Commentary Magazine


Topic: Lori Lowenthal Marcus

Phony Scandal? Courts Open Window on the IRS’s Political Litmus Tests

Interest in the Internal Revenue Service’s outrageous practice of subjecting politically conservative groups to discriminatory treatment has died down a bit since the revelations about this scandal first hit the news a year ago. But a court decision that was handed down earlier this week about a similar instance of potential government misconduct may shed more light on the way the Tea Party and other right-wing organizations were given the business by Lois Lerner and the rest of what appears to be a highly politicized bureaucracy at the heart of our tax collection system.

On Tuesday, Federal Judge Ketanje Brown Jackson issued the first substantive ruling in any suit that challenged the IRS’s pose of political neutrality under the Obama administration. The case concerns Z Street, a Philadelphia area-based pro-Israel organization that filed for tax-exempt status in December 2009 because of its role in educating the public about Israel and the Middle East conflict. The group’s founder Lori Lowenthal Marcus wrote in the Jewish Press this week about what followed:

On July 19, 2010, when counsel for Z STREET spoke with the IRS agent to whom the organization’s application had been assigned, that agent said that a determination on Z STREET’s application may be further delayed because the IRS gave “special scrutiny” to organizations connected to Israel and especially to those whose views “contradict those of the administration’s.”

Z Street subsequently sued the government and rightly argued that its constitutional rights had been violated because of the “viewpoint discrimination” that the IRS agent had openly displayed. Now after years of delays, Judge Jackson has ruled that by asserting that Z Street had no right to sue, the government had tried to “transform a lawsuit that clearly challenges the constitutionality of the process … into a dispute over tax liability.” She similarly dismissed the government’s claims of sovereign immunity.

What has this got to do with the Tea Party and its complaints? Plenty.

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Interest in the Internal Revenue Service’s outrageous practice of subjecting politically conservative groups to discriminatory treatment has died down a bit since the revelations about this scandal first hit the news a year ago. But a court decision that was handed down earlier this week about a similar instance of potential government misconduct may shed more light on the way the Tea Party and other right-wing organizations were given the business by Lois Lerner and the rest of what appears to be a highly politicized bureaucracy at the heart of our tax collection system.

On Tuesday, Federal Judge Ketanje Brown Jackson issued the first substantive ruling in any suit that challenged the IRS’s pose of political neutrality under the Obama administration. The case concerns Z Street, a Philadelphia area-based pro-Israel organization that filed for tax-exempt status in December 2009 because of its role in educating the public about Israel and the Middle East conflict. The group’s founder Lori Lowenthal Marcus wrote in the Jewish Press this week about what followed:

On July 19, 2010, when counsel for Z STREET spoke with the IRS agent to whom the organization’s application had been assigned, that agent said that a determination on Z STREET’s application may be further delayed because the IRS gave “special scrutiny” to organizations connected to Israel and especially to those whose views “contradict those of the administration’s.”

Z Street subsequently sued the government and rightly argued that its constitutional rights had been violated because of the “viewpoint discrimination” that the IRS agent had openly displayed. Now after years of delays, Judge Jackson has ruled that by asserting that Z Street had no right to sue, the government had tried to “transform a lawsuit that clearly challenges the constitutionality of the process … into a dispute over tax liability.” She similarly dismissed the government’s claims of sovereign immunity.

What has this got to do with the Tea Party and its complaints? Plenty.

As the Wall Street Journal editorial page noted yesterday:

This ruling will force the IRS to open its books on the procedures it used and decisions it made reviewing Z Street’s tax-exempt application, procedures it has tried to keep shrouded. As the case proceeds, Z Street’s attorneys can seek depositions from many who have been part of the larger attempt to sit on similar applications by other conservative groups.

In other words, this case may be the straw that breaks the camel’s back of the IRS’s politically prejudicial policies. If an IRS agent can reject or stall a pro-Israel group’s application on the grounds that “these cases are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies,” then no group, no matter what its political orientation or cause is safe from being subjected to a political litmus test designed by any administration of either political party.

