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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Rep. Darrell Issa: Tea Party-Targeting IRS Staffers Took Their Orders From Washington

| Mon Jun. 3, 2013 12:14 PM EDT
Rep. Darrell Issa (R-Calif.).

Despite the claims of Obama administration officials, the IRS scandal is not the fault of "rogue" staffers in Cincinnati, according to Rep. Darrell Issa (R-Calif.). No, the chairman of the House oversight committee charges—despite the paucity of evidence backing him up—that it leads all the way back to the agency's headquarters in Washington.

On CNN's State of the Union on Sunday, Issa made some of his strongest claims yet that top IRS brass knew of, if not directed, the targeting of right-leaning groups applying for tax-exempt status for special scrutiny. Issa also ripped Obama administration officials for denying that the IRS scandal reaches back to Washington.

"The administration is still trying to say there's a few rogue agents in Cincinnati, when in fact the indication is they were directly being ordered from Washington," Issa said.

He called White House Press Secretary Jay Carney the administration's "paid liar" while accusing him of dissembling about the extent of the IRS scandal. Carney, Issa said, is "still making up things about what happens and calling this a local rogue. The reason that [IRS director] Lois Lerner tried to take the Fifth [Amendment when asked to testify before Congress] is not because there's a rogue in Cincinnati. It's because this is a problem that was coordinated in all likelihood right out of Washington headquarters. And we're getting to proving it."

Issa also suggested—again, without evidence—that tea partiers' complaints about the agency's heavy-handed treatment were overlooked because it was an election year. "My gut tells me that too many people knew that this wrongdoing was going on before the election, and at least by some sort of convenient benign neglect allowed it to go on through the election, allowed these groups, these conservative groups, these, if you will, not friends of the president to be disenfranchised through an election," he said. "Now, I'm not making any allegations as to motive, that they set out to do it. But certainly, people knew it was happening."

There's been quite a bit of fallout since the IRS scandal erupted two weeks ago, when Lerner, who runs the IRS division that oversees politically active nonprofits, apologized for the singling out of conservative groups. Lerner is now on paid leave. Steven Miller, the acting commissioner of the IRS when the scandal broke, resigned his position; he was replaced by Danny Werfel, an Obama administration official. Members of the House and Senate have held numerous hearings on the issue, blasting Lerner, Miller, and the Treasury inspector general whose report found numerous examples of wrongdoing but no evidence of political bias. The release of an internal video showing IRS staffers learning a dance called the "Cupid Shuffle" at a 2010 conference has only added to the agency's woes.

Werfel, the current acting commissioner, will address the video and the IRS' targeting scandal at Congressional hearings this week.

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Cigarette Maker Funded Dark-Money Conservative Groups

| Fri May 31, 2013 2:49 PM EDT

When we use the term "dark money," we're usually referring to politically active nonprofit groups—like the kind at the center of the recent IRS scandal—that spend millions on political campaigns yet don't disclose their funders. Think Karl Rove's Crossroads GPS, Koch-backed Americans for Prosperity, and pro-Democrat Patriot Majority. Rarely, if ever, does the public learn who bankrolls these organizations.

This week, though, we got one such glimpse. As the Center for Public Integrity reported, Reynolds American Inc., the corporation behind Camel and Winston cigarettes, funded several high-profile dark money groups in 2012. Reynolds doled out $175,000 to Americans for Tax Reform, conservative activist Grover Norquist's anti-tax group. The company also gave $50,000 to Americans for Prosperity, $45,000 to the US Chamber of Commerce, and $100,000 to the Partnership for Ohio's Future, an Ohio Chamber-backed group that supported restricting the worker bargaining rights.

Here's more from CPI's Dave Levinthal:

The tobacco company’s donations are just a fraction of the nearly $50 million that those two groups reported spending on political advocacy ads during the 2012 election cycle, almost exclusively on negative advertising. Federal records show that Americans for Prosperity alone sponsored more than $33 million in attack ads that directly targeted President Barack Obama.

But the money, which Reynolds American says it disclosed in a corporate governance document at the behest of an unnamed shareholder, provides rare insight into how some of the most powerful politically active 501(c)(4) “social welfare” nonprofits are bankrolled.

Reynolds American is the parent company of R.J. Reynolds Tobacco, which makes Camel and Winston brand cigarettes.

“The shareholder specifically requested that we disclose information about 501(c)(4)s, and in the interests of greater transparency, we agreed,” Reynolds American spokeswoman Jane Seccombe said.

Large corporations—tobacco companies or otherwise—almost never release information about their giving to such groups, and it’s most unusual for the groups themselves to voluntarily disclose who donates to them.

After the Supreme Court's 2010 Citizens United decision, which freed corporations to pump vastly more money into American campaigns, businesses faced two options. They could donate to super-PACs, which can raise and spend unlimited sums of money but must disclose their donors. Or they could fund politically active nonprofits, which can dabble in politics but don't name their donors. In the wake of Citizens United, we heard countless warnings about a "flood" of corporate cash into politics through big-spending super-PACs. But that flood never quite materialized: For-profit corporations accounted for just over $1 of every $10 raised by super-PACs in the 2012 election cycle. Instead, it was a small band of millionaires and billionaires that gave super-PACs most of their dough.

What the relatively small Reynolds American Inc. donations suggest is that corporations chose the nonprofit route and so avoided scrutiny of their political giving in today's big-money era. In this case, Reynolds' donations were disclosed only because a pesky shareholder asked for them to be. That's not the case for most corporations, whose giving remains a secret.

Former IRS Chief: "I Certainly Am Not Personally Responsible" for Tea Party Scandal

| Tue May 21, 2013 5:00 PM EDT
Former IRS Commissioner Doug Shulman.

Former IRS Commissioner Douglas Shulman, a George W. Bush appointee who ran the tax agency when low-level employees wrongly singled out conservative groups for special scrutiny, testified on Tuesday before Congress for the first time since the scandal erupted on May 10. Senators hoping for new revelations or a mea culpa from Shulman, however, were left wanting. He said little about why IRS staffers targeted tea party groups and others for some 18 months, and he repeatedly downplayed his own role.

But one thing was clear from the hearing: The fallout from the IRS' tea party debacle isn't over, and its implications may spill over into campaign finance rules. J. Russell George, the Treasury Department inspector general who investigated the IRS' actions, said his office will be auditing how the IRS oversees politically active nonprofit groups and presumably how the agency determines which nonprofits are too political. That's potentially big news for the money-in-politics world: Nonprofits spent hundreds of millions of dollars during the 2012 campaign, and as the IRS scandal has further revealed, the agency's process for determining how much politicking by a group runs afoul of regulations is vague and confusing.

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