[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
EXECUTIVE OVERREACH IN DOMESTIC AFFAIRS
(PART II)_IRS ABUSE, WELFARE REFORM,
AND OTHER ISSUES
=======================================================================
HEARING
BEFORE THE
EXECUTIVE OVERREACH TASK FORCE
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
APRIL 19, 2016
__________
Serial No. 114-71
__________
Printed for the use of the Committee on the Judiciary
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Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
LAMAR S. SMITH, Texas ZOE LOFGREN, California
STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas JUDY CHU, California
JIM JORDAN, Ohio TED DEUTCH, Florida
TED POE, Texas LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------
Executive Overreach Task Force
STEVE KING, Iowa, Chairman
F. JAMES SENSENBRENNER, Jr., STEVE COHEN, Tennessee
Wisconsin JERROLD NADLER, New York
DARRELL E. ISSA, California ZOE LOFGREN, California
LOUIE GOHMERT, Texas SHEILA JACKSON LEE, Texas
JIM JORDAN, Ohio HENRY C. ``HANK'' JOHNSON, Jr.,
TED POE, Texas Georgia
JASON CHAFFETZ, Utah JUDY CHU, California
TREY GOWDY, South Carolina TED DEUTCH, Florida
RAUL LABRADOR, Idaho CEDRIC RICHMOND, Louisiana
RON DeSANTIS, Florida SCOTT PETERS, California
KEN BUCK, Colorado
MIKE BISHOP, Michigan
Paul B. Taylor, Chief Counsel
James J. Park, Minority Counsel
C O N T E N T S
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APRIL 19, 2016
Page
OPENING STATEMENTS
The Honorable Steve King, a Representative in Congress from the
State of Iowa, and Chairman, Executive Overreach Task Force.... 1
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Executive Overreach
Task Force..................................................... 3
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 14
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 15
WITNESSES
Cleta Mitchell, Partner, Foley and Lardner
Oral Testimony................................................. 17
Prepared Statement............................................. 20
David E. Bernstein, George Mason University Foundation Professor,
George Mason University School of Law
Oral Testimony................................................. 32
Prepared Statement............................................. 35
Emily Hammond, Associate Dean for Public Engagement & Professor
of Law, The George Washington University Law School
Oral Testimony................................................. 47
Prepared Statement............................................. 49
Andrew M. Grossman, Adjunct Scholar, Cato Institute, and Partner,
Baker & Hostetler LLP
Oral Testimony................................................. 53
Prepared Statement............................................. 56
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Material submitted by the Honorable Steve Cohen, a Representative
in Congress from the State of Tennessee, and Ranking Member,
Executive Overreach Task Force.............................5
deg.OFFICIAL HEARING RECORD
Unprinted Material Submitted for the Hearing Record
Report titled ``No Evidence of White House Involvement or Political
Motivation in IRS Screening of Tax-Exempt Applicants,'' submitted
by the Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Executive Overreach Task
Force. This report is available at the Committee and can also be
accessed at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=104807
EXECUTIVE OVERREACH IN DOMESTIC AFFAIRS (PART II)--IRS ABUSE, WELFARE
REFORM, AND OTHER ISSUES
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TUESDAY, APRIL 19, 2016
House of Representatives
Executive Overreach Task Force
Committee on the Judiciary
Washington, DC.
The Task Force met, pursuant to call, at 2:29 p.m., in room
2141, Rayburn House Office Building, the Honorable Steve King
(Chairman of the Task Force) presiding.
Present: Representatives King, Goodlatte, Issa, Gohmert,
Jordan, Poe, Gowdy, Labrador, DeSantis, Buck, Bishop, Cohen,
Conyers, Johnson, and Deutch.
Staff Present: (Majority) Paul Taylor, Chief Counsel,
Subcommittee on the Constitution and Civil Justice; Zachary
Somers, Parliamentarian & General Counsel, Committee on the
Judiciary; Tricia White, Clerk, Subcommittee on the
Constitution and Civil Justice; (Minority) James Park, Minority
Counsel, Subcommittee on the Constitution & Civil Justice;
Susan Jensen, Senior Counsel; Matthew Morgan, Professional
Staff Member; and Veronica Eligan, Professional Staff Member.
Mr. King. The Executive Overreach Task Force will come to
order. Without objection, the Chair is authorized to declare a
recess of the Task Force at any time.
And I'll begin with my opening statement.
At our first Task Force hearing, we explored how Congress
itself, over the past many decades, has acted or not acted in
ways that have tended to cede its legislative power to the
executive branch.
