Reign In the IRS (Another Scandal) Kim Strassell

Another IRS Scandal Waiting to Happen

Federal Elections Commissioner Donald McGahn wants to rein in the bureaucracy of this sensitive agency. The political left is furious.

The Obama administration claims it wants to ensure that the rank political abuse perpetrated by the Internal Revenue Service is never repeated. Ask Donald McGahn how that's going.

Mr. McGahn is a Republican appointee to the Federal Election Commission, an agency with every bit as much potential for partisan meddling as the IRS. Due to leave the agency soon, Mr. McGahn's parting gift is a campaign to rein in an out-of-control FEC bureaucracy. But the left is fighting that oversight and is determined to keep power in the hands of unaccountable staff.
 
The FEC was created in the wake of Watergate, in part to remove primary power over political actors from the Justice Department. It sports an equal number of Democratic and Republican commissioners, so that neither side can easily impose a partisan agenda. This means a lot of deadlocks, a situation that infuriates the left, which prefers a fire-and-brimstone regulator.

It also frustrates the FEC's staff, which has responded by going around the commissioners. The Federal Election Campaign Act (FECA), for instance, makes it clear that staff may not commence investigations until a bipartisan majority (four members) of the commission votes that there is a "reason to believe" a violation has occurred. In theory, this provision should guard against IRS-like witch hunts.

Except that over the years staff have come to ignore the law, and routinely initiate their own inquiries—often on little more than accusations they find on blogs or Facebook . For a sense of how these investigations can go off the rails, consider that Lois Lerner—before serving as the center of today's IRS scandal—was the senior enforcement officer at the FEC. A Christian Coalition lawyer has testified that during a (sanctioned) FEC investigation in the 1990s—in addition to generating endless subpoenas, depositions and document requests, Ms. Lerner's staff demanded to know what Coalition members discussed at their prayer meetings and what churches they belonged to. Once staff gets rolling, there is little to stop them.

More troubling to some FEC commissioners has been the staff's unsanctioned and growing ties to the Obama Justice Department. In September 2011, Tony Herman was named FEC general counsel. Mr. Herman in early 2012 brought in Dan Petalas, a Justice prosecutor, as head of the agency's enforcement section. FECA is clear that a bipartisan majority of commissioners must vote to report unlawful conduct to law enforcement. Yet FEC staff have increasingly been sending agency content to Justice without informing the commission.

For instance, when a complaint is filed with the FEC against a political actor, the general counsel is required to write a report for the commissioners on whether there is a "reason to believe" the actor committed a violation. This report is confidential and never made public until a case is closed. Yet FEC staffers have sent these reports to Justice, in one case before the report was considered by the commissioners.

In a June memo, Mr. Herman defended staff supremacy with the astonishing argument that big decisions are best made by "non-partisan, career leadership." (No joke.) That way, the commission is shielded from "claims that it is deciding whether to assist DOJ criminal prosecutions" on the basis of "political considerations." Better, apparently, to keep the public completely in the dark.
These ties are disturbing, since the Obama campaign pioneered the tactic of demanding that Justice pursue criminal investigations of its political opponents as a means of intimidation. The FEC's info-funneling to Obama Justice raises the obvious question of whether Obama Justice wasn't in turn influencing FEC reports. (It also raises another question: If Justice had this kind of pipeline to the FEC,
did it have one to the IRS?)

These questions are why election law requires bipartisan diligence over investigations and information sharing. Mr. McGahn is attempting to right the ship by getting the commission to adopt a new enforcement manual that would require uniform procedures. Yet FEC Chairman Ellen Weintraub has been uncharacteristically quiet on the issue, and liberal groups such as the Center for American Progress (via its Think Progress blog) have launched howling accusations that Mr. McGahn is trying to "block enforcement" and "weaken the agency." Some have suggested he's trying to ram through the change while the commission has a temporary 3-2 Republican majority.

In fact, Mr. McGahn hasn't forced this issue, because he's intent on getting all his colleagues to stand up for institutional responsibility.

He's made clear he's not trying to end the relationship with the DOJ, or to stop investigations. As he told me this week, the only question is who will make the decisions: "The presidentially appointed, Senate-confirmed commissioners who answer to the public, or an unaccountable staff?"

The left wants the latter, since it provides more latitude to use the FEC to their political ends. This has worked to their benefit at agencies like the (currently illegitimate) National Labor Relations Board, where (Acting) General Counsel Lafe Solomon is single-handedly running U.S. labor policy, much to their liking.

But Americans, and the FEC commissioners, need only recall our recent experience of letting federal employees meddle in politics. Mr. McGahn deserves great credit for trying to avoid the potential for another IRS scandal. Let's see if the Obama team is just as serious.

A version of this article appeared July 13, 2013,