Justice Fires Back at Issa on Testimony Over IRS Probe

Tuesday, May 27, was the day the Justice Department was supposed to produce a key prosecutor to testify to staff on a House panel probing alleged political favoritism at the Internal Revenue Service.

But that was according to a May 22 letter sent to Attorney General Eric Holder by House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., who is concerned about what he sees as improper coordination between IRS and Justice in deciding which groups to investigate for possible campaign finance law violations.

As of publication time May 27, there was no scheduled appearance by Jack Smith, chief of Justice’s Public Integrity Section, and no updated comment from the department or Issa’s panel.

What did emerge on Tuesday was a letter from Justice explaining its procedures and reasoning on questions of testifying to Congress. It comes as the latest wrinkle in the year-old controversy over IRS efforts to single out for extra scrutiny certain nonprofit groups applying for tax-exempt status. Former IRS Exempt Organizations director Lois Lerner is at the center of the controversy.

Issa, joined by Rep. Jim Jordan, R-Ohio, demanded testimony from Justice’s Smith after Smith’s subordinate, Richard Pilger, director of the department’s Election Crimes Branch, told committee staff that Justice “met with Lois Lerner in October 2010, two and a half years earlier than previously known, to discuss potential criminal enforcement relating to political speech of nonprofit groups in the wake of the Supreme Court’s Citizens United decision,” Issa’s letter stated.

“The committee’s transcribed interview of Richard Pilger presents further troubling information about the department’s contemplated prosecution of nonprofit groups for false statements,” the letter said. “It is apparent that the department’s leadership, including Public Integrity Section Chief Jack Smith, was closely involved in engaging with the IRS in the wake of Citizens United and political pressure from prominent Democrats to address perceived problems with the decision….We now know from Mr. Pilger that the Justice Department contributed to this pressure.”

The chairman’s letter came days after Issa issued a subpoena for Pilger after he declined to answer committee questions on May 6 -- on instructions from a Justice Department lawyer.

Justice outlined its reasons for not testifying in a May 7 letter to Issa and oversight panel ranking member Rep. Elijah Cummings, D-Md., written by Peter Kadzik, principal deputy assistant attorney general in the Justice Office of Legislative Affairs, in response to Issa’s earlier letter.

“Your letter appears to reflect a misunderstanding of good-faith efforts by Richard Pilger, a 20-year career prosecutor in PIN and the director of PIN's Election Crimes Branch, to reach out to the IRS regarding law enforcement efforts in the area of campaign finance,” Kadzik wrote, according to the letter as published by the nonprofit Tax Analysts. 

“As you know, it is the department's longstanding policy, across administrations, to decline congressional requests to question line prosecutors because doing so would pose significant risks of the appearance of political influence on the department's law enforcement efforts, and would have a harmful chilling effect on department attorneys in exercising the independent judgment that is essential to the integrity of law enforcement and litigation functions, as well as the public confidence in those decisions,” Kadzik continued.

Justice explained that Pilger’s unusual testimony to House committee staff was done on the condition that he provide no non-public information in response to questions about specific investigations. The department described Pilger’s contact with Lerner as a routine effort to better understand the evolving legal landscape in campaign finance regulation.

“Contrary to the suggestions in your letter, the department has not been involved in any effort to ‘target political speech’ based on partisan affiliation, nor is there any basis for the suggestion in your letter that the department in any way ‘colluded with the IRS to target nonprofit groups’ on such an improper basis,” Kadzik wrote. “Mr. Pilger's contacts with the IRS were entirely appropriate and consistent with our efforts to work with other agencies to ensure that criminal conduct, wherever it occurs, is brought to the attention of the department.”