Contrary to our Founders' original intentions, our second
hearing focused on just--on just some of the many examples in
which the President has exercised sometimes sheer will to wrest
legislative authority from the United States Congress.
Our third hearing today explores even more such abuses. One
of the most egregious abuses in the executive branch's handling
of the Internal Revenue Service, which was used to restrict the
ability of organizations dedicated to educating people on the
Constitution and the Bill of Rights to obtain task-exempt
status that they are allowed by law.
A report by the Treasury Department's own Inspector General
found that organizations that were involved in educating on the
Constitution and the Bill of Rights were singled out for
adverse tax treatment by the Internal Revenue Service. Other
groups with the term ``progressive'' in their name were not
subject to the same adverse treatment.
Adding to the horror of the IRS' abuse of its regulatory
authority to favor political supporters of the President is
research indicating that politically biased favorable treatment
may have significantly affected the 2012 Presidential election.
Researchers at the American Enterprise Institute and the
Harvard Kennedy School of Government found that Republican
candidates in the 2010 elections enjoyed huge success when
organizations educating people on the Constitution and the Bill
of Rights were left unfetterred by the IRS.
That cycle brought the Republican party some 3 million to 6
million additional votes in House races. As the researchers
concluded, that success was not the result of a few days of
work by an elected official or two, but it involved activists
all over the country who spent the year-and-a-half leading up
to the midterm elections by volunteering, organizing, donating,
and rallying.
Much of these grassroots activities were centered around
501(c)(4)s, which, according to our research, were an important
component of Republican success at cycle. The researchers
concluded that if those grassroots activities had continued to
grow at the pace seen in 2009 and 2010 and had their effect on
the 2012, it would have been similar to that seen in 2010. They
would have brought the Republican party as many as 5 to 8\1/2\
million votes compared to Obama's victory margin of 5 million.
But that didn't happen.
Instead, in March of 2010, the IRS decided to single out
for special adverse treatment groups that educated citizens on
the Constitution and the Bill of Rights that contained the word
``patriot'' in their names or that otherwise indicated subjects
unappealing to the current Administration. For the next 2
years, the IRS approved the applications of only four such
groups, delaying all others while subjecting the applicants to
highly intrusive, intimidating requests for information
regarding their activities, their membership, their contacts,
their Facebook posts, and private thoughts.
As the researchers found, ``As a consequence, the founders,
members, and donors of these adversely affected groups found
themselves incapable of exercising their constitutional rights,
and their impact was muted in the 2012 election cycle.''
The IRS abuse had cost these organizations thousands of
dollars in legal fees and swallowed the time these all-
volunteer networks could have devoted to voter turnout, to
outreach in Black and Latino neighborhoods, and other events to
educate the public on the Constitution and the basic concept of
political and individual liberty.
Adding insult to injury, a Federal lawsuit brought by
organizations harmed by the IRS' misconduct has been marred by
delays on the part of Federal Government attorneys so
unreasonable that the Sixth Circuit Court of Appeals wrote as
follows, in an opinion issued just last month. Because of its
significance, I will quote it in length: ``Among the most
serious allegations a Federal court can address are that an
executive agency has targeted citizens for mistreatment based
on their political views. Not--no citizen, Republican or
Democrat, Socialist or Libertarian, should be targeted or even
have to fear of being targeted on those grounds. Yet in this
lawsuit the IRS has only compounded the contact that gave rise
to it.
``The plaintiffs seek damages on behalf of themselves and
other groups whose applications the IRS treated in the manner
described by the Inspector General. The lawsuit has progressed
as slowly as the underlying applications themselves.
``At every turn, the IRS has resisted the plaintiffs'
request for information regarding the IRS' treatment of the
plaintiff class, eventually to the open frustration of the
District Court. At issue here are the IRS be-on-the-lookout
lists of organizations allegedly targeted for unfavorable
treatment because of their political beliefs. The District
Court ordered production of those lists and did so again over
an IRS motion to reconsider.
``Yet almost a year later, the IRS still has not complied
with the court's orders. The lawyers in the Department of
Justice have a long and storied tradition of defending the
Nation's interests and enforcing its laws, all of them not just
selective ones, in a manner worthy of the Department's name.
The conduct of the IRS' attorneys in the District Court falls
outside that tradition.''
Those are chilling words--close quote. Those are chilling
words from a Federal appeals court which found the Justice
Department under this Administration has failed to enforce the
Nation's laws and fairly--and has failed in a manner unworthy
of the Department's name.
I look forward to hearing from all our witnesses here today
on these and other issues.
The Chair would now recognize the Ranking Member for his
opening statement.
Mr. Cohen. Thank you, Mr. Chair.
