Compromised Code Names, Operations and Equipment / Recent and in progress ( Updated 12:37PM PST / 27OCT2013 )

Editors Note: (Ralph Turchiano) Requested Repost from the archives (Oct 2013)

EEV: Recently Compromised or exposed Code names, Operations, Software and facilities. The list is in no particular order and is being updated frequently. These are just the discoveries from the past 2 years.

* Details of ALL operations can be found through inputting the codename in the search bar. (Being Updated, will be formatted for easy access in the near future _ The most recently compromised will be at the top (for the first week) after 26 OCT 2013

Compromised Code Names, Operations and Equipment

_______________________ Recent

MUSCULAR – The NSA’s principal tool to exploit the data  links is a project called MUSCULAR, operated jointly with the agency’s British  counterpart, GCHQ.

 Einstein antenna system –  Can intercept cell phone signals while simultaneously locating people of interest.

 Birdwatcher Program – intercepts microwave and millimeter-wave signals. Some programs,  deal primarily with encrypted communications in foreign countries and the search for potential access points. Birdwatcher is controlled directly from SCS headquarters in Maryland.

Quantum –  NSA controls a set of servers that sit on the Internet backbone, and these servers are used to redirect targets away from their intended destinations to still other NSA-controlled servers that are responsible for the injection of malware.

FoxAcid –  NSA server that selects from a toolkit of exploits in order to gain access to the user’s computer. Presumably this toolkit has both known public exploits that rely on a user’s software being out of date, as well as zero-day exploits which are generally saved for high value targets.

Tailored Access Operations (TAO), the branch  of the US National Security Agency (NSA) which deals with cyber-attacks


Opus Dei – International Roman  Catholic order, founded in 1928 and championed early by Spanish  dictator Francisco Franco, is dedicated to establishing its members in high  political, corporate, and religious offices all over the world.

Rossotrudnichestvo exchange program – Alleged exchange program used to recruit Americans to train as Russian spies

Shenguang (“Divine Light”) – China’s laser project for inertial confinement fusion, which aims to use high-powered lasers to produce a sustained nuclear fusion reaction ( lasers designed to damage or destroy US satellites )

Apstar-7 satellite (  APT Satellite Holdings )  – Chinese Satellite the Pentagon leases to oversee communications with its African bases

Operation Socialist – An assault on Belgacom’s “core GRX routers”

“Man in the Middle” or “MiTM” operations “ –  highly-sophisticated deception which allows a third party to intervene in an electronic conversation and pretend to be each of the other two parties, obtaining valuable information or spreading disinformation without the targets realizing

US-985D – Text messages France

Unit 61398 –  Engages in harmful ‘Computer Network Operations’,” is located in Shanghai’s Pudong district, China’s financial and banking hub, and is staffed by perhaps thousands of people proficient in English as well as computer programming and network operations. Is considered a Chinese State Secret. The unit has stolen “hundreds of terabytes of data from at least 141 organizations across a diverse set of industries beginning as early as 2006.

Apalachee – EU/ UN Tapping

Bumblehive – NSA Storage Facility

Boundless Informant – NSA Data Mining program

CHAMP ( Counter-Electronics High Power  Microwave Advanced Missile Project ) Boeings missile with  electromagnetic pulse capability

Codeword – Currently Unkown

Swag Security – China’s hack group U.S. Medicaid system / Nuclear Codes ( Ironically also a Bank of America Code Word )

Tailored Access Operations – NSA Special Targets

Flatliquid – Tap Diplomatic Communications

Whitetamale – Mexico e-mails

Lugar Research Center – U.S. Top Secret Biologics lab ( Republic of Georgia )

Special Collection Service – Secret eavesdropping posts in 80 US embassies and consulates around the world.

DishFire – Text message filtering / the intelligence agency collects information on credit card transactions from some 70 banks worldwide.

Sophia – Industrial Control System Computer Networking Fingerprinting Tool ( Powergrid )

Visdom – Competing Industrial Control System Computer Networking Fingerprinting Tool ( Powergrid )

FunVax – Biological pacification of individuals through vaccination

Section 6103 – IRS abuse

IceFog – Advanced Persistent Threats ( China ? )

Tel Shahar – Where the state-of-the-art facility to host the new ballistic-missile  defense system (  Arrow 3 ) in Israel – Accidentally disclosed by the Penatgon

Privacy & Civil Liberties Board (PCLOB) – Board set up to oversee domestic spying whose meetings and members are difficult to confirm and may not exist

Spearfishing – Emailed viruses

Hidden Lynx – Chinese Haking Group / Cyber-Mercenaries

Operation Aurora – General mass espionage

NetTraveler – Espionage Program

Red October  ( Rocra ) – Espionage campaign against military personnel in Eastern Europe, Central Asia, and dozens of other nations (U.S., Australia, Ireland, Switzerland, Belgium, Brazil, Spain, South Africa, Japan, and the UAE.) . Features include an advanced cryptographic spy-module designed to lift data from Acid Cryptofiler, which is known to be used by NATO, the European Union, European Parliament and European Commission since the summer of 2011 to encrypt classified information.

DarkSeoul – Hacker Group (North Korean / China ? )

Shadow Network – Chinese Espionage Group

Team Cymru – Monitor Criminal Activty ( non profit )

Follow the Money – Financial Intelligence division NSA

SWIFT – European Financial Network

GHCQ Cheltenham – Processes Middle East  emails, telephone calls and web traffic

XKeyscore – spying program is used to skim regional data from the Visa network

SOD ( Special Operations Division )- Two dozen partner agencies comprise the unit, including the FBI, CIA, NSA, Internal Revenue Service and the Department of Homeland Security.

Total Information Awareness ( TIA ) – Pentagon intelligence gathering

ThinThread – Software correlated data from emails, phone calls, credit card payments and Internet searches and stored and mapped it in ways that could be analysed.

TrailBlazzer – Relaced Thinthread Software to correlated data from emails, phone calls, credit card payments and Internet searches and stored and mapped it in ways that could be analysed.

Going Dark -FBI initiative to extend its ability to wiretap virtually all forms of  electronic communications.

International Mobile Subscriber Identity locator  ( IMSI ) – These devices allows the government to electronically search large areas for a particular cell phone’s signal—sucking down data on potentially thousands of innocent people along the way.

Stingrays – Another name for International Mobile Subscriber Identity locator

Tripwire or Trapwire – information collection software OR lines in the sand which, if crossed, cover  personnel levels, security measures, and in this case, the extreme step of  suspending operations.

Voice Grid Nation ( VoiceGrid program ) – is a system that uses advanced algorithms to match identities to voices. Brought to the US by Russia’s Speech Technology Center, it claims to be capable of allowing police, federal agencies and other law enforcement personnel to build up a huge database containing up to several million voices.

Prism ( Discovered prior to Snowden ) – NSA direct access to the servers of nine prominent Internet companies, enabling the spy agency to track e-mails, photographs, and video, among other forms of digital communications .

Bullrun ( Edgehill GHCQ version ) –  NSA’s abilities to defeat the encryption used in specific network communication technologies. Bullrun involves multiple sources, all of which are extremely sensitive.” The document reveals that the agency has capabilities against widely used online protocols, such as HTTPS, voice-over-IP and Secure Sockets Layer (SSL), used to protect online shopping and banking.

Cheesy Name –  aimed at singling out encryption keys, known as ‘certificates’, that might be vulnerable to being cracked by GCHQ supercomputers.

Humint Operations Team (HOT) Humint, short for “human intelligence –  Information gleaned directly from sources or undercover agents.The old fashion way.

Sigint [signals intelligence] enabling – The program “actively engages US and foreign IT industries to covertly influence and/or overtly leverage their commercial products’ designs”

Kimsuky – North Korean Hacking group

GENIE –  US computer specialists break into foreign networks so that they can be put under surreptitious US control.

WABASH – Tapping French offices U.N.

Blackfoot – Tapping French offices New York

Tempora – GCHQ’s Tapping transatlantic  fibre-optic cables

Sensitive relationship teams – Staff that were urged in one internal guidance paper to disguise the origin of “special source” material in their reports for fear that the role of the companies as intercept partners would cause “high-level political fallout”.

Menwith Hill in North Yorkshire – NSA intercept station

Atlas International Trading – Company in the Pentagon’s Foreign Materiel Acquisition and Exploitation program

Advanced Persistent Threat Groups – Nitro, Aurora, ElderWood, Sykipot, Comment Crew (APT1), NightDragon, FlowerLday, Luckycat, Pitty Panda.

Western Tradition Partnership, or WTP – Compromise U.S. Politicians – Dark Money – Major campaign bundler to the Obama campaign Shanghai based domain owned by Robert  Roche with strong  commercial ties to the  Chinese government. He has made 19 visits to the  White House since 2009, including a personal meeting with Obama.

Stuxnet , Duqu , Wiper, Flame – Tilded Platform malware used for cyberespionage and cybersabotage in the Middle East.

WildSage – NSA database. The system “provides a mechanism for cybersecurity centers to share signatures at the SECRET classification level

Port reader software – FBI desire to harvest information on users’ “dialing, routing, addressing, or signaling information associated with a target’s communications”. And, as the FBI stated, this information will only include source, destination IP addresses and port numbers.

Dynamo – Dutch name in COMINT

Richter – German name in COMINT

One-End Foreign (1EF) solution – system, the NSA is able to direct more than half of the internet traffic it intercepts from its collection points into its own repositories

EvilOlive – NSA’s attempt to broaden 1EF Doubling its capacity

ShellTrumpet – NSA’s processor

MoonLightPath – Metadata collection for  Special Source Operations

Spinneret – Metadata collection for  Special Source Operations

Transient Thurible -GHCQ headquarters that manages  XKeyScore (XKS) and Deep Dive metadata collections

Project Riverside – found that rich individuals and private companies had been hiring unscrupulous private detectives to obtain sensitive information on targets for years.

QinetiQ North America (QQ/) – Hi-Tech U.S. defense contractors, which are the favorite target of Cyberpillaging

Acoustic vector sensor – sensor measures the movement of air, disturbed by sound waves, to almost instantly locate where a sound originated. It can then identify the noise and, if required, transmit it live to waiting ears.

Achieve Olympic Glory – Now Pay the IRS

 U.S. Olympic gold medal winners could owe almost $10,000 to the IRS

All hail the Olympic taxpayers! Any valuable Americans win in Sochi, and the cash bonuses that come with them, will be subject to hefty federal income taxes

As 230 U.S. Olympic athletes gear up to compete in the 2014 Winter Games, the only thing colder than the slopes at Sochi is the fact that any prizes awarded by the U.S. Olympic Commission (USOC) will be taxed by the IRS. Many Americans don’t realize that the U.S. taxes income earned abroad, and as such even the winnings of Olympic athletes are subject to the reach of the IRS. Continue reading “Achieve Olympic Glory – Now Pay the IRS”

‘A public safety disaster’: Obamacare could force THOUSANDS of volunteer fire departments to close

  • The Affordable Care Act forces companies with more than 50 workers to buy them all health insurance or pay hefty fines
  • The IRS says volunteer firefighters are ’employees,’ even though the Department of Labor says they’re ‘volunteers’
  • Out of more than 1 million fire departments in the U.S., 87 per cent are staffed entirely or mostly by life-saving volunteers
  • Members of Congress are weighing in, but the Obama administration hasn’t taken any action yet to carve out a fire-fighting exception

By  David Martosko, U.s. Political Editor

PUBLISHED: 15:58 EST, 9 December 2013 |  UPDATED: 23:11 EST, 9 December 2013

Volunteer fire departments all across the U.S. could find themselves out of money and unable to operate unless Congress or the Obama Administration exempts them from the Affordable Care Act.

‘I thought the kinks were worked out  of Obamacare at the first of the month, Central Florida volunteer  firefighter Carl Fabrizi told Sunshine State News.

‘Man, oh, man, this could potentially destroy some real good companies in Florida.’

The U.S. Department of Labor takes the term ‘volunteer’ literally, but the IRS says volunteer firefighters are technically employees if they’re on the job more than 30 hours per week, making them subject to Obamacare’s employee-mandate rules.


Firefighters battled a blaze in the aftermath of a Nov. 18 tornado in Washington, Illinois. The vast majority of U.S. firefighters are community volunteers 

Firefighters battled a blaze in the aftermath of a Nov. 18 tornado in Washington, Illinois. The vast majority of U.S. firefighters are community volunteers Continue reading “‘A public safety disaster’: Obamacare could force THOUSANDS of volunteer fire departments to close”

IG finds some not-so-intelligent conduct in the intelligence community

Intelligence community appears to be endemic with fraud

i.e. Two owners, who were the only employees of a subcontracting firm, mischarged 1,691 hours to the government for time running “a business for horse saddle padding,” according to the IG report


By  , Published: December 4

Adding to all its other problems, the intelligence community’s inspector general, I. Charles McCullough III, has discovered a rash of fraud cases involving employees and contractors within the 16 agencies and the Office of the Director of National Intelligence (ODNI).

Between July 1, 2012, and March 31, McCullough’s office completed 26 investigations that substantiated violations of criminal law or administrative regulations. An additional 29 inquiries remain open, according to a heavily redacted inspector general’s report made public last week by Steven Aftergood on his Federation of American Scientists Web site.

Continue reading “IG finds some not-so-intelligent conduct in the intelligence community”

Obama’s tech expert too busy fixing website to testify

Source: Reuters – Fri, 8 Nov 2013 02:19 AM

Author: Reuters

(Recasts with Park asking for delay due to work on website)

WASHINGTON, Nov 7 (Reuters) – The chief technology officer for the White House is willing to testify to a powerful oversight committee in the U.S. House of Representatives, but Todd Park is still too busy trying to fix the glitch-ridden Obamacare website to appear, the White House said on Thursday.

Republican Darrell Issa said he wants to hear from Park and other top Obama administration tech officials next Wednesday about why has performed so poorly, potentially preventing millions of people from enrolling in new online health insurance exchanges.

Issa, noting that Park was a “central leader” in the website’s development, asked him to reconsider his decision by Friday or potentially face a subpoena compelling him to testify.

Park is open to meeting with Issa’s staff informally in late November and would testify at a hearing sometime in the first two weeks of December, said Donna Pignatelli, the assistant director for legislative affairs in the White House Office of Science and Technology Policy.

“Because Mr. Park is currently occupied full time on the critically important work of improving the website for the millions of Americans seeking affordable health insurance options, his testimony needs to be scheduled at a time that is less disruptive to that work,” Pignatelli said in a letter to Issa.


Park’s precise role in the website’s insurance marketplaces is unclear, although he has been deeply involved in the round-the-clock effort to try to fix the bugs, occasionally sleeping on a mat in his office.

Before joining the Obama administration, Park was a successful healthcare IT developer, steering Athenahealth  through a blockbuster IPO, and helping start another company, Castlight, which provides data on healthcare costs.

The 40-year-old helped build the original website in 90 days in 2010 when he was chief technology officer at the Department of Health and Human Services. The website then provided information about public and private insurance programs, sorted by zipcode.

Elijah Cummings, the top Democrat on the House Oversight panel, chastised Issa for the threat and for ignoring Park’s offer to testify in December.

“I am personally very concerned that the Chairman’s actions may have a direct and negative impact on efforts to fix, which would aggravate the problem rather than help solve it,” Cummings said in a statement.

Issa is a strong critic of the Obama administration. He has launched a number of probes, including one into the Internal Revenue Service’s scrutiny of conservative groups seeking tax-exempt status, and a “Fast and Furious” investigation into a failed U.S. government sting operation involving gun running.

The hearing next week could shed light on what role various officials played in developing the site’s technology. So far, the project appears to have been spread out among offices and federal contractors without strong oversight.

Other officials due to appear include Steve VanRoekel, chief information officer at the White House and Henry Chao, deputy chief information officer at the Centers for Medicare and Medicaid Services.

The Patient Protection and Affordable Care Act, President Barack Obama’s signature healthcare law, was passed in 2010 and upheld by the U.S. Supreme Court last year. It requires most Americans to have health insurance beginning Jan. 1 or pay a fine.

Republicans see the Democratic president’s program as a costly expansion of government and fear Obamacare is too complicated and expensive to work.      (Additional reporting By Karey Van Hall; Editing by Xavier Briand and Ken Wills)

Obama Secret Service Agent: “Things are much worse than Americans can even imagine”


Wednesday, 06 November 2013

You may have your suspicions about what’s going on behind closed doors at the White House.

But according to one of US President Obama’s former body guards it’s much worse than Americans can even imagine.

Dan Bongino has protected numerous Presidents over his career, including President Obama. He has been within ear-shot of many a discussion in the Oval Office, but up until this administration has stayed out of the lime light. Apparently, however, the activities of this administration are so abhorrent that he could no longer keep quiet.

Bongino is so upset with what he witnessed that he is now running for Congress because he feels it’s the only way to take America back from the sycophants who have made every effort to enrich themselves with money and power at the expense of the American people.

How bad is it?

We’re in a lot of trouble.

The President sees government – and I think it’s because of his lack of experience and maybe community organizing in the past – as this shiny new toy.

For all the disagreements I had with Clinton, Carter and Bush there were always limits… there was that line you just didn’t cross… We cross it seemingly every day. We’re lost in the scandals…

The Jamie Dimon shakedown at Chase… the HHS scandal.. Kathleen Sebelius shaking down the health care industry for money… the IRS… it’s to the point where these scandals in and of themselves would be huge back-breaking scandals [but] are just lost in the scandal fog of this administration…

It’s worse than people know… and I’m not trying to scare you either.

This is coming from someone who has stood next to Presidents for his entire career.

The implications are absolutely terrifying, especially considering how bad the publicly known scandals already are. Can you imagine what’s happening outside the view of Americans?

This is not about Republican or Democrat, it’s about liberty, pure and simple, and this administration has done more to damage our individual rights than any that has come before it.

Bongino expresses this succinctly when discussing the NSA scandal and the administration’s use of the information acquired by government snoops all over the country.

You give the government information and it will be abused. It is not a matter of if it’ll be abused, it’s only a matter of when…

When the line between the personal self and the public self… when that line is determined by the government that keeps your information in a trove for release any time they need it, how are you free?

..the bottom line is, having worked inside the government, it will be abused. It is only a matter of time.

We are all doing something wrong. The catch is not “if” we’re doing something wrong. It is “are your private wrongs impacting on my civil liberties?” If not, the government has no business in your life… it’s a red herring…

If you’re not doing something wrong? The question is only whether your private wrongs that have no effect on anyone else become exposed for the government’s benefit.

…It’s only a matter of time before someone slaps an email on your desk from fifteen years ago… and says ‘look what we got against you.’

Remember, when the key is held by someone else liberty means absolutely nothing. That personal and private self are being evaporated.