Z Street’s Marcus deserves praise for having the guts to persist in her challenge to the government for years even though the media had little interest in publicizing what appeared to be an outrageous example of how the IRS had become politicized under the Obama presidency. Last year Marcus learned she wasn’t alone when the news about the Tea Party broke. Now, as her legal process unfolds, Americans may get a better idea about how broken the system has become.

Using the IRS to punish political foes is blatantly illegal. If, as we suspect, the Z Street case reveals the sort of internal email traffic that will reveal how widespread this practice has become in the last five years, perhaps even a liberal mainstream press that still thinks the problems at the IRS are a “phony scandal” will start to pay attention.

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Flotsam and Jetsam

It’s about time someone took it to Meghan McCain: “She’s an über-cool politics chick with lots to say of the conventional-thinking NYTimesish variety, and she’s got credulous lefties lapping up her disses of conservatives like kittens at cream bowls.” And what better way to get that attention than to diss the woman who drives liberals mad? Funny how liberal pundits whine that the former governor, who has articulated positions on a range of issues, doesn’t “know anything,” but they’re willing to spend endless hours talking to a 25-year-old who’s, well, never done anything.

Lori Lowenthal Marcus has the goods on the latest J Street scam: “In short, J Street manipulated the Hillel of Greater Philadelphia (of which I am a board member) into leasing to them space in the Hillel building for their J Street Local launch by entering into a firm agreement, and then ignoring that agreement to Hillel’s detriment. J Street’s deception made Hillel’s carefully planned and extensive pre-event efforts to soothe concerned donors, students, and others that there was no—and that it would be made very clear that there was no—connection between Hillel and J Street.”

House Democrats aid the Justice Department in stonewalling on the New Black Panther Party case: “In their bid to protect President Obama’s liberal political appointees at the Justice Department, congressional Democrats are surrendering their responsibility to keep a presidential administration honest.”

Not so much sycophantic laughter in the White House briefing room: “‘There definitely aren’t a lot of laughs around the briefing room these days,’ says Washington Examiner White House correspondent Julie Mason. ‘Robert’s little digs and evasions have lost their power to amuse — particularly since we haven’t had a presser since July. … Reporters know how close the press secretary is to the president, and yet the quality of the information we get doesn’t often reflect that.” Well, rudeness and lack of candor are pretty much par for the course for the Obami.

Big Labor is steamed it’s gotten nothing for all those millions: “Labor groups are furious with the Democrats they helped put in office — and are threatening to stay home this fall when Democratic incumbents will need their help fending off Republican challengers. … The so-called ‘card check’ bill that would make it easier to unionize employees has gone nowhere. A pro-union Transportation Security Administration nominee quit before he even got a confirmation vote. And even though unions got a sweetheart deal to keep their health plans tax-free under the Senate health care bill, that bill has collapsed, leaving unions exposed again.” And not even Harold Craig Becker could get confirmed.

Obama is bringing people together — Paul Krugman and Bill Kristol agree that his crony-capitalism comments on Wall Street bonuses were horridly tone-deaf. Next thing you know, Jane Hamsher and Yuval Levin will agree on ObamaCare. Oh, wait. It takes real skill to build such a broad-based coalition.

It’s something, but hardly enough: “A day after Iran said it was beginning to feed low enriched uranium through centrifuges at its Natanz pilot facility to create nuclear medical isotopes, the U.S. has announced sanctions on four engineering firms said to be controlled by Iran’s Islamic Revolutionary Guards Corps (IRGC).”

Because Nancy Pelosi never met a tax cut she could support, this will be a problem: “House Majority Leader Steny Hoyer (D-Md.) is praising the Senate for including a payroll tax credit in its jobs package, but it could set up a battle in his House Democratic caucus. Economic conditions are ripe for a provision that serves as an incentive for employers to expand their workforces, in Hoyer’s vies. The economy is growing again, and surveys indicate growing confidence by business.” Republicans are probably lucky that Pelosi and not Hoyer is Speaker. Hoyer actually sounds in touch with reality.