Today's Executive Overreach Task Force, or President
Obama's still President--we shall continue the lashings--
hearing is to congressional hearings what a clip show is to a
television series. In the absence of original idea or coherent
focus, we simply go and re-air snippets of tired old story
lines from long ago, past episodes; Seinfeld Part 1, or TBT,
hash tag.
It is simply sad that at a time when our Nation and our
world face a host of daunting challenges, the Zika virus,
problems in the Middle East, this Congress has chosen to spend
its time and taxpayer money on political theater.
It is telling that today's hearing has no focal point. Its
only purpose appears to be to give conservative critics the
opportunity, once again, to assert that President Barack Obama
has acted beyond the law. And as part of a longstanding pattern
of attempts to paint this President, in particular as somehow
illegitimate, goes all the way back to the 2008 campaign.
This is the week that Passover starts on Friday, and we say
why is this night different from all other nights? Why is this
President different from all other Presidents? I think we all
know why. Simply too bad for the critics that the facts do not
support their arguments.
On the alleged targeted conservative groups by the Internal
Revenue Service, extensive investigations by two Congressional
Committees, the Department of Justice and the Treasury, have
concluded the IRS did not break the law.
Indeed, the Justice Department wrote to the Committee on
October 23, 2015. Its conclusion's worth noting at some length.
We conducted more than 100 witness interviews, collected more
than 1 million pages of IRS documents, analyzed almost 500 tax
exemption applications, examined the role and potential
culpability of scores of IRS employees, and considered the
applicability of civil rights tax administration and
obstruction statutes.
Our investigation uncovered substantial evidence of
mismanagement, poor judgment, and institutional inertia,
leading to the belief by many tax-exempt applicants the IRS
targeted them based on their political viewpoints. But poor
management is not a crime. We found no evidence that any IRS
official acted based on political, discriminatory, corrupt, or
other inappropriate motives to help support a criminal
prosecution. We also found no evidence that any official
involved in the handling of tax-exempt applications or IRS
leadership attempted to obstruct justice.
I'd like to ask unanimous consent to include the Justice
Department's October 23, 2015, letter in the record.
Mr. King. Hearing no objection, so ordered.
[The information referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
__________
Mr. Cohen. Thank you. Thank you.
Our Democratic colleagues in the Oversight and Government
Reform Committee reached similar conclusions after that
Committee's extensive investigation into this matter. The
Committee staff report prepared by Ranking Member Elijah
Cummings concluded that after ``detailed lengthy transcribed
interviews of 39 witnesses, including Republicans and
individuals who have no political affiliation,'' there was ``no
evidence of White House involvement,'' and ``no evidence of
political motivation on the IRS' part.''
Unanimous consent to place into the record the Democratic
staff report on the Committee of Oversight and Government
Reform entitled ``No Evidence of White House Involvement or
Political Motivation in IRS Screening.'' *
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*Note: The material referred to is not printed in this hearing
record but is on file with the Task Force, and can also be accessed at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=104807
Mr. King. Also hearing no objection, so ordered.
Mr. Cohen. Thank you, Mr. Chair.
The majority has picked the wrong President to pick on with
the IRS. It's a long time ago, but all we've got to go back to
is Richard Nixon. He was real good at using the IRS to punish
his opponents, and it would be real bipartisan agreement that
we could have examined him and said, that was a bad time, and
the IRS was used by Richard Nixon.
It is taxpayer money that pays for this national defense.
It is taxpayer money that pays the salaries of Federal law
enforcement and intelligence officers. It's taxpayers' money
that pays down the national debt. Taxpayer money that pays for
Medicare, Medicaid, and Social Security, and crop subsidies.
And it is the men and women of the IRS that ensure that
millions of Americans get the refunds and tax credits. And it's
the men and women of the IRS that ensure that we have the money
to discuss these and many other critical things.
As Justice Oliver Wendell Holmes said, taxes are what you
pay to live in the civilized society. And taxes are fine.
You've got to have an IRS. The whole idea of abolishing is
poppycock.
Like the IRS matter, the litany of other issues the
majority raises in today's hearing is just to repeat the past
complaints about agency action. The fact of the matter is the
administrative process includes numerous checks, including
judicial review, on an agency's actions and its interpretations
and authority to act, and critics offer no credible evidence
that these checks have failed.
Instead of wasting time, limited time, that we have on a
hearing about these nonissues, we should be considering
substantive issues, like how to tackle over-incarceration, how
to end gun violence, how to help students managing crushing
student loan debt, and how to help people be part of the
American Dream, and have a right to vote. Regrettably, these
issues sit by the wayside while we engage in this purely
political exercise.