Make no mistake. They – and that especially includes this administration and/or agents acting under their directives and initiatives – will use everything they can against you when it suits them.

The prerogative has always been to destroy anything or anyone who threatens the establishment. We’ve seen it time and again with this, as well as past, White House administrations and Congressional membership.

Now, more than ever before, they will start targeting those who speak out against them and jeopardize their agenda.


White House, IRS exchanged confidential taxpayer info

Posted By Patrick Howley On 1:17 PM  10/09/2013 In Politics

Top Internal Revenue Service Obamacare official Sarah Hall Ingram discussed confidential taxpayer information with senior Obama White House officials, according to 2012 emails obtained by the House Oversight and Government Reform Committee and provided to The Daily Caller.

Lois Lerner, then head of the IRS Tax Exempt Organizations division, also received an email alongside White House officials that contained confidential information.

Ingram attempted to counsel the White House on a lawsuit from religious organizations opposing Obamacare’s contraception mandate. Email exchanges involving Ingram and White House officials — including White House health policy advisor Ellen Montz and deputy assistant to the president for health policy Jeanne Lambrew — contained confidential taxpayer information, according to Oversight.

The emails provided to Oversight investigators by the IRS had numerous redactions with the signifier “6103.”

Section 6103 of the Internal Revenue Code forbids a federal employee from “disclos[ing] any return or return information obtained by him in any manner in connection with his service as such an officer or an employee.”

Federal employees who illegally disclose confidential taxpayer information could face five years in prison.

“Thanks, David. Thanks for the information on [6103],” White House official Lambrew wrote to IRS official David Fish in a July 20, 2012 exchange. “I am still hoping to understand whether the 50 percent rule is moot if the organization does not offer goods and services for sale to the general public. Do we assume that organizations like [6103] do offer goods and services for sale?”

Another email from Montz to Ingram and others refers to the “[6103] memo” and the “[6103] letter” while discussing organizations that are not required to file 990′s.

Ingram appeared before Rep. Darrell Issa’s House Oversight Committee Wednesday and claimed she could not recall a document that contained confidential taxpayer information.

“Well one of the areas of interest is there’s a significant redaction that quotes the statute 6103. Do you know who is underneath that blackout?” Issa asked Ingram.

“I don’t recall the document so I can’t help you with what’s underneath that redaction,” Ingram said.

“Her response has not put concerns to rest,” Oversight staffer Frederick Hill said. ”This caught people’s eye.”

Issa has requested unredacted copies of the emails, citing a prohibition from misusing Section 6103 “for the purpose of concealing information from a congressional inquiry.”

Ingram headed the scandal-ridden IRS office responsible for overseeing tax-exempt nonprofit groups before leaving to head the agency’s office in charge of Obamacare implementation.

An IRS voice mail message declined to comment on any media inquiries during the government shutdown, citing law.

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Seven stupid things the gov’t spent money on during the shutdown

Posted By Michael Bastasch On 9:23 PM  10/02/2013 In Daily Caller News Foundation

The government is shut down and thousands of government workers have been sent home. But will it save any money?

The shutdown in during the Clinton Presidency cost taxpayers about $1.5 billion in 22 days. According to IHS Global Insight, the shutdown could cost the U.S. economy $1.6 billion per week — and NBC News reported that the shutdown would cost $12.5 million per hour.

Here are seven things that the government, in all its wisdom, has opted to do during the current shutdown.

1. Federal agencies created new websites to tell visitors that they don’t have enough funding to run their old websites.

Federal agencies, including the U.S. Department of Agriculture and the National Park Service, have created new splash pages to tell visitors that they don’t have enough money or manpower to maintain their normal websites. The Internal Revenue Service website will be active, but won’t be updated — at least they’re not auditing you.

According to USA Today, even Capitol Hill’s Twitter feed will be impacted. The newspaper reports that, “Twitter followers received a message from the architect of the U.S. Capitol proclaiming certain accounts will be inactive. A message posted on first lady Michelle Obama’s Twitter account said tweets would be limited ‘due to Congress’s failure to pass legislation to fund the government.’”

2. The feds shut down the parking lot of Mt. Vernon, but not the park itself.

In another brilliant move, the National Park Service closed off the parking lot to Mt. Vernon, the home of the country’s first president George Washington. Since Mt. Vernon is privately owned, the NPS can’t shut down the park, so they instead opted to shut down the parking lot at the popular tourist attraction.

The news came from one brave man on Twitter who has been tweeting to the world all day about how the parking lot (well, at least one parking lot at the time this report was being written) was closed, despite Mt. Vernon officials saying it was open.

1 parking lot directly out front of Mount Vernon remains closed in spite of dispute with Park Service— Stephen Gutowski (@collegepolitico) October 2, 2013

3. A D.C-area canal is closed and had all the pumps taken off of it.

The National Park Service has actually had someone remove the handles off all the well pumps along the Chesapeake & Ohio Canal that runs 184 miles from Washington, D.C. to Cumberland, Maryland, according to sources. The NPS has also stationed officers in the park to make sure bikers don’t ride down closed bike paths and that no one can come near the scenic waterway.

Mike Nardolilli, president of the C&O Canal Trust, said in an email: “As you may be aware, our Federal Government has shut down for an indeterminate amount of time. What you may not have realized, however, is that the closure of the Federal Government means the closure of the C&O Canal National Historical Park and all other National Parks.”

However, rebellious bikers seem to be taking matters into their own hands and are using the closed trails due to lax enforcement.

4. Angry moms launch full-scale assault to reopen D.C. turtle park.

According to sources, angry moms near the Eastern Market are of Washington, D.C. have been diligently tearing down barriers erected by the National Park Service around Marion Park, or the turtle park as it is commonly referred to because of the fake turtles that children like to play on.

Sources said that the park was blocked off by park officials, but the source suspected that neighborhood moms have been taking down barriers to the park so their children could play there. In response, park officials keep erecting new ones, which the moms promptly tear down.

The park is extremely small and sort of seems pointless to block off.

5. Not closing parks near Democratic senators’ houses.

Sources tell TheDCNF that Lincoln Park in D.C., which maintained by the NPS, was not closed down, nor were any signs put up that indicated it was closed due to the government shutdown. According to the same source, it’s close to the homes of “quite a few” Democratic senators, and the source has previously seen Montana Democratic Sen. Max Baucus walking in the park.

While Lincoln Park remains seemingly open for Baucus and other senators to go for a walk, national parks all across Montana have been closed down and thousands of tourists have been turned away.

The NPS did not respond to TheDCNF’s request for comment, probably because no one is working in their press office.

6. Posting park rangers at the WWII memorial to prevent rogue veterans from getting in.

Bus-loads of WWII veterans were forced to storm their own monument after it was blocked off by the National Park Service. A group of lawmakers led by Mississippi Republican Rep. Steven Palazzo pushed aside the park rangers’ barriers and allowed veterans to get into the memorial.

“Some idiot in government sent goons out there to set up barricades so they couldn’t see the monument. People had to spend hours setting up barricades where there are never barricades to prevent people from seeing the World War II monument because they’re trying to play a charade,” Kentucky Republican Sen. Rand Paul said on Fox News’s “Hannity.”

7. The DoD is postponing the Navy-Air Force football game.

USA Today reports that the Department of Defense is postponing this weekend’s Navy vs. Air Force football game due to the government shutdown. The military has also suspended all other armed services athletic events until the shutdown is resolved.

Update: The Navy-Air Force game is no longer postponed after the academies agreed to use non-federal funds to put on the games.

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Unearthed emails show embattled IRS official knew her agency was secretly targeting conservative groups

By  David Martosko In Washington

PUBLISHED: 18:00 EST, 12  September 2013 |  UPDATED: 18:18 EST, 12 September 2013

Emails released this week by congressional  investigators show that an embattled former IRS manager was directly involved in  targeting conservative nonprofit groups for special scrutiny beginning at the  height of the 2010 midterm election season.

Lois Lerner, who is still on the IRS payroll  despite losing her post as Director of Exempt Organizations, has refused to  testify before Congress about her involvement. But the emails, which date from  2011 and were provided to MailOnline by the House Ways and Means Committee,  indicate that she knew early on what her agency was doing.

Lerner, the messages show,  specifically singled out applications for tax-exempt status from organizations  that described themselves as right-wing ‘tea party’ groups, and ordered that the  politically sensitive requests should be held in limbo until the IRS could  develop a coherent policy to address them.

CRUELLA DE (TAX) BILL? Lois Lerner 'took the fifth' before Congress, refusing to testify. But her emails show her level of involvement in the tea party scandal that deeply tarnished the IRS 

CRUELLA DE (TAX) BILL? Lois Lerner ‘took the fifth’  before Congress, refusing to testify. But her emails show her level of  involvement in the tea party scandal that deeply tarnished the IRS



Grass roots: Tea party groups have continued to wield political power, most recently by advocating against the full implementation of President Obama's health care overhaul law 

Grass roots: Tea party groups have continued to wield  political power, most recently by advocating against the full implementation of  President Obama’s health care overhaul law

Capitol Hill Democrats have countered that  groups on both the right and left were targeted, but evidence made public to  date suggests that almost all of the affected organizations opposed President  Obama and his policies.

The ‘Tea Party Matter [is] very dangerous,  Lerner instructed her IRS colleagues in February 2011. ‘This could be the  vehicle to go to court,’ she added, on the question of whether a Supreme Court  ruling about the status of political donations from corporations might also  apply to nonprofit groups. ‘Counsel and Judy Kindell [Lerner’s top advisor]  need to be in on this one … Cincy should probably NOT have these  cases.’


IRS officials said in the congressional  investigation’s early days that a few ‘rogue employees’ in the IRS’s Cincinnati,  Ohio office – and not managers like Lerner or her counterparts in Washington,  D.C. – made the decisions about which conservative groups’ applications to  target.

Ways and Means Chairman Dave Camp, a Michigan  Republican, said in a statement that ‘there is increasing and overwhelming  evidence that Lois Lerner and high-level IRS employees in Washington were  abusing their power to prevent conservative groups from organizing and carrying  out their missions.’

‘There are still mountains of documents to go  through,’ Camp added, ‘but it is clear the IRS is out of control and there will  be consequences.’

Serious messages: Tea party activists have leveled stern warnings to the IRS after the agency targeted their groups for special treatment based on their political philosophies 

Serious messages: Tea party activists have leveled stern  warnings to the IRS after the agency targeted their groups for special treatment  based on their political philosophies


About 70 tea partiers gathered in Washington, DC as their counterparts in other cities descended on federal buildings in protest 

Conservatives organizations say they hold President  Obama responsible for the ‘abuses’ his tax collectors have inflicted on his  political opposites


In an email from three months later, Lerner  seemed to acknowledge that the IRS had made a mess of its habit of selectively  hamstringing groups whose political ideology didn’t mesh with the  president’s.

‘It is what it is,’ she wrote. ‘Although the  original story isn’t as pretty as we’d like, once we learned this [sic] were off  track, we have done what we can to change the process, better educate our staff  and move the cases.’

‘So, we will get dinged, but we took steps  before the ‘dinging’ to make things better and we have written  procedures.’

A year later, IRS higher-ups testified in  congressional hearings that the agency hadn’t made special efforts to treat  conservative groups differently from others.

A third email shows a stunning intersection  of government bureaucracy and partisan politicking in Lerner’s  office.

Sharon Light, a senior member of Lerner’s  “Technical Adviser’ team, forwarded her a National Public Radio article on July  10, 2012 about the plight of Senate Democrats who found it increasingly  difficult to repeat their electoral successes in the wake of court decisions  that allowed corporate dollars to flood into statewide elections.

Democrats had complained to the Federal  Election Commission that some tax-exempt groups on the political right should be  regulated like political committees instead of charities. The issue was whether  the identity of their donors should be subject to public disclosure.

‘Perhaps the FEC will save the day,’ Lerner  added to the email chain.


The Senate Conservatives Fund launched to host Cruz's video. That PAC spent more than $3.5 million on political races in 2012 

Texas Republican Sen. Ted Cruz and the Senate  Conservatives Fund launched a website this year to gather support for abolishing  the IRS and shifting the United States to a less complicated tax  code


Light was one of six IRS managers who sought  career lifeboats at the height of the controversy this summer. She now works for  the American Cancer Society.

The latest cache of Lerner’s emails to be  made public were first discussed in a Wall Street  Journaleditorial.

Lerner insisted during a May 22, 2013  congressional inquiry that she did ‘nothing wrong,’ but then asserted her Fifth  Amendment right against self-incrimination and left the hearing. She was later  placed on administrative leave, with pay

Rep. Sander Levin, the Ways and Means  Committee’s ranking Democrat, told The Washington Times on Thursday that Republicans have failed to uncover a smoking gun that  demonstrates any poltical favoritism.

‘Lois Lerner was incompetent in her  management of the IRS tax-exempt division and unprofessional in her conduct –  reasons why I immediately called for her to be relieved of her duties,’ Levin  said, claiming the GOP was engaging in ‘selective leaking’ of documents to the  press.


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Lois Lerner emails from Ways and Means.pdf by MailOnline

Top one percent took record 19.3percent of US income last year – the LARGEST share of pre-tax income since 1927

  • Last year the top 1 per cent of earners  in the U.S. accounted for 19.3 per cent of pre-tax income
  • That’s the largest per cent since  1927
  • The economic disparity between the 1 per  cent and everyone else in the U.S. has escalated drastically in the past three  decades
  • The Occupy Wall Street movement, which  started two years ago this month, created the slogan ‘We are the 99 per cent’  highlighting this economic disparity

By  Associated Press and Daily Mail Reporter

PUBLISHED: 12:21 EST, 10  September 2013 |  UPDATED: 16:38 EST, 10 September 2013

Almost two years to the day that the Occupy  Wall Street movement started, a report confirms that the rich are getting even  richer.

The top 1 per cent of earners collected 19.3  per cent of household income in 2012, their largest share in Internal Revenue  Service figures going back a century.

U.S. income inequality has been growing for  almost three decades.

Record breaking: The top 1 per cent of earners took home a record 19.3 per cent of pre-tax income - the largest share since 1927 

Record breaking: The top 1 per cent of earners took home  a record 19.3 per cent of pre-tax income – the largest share since  1927



Escalating wealth: For the past three decades the only growing economic disparity has been between the top 1 per cent of earners in America, and everybody else 

Escalating wealth: For the past three decades the only  growing economic disparity has been between the top 1 per cent of earners in  America, and everybody else


But until last year, the top 1 per cent’s  share of pre-tax income hadn’t surpassed the 18.7 per cent it reached in 1927,  according to an analysis of IRS figures dating to 1913 by economist Emmanuel  Saez of the University of California, Berkeley, and three colleagues.

Saez wrote that 2012 incomes of the richest  Americans might have surged in part because they cashed in stock holdings to  avoid higher capital gains taxes that took effect in January.

The nation’s top 1 per cent have been the  targets of resentment in recent years which was manifested in the Occupy Wall  Street movement that started in September 2011.

The movement started in New York’s Zuccotti  Park, and thousands camped out and marched for months calling for wide-reaching  change in the capitalist system.

The adopted chant was ‘We are the 99 per  cent’ and the movement spread to cities throughout the U.S.

Richer: Microsoft founder Bill Gates is definitely a member of the 1 per cent in the U.S. This past May he regained the title of 'World's Richest Man' 

Richer: Microsoft founder Bill Gates is definitely a  member of the 1 per cent in the U.S. This past May he regained the title of  ‘World’s Richest Man’


A report by the Congressional Budget Office  found that the income inequality in the U.S. had not risen dramatically over the  past 20 years, except when it came to the top 1 per cent.

Their earnings went up astronomically while  all the other percentiles remained relatively the same.

The Occupy Wall Street movement has largely  fizzled out now, since the group was kicked out of Zuccotti Park. But they  continue to hold marches.

Last September, they marked the one-year  anniversary of the movement by returning to Zuccotti Park and 185 people were  arrested across the city that day

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IRS agent in charge of Cincinnati Exempt Organizations during tax exemptions scandal has been promoted

  • Cindy Thomas has been promoted to the  senior technical team for the Director of Exempt  Organizations
  • Thomas was in charge of the Exempt  Organizations Office in Cincinnati when political groups were targeted for extra  scrutiny
  • Thomas is filling a role left vacant when  a sixth senior IRS staff member quit recently
  • She has not been called to testify to  Congress on the issue

By  Alex Greig

PUBLISHED: 14:14 EST, 10  August 2013 |  UPDATED: 14:14 EST, 10 August 2013

The IRS agent in charge of the Exempt  Organizations Office in Cincinnati at a time when political groups were targeted  for extra scrutiny has just received a promotion.

Cindy Thomas, a 35-year IRS veteran, has been  appointed to the senior technical adviser team for the Director of Exempt  Organizations.

The position became available after Sharon  Light, who worked closely with Lois Lerner, left the organization. She was the  sixth senior IRS official to leave since the scandal broke three months ago.

New job: Cindy Thomas, pictured, was the program manager of the IRS tax-exempt organizations determinations division and has now been promoted to the senior technical adviser team 

New job: Cindy Thomas, pictured, was the program manager  of the IRS tax-exempt organizations determinations division and has now been  promoted to the senior technical adviser team


Light left the job to take up a position with  the American Cancer Society.

Lerner is the embattled former head of the  IRS Exemptions Office who has been called upon to testify before the House  Oversight and Government Reform Committee.

She is on administrative leave from the  organization while investigations are ongoing, according to various media  reports.

Testify: Lois Lerner (pictured) who headed the division that oversees exempt organizations invoked the Fifth Amendment before Congress recently when questioned about IRS practices  

Testify: Lois Lerner (pictured) who headed the division  that oversees exempt organizations invoked the Fifth Amendment before Congress  recently when questioned about IRS practices


Kenneth Corbin, who has taken up Lerner’s  position, wrote in an email to employees:

‘Cindy brings a strong background in EO  Determinations and the history of the organization,’

‘And, since she is located in Cincinnati,  she will provide a voice for the process and challenges faced in determinations  work.’

According to  a Fox News report, Thomas was the person in charge  of IRS workers who dragged their feet on tax-exemption approvals.

‘When an application for tax exempt status  comes into the IRS, agents have 270 days to work through that application. If  the application is not processed within those 270 days it automatically triggers  flags in the system.

‘So who in the chain of command would have  received all these flags? The answer, according to the IRS directory, is one  woman in Cincinnati, Cindy Thomas, the Program Manager of the Tax Exempt  Division,’ reported Fox News.

Chain of command: Fox News created this graphic to show that Thomas was in charge of employees who sent probing letters to political groups 

Chain of command: Fox News created this graphic to show  that Thomas was in charge of employees who sent probing letters to political  groups


Death and taxes: The IRS has come under scrutiny over the past three months since it was revealed the organization may unfairly target political groups applying for tax exemptions 

Death and taxes: The IRS has come under scrutiny over  the past three months since it was revealed the organization may unfairly target  political groups applying for tax exemptions


But the question of whether there was any  type of political motivation for the IRS tax exemptions department’s Be On The  Lookout list has not yet been answered.

