Monday, December 29, 2014

Leaning Right in Hollywood, Under a Lens

Leaning Right in Hollywood, Under a Lens

LOS ANGELES — In a famously left-leaning Hollywood, where Democratic fund-raisers fill the social calendar, Friends of Abe stands out as a conservative group that bucks the prevailing political winds.
A collection of perhaps 1,500 right-leaning players in the entertainment industry, Friends of Abe keeps a low profile and fiercely protects its membership list, to avoid what it presumes would result in a sort of 21st-century blacklist, albeit on the other side of the partisan spectrum.
Now the Internal Revenue Service is reviewing the group's activities in connection with its application for tax-exempt status. Last week, federal tax authorities presented the group with a 10-point request for detailed information about its meetings with politicians like Paul D. Ryan, Thaddeus McCotter and Herman Cain, among other matters, according to people briefed on the inquiry.
The people spoke on the condition of anonymity because of the organization's confidentiality strictures, and to avoid complicating discussions with the I.R.S.
Those people said that the application had been under review for roughly two years, and had at one point included a demand — which was not met — for enhanced access to the group's security-protected website, which would have revealed member names. Tax experts said that an organization's membership list is information that would not typically be required. The I.R.S. already had access to the site's basic levels, a request it considers routine for applications for 501(c)(3) nonprofit status.
Friends of Abe — the name refers to Abraham Lincoln — has strongly discouraged the naming of its members. That policy even prohibits the use of cameras at group events, to avoid the unwilling identification of all but a few associates — the actors Gary Sinise, Jon Voight and Kelsey Grammer, or the writer-producer Lionel Chetwynd, for instance — who have spoken openly about their conservative political views.
The I.R.S. request comes in the face of a continuing congressional investigation into the agency's reviews of political nonprofits, most of them conservative-leaning, which provoked outrage on the right and forced the departure last year of several high-ranking I.R.S. officials. But unlike most of those groups, which had sought I.R.S. approval for a mix of election campaigning and nonpartisan issue advocacy, Friends of Abe is seeking a far more restrictive tax status, known as 501(c)(3), that would let donors claim a tax deduction, but strictly prohibits any form of partisan activity.
The group is not currently designated tax-exempt, but it behaves as a nonprofit and has almost no formal structure, people briefed on the matter said. The I.R.S. review will determine whether Friends of Abe receives tax-exempt status that would provide legal footing similar to that of the People for the American Way Foundation, a progressive group fostered by the television producer Norman Lear and others. If not, Friends of Abe could resort to the courts, or it might simply operate as a nonprofit, but it would be unable to receive tax-deductible contributions.
Jeremy Boreing, executive director of Friends of Abe, declined on Wednesday to discuss details of the tax review, but said the group would continue regardless of outcome.
“Certainly, it's been a long process,” he said.
“Friends of Abe has absolutely no political agenda,” he added. “It exists to create fellowship among like-minded individuals.”
People for the American Way, Mr. Lear's group, stands as something of a liberal counterpart to Friends of Abe, though the organization is far larger, with an affiliate that spends millions of dollars a year on issue advocacy in Washington and beyond. But the entertainment industry has been crisscrossed by progressive groups like the Natural Resources Defense Council, which maintains a tax-exempt educational adjunct under the 501(c)(3) provision, and includes the producer Laurie David and the actor Leonardo DiCaprio among its trustees. Another, the American Foundation for Equal Rights, is a nonprofit that supports marriage rights for gay people and counts the producer Bruce Cohen and the writer Dustin Lance Black among its founders.
In the request last week, tax officials combined broad questions about membership criteria and social events, according to the people briefed on the matter, with pointed queries about meetings with a Los Angeles mayoral candidate, Kevin James, and Republican politicians like Mr. Ryan, Mr. Cain and Rick Santorum.
Officials particularly wanted to know why a speech introducing Mr. Cain at a Friends of Abe event in November 2011 — when he was a presidential candidate — should not be regarded as potentially prohibited political campaign support.
While tax-exempt groups are permitted to invite candidates to speak at events, it is not uncommon for the I.R.S. to scrutinize such activities to determine whether they cross the line into partisan election activity. One issue is whether the organization invites all the qualified candidates.
“The I.R.S. would say that if you are inviting only conservative candidates, that's a problem,” said Marcus S. Owens, a former director of the I.R.S.'s exempt organizations division. “But it's never really been litigated.”
Ofer Lion, a lawyer representing Friends of Abe in its application for tax-exempt status, declined to comment.
Friends of Abe began about nine years ago as little more than an email chain linking conservative stars, filmmakers and other Hollywood figures who were generally reluctant to openly discuss their views. The name is a take on Friends of Bill, the circle of loyalists who have adhered to Bill Clinton over the years.
Mr. Sinise was a leading voice among those who in early 2005 gathered at Morton's Steakhouse here for an informal dinner that members have since identified as the group's closest approach to an actual founding moment.
As Friends of Abe grew, however, Mr. Sinise withdrew from active leadership, and Mr. Boreing, a film producer and director, took charge.
Membership has been defined mostly by access to a private website (there are no dues, but enhanced online access requires a small fee), and attendance at a growing number of events that have included meetings with political operatives like Karl Rove and Frank Luntz; politicians like Michele Bachmann and John Boehner; and media figures like Ann Coulter, Dennis Miller and Mark Levin.
The recent I.R.S. query did not mention the earlier request for access to the names of members, people briefed on the query said.
But a remaining question is whether at least some of the group's politically oriented encounters will be interpreted as campaign activity, and weigh against its bid for tax exemption as a 501(c)(3) organization, devoted to educational or charitable work.
A spokesman for the I.R.S. on Wednesday said it was prohibited from commenting on specific taxpayer activity.
Tax officials and congressional overseers have been embroiled in a debate over the enforcement of rules that restrict campaign activity by tax-exempt groups since last year, when an I.R.S. official acknowledged that officers had improperly targeted Tea Party groups for extra scrutiny. But most of those groups were seeking recognition as so-called 501(c)(4) groups, whose ability to conduct a limited amount of campaign activity is governed by a vague patchwork of rules and standards. In November, in an effort to make the process both more transparent and more rigorous, the I.R.S. announced that it would begin formulating new rules.
Michael Cieply reported from Los Angeles and Nicholas Confessore from New York.
from BBC News, 2014-Feb-12, by Soutik Biswas:

Why did Penguin recall a book on Hindus?