Further deponent sayeth naught, I yield back the balance of
my time.
Mr. King. I thank the Ranking Member of the Task Force.
And I now yield to the Chairman of the full Judiciary
Committee, Mr. Goodlatte, from the Commonwealth of Virginia.
Mr. Goodlatte. Thank you, Chairman King, for convening this
third hearing of the Task Force on Executive Overreach.
Following up this last hearing, the topic today includes
more recent case studies of the abuse of Executive power. And
I'll focus my remarks on the President's actions regarding the
implementation of the work requirements and the bipartisan
welfare reform laws and its unilateral rewriting of Federal
energy laws.
In 1996, President Clinton and a Republican Congress signed
into law the Bipartisan Personal Responsibility and Work
Opportunity Reconciliation Act, which created the Temporary
Assistance for Needy Families program, or TANF. This program
was designed to discourage dependency and encourage employment
by placing certain restrictions on welfare. TANF provided that
individuals could only receive benefits for up to 5 years and
also require recipients to engage in work within 2 years of
receiving benefits.
The work requirements in particular were recognized as the
reason for TANF's success in helping millions of Americans get
back to work. Welfare roles were decreased by half, and the
poverty rate for African-American children reached its lowest
point in U.S. history. Researchers studying the self-reports of
happiness by former welfare recipients have shown that these
work requirements increased the happiness of single mothers
taking part in the program, concluding that ``the package of
welfare and tax policy changes targeting single mothers and
generally promoting work increased single mothers' happiness.
The observed increase in happiness result--appears to result
from both an increase in single mothers reporting a high level
of happiness and a decrease in single mothers reporting a low
level of happiness. The magnitude of the effect appears quite
large.''
These new workers confirm what many studies of human
happiness have shown, and that is that one of the best means of
achieving happiness is through earned success. As other
researchers have shown, paid work activities provide social
contact, a means of achieving respect, and a source of
engagement, challenge, and meaning.
The Obama administration, however, in a mere memorandum
issued by the Department of Health and Human Services, deemed
it that States no longer had to follow TANF's work requirements
and could dispense welfare, even if recipients didn't meet the
TANF's statutory standards.
In the 1996 welfare reforms, Congress provided a list of
which statutory provisions the Federal Government could waive,
and TANF's work requirements in section 407 were not listed as
waiveable. In the many years since the 1996 act was passed, no
Administration had ever asserted this authority because the
statute's clear text allows for no waivers of TANF's work
requirements. The result, if TANF's--if waivers were fully
implemented, would be more dependency and less of the sort of
earned success that leads to greater happiness.
The Obama administration has also attempted to unilaterally
impose energy use rules on the States without congressional
authorization. Initially, 26 States, and now 29 States, asked
the Chief Justice of the Supreme Court to intervene immediately
to stop this abuse, and the Supreme Court promptly stayed the
enforcement of the President's plan pending a resolution of the
constitutional challenges against it.
Even prominent liberal law professor, Laurence Tribe, who
taught President Obama constitutional law at Harvard Law
School, wrote the following about President Obama's clean power
plan: ``After studying the only legal basis offered for the
EPA's proposed rule, I concluded that the Agency is asserting
Executive power far beyond its lawful authority. Even more
fundamentally, the EPA, like every administrative agency, is
constitutionally forbidden to exercise powers Congress never
delegated to it in the first place. The brute fact is that the
Obama administration failed to get climate legislation through
Congress. Yet the EPA is acting as though it has the
legislative authority anyway to reengineer the Nation's
electric generating system and power grid. It does not.''
I look forward to hearing from our witnesses today who will
discuss these and other abuses of Executive power and the means
of preventing them.
Thank you, Mr. Chairman.
Mr. King. I thank the Chairman, the gentleman from
Virginia.
And now I yield to the Ranking Member of the full Committee
from Michigan, Mr. Conyers.
Mr. Conyers. Thank you, Chairman King.
Members of the Subcommittee, when the Committee first
established this Task Force, I expressed hope that we could
work in a substantive and bipartisan manner to address serious
questions about relationship between the executive and
legislative branches. I continue to hold out that hope, but I
am disappointed that so far the Task Force, to me, seems mostly
to have been the kind of partisan political exercise that I was
afraid it might be.
This is especially so coming after hearings attacking the
President on the Patient Protection and Affordable Care Act and
immigration and attacking the very notion of regulatory
agencies themselves. Today's grab bag collection of topics,
which appear only intended to support the claim that the Obama
administration is lawless, only deepens my disappointment. To
begin with, none of the investigations into the actions of the
Internal Revenue Service in assessing the applications for tax-
exempt status by certain conservative groups has identified any
illegal conduct.