According to Congressman Elijah Cummings,  transcripts of an interview with an anonymous IRS manager who describes himself  as a ‘conservative Republican’ reveal that the IRS agent told Congressional  investigators he had initiated the targeted reviews without any instruction from  the White House, and that they weren’t politically motivated.

On August 7, Representative Darrell Issa, the  chairman of the House Oversight and Government Reform Committee, requested  documents, including emails between staff at the IRS and the Federal Electoral  Commission, about the ‘inappropriate coordination’ of tax-exempt applications of  various groups.

So far, Cindy Thomas has not been called to  appear before Congress.

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Report: IRS agents used secret DEA data to make cases against taxpayers, covered up where the info came from

By  David Martosko

PUBLISHED: 15:12 EST, 8  August 2013 |  UPDATED: 15:15 EST, 8 August 2013



An outdated version of a manual distributed  to Internal Revenue Service agents showed them how to hide the origin of  intelligence on taxpayers that came from a secretive database built by the Drug  Enforcement Agency.

The DEA program, operated by its clandestine  Special Operations Division (SOD), includes information collected by the  National Security Agency. It made front-page news on Monday when Reuters  reported that it funnels intelligence including overseas intercepts, domestic  wiretaps and statements from informants to other law enforcement agencies, which  use the material to build criminal cases against Americans.

One controversial element of the program  involves the government’s use of ‘parallel construction’ techniques to recreate  criminal investigations without disclosing that the NEA’s Special Operations  Division provided its launching point.

The IRS’s employee manual, Reuters  reported Thursday, included from 2005 to 2007 a  350-word entry telling agents to bury references to tips from the DEA’s  program.


Only in America: That not-so-friendly IRS audit notice may be the product of a tip from the DEA, whose information includes top-secret NSA intercepts 

Only in America: That not-so-friendly IRS audit notice  may be the product of a tip from the DEA, whose information includes top-secret  NSA intercepts

The DEA's Special Operations Division runs a secretive information-sharing program whose output is routinely concealed by other law enforcement agencies. Reuters redacted this image for what it said were 'security reasons' 

The DEA’s Special Operations Division (SOD) runs a  secretive information-sharing program whose output is routinely concealed by  other law enforcement agencies. Reuters redacted this image for what it said  were ‘security reasons’


DEA regularly works with U.S. Border Patrol agents to build large-scale narcotics cases, but it wasn't widely known until this week that federal drug enforcers also provide secretly-sourced intelligence to the IRS and other agencies 

DEA regularly works with U.S. Border Patrol agents to  build large-scale narcotics cases, but it wasn’t widely known until this week  that federal drug enforcers also provide secretly-sourced intelligence to the  IRS and other agencies

The instructions specifically described  ‘affidavits, court proceedings [and] investigative files’ as off-limits for any  references to DEA-supplied information.


DEA officials have insisted that the  techniques are required to protect their sources, and their purpose is not the  withholding of evidence.

‘Special Operations Division has the ability  to collect, collate, analyze, evaluate, and disseminate information and  intelligence derived from worldwide multi-agency sources, including classified  projects,’ the IRS manual read until the agency withdrew it from an online  location in 2007.


When the document was first published in  2005, it noted that the U.S. Justice Department ‘closely guards the information  provided by SOD with strict oversight,’ and restricted its information to  drug-investigation purposes.

But DEA officials told Reuters that the SOD’s  role was more recently expanded to include investigations into organized crime  and money laundering.


The DEA's program encourgaes the use of 'parallel construction' techniques, which extend far beyond intelligence gathering 

The DEA’s program encourgaes the use of ‘parallel  construction’ techniques, which extend far beyond intelligence gathering. Its  use, legal experts say, raises fundamental questions about whether the  government is concealing information used to investigate and help build criminal  cases against Americans

The manual instructed IRS agents to use tips  from the DEA to find new, ‘independent’ evidence against criminal  targets.

‘Usable information regarding these leads  must be developed from such independent sources as investigative files,  subscriber and toll requests, physical surveillance, wire intercepts, and  confidential source information,’ the manual read.

House Oversight Committee Chairman Darrell Issa and other Republicans have been investigating the IRS for months, and the new revelations could provide new fuel to that fire 

House Oversight Committee Chairman Darrell Issa and  other Republicans have been investigating the IRS for months, and the new  revelations could provide new fuel to that fire

‘Information obtained from SOD in response to  a search or query request cannot be used directly in any  investigation.’

Neither the DEA nor the IRS would talk to  Reuters about the controversial technique. MailOnline contacted both agencies  with questions but received no reply.

Rep. Mike Rogers, a  Michigan Republican who chairs the House Intelligence Committee,  criticized the ‘parallel construction’ program during an appearance on former  Arkansas Gov. Mike Huckabee’s talk radio program.

‘If they’re recreating a trail, that’s wrong  and we’re going to have to do something about it,’ Rogers, a former FBI agent,  said.

‘We’re working with the DEA and intelligence  organizations to try to find out exactly what that story is.’

Kentucky Sen. Rand Paul, a libertarian-minded  potential 2016 presidential candidate, told Reuters that he was concerned about  DEA agents ‘trying to cover up a program that investigates  Americans.’

‘National security is one of government’s  most important functions,’ Paul said. ‘So is protecting individual  liberty.

‘If the Constitution still has any sway, a  government that is constantly overreaching on security while completely  neglecting liberty is in grave violation of our founding doctrine.’

MailOnline reported Tuesday that the DEA program is also  sending information to local police departments, helping them build petty drug  cases against small-time narcotics dealers and other minor  defendants.

Reuters explained that IRS agents are 'under direct orders to not disclose' that a DEA program was involved in the cases they build 

Reuters explained that IRS agents are ‘under direct  orders to not disclose’ that a DEA program was involved in the cases they build.  Instead they provide a ‘plausible story that creates a new investigative trail’  which won’t lead ‘back to the secret source’



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IRS lawyer says scandal was overseen by D.C., names names

Posted By Patrick Howley On 9:32 PM  07/17/2013 In Politics

Top IRS officials in Washington, D.C. planned and oversaw the agency’s improper targeting of conservative groups, according to the 72-year old retiring IRS lawyer who will testify Thursday before the House Oversight Committee.

Retiring IRS lawyer Carter C. Hull implicated the IRS Chief Counsel’s office, headed by Obama appointee William J. Wilkins, and Lois Lerner, the embattled head of the IRS’ exempt organizations office, in the IRS targeting scandal and made clear that the targeting started in Washington, according to leaked interviews that Hull granted to the Oversight Committee in advance of Thursday’s hearing.

Treasury Inspector General J. Russell George will return to Republican chairman Darrell Issa’s committee Thursday along with two central characters in the IRS saga: Hull and Cincinnati-based IRS employee Elizabeth Hofacre, who previously gave Hull’s name to congressional investigators, fingering him as her Washington-based supervisor.

Hull is naming names.

“In April 2010, Mr. Hull was instructed to scrutinize certain Tea Party applications by one of his superiors in Washington. According to Mr. Hull, these applications were used as ‘test’ cases and assigned to him because of his expertise and because IRS leadership in Washington was ‘trying to find out how [the IRS] should approach these organizations, and how [the IRS] should handle them,’” according to Oversight Committee documents.

“According to Hull’s testimony, Ms. Lerner…gave an atypical instruction that the Tea Party applications undergo special scrutiny that included an uncommon multi-layer review that involved a top advisor to Lerner as well as the Chief Counsel’s office,” according to Oversight Committee documents.

In August 2012, the “Chief Counsel’s office held a meeting with Mr. Hull, Ms. Lerner’s senior advisor, and other Washington officials to discuss these test applications.”

Lerner eventually told Hull that tea party applications would have to go through a round of review at the IRS Chief Counsel’s office, which “created a bottleneck and caused the delay of other Tea Party applications in Cincinnati,” according to Oversight Committee documents.

Former IRS official Michael Seto also told investigators about an email Lerner sent laying out her new review process, in which tea party applications would have to go through her staff, according to Oversight documents.

As The Daily Caller reported, Hull instructed Hofacre’s Cincinnati office, which oversaw audits of tax-exempt nonprofit groups, to target tea party groups and provided her a copy of a letter he wrote to a conservative group requesting additional information in an audit. Hull signed a May 12, 2010 letter to the Albuquerque Tea Party, grilling the group on the recent content of its newsletters and its website.

“I was essentially a front person, because I had no autonomy or no authority to act on [applications] without Carter Hull’s influence or input,” Hofacre told congressional investigators.

Hull is retiring from the IRS this summer, and he recently took down his Facebook page after he was publicly exposed.

Hull’s interviews indicate that he is unlikely to plead the Fifth, as some lawyers involved in the scandal were expecting.

“The big question here is: will Carter Hull plead the Fifth?” Jordan Sekulow, executive director of the American Center for Law and Justice (ACLJ), which represents tea party plaintiffs in a class-action suit against the IRS, told the Daily Caller prior to the leaking of his interview transcripts. “We have letter after letter from him proving that he targeted tea party groups. Will he acknowledge the existence of these letters? Or will he do what Lois Lerner did and plead the Fifth?”

“In her case, unsuccessfully,” Sekulow added.

Lerner, the Washington-based IRS official who originally apologized on behalf of the agency in May, attempted to plead the Fifth Amendment in an Oversight hearing, but committee members, led by Republican chairman Darrell Issa, ruled that she had already waived her Fifth Amendment rights by making a statement in a hearing attesting to her innocence.

It is unclear at this time whether Hull and Hofacre ever met in person prior to Thursday’s hearing.

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IRS published online thousands of Social Security numbers

Published time: July 08, 2013 19:41                                                                            

AFP Photo / Karen BleierAFP Photo / Karen Bleier

The Internal Revenue Service mistakenly exposed as many as 2,319 Social Security numbers by posting them on the Internet, which a California-based archivist discovered last week.

The IRS has already come under scrutiny for targeting  conservative political groups more frequently for audits and   wasting  millions of dollars on luxury hotels, alcohol, parody videos and  tickets to sports games. The latest allegations against the IRS  serve as further embarrassment to an agency that has been under  fire for months.

Archivist Carl Malamud of Bulk Resource has long requested that  the IRS publicly release transaction documents of nonprofit  political groups, which are known as 527s, to allow the public to  monitor the spending of charities and other such organizations.  The tax forms that these nonprofit groups are required to file  are then added to a database, which the IRS has often sent to  Malamud for release on his website,

But the IRS told Malamud to disregard the Form 990-Ts, which it  had including in its January release. This update contained more  than 3,000 tax returns, about 319 of which contained sensitive  data, including Social Security numbers.

Once noticed  that the files contained sensitive information on July 2, they  were immediately removed from the site and replaced with a new  version. Bulk Resource contacted senior White House officials to  notify them of the privacy violations, but the administration did  not remove the files from public view until July 3, leaving them  available for nearly a full day.

“The IRS has a policy that even in an emergency, their staff  are not allowed to use e-mail to communicate with organizations  such as ours, a policy that makes it much harder to respond to  incidents quickly,” Malamud wrote in a press release. “The  IRS has recklessly violated the privacy of Americans and  deliberately tried to keep scrutiny away from our worst  charities.”

He noted that IRS data security efforts are “unprofessional  and amateur,” and is now urging the agency to shut down  access to its 527 database to prevent the potential release of  any more private information that may be in the documents.

In a report filed to the inspector general’s office, Malamud said  that four unique IP addresses had clicked on the documents a  total of eight times, but that no privacy complaints had been  made. It remains unclear whether or not any identity thieves took  advantage of the information before it was taken off the  Internet.

“It is time now for the administration to send a tiger team  over to the I.R.S. to help fix their information management  practices,” Malamud wrote. “The I.R.S. has indulged too  often in bad Information Technology and this habit has become  ingrained in the culture and procedures of the Service. It is  time now for the I.R.S. to admit that it needs help. That is the  first step towards recovery.” has  long worked to make nonprofit tax returns more accessible, and  launched its effort at the request of Internet activist and  computer programmer Aaron Swartz, who committed suicide in  January. But the group believes that by mistakenly releasing  Social Security numbers, the IRS has proven its unprofessional  manner and conducted a “serious violation of federal law.”


U.S. Postal Service Logging All Mail for Law Enforcement

July 3, 2013




WASHINGTON — Leslie James Pickering noticed something odd in his mail last September: a handwritten card, apparently delivered by mistake, with instructions for postal workers to pay special attention to the letters and packages sent to his home.

“Show all mail to supv” — supervisor — “for copying prior to going out on the street,” read the card. It included Mr. Pickering’s name, address and the type of mail that needed to be monitored. The word “confidential” was highlighted in green.

“It was a bit of a shock to see it,” said Mr. Pickering, who with his wife owns a small bookstore in Buffalo. More than a decade ago, he was a spokesman for the Earth Liberation Front, a radical environmental group labeled eco-terrorists by the Federal Bureau of Investigation. Postal officials subsequently confirmed they were indeed tracking Mr. Pickering’s mail but told him nothing else.

As the world focuses on the high-tech spying of the National Security Agency, the misplaced card offers a rare glimpse inside the seemingly low-tech but prevalent snooping of the United States Postal Service.

Mr. Pickering was targeted by a longtime surveillance system called mail covers, a forerunner of a vastly more expansive effort, the Mail Isolation Control and Tracking program, in which Postal Service computers photograph the exterior of every piece of paper mail that is processed in the United States — about 160 billion pieces last year. It is not known how long the government saves the images.

Together, the two programs show that postal mail is subject to the same kind of scrutiny that the National Security Agency has given to telephone calls and e-mail.

The mail covers program, used to monitor Mr. Pickering, is more than a century old but is still considered a powerful tool. At the request of law enforcement officials, postal workers record information from the outside of letters and parcels before they are delivered. (Opening the mail would require a warrant.) The information is sent to the law enforcement agency that asked for it. Tens of thousands of pieces of mail each year undergo this scrutiny.

The Mail Isolation Control and Tracking program was created after the anthrax attacks in late 2001 that killed five people, including two postal workers. Highly secret, it seeped into public view last month when the F.B.I. cited it in its investigation of ricin-laced letters sent to President Obama and Mayor Michael R. Bloomberg. It enables the Postal Service to retrace the path of mail at the request of law enforcement. No one disputes that it is sweeping.

“In the past, mail covers were used when you had a reason to suspect someone of a crime,” said Mark D. Rasch, who started a computer crimes unit in the fraud section of the criminal division of the Justice Department and worked on several fraud cases using mail covers. “Now it seems to be, ‘Let’s record everyone’s mail so in the future we might go back and see who you were communicating with.’ Essentially you’ve added mail covers on millions of Americans.”

Bruce Schneier, a computer security expert and an author, said whether it was a postal worker taking down information or a computer taking images, the program was still an invasion of privacy.

“Basically they are doing the same thing as the other programs, collecting the information on the outside of your mail, the metadata, if you will, of names, addresses, return addresses and postmark locations, which gives the government a pretty good map of your contacts, even if they aren’t reading the contents,” he said.

But law enforcement officials said mail covers and the automatic mail tracking program are invaluable, even in an era of smartphones and e-mail.

In a criminal complaint filed June 7 in Federal District Court for the Eastern District of Texas, the F.B.I. said a postal investigator tracing the ricin letters was able to narrow the search to Shannon Guess Richardson, an actress in New Boston, Tex., by examining information from the front and back images of 60 pieces of mail scanned immediately before and after the tainted letters sent to Mr. Obama and Mr. Bloomberg showing return addresses near her home. Ms. Richardson had originally accused her husband of mailing the letters, but investigators determined that he was at work during the time they were mailed.

In 2007, the F.B.I., the Internal Revenue Service and the local police in Charlotte, N.C., used information gleaned from the mail cover program to arrest Sallie Wamsley-Saxon and her husband, Donald, charging both with running a prostitution ring that took in $3 million over six years. Prosecutors said it was one of the largest and most successful such operations in the country. Investigators also used mail covers to help track banking activity and other businesses the couple operated under different names.

Other agencies, including the Drug Enforcement Administration and the Department of Health and Human Services, have used mail covers to track drug smugglers and Medicare fraud.

“It’s a treasure trove of information,” said James J. Wedick, a former F.B.I. agent who spent 34 years at the agency and who said he used mail covers in a number of investigations, including one that led to the prosecution of several elected officials in California on corruption charges. “Looking at just the outside of letters and other mail, I can see who you bank with, who you communicate with — all kinds of useful information that gives investigators leads that they can then follow up on with a subpoena.”

But, he said: “It can be easily abused because it’s so easy to use and you don’t have to go through a judge to get the information. You just fill out a form.”

For mail cover requests, law enforcement agencies submit a letter to the Postal Service, which can grant or deny a request without judicial review. Law enforcement officials say the Postal Service rarely denies a request. In other government surveillance programs, like wiretaps, a federal judge must sign off on the requests.

The mail cover surveillance requests are granted for about 30 days, and can be extended for up to 120 days. There are two kinds of mail covers: those related to criminal activity and those requested to protect national security. Criminal activity requests average 15,000 to 20,000 per year, said law enforcement officials, who spoke on the condition of anonymity because they are prohibited by law from discussing them. The number of requests for antiterrorism mail covers has not been made public.

Law enforcement officials need warrants to open the mail, although President George W. Bush asserted in a signing statement in 2007 that the federal government had the authority to open mail without warrants in emergencies or in foreign intelligence cases.

Court challenges to mail covers have generally failed because judges have ruled that there is no reasonable expectation of privacy for information contained on the outside of a letter. Officials in both the Bush and Obama administrations, in fact, have used the mail-cover court rulings to justify the N.S.A.’s surveillance programs, saying the electronic monitoring amounts to the same thing as a mail cover. Congress briefly conducted hearings on mail cover programs in 1976, but has not revisited the issue.

The program has led to sporadic reports of abuse. In May 2012, Mary Rose Wilcox, a Maricopa County supervisor in Arizona, was awarded nearly $1 million by a federal judge after winning a lawsuit against Sheriff Joe Arpaio. The sheriff, known for his immigration raids, had obtained mail covers from the Postal Service to track her mail. The judge called the investigation into Ms. Wilcox politically motivated because she had been a frequent critic of Mr. Arpaio’s, objecting to what she considered the targeting of Hispanics in his immigration sweeps. The case is being appealed.

In the mid-1970s the Church Committee, a Senate panel that documented C.I.A. abuses, faulted a program created in the 1950s in New York that used mail covers to trace and sometimes open mail going to the Soviet Union from the United States.