"Now here's this book. And there will be more. After half a century of studying and engaging with Hinduism, I'm not about to be silenced by a few (bad) eggs," academic Wendy Doniger wrote in her latest book On Hinduism, published last year.
Doniger, who teaches at the University of Chicago and has written nearly half a dozen books on Hinduism, including a translation of the Kama Sutra, was writing about how her 2009 book The Hindus: An Alternative History quickly became a lightning rod for Hindu anger.
Doniger wrote that bloggers had accused her of attacking Hinduism and sexualising Hindus, flooded Amazon with their "lurid opinions of the book" and sent her obscene and threatening emails. There was even a protest outside the US embassy in Delhi calling for the book, which was climbing the best-seller non-fiction list, to be banned. The book had also prompted a legal challenge from Hindu groups and attracted at least two separate criminal complaints.
But Tuesday's news of her publisher Penguin India deciding to recall and destroy all remaining copies of The Hindus is being seen as the unkindest cut of all.
The publisher appears to have come to an out-of-court agreement with a little-known Hindu campaign group called Shiksha Bachao Andolan (Save Education Movement), which had filed cases against the book.
The man behind the campaign is Shiksha Bachao Andolan leader Dinanath Batra, a former teacher and school principal. After retirement, he told a newspaper, he began to devote his time to a "mission to see distortions removed from books taught to schoolchildren".
Since then, he says, he has filed some 10 lawsuits involving "objectionable passages" from various textbooks. He filed another demanding an essay on Ramayana by the late poet and scholar AK Ramanujan be dropped from the history syllabus of Delhi University. That was followed by a legal notice to a newspaper for publishing a story on Hindu terrorism. Then he trained his guns on the Doniger book.
"The book is in a bad taste right from the beginning," Mr Batra told a BBC Hindi colleague on Wednesday. "If you see the front page [cover], the picture there is also objectionable since it portrays a deity in a vulgar pose. The book is slanderous and even facts have been distorted."
The Hindus is a magisterial 779-page work that attempts a narrative that is different to the one constituted by the famous texts in Sanskrit, the literary language of ancient India.
Doniger writes that it also tells an alternate history to "show how much the groups that conventional wisdom says were oppressed and silenced and played no part in the development of the [Hindu] tradition - women, untouchables [Dalits]- did actually contribute to Hinduism". Reviewers who liked the book described it as "history as entertainment" and "staggeringly comprehensive". They praised Doniger's "vast erudition, insight, graceful writing laced with gentle wit".
Mr Batra doesn't think so.
He finds it objectionable that Doniger writes in the book that independence hero Mahatma Gandhi had a "habit of sleeping beside girls young enough to be called jailbait in the United States"; and that 19th Century Hindu monk Swami Vivekananda "set himself against all forms of caste distinction and advised people to eat beef".
Mr Batra's pride is also hurt by Doniger's assertion that Maharashtrian queen Lakshmi Bai "claimed loyalty to the British" and sought their help when a local rival to the throne invaded her kingdom. And he also does not believe Doniger when she writes that "there is no Hindu canon", and that ideas about major issues such as vegetarianism, non-violence, even caste, are "subjects of a debate, not a dogma".
The fact that a top publisher has acceded to the demands of a fringe Hindu group has come as a shock to many. (Penguin has refused to comment so far.)
"This is deeply disappointing," historian Ramachandra Guha tweeted. "Penguin should have appealed in a higher court."
Journalist and commentator Swapan Dasgupta said he was "very uneasy" about Penguin's decision. "Ideas and academic studies, however contentious, can't be handled by censorship."
Doniger has, however, has been kinder to her publisher.
She said in a statement that she did not blame Penguin Books, which had made an effort to save the book by defending it in the courts for four years - both as a civil and criminal suit - unlike other publishers, which have quietly withdrawn books.
What's seen as a bigger worry is the erosion of India's liberal tradition.
Academic Pratap Bhanu Mehta writes that the country's reputation as a bastion of liberal values is "dimming by the day".
He makes the point that the courts have also failed liberal India "because of a law that signals that it is open to banning books", a point Doniger also makes in her statement. Mr Mehta despairs that liberal India has also been "silenced" by "professional offence mongers". He blames the educators for the "extraordinary failure of the project of liberal education".
Mr Mehta writes: "Wendy Donniger could not have damaged Hindus. But if liberal India dies, Hinduism will die as well. It's a frightening message for one of the world's largest religions."
from the Wall Street Journal, 2014-Feb-4, by Lee E. Goodman:

Lee E. Goodman: The Feds Flirt With Reining in TV Talk
A TV station invites two candidates to debate. Has it made an illegal contribution to their campaigns?

David Gregory and George Stephanopoulos should be concerned. The same Federal Election Commission that represented to the Supreme Court that it could ban books now claims the authority to censor Sunday-morning news programs.
This startling assertion of government power became public in December when the FEC released an enforcement file in the case of a Boston television station's regular Sunday-morning news program, "On the Record." The station, WCVB, had invited two congressional candidates (a Democrat and a Republican) into its studio to appear on "On the Record" in the weeks leading up to the 2012 election and formatted the joint appearance as a 30-minute debate.
Another candidate (a libertarian) who was not invited filed a complaint alleging that the value of WCVB's production costs and airtime constituted unlawful corporate contributions to the two candidates who were invited. Corporate contributions to federal candidates are illegal and people who make them face stiff fines, injunctions, and can even go to prison.
The Federal Election Campaign Act, which established the FEC, regulates money in federal campaigns to protect American citizens from corrupt politicians. It also expressly forbids the agency from regulating the press. Congress enacted this "press exemption" to protect the profoundly important First Amendment right of the press to inform the public about campaigns and candidates without government interference.
WCVB invoked the First Amendment and the campaign act's press exemption. When the FEC considered the matter in November 2013, the staff recommended that the agency disregard both. The FEC proceeded to sit in judgment of the news directors' editorial criteria for choosing the candidates to appear to debate on the station's Sunday morning program. Ultimately the FEC decided that the editorial criteria were sufficiently objective and thus the station had not made an unlawful corporate contribution. It dismissed the case.
Based on this outcome, Messrs. Gregory and Stephanopoulus might rest easy. They shouldn't, which is why I took issue with the FEC's ostensible beneficence. A decision to approve implies the power to disapprove. And in the case of FEC regulatory authority over corporate contributions, the power to investigate, punish and even enjoin is the power to censor news programs like "On the Record," "Meet the Press" and "This Week." The upshot of the WCVB decision is that every television newsroom must look over its shoulder whenever it invites two or more candidates to a joint appearance.
Tellingly, Congress forbade even the Federal Communications Commission, an agency expressly empowered to regulate broadcast television stations, to dictate such news judgments. But the FEC appears to be intent upon meddling in TV newsrooms.
History is rife with government efforts to disrupt, investigate and even silence dissenting published opinion. From early colonial times when royal governments punished and shuttered printers critical of royal governors, to film-review-board censorship, attempts to enjoin the printing of the Pentagon Papers and, more recently, government prying into journalists' telephone records, government power has proved to be a dangerous threat to freedom of the press.
The judgments of six FEC commissioners—who are by law appointed by partisan affiliation—can be biased too. A few examples from recent years (several predating current commissioners' tenures) are revealing. The FEC voted unanimously in 2008 to recognize a technology company's (Melothe Inc.) right to launch a new Web campaign channel devoted exclusively to pro-Democratic coverage, endorsements of Democratic candidates and even solicitations for contributions on behalf of Democratic candidates. Six commissioners also voted to recognize former Democratic Sen. Jean Carnahan's right to launch an online publication in 2005 devoted exclusively to pro-Democratic commentary free from regulation.
But in 2010, three commissioners voted to find that "The Sean Hannity Show" violated the law when the radio program endorsed a Republican candidate for Congress and emailed its endorsement and a solicitation of support to the show's distribution list.
Likewise, there were six unanimous votes in 2004 on the commission to dismiss complaints against Michael Moore, Harvey Weinstein and their production companies for expending corporate funds to produce, advertise and exhibit the anti-Bush editorial film "Fahrenheit 9/11," but only four votes in 2010 to recognize the press rights of Citizens United to make conservative documentary films. Also in 2010, the commission deadlocked three to three when filmmaker RG Entertainment Ltd. sought to advertise and distribute the conservative documentary "I Want Your Money."
The point is that government officials cannot be trusted to regulate journalists fairly and without bias. For precisely that reason, Congress prohibited the FEC from regulating the news media's exercise of editorial discretion—and that manifestly includes any attempt to second-guess a TV news program's criteria for hosting two candidates for elective office to debate.
While some in the media advocate more aggressive enforcement of campaign-related speech, they should pay close attention to what aggressive FEC regulation of WCVB's "On the Record" signifies for their own First Amendment rights.
Mr. Goodman, a Republican, was appointed to the Federal Election Commission in October 2013 and elected as chairman in December. The opinions expressed do not necessarily represent the views of the FEC.
from Politico, 2014-Jan-24, by Tal Kopan:

Right wing: Dinesh D'Souza charges red flag

In the wake of the indictment of conservative author and filmmaker Dinesh D'Souza for alleged fraud, conservatives are crying foul that it is evidence of the Obama administration punishing its critics.
Ranging from questions about selective enforcement of laws to outright accusations of manipulation, many bloggers, writers and pundits on the right raised flags about the arrest of the prominent critic of President Barack Obama and creator of the controversial film “2016: Obama's America,” released in 2012.
D'Souza's co-producer on “2016” called the arrest politically motivated in an interview with The Hollywood Reporter.
“In America, we have a long tradition of not doing what is commonly done in too many other countries — criminalizing dissent through the selective enforcement of the law,” Greg Molen said. “In light of the recent events and the way the IRS has been used to stifle dissent, this arrest should send shivers down the spines of all freedom-loving Americans.”
His thoughts were echoed by prominent conservatives, including influential Drudge Report founder Matt Drudge, who sent out a conspiracy-stoking tweet.
They are going after the Obama critics with indictments. VA Gov. Now Dinesh D'souza. Holder unleashing the dogs...
11:51 PM - 23 Jan 2014
569 Retweets 143 favorites
D'Souza has been accused of making straw donations to the campaign of the opponent of Sen. Kirsten Gillibrand (D-N.Y.) in the 2012 election, and in a press release, the U.S. Attorney's Office said the indictment came out of a “routine review” by the FBI, which was seized upon by the blogosphere.
“A routine review, eh? At the very least, the report raises a few questions,” Ed Morrissey wrote on HotAir. “The race, although not specified, appears to be the Senate election between Kirsten Gillibrand and Wendy Long in New York, in which Long lost to Gillibrand by forty-five points (72% to 27%). Why would D'Souza try to push illegal contributions in the low five figures and risk criminal prosecution in a race where tens of millions of dollars were spent, and where the challenger was utterly doomed? For that matter, why use straw men when D'Souza could have just bundled for Long instead, or set up a PAC?”
Morrissey critiqued campaign contribution laws as inherently flawed and acknowledged D'Souza could have broken the law, but he said that doesn't lower the red flags.
“How many of these cases involve Obama boosters rather than critics? How did prosecutors decide to look into D'Souza's activities in the first place?” Morrissey wrote.
Conservative website The Daily Caller published a story with the headline, “Obama administration indicts conservative filmmaker critical of Obama,” which cited Molen's comments to THR and implied there could be motives behind the indictment.
“`2016: Obama's America' was a surprise box-office smash, raking in $33 million in revenue. The documentary is currently the second-most-popular political documentary in American history behind `Farenheit 9/11,' a 2004 movie by leftist documentarian Michael Moore which thrashes the foreign policy of Obama's predecessor, George W. Bush. Bush administration officials never indicted Moore,” the article read.
Writing on, senior editor Brian Doherty also used the indictment to criticize campaign finance laws, wielding sarcasm to question any possible motives in D'Souza's arrest.
“Is it a good thing that someone should face fines and/or jail time for deciding to express his support of a political candidate by reimbursing people he knows for the amounts of money they donated to that candidate? The correct answer is no,” he wrote. “Yet, in this land of free speech and democracy, where political expression is highly valued, you can and indeed do face criminal charges for such actions. See the fate today of conservative politico and writer (and anti-Obama filmmaker, but we can be sure that had nothing to do with this) Dinesh D'Souza.”
He continued: “Expressing your support for a candidate above an arbitrary legislative limit—or, even, giving some cash to friends of yours for whatever reason you want, money is fungible—is corruption of the electoral process. That laws like this exist to slam enemies of the regime when such laws might be needed, well, that's just politics.”
Some bloggers took their criticism farther, with Pamela Gellar of Atlas Shrugged comparing the Obama administration to fascists in the pre-World War II era.
“The ongoing persecution of Republicans and conservatives mirrors the attacks by the fascists of Europe on their opponents in the 1930s. Punishing Obama's political adversaries claims another victim,” Gellar wrote in a post. “The latest attacks are against conservative authors and/or groups that share a philosophy based on individual rights. Dinesh D'Souza is the latest target.”
from the Wall Street Journal, 2013-Aug-22, p.A13, by David B. Rivkin Jr. and Lee A. Casey:

The True Lesson of the IRS Scandal
There should be less federal regulation of political speech.

President Obama and his political allies have dismissed as "phony scandals" mounting evidence that the Internal Revenue Service and other federal agencies hindered and punished conservative advocacy groups. Meanwhile, efforts are under way to impose even more regulation on core political speech. The government's abuses are very real, but the scandal's lessons are not appreciated: The federal regulation of political speech has already gone further than can be justified by existing law, let alone the Constitution. The debate about political speech has so far focused on a particular type of nonprofit entity: social-welfare organizations exempt from federal income tax under section 501(c)(4) of the Internal Revenue Code. A group qualifies for this exempt status if it is "operated exclusively for the promotion of social welfare." This means its efforts cannot inure to the benefit of specific individuals, members or private clubs. On Wednesday, Rep. Chris Van Hollen (D., Md.) filed a federal lawsuit seeking to force the IRS to tighten the eligibility rules for politically active groups seeking 501(c)(4) status. Yet "social welfare" is a capacious term that includes many policy and political goals—from preserving historic battlefields to repealing laws for or against same-sex marriage. The IRS has long recognized this by permitting such groups, if consistent with their stated social-welfare purpose, to engage primarily or even wholly in public-issue advocacy or lobbying. In other words, they are permitted to engage in political speech directed at government officials. At the same time, however, the IRS says that political campaign activities cannot account for more than half of a 501(c)(4)'s expenditures. But the statute itself contains no such limitation. In short, the IRS effectively robs social-welfare organizations of one half of their potential political speech. This distinction between lobbying and election advocacy is entirely arbitrary. Electing candidates who support an organization's principles and goals may be the most effective (and in some cases the only) means of achieving that organization's social-welfare purpose. Yet the IRS rules here are consistent with the federal government's overall approach to regulating elections since at least the 1970s. Bizarre as it may be in the world's leading democracy, federal election laws treat the most effective form of political speech as the most disfavored. Stricter regulations like those sought by Rep. Van Hollen and others would only worsen the problem. Until recently, the Supreme Court largely supported this system, interpreting the Constitution's free-speech guarantees to permit these limitations in order to avoid corruption or its appearance. Even so, the court rejected efforts to control political activities, including expenditures, in support of a candidate but made independently of a candidate's own campaign organization. The exception was corporations, which could not make independent expenditures. In Citizens United v. FEC (2010), a majority of the court more sensitive to the First Amendment invalidated restrictions on independent political campaign expenditures by corporations, associations and labor unions. Since Citizens United, the use of 501(c)(4) organizations to engage in political speech has burgeoned—largely because such groups need not disclose their donors as purely political organizations still must. Calls for the IRS to close this supposed "loophole" also have multiplied. That is a bad idea, not supported by the statutory language, and it is unconstitutional to boot. Although the Supreme Court has held that there is no duty to subsidize political speech through tax exemptions, there is no plausible basis on which the IRS (or Congress) can limit tax-exempt status to groups that eschew independent campaign spending while permitting other forms of political speech, such as lobbying. Where the potential for corruption—for example, giving money to a candidate in exchange for favors—is absent, as the Citizens United ruling found with regard to independent expenditures, treating one form of political speech differently than others is not rational. It fails even the most deferential judicial review standard, much less the more exacting compelling governmental interest ordinarily applied under the First Amendment. The IRS-created 50% limit is vulnerable to challenge on the same grounds. It should make no difference under the existing statutory language what form the political speech of a 501(c)(4) takes; the organization should be able to spend 100% of its funds on independent campaign spending. There also are sound policy reasons to cut 501(c)(4)s loose from such regulations. Such groups allow ordinary people to compete with the better-funded media industry, political parties, celebrities and other wealthy players, in the marketplace of ideas. Constraining the activities of 501(c)4s would not, as "progressives" claim, protect the little guy and level the playing field. Instead it would protect entrenched interests and, most of all, incumbents who can raise money simply because they hold public office. Congress could abolish the 501(c)(4) status entirely. However, neither the IRS nor Congress can produce a result in which some groups, whose social-welfare purposes can be advanced through nonpolitical speech (such as promoting botany or historical research), can use 100% of their resources to do so, while others groups, whose social-welfare purposes can be advanced only through political speech, cannot. To conclude otherwise would enable the government to engage in content-based restrictions on speech that have always been viewed as the most insidious violation of the First Amendment. The Supreme Court also has long made clear that Congress cannot deploy tax subsidies as a means of suppressing "dangerous ideas." The IRS scandal is a moment of reckoning. It offers the country a unique opportunity to free a substantial portion of political speech from government regulation. This is an opportunity not to be wasted. Republicans should broaden their oversight inquiries into the constitutional and statutory basis on which the IRS has limited 501(c)(4) expenditures in the past—and force the agency to justify any plans it has to continue or expand those limits. Messrs. Rivkin and Casey served in the Justice Department during the Reagan and George H.W. Bush administrations. They are partners in the Washington, D.C., office of Baker & Hostetler LLP.
from the New York Times, 2013-Nov-26, by Nicholas Confessore, with Eric Lipton contributing:

New Rules Would Rein In Nonprofits' Political Role

The Obama administration on Tuesday moved to curb political activity by tax-exempt nonprofit organizations, with potentially major ramifications for some of the biggest and most secretive spenders in American politics.
New rules proposed by the Treasury Department and the Internal Revenue Service would clarify both how the I.R.S. defines political activity and how much nonprofits are allowed to spend on it. The proposal covers not just television advertising, but bread-and-butter political work like candidate forums and get-out-the-vote drives.
Long demanded by government watchdogs and Democrats who say the flow of money through tax-exempt groups is corrupting the political system, the changes would be the first wholesale shift in a generation in the regulations governing political activity by nonprofits.
The move follows years of legal and regulatory shifts, including the Supreme Court's Citizens United ruling in 2010, that have steadily loosened the rules governing political spending, particularly by those with the biggest bank accounts: corporations, unions and wealthy individuals.
But the proposal also thrusts the I.R.S. into what is sure to be a polarizing regulatory battle, with some Republicans immediately criticizing the proposal on Tuesday as an attack on free speech and a ploy to undermine congressional investigations into the agency's handling of applications from Tea Party groups.
“Before rushing forward with new rules, especially ones that appear to make it harder to engage in public debate, I would hope Treasury would let all the facts come out first,” said Representative David Camp of Michigan, the chairman of the House Ways and Means Committee.
Political spending by tax-exempt groups — from Crossroads Grassroots Policy Strategies, co-founded by the Republican strategist Karl Rove, to the League of Conservation Voters — skyrocketed to more than $300 million in 2012 from less than $5.2 million in 2006, according to the Center for Responsive Politics. Much of the money has been funneled through chains of interlinked nonprofit groups, making it even harder to determine the original source.
And unlike political parties and “super PACs,” political nonprofits are permitted to keep the names of donors confidential, making them the vehicle of choice for deep-pocketed donors seeking to influence campaigns in secret.
The new rules would not prohibit political activity by nonprofits. But by seeking to establish clearer limits for campaign-related spending by groups claiming tax exemption, the I.R.S. proposal could have an enormous impact on some of the biggest groups, forcing them to either limit their election spending or register as openly political organizations, such as super PACs.
A spokesman for Crossroads declined to comment, as did officials at other political nonprofits.
Nick Ryan, the founder of the American Future Fund, which spent at least $25 million on political advertising last year, said, “Unfortunately, it appears that the same bureaucrats that attempted to suppress the speech of conservative groups in recent years has now put together new rules that apply to (c)4 groups but do not apply to liberal groups like labor unions.”
“I wish I could say I am surprised,” Mr. Ryan added, “but I am not."
The final rules are unlikely to be issued until after the 2014 election, after a public comment period.
The administration's proposal would apply to nonprofits organized under Section 501(c)4 of the tax code, which are granted tax exemption in exchange for devoting themselves to the promotion of “social welfare.”
Under current rules, promoting social welfare can include some political activity, along with unlimited amounts of lobbying. Some of the largest political nonprofits — like Americans for Prosperity, backed by the conservative philanthropists Charles and David Koch — have used that provision to justify significant expenditures on political ads.
But under the new proposal, a broad swath of political work would be classified as “candidate-related political activity” and explicitly excluded from the agency's definition of social welfare. Those activities include advertisements that mention a candidate within 60 days of an election as well as grants to other organizations making candidate-related expenditures.
“Depending on the details, this could be dramatic,” said Marcus S. Owens, a former chief of the I.R.S.'s exempt organizations division.
The rules could also affect more traditional conservative and liberal advocacy organizations, including Tea Party groups whose complaints of harassment by I.R.S. employees prompted the resignation of several high-ranking I.R.S. officials last spring. Distributing voter guides, for example, would automatically count as political activity.
Jay Sekulow, a lawyer representing more than three dozen of the groups in a federal lawsuit against the I.R.S., described the new proposal as a further attack on free speech. “This is a feeble attempt by the Obama administration to justify its own wrongdoing with the I.R.S. targeting of conservative and Tea Party groups,” he said in a statement.
Administration officials described the new proposal as a response to widespread complaints that the existing regulations were too vague, leading to inconsistent or arbitrary enforcement. The I.R.S. would be better equipped to enforce the rules, the officials said, if they were clearer, while nonprofit groups would be better able to comply.
“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by tax-exempt social welfare organizations," said Mark J. Mazur, the assistant Treasury secretary for tax policy.
In addition to clarifying what activities count toward assessing a tax-exempt group's primary purpose, the final guidance could include a more precise definition of how much political activity a 501(c)4 group is permitted to engage in while still maintaining its tax exemption.
Many election lawyers and their clients use an unofficial rule of thumb: If a tax-exempt group spends less than 50 percent of its budget on political activity, then its primary purpose is not winning campaigns.
Some activists have argued that a rule requiring 501(c)4s to spend no more than 10 percent to 15 percent of their budgets on political activities would be closer to the letter and spirit of existing law.
Some lawyers said they worried that the new rules, particularly those that could apply to grass-roots organizing, could unfairly burden bona fide social welfare groups. Others suggested that tighter restrictions on social welfare groups would only hasten the migration of political money into other kinds of entities whose campaign spending is not subject to I.R.S. jurisdiction.
Mr. Owens, now a tax lawyer in Washington, said the I.R.S. proposal would have one certain consequence: more business.
“I'm looking forward to a very profitable New Year,” he said.
from the New York Times, 2013-May-10, by Jonathan Weisman:

I.R.S. Apologizes to Tea Party Groups Over Audits of Applications for Tax Exemption