In short, despite numerous hearings, witness interviews,
and document reviews, including by Congressional Committees and
by the Departments of Justice and the Treasury, no one found
that the IRS or its employees broke the law. Yet just last
week, we heard at least two Members of this Task Force call for
the impeachment of the IRS Commissioner from the House floor.
And this week, the House will be devoting much of its floor
schedule to legislation designed to impugn and undermine the
IRS.
The real scandal here is the waste of taxpayer money in the
majority's continued pursuit of this nonscandal. Likewise,
today's hearings also raises, to me, the unsubstantiated
specter of the undeserving welfare recipient. Denigrating the
poor as undeserving is a way to score points, I suppose, with
some conservative voters, notwithstanding the fact that the
Administration has the authority to waive work participation
requirements of the Temporary Assistance to Needy Families
program.
Section 1115 of the Social Security Act specifies that the
Secretary of Health and Human Services may waive certain of the
requirements for State welfare programs, including those
requirements the States themselves claim are onerous and may
even undermine the goals of the welfare amendments enacted in
1996.
Indeed, 3 years ago, the House passed legislation to
prohibit the Secretary of Health and Human Services from
granting such waivers. That bill, by prohibiting such waivers,
implicitly acknowledged that the Secretary had such waiver
authority. But my deeper concern is with this line of attack
that is that it is simply intended to impugn the most
disadvantaged in our society for political gain.
Finally, today's hearings also assail the Environmental
Protection Agency's authority under the Clean Air Act to
regulate carbon dioxide emissions by power plants. It's clear
that section 111(d) of the Act gives the EPA broad authority to
address not just pollutants that were known at the time of the
Act's passage, but also new problems as they arose. In fact,
Congress intentionally gave the EPA the discretion, as the
expert agency, to elaborate on these criterias and to resolve
ambiguities in them.
As protestors in front of the Capitol remind us,
particularly during an election year, we should be using the
Committee's time to consider measures that provide real
solutions. These include, for example, H.R. 885, the ``Voter
Rights Amendment Act,'' which would help restore fundamental
protections for voters. And we should address the flood of
corporate money in our political system as legitimized by the
Supreme Court's Citizens United decision.
Nevertheless, I look forward to hearing our witnesses
today. I welcome them all and I thank them for appearing.
And I yield back, Mr. Chairman.
Mr. King. Nevertheless, I thank the gentleman.
And without objection, other Members' opening statements
will be made part of the record.
Let me now introduce our witnesses. Our first witness is
Cleta Mitchell, a partner in the Washington, D.C., office of
Foley and Lardner, LLP. And our second witness is Mr. David
Bernstein, a George Mason University Foundation professor at
the George Mason University School of Law. He's the author of
the book Lawless: The Obama Administration's Unprecedented
Assault on the Constitution and the Rule of Law. It was
published in November last year. And then our third witness is
Emily Hammond, professor of law at George Washington University
School of Law. Welcome. And our fourth and final witness is
Andrew Grossman, a partner at the D.C. office of Baker and
Hostetler.
And we welcome you all here today and we look forward to
your testimony.
Each of the witnesses' written statements will be entered
into the record in its entirety. I ask that each witness
summarize his or her testimony in 5 minutes or less. To help
you stay within that time, there's a timing light in front of
you. The light will switch from green to yellow, indicating
that you have 1 minute to conclude your testimony. When the
light turns red, it indicates that the witness's 5 minutes have
expired.
Before I recognize the witnesses, it's a tradition of the
Task Force that they be sworn in. Please stand to be sworn in.
Thank you.
Do you solemnly swear that the testimony you're about to
give will be the truth, the whole truth, and nothing but the
truth so help you God?
Let the record reflect that the witnesses have answered in
the affirmative.
I now recognize our first witness, Ms. Mitchell, for her 5-
minute testimony.
TESTIMONY OF CLETA MITCHELL, PARTNER,
FOLEY AND LARDNER
Ms. Mitchell. Thank you, Mr. Chairman, and Members of the
Task Force. Thank you for the opportunity to appear here today
on this very important issue of executive branch overreach.
And I think it's important, even though there are some
specific agencies that are listed as the topics about which
we're to discuss today, and I could spend the rest of the day
detailing to you the experiences that I've had with and for my
clients and their experiences with the IRS and the targeting.
And just to put it in perspective, Congressman Cohen, I've been
doing this for a long time, helping organizations receive tax-
exempt status from the IRS.
