IRSgate, President Clinton’s pattern of using government agencies and their files to harass and intimidate those he considers to be his political adversaries, Internal Revenue Service , House Judiciary Committee evidence, December 1998

IRSgate, President Clinton’s pattern of using government agencies and their files to harass and intimidate those he considers to be his political adversaries, Internal Revenue Service , House Judiciary Committee evidence, December 1998


                       "IMPEACHMENT OF PRESIDENT
                        WILLIAM JEFFERSON CLINTON


                         THE EVIDENTIARY RECORD
                         PURSUANT TO S. RES. 16
                               VOLUME VII

Transcript of October 5, 1998 presentations of David Schippers and Abbe 
 Lowell, and debate on H. Res. 581, beginning an impeachment inquiry. 
               Committee Print, Ser. No. 8, December 1998"

"Mr. Barr. Mr. Chairman, I also ask unanimous consent to 
insert the Judicial Watch Interim Report dated September 28, 
    Mr. Hyde. Without objection."
"Judicial Watch Interim Report on Crimes and Other Offenses Committed by 
 President Bill Clinton Warranting His Impeachment and Removal from 
 Elected Office"

 "part ii
 Crimes and Other Offenses Relating to the Misuse of the Internal 
 Revenue Service that Warrant Impeachment and Removal from Office of 
 President Bill Clinton
I. Introduction.
 President Clinton's pattern of using government agencies and their 
files to harass and intimidate those he considers to be his political 
adversaries apparently extends to the Internal Revenue Service 
(``IRS''). Among several of his targets was the Western Journalism 
Center (``WJC'').
 On May 13, 1998, Judicial Watch, on behalf of WJC, a non-profit 
organization established to promote education in journalism and 
investigative reporting,(112) sued former IRS Commissioner 
Margaret Milner Richardson, IRS agent Thomas Cederquist, and several 
unnamed IRS officials for violating its First Amendment rights to 
freedom of speech and freedom of the press, as well as its Fourth 
Amendment right to freedom from unreasonable searches and seizures. The 
gravamen of WJC's suit was that these IRS officials violated WJC's 
constitutional rights in retaliation for WJC's having sponsored an 
investigation into the death of former Deputy White House Counsel 
Vincent Foster. Importantly, Ms. Richardson is a close personal friend 
of First Lady Hillary Rodham Clinton, and had worked on President 
Clinton's 1992 presidential campaign.(113)
 Mr. Foster's death on July 20, 1993 was ruled a suicide by 
Independent Counsels Robert Fiske, and Kenneth Starr, the United States 
Park Police, and the Federal Bureau of Investigation. Because the 
official investigations left significant questions unanswered, WJC 
sponsored an investigation and published statements that challenged the 
official results. As a consequence, WJC was targeted by the Clinton 
Administration and subsequently audited by the IRS. Afterwards, WJC's 
tax status remained unchanged and no additional taxes or penalties were 
assessed.(114) However, WJC's ability to investigate and 
report on government corruption was severely curtailed by the audit.
 WJC's lawsuit alleges that the IRS audit was not about taxes; it 
was about illegal use of the IRS for political 
retaliation.(115) Thus, the case presents yet another 
example of the Clinton Administration's use of governmental power to 
intimidate and destroy its perceived adversaries.
 The audit violated WJC's constitutional rights. Not only was WJC 
subjected to an onerous and burdensome audit to retaliate against it 
for its prior reporting, but it also was prevented from further 
exercising its First Amendment rights, because WJC was forced to devote 
its limited personnel and resources to the audit instead of to its 
journalistic endeavors. Because WJC was required to turn over 
substantial quantities of information and documentation, the audit also 
violated WJC's Fourth Amendment right of freedom from unreasonable 
searches and seizures. Also, the audit had a chilling effect on WJC's 
ability to raise funds.
 Evidence indicates that WJC was not the only likely victim of 
President Clinton's IRS. A later survey by WJC revealed that at ``least 
20 non-profit organizations `unfriendly' to the Clinton administration 
have faced Internal Revenue Service audits since 1993,'' while ``not a 
single prominent public policy organization friendly to the Clinton 
Administration has apparently been targeted for audit in the same 
period, according to two random samples and research into the non-
profit community.''(116) The targeted organizations included 
National Review, American Spectator, Citizens Against Government Waste 
and the Heritage Foundation.(117) In January 1997, even the 
left-leaning Public Broadcasting Service found ``that a remarkable 
number of Bill Clinton's critics have recently become the target of IRS 
audits.'' (118)
 These reports are consistent with the Clinton Administration's use 
of the IRS in the White House Travel Office matter. In 1993-94, 
UltrAir, a charter company used by the White House Travel Office, as 
well as Billy Dale, the former director of that office, audited by the 
IRS.(119) Associate Counsel to the President William Kennedy 
had reportedly sought to have the FBI investigate UltrAir and Dale in 
order to replace them with allies of the President.(120) 
Kennedy reportedly advised an official of the FBI that the IRS would be 
used to investigate the White House Travel Office if the FBI did not do 
so.(121) Subsequently, both UltrAir and Dale were audited by 
the IRS, with no income tax violations being found.(122)
II. Background of the WJC.
 WJC is a 501(c)(3) tax-exempt, charitable organization and, as 
such, pays no federal income tax. WJC was granted 501(c)(3) status by 
the IRS in August of 1996.
 WJC's operations are funded by contributions from its supporters 
and foundations, who, in turn, are able to deduct these contributions 
from their own federal income taxes. WJC's contributors rely on WJC's 
501(c)(3) status when making contributions.
 WJC's journalism credentials are substantial. It was founded by 
Joseph Farah, an award-winning journalist and former editor of The 
Sacramento Union, and James G. Smith, the former President of The 
Washington Star, to promote journalism education and investigative 
reporting. WJC was formerly the publisher of Inside California, which 
focused primarily on investigations concerning the state of California. 
WJC currently is the publisher of Dispatches, a bi-weekly investigative 
publication that focuses primarily on national events. Its extensive 
investigative reporting has been widely cited and credited in such 
influential national publications as The Los Angeles Times, The Oakland 
Tribune, The Orange County Register, The Sacramento Bee, The San 
Francisco Chronicle, The San Francisco Examiner, The Wall Street 
Journal and Investor's Business Daily.
 WJC's investigative reporting is non-partisan. For example, it 
undertook an extensive investigation into the National Education 
Association's political power. It also undertook a substantial 
investigation into the ``militarization'' of the federal government 
during both Republican and Democratic administrations. It also 
undertook an extensive investigation into corruption, waste, fraud and 
abuse in California government during a Republican administration.
III. Details of the Harassment.
 The audit clearly was intended to harass WJC. In July 1996, WJC 
learned that it was being audited by the IRS. On at least two separate 
occasions, the IRS agent conducting the audit, defendant Thomas 
Cederquist, admitted to WJC's accountant that ``this is a political 
case,'' and ``the decision is going to be made at the national level.''
 During the course of the audit, WJC was asked to produce documents 
about its decision to undertake an investigation into Mr. Foster's 
death and about why opposing viewpoints were not presented in published 
statements about its investigation. At least five (5) IRS ``Information 
Document Requests'' (Form 4565) were served on WJC demanding the 
production of thousands of pages of documents and substantial 
quantities of information. One document request, dated August 16, 1996, 
sought the following materials, among others, relating directly to the 
investigation into Foster's death:

 Copies of all documents relating to the selection of 
 Christopher Ruddy as an investigative reporter and how the 
 topic was selected. Who was on the review committee? What 
 review process is used for peer review? Were any other projects 
 considered? What about any opposing viewpoints? Why were they 
 not presented in your advertisements? (123)

 When WJC's executive director challenged the audit as being 
retaliatory in an opinion article published in The Wall Street Journal 
(124) and charged that the IRS had undertaken other 
politically-inspired audits of perceived adversaries of President 
Clinton and his Administration, the scope of the audit was enlarged. 
The IRS then began audits of two of WJC's largest individual donors, as 
well as several individuals WJC had retained to provide expert and 
research services for its Foster investigation.
 Evidence unknown to WJC at the time, but later revealed, showed 
Clinton Administration targeting of WJC. WJC learned of a December 1994 
internal memorandum prepared by Associate White House Counsel Jane C. 
Sherburne that outlined strategies for addressing various political 
scandals confronting President Clinton and his 
Administration.(125) WJC was specifically named in the 
memorandum for its investigation into Foster's death.(126) 
WJC later learned of a 1995 report prepared by the White House 
Counsel's Office in conjunction with the Democratic National Committee 
entitled ``Communication Stream of Conspiracy Commerce,'' that 
purported to document a ``right wing'' conspiracy to convey ``fringe'' 
stories about political scandals to the mainstream 
media.(127) The first news organization identified on the 
first page of this report was WJC.(128)
 The tremendous burden imposed on WJC because of the tax audit, 
including the time WJC was forced to devote to the audit and the funds 
it was compelled to expend, severely curtailed WJC's ability to 
exercise its First Amendment rights. WJC was effectively forced to shut 
down its investigative reporting and other activities, including its 
investigation into Foster's death. One of WJC's investigative reporting 
publications, Inside California, was terminated as a result of the 
 Because of the audit, several foundations and other contributors 
who had made donations to WJC in the past and/or were considering 
making donations to WJC, decided against making new and/or additional 
donations either because they feared retaliatory audits or because they 
feared that the ongoing audit would lead to the revocation of WJC's 
501(c)(3) tax exempt status and, consequently, that their donations 
would not be tax-deductible. As a result of this funding loss, WJC was 
forced to lay off at least two members of its already small staff, 
which further limited WJC's ability to exercise its First Amendment 
 In May 1997, defendant Cederquist undertook a two-day examination 
of documentation in WJC's offices. Cederquist did not appear for the 
second day of this examination, however, as IRS Agent John Grisso 
appeared in Cederquist's place. During this second day of the 
examination, Agent Grisso stated to Farah that he did not understand 
why so much time and energy had been devoted to the WJC audit because 
``there was nothing there.'' Agent Grisso advised Farah that he would 
recommend that a ``no-change'' letter be issued.
 Ultimately, the Clinton Administration failed to destroy WJC, which 
has become an influential source of news and commentary on the 
IV. Conclusion.
 The likely reason for the audit was to retaliate against WJC for 
sponsoring an investigation into the Foster death, punish it for 
challenging the results of the official investigations, limit its 
ability to continue to both investigate and publish materials perceived 
as being harmful to the President and his Administration, and 
discourage potential donors from contributing.
 The lawsuit is based on Bivens v. Six Unknown Named Agents of the 
Federal Bureau of Investigation, 403 U.S. 388 (1971), wherein the U.S. 
Supreme Court declared that federal officials may be held liable in 
their individual capacities for violating a person's constitutional 
rights while acting under color of federal law. Judicial Watch expects 
the lawsuit to serve as a warning and deterrent to IRS officials, that 
they cannot violate citizens' constitutional rights without being held 
personally accountable.
 This personal accountability includes President Clinton. Any 
impeachment inquiry should include the misuse of the IRS, as 
demonstrated by the experience of WJC and other organizations that 
President Clinton perceives as his adversaries.(130)"

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