WASHINGTON — The Internal Revenue Service apologized to Tea Party groups and other conservative organizations on Friday for what it now says were overzealous audits of their applications for tax-exempt status.
Lois Lerner, the director of the I.R.S. division that oversees tax-exempt groups, acknowledged that the agency had singled out nonprofit applicants with the terms “Tea Party” or “patriots” in their titles in an effort to respond to a surge in applications for tax-exempt status between 2010 and 2012.
She insisted that the move was not driven by politics, but she added, “We made some mistakes; some people didn't use good judgment.”
“For that we're apologetic,” she told reporters on a conference call.
Republicans seized on the acknowledgment, demanding more information and adding it to a growing list of steps by the Obama administration that they say prove political interference, from allegations of hiding the terrorist origins of the attack in Benghazi, Libya, to the demand for disclosure of donors to conservative “super PACs.”
Senator Mitch McConnell of Kentucky, the Republican leader, called for “a transparent, governmentwide review aimed at assuring the American people that these thuggish practices are not under way at the I.R.S. or elsewhere in the administration against anyone, regardless of their political views.”
The White House press secretary, Jay Carney, said the events in question happened while the I.R.S. was under the directorship of a Bush administration appointee and regardless, it is an agency run independently of White House oversight. He also said the matter is already under investigation by the agency's inspector general.
The apology and the ensuing reaction could be a turning point for the I.R.S., which has been caught between Congressional Democrats pressing the agency to more aggressively protect tax-exempt status from overtly political groups and conservative groups claiming harassment.
Campaign finance watchdogs have said for years that 501(c)(4) tax exemptions are widely abused by conservative and liberal groups whose primary purpose is to influence elections, not to promote “social welfare,” as tax-exempt status mandates.
But Ms. Lerner said the examinations of the Tea Party groups were not a response to such pressure. She portrayed it more as a bureaucratic mix-up. Between 2010 and 2012, applications for 501(c)(4) tax exemptions nearly doubled, to more than 2,400. As the agency has done in the past, it centralized the processing of the surge at its Cincinnati office, where about 300 were flagged for further examination.
Staff members at that office singled out the terms “Tea Party” and “patriot,” she said, but not out of political bias; it was “just their shortcut.” Only about a quarter of the 300 cases flagged for scrutiny were Tea Party-related, she said, but she called the singling out of those groups “absolutely inappropriate and not the way we should do things.”
Ms. Lerner indicated that no disciplinary action had been taken against the low-level employees she said were responsible; when pressed, she said she could not comment on personnel matters. But, she said, policy changes had been made to ensure that similar episodes would not occur. For instance, high-level I.R.S. officials must now approve efforts to lump similar applications or audits into one centralized location for processing.
To the conservative groups and their defenders, the acknowledgment confirmed their worst accusations. In early 2012, numerous Tea Party-affiliated groups came forward to charge the I.R.S. with harassment for demanding that they fill out extensive — and intrusive — questionnaires before their tax-exempt applications could be approved. The questionnaires demanded detailed membership lists, donors, contact information, logs of activities and other information about the groups' intentions.
Many of those groups found representation with the conservative American Center for Law and Justice and its outspoken lead lawyer, Jay Sekulow, who accused the I.R.S. of “McCarthyism” intended to stifle conservative speech.
The center called the apology “a significant victory for free speech.”
But the leader of one of the groups that cried foul, the Kentucky 9/12 Project, said he had received no such admission from the agency. Eric Wilson, the group's director, said he never complied with the I.R.S. questionnaire.
Nonetheless, the I.R.S. sent the group a one-paragraph letter on April 1 granting nonprofit status, with no explanation for the protracted process and no regrets, he said.
Organizations that had been pressing for more aggressive enforcement of tax-exemption laws reacted with alarm. Lisa Gilbert, the director of Public Citizen's Congress Watch division, said the I.R.S. should not be targeting any particular political ideology. But, she said, questioning applicants for tax exemption to determine whether they were primarily political was entirely proper and should be more widely pursued.
“We don't think it's inappropriate to ask questions,” she said. “Tax-exempt groups are abusing their tax status to pursue political agendas.”
Under current law, tax-exempt 501(c)(4) organizations are supposed to be “primarily” engaged in social welfare work. In practice, groups like the conservative Crossroads GPS and the liberal Priorities USA appear to spend virtually all their efforts trying to sway elections.
Last year, Senate Democrats began pressing the I.R.S. to more aggressively target such groups. As the Tea Party questionnaires surfaced, the agency released a statement saying, “To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must be primarily engaged in the promotion of social welfare. The promotion of social welfare does not include any unrelated business activities or intervention in political campaigns on behalf of or in opposition to any candidate for public office.”
But pressure will now come from the other direction. Representative Dave Camp of Michigan, the House Ways and Means Committee chairman, announced Friday that he would hold hearings on the matter. Representative Eric Cantor of Virginia, the House majority leader, promised an investigation.
Senator Orrin G. Hatch of Utah, the ranking Republican on the Senate Finance Committee, rejected the apology as insufficient, demanding “ironclad guarantees from the I.R.S. that it will adopt significant protocols to ensure this kind of harassment of groups that have a constitutional right to express their own views never happens again.”
from Reuters, 2014-Jan-24, by Harro ten Wolde and Nikola Rotscheroth with editing by Catherine Evans:

German court orders Google to block Max Mosley sex pictures

A German court has ordered Google to block search results in Germany linking to photos of a sex party involving former Formula One boss Max Mosley.
The court said on Friday that although Google had not taken the pictures it was responsible as a distributor of the images.
"The court is of the opinion that the banned pictures of the plaintiff severely violate his private sphere, as they show him active in sexual practices," the court said.
The ruling comes more than two months after a French court ordered Google to find a way to remove recurring links to images of Mosley, who was photographed in 2008 at an orgy with prostitutes.
The dispute in the Hamburg court relates to photographs of Mosley published by the defunct British tabloid News of the World that were accompanied by an article suggesting he had organized a "sick Nazi orgy".
Mosley has acknowledged that he engaged in sado-masochistic activity with the five women and paid them 2,500 sterling ($4,000), but denied the orgy was Nazi-themed.
The decision is another setback for Google as it tries to defend a global stance that the search engine is merely a platform that delivers links to content and it should not be responsible for policing them.
Although Google can delete images on its website, it cannot prevent others reposting them, resulting in a constant game of catch-up.
Google said on Friday it would appeal the ruling.
"It could mean that Internet providers are required to monitor even the smallest components of content they transmit or store for their users. We believe this is contrary to European law," a Google spokesman said.
In a blog post published in September, Google said it had already removed "hundreds of pages for Mr. Mosley" as part of a process that helps people delete specific pages from Google's search results after they have been shown to violate the law.
from Bloomberg, 2013-Nov-26, by Nicole Gaouette in Washington, edited by John Walcott:

NSA Spying Risks $35 Billion in U.S. Technology Sales

International anger over the National Security Agency's Internet surveillance is hurting global sales by American technology companies and setting back U.S. efforts to promote Internet freedom.
Disclosures of spying abroad may cost U.S. companies as much as $35 billion in lost revenue through 2016 because of doubts about the security of information on their systems, according to the Information Technology & Innovation Foundation, a policy research group in Washington whose board includes representatives of companies such as International Business Machines Corp. (IBM) and Intel Corp. (INTC)
“The potential fallout is pretty huge given how much our economy depends on the information economy for its growth,” said Rebecca MacKinnon, a senior fellow at the New America Foundation, a Washington policy group. “It's increasingly where the U.S. advantage lies.”
Any setback in the U.S. push to maintain an open Internet also could inflict indirect damage on companies such as Apple Inc. (AAPL) and Google Inc. (GOOG) that benefit from global networks with few national restrictions.
Almost 40 percent of the world's population, or 2.7 billion people, are online, according to the International Telecommunication Union, a Geneva-based United Nations agency.
Cisco Systems Inc. (CSCO), the world's largest maker of computer-networking equipment, said this month that the NSA disclosures are causing some hesitation among customers in emerging markets.
Orders in China fell 18 percent in the three months ended Oct. 26. Elsewhere, Robert Lloyd, head of development and sales, said on a conference call Nov. 13, “it's not having a material impact, but it's certainly causing people to stop and then rethink decisions.”

`Serious Damage'

News about U.S. surveillance disclosed by former NSA contractor Edward Snowden has “the great potential for doing serious damage to the competitiveness” of U.S. companies such as Cupertino, California-based Apple, Facebook Inc., and Microsoft Corp., Richard Salgado, Google's director for law enforcement and information security, told a U.S. Senate panel Nov. 13. “The trust that's threatened is essential to these businesses.”
The spying revelations have led governments around the world to consider “proposals that would limit the free flow of information,” Salgado said. “This could have severe unintended consequences, such as a reduction in data security, increased cost, decreased competitiveness, and harm to consumers.”

Brazil, Germany

Countries such as China and Russia that are seeking to impose more national controls on the Internet are finding their views gaining ground. Rising economic powers, including India, Mexico and South Korea, are weighing further limits. Brazil's President Dilma Rousseff, a target of NSA surveillance, is calling for a new conversation about Internet governance with support from Germany, whose chancellor, Angela Merkel, also was an NSA target.
The uproar in Germany will probably hurt Akamai Technologies Inc. (AKAM)'s business there, according to Tom Leighton, chief executive officer of the Cambridge, Massachusetts-based company that helps corporate customers deliver online content faster.
“It's clearly bad for American companies,” Leighton said Nov. 20 at “The Year Ahead: 2014,” a two-day conference in Chicago hosted by Bloomberg LP. “It's particularly bad now in Germany, where it's really being played up, to whip up anti-American corporate sentiment. We'll probably lose some business there.”

Data Flows

Technology companies aren't the only ones facing potential damage from disclosure of the NSA's surveillance, said Myron Brilliant, an executive vice president with the U.S. Chamber of Commerce in Washington. Studies show products and services that rely on cross-border data flows are expected to add an estimated $1 trillion in value to the U.S. economy annually over the next 10 years, he said.
“This is a priority issue, not just for technology or Web-based companies, but also small- and medium-sized businesses,” Brilliant said, listing finance, manufacturing, health care, education, shipping “and other areas not commonly thought of as Internet companies.”
Information technology companies were the first to see fallout after Snowden fled to Hong Kong in May and began releasing details of U.S. surveillance programs. Snowden is now living in Russia.

