MacIver News Service | Jan. 10, 2018
By M.D. Kittle
MADISON – Dozens of conservative organizations are receiving late Christmas presents years after the IRS handed them a lump of coal.
The federal government in recent days has been issuing settlement checks to 100 right-of-center groups wrongfully targeted for their political beliefs under the Obama administration’s Internal Revenue Service, according to an attorney for the firm that represented plaintiffs in NorCal v. United States.
Three of the claimants in the $3.5 million national class-action suit are based in the Badger State.
“This is really a groundbreaking case. Hopefully it sets a precedent and will serve as a warning to government officials who further feel tempted to discriminate against U.S. citizens based on their viewpoints,” Edward Greim, attorney for Kansas City, Mo.-based Graves Garrett LLC told MacIver News Service.
Most of the claimants will each receive a check for approximately $14,000, Greim said. Five conservative groups that were integrally involved in the lawsuit get a bonus payment of $10,000 each, the attorney said.
About $2 million of the settlement goes to cover the legal costs of five long years of litigation. IRS attorneys attempted delay after delay, objection after objection, trying to use the very taxpayer protection statutes the plaintiffs were suing under to suppress documents.
The agency has admitted no wrongdoing in what a federal report found to be incidents of intrusive inspections of organizations seeking nonprofit status. Greim has said the seven-figure settlement suggests otherwise.
An IRS spokesman declined to comment.
Brandon Scholz, managing director of Wisconsin Small Businesses United, one of the groups receiving a settlement check, said IRS’ conduct had a “chilling effect” on free speech.
“Shame on those people at the IRS who engaged in putting their foot down on the throats of people who were simply trying to advocate for an issue or express an opinion,” he said. “That stain on the IRS should remain there as a reminder that this should never take place again.”
Consumer Rights Wisconsin is the other conservative organization receiving a settlement check, according to Greim.
Autonomous Solidarity Organization, Inc., a Madison-based grassroots organization, is among a handful of liberal organizations receiving a settlement check. The vast majority of groups targeted were conservative, but the IRS began adding liberal organizations to their intense-scrutiny initiative after the agency got caught.
“In the spirit of democracy, we would have of course preferred that our organization, as well as all of the others in the class, had been treated fairly and equitably in the first place,” Sara Gilbertson, Autonomous Solidarity treasurer, wrote in an email to MacIver News Service. “As generous as the settlement is, there are fundamental differences in the work we were doing and planning in 2013 and 2014 and what is needed today, and money cannot change the past.”
Gilbertson said it took nearly two years for the organization’s 501(c)(3) status to be granted.
“Today, we are pleased that this class action lawsuit has been settled favorably and hope that going forward, no organization will face such unlawful and arbitrary heightened scrutiny,” she added. “We also find it delightfully ironic that the efforts of the NorCal Tea Party and their attorneys have benefitted organizations like ours that are working to uphold human rights, social justice, and worker justice, since we would not have had the resources to pursue legal action on our own.”
Disgraced former bureaucrat Lois Lerner led the IRS division that processes applications for tax-exempt groups. A 2013 inspector general’s report found the IRS had singled out conservative and tea party organizations for intense scrutiny, oftentimes simply based on their conservative-sounding or tea party names. The IRS delayed for months, even years, the applications, and some groups were improperly questioned about their donors and their religious affiliations and practices.
Lerner claims she did nothing wrong. In clearing her of wrongdoing, an Obama administration Department of Justice review described Lerner as a hero. But she invoked her Fifth Amendment right in refusing to answer questions before a congressional committee. The plaintiffs in the class-action lawsuit took the first and only deposition of Lerner, a document that the former IRS official and her attorneys have fought to keep sealed.
“At one level, it’s hard to even assess a dollar amount to what they did, it’s so contrary to what we think our bureaucrats in Washington should be doing. It boggles the mind,” Greim said.
In signing off on the agreement in August, federal Judge Michael R. Barrett said the settlement was “fair, reasonable and adequate.”
Greim said the money recovered in the settlement approximates the number of IRS violations involved.
“That’s about what the evidence showed,” the attorney said. “We felt like we got about everything we could.”
Originally the class-action included some 400 potential claimants.
Conservative activists are skeptical of the IRS’ public apologies and its pledge to end such targeting practices.
“The message is do not let up on the gas pedal. Do not be intimidated,” Scholz said.
Bill Osmulski contributed