A suit brought in 1973 by a high school student in New Jersey, whose letter to the Socialist Workers Party was traced by the F.B.I. as part of an investigation into the group, led to a rebuke from a federal judge.

Postal officials refused to discuss either mail covers or the Mail Isolation Control and Tracking program.

Mr. Pickering says he suspects that the F.B.I. requested the mail cover to monitor his mail because a former associate said the bureau had called with questions about him. Last month, he filed a lawsuit against the Postal Service, the F.B.I. and other agencies, saying they were improperly withholding information.

A spokeswoman for the F.B.I. in Buffalo declined to comment.

Mr. Pickering said that although he was arrested two dozen times for acts of civil disobedience and convicted of a handful of misdemeanors, he was never involved in the arson attacks the Earth Liberation Front carried out. He said he became tired of focusing only on environmental activism and moved back to Buffalo to finish college, open his bookstore, Burning Books, and start a family.

“I’m no terrorist,” he said. “I’m an activist.”

Mr. Pickering has written books sympathetic to the liberation front, but he said his political views and past association should not make him the target of a federal investigation. “I’m just a guy who runs a bookstore and has a wife and a kid,” he said.

This article has been revised to reflect the following correction:

Correction: July 3, 2013

An earlier version of this article misstated the Justice Department position once held by Mark Rasch. He started a computer crimes unit in the criminal division’s fraud section, but he was not the head of its computer crimes unit, which was created after his departure.


IRS accused of granting $500 mln in suspicious contracts to a small business called Strong Castle founded in 2011

Published time: June 26, 2013 16:47                                                                            

Women walk out of an Internal Revenue Service office in New York (Reuters)Women walk out of an Internal Revenue Service office in New York (Reuters)

A Virginia IT company inappropriately secured $500 million worth of IRS contracts based on false statements and ties to an agency official, according to a congressional staff report released on Tuesday.

The House Oversight and Government Reform Committee released a  report accusing an Internal Revenue Service employee of procuring  inappropriate contracts for a small business called Strong  Castle, which was founded in 2011 by a man named Braulio  Castillo.

In 2012, Castillo received more than $500 million in IRS awards  for his technology firm and a mere $465,780 from other federal  government agencies. The report accuses IRS deputy director Greg  Roseman, a close friend of Castillo’s, of “influencing the  selection process” to benefit his friend.

“The IRS – where Strong Castle received well over 99 percent  of its 2012 revenues – employs Castillo’s long-time friend, Greg  Roseman, who oversaw each and every contract awarded to Strong  Castle by the IRS in 2012,” the report’s authors wrote.

The congressional committee also found that before launching the  IT company, Castillo filed for “disability rating” with the  Veterans Administration, claiming he suffered from a foot injury  he obtained at a military prep school in 1984. The rating  qualified Strong Castle as a “service-disabled, veteran-owned  small business,” which gave it preferential treatment in bidding  competitions. But Castillo never served on active duty, and  played college sports after the alleged injury.

“The case of Strong Castle and its cozy relationship with the  IRS is but one example of a deeply flawed procurement process in  the federal government,” the report says.

The congressional committee on Wednesday summoned  Roseman to interrogate him about the IRS contracts and his  relationship with Castillo.

“Mr. Roseman, when did you first become aware of a company  called Strong Castle Inc.?” Chairman Darrell Issa (R-Calif.)  asked the IRS employee.

Roseman invoked his Fifth Amendment right to remain silent and  refused to answer any questions. He has been removed from his  position as IRS deputy director pending the outcome of an  inspector general investigation into the contracts.

Strong Castle denies any wrongdoing and claims that it obtained  the contracts legally.

“Throughout our work with the IRS, we have never received any  improper preferential treatment and have competed fairly for  every contract that we have received,” the company told  Reuters in a statement.

But the report claims Castillo and Roseman met in 2003,  frequently exchanged phone calls and text messages, and formed a  long-lasting friendship. Upon the launch of Strong Castle,  Roseman sent Castillo a congratulatory text message which stated,   “U will be fortune 500 in no time.”

Issa started a probe into the potentially-inappropriate  contracting in February, and believes that there is “at least  an appearance of impropriety between the two men.”

“The IRS and Strong Castle have made a mockery of fair and  open competition for government contracts,” Issa said in a  statement.

Swiss Govt rejects deal, won’t let US Govt see Bank Accts….


Wednesday, 19 June 2013

Swiss parliament rejected a bill designed to resolve a dispute over undeclared bank accounts held by U.S. citizens, potentially setting the stage for American prosecution of the country’s banks.

Members of parliament’s lower house voted 123 to 63 against the bill, which would have allowed Swiss banks to cooperate with the U.S. and to settle a long-running dispute over wealthy American tax evaders. The government has said it has no plan B, in the event of the bill failing to pass.

Switzerland wants to prevent the indictment of another of the country’s banks. Wegelin & Co. was indicted last year and pleaded guilty in January to helping U.S. taxpayers hide assets from the Internal Revenue Service. The bank had taken over clients from UBS AG, which avoided prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over client names.

“I don’t think the Americans will really start a wave of indictments — such a scenario is unlikely,” said Peter V. Kunz, a professor of comparative law at the University of Bern. “I do however think one or other banker could face charges. But no one really knows. The legal risks and the legal uncertainties will remain for the Swiss financial sector. How it all will end is totally up in the air.”


IRS spent more than $121 million on travel charge cards for employees and ‘leniently’ disciplined those who abused them: Report

  • Report finds that more than 1,000 IRS  employees abused their government-issued charge cards
  • IRS officials demonstrated a pattern of  being overly lenient when  punishing employees who misused charge cards, or who  failed to pay their bill on time

By  Daily Mail Reporter

PUBLISHED: 13:50 EST, 14  June 2013 |  UPDATED: 13:50 EST, 14 June 2013

A recently released report by the Treasury  Inspector General for Tax Administration finds that in fiscal years 2010 and  2011, more than 1,000 employees at the Internal Revenue Service misused  Citybank-issued charge cards designated to pay for employees’ work-related  expenses. During those same fiscal years, the report finds that IRS employees  issued approximately 325 bad checks to Citybank to pay the balance on the charge  cards.

Additionally, the report concluded that IRS  officials demonstrated a pattern of being overly lenient when punishing  employees who misused the charge cards, or who failed to pay their bill on  time.

The IRS spent $121 million in travel expenses for its employees in one year 

The IRS spent $121 million in travel expenses for its  employees in one year

‘Of particular concern is the fact that the  IRS ask taxpayers to  voluntarily pay taxes owed in a timely manner and yet was  more tolerant  when its employees became delinquent and defaulted on outstanding  payments, violated the terms of the Citibank contract, abused a  Government-provided resource (travel funding), and compromised the  integrity  of the IRS,’ the report notes.

In other words, the report finds that  oftentimes when employees at the agency – which drops the hammer on citizens who  don’t pay their taxes in a timely  manner – fail to pay their bill or abuse a  charge card, they aren’t punished to nearly the same degree as average citizens  who are late on their taxes.


In 1998, then-President Bill Clinton  signed  a law that requires federal employees to use a ‘government-issued travel charge  card’ to pay for most job-related travel. IRS employees  use Citybank cards,  which are billed in one of two ways: directly, or  centrally.

For centrally  billed cards, the bank bills  the IRS directly. For directly billed  cards, the bank bills individual  employees, who are then reimbursed by  the IRS.

Employees are not permitted to use the cards  for anything other than IRS-related travel expenses.

The report finds that while the IRS is  generally effective in controlling  how the cards are used, ‘in some instances  controls were not implemented effectively, which  increased the risk for misuse  and resulted in some travel card misuse  going undetected.’

'Do as I say, not as I do': the IRS is lenient towards its employees who abuse government-issued charge cards, or who can't pay their bill on time 

‘Do as I say, not as I do’: the IRS is lenient towards  its employees who abuse government-issued charge cards, or who can’t pay their  bill on time

Examples of card misuse include, among other  things, use of the card by someone other than the cardholder, use while not on  official travel, purchases from an  unauthorized merchant and failure to pay on  time.

According to the report, obtained by, ’15  cardholders with either secret or top-secret clearances had their  travel  accounts suspended due to their failure to pay outstanding  balances. Two other  cardholders with secret and  top-secret clearances presented NSF [non-sufficient  funds] checks to  Citibank for payment of their travel card balance.’

Additionally, ’94 cardholders serving public  trust positions requiring moderate and  high-level background checks wrote one  or more NSF checks, and 36 had  their accounts charged off [written off as a  loss by Citibank] due to  their failure to pay outstanding balances.


‘For example,’ the report states, ‘a tax  compliance officer wrote seven NSF  checks in FY 2011 while occupying a position  that required a  moderate-risk background investigation.’

By the end of 2011, 51,974 IRS employees had  their own Citybank travel cards. In all, they ran up a $121 million bill, which  is paid for by taxpayers.

To get an idea of how the IRS punished those  who abused the card, the IG’s Office examined 30 cases of travel card misuse and  determined that officials are very lenient when disciplining abusers.

‘While the CCS Branch correctly referred  misuse cases to Labor  Relations, disciplinary actions against employees were  typically less  severe than those recommended by the IRS’s penalty guidelines in  approximately half of the 30 cases reviewed,” according to the  report.

The report also determined that ‘the IRS  lacked standard policies for  referring employees who misused their travel cards  to security personnel to determine if background checks, security clearances,  and suitability for employment determinations required reevaluation. As a  result,  employees who wrote NSF checks or had suspended or charged-off accounts  received little or no disciplinary action in response to their misuse  and did  not have their background clearances reevaluated for suitability for  employment.’

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The spy who came in for your soul – ” We are, like, that far from a turnkey totalitarian state.”

COLUMN – The spy who came in for your soul

Source: Reuters – Sun, 9 Jun 2013 08:00 PM

Author: Reuters

(Jack Shafer is a Reuters columnist but his opinions are his own.)

By Jack Shafer

June 9 (Reuters) – Leaks to the press, like hillside rain tugged seaward by gravity, gather momentum only if the flow is steadily replenished.

After a major leak to the Guardian’s Glenn Greenwald resulted in a scoop Wednesday about the National Security Agency’s harvesting of phone records, reporters instantly mined their back pages for leads and rang up their sources to amplify and extend his story, and went looking for leakers of their own. In other words, the press pack prayed for rain.

But before that scoop had run its course, Greenwald (and Ewen MacAskill) went to press with another revelation about the NSA’s Prism program, which collects email, chat, VOIP conversations, file transfers, photos, videos and more from Web users. A similar Washington Post piece by Barton Gellman and documentary filmmaker Laura Poitras beat the Guardian duo by a few minutes, a downpour in a very short time. The Guardian-Post overlap was so pronounced that it’s likely the two publications were nurtured by the same source, identified in the Post as “a career intelligence officer.”

Friday afternoon, Greenwald and MacAskill dropped another bombshell about Obama’s cyberattack plans in the Guardian. These aren’t leaks. This is a flood.

Faster than you can say evaporation-condensation-precipitation, I expect this week’s expos?s to produce additional investigations that will produce more leaks and further scoops about our digital records. This will now fuel new cycles of reporting, leaks and scoops – and another, and another – as new sources are cultivated and reportorial scraps gathering mold in journalists’ notebooks gain new relevance and help break stories.

Greenwald’s storm will continue to rage because, I suspect, the story won’t be limited to just phone records or Web data. Ultimately, it will be about the government’s pursuit of all the digital breadcrumbs we produce as necessary byproducts of day-to-day life – and phone records and Web data are just a small part.

Bank records, credit history, travel records, credit card records, EZPass data, GPS phone data, license-plate reader databases, Social Security and Internal Revenue Service records, facial-recognition databases at the Department of Motor Vehicles and elsewhere, even 7-Eleven surveillance videos comprise information lodes that are of equal or greater value to the national security establishment than phone and Web files. It doesn’t sound paranoid to conclude that the government has reused, or will reuse, the interpretation of the Patriot Act it presented to the secret FISA court in its phone record and Prism data requests to grab these other data troves.

Lest I sound like a Fourth Amendment hysteric, I understand there’s nothing automatically sacrosanct about any of the digital trails we leave behind. Lawful subpoenas can liberate all sorts records about you, electronic or otherwise.

What’s breathtaking about these two government surveillance programs that the Guardian and the Washington Post have revealed is that they’re vast collections of data about hundreds of millions of people suspected of no wrongdoing and not part of any civil action. Defending the phone-record cull, National Intelligence Director James R. Clapper explained this week that smaller sets of information aren’t very useful in screening for and identifying “terrorism-related communications,” hence all must collected.

Besides, as the government and its supporters insist, phone-record metadata does not include the names of individuals or organizations connected to the phone numbers (and government eavesdropping isn’t part of the operation).

I won’t belabor the point made better in scores of venues this week about how massive phone-record sets can be manipulated to produce revelatory information about individuals. Not even a saint could resist the siren call to combine data sets and use them in impermissible ways for “the good of the people.”

Even before governments start to combine data, it knows too much about you. Once it gets started, it can know practically everything worth knowing. A former NSA employee captured the grand scheme succinctly last year when he told Wired magazine, “We are, like, that far from a turnkey totalitarian state.”

Daniel J. Solove, who has been beavering away at privacy issues for some time, addresses what he calls the “exclusion” problem posed by the government’s massing of personal data.

He writes:

“Many government national-security measures involve maintaining a huge database of information that individuals cannot access. Indeed, because they involve national security, the very existence of these programs is often kept secret. This kind of information processing, which blocks subjects’ knowledge and involvement, is a kind of due-process problem. It is a structural problem, involving the way people are treated by government institutions and creating a power imbalance between people and the government. To what extent should government officials have such a significant power over citizens? This issue isn’t about what information people want to hide but about the power and the structure of government.”

Journalists love nothing more than to learn and share secrets, which, with the Guardian and the Washington Post as our guides, appear to be in ample supply.

If anything, journalists are fully vested in maintaining their constitutional rights to ask questions, associate freely, and speak and write their minds. If journalists react strongly to government intrusions – even well-meaning intrusions intended to protect us from acts of terrorism – it’s because we’re too intimate with the misuse of power and regard most government secrets as measures designed to displace freedom in favor of security.

Or as a character in David Hare’s film “Page Eight” put it disparagingly, “We can’t be free because we have to be safe.”

The only thing that beats leakers is a long, hard freeze. In my experience, fire beats ice every time.

(Jack Shafer is a Reuters columnist covering the press and politics.)

(Jack Shafer)

US Media not allowed to report on Obama scandals?


Thursday, 06 June 2013

As reported be John Nolte:

Well, if it is Thursday, there must be a new Obama scandal. But one thing is for damn sure, whatever that scandal is, you can bet the American mainstream media will be playing catch up and not carrying the glory of breaking a story about a major White House scandal.

Fact: Over the past few weeks, four major scandals have broken over the Obama administration, and it is a very sad (and frightening) truth that our pathetic, American, lapdog mainstream media is not responsible for breaking even a single one.

Verizon? Nope, not our guys. That was the Brits over at The Guardian.

IRS? Nope, not our guys. The IRS broke their own scandal with a planted question.

The Justice Department’s seizure of Associated Press phone records? Nope, not our guys. Believe it or not, the Associated Press didn’t even break that story. Like the IRS, we only found out because the Justice Department outted itself in a letter notifying the AP of what it had done.

Benghazi? Are you kidding. With a couple of rare exceptions (Jake Tapper, Sharyl Attkisson) the media has spent the last 8 months attacking those seeking the truth (Congress, Fox News) not seeking the truth. It was the GOP congress that demanded the email exchanges around the shaping of the talking points, not the media.

Left up to the media, we wouldn’t know anything about Libya. All of the media’s energy was collectively poured into ensuring the truth was never discovered.

And do you want to know what makes this realization especially pathetic? In three of the four scandals (the AP being the exception), had our media been less interested in protecting Power and more interested in holding Power accountable, these huge, career-making stories were right there for their taking.

For over a year now, conservative Tea Party groups have been complaining about IRS harassment. But because Obama told them to, the media hate the Tea Party. So in the face of these complaints and even a few Congressional inquiries, the media either ignored the harassment reports or openly sided with the IRS. (No joke. Click the link. )

Obviously, you can say the same about Libya. All the dots were there to connect: Security failures, two weeks of lies, the midnight arrest of some hapless filmmaker… But rather than connect the dots, the media played goalie for Obama against Fox News and Darrell Issa. Besides, there was a re-election to win and Todd Akin got something wrong about The Womanparts.

Moreover, there are still plenty of dots to connect about Libya. But the new SQUIRREL is OVERREACH and already the lapdogs are back in goalie formation.

As far as the Verizon story, members of Congress, specifically Democrat Senators Ron Wyden (OR) and Mark Udall (CO), have been hint-hint-wink-winking to the media that something is horribly amiss going back to December:

In a Senate floor speech in December, Wyden hinted at classified information he had received but could not share due to Senate rules that indicated the law “on Americans’ privacy has been real, and it is not hypothetical.”

“When the public finds out that these secret interpretations are so dramatically different than what the public law says, I think there’s going to be extraordinary anger in the country,” he told The Huffington Post the following month.

That is from today’s Politico report on the Verizon scandal. Apparently, Politico knew of this back in December but had all their investigative researchers digging into why those short-skirted Tea Partiers had it coming, so they missed another one of the biggest stories of the year.

Politico shouldn’t feel bad, though, because when it comes to missing the four biggest scoops of the Obama administration, they have plenty of lazy, lapdog, sycophant company in that department.

Our media is not only biased, it is an utter and complete failure and embarrassment. And although there are plenty of remaining table scraps to make meals out of, the media is already losing interest in the IRS, Libya, and AP scandals, but for only one reason–they are absolutely terrified of where they might lead.

During the Bush years, it was the New York Times, Washington Post and Sy Hersh breaking story after story after story about the White House. And yes, some of that reporting was–ahem –overreach, but at least Power knew it was being watched; our democracy was safe because an overzealous media is what you call a luxury problem.

Today, it is the complete opposite and the result is an administration run amok.

Get down on your knees and thank your Maker for conservative New Media, Roger Ailes, and for the few true liberals left in the media, like Glenn Greenwald–who works for the Brits.

Records: Top official in charge of embattled IRS visited the Obama White House far more than any cabinet official

  • Douglas Shulman made 157 visits to the Obama  White House, while his boss, the treasury secretary, was there only 43  times
  • Congressional staffer on ‘best-case  scenario’: Shulman gave the White House  ‘a heads-up about the possible illegality of what they were doing’
  • White House visitor records may shed new  light on how much the Obama administration knew about the IRS targeting  conservative groups
  • Shulman visited more than the combined total  of the secretaries of energy, defense, education, homeland security, and health  and human services

By  David Martosko In Washington

PUBLISHED: 15:33 EST, 30 May  2013 |  UPDATED: 15:43  EST, 30 May 2013

According to public records of White House  visitors, the IRS commissioner who left office shortly after President Obama’s  re-election visited the White House far more often than any cabinet  official.

