Obama’s Tax Audit Strategy

By Dick Morris on June 5, 2013

Published on TheHill.com on June 4, 2013

Did the Internal Revenue Service scandal begin when the Obama administration aggressively tried to deny tax-exempt status to pro-Israeli groups that funded settlements on the West Bank in defiance of its wishes? The IRS seems to have used tax audits to try to cripple these Jewish groups. When the Citizens United decision came down, did President Obama turn the guns focused on the conservative Jewish groups to fire on Republican political organizations?

The Washington Free Beacon reports that the idea of using the IRS to undermine settlement activity surfaced barely two months after Obama took office.

On March 26, 2009, The Washington Post questioned the tax-exempt status of pro-settlement Jewish groups.

The next day, the American-Arab Anti-Discrimination Committee (ADC), which has enjoyed warm relations with the president, asked the IRS to investigate groups “allegedly raising funds for the development of illegal settlements in the occupied West Bank.”

Meanwhile, Arab pressure to audit the settlement groups escalated. In October 2009, a cable revealed by WikiLeaks recounted a meeting between the chief negotiator for the former Palestinian Prime Minister Ahmed Qurei and U.S. Consul General Daniel Rubinstein. The cable noted that Qurei gave

Rubinstein “a copy of an article … in Israeli daily Haaretz newspaper on August 17, entitled ‘American Non-profit Organization Raises Funds for Settlement’ and asked the US to review the situation with an eye toward eliminating organizations’ tax exempt status if they are funding settlement activity.”

The Free Beacon notes that the following week, J Street, a pro-Palestinian lobbying group, also demanded an investigation into U.S. charities that contribute to settlements.

HaYovel, a group that sends volunteers to work in West Bank vineyards, was the first to be audited, six months after its role was prominently featured in a New York Times article. The Times quoted a senior State Department administration official calling such groups “a problem” and “unhelpful to the efforts that we’re trying to make.” It was the first of many Jewish pro-settlement groups to experience IRS audits.

When the Citizens United decision came down, outraging the Obama administration, the IRS already had begun to use the agency’s power to audit and intimidate Jewish groups promoting West Bank settlements. The idea of using the same M.O. to go after tax-exempt groups that sprang up in the wake of the Supreme Court’s decision likely was another fruit of the same tree.

Was the president personally involved? The numerous visits to the White House by Acting IRS Director Douglas Shulman — including four personal meetings with the president — in a two-year period after the court ruling bear further scrutiny. By comparison, the Bush 43 IRS director visited the building only once in his tenure.

Schulman’s meetings with White House staff may have focused on the IRS’s role in administering ObamaCare, but the chances that the audit of conservative groups was discussed cannot be ruled out, especially in view of the work of Schulman’s wife, Susan L. Anderson.

Anderson works for Public Campaign, an organization “dedicated to sweeping campaign reform that aims to dramatically reduce the role of big special interest money in American politics” and funded by groups like Health Care for America Now!

Anderson, who supported the Occupy Wall Street campaign, appears to have occupied the IRS through her husband. According to Breitbart.com, Anderson’s tweets indicate that she worked for Obama and had an obsession with cutting Karl Rove’s Crossroads group down to size.

On June 20, 2012, for example, she tweeted “Karl Rove Crossroads get money out,” and appealed to supporters to come to a demonstration to “CONFRONT Karl Rove plus American Crossroads REBUILD THE AMERICAN DREAM.”

Anderson’s activities and Schulman’s White House visits need further congressional scrutiny. Who knows where it might lead?

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