And in a nutshell, what happened beginning in 2009, that's
the first client that I had that I realized--began to realize
something had changed in the fall of 2009. The IRS took what
used to be a process that lasted 3 to 4 weeks and changed it,
without any notice to the public, based on targeting and
selection and really rounding up and branding of applicants,
and turned it into a process that took 3 to 4 years and created
burdensome, intrusive, multiple levels and layers of inquiries
about every internal aspect of the organization's operations,
such that it chilled the First Amendment rights of hundreds of
citizen groups and tens of thousands of citizens in the United
States.
And I have attached to my testimony today testimony which I
provided to the House Oversight and Government Reform Committee
in July of 2014, which conducted a hearing on how to keep it
from happening again. And I'll just mention three of those
items, but there are other suggestions in there. And Congress
has enacted a couple of those things, but there is more that
needs to be done.
First, Congress should repeal the requirement that exempt
organizations disclose their donor list to the government. It's
a private schedule. It's not public. There's no public policy
reason for citizens groups to have to turn over their donor
lists to the Federal Government, to the IRS. And we would urge
you to please repeal the Schedule B donor disclosure filing
requirement.
I would urge you to also enact legislation that creates a
permanent protection so that the IRS is not--and any IRS
employee is prohibited by law from utilizing the publicly filed
campaign finance reports and published reports of donor
information as a basis for targeting citizens and taxpayers for
audit. That is--the Supreme Court has recognized the First
Amendment rights of Americans to make contributions to
organizations, candidates, and parties of their choice. And
disclosure is required by law. The IRS should not be allowed to
use that public disclosure as the basis for targeting people
for audit or adverse tax activity. So we would urge Congress to
make that clear in the statute that that is prohibited.
And, finally, I would urge the Committee and the Congress
to enact something that the Supreme Court said existed but
which courts throughout the country have resisted giving life
to, and that is to provide an individual cause of action that
citizens and taxpayers would have to pursue individual IRS
employees and, frankly, other Federal employees who violate the
constitutional rights of taxpayers and citizens.
The Supreme Court in the Bivens v. six unnamed Federal
narcotics agents, the Supreme Court recognized this cause of
action, but the IRS and the government employees, the IRS
employees, in the cases that have been filed regarding the
tax--the IRS targeting scandal, has all said that such a right
of action does not exist. We urge Congress to clarify and make
clear that it does exist.
And then I want to close with something that I think is
important for Congress to recognize. This is not a partisan
issue. This is a--the Article I role of Congress is at--is at--
very much at risk with executive branch overreach not just in
this Administration, but going back for decades. And I have
five recommendations that I would like Congress to consider
doing. First--to reclaim its constitutional authority.
First, I think Congress should abolish the House and Senate
Appropriations Committees and reassign the funding
responsibility to the Committees of jurisdiction so that
funding, oversight, and authorization are handled on an ongoing
year-in, year-out basis by the Committees of jurisdiction,
rather than separating them such that oversight and authorizing
is separated from funding.
Secondly, I think that Congress should consider repealing
all general legislative authority delegated to Federal
agencies. Because what has happened over the last 40 years is
that Congress has delegated its constitutional obligation for
enacting legislation and sent that off to Federal agencies and
then wonders why it is that the Federal agencies are acting
like the Congress. So I would urge the Congress to repeal the
general legislative authority that's been delegated and to
provide that no regulations can be promulgated without prior
congressional approval.
I think you should abolish the Joint Committee on Taxation.
We're never going to get tax reform or any changes that I have
proposed until and unless you get rid of the Joint Committee on
Taxation. I've included recommendations that also were in
testimony a year ago, again before the House Committee on
Oversight and Government Reform, on how FOIA needs to be
redefined, the deliberative process, privilege needs to be
eliminated.
And, frankly, I would recommend that Congress create within
the GAO a FOIA watchdog division, and that all the funds that
are now spent by agencies spending the taxpayers, the millions
and millions of dollars, telling us things that may not even be
true, and those funds be reallocated so that when citizens try
to enforce their FOIA rights, that they actually get a proper
response and get the documents that the law says they're
entitled to have.
And, finally, I would urge Congress to repeal the Chevron
deference doctrine that provides that when litigants appear
before the courts of this land to try to hold a Federal agency
accountable, the court gives--puts the thumb on the scale and
gives preference and deference to the agencies. Until Congress
does something about these principles that have evolved over
the last 40 years, we are not going to see an end to executive
overreach.
Thank you.
[The prepared statement of Ms. Mitchell follows:]**
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**Note: Supplemental material submitted with this statement is not
printed in this hearing record but is on file with the Task Force, and
can also be accessed in this witness's statement at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=104807
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__________
Mr. King. Thank you, Ms. Mitchell.