Cognitive-dissonance alert! David Brooks warms to Rep. Paul Ryan’s vision: “Government would have very few decision-making powers. Instead it would essentially redistribute money so that individuals could better secure their own welfare provision. Medicare and Social Security would essentially be turned into cash programs. The elderly would receive $11,000 a year to purchase insurance. The tax code would be radically simplified.” But Obama doesn’t believe in any of that, so … ?

First, Michael Steele. Now Gov. David Paterson is playing the race card.

It’s about time someone took it to Meghan McCain: “She’s an über-cool politics chick with lots to say of the conventional-thinking NYTimesish variety, and she’s got credulous lefties lapping up her disses of conservatives like kittens at cream bowls.” And what better way to get that attention than to diss the woman who drives liberals mad? Funny how liberal pundits whine that the former governor, who has articulated positions on a range of issues, doesn’t “know anything,” but they’re willing to spend endless hours talking to a 25-year-old who’s, well, never done anything.

Lori Lowenthal Marcus has the goods on the latest J Street scam: “In short, J Street manipulated the Hillel of Greater Philadelphia (of which I am a board member) into leasing to them space in the Hillel building for their J Street Local launch by entering into a firm agreement, and then ignoring that agreement to Hillel’s detriment. J Street’s deception made Hillel’s carefully planned and extensive pre-event efforts to soothe concerned donors, students, and others that there was no—and that it would be made very clear that there was no—connection between Hillel and J Street.”

House Democrats aid the Justice Department in stonewalling on the New Black Panther Party case: “In their bid to protect President Obama’s liberal political appointees at the Justice Department, congressional Democrats are surrendering their responsibility to keep a presidential administration honest.”

Not so much sycophantic laughter in the White House briefing room: “‘There definitely aren’t a lot of laughs around the briefing room these days,’ says Washington Examiner White House correspondent Julie Mason. ‘Robert’s little digs and evasions have lost their power to amuse — particularly since we haven’t had a presser since July. … Reporters know how close the press secretary is to the president, and yet the quality of the information we get doesn’t often reflect that.” Well, rudeness and lack of candor are pretty much par for the course for the Obami.

Big Labor is steamed it’s gotten nothing for all those millions: “Labor groups are furious with the Democrats they helped put in office — and are threatening to stay home this fall when Democratic incumbents will need their help fending off Republican challengers. … The so-called ‘card check’ bill that would make it easier to unionize employees has gone nowhere. A pro-union Transportation Security Administration nominee quit before he even got a confirmation vote. And even though unions got a sweetheart deal to keep their health plans tax-free under the Senate health care bill, that bill has collapsed, leaving unions exposed again.” And not even Harold Craig Becker could get confirmed.

Obama is bringing people together — Paul Krugman and Bill Kristol agree that his crony-capitalism comments on Wall Street bonuses were horridly tone-deaf. Next thing you know, Jane Hamsher and Yuval Levin will agree on ObamaCare. Oh, wait. It takes real skill to build such a broad-based coalition.

It’s something, but hardly enough: “A day after Iran said it was beginning to feed low enriched uranium through centrifuges at its Natanz pilot facility to create nuclear medical isotopes, the U.S. has announced sanctions on four engineering firms said to be controlled by Iran’s Islamic Revolutionary Guards Corps (IRGC).”

Because Nancy Pelosi never met a tax cut she could support, this will be a problem: “House Majority Leader Steny Hoyer (D-Md.) is praising the Senate for including a payroll tax credit in its jobs package, but it could set up a battle in his House Democratic caucus. Economic conditions are ripe for a provision that serves as an incentive for employers to expand their workforces, in Hoyer’s vies. The economy is growing again, and surveys indicate growing confidence by business.” Republicans are probably lucky that Pelosi and not Hoyer is Speaker. Hoyer actually sounds in touch with reality.

Cognitive-dissonance alert! David Brooks warms to Rep. Paul Ryan’s vision: “Government would have very few decision-making powers. Instead it would essentially redistribute money so that individuals could better secure their own welfare provision. Medicare and Social Security would essentially be turned into cash programs. The elderly would receive $11,000 a year to purchase insurance. The tax code would be radically simplified.” But Obama doesn’t believe in any of that, so … ?

First, Michael Steele. Now Gov. David Paterson is playing the race card.

Read Less




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