Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Ex-IRS Director: Tea Party Groups Deserved Scrutiny, But IRS Bungled the Job

| Wed May. 15, 2013 3:00 AM PDT

Among those in attendance last Friday when IRS official Lois Lerner admitted that agency staffers had systematically singled out tea partiers and other conservative groups for special scrutiny was a lawyer named Marcus Owens. Lerner's admission was shocking, and nobody realized that more than Owens. That's because he served as director of the Exempt Organizations Division from 1990 to 2000, prior to Lerner holding the job.

Owens, who has worked on tax law issues in private and public practice for almost 40 years, including 25 years at the IRS, says he has been getting a lot of calls about the scandal. The way he sees it, he told me in an interview on Tuesday, is that the IRS was right to take a close look at conservative groups applying for tax-exempt status during the 2010 and 2012 election cycles. Particularly in 2010, hundreds of new conservative groups were springing up across the country. "I think that it would be unreasonable to expect the IRS to ignore that, and to simply approve these 501(c)(4) applications from politically active organizations as if they were Scout troops or Little Leagues," he said. "That doesn't mean they should be denied exemption or that the evaluation should be overboard or overly intrusive, but there should be special evaluation."

Did the Acting IRS Commissioner Mislead Congress?

| Tue May. 14, 2013 10:50 AM PDT

When Lois Lerner, a top IRS official, revealed last Friday that agency staffers had singled out conservative nonprofit groups for extra scrutiny over their potential political activities, she blamed low-level, "frontline" staffers in the agency's Cincinnati office, a hub of activity that handles tens of thousands of applications for tax-exempt status. The IRS later said no high-level officials were aware of these controversial actions.

As it turns out, the current acting IRS commissioner knew that staffers were flagging applications from certain conservative groups a year before Congress and the public found out about it. And members of Congress are steaming mad that the IRS was aware of the questionable practices of some of its staffers and didn't speak up about it. Several Republicans claim that Congress was misled by the IRS and its top brass about these actions.

The IRS said that current acting commissioner Steven Miller learned on May 3, 2012, that staffers had been picking out conservative groups for greater scrutiny than is typical. (Miller was deputy commissioner at the time.)

Yet Republican lawmakers say Miller neglected to tell Congress about the systematic singling out of conservative groups in subsequent interactions. Miller wrote two letters to Congress after his May 2012 briefing about how the IRS reviews applications for tax-exempt status, but did not mention the scrutiny of tea party groups. On July 25, 2012, Miller testified before the House ways and means oversight subcommittee on the subject of "organizational and compliance issues related to public charities." During questioning, Miller was asked about tea party groups being harassed, but not about tea partiers specifically. He did not mention having been briefed on the IRS' actions.

"It is almost inconceivable to imagine that top officials at the IRS knew conservative groups were being targeted but chose to willfully mislead the Committee's investigation into this practice," Rep. Dave Camp, chair of the ways and means committee, said in a statement.

An IRS spokesman did not respond to a request for comment.

Miller wrote in an op-ed for USA Today on Tuesday that the IRS' singling out of conservative groups showed "a lack of sensitivity to the implications of some of the decisions that were made." He added that sifting through applications for tax-exempt status was "factually complex, and it's challenging to separate out political issues from those involving education or social welfare." He did not say why he didn't tell Congress about the tea party scrutiny when he learned of it in May 2012.

Other lawmakers say they corresponded with the IRS on the tea party issue and can't understand why the agency didn't share all of what it knew. "I wrote to the IRS three times last year after hearing concerns that conservative groups were being targeted," Sen. Orrin Hatch (R-Utah), said in a statement Monday. "Yet it didn't occur to anyone at the IRS to let us know that this targeting was in fact happening? Knowing what we know now, the IRS was at best being far from forthcoming, or at worst, being deliberately dishonest with Congress. These are the facts and the questions we need answered."

They could be answered soon. On Friday, the House ways and means committee will hold a hearing on the IRS' tea party controversy. Other House and Senate committees have pledged to investigate the matter, too.

Electric Car Guru Elon Musk Ditches Mark Zuckerberg's FWD.us Group

| Mon May. 13, 2013 7:31 AM PDT
Tesla Motors CEO Elon Musk.

Elon Musk, the CEO of Tesla Motors and the private space travel company SpaceX, has parted ways with FWD.us, the tech-centric political group that Facebook cofounder Mark Zuckerberg launched last month. So, too, has investor and entrepreneur David Sacks, who created the social network Yammer and financed the satiric 2005 movie Thank You for Smoking. The tech news website AllThingsD first reported the departures of Musk and Sacks, and their names have been removed from the list of nearly two-dozen "major contributors" to FWD.us.

Zuckerberg and Facebook "Causes" creator Joe Green founded FWD.us to lobby on behalf of Silicon Valley firms in Washington. They quickly earned the endorsements of a host of other tech superstars. The group—which, as a 501(c)(4) nonprofit, does not have to disclose its donors—has reportedly raised more than $25 million so far. The group chose the ongoing fight over comprehensive immigration reform as its first foray into Congressional politics, seeking to expand the number of visas available to engineers and other high-skilled workers that tech companies would like to recruit. By all accounts, FWD.us' message has gotten a warm reception on Capitol Hill.

