New Trump Special Counsel Jack Smith Was Involved in Obama-Era Lois Lerner IRS Scandal

Newly appointed special counsel Jack Smith was instrumental in the Justice Department‘s public integrity unit inserting itself into the Lois Lerner IRS scandal targeting conservative nonprofit groups.

Smith, picked by Attorney General Merrick Garland to helm the DOJ’s investigations of former President Donald Trump, led the Public Integrity Section from 2010 until early 2015.

Lerner, director of the IRS’s Exempt Organizations Unit, led an IRS effort targeting Tea Party groups and similar conservative nonprofit organizations. Smith’s push for DOJ officials to contact Lerner and the IRS in order to get the DOJ involved seemed to be the impetus behind the IRS sending the FBI reams of nonprofit tax records.

An IRS watchdog and the DOJ later admitted the IRS committed wrongdoing, although not of the criminal variety. Lerner would apologize.

Republicans unsuccessfully sought a special counsel to investigate the IRS scandal at the time, with Smith’s actions cited as one reason.

“Jack Smith was looking for ways to prosecute the innocent Americans that Lois Lerner targeted during the IRS scandal,” Rep. Jim Jordan (R-OH), expected to lead the House Judiciary Committee next year, told the Washington Examiner.

Jordan and Rep. Darrell Issa (R-CA), who led House Oversight, sought Smith’s testimony in May 2014, saying, “It is apparent that the Department’s leadership, including Public Integrity Section Chief Jack Smith, was closely involved in engaging with the IRS.”

Smith testified that month that he spoke with the FBI about these nonprofit groups.

“We had a dialogue with the FBI. Never opened any investigations, Public Integrity [Unit] did not. But we did have a dialogue with them over time following this [Oct. 8, 2010, meeting with Lerner].”

Smith considered “whether it made sense to open investigations” but said his unit “did not open any.”

SPECIAL COUNSEL JACK SMITH’S MIXED TRACK RECORD TARGETING HIGH-PROFILE POLITICIANS

Issa released a June 2014 report that said the DOJ arranged the meeting with Lerner after Smith read a September 2010 New York Times article, “Donor Names Remain Secret as Rules Shift,” which opened with an anecdote about a conservative group.

The report revealed Lerner and an IRS commissioner, Sarah Ingram, spoke with the reporter on background for the article.

After reading it, Smith wrote to DOJ colleagues: “Check out [the] article on front page of ny times regarding misuse of nonprofits for indirectly funding campaigns. This seems egregious to me — could we ever charge a [18 U.S.C. §] 371 conspiracy to violate laws of the USA for misuse of such non profits to get around existing campaign finance laws + limits? … IRS Commissioner sarah ingram oversees these groups. Let’s discuss tomorrow but maybe we should try to set up a meeting.”

Smith testified in May 2014: “I remember there being a concern in the article that there was[n’t] appropriate enforcement here, and I wanted to discuss.”

Smith organized meetings with his senior leadership, including Richard Pilger, director of the DOJ’s Election Crimes Branch, with one meeting saying the DOJ considered a “possible 501 / campaign finance investigation.”

Jordan told Deputy Attorney General James Cole in July 2014 that a special counsel was needed to investigate the IRS scandal.

“The fact that Richard Pilger and Jack Smith had interaction with Lois Lerner in 2010 and 2013, that you had a data base of 1.1 million pages of taxpayer information, donor (c)(4) information, you had it for four years, and some of that information was confidential — all that fact, all that cries out for a special prosecutor,” Jordan said.

Smith recommended his unit meet with Ingram to discuss DOJ enforcement. Pilger expressed skepticism and told Smith it would be “very challenging as criminal work in the near term.” Nancy Simmons, the unit’s senior counsel, said she didn’t see “a viable way to make a prosecutable federal case.”

Smith nevertheless pushed forward. Pilger reached out to Ingram’s office in September 2010 to set up an IRS meeting. Ingram told her staff, ‘‘We have to do this,’’ and asked Lerner to organize.

Pilger met with Lerner and other IRS officials, saying the goal was to talk with Lerner about being “more vigilant to the opportunities from more crime in the … 501(c)(4) area.”

The Senate Finance Committee, led by then-Sen. Orrin Hatch, revealed in a 2015 report that Lerner and Pilger spoke about the IRS providing the DOJ and the FBI with nonprofit filing data and about inviting the FBI to the meeting on Oct. 8, 2010, where the IRS, DOJ, and FBI would discuss further.

Pilger contacted the IRS a few weeks later so the Smith-led unit could further discuss “criminal tax enforcement against tax exempt organizations,” but IRS official Nancy Marks warned the IRS had not “seen activity that rises to the level of criminal investigation.”

Lerner messaged her staff in early October 2010, saying, “[The DOJ] would like to begin looking at 990s from last year for c4 orgs. They are interested in the reporting for political and lobbying activity. How quickly could I get disks to them?”

The GOP report said, “The IRS sent 21 disks containing 1.1 million pages of nonprofit tax-return information — including confidential taxpayer information — to the FBI in advance of this meeting” with Lerner. The documents were sent to then-FBI supervisory special agent Brian Fitzpatrick.

Then-Principal Deputy Assistant Attorney General Peter Kadzik wrote in June 2014 the disks appeared to “contain only publicly available information.” Two days later, Kadzik admitted that “a small number of the Form 990s on the disks inadvertently include confidential information.”

Lerner admitted in May 2013 the IRS had scrutinized nonprofit groups that used terms such as “Tea Party” or “patriots” in their applications but claimed it wasn’t a political decision, saying, “We made some mistakes. Some people didn’t use good judgment. … For that we’re apologetic.”

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The Treasury Department’s watchdog concluded in 2013 that “the IRS used inappropriate criteria that identified for review Tea Party and other organizations.”

The DOJ said in 2015: “Our investigation uncovered substantial evidence of mismanagement, poor judgment, and institutional inertia.”

Then-Attorney General Jeff Sessions announced in 2017 that the DOJ entered into settlements with conservative groups targeted by the IRS during the Obama administration. The IRS admitted its actions were “wrong” and “for such treatment, the IRS expresses its sincere apology.”