The New Front in the IRS Scandal: The Inspector General's Office

Revelations that the IRS also targeted progressives groups casts J. Russell George in a new light.

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The IRS also targeted "progressive" groups as a class, as the above excerpt from documents released Monday shows. Click to enlarge.

When the Treasury Department inspector general for tax administration appeared before a House Appropriations subcommittee hearing on June 3, he did not shy away from introducing a highly politicized framework for understanding the Internal Revenue Service's actions in targeting conservative groups seeking tax-exempt status.

"This is unprecedented, Congressman .... During the Nixon Administration, there were attempts to use the Internal Revenue Service in manners that might be comparable in terms of misusing it," J. Russell George, the George W. Bush appointee who leads the IG's office, told the committee in the closely watched hearing.

"I'm not saying that ... the actions that were taken are comparable, but I'm just saying, you know, that the misuse of the -- causing a distrust of the system occurred sometime ago. But this is unprecedented," he continued.

It seemed a needlessly inflammatory statement. The impartial investigator within the Treasury Department had just, unprompted, introduced the historic specter of presidential involvement in directing abusive tax treatment of White House enemies, despite a total lack of evidence that such a thing had occurred under President Obama, according to his own findings thus far. It was the first mention of Nixon at the hearing, albeit delivered with a deliberative caveat. He wasn't saying, he was just saying, you know?

Now comes news that the inspector general might not be the impartial arbiter he successfully presented himself to be in releasing the May audit report, "Inappropriate Criteria Were Used to Identify Tax Exempt Applications for Review."

Documents released on Monday show that the Tax Exempt Division didn't just target groups with "Tea Party," "patriot," or "9/12" in their names. The IRS also explicitly targeted groups that included the word "progressive" in their names, undermining the entire idea that conservative groups alone found themselves treated in particular ways. This revelation is not a huge surprise: By June 5 it was clear that a substantial fraction of the targeted groups since 2010 were left of center or nonpartisan, including a number whose name began with the word "progressive," as I reported at the time. There were hints of this bigger picture in the Treasury's May report, as well, but it was so narrowly written to focus on the treatment of conservative groups that it did not get into detail as to what had been done to the other groups, or what exactly who they were.

In May, George declined to answer questions about whether progressive groups were targeted, a kind cageyness that now raises questions about his impartiality in presenting findings about what went on at the IRS.

At the May 22 House Oversight and Government Reform Committee hearing "The IRS: Targeting Americans for Their Beliefs," Chairman Darrell Issa asked George point-blank about "be on the lookout" orders: "Were there any BOLOs issued for progressive groups, liberal groups?"

"Sir, this is a very important question," the courtly George replied. "Please, I beg your indulgence .... The only 'be on the lookout,' that is BOLO, used to refer cases for political review were the ones that we described within our report."

"There were other BOLOs used for other purposes," he added -- such as "indicators of known fraud schemes" and, for "nationwide organizations, there were notes to refer state and local chapters to the same reviewers."

He did not mention the one now revealed for progressive groups.