I now recognize Mr. Bernstein for his testimony.
TESTIMONY OF DAVID E. BERNSTEIN, GEORGE MASON UNIVERSITY
FOUNDATION PROFESSOR, GEORGE MASON UNIVERSITY SCHOOL OF LAW
Mr. Bernstein. Thank you, Mr. Chairman, Members of the Task
Force. Thank you for having me here for this hearing. As the
Chairman mentioned, I have a book about the Obama
administration and what I perceive to be its lawlessness I
document there. But I want to emphasize that, as Ms. Mitchell
said, the encroachment by the executive branch on the powers of
the legislature and of the judiciary is something that's been
going on for a long time. I'm afraid we're reaching a tipping
point. And for those who think this is solely a partisan issue,
I would suggest that you consider, when I discuss these issues
today, how you would feel if a President Trump or a President
Cruz exercised similar authority when they--if and when they
became President.
So I'm going to focus on several examples today of how the
Obama administration has not only violated the law, which is
not that uncommon for an executive branch these days, but has
done so in ways that really pose a threat to checks and
balances that are meant to evade checks and balances. The
Administration has not only acted unilaterally without
congressional assent, which is what has gotten most publicity,
but in some cases, the one I'm going to discuss today, has
acted in ways that make it almost impossible for the judiciary
to get involved and be the final check on the executive branch.
So my first example involves new government regulations
that are disguised as mere guidance. Right? So these executive
branch agencies have all this power and they're supposed to,
Congress decided in 1940, that in order to enact regulations
based on relatively broad or vague congressional legislation,
they need to go through this notice and comment period, go
through the Administrative Procedure Act, and publish formal
regulations that are then subject to judicial review.
But one way of evading that is to just say, well, we're not
making regulations; we're just issuing guidance. So the example
I have is in 2011, the Department of Education, Office of Civil
Rights, sent a Dear Colleague letter to universities around the
country requiring universities to change the procedures that
they have for dealing with sexual assault on campus when people
complain of sexual assault. They were required by this letter
to lower the standard of proof to find an accused guilty and
also denying a few students of their due process rights, for
example, by denying them the right to cross-examine their
accusers.
The letter purported to be an interpretation of the Title
IX amendment to the Educational Act of 1972, but there's really
no case citations in the letter; there's no formal legal
analysis. It's just dicta.
Now, when questioned about this, sometimes OCR said, well,
these are--this is just guidance. These aren't real
regulations. However, assistant secretary of the OCR, Catherine
Lhamon, testified under oath before the Senate a couple of
years ago, and she said that we expect the recipients of the
letter--in other words, all universities, that in any way take
Federal funds--to ``fully comply with OCR guidance.''
When the government expects full compliance with its
pronouncements, it needs to go through a notice and comment
process and create regulations subject to judicial review and
not just announce these rules in a letter that can't be
reviewed by anybody.
My second example of Administration overreach is the use of
TARP funds to--first, to bail out Chrysler and GM and then to
use the leverage this gave the government to essentially run
the day-to-day operations of General Motors for a time. And the
Supreme Court established a long time ago in Youngstown Sheet
and Tube Company v. Sawyer in 1951, that economic emergency,
even when there's a war going on, like the Korean War, does not
give the President authority to act unilaterally in the absence
of statutory authority. And the most famous opinion from that
case by Justice Jackson has come to stand for the proposition
that the President's power is lowest when Congress has
specifically denied the President the authority to do
something.
So here is a bipartisan issue for you: It was the Bush
administration in late 2008 that started this. In 2008,
Congress, of course, passed TARP and said, we want to give
money to financial institutions. Oh, well, I'll give money to
car companies we decided too. The House voted yes. The Senate
said no. The President went ahead and gave the money to the car
companies anyway.
The Obama administration came in, instead of withdrawing
from doing this illegal action, instead gave even more money to
the car companies and said, by the way, we have a deal for you
you can't refuse. We're going to tell you who your chairman is
going to be, who your board of directors are going to be, which
car models are going to continue, which dealerships are going
to continue, and there was really no statutory authority
whatsoever to do this.
The third example of Obama administration overreach may
actually be called underreach, the Administration's refusal to
enforce certain deadlines that are in the Affordable Care Act.
And they've done so for, basically, political reasons. There
were some rules that would have required people to get new
insurance plans that didn't meet Obama--because they didn't
meet ObamaCare requirements. The Administration just said, oh,
we're going to postpone that for a few years and asked the
State insurance commissioners to do so as well.