Visitor logs show that Douglas Shulman  visited the White House 157 times during his time in the Obama administration.  Those visits included 118 separate appearances at the White House between  January 2010 and December 2011, when the IRS was engaged in targeting tea party  and other conservative groups for special scrutiny when they applied for  tax-exempt status.

Shulman’s predecessor, Mark Everson, made  just one visit to the Bush White House during his four years as IRS commissioner  between 2003 and 2007.

An analysis published by The Daily Caller shows that the White House  has disclosed 62 visits by Attorney General Eric Holder since Obama took office.  Former Treasury Secretary Tim Geithner, Shulman’s superior, made 48 such visits.  Hillary Clinton was in the White House 43 times while she was Secretary of  State.

Douglas Shulman visited the White House far more often than any cabinet official while he was the IRS commissioner, as shown in this chart published by The Daily Caller (reprinted with permission)Douglas Shulman visited the White House far more often  than any cabinet official while he was the IRS commissioner, as shown in this  chart published by The Daily Caller (reprinted with permission)

Former IRS Commissioner Douglas Shulman testified on Capitol Hill on May 22, 2013 before the House Oversight and Government Reform Committee 

Former IRS Commissioner Douglas Shulman testified on  Capitol Hill on May 22, 2013 before the House Oversight and Government Reform  Committee. The hearing was called to investigate the extra scrutiny the IRS gave  to tea party and other conservative groups

Shulman also has more recorded visits to 1600  Pennsylvania Avenue than the 48 logged by Health and Human Services Secretary  Kathleen Sebelius, a key figure in the passage and implementation of Obamacare.  Education Secretary Arne Duncan has been in the White House 31 times. Steven Chu  made 22 visits while he was Secretary of Energy. Former Defense Secretary Robert  Gates visited just 17 times.


Other than Shulman, the official with the  most visits was Rebecca blank, then the acting Secretary of Commerce. After  Blank on the list came Assistant Attorney General Thomas Perez, who has been  nominated to serve as Labor Secretary; and Chicago businesswoman Penny Pritzker,  the president’s recent choice for Commerce.

Mark Everson (2nd from L), the IRS Commissioner during most of the George W. Bush administration, visited the White House just once 

Mark Everson (2nd from L), the IRS Commissioner during  most of the George W. Bush administration, visited the White House just once.  Shown at center is then-Deputy U.S. Attorney General James B. Comey, whom Obama  is expected to tap this week to lead the FBI

President George W. Bush appointed Shulman to  the post in  March 2008 despite his history of donating to the Democratic  National  Committee. Insiders said at the time that picking him was a  conciliatory move to Democrats in the U.S. Senate who said they would refuse to  confirm a conservative.

Shulman left the IRS in November 2012,  shortly after Obama’s  re-election, and years after his agency began unethically  targeting tea  party groups and other right-wing organizations.

Shulman’s White House visits, almost one per  week during a 40-month period, were the subject of questions during a May 22  House Oversight Committee hearing, when Democratic Rep. Gerry Connolly asked him  for ‘some of the reasons you might be at the White House?’

Hillary Clinton visited the White House just 43 times while she was secretary of stateAttorney General Eric Holder made 62 White House visits during the same period of time when Douglas Shulman racked up 157

Hillary Clinton (L) visited the White House just 43  times while she was secretary of state, during the same months when Douglas  Shulman racked up 157. Attorney General Eric Holder made just 62 such  trips

WHO'S THE BOSS? Then-Treasury Secretary Timothy Geithner (R) was Shulman's boss but made just 43 White House visits while his subordinate was there 157 times 

WHO’S THE BOSS? Then-Treasury Secretary Timothy Geithner  (R) was Shulman’s boss but made just 43 White House visits while his subordinate  was there 157 times. Then-Defense Secretary Leon Panetta (L) made even fewer  treks to 1600 Pennsylvania Avenue

Shulman suggested that participating in ‘the  Easter Egg Roll with my kids’ was one explanation, before adding ‘questions  about the administrability of tax policy they were thinking of; our budget; us  helping the Department of Education streamline application processes for  financial aid.’

But one Republican staffer on the Hill told  MailOnline that Shulman’s visits ‘clearly were part of a strategy to give the  White House a heads-up about the possible illegality of what they were doing to  tea party groups.’

‘That’s a best-case scenario,’ added the  staffer, who requested anonymity because he is not authorized to speak publicly  about investigations into executive branch offices.

‘In the worst-case, Shulman could have been  updating the White House on the progress of something the president’s people  proposed in the first place. I mean, the tea party was huge in 2010, and the  Obama machine could have been interested in slowing it down.’

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FACEBOOK censors pictures of children rallying against GMOs

Monday, 27 May 2013

In one of the most devastating acts of destruction of its own credibility, Facebook engaged in yet more censorship of Free Speech with the suspending of an account that posted a photo of children rallying against Monsanto during today’s global March Against Monsanto.

The picture shows two children of US resident Andrea Lalama. They are carrying hand-drawn signs that read:

“ORGANIC FOOD It’s My Medicine – Label GMOs – Say NO to GMO”



After this picture was shared on Facebook by Natural News, Andrea’s account was immediately suspended. Facebook displayed a message on her account which read (see screen capture, below):

“FACEBOOK: You have been restricted from Interacting With Pages until Saturday, June 8, 2013 at 6:47pm.”

Yet another account called “Reversing Autism” was also suspended by Facebook for posting Monsanto march photos. The following screen capture shows the Reversing Autism account being labeled by Facebook as posting content that is “abusive.”

Apart from blocking Ghandi quotes (which is bizarre in the first place), Facebook has also been caught in the outrageous abuse of Free Speech through the censorship of people who have all sorts of non-mainstream views, including people who believe in the U.S. Constitution or the Bill of Rights.

According to Natural News reporter Mike Adams, this Facebook censorship is nothing new, and in light of recent revelations that the U.S. government engaged in an outrageous abuse of power to threaten, intimidate and silence certain groups through the IRS, many people are now questioning whether Facebook actually is part of the government surveillance grid that intentionally suppresses information the government doesn’t want to be seen. //Mike Adams, Natural News


Report: Michelle Obama once dated inspector general at the center of IRS investigation into anti-tea party political favoritism

By  David Martosko

PUBLISHED: 15:33 EST, 22 May  2013 |  UPDATED: 19:45  EST, 22 May 2013


A young Michelle Robinson, the future first  lady of the United States, may have dated Treasury Department Inspector General  J. Russell George at Harvard Law School, a new report claims.

George, 49, has testified in two congressional hearings about the IRS’s unethical targeting of conservative organizations with special scrutiny after they applied for tax-exempt status.

The revelation of a previous link to Michelle  Obama came in a lengthy interview with George – published a week after the IRS  scandal was brought to light.

National Journal reported Wednesday that U.S. Treasury Inspector General for Tax Administration J. Russell George dated first lady Michelle Obama while the two were in law school 

U.S. Treasury Inspector General for Tax Administration  J. Russell George (L) testified before the House Oversight and Government Reform  Committee on Wednesday about IRS abuses of right-wing nonprofit groups. National  Journal reported hours earlier that he had dated the first lady while the two  were in law school

Mrs. Obama (L), equal parts political cohort and marital consort, has become a force to be reckoned with in Washington 

Mrs. Obama (L), equal parts political cohort and marital  consort, has become a force to be reckoned with in Washington

Mrs Obama has never spoken publicly  about  her boyfriends during the years before she met Barack Obama – the  future  president – at a Chicago law firm where they were both  associates.

George and Mrs  Obama, then Michelle Robinson, graduated together from the university in  1988.

He told the National  Journal that the two shared social  circles at Harvard, and were both active in the Black Law Students  Association.


But Virginia Republican Rep Tom Davis, who  worked with George as staff director of the House Oversight committee in the  late 1990s and early 200s – the same committee that questioned George on  Wednesday, said the relationship was more than just friendly.

‘I think he actually dated Michelle at one  point,’ Davis told National Journal.

Pressed about  his purported love interest from a quarter-century ago, George said that  conclusion ‘is overstating it.’

First Lady Michelle Obama is pictured on Wednesday alongside Aidan LeBlanc, a 12-year-old 6th grader dressed as Abraham Lincoln from Willow Springs Elementary School, in Washington 

First Lady Michelle Obama is pictured on Wednesday  alongside Aidan LeBlanc, a 12-year-old 6th grader dressed as Abraham Lincoln  from Willow Springs Elementary School, in Washington

In their early years together, Michelle Robinson and Barack Obama spent a Christmas holiday together in Hawaii. They were married in October 1992 

In their early years together, Michelle Robinson and  Barack Obama spent a Christmas holiday together in Hawaii. They were married in  October 1992, four years after her Harvard Law School graduation

‘Michelle was a lovely person, and down to  earth,’ he said, recalling times when Black Law Student Association members  ‘went out for pizza; we would go out together.’

‘Don’t get me in trouble,’ George told the  Washington newspaper, after ‘pausing for a beat.’

From Harvard, the future Mrs Obama got a job  at a law firm in Chicago, one of just 14 black lawyers in an office of  hundreds.

It is at that firm of Sidley &  Austin  that she met Barack, who arrived as a summer associate in 1988.

For their first date in 1989, Obama took her  to the Art Institute of Chicago and to see the Spike Lee film Do the Right  Thing.

After stopping for ice cream at  Baskin-Robbins, the two shared their first kiss. A plaque now marks the  location.

Kissing plaque: A 3,000-pound granite marker, pictured, was erected to commemorate the where the President first kissed Michele Obama


Kissing plaque: A 3,000-pound granite marker has been  erected in Chicago to commemorate where the president first  kissed Michelle in  1989

Did a young Michelle Robinson catch the eye of the Treasury Inspector General J. Russell George? A Virginia congressman who once worked with him on Capitol Hill remembers it that wayDid a young Michelle Robinson catch the eye of the Treasury Inspector General J. Russell George? A Virginia congressman who once worked with him on Capitol Hill remembers it that way

Did a young Michelle Robinson catch the eye of the  Treasury Inspector General J. Russell George more than four years before she  married the future president? A Virginia congressman who once worked with him on  Capitol Hill remembers it that way

They married in 1992 at the Trinity United  Church of Christ in  Chicago.

George, who was born in New York City,  attended Harvard Law in  between stints working for then-Senator Bob Dole of  Kansas and serving  in the administration of President George H.W. Bush, both  Republicans.

In 1995, he returned to Washington for good  after he took a job at Committee on Government Reform, among other high-profile  positions in government.

He was appointed by President George W. Bush  to serve as inspector general of the Corporation for National and Community  Service before moving on to his current post in 2004.

Mrs Obama’s time at the prestigious  Cambridge, Massachusetts law school put her squarely in the middle of  the  nationwide debates raging about race politics in the 1980s.

J. Russell George (L) testified on May 17 alongside the outgoing acting IRS Commissioner Steve Miller before the House Ways and Means committee 

J. Russell George (L) testified on May 17 alongside the  outgoing acting IRS Commissioner Steve Miller before the House Ways and Means  committee. George wrote the report that officially recounted an audit of the  IRS’s scandalous behavior toward tea party groups

During her final year at Harvard, she wrote  an article for the Black Law Students Association’s newsletter in which she  argued that the school was perpetuating ‘racist and sexist stereotypes’ because  it wasn’t hiring enough minority law professors based on the color of their  skin.

The Daily  Caller first reported on the essay,  in which she wrote that hiring on the sole basis of merit, instead of recruiting  according to affirmative-action principles, ‘serve[d] to legitimize students’  tendencies to distrust certain types of teaching that do not resemble the  traditional images’ of law school.

The future first lady lauded the  teaching  styles of liberal academics Martha Minow and Charles Ogletree,  who ignored the  traditional question-and-answer ‘Socratic method’ in  favor of other habits.


Harvard Law School may have been the ultimate matchmaker society in the late 1980s, connecting Michelle Robinson romantically with future president Barack Obama and the future chief inspector of the Treasury Department 

Harvard Law School may have been the ultimate matchmaker  society in the late 1980s, connecting Michelle Robinson romantically with future  president Barack Obama and the future chief inspector of the Treasury  Department

She also praised critical race theory, the  idea that powerful groups of  people – including caucasians – use the law as an  instrument to oppress  the powerless, including blacks.

Mrs. Obama also wrote a  message for the Harvard Law School’s  yearbook in which she called for greater civility in American  society.

‘After three years,’ wrote the graduating  lawyer-to-be, ‘I continue to be struck by the tremendous talent and energy among  HLS students and faculty.

‘The diversity of campus life challenges all  of us to question our assumptions, listen to other viewpoints, and articulate  our values in a spirit of mutual respect and tolerance.’

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Top IRS official will invoke the Fifth Amendment in congressional hearing about tea party targeting program

By  David Martosko

PUBLISHED: 16:14 EST, 21 May  2013 |  UPDATED: 16:51  EST, 21 May 2013


The Los Angeles Times reported Tuesday  afternoon that Lois Lerner, who heads up the Internal Revenue Service’s  tax-exempt division, plans to invoke the Fifth Amendment to the U.S.  Constitution in a hearing Wednesday before the House Committee on Oversight and  Government Affairs.

The Fifth Amendment provides that U.S.  citizens may not be compelled to offer testimony if telling the truth would  incriminate them.

Lerner’s defense lawyer, William W. Taylor  III, wrote to the committee on Tuesday that his client would refuse to answer  questions related to what she knew about the extra levels of scrutiny applied to  conservative nonprofit organizations that applied for tax-exempt status  beginning in 2010.

Lois Lerner heads the IRS's Exempt Organizations division. Her lawyer says she will plead the Fifth Amendment on Wednesday to avoid answering questions about her agency's tea party scandal during a congressional hearing 

Lois Lerner heads the IRS’s Exempt Organizations  division. Her lawyer says she will plead the Fifth Amendment on Wednesday to  avoid answering questions about her agency’s tea party scandal during a  congressional hearing

IRS headquarters in Washington, D.C. is fast becoming the epicenter of the tea party probe, despite an Inspector General report that focused on employees in Cincinnati, Ohio 

IRS headquarters in Washington, D.C. is fast becoming  the epicenter of the tea party probe, despite an Inspector General report that  focused on employees in Cincinnati, Ohio

She also will decline to say why she didn’t  disclose what she knew to Congress, according to the LA  Times.

Lerner ‘has not committed any crime or made  any misrepresentation,’ Taylor’s  letter read, ‘but under the circumstances she  has no choice but to take  this course.’

He is asking the oversight committee to  excuse Lerner from testifying, claiming that calling her in a congressional  hearing would ‘have no purpose other than to embarrass or burden her’ since  members would not expect her to answer questions.


Ahmad Ali, a committee spokesman, told  MailOnline that ‘Ms. Lerner remains under subpoena from Chairman Issa to appear  at tomorrow’s hearing – the Committee has a Constitutional obligation to conduct  oversight.’

‘Chairman [Darrel] Issa remains hopeful that  she will ultimately decide to testify tomorrow about her knowledge of outrageous  IRS targeting of Americans for their political beliefs.’

The IRS applied special criteria to  conservative organizations seeking tax-exempt status, putting them on a ‘Be On  The Lookout’ (BOLO) list, based on the groups’ names and political  philosophies.

President Barack Obama has said he was  unaware of the program until May 10, when excerpts of an IRS Inspector General  Report on the practice were leaked to reporters.

Jay Carney, the Obama administration's designated flak-catcher, insists that the president didn't know about the IRS targeting tea party groups until he learned about it during a TV news broadcast 

Jay Carney, the Obama administration’s designated  flak-catcher, insists that the president didn’t know about the IRS targeting tea  party groups until he learned about it during a TV news broadcast

But Jay Carney, the president’s chief  spokesman, confirmed Monday that senior White House staff, including White House  Counsel Kathy Ruemmler and Chief of Staff Denis McDonough, knew about the IRS’s  habits as early as April 24, and chose not to tell Obama.

The Inspector General report found that  Lerner and other IRS were notified in or before June 2011 that some staff in the  agency’s Cincinnati, Ohio office were using ‘tea party,’ ‘patriots’ and other  key words to add applicants to the BOLO list.

Once on that list, the groups were subjected  to additional auditing of their financial practices, their membership and their  political activities.

Despite knowing about the program, Lerner and  other senior IRS staffers withheld the information from Congress despite  receiving several requests from House committees whose members heard from  constituents that their tea party groups’ tax-exempt approvals were taking as  long as two years to be resolved.

The House Oversight and Government Affairs  Committee was among those that specifically asked the IRS whether it was  inspecting tea party groups more closely than other applicants, including those  on the political left.

Under mounting pressure, President Barack Obama announced Wednesday in the East Room of the White House that acting IRS Commissioner Steven Miller would be stepping down 

Under mounting pressure, President Barack Obama  announced May 15 in the East Room of the White House that acting IRS  Commissioner Steven Miller would be stepping down. It emerged hours later,  however, that Miller’s term as acting commissioner was already scheduled to end  in early June

Lerner herself launched her agency’s scandal  with a planted question-and-answer exchange during a May 10 American Bar  Association conference.

Asked the pre-arranged question, Lerner  responded by conceding that her employees had acted inappropriately.

‘Instead of referring to the cases as  advocacy cases, they actually used case names on this list,’ she told the  assembled tax lawyers.

‘They used names like “tea party” or  “Patriots,” and they selected cases simply because the applications had those  names in the title.That was wrong. That was absolutely incorrect, insensitive,  and inappropriate — that’s not how we go about selecting cases for further  review.’

She later claimed that the increase in  scrutiny of tea party groups was due to an influx of new applications from  right-wing organizations, following the Supreme Court’s ‘Citizens United’  ruling, which opened the floodgates to greater political participation by  nonprofit advocacy groups.

The Washington Post called that claim bogus,  however, with the newspaper’s fact checker awarding it a ‘four Pinocchios’  rating for dishonesty.

FOUR PINOCCHIOS: 'Between 2010 and 2012, we started seeing a very big uptick in the number of 501(c)(4) applications we were receiving,' Lerner claimed, but the Washington Post determined that wasn't true. 

FOUR PINOCCHIOS: ‘Between 2010 and 2012, we started  seeing a very big uptick in the number of 501(c)(4) applications we were  receiving,’ Lerner claimed, but the Washington Post determined that wasn’t  true.

Lerner’s boss, acting IRS commissioner Steven  Miller, was relieved of his post by Treasury Secretary Jack Lew last week,  although the term of his appointment to the job was already scheduled to end in  early June.

Other higher-ups inside the IRS have not been  publicly held accountable for the improper targeting of conservative  organizations.