But the group caused a political firestorm recently when it ran TV advertisements praising Sen. Mark Begich (D-Alaska) for supporting more oil drilling in the Arctic National Wildlife Reserve. Another ad depicted Sen. Lindsey Graham (R-S.C.) criticizing Obamacare and President Obama's refusal (so far) to green-light the controversial Keystone XL pipeline. FWD.us ran the ads to give Begich and Graham some political cover on immigration reform, the theory being that by touting the senators' conservative bona fides, they could give them the space to take a moderate position on an immigration reform bill. The Begich and Graham ads ran for a week and are no longer on the air. Liberal and environmental groups reacted furiously to FWD.us' conservative and anti-environmental message, protesting at Facebook's headquarters in Menlo Park, California. And last week, nine progressive groups, including MoveOn.org, Progressives United, the Sierra Club, and Daily Kos, pledged to pull down their existing paid Facebook ads or cancel future ad buys for at least two weeks.

It's not surprising that Musk would break with FWD.us. Tesla Motors builds high-end electric cars; its entire business model is built around a clean-tech economy. Musk also sits on the board of SolarCity, a company that delivers, installs, and maintains solar panels powering homes, businesses, and government offices.

Musk sent this statement to AllThingsD: "I agreed to support Fwd.us because there is a genuine need to reform immigration. However, this should not be done at the expense of other important causes. I have spent a lot of time fighting far larger lobbying organizations in DC and believe that the right way to win on a cause is to argue the merits of that cause. This statement may surprise some people, but my experience is that most (not all) politicians and their staffs want to do the right thing and eventually do."

FWD.us spokeswoman Kate Hansen emailed this statement to Mother Jones: "We recognize that not everyone will always agree with or be pleased by our strategy—and we're grateful for the continued support of our dedicated founders and major contributors. FWD.us remains totally committed to supporting a bipartisan policy agenda that will boost the knowledge economy, including comprehensive immigration reform."

Koch-Linked Women's Group Takes Credit for Mark Sanford's Win

| Wed May. 8, 2013 3:00 PM PDT
Incoming Congressman Mark Sanford.

Soon after Mark Sanford, the former governor of South Carolina who resigned in disgrace in 2009, pulled off an upset win in his congressional race on Tuesday, a conservative group called the Independent Women's Voice boasted of its role in his victory. "Independent Women's Voice was the only outside group supporting Sanford on a significant scale, by educating voters about the facts about the Democratic candidate," IWV president Heather Higgins said in a statement. IWV spent $250,000 on TV and print ads in the last week of the election, helping to power Sanford to victory over Democrat Elizabeth Colbert Busch in a special election in South Carolina's 1st Congressional district.

And if the billionaire industrialists Charles and David Koch are encouraged by Sanford's win, they, too, can claim a degree of credit, for IWV has plenty of ties to the Koch political network.

IWV, a nonprofit group that doesn't have to name its funders (and can't make politics the majority of what it does), is the sister organization of the Independent Women's Forum, another nonprofit focused more on policy issues. Higgins, who chairs IWF's board, has staked out a position as a leading critic of Obamacare. She also argues that independent women voters are not destined to vote Democratic and, instead, these women are up for grabs on political and policy matters and can be won over by Republicans—if GOPers get their messaging right.

When IWV applied for tax-exempt status in September 2004, it listed Nancy Pfotenhauer, a former Koch Industries lobbyist, as its president. (She also had a leadership position at Independent Women's Forum.) Pfotenhauer, who is currently a Koch spokeswoman, has filled a number of roles with Koch-linked groups. She was formerly the president of Americans for Prosperity, the Kochs' flagship advocacy organization, and is now a director at AFP. She was a vice president for Citizens for a Sound Economy, the Koch-backed predecessor to AFP. She also advised John McCain's during his 2008 presidential campaign.

IWV does not have to disclose its donors, but the group received $250,000 in 2009 from the Center to Protect Patient Rights, a money conduit for conservative nonprofits run by Koch operative Sean Noble. As the Center for Responsive Politics has reported, the Center to Protect Patient Rights handed out $44 million in 2010 and nearly $15 million in 2011 to an array of nonprofit groups including Grover Norquist's Americans for Tax Reform and the 60 Plus Association, which describes itself as the "conservative alternative" to the AARP. Noble spoke at a 2010 Koch donor retreat (PDF) in Aspen, Colorado. Pfotenhauer spoke at the same retreat, as did Higgins.

Higgins also briefly served on the board of the Center to Protect Patient Rights. There is no public information revealing whether IWV still receives financial support from Koch-linked sources.

There's another curious wrinkle about IWV. In its 2004 application for tax-exempt status, the group said it would not spend "any money" on influencing elections. Yet in later tax filings, IWV changed its tune and told the IRS it spent $772,435 on elections in 2010. There are no tax filings available yet detailing IWV activity in 2012 or 2013.

IWV's six-figure spending on Mark Sanford's behalf was anything but a safe bet. But as it turns out, it was money very well spent.

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