Ex-Internal Revenue Service official Lois Lerner tried to audit Republican Sen. Chuck Grassley after Grassley blocked President Obama’s nominee to head the Department of Justice (DOJ) tax division, an executive branch insider told The Daily Caller.
Grassley made it more difficult for the IRS and DOJ to work together to target conservative groups by blocking Obama’s political appointee Mary L. Smith from taking over the DOJ Tax Division, which prosecutes criminal cases for the IRS. Grassley held up the nomination in early 2010, just as Lerner and fellow IRS officials were mapping out their targeting strategy. The White House later withdrew Smith’s nomination.
The source confirmed to The Daily Caller that the White House and IRS officials “were very upset at Senator Grassley and Republicans for blocking a vote on Mary Smith’s nomination.”
The IRS relies on the DOJ Tax Division to prosecute both criminal and civil cases, and has entire legal teams devoted to making DOJ referrals. Placing a political appointee as assistant attorney general for the DOJ Tax Division was a top priority for the Obama White House.
Grassley made sure that no Obama political nominee got confirmed for the post, and kept in a “career,” or non-political, DOJ tax head for another two years.
“The Assistant Attorney General is not the kind of position that you probably would want someone learning on the job,” Grassley said at a Feb. 4, 2010 Senate Judiciary Committee hearing, pointing out Smith’s lack of tax experience.
Lerner’s IRS underling Nikole Flax announced the agency’s new scrutiny of nonprofit groups in February 2010, the very same month that Grassley made his concerns known about Smith. Grassley’s opposition to Smith infuriated top officials at the IRS.
Smith was heavily touted by the administration for her Native American background. Smith worked on President Clinton’s re-election campaign and as Clinton’s Associate Counsel to the President and was a partner at the Chicago law firm Schoeman Updike Kaufman & Scharf when Obama nominated her for the position in 2009.
Grassley remained a thorn in the side of the IRS, scrutinizing the activities of Lerner’s Exempt Organizations division more closely than other lawmakers during Obama’s first term.
Lerner finally tried to drum up a criminal case against Grassley after accidentally receiving some of his mail.
“Perhaps we should refer to exam?” Lerner wrote to colleagues in 2012 after she received an invitation from a group asking Grassley to speak at a December 2012 event and offering to pay Grassley’s wife to attend. Lerner and Grassley were both invited to speak at the same event, hosted by an organization that had its name redacted from released congressional documents. Lerner felt that the group’s offer to pay for Grassley’s wife could be a potential criminal violation.
“We would need to wait for: (i) Grassley to accept and attend the speaking arrangement and (ii) then determine whether [redacted] issues him a 1099,” IRS official Matthew Giuliano replied to Lerner, thinking aloud about the circumstances they would need to make a criminal case against Grassley.
“We have seen a lot of unbelievable things in this investigation, but the fact that Lois Lerner attempted to initiate an apparently baseless IRS examination against a sitting Republican United States Senator is shocking,” said Republican House Ways and Committee chairman Rep. Dave Camp upon the publication of Lerner’s email regarding Grassley.