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White House knew extent of IRS scandal in April, says report

Wall Street Journal says counsel learned of targeting of conservative groups on 22 April, 18 days before president

  •,              Monday 20 May 2013 12.33 EDT
President Obama

President Barack Obama has been under pressure in recent weeks. Photograph: Alex Wong/Getty Images

Barack Obama‘s hopes of moving beyond the scandals that have dogged his administration were dashed on Monday, when it was disclosed that the White House had been informed last month about the details of the IRS affair.

After being forced on the defensive all last week on the apparent targeting of conservative groups by the Inland Revenue Service, the Benghazi consulate attack and the seizure of Associated Press phone records by the Department of Justice, the White House had hoped to move on this week, switching attention to other issues, primarily foreign affairs.

But the Wall Street Journal on Monday picked up an important discrepancies in the official White House versions of how much it knew about the IRS scandal in advance.

Obama has said that he learned about the scandal at the same time as the press, on 10 May. Last Monday Obama’s press spokesman, Jay Carney, said that the White House counsel Kathryn Ruemmler had been informed in April that an independent audit of the scandal had been completed, but had not been given the findings. A White House adviser, Dan Pfeiffer, interviewed on CBS on Sunday, echoed Carney’s line, saying the White House had been made aware of the scandal a few weeks ago by the Treasury, although not the full details of what had happened.

But the WSJ reported that Ruemmler learned from Treasury lawyers on 22 April that “a small number of line IRS employees had improperly scrutinised certain … organizations by using words like ‘tea party’ and ‘patriot'”.

Republicans, who have been trying to establish a link between the IRS scandal and the White House, seized on the apparently contradictory statements. “I just don’t know who I can believe anymore,” said Brendan Buck, spokesman for the Republican House Speaker, John Boehner.

The scandal involves an IRS office in Cincinnati, Ohio, which selected for extra scrutiny conservative groups with words such as ‘tea party’ or ‘patriot’ in their titles. The IRS denies this was for partisan reasons but admitted applications by these groups for tax-exempt status have been delayed.

In another sign that the scandals will not die away quickly, Tea Party groups are to launch a lawsuit against the IRS for discriminating against them. Another came in a letter sent to the IRS on Monday by the Senate finance committee.

The committee chairman Max Baucus, a Democrat, and Orrin Hatch, the ranking Republican, list a series of demands for internal documents relating to the scandal and the names and position of everyone who had been either involved in or informed about it. The deadline for the hand-over of the material is 31 May.
A House hearing began on Friday but the Senate enjoys a lot more power. In their joint letter, Baucus and Hatch wrote: “Targeting applicants for tax-exempt status using political labels threatens to undermine the public’s trust in the IRS. The lack of candor in advising the Senate of this practice is equally troubling.”

In a separate development, the Washington Post on Monday disclosed new details of the Obama administration‘s crackdown on leaks to journalists.

Court documents obtained by the Post showed that the Department of Justice tracked the comings and goings to the State Department of James Rosen, the chief Washington correspondent of Fox News.

Officials wanted to track his connections with Stephen Jin-Woo Kim, a former state department adviser, in relation to alleged leaks of classified information about North Korea in 2009. By using Rosen’s security badge access, Justice officials were able to track the timings of his visits to the State Department. They also seized Rosen’s phone records and personal emails. Kim was indicted by a grand jury in August 2010, over an alleged conversation with Rosen about a North Korea nuclear bomb test.

The Department of Justice’s seizure of AP phone records in relation to a leak of a CIA operation to stop a bomb plot hatched in Yemen has not yet had the same traction as the IRS scandal. But the involvement of a Fox News reporter excited rightwing commentators on Monday.

The Obama administration has launched more actions against whistleblowers than any previous presidency, prompting accusations that it has launched a “war on journalism”.

Obama administration knew IRS was harassing tea party groups since JUNE

Revealed: Obama administration knew about investigation into claims that IRS  was harassing tea party groups since June 2012 as ousted head of the agency  insists it was not illegal

  • Appointee in charge of screening tax-exempt  applications is now in charge of implementing new Obamacare taxes
  • Ousted Steven Miller defends himself,  insists that targeting of conservatives was ‘foolish mistakes,’ not political  gamesmanship
  • May 10 leak that launched the scandal was  ‘prepared,’ Miller acknowledges
  • Former IRS commissioner testified last year  that there was ‘absolutely no targeting’ going on
  • Democrats on the panel blame 2010 ‘Citizens  United’ Supreme Court ruling for creating a flood of tax-exemption applications  during an election year

By  David Martosko In Washington and Associated Press Reporter

PUBLISHED: 07:59 EST, 18 May  2013 |  UPDATED: 08:00  EST, 18 May 2013


Obama administration officials were made  aware in June 2012 about an investigation into complaints from conservative tea  party groups that they were being harassed, and they knew the probe was ongoing  at the height of the presidential race, a Treasury inspector general revealed  Friday.

J. Russell George, the Treasury inspector  general for tax administration, testified alongside ousted IRS head Steven  Miller, who did little to subdue Republican outrage during hours of intense  congressional questioning.

Both defiant and apologetic, Miller  acknowledged agency mistakes in targeting tea party groups for special scrutiny  when they applied for tax-exempt status, but he insisted that agents broke no  laws and that there was no effort to cover up their actions.


Revelations: J. Russell George, the Treasury inspector general for tax administration, testified that Treasury officials were made aware of the probe into allegations of harassment against tea part groups last June  

Revelations: J. Russell George (left), the Treasury  inspector general for tax administration, testified that Treasury officials were  made aware of the probe into allegations of harassment against tea part groups  last June

Miller only stoked the criticism of many  Republicans, who are assailing the administration on a sudden spate of other  controversies, as well, even as some Democrats tried to contain the political  damage.

‘I don’t know that I got any answers from you  today,’ Rep. Mike Kelly, R-Pa., told Miller. ‘I am more concerned today than I  was before.’

At one point in the day’s hearing, Treasury  IG George said he had told the department’s general counsel about his  investigation on June 4, 2012, and Deputy Treasury Secretary Neal Wolin ‘shortly  thereafter.’

But, George cautioned, those discussions were  ‘not to inform them of the results of the audit. It was to inform them of the  fact that we were conducting the audit.’

After the hearing, inspector general  spokeswoman Karen Kraushaar said George ‘informed Department of Treasury  officials that we were looking into the IRS’ handling of applications for  tax-exempt status, partly due to allegations raised by conservative  organizations.’

Steven MillerSteven Miller

Defiant: Ouster head of the IRS Steven Miller insisted  he did not deceive Congress, though he repeatedly failed to reveal the  controversy last year when he was asked about it by lawmakers

Kraushaar said the disclosure was part of a  routine briefing about the office’s activities.

The Treasury Department issued a statement  Friday saying officials first became aware of the actual results of the  investigation in March of this year, when they were provided a draft of George’s  report, a standard practice.

George’s disclosure came before the House  Ways and Means Committee in the first of several congressional hearings on the  matter. He was joined by Miller, who spoke publicly about the controversy for  the first time.

Miller apologized for the actions of agents  who singled out conservative political groups for additional, often burdensome  scrutiny.

‘First and foremost, as acting commissioner,  I want to apologize on behalf of the Internal Revenue Service for the mistakes  that we made and the poor service we provided,’ he told the committee. ‘The  affected organizations and the American public deserve better.’

But members on both sides of the aisle were  furious, and castigated him for the mismanagement and political gamesmanship the  IRS engaged in on his watch.

Texas Republican congressman Kevin Brady had  the harshest criticism for Miller.

‘Is this still America?’ he asked  him.

‘Is this government so drunk on power that it  would turn its full force, its full might, to harass, and intimidate, and  threaten an average American who only wants her voice, their voices  heard?’

‘The American public deserves better,’ Miller  agreed. But both he and George insisted that no IRS employees engaged in  political witch-hunting.

J. Russell George (L) and Steven Miller (R) were called on the carpet 

The House Ways and Means Committee held the first  congressional hearing on the Internal Revenue Service targeting conservative  applicants for tax-exempt status with special scrutiny based on their politics.  J. Russell George (L) and Steven Miller (R) were called on the carpet


House Ways and Means Committee Chairman Rep. Dave Camp castigated the former IRS acting commissioner for presiding over a corrupt system that played political favoritesHouse Ways and Means Committee Chairman Rep. Dave Camp  castigated the former IRS acting commissioner for presiding over a corrupt  system that played political favorites


George oversaw the year-long internal probe  that ended in a report released Wednesday. It concluded that the  agency used  ‘inappropriate criteria’ in selecting tax-exemption  applications for closer  scrutiny, but did not find any wrongdoing on the part of senior-level IRS  officials.

Miller concurred with that finding, blaming  the problem instead on ‘foolish  mistakes’ while affirming that partisanship  ‘has no place at the IRS.’ He also insisted he did not deceive Congress, though  he repeatedly failed to reveal the controversy last year when he was asked about  it by lawmakers – even after he had been briefed.

‘I did not mislead Congress or the American  people,’ Miller said.

President Barack Obama announced his removal  on Wednesday, as a scandal unfolded involving the IRS targeting hundreds of  right-wing organizations for intense scrutiny based on keywords like ‘tea party’  or ‘patriots’ in their names.

He told committee members that before the  episode became public, he had no contact with the Treasury Department, the White  House or Obama’s re-election campaign about targeting conservative  groups.

‘Absolutely not,’ Miller said.

He surprised committee members when he said  ‘it is absolutely not illegal’ for IRS agents to single out conservative groups  for additional scrutiny.

‘Please don’t get me wrong,’ he added. ‘It  should not happen.’

George, the inspector general, backed up  Miller’s assertion when he said the yearlong investigation did not uncover  illegal activity.

‘It is not illegal, but it was  inappropriate,’ George said of targeting conservative groups.

George’s report concluded that an IRS office  in Cincinnati, which screened applications for the tax exemptions, improperly  singled out tea party and other conservative groups for tougher treatment. The  report says the practice began in March 2010 and lasted in various forms until  May 2012.

Agents did not flag similar progressive or  liberal labels, though some liberal groups did receive additional scrutiny  because their applications were singled out for other reasons, the report  said.

Miller wrote to IRS employees, however, that  he was leaving at the end of his scheduled term in early June.

Ultimately, he conceded on Friday, he agreed  to step down because responsibility for the IRS’s activities ‘stops at my  desk.’

Michigan Democratic Rep. Sander Levin is the most senior Ways and Means Democrat to side with Republicans against IRS corruption 

Michigan Democratic Rep. Sander Levin is the most senior  Ways and Means Democrat to side with Republicans against IRS  corruption

Committee chair Dave Camp, a Michigan Republican, stared down Miller, saying that ‘this systemic abuse cannot be  fixed with just one resignation.’

‘And as much as I expect more people  need to  go, the reality is this is not a personnel problem,’ Camp  maintained. ‘This is  a problem of the IRS being too large, too powerful, too intrusive and too  abusive of honest, hardworking taxpayers.’

Sander Levin, the panel’s ranking Democrat,  said the IRS and its employees  ‘have completely failed the American people’ by  ‘singling out  organizations for review based on their name or political views,  rather  than their activity.’

‘All of us are angry about this on behalf of  the nation,’ the left-leaning Michigan congressman said.

Lois Lerner is the civil servant who heads up  the IRS division in charge of evaluating charitable and other nonprofit  organizations. Levin called for her head.

Lois Lerner, director of the IRS's Exempt Organizations section, told a legal conference on May 10 that her agency's Inspector General would soon publish a report about the unfair targeting of tea party groups for special tax scrutiny 

Lois Lerner, director of the IRS’s Exempt Organizations  section, told a legal conference on May 10 that her agency’s Inspector General  would soon publish a report about the unfair targeting of tea party groups for  special tax scrutiny. Her disclosure, which Steven Miller conceded Friday was  ‘prepared,’ launched the scandal

‘Ms. Lerner should be relieved of her  duties.’ he said.

We must seek the truth, not political  gain.’

In what Miller called ‘a prepared Q-and-A’ on  May 10, Lerner told an American Bar Association conference about a pending IRS  Inspector General report examining the targeting of conservative groups inside  the IRS’s Exempt Organizations section.

That admission started the media feeding  frenzy that has spiraled into a full-blown scandal. The acknowledgement that  Lerner went to the event with the intention of publicly disclosing the IG  report’s existence raised eyebrows on the congressional panel.

Illinois Republican Rep. Peter Roskam quizzed  Miller about a phone conversation he said he had with Lerner about the planned  disclosure, which Miller said was intended to coincide with a disclosure to  Congress.

He agreed with Roskam, however, that Congress  wasn’t told at the same time a question was ‘planted’ at the bar association  conference.

‘We called to try to get on the calendar’ of  the Ways and Means Committee,’ Miller said.

‘You called to try to get on the calendar?’  Roskam asked, incredulous. ‘Is that all you’ve got?’

‘It’s the truth,’ Miller  responded.

Under questioning from California Republican  Rep. Devin Nunes, Miller said he would not commit to giving Congress his notes,  phone records, and other evidence of conversations with Lerner.

Nunes reminded him that Congress could, and  might, subpoena them.

'IS THIS STILL AMERICA?' Texas Rep. Kevin Brady slammed former IRS acting commissioner Steve Miller for presiding over the political persecution of a constituent whose tax-exempt application was targeted for abuse 

‘IS THIS STILL AMERICA?’ Texas Rep. Kevin Brady slammed  former IRS acting commissioner Steve Miller for presiding over the political  persecution of a constituent whose tax-exempt application for her tea party  group was subject to nearly 100 lengthy, intrusive questions

Lerner’s superior, Sarah Hall Ingram, was the  most senior political appointee in charge of exempt organizations reviews during  the years when the IRS was targeting right-wing groups. This year the Obama  administration has elevated her to a position of authority over the tax  implementation of the Affordable Care Act, the president’s signature health care  overhaul.

Miller called her ‘a superb civil servant,’  and said he promoted her to her current position.

In a flurry of press releases, broadcast  statements and tweets, conservatives have lashed out at Ingram, suggesting a  level of corruption on her part that could compromise the fair and impartial  implementation of Obamacare.

Ingram ‘allowed and possibly encouraged the  outrageous and discriminatory tactics toward Tea Party Patriots based on  political ideology, clearly violating her supposedly unbiased office,’ said  Jenny Beth Martin, the group’s national coordinator.

‘We … do not trust anyone who was involved  in targeting tea party groups to administer the Affordable Health Care Act in a  fair and equal manner,’ Martin added.

‘We certainly do not trust Sarah Hall Ingram  to be anywhere near our incredibly sensitive health care decisions.  It  appears the administration has rewarded her for allowing the discriminatory  actions rather than disciplining her. She must be terminated or resign  immediately for her disgraceful actions.’

New York Democratic Rep. Charles Rangel complained that the Supreme Court's 'Citizens United' ruling created an environment ripe for abuse of political donations, making the IRS's job impossible to do fairly 

New York Democratic Rep. Charles Rangel complained that  the Supreme Court’s ‘Citizens United’ ruling created an environment ripe for  abuse of political donations, making the IRS’s job impossible to do  fairly

In a stunning flashback moment, Louisiana  Republican Rep. Charles Boustany played a video clip showing former IRS  Commissioner Douglas Shulman testifying before the House Ways and Means  Subcommittee on Oversight in March 2012.

‘Can you give us assurances that the IRS is  not targeting particular groups based on political leanings?’ Boustany, the  subcommittee’s chairman, asked Shulman then.

‘There’s absolutely no targeting,’ the  then-commissioner responded in 2012. ‘This is the kind of back-and-forth that  happens when people apply for 501(c)(4) status.’

Asked Friday if this was a lie, Miller said  ‘It was incorrect.’

‘But whether or not it was untruthful –‘ he  continued, without reaching a conclusion.

‘Why did you mislead Congress and the  American people on this?’ Boustany asked.

‘Congressman, I did not mislead Congress or  the American people,’ Miller responded.

Washington Democrat Jim McDermott, a reliable  liberal partisan, acknowledged that ‘the IRS stiff-armed us, basically, at  best,’ in past testimony, but defended the agency”s behavior.

Tax ‘examiners took a shortcut,’ in the face  of a flood of new applications for tax-exempt status, he said, ‘which they  deeply regret’

Still, he conceded that it was wrong to treat  groups differently because of their political positions.

‘As much as I dislike the right,’ he said, ‘I  think it’s wrong to be un-evenhanded in government application’ of laws and  regulations.

Wisconsin Republican Rep. Paul Ryan slammed Miller for failing to tell the Ways and Means Committee what he knew during a previous hearing 

Wisconsin Republican Rep. Paul Ryan slammed Miller for  failing to tell the Ways and Means Committee what he knew during a previous  hearing

Paul Ryan, the Republicans’ vice presidential  nominee in 2012, slammed Miller for what he said was less-than-truthful  testimony when he appeared before a subcommittee last  year. Although he had been briefed by then about the problems with tax-exempt  applications from tea party groups, he said nothing.

Miller hid material facts from Congress, Ryan  said.

‘How can we conclude that you did not mislead  this committee?’

Miller fired back. ‘I stand by my answers,’  he said, saying that the word ‘”harassment” implies political motivation’ on the  part of IRS employees.

‘There was no political motivation,’ he  insisted.

The Tea Party Patriots and other right-wing groups provided a powerful rallying force during the 2010 midterm elections, but were targeted the same year by the IRS 

The Tea Party Patriots and other conservative groups  provided a powerful rallying force during the 2010 midterm elections. It was  around the same time that the Obama administration’s IRS began targeting such  groups that applied for tax-exempt nonprofit status


Washington Republican Rep. Dave Reichert  picked up that thread when it was his turn to ask questions.

‘Do you not believe it’s your job to provide  us with the information that you knew?’ he demanded.

‘You’re a law-enforcement agency, for crying  out loud.’

‘I answered all questions truthfully,’ Miller  responded.

‘You’re not going to cooperate,’ said  Reichert, dismissing him and moving on to question George.

The hearing is the first in what will likely  be a series of inquisitions  from Congress about the IRS scandal, just one of  the three hanging over  the Obama administration.

The House Oversight and Government Reform  Committee will hold its own hearing on May 22, taking testimony from  Lois Lerner, former  IRS Commissioner Shulman, and Treasury  Deputy Secretary Neal Wolin.

Barack Obama (R) and Turkish Prime Minister Recep Erdogan hold a joint news conference in the White House Rose Garden, but most of the focus was on three unfolding White House scandals 

Barack Obama (R) and Turkish Prime Minister Recep  Erdogan (L) held a joint news conference in the White House Rose Garden on  Thursday, but the president was hammered on his domestic scandals. Asked if  anyone in the White House knew about the IRS’s targeting of right-wing groups  before the White House Counsel was notified around April 22, Obama would only  say that he personally had no knowledge of it

New York Democrat Charles Rangel took  issue with the Supreme Court’s 2010 ‘Citizens United v. Federal Election  Commission’ ruling, which he said created en environment that resulted in the  IRS’s malfeasance.

The underlying problem, he said, was a  resulting law ‘almost written for abuse,’ as it prohibits Congress from  interfering with 501(c)(4) groups’ political spending.

The Citizens United Ruling is generally  credited with creating a flood of applications for tax-exempt status with the  IRS, including hundreds from conservative groups hoping to capitalize on their  newfound power to influence national politics with untraceable  dollars.

‘This is not “Democrat or Republican,”‘ Range  said. ‘It relates to the integrity of the government.’

‘We’re on the same side as far as determining  how this happened.’

Rangel told Miller that he wanted the ‘tens  of thousands of IRS employees [to] have the stigma of corruption taken away from  them.’

‘Whether this is criminal activity or a  mistake,’ the New York Democrat said, ‘I don’t know.’

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Popular St. Louis anchor who complained about IRS harassment after interview with Obama taken off the air

By  Jessica Montoya Coggins

PUBLISHED: 18:09 EST, 17 May  2013 |  UPDATED: 02:57  EST, 18 May 2013


A popular news anchor in Missouri has found  himself in the middle of the IRS scandal that is engulfing the Obama White  House.

Larry Conners, a longtime anchor with St.  Louis’s KMOV-TV, penned a Facebook post suggesting the IRS was targeting him and  his family following an interview with President Barack Obama in 2012.

The much-read post has elicited a bevy of  controversy and has resulted with the anchor to be effectively ‘off the  air‘ until further notice.



Following Tuesday’s 5:00 PM broadcast, anchor Larry  Conners offered an explanation of sorts about his Facebook post the previous day  regarding the IRS

dThe Facebook post from Conners dated May 13 has received  over 500 comments and been ‘liked’ over 1,500 times

The Facebook post (which as of the  publication of this article is still intact) from Conners details the events  that followed an interview he conducted with Obama in April of 2012.

‘I don’t accept “conspiracy theories”, but I  do know that almost immediately after the interview, the IRS started hammering  me. At the time, I dismissed the “co-incidence”, but now, I have concerns.’

According to Conners in his Facebook post he  claims that the Obama staffers reacted negatively towards his interview, in  fact, ‘they went cold.’


‘I questioned President Obama on several  topics: the [Buffett] Rule, his public remarks about the Supreme Court before  the ruling on the Affordable Care Act. I also asked why he wasn’t doing more to  help Sen. Claire McCaskill who at that time was expected to lose. The Obama  interview caught fire and got wide-spread attention because I questioned his  spending.’

Indeed the interview,  which aired in St. Louis in April 2012 in two segments did show Conners grilling  the President, then up for reelection, quite hard.

When Connors asked Obama if he was ‘out of  touch’ (in relation to his family’s vacations and other pursuits) Obama appeared  quite dismissive.

‘I think most folks understand how hard I  work and the administration works on behalf of the American people.’


In April of 2012 Conners conducted a one-one-one  interview with President Obama that asked tough questions about the  administration’s spending habits

Promoting the one-on-one interview which  occurred at the White House to KMOV, Conners acknowledged the President  side-stepped his ‘out-of-touch’ question.

Another major component of that interview was  Senator Claire McCaskill, a Democrat running for Senate reelection in Missouri,  who at the time in spring of 2012 appeared quite vulnerable.

Conners told the audience that McCaskill had  asked for support from the President during her reelection bid but had received  ‘no response.’

During the interview Obama did affirm his  campaign’s commitment to McCaskill but did not offer any concrete ways he was  planning to campaign in Missouri.

McCaskill would go on to reclaim her Senate  seat in large part because of her opponent Todd Akin’s controversial remarks  about pregnancy resulting from a rape.


Conners had been with KMOV since 1986; he was recently  replaced in the 10:00 PM evening broadcast

On Tuesday Conners closed the early evening  broadcast of KMOV with a direct statement to viewers regarding his Facebook post  on Monday night about the incident with the IRS and the Facebook post discussing  it.

‘At first I need to state those were my  personal views not those of KMOV,’ he began.

Conners continued by saying, ‘My issues with  the IRS preceded that interview by several years. As a journalist I understand  the importance of keeping personal matters separate from my professional work  sometimes you have to do that to retain your independence as a news  man.’

There has not been a definitive return-date  for Conners from his employer.

News Director Sean McLaughlin on Thursday  confirmed that, ‘[Conner’s] not suspended, we just all thought it made sense  [for him] to take a few days off.’


Tax records with St. Louis county indicate that Conners  and his wife had received a federal tax lien last year

County records from St. Louis, as detailed by  the St. Louis Post-Dispatch, do show that Conners and his wife Janet received a  federal tax lien of $85,000 in ‘small business/self employed taxes.’

The IRS filings show that Conners and his  wife have owed back the money since 2008.

The Belo Corporation, which owns KMOV,  released a statement through the Vice President of Content Michael Valentine.  ‘We don’t condone personal posts that jeopardize the journalistic nature of our  business. It’s really that simple.’

Conners has been with KMOV since 1986 and had  been a co-anchor of their 6:00 PM broadcast. In April he was replaced by Steve  Savard for the 10:00 PM broadcast.

The Facebook post that sparked all this  controversy has been ‘liked’ over 1,500 times and been shared over 1,800 times.  There are currently over 500 comments

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IRS targeted 298 nonprofit US groups critical of government and involved in political activities

США Америка ГР Нью-Йорк статуя свободы
Statue of Liberty

© Photo: Voice of Russia

The US Internal Revenue Service singled out for scrutiny groups with “tea party” or “patriot” in their names as well as nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general.

 The IRS focused on groups who applied for tax-exempt status and who were focusing on “criticizing how the country was being run” and those that were involved in educating Americans “on the Constitution and Bill of Rights.”

 Part of the report is dedicated to “social welfare” groups that draw extra attention since the Supreme Court ruled a decision allowing corporations and labor unions to raise and spend unlimited sums on elections as well as register for tax-exempt status.

 Since the ruling came out, the number of political groups applying for tax-exempt status doubled. Out of the 298 groups selected for special scrutiny, 72 had “tea party” in their title, 13 had “patriot” and 11 had “9/12.”

 The groups that applied for tax-exempt status and have been involved in political activity or a social activity have opened themselves up to scrutiny by the IRS. But at the moment, there are no proper criteria or standards of what should be recognized as political activity.

 The groups were asked to supply information on their relationship with current candidates and elected officials as well as future candidates, along with detailed information about its contributors and members.

 Voice of Russia, the Washington Post


Senior IRS officials knew in 2011 agents targeted political groups, report says

Inspector general findings seems to contradict public statements that Tea party and others were flagged for additional scrutiny

  • Associated Press in Washington
  •,   Sunday 12 May 2013 11.18 EDT
irs tea party white house

White House spokesman Jay Carney has brushed aside calls for the White House itself to investigate. Photograph: Win Mcnamee/Getty Images

Senior officials at the US tax agency knew agents were targeting conservative political groups as early as 2011, according to a draft of an inspector general’s report obtained by The Associated Press that seemingly contradicts public statements by the commissioner of the Internal Revenue Service.

The IRS apologized Friday for what it acknowledged was “inappropriate” targeting of conservative political groups during the 2012 election to see if they were violating their tax-exempt status. The agency blamed low-level employees, saying no high-level officials were aware.

But on June 29, 2011, Lois G Lerner, who heads the IRS division that oversees tax-exempt organizations, learned at a meeting that groups were being targeted, according to the watchdog’s report. At the meeting, she was told that groups with “tea party,” ”patriot” or “9/12 project” in their names were being flagged for additional and often burdensome scrutiny, the report says.

Lerner instructed agents to change the criteria for flagging groups “immediately”, the report says.

“Tea party” and “patriot” are favorite terms of the small-government conservative movement that has emerged in recent years and is highly critical of President Barack Obama. The 9-12 Project is a group started by conservative TV personality Glenn Beck.

The revelation that the IRS targeted those groups is becoming a new headache for the Obama administration, which is already confronting a highly polarized, partisan atmosphere in Washington.

On Saturday, White House spokesman Jay Carney said in a statement that Obama is concerned that “a small number” of IRS employees may have fallen short of the high level of integrity expected of public servants.

“We understand that the matter is currently under review by the inspector general,” Carney said. “If the inspector general finds that there were any rules broken or that conduct of government officials did not meet the standards required of them, the president expects that swift and appropriate steps will be taken to address any misconduct.”

The Treasury Department’s inspector general for tax administration is expected to release the results of a nearly yearlong investigation in the coming week. The AP obtained part of the draft report, which has been shared with congressional aides.

Among the other revelations, on August 4, 2011, staffers in the IRS’ Rulings and Agreements office “held a meeting with chief counsel so that everyone would have the latest information on the issue.”

On January 25, 2012, the criteria for flagging suspect groups was changed to, “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform/movement,” the report says.

While this was happening, several committees in Congress were writing IRS Commissioner Douglas Shulman to express concern because tea party groups were complaining of IRS harassment.

In Shulman’s responses, he did not acknowledge targeting of tea party groups. At a congressional hearing March 22, 2012, Shulman was adamant in his denials.

The portion of the draft report reviewed by the AP does not say whether Shulman or anyone else in the Obama administration outside the IRS was informed of the targeting. It is standard procedure for agency heads to consult with staff before responding to congressional inquiries, but it is unclear how much information Shulman sought.

The IRS has not said when Shulman found out that tea party groups were targeted.

Shulman was appointed by President George W Bush, a Republican. His six-year term ended in November. Obama has yet to nominate a successor. The agency is now run by an acting commissioner.

The IRS said in a statement Saturday that the agency believes the timeline in the IG’s report is correct, and supports what officials said Friday.

“IRS senior leadership was not aware of this level of specific details at the time of the March 2012 hearing,” the statement said. “The timeline does not contradict the commissioner’s testimony. While exempt organizations officials knew of the situation earlier, the timeline reflects that IRS senior leadership did not have this level of detail.”

Lerner’s position is three levels below the commissioner.

Several congressional committees have promised investigations, including the Ways and Means Committee, which plans to hold a hearing.

The group Tea Party Patriots said the revelation was proof that the IRS had lied to Congress and the public when Schulman said there had been no targeting of Tea party groups.

“We must know how many more lies they have been telling and how high up the chain the cover-up goes,” Jenny Beth Martin, the group’s national coordinator, said in a statement Saturday.

“It appears the IRS committed crimes and violated our ability to exercise our First Amendment right to free speech. A simple apology is not sufficient reparation for violating the constitutional rights of United States citizens. Therefore, Tea Party Patriots rejects the apology from the Internal Revenue Service,” Martin said.

On Friday, White House spokesman Jay Carney said the administration expected the inspector general to conduct a thorough investigation, but he brushed aside calls for the White House itself to investigate.


Florida hit by “tsunami” of tax identity fraud: ” file fraudulent tax returns on Turbo Tax “

By David Adams | Reuters – 9 hrs ago


  • Seized fraudulent tax mailings are displayed during a news conference in Tampa, Florida, in this undated police handout photo. Tax identity theft skyrocketed to more than 1.2 million cases in 2012 from only 48,000 in 2008, according to the U.S. Treasury Department. REUTERS/Tampa Police Department/Handout

    View PhotoReuters/Reuters – Seized fraudulent tax mailings are displayed during a news conference in Tampa, Florida, in this undated police handout photo. Tax identity theft skyrocketed to more than 1.2 million cases …more  in 2012 from only 48,000 in 2008, according to the U.S. Treasury Department. REUTERS/Tampa Police Department/Handout  less 

MIAMI (Reuters) – Bruce Parton was only a few weeks from retirement after 30 years as a mail carrier in sunny Florida.

              He never lived to fulfill his retirement plan of moving back to a quiet life in the Catskill mountains of New York, not far from where he grew up on Long Island.

              Instead, he was gunned down on his daily mail route in December 2010 by members of an identity theft ring who stole his master key as part of a scheme to claim fraudulent tax refunds.

              Using stolen names and Social Security numbers, criminals are filing phony electronic tax forms to claim refunds, exploiting a slow-moving federal bureaucracy to collect the money before victims, or the Internal Revenue Service, discover the fraud.

              Parton was a victim of what officials say has ballooned into a massive, and dangerous, illegal industry that could cost the nation $21 billion over the next five years, according to the U.S. Treasury Department.

While that is a relatively small sum compared to the $1.1 trillion collected from individual tax payers in the last fiscal year, the crime has been growing by leaps and bounds in the last three years.

“We are on the top of a national trend that is causing a hemorrhage of tax dollars,” said Wifredo Ferrer, United States Attorney for south Florida. “It’s a tsunami of fraud.”

              While the IRS says it has detected cases in every state except North Dakota and West Virginia, the fraud’s epicenter is Florida, and it is mostly concentrated in Miami and Tampa.

              Miami has 46 times the per-capita rate of false tax refund claims than the rest of the country, and 70 times the national average in dollar terms, Ferrer told Reuters.

              “For whatever reason, we always tend to lead the nation when it comes to fraud,” he said, noting that his office has been battling massive Medicare fraud in recent years that has since spread to other parts of the country.

              Florida’s high proportion of older residents, who can be more vulnerable to fraud, may be one reason for the high levels of fraud in the state.

Nationwide, the number of cases of tax identity theft detected by authorities sky-rocketed to more than 1.2 million cases in 2012 from only 48,000 in 2008, according to the Treasury Department.

The real number of phony tax filings is likely much higher as the fraud is hard to track, according to a November General Accountability Office report.


The tax ID theft problem is particularly troubling as, unlike Medicare fraud, it is associated with violent crime and armed gangs.

Tampa police first detected it in 2010 when officers discovered wanted street criminals engaged in tax fraud. “They were holed up in hotels with laptops churning out tax claims,” said congresswoman Kathy Castor, who represents the area and is pressing the IRS to get tougher on the fraud.

When agents raided a Howard Johnson in East Tampa in late 2010, they found suspects smoking marijuana and four laptop computers being used to file fraudulent tax returns on Turbo Tax, the tax preparation software, according to police records.

The suspects had lists of personal information containing more than 1,000 names and confidential personal information, multiple re-loadable debit cards, and records of numerous financial transactions. The investigation revealed that the suspects had been camped out in the hotel room for more than a week filing claims.

Tax identity fraudsters are apparently drawn by the ease of the crime, officials say.

“The scheme is very basic, it works virtually the same in almost every case,” said Ferrer. “All they need is your name and the tax ID number.”

Armed with that information a refund claim can be filed electronically, making up other details on the form, including addresses, employer data, income and deductions.

Criminals obtain the vital numbers using various tactics, often by bribing office workers with access to personnel files inside companies, as well as large public institutions such as hospitals and schools, according to prosecutors.

Last summer a hacker stole 3.8 million unencrypted tax records from the South Carolina Department of Revenue in what is believed to be the largest security breach of a U.S. tax agency. Authorities say they do not know the hacker’s motive.

              One North Miami man, Rodney Saint Fleur, was charged last year with using the LexisNexis research service account at the law firm where he worked to access names and Social Security numbers of 26,000 people as part of an identity theft scheme, according to court documents.

              Victims in Florida have varied from hospital patients, to Holocaust survivors at an elderly Jewish community center, as well as active duty military serving overseas.

In December, a former U.S. Marine from North Miami was sentenced to nearly five years in prison for stealing the identities of more than 40 fellow Marines stationed at Camp Leatherneck in Afghanistan as part of a plot to claim $54,000 in fraudulent income-tax refunds.

In Parton’s case the criminals were after his master key that gives postal workers access to mail drop-off boxes and apartment mailboxes. He was shot twice in the chest by a gunman as part of a plot to steal identities in people’s mail for tax refund fraud.

The gunman, Pikerson Mentor, 31, was sentenced last month to life plus 42 years.

More than 600 people turned up for Parton’s funeral, including postal workers and people who got to know him on his route. “He had been doing that mail route for 10 years and he always had a smile for everyone,” said his daughter, Nina Parton.

The criminals stay under the radar using identities of the elderly or the very young, who are unlikely to be filing for earned income, as well as the deceased. They typically claim small refunds, around $3,000, but use multiple identities, with payments often made to pre-paid debit cards.


The IRS said last week it is intensifying a crackdown on identify theft, with 3,000 agents devoted to tackling the problem, double the number assigned in 2011.

The number of IRS criminal investigations into identity theft more than tripled in the year to September 2012, and it was on pace to double again this year, acting IRS Commissioner Steven Miller told reporters.

              The tax collection agency prevented $20 billion in attempted tax refund fraud in fiscal year 2012, up from $14 billion a year earlier, he said.

              “It’s one of the biggest challenges that faces the IRS today,” Miller said. “We’re doing much better on all fronts but we have much more to do.”

Despite the increase in investigations, the agency still had a backlog of 300,000 cases of people waiting for legitimate refunds after they were victims of fraud. It takes an average of six months to resolve a case, Miller said.

“The IRS have put a lot of resources on it, but they always seem to be behind the curve,” said Keith Fogg, a tax professor at Villanova University School of Law.

Electronic filing, which now accounts for 80 percent of returns and was introduced to speed up delivery of refunds, has made the system more vulnerable to fraud.

The IRS is seeking to speed up the loading of data from W-2 payroll forms issued at the beginning of the tax season, a time lapse which gives fraudsters a window of opportunity to file using false data.

The IRS is also looking for ways to authenticate the identity of tax filers at the time of filing to pre-empt fraud, as well as working with the Social Security Administration to limit access to a registry of social security data of deceased tax payers, the so-called “Death Master File”, a frequent target of fraud.

“We will not be prosecuting our way out of this. That’s not going to be the answer. We’re going to have to make it more and more difficult for criminals to profit from this behavior,” said Miller. “If they’re not successful they will move onto something else.”

(Editing by Mary Milliken and Claudia Parsons)–finance.html


Almost 2,400 Millionaires Pocketed Unemployment Benefits


            By Frank Bass –             Oct 2, 2012

Almost 2,400 people who received unemployment insurance in 2009 lived in households with annual incomes of $1 million or more, according to the Congressional Research Service.

The report was released after about 1.1 million people exhausted their jobless benefits during the second quarter of 2012, when more than 4.6 million filed initial unemployment claims. Eliminating those payments to high earners is one idea being considered as U.S. lawmakers struggle to curb a projected $1.1 trillion deficit for the fiscal year that ended Sept. 30, with the nationwide jobless rate at 8.1 percent.

“Sending millionaires unemployment checks is a case study in out-of-control spending,” U.S. Senator Tom Coburn, an Oklahoma Republican, said in an e-mail. “Providing welfare to the wealthy undermines the program for those who need it most while burdening future generations with senseless debt.”