Cisco in China

Facing a backlash that's already crimping sales in China, San Jose, California-based Cisco may be locked out of future purchases if the Chinese government cites security concerns to favor domestic companies in a projected surge of IT spending, to $520 billion in 2015, to increase urban broadband speeds and expand rural Internet access.
The cloud computing market will be valued at $207 billion by 2016, according to the Information Technology & Innovation Foundation.
A survey by the Cloud Security Alliance, an industry group, found that 10 percent of its non-U.S. members have canceled contracts with U.S.-based cloud providers since May. Fifty-six percent said they'd be less likely to use one.
“People aren't going to trust the U.S. and U.S. companies as much,” said Jason Healey, director of the Cyber Statecraft Initiative at the Atlantic Council, a Washington-based policy group. “You're going to see national boundaries begin in cyberspace.”

Internet Regulation

For years, the U.S. has lobbied against such an approach, advocated by countries including China and Russia. In 2011, they submitted a proposed “Internet code of conduct” to the United Nations. The U.S. has pushed back, “trying hard to get up-and-coming countries like Brazil to trust us, not the Chinese, about how the Internet should look,” Healey said.
A top-down intergovernmental approach “would hamper the pace of innovation and hamper global economic development, and it could lead to unprecedented control over what people say and do online,” Daniel A. Sepulveda, the U.S. State Department's coordinator for international communications and information policy, said in a Nov. 6 phone briefing.
Today, a UN panel adopted a resolution sponsored by Brazil and Germany expressing concern over the “negative impact” of Internet surveillance. The 193-member General Assembly will vote next month on the document, which calls for a report by next year on privacy protections “in the context of domestic and extraterritorial surveillance and/or interception of digital communications and collection of personal data.”

`Political Message'

The move sends a “political message” that “the right to privacy has to be protected” even though the resolution isn't legally binding, Peter Wittig, Germany's ambassador, told reporters after the resolution's adoption.
Since Snowden's disclosures revealed that the NSA was monitoring exchanges between Rousseff and her top aides, the Brazilian president has led an effort to establish Internet protections.
Brazil is considering legislation that would require companies such as Mountain View, California-based Google to use local data centers or equipment developed by the government. A preference for non-U.S. providers could hurt companies such as Sunnyvale, California-based Juniper Networks Inc. (JNPR), which accounted for 10 percent of Brazil's router revenue in the first half of the year, or Cisco, which holds 56 percent.

German E-Mail

In Germany, Bonn-based Deutsche Telekom AG (DTR) is part of an alliance of companies promoting a system to keep German e-mail and Web searches within the country.
“The private sector is very worried about this because it messes with what might be most economic way to route message flows and traffic,” said Gene Kimmelman, project director for human rights and Internet policy at the New America Foundation, a Washington policy group. “If you're forced to have equipment in a certain country, by law, it might add significant expense to an operation.”
European Union legislators set to negotiate a trade agreement with the U.S. want to include strict rules for American companies handling EU citizens' data and fine them heavily for violations.
Some of the anger over the NSA is disingenuous, given that there's “a substantial awareness that surveillance goes on” in many countries, Kimmelman said.
Even so, Google's Salgado said international reaction to the NSA's surveillance risks changing the nature of the Internet.
He said proposals being advanced could lead to the “creation of a splinter net, broken up into smaller national regional pieces with barriers around it to replace the global Internet that we know today.”
from BBC News, 2013-Aug-18:

Snowden case: Brazil 'concerned' after UK detention

Brazil says the detention under British terror laws of one of its citizens at London's Heathrow airport caused "grave concern" and was "unjustified".
David Miranda, the partner of Guardian journalist Glenn Greenwald who published documents leaked by Edward Snowden, was held at Heathrow for nine hours on his way to Rio de Janeiro.
He reportedly had his mobile phone, laptop, DVDs and other items seized.
Mr Miranda was later released by British authorities.
Mr Greenwald called his partner's detention an "intimidation" and a "profound attack on press freedoms".
Under the Terrorism Act 2000, UK police can hold someone at an airport for up to nine hours - but the power must be used appropriately and proportionately and is subject to independent scrutiny.
Amnesty International says the incident shows the law can be abused for what it described as "petty and vindictive reasons".

'Serious threat'

"At 08:05 on Sunday 18 August 2013 a 28-year-old man was detained at Heathrow Airport under Schedule 7 of the Terrorism Act 2000. He was not arrested. He was subsequently released at 17:00," said a statement issued by the Metropolitan Police.
"To detain my partner for a full nine hours while denying him a lawyer, and then seize large amounts of his possessions, is clearly intended to send a message of intimidation to those of us who have been reporting on the NSA [United States National Security Agency] and GCHQ [Government Communications Headquarters]," he wrote in The Guardian.
Mr Greenwald said the British authorities' actions were a "serious threat to journalists everywhere".
The Brazilian government issued an official statement soon after the release of David Miranda. Glenn Greenwald, US journalist Mr Greenwald called his partner's detention a "serious threat to journalists"
The foreign ministry document says there was no justification for detaining an "individual against whom there are no charges that can legitimate the use of that [anti-terror] legislation".
It also says Brazil expects incidents "such as the one that happened to the Brazilian citizen today" not to be repeated.
Mr Miranda was flying back from the German capital, Berlin, to Rio de Janeiro, where he lives with Mr Greenwald, when he was detained in transit through Heathrow.
In Germany, he had met US film-maker Laura Poitras, who has also been working on the Snowden files with Greenwald and the Guardian. according to the newspaper.
Following his detention at Heathrow, Brazilian government officials and Guardian lawyers were called to the airport, The Guardian says.
The NSA has broken privacy rules and overstepped its legal authority thousands of times in the past two years, according to documents leaked by Edward Snowden.
The incidents resulted in the unauthorised electronic surveillance of US citizens, it is alleged.
Mr Snowden, a former NSA contractor, has leaked top secret documents to the US and British media.
He has been given asylum in Russia.
from CNN, 2013-Nov-29, by Shawn Nottingham and Mariano Castillo:

U.S. man in hot water in Dubai over parody video

It was intended as a piece of comedy, but it's turned into a drama.
A young American living in the United Arab Emirates has been imprisoned since April, his family says, for posting what was intended to be a funny video on the Internet.
Now, the family of Shezanne "Shez" Cassim wants to bring attention to his case ahead of a hearing December 16.
The video in question is a 19-minute short that pokes fun at a clique of Dubai teens who are influenced by hip-hop culture. In the 1990s, the label "Satwa G" was coined for a group of suburban teens who were known to talk tougher than they really were.
The video depicts a look at a "combat school" in the suburb of Satwa, where these "gangsters" are trained. The training includes how to throw sandals at targets, using clothing accessories as whips, and how to call on the phone for backup.
"It's like someone in the U.S. making a parody video of a Brooklyn hipster and getting thrown in jail for it and being held in jail for months without bail," Cassim's brother, Shervon Cassim, told CNN affiliate KARE. "That's what's going on here."
Cassim's family says Shez, 29, has been charged with endangering national security, but they've not been told what about the video endangered security.
UAE authorities did not respond to CNN requests for details about what charges Cassim may be facing and why.
"It's just a straightforward silly comedy video. And he's being treated like some sort of dangerous criminal, high security criminal that they need to keep under maximum security conditions," Shervon Cassim told KARE about his brother.
Shez Cassim has lost a lot of weight, but is otherwise in good physical condition, his brother told CNN.
Cassim, from Woodbury, Minnesota, moved to Dubai in 2006 after graduating college to work for PricewaterhouseCoopers.
He and some friends made and posted the video online in 2012. He was arrested in April 2013.
According to the family, Cassim and eight friends have been charged under a cybercrimes law for endangering public order. This law, the family says, wasn't passed until after the video had been released.
Two attempts by Cassim's lawyers to get him released on bail have been rejected.
The U.S. State Department is providing consular services to Cassim, a department official said, and has attended all his court hearings.
"The U.S. Embassy and Consulate General have engaged with UAE counterparts to urge a fair and expedient trial and judgment," the official said.
The Satwa G's, the family said in a statement, were known as wanna-be gangsters, and that's how Cassim portrayed them.
"These 'gangstas' were known for their decidedly mild behavior and were seen as the total opposite of actual criminals," the statement said. "The fictional training depicted in the video teaches techniques that include the best way to throw a sandal at a newspaper (target) and, ultimately, how to use the mobile phone when in trouble."
At the last hearing, the judge in the case asked for an Arabic translation of the video, giving the family some hope that the authorities will realize that it was a parody.
"I just want my son home for Christmas," said Cassim's mother, Jean Cassim, in a statement. "He's a good young man with a great career and has never been in trouble. Now he's being held for no reason. I've been praying, going to mass and lighting candles, and that's what I'm going to keep doing."
An average of about 2,500 Americans are jailed abroad every year, and about a third of those arrests are related to illegal drugs, the U.S. State Department says. "In 2010 alone, consular officers conducted more than 9,500 prison visits, and assisted more than 3,500 Americans who were arrested abroad," the State Department's website says.
U.S. travelers in foreign countries are subject to the laws of those countries, and there's a limit to how much help they can get from the U.S. Embassy or Consulate there.
U.S. diplomatic corps officials "cannot represent you in legal proceedings or pay your legal fees or other expenses. But they can perform many vital services such as providing a list of attorneys, assisting in contacting your family, helping your family to send money, and monitoring your health and welfare," the State Department says.
from the Washington Examiner, 2013-Aug-9, by Paul Bedard:

IRS agent: Tax agency is still targeting Tea Party groups

In a remarkable admission that is likely to rock the Internal Revenue Service again, testimony released Thursday by House Ways and Means Committee Chairman Dave Camp reveals that an agent involved in reviewing tax exempt applications from conservative groups told a committee investigator that the agency is still targeting Tea Party groups, three months after the IRS scandal erupted.
In closed door testimony before the House Ways & Means Committee, the unidentified IRS agent said requests for special tax status from Tea Party groups is being forced into a special "secondary screening" because the agency has yet to come up with new guidance on how to judge the tax status of the groups.
In a redacted transcript from the committee provided to Secrets, a Ways & Means investigator asked: "If you saw -- I am asking this currently, if today if a Tea Party case, a group -- a case from a Tea Party group came in to your desk, you reviewed the file and there was no evidence of political activity, would you potentially approve that case? Is that something you would do?"
The agent said, "At this point I would send it to secondary screening, political advocacy."
The committee staffer then said, "So you would treat a Tea Party group as a political advocacy case even if there was no evidence of political activity on the application. Is that right?" The agent admitted, "Based on my current manager's direction, uh-huh."
Camp called the renewed targeting of Tea Party groups "outrageous."
Added a committee aide, "In plain English, the IRS is still targeting Tea Party cases."
During 2010-2012 period when the anti-Obama Tea Party groups faced special scrutiny from the president's IRS, agents used a "be on the lookout," or BOLO, list which said groups with words like "Tea Party" in their title should face special, secondary screening for political activities that might hamper their special tax status.
When the scandal erupted after a Treasury Department inspector general revealed the improper political scrutiny, the acting head of the IRS, Danny Werfel, said the BOLO list had been suspended. That was six weeks ago.
But because there is nothing in its place, agents apparently either don't know how to handle Tea Party tax exempt applications, or are too scared to make a decision.
Asked by the committee how it handles Tea Party applications, the agent said, "If a political advocacy case came in today, I would give it -- or talk about it to my manager because right now we really don't have any direction or we haven't had any for the last month and a half."
Camp, the Michigan Republican, told Secrets, "It is outrageous that IRS management continues to target Tea Party cases without any justification. The harassment, abuse and delays these Americans have faced over the last few years has been unwarranted, unprovoked and, at times, possibly illegal. The fact that the IRS still continues to treat the Tea Party differently and subject them to additional targeting is outrageous and it must stop immediately."
In response, the IRS reiterated Werfel's pledge to not target groups because of political labels. "The IRS has taken decisive action to eliminate the use of inappropriate political labels in the screening of 501(c)(4) applications. We look forward to seeing the full transcript to gain a fuller understanding of the context of the interview," they said early Friday.
Werfel, called in to fix the scandal, directed the IRS to eliminate the use of BOLO lists. The statement said that "IRS policy is now clear that screening is based on activity, not words in a name. The new steps and current policies...specifically spells out that political campaign intervention will be reviewed without regard to specific labels. The IRS will not tolerate any deviation from this."
In an IRS review, the plan was that after the BOLO lists were removed, political labels would be ignored by the "Determinations Unit" as they screened for information for those seeking tax exempt status.
Below is the Ways & Means Committee transcript of the IRS official.
Wednesday, August 1, 2013
Committee: Today, currently, how do you analyze advocacy cases. If, for example, Tea Party of Arkansas came in today, how would you handle it?
IRS agent: Well, the BOLO list doesn't exist anymore.
Committee: Sure.
IRS: If a political advocacy case came in today, I would give it -- or talk about it to my manager because right now we really don't have any direction or we haven't had any for the last month and a half.
Committee: If you saw -- I am asking this currently, if today if a Tea Party case, a group -- a case from a Tea Party group came in to your desk, you reviewed the file and there was no evidence of political activity, would you potentially approve that case? Is that something you would do?
IRS agent: At this point I would send it to secondary screening, political advocacy.
Committee: So you would treat a Tea Party group as a political advocacy case even if there was no evidence of political activity on the application. Is that right?
IRS agent: Based on my current manager's direction, uh-huh.
Paul Bedard, The Washington Examiner's "Washington Secrets" columnist, can be contacted at
from the Wall Street Journal, 2013-Jul-11, printed 2013-Jul-13, p.A11, by Kimberley A. Strassel:

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.
from the Guardian, 2013-Jun-17, by Jeff Jarvis:

I fear the chilling effect of NSA surveillance on the open internet
Snowden's NSA leak revelations are changing people's assumptions about online privacy, killing trust in web freedom

I fear the collateral damage the NSA's spying via technology will do to that technology. The essential problem is not the internet or internet companies or even the spies. The real problem is the law and what it does not prevent the American government from doing with technology, and how it does not protect the principles upon which this nation was founded.
The damage to the net and its freedoms will take many forms: users may come to distrust the net for communication, sharing, and storage because they now fear – with cause – that the government will be spying on them, whether or not they are the object of that surveillance. International users – properly concerned that they are afforded even less protection than Americans – may ditch American platforms. The European Union and other national governments, which already were threatening laws targeting US technology companies, will work harder to keep their citizens' data away from the US. Technologists may find it necessary to build in so many protections, so much encryption and caution, that the openness that is a key value of the net becomes lost.
If we trust the net less, will we use it less? Will it become less of an engine for innovation and economic development? Will it be a diminished tool for speech and assembly among citizens?
If governments use this event as an excuse to exercise more oversight and control over the net, will that not then, in turn, reduce citizens' trust in the net and their freedom using it? Governments present themselves as the protector of our privacy, but as the NSA story demonstrates, governments present the greatest threat to our privacy as they have the means both to surveil us and to use our information against us.
And note well that governments' relationship with the net is necessarily influenced by the net's disruptive force on government: witness the internet's use in organizing protests against governments in Turkey, Brazil, Egypt, Tunisia, Iran, and more nations by the day. Isn't a weakened, controlled, distrusted net in governments' interests?
So far, much of the negative coverage and emotion in this story have centered on the technology companies alleged by Edward Snowden's leaked PowerPoint slides to have cooperated with the NSA. The Washington Post has yet to correct its contention that the NSA and FBI are "tapping directly" into the servers of internet companies, though that simplistic characterization has been soundly denied by Google, Facebook, and others. The Associated Press has given a more nuanced and sensible interpretation of the slides, explaining that some Prism data is the product of warrants served on those companies, producing data from their servers that is delivered by file transfer, or disc in Google's case, and some is the result of apparent wholesale eavesdropping on internet fibre.
That tapping into the net's full flow of communications is far more troubling even than the US government's secret warrants. For a savvy description of how that can occur, listen to security expert Steve Gibson's podcast. I've yet to hear internet bandwidth providers (Level3, Verizon, et al) questioned as internet service companies have been about whether and how they are cooperating with the spies. That is a next phase of this story.
What the NSA is doing may be legal, made so by the Patriot Act. But even on Fox News, regular contributor Andrew Napolitano has questioned whether its actions and this law are constitutional. That is the key question Edward Snowden and company now put before us: what principles are being violated or upheld by the government's actions? That is the discussion we must have. I see these core principles at stake.
First, privacy: in the United States, first-class letters and parcels are protected from search and seizure except by warrant. That should be the case, but is not, for any private communication using any technology: other classes of mail, email, internet telephony, Twitter direct message, or means yet to be invented.
Second, the balance of powers: the NSA is overseen by a secret court and gagged legislators. Thus, save for Snowden's leaking, we the people are excluded from the information we need and the opportunity we deserve to keep our representatives and agents in check.
A third principle riding atop these is transparency: the notion that government should be transparent by default and secret by necessity (and there are necessary secrets). Today, government is secret by default and transparent by force, whether from whistleblowers and journalists. When government threatens to torture the whistleblowers and prosecute the journalists who share information with us, then that puts a chill on speech and a choke on the transparency citizens depend upon to assure their rights and monitor their governments.
The first two are principles enshrined in the US constitution: in the fourth amendment that guarantees freedom from unreasonable searches and seizures; and in the structure of American government itself. The third is a principle whose value I have learned from the net and the power it gives any citizen to speak publicly; to find, organize, or join a public; and ultimately, to choose what is public and what is not. The NSA's actions and the laws that enable them – as well as some occasionally overblown conjecture around this – threaten to diminish the power and freedom of the net.
I worry that the damage is done.
Jeff Jarvis is journalism professor at the City University of New York.
from National Review Online and, 2013-Jun-11, by Victor Davis Hanson:

Pick Your Scandal
Violating Americans' privacy while failing to identify the terrorists among us.

All can agree that the Obama administration is mired in myriads of scandals, but as yet no one can quite figure out what they all mean and where they will lead.
Benghazi differs from all the other scandals — and from both Watergate and Iran-Contra — because in this case administration lapses led to the deaths of four Americans. Nine months later, the administration's problems of damage control remain fourfold: (a) there was ample warning that American personnel were in danger in Libya, and yet requests for increased security were denied; (b) during the actual attack, the American tradition of sending in relief forces on the chance that fellow Americans could be saved was abrogated; (c) the president and his top officials knowingly advanced a narrative of a culpable filmmaker that they knew was not accurate; (d) a through c are best explained as resulting not from honest human error or the fog of war, but from a methodical effort to assure the public in the weeks before the election that “lead from behind” in Libya had been a successful venture and that the death of Osama bin Laden had made al-Qaeda–inspired terrorism rare. All other concerns became secondary, including the safety of Americans in Libya.
Until someone proves that the administration was not wrong in failing to beef up our posts, was not wrong in not ordering immediate succor, was not wrong in blaming the violence on a filmmaker, and was not wrong in covering up the truth by promoting a demonstrably false narrative, the scandal will not go away.
Other questions remained unanswered. What role was the “consulate” actually playing? Who gave the stand-down order despite the calls for help? Who dreamed up the filmmaker-as-guilty-party yarn? Did General David Petraeus's post-Benghazi testimony square with the CIA talking points, and were any of these events related to his post-election resignation? And does Jay Carney face any consequences for blatantly lying to the press corps when he asserted that the administration had made a single adjustment to its Benghazi talking points — when there were, in fact, twelve substantive revised drafts?
In the AP and Fox News scandals, it cannot have been leaks per se that prompted the administration to go after journalists, given that the administration itself had leaked key classified information about the Stuxnet virus, the drone program, the bin Laden hit, and the Yemeni double agent. The suspect reporters were not so much enemies as rivals. They were monitored not because the administration wanted all leaks stopped so as to ensure that national security was not endangered, but because it wished to retain a monopoly on them: In-house favorable leaks were okay; unauthorized ones by others were grounds for surveillance. Note in all these scandals that when the Obama administration begins demonizing an opponent — Fox News since 2009; the Tea Party in 2010 — then usually the government finds a way unlawfully to go after it. For now, the public wonders how does Eric Holder explain his conflicting testimony to Congress, and will those in the administration who leaked favorable classified information to pet reporters be prosecuted? Will granting exclusive access to the bin Laden trove to a reporter like David Ignatius, who could be expected to present a narrative laudatory of the administration, have any repercussions?
The AP/Fox scandal affects not only the reporters involved but also the way the news is disseminated, and the IRS mess potentially affects every American. When the IRS comes calling, Americans cannot employ the sort of obfuscation and dissimulation that the IRS itself now employs. Try taking the Fifth Amendment with an IRS auditor or claiming that a suspicious visit to a business associate was due to an Easter-egg roll, and then see how well your audit goes. Because the system of voluntary tax compliance collapses without honesty and nonpartisanship, our entire tax-collection apparatus is now suspect. Every prominent conservative from now on, every tea-party-like nonprofit organization, every Republican political donor will assume, rightly or wrongly, that the next IRSletter in the mail is not legitimate, but prompted by Obama-era politics.
I don't see how the reputation of the IRS can quite recover, especially given reports of its repugnant waste of money on entertainment and frivolity, at a time of sequester belt-tightening (e.g., why do travelers suffer airline delays supposedly due to thinned-out air-traffic controllers, while IRS agents play-act Captain Kirk and Mr. Spock in a $60,000 parody video?), coupled with the fact that 47 percent of the public pays no federal income tax at all. Add it all up, and there is now a historic opportunity for principled reformers to do away with the IRS as we know it, and to rebrand it as a collection agency for a flat federal income tax. Will a new gang of eight address “comprehensive tax-collection reform”?
So far, we know that the administration's story that IRS malfeasance was confined to a single regional office cannot be true. If it turns out that Washington IRSofficials were communicating with the Obama administration about inordinate scrutiny of political opponents, then the scandal will reach Nixonian proportions.
The problem with the NSA monitoring is not just Obama's hypocrisy of once decrying elements of the Patriot Act only to embrace them, or indeed expand upon them. By now, everyone knows that what Obama demagogued in 2008 was what he adopted in 2009. Nor is the problem that the U.S. does not have a need to monitor the communications of potential terrorists who plan attacks through the Internet, e-mail, and cell phones. Rather, the dilemma for the Obama administration is that the apparently vastly expanded NSA surveillance came at a time when, in high-profile terrorist cases — the Tsarnaev bombing, Major Hasan's murder spree — U.S. officials did not use the intelligence in their possession to preempt terrorist acts. Fairly or not, there is the impression that a James Rosen of Fox News or the tea-party affiliates were more likely to earn unlawful federal attention than was a possible terrorist. In the present climate, the NSA will be presumed guilty of something until proven innocent.
And of course the NSA disclosures do not appear in a vacuum, but amid a multitude of other scandals in which the administration's initial explanations have proven deceptive. In other words, if even a few cases emerge in which those who by no stretch of the imagination could be suspected of terrorism were monitored, then the NSA disclosures will prove by far the most damaging of all the scandals.
Finally, the common denominator in these transgressions is that they all predated the 2012 election, were kept secret from the public, and emerged only once Barack Obama was safely elected. In that regard, they were successful operations that ensured that the voters went to the polls with the impression that al-Qaeda–inspired terror was rare, Libya was secure, the Tea Party had deflated and disappeared, and their unheralded president was, as the good leaks showed, in the shadows successfully fighting terrorists by drone, computer, SEAL teams, and double agents. The later whistle-blowers — the State Department's Gregory Hicks, the NSA's Edward Snowden, and Lois Lerner of the IRS in her psychodramatic response to the set-up questioner – were supposed Obama supporters and came forward only after the election. Note also the clear administration lying: Susan Rice reiterating the false story about a culpable filmmaker and a spontaneous demonstration; Jay Carney sticking to his lie about a single change in administration talking points; Eric Holder misleading Congress by assuring the House Judiciary Committee that he would not do what he in fact did in the James Rosen case; James Clapper insisting to Congress that the NSA collects data only under strict court supervision.
Paranoia over reelection, in classic Nixon style, is the common key that unlocks much of the mystery surrounding the administration's reckless, unethical, and often unlawful behavior.
NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution.
from the Associated Press via USA Today, 2013-Sep-11:

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