They also changed the employer mandate to 50 to 100
people--50 to 100 employers--employees. They said, you don't
have to abide by that. And it was because elections were coming
up, this was unpopular, and they didn't even try to give legal
analysis. There was no memo. There was no legal analysis. There
were just blog posts on the HHS Web site. ``Government by blog
posts,'' one of my former students and now professional
colleagues calls it.
This happened even when the Republicans offered to pass
legislation to achieve the same goal. President Obama said,
well, I don't want you to pass legislation; I want to do it
myself. If you pass legislation, I'm going to veto it.
So my testimony has gone through these three categories:
Informally regulating through guidance instead of formal
regulations, exercising massive regulatory authority without
legislation over GM in the name of combating economic
emergency, and delaying implementation of duly enacted
legislation for political reasons. And I fear that if this
isn't checked, the whole system of checks and balances we have
is at risk.
[The prepared statement of Mr. Bernstein follows:]
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__________
Mr. King. Thank you, Mr. Bernstein.
The Chair now recognizes Ms. Hammond for her testimony.
TESTIMONY OF EMILY HAMMOND, ASSOCIATE DEAN FOR PUBLIC
ENGAGEMENT & PROFESSOR OF LAW, THE GEORGE WASHINGTON UNIVERSITY
LAW SCHOOL
Ms. Hammond. Thank you, Chairman King, Ranking Member
Cohen, and distinguished Members of the Task Force for the
opportunity to testify today.
I'd like to make a call for nonpartisan administrative law.
And what I mean by that is this: We should want a system that
permits agencies the flexibility that they need to exercise
their expertise, while providing numerous mechanisms to ensure
that they operate within the bounds of their statutory
mandates. There is room for political decisionmaking within
those statutory bounds, and we should be very reluctant to
tinker with administrative law for political purposes, because
doing so risks a system that operates poorly, regardless of
which party has the executive branch.
Our Constitution envisions this kind of system. Congress,
of course, may provide as much specificity as it wants in
directing agencies how to carry out their work, but this
institution simply can't draft statutory language for every new
challenge that will arise in the future. So the Constitution
permits the President some degree of discretion in executing
and enforcing the laws passed by Congress.
With respect to Federal agencies, the President indeed
exerts a great deal of control over their policymaking, but the
agencies' behavior is constrained in important ways. Consider
The Administrative Procedure Act, the APA. At every major part
of the APA is a purpose to balance the need for agency
discretion with the imperative that they stay within their
mandates.
The APA's judicial review provisions are important for
enforcing these expectations. Indeed, as I testified in this
room last month, judicial review enables courts to police those
jurisdictional boundaries set by Congress. They can guard
against serious agent errors and incentivize agencies to engage
in legitimizing behaviors before the fact, promoting fidelity
to statute. Let me give two examples of how this system
operates.
The Supreme Court's decision in Massachusetts v. EPA,
illustrates the limits of Presidential control and the strength
of statutory boundaries. As you are no doubt aware, that case
involved an agency action rejecting a rulemaking petition to
regulate greenhouse gas emissions from new motor vehicles under
the Clean Air Act. The EPA denied the petition, and it relied
for its explanation on various presidential policy preferences.
The Court held that EPA's reasoning was arbitrary and
capricious because it did not relate to the statutory test.
Notably, this judicial role in cabining executive discretion
operates regardless of the particular political view at issue.
This is illustrated by the recent decision, Utility Air
Regulatory Group v. EPA, in which the Supreme Court again had
occasion to consider EPA's approach to regulating greenhouse
gas emissions under the Clean Air Act, this time, under a
different Presidential administration with different policy
preferences. Once again, the Court held in part that the EPA
had exceeded its statutory authority.
As these examples show, agencies admittedly pushed the
boundaries of their statutory authority, whether or not at the
express direction of the executive. But courts police that. And
even when judicial review is not available, our system provides
a variety of mechanisms to monitor agency behavior.
It's striking that the other agencies being discussed today
and their actions are the subject of incredible amounts of
external review. The FBI, the Department of Justice, the
Government Accountability Office, the press, the public, and of
course, this institution, have all participated in oversight
and robust debate concerning these issues.
It's easy to pick a few examples of big agency decisions to
criticize. But I want to emphasize that agencies take thousands
of actions every day that conform to good governance. The
expectations of judicial review have been internalized into
agency culture to such a large degree that they are often
present even for unreviewable agency actions.
Our system of administrative law has a vast array of built-
in mechanisms to ensure that agencies conform to their
statutory mandates. The best policy approach is to let those
mechanisms operate as intended