The 2,362 people in millionaire homes represent 0.02  percent of the 11.3 million U.S. tax filers who reported  unemployment insurance income in 2009, according to the August  report. Another 954,000 households earning more than $100,000  during the worst economic downturn since the Great Depression  also reported receiving unemployment benefits.

The reported benefits may include those received by spouses or dependents of people who made high incomes, or benefits received earlier in the year before a household member got a high-paying job.

Eliminating the federal share of unemployment benefits for millionaires would save $20 million in the next decade, the congressional researchers said in their report.

Prohibiting Benefits

Congress has expanded unemployment benefits that had been paid for by states and lasted 26 weeks. The federal money lengthened the maximum period to 99 weeks, though the researchers said in practice no state currently offers more than 79 weeks.

Coburn introduced legislation in February 2011 to prohibit federally funded unemployment benefits for people who had at least $1 million in assets in the year before they filed a claim. The Senate voted unanimously for his measure, the Ending Unemployment Payments to Jobless Millionaires Act of 2011. It was later added to another bill, which hasn’t passed the Senate.

Coburn found that 18 households reporting an adjusted gross income that exceeded $10 million received an average unemployment benefit of $12,333 in 2009. The average benefit for 74 households earning between $5 million and $10 million was $18,351. The average household making $1 million or more received $11,113, or about 37 weeks of unemployment benefits.

Payroll Taxes

Unemployment benefits, which averaged about $300 per week in 2011, are paid out of accounts funded by payroll taxes and administered by states. Like Social Security and Medicare, the federal health insurance program for the elderly and disabled, unemployment insurance has no income limits.

The Internal Revenue Service reported that 2,840 millionaire households, or 0.03 percent of tax filers, received unemployment benefits in 2008. Another 816,700 beneficiaries earned between $100,000 and $1 million in 2008, the report said.

The House of Representatives last December passed a bill that would have taxed jobless benefits at 100 percent for single filers with an income of $1 million or married filers earning more than $2 million. The provision, part of a jobs bill written by Michigan Representative Dave Camp, a Republican who leads the House Ways and Means Committee, was dropped before the legislation was sent to President Barack Obama for his signature.

Auctioning Airwaves

Lawmakers voted in February to fund the $30 billion cost of extending unemployment benefits by auctioning public television airwaves and increasing pension contributions by new federal employees. The extension expires at the end of the year.

During the recovery from the recession, real unemployment, including discouraged workers and part-time employees seeking full-time jobs, peaked at 18 percent in January 2010. The number of American workers who collected unemployment benefits topped out at 6.6 million in May 2009, the highest seasonally adjusted number in more than 30 years, according to the Labor Department’s Employment and Training Administration.

The average unemployed American is out of work for nearly 40 weeks, according to the U.S. Bureau of Labor Statistics. Even so, congressional researchers said it’s possible that IRS figures understate the number of households that receive unemployment insurance because the first $2,400 in benefits wasn’t taxed in 2009, although it is now.

To contact the reporters on this story: Frank Bass in New York at

To contact the editors responsible for this story: Flynn McRoberts at

Ex-IRS examiner charged with naming whistleblower and interfering with the audit of an international bank

Ex-IRS examiner charged with naming whistleblower

Posted 2012/09/28 at 10:20 am EDT

WASHINGTON, Sep. 28, 2012 (Reuters) — A former U.S. Internal Revenue Service examiner was arrested on Thursday and charged with exposing an IRS whistleblower and interfering with the audit of an international bank, said the U.S. Attorney for the Southern District of New York.

Dennis Lerner, 59, was arrested at his home in Edgewater, New Jersey, and appeared before a judge in Manhattan, according to a statement from U.S. Attorney Preet Bharara.

Lerner was charged with violating federal conflict of interest laws and improperly disclosing confidential IRS information. He could face up to 20 years in prison.

“Lerner’s violations of basic conflict of interest laws were brazen and continued in the face of warnings,” Bharara said.

Prosecutors said in the statement that Lerner worked as an IRS international examiner from June 2010 to August 2011.

While at the IRS, Lerner audited an unnamed international bank for alleged underreporting of $1 billion in income with the help of a confidential whistleblower, said the statement and legal documents based on an investigation by the U.S. Treasury Inspector General for Tax Administration, an IRS watchdog unit.

Lerner was leading negotiations between the agency and the unnamed bank on a $210 million proposed settlement when he abruptly resigned from the IRS, the statement said.

Unknown to the agency, during the settlement talks Lerner had been seeking a job as tax director at the bank. He got the job in September 2011, the statement said.

A source close to the investigation said the bank involved in the case was German-based Commerzbank AG. Officials for Commerzbank could not be immediately reached late Thursday.

Despite warnings from the IRS about further contact with the agency being improper, Lerner subsequently sought information from former colleagues about the audit and encouraged them to approve the settlement, the statement said.

He also divulged to people not employed by the IRS the identity of the whistleblower and “details regarding pending IRS audits of other companies,” it said.

A spokesperson for Bharara said Lerner was represented by attorney Jonathan Marvinny, who could not immediately be reached.

(Corrects sixth paragraph to say bank allegedly underreported $1 billion in income.)

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Phil Berlowitz)

More than 1,000 pastors plan to challenge IRS by endorsing presidential candidate

By Eric W. Dolan Sunday, September 23, 2012 11:10 EDT

Preacher holding Bible via Shutterstock

More than 1,000 pastors plan to openly defy the IRS by telling their congregation on October 7 to vote for a particular presidential candidate, according to Fox News.

The annual event, dubbed “Pulpit Freedom Sunday,” has been organized by the conservative Christian group Alliance Defending Freedom. The pastors participating in the event plan to preach about the election, endorse a candidate, and send video of their sermon to the IRS.

“The purpose is to make sure that the pastor — and not the IRS — decides what is said from the pulpit,” Erik Stanley, senior legal counsel for the group, told “It is a head-on constitutional challenge.”

The Johnson amendment in Section 501(c)(3) of the Internal Revenue Code prohibits tax-exempt charities and churches from intervening in political campaigns on behalf of or in opposition to any candidate. The IRS has been reluctant to revoke churches’ tax-exempt status for violating the more than 50-year-old IRS rule, but the agency has issued written warnings to dozens of churches.

“The IRS will send out notices from time to time and say you crossed the line,” Jim Garlow, a senior pastor of Skyline Wesleyan Church in San Diego, told “But when it’s time to go to court, they close the case.”

The goal of Pulpit Freedom Sunday is to force the IRS to take churches to court and have the Johnson Amendment declared unconstitutional.

Americans United for Church and State has pushed back against the event, sending letters to 60,000 houses of worship that urge them to obey federal tax law.

“People don’t join churches because they want to be told how to vote,” said the Rev. Barry W. Lynn, executive director of Americans United. “Our letter reminds religious leaders about what the law requires, why it makes sense and how it could affect them.”

“Most clergy of all faiths know it’s inappropriate to use their pulpits to stump for political candidates,” he added. “But there are very vocal misguided religious and political forces that constantly prod religious leaders to violate federal tax law. We urge clergy to just say no.”

In response, the Alliance Defending Freedom accused Americans United for Church and State of trying to “intimidate churches into silence.”

[Preacher holding Bible via Shutterstock]

Grieving mother ordered to pay $14,000 in taxes on the student loans that were written off after son’s suicide: Loans Forgiven by the Government are Considered Taxable Income by the IRS

  • Russell Friend,  22, committed suicide shortly before graduating from college
  • His mother Regina  had accumulated $55,400 in loans and interest to help him pay for  school
  • Those loans  were forgiven by the government but IRS considers that ‘gift’ taxable income so  she has to pay an additional $14,000 more in taxes

By Meghan Keneally

PUBLISHED:04:20 EST, 21  September 2012| UPDATED:06:17 EST, 21 September 2012

A mother in Maryland still grieving the death  of her 22-year-old son is now faced with a new unwelcome reminder of his  suicide: a $14,000 tax bill.

When Russell Friend was found dead in late  August last year, the government forgave his student loans and the portion of  the payments that his mother Regina was expected to pay as is protocol.

But not all of the payments stopped because  the Internal Revenue Service considers forgiven loans to be a form of taxable  income, so now Ms Friend faces a substantially higher tax bill that she won’t be  able to pay.

Loving mother: Regina Friend (right) accrued $55,400 in  loans and interest in order to help her son Russell (left) pay for his tuition  at Temple College in Pennsylvania

After originally starting college at Morgan  State, Russell transferred to Temple College where he was a popular member of  the track team and had completed enough credits to graduate.

He went missing in August 2011, left a note  saying ‘sorry guys’ and a message on his Facebook saying ‘I’m sorry everyone’,  and his body was found on the banks of the Delaware River days later.

Federal policy automatically dismisses any  loans taken out by students in the case of their death of permanent disability,  and the loans and interest that Ms Friend had accrued- which totalled $55,400-  were also dropped.

Ms Friend was far from the only parent to  have to rely on this regulation when their child died, as The Baltimore  Sun reports that the Department of  Education cancelled $2.7billion in such loans in 2011.

The problem that comes with said  cancellations is that the amount of those forgiven loans are taxable, and now  that means Ms Friend is faced with a $14,000 payment on top of her existing  taxes.

Though she has a steady job in the technology  department of PHH Corp, a mortgage company, both Ms Friend and her tax preparer  do not know what to do about the additional costs.

Tragic: Russell, a popular member of the school’s track  team, disappeared in August 2011 and his body was found on the shore of the  Delaware River

‘As far as what I intend to do about it, I  have no idea,’ Ms Friend told The Baltimore Sun.

‘I don’t think I’ve even seen $14,000 all at  once. I don’t want to give  the impression that I’m dirt poor or anything, but I  do not have any  means of taking on that kind of debt.’

Similar situations happened to the families  of Freddy  Reynoso and Amanda  Greenhalgh, students in California  and New Jersey respectively who both died and  their parents were left  struggling to pay the thousands of dollars of  taxes that followed the  forgiveness of their loans.

‘While there are options for some borrowers,  they are complicated and  confusing,’ said Persis Yi, a lawyer for the National  Consumer Law  Center.

‘It is most unfortunate that the system is  set up to wreak great havoc on borrower’s lives at a time when the borrower  deserves the most compassion,’ the lawyer told The Huffington  Post.

The confusion and bills just add to the pain  that Ms Friend has tried to deal with over the past 13 months.

‘I don’t think there will ever be closure for  what happened. It’s something I will have to learn to live with, but it is like  throwing salt into a wound,’ Ms Friend said

Read more: Follow us: @MailOnline on Twitter | DailyMail on Facebook

Federal court allows top donors to tax-exempt groups to remain secret

By Eric W. Dolan Tuesday, September 18, 2012 17:03 EDT

Money via AFP

The D.C. Circuit Court on Tuesday ruled that tax-exempt groups like Crossroads GPS only had to disclose donors who give money for the specific purpose of funding campaign ads.

The Court of Appeals reversed (PDF) the decision of a lower court, which held that the Federal Election Commission (FEC) had created a loophole by limiting disclosure of donors to only those who explicitly contributed “for the purpose of furthering electioneering communications.”

Rep. Chris Van Hollen (D-Maryland), who challenged the FEC regulation, argued that the Bipartisan Campaign Reform Act required organizations engaged in campaign activities to identify all contributors who donated over $1,000. By including the “purpose” language in their regulation, the FEC allowed for outside campaign groups to improperly keep many of their top donors a secret, he alleged.

“Today, the D.C. Court of Appeals struck a blow against transparency in the funding of political campaigns and reinstated the flawed regulation that rendered the disclosure requirements meaningless – made clear by the fact that millions of dollars of special interest money has flooded the airwaves with ads from anonymous sources,” Van Hollen said in a statement. “The Court of Appeals’ decision today will keep the American people, for the time being, in the dark about who is attempting to influence their vote with secret money.”

The Center for Individual Freedom and the Hispanic Leadership Fund argued against Van Hollen, saying that forcing tax-exempt groups to disclose their donors was an unconstitutional restriction on free speech.

The case will return to the lower court for further consideration, giving the FEC a chance to conduct a new rulemaking.

“Hopefully, either the FEC will issue a new disclosure regulation that actually requires disclosure or the District Court will strike down the existing regulation as arbitrary and capricious,” Van Hollen said. “We will continue to examine all of our options as we move forward.”

Georgia flouts federal order, withholds lunch ladies’ unemployment benefits

school bus via Shutterstock

By The Christian Science Monitor
Saturday, September 8, 2012 8:33 EDT

Scott Marshall, top, of Calhoun, Ga., files for unemployment in Dalton, Ga., in this photo from last month. (David Goldman/AP/File)

Georgia has set up a showdown with the Obama administration over how deeply states can cut jobless benefits by refusing to give school bus drivers and lunch ladies unemployment benefits during their summer breaks.

The issue echoes beyond Georgia because other states including Pennsylvania, Michigan, Missouri, and Arizona have trimmed unemployment benefits in various ways to rein in costs. Florida, for example, has a proposal to require drug tests for recipients to be eligible for benefits, while other states have reduced the total number of weeks that benefits can be received.

For its part, the Georgia unemployment insurance fund is broke, owing Washington more than $700 million for money it borrowed during the recession – adding to Georgia Labor Commissioner Mark Butler‘s sense of urgency.

But his open defiance of a US Labor Department order to restore unemployment benefits to seasonal workers is seen as the boldest move yet by a cash-strapped state. The Labor Department has responded by threatening to withhold the $72 million it pays Georgia annually to administer the program.

Mr. Butler has called it a states’ rights issue, contending he within his rights to refuse payment because the people aren’t technically unemployed; summer breaks are a part of their contracts and they don’t receive new contracts until the fall. But these 4,000 school bus drivers, janitors, pre-K teachers, and landscapers have traditionally received jobless benefits during the summer and have budgeted for it, creating hardships.

What Georgia is doing “is unusual because most states don’t want to threaten all their funding in a situation where it’s pretty clear that they’re on the wrong side of the law,” says Maurice Emsellem, a policy director at the National Employment Law Project in Washington. “But it also points to similar concerns in other states, especially those states with serious loans” from the federal government.

Last month, Labor Department officials charged that Butler’s view is without “adequate statutory basis.” Butler responded Friday, telling the Atlanta Journal-Constitution: “We will not back down from something we feel right about. We have the authority to write laws when it comes to unemployment.”

The Labor Department is “reviewing Georgia’s new legal position,” a spokesman told the Journal-Constitution.

Other states have addressed the same issue in different ways. Several states have passed legislation targeting seasonal private-industry employees like symphony musicians. South Carolina, meanwhile, is forcing claimants to make at least one of their work searches through a state online system.

Governors and statehouses are “basically doing all they can to make it more difficult for unemployed workers to get the benefits that they are due,” says George Wentworth, a former general counsel for the Connecticut Department of Labor.

That trend is having an effect. In Florida, for one, only 16 percent of unemployed are now eligible for unemployment insurance. As Congress, too, has begun to pull back benefits, the number of laid-off workers receiving extended unemployment insurance directly from Washington has declined from 1.1 million in October 2010 to 473,000 today.

In a white paper last year, the Obama administration suggested that if federal emergency-unemployment programs weren’t extended, large numbers of people would start dropping out of the workforce, becoming a further drag on the recovery. Those fears seemed reflected in Friday’s unemployment report, where the unemployment rate dropped from 8.3 to 8.1 percent mostly because nearly 400,000 people left the workforce, compared with 91,000 who found non-farm jobs.

As the long-term unemployed finally lose their benefits and as states cut back, many former workers have joined record numbers of Americans applying for Social Security Disability Insurance, the rolls of which have increased from around 7 million in 2007 to 9 million today, with nearly 3 million new applicants last year alone. Food stamp use, too, is at record highs.

Researchers “find that applications for [Social Security disability] by unemployed works older than age 50 increase as these workers get close to exhausting their unemployment benefits,” writes the White House in a position paper on extending emergency benefits. “This increase is driven by applications from individuals with limited assets,” meaning those who wouldn’t be able to come up with $5,000 to cover an unexpected emergency.

The bottom line, say economists, is that an already dire situation for millions of idle Americans is threatening to get worse. Attempts in Georgia to curb benefits, for example, come as the state’s unemployment rate inched up to 9.3 percent.

At the same time, pressure on states to curb unemployment benefits will also continue to build as long as “we’re stuck in this really low growth equilibrium,” says Edward Stuart, an economist at Northeastern Illinois University in Chicago.

The Christian Science Monitor (

Banks plan outside spending group to influence elections

By Alina SelyukhPosted 2012/09/05 at 4:54 pm EDT

WASHINGTON, Sep. 5, 2012 (Reuters) — A major banking industry trade group is planning a foray into the U.S. elections by creating a tax-exempt organization capable of raising unlimited anonymous funds, the groups’ chief operating officer said Wednesday.

The board of directors at the American Bankers Association, which represents about 5,000 U.S. banks, will vote on Thursday whether to launch a nonprofit advocacy group, which would join the scores of tax-exempts already pouring millions into the 2012 election without having to disclose donors.

“It’s a capability that most trade associations have,” said ABA’s Chief Operating Officer Michael Hunter. “It’s been on the table for a while … In some ways this is just building out a capability that the ABA needs in the long term.”

The group is expected to focus on changing the 2010 Dodd-Frank law that overhauled federal oversight of the financial system, Hunter said.

But it would be up to the nonprofit’s own board of directors – proposed to be made up of 14 bankers – to decide which House and Senate races the nonprofit would seek to influence, he said.

“They could decide to marshal resources for the 2013 election,” Hunter said. “Nothing’s on the table an everything’s on the table.”

The ABA’s traditional disclosed donations so far this campaign cycle stand at about $1.7 million, and have gone predominantly to Republican candidates in the House and Senate, according to a tally on the website of the Center for Responsive Politics.

Tax-exempt organizations have been prominent political players for nearly a decade, and have been under scrutiny for keeping donors anonymous. The issue has especially escalated this year because of the Democrats’ quest to restrain powerful conservative groups.

The Internal Revenue Service grants these groups tax exemption as long as most of their money is not spent on politics.

Corporations gained new political power in 2010 when the U.S. Supreme Court ruled that corporations’ and unions’ free speech rights were equal to those of individuals. The ruling lifted limits on what they may directly spend from their treasuries to support or oppose a candidate.

Hunter said the nonprofit would ask member banks for donations depending on the bank’s size. Small ones will be asked for $1,000, he said, medium-sized banks $5,000, and $10,000 from large ones.

If all members contribute what they’re asked for, the nonprofit would kick off with $6 million, but Hunter said he expected 40 percent to 50 percent of the members to participate, putting the likely startup cash pool at about $2 million.

The ABA’s plan for a nonprofit, revealed in a private call with members on Tuesday, was first reported by Bloomberg.

(Additional reporting by Emily Stephenson; Editing by M.D. Golan)