casually asserted that Koch Industries, one of America’s largest privately-owned companies, doesn’t pay any income taxes:

So in this country we have partnerships, we have S corps, we have LLCs, we have a series of entities that do not pay corporate income tax. Some of which are really giant firms, you know Koch Industries is a multibillion dollar businesses. So that creates a narrower base because we’ve literally got something like 50 percent of the business income in the U.S. is going to businesses that don’t pay any corporate income tax.

If Koch Industries is an S corp, then its owners (principally Charles and David Koch) pay individual income taxes on the company’s profits, making them by far the largest individual taxpayers in the United States. Be that as it may, one of two things must be true: either Goolsbee had illegally accessed Koch Industries’ tax returns, or he made it up. So Koch asked the administration whether someone had been illegally scrutinizing its tax returns. The administration refused to answer.

That led to a Freedom of Information Act request, which was served by a group called Cause of Action on October 9, 2012. The request covered just eight categories of documents, of which these were the key ones:

3) Any communications by or from anyone in the Executive Office of the President constituting requests for taxpayer or “return information” within the meaning of § 6103(a) that were not made pursuant to § 6103(g);

4) All documents, including notes and emails, referring or relating to any communication described in request #3;

Cause of Action wanted to know whether Goolsbee, whose office fell within the Executive Office of the President, or someone working under him, had asked for taxpayer “return information.” The administration eventually produced a handful of irrelevant documents and a comprehensive list of objections. Obama’s key objection was that the IRS is legally prohibited from producing documents responsive to requests 3 and 4 because doing so would violate the taxpayer’s–Koch Industries’–privacy.

The fact that a legal position is ludicrous never prevents the Obama administration from asserting it. Having exhausted its administrative remedies, Cause of Action commenced a FOIA lawsuit against the IRS. Cause of Action and the IRS made cross-motions for summary judgment, briefing on which was completed in August 2014. On Friday, almost exactly one year later, Federal Judge Amy Jackson issued an order in which she overruled the Obama administration’s claim that it couldn’t say whether the White House had broken the law by accessing taxpayer information:

Congress amended section 6103 in 1976 “in the wake of Watergate and White House efforts to harass those on its ‘enemies list,’” in order to “restrict[] government officers and employees from revealing ‘any return’ or ‘return information,’” id. at 611, and its “core purpose” is to “protect[] taxpayer privacy.” Id. at 615. So, this Court questions whether section 6103 should or would shield records that indicate that confidential taxpayer information was misused, or that government officials made an improper attempt to access that information.

The IRS argues that “section 6103’s definition of ‘return information’ . . . makes no distinction based on the purpose for which a person might seek disclosure of the documents.” Def.’s Reply at 15. But accepting this argument would require a finding that even requests for return information that could involve a violation of section 6103 constitute “return information” that is exempt from disclosure under FOIA Exemption 3 and section 6103. The Court is unwilling to stretch the statute so far, and it cannot conclude that section 6103 may be used to shield the very misconduct it was enacted to prohibit.

So someday–not any time soon–the IRS will finally be forced to answer the question that Koch Industries asked it five years ago, in 2010. The Obama administration’s strategy is always the same–stonewall, assert every possible theory, no matter how frivolous, and try to run out the clock. Whether an honest answer to the question will be given, years after the fact, is of course another question.

The Obama administration’s lawlessness is perhaps its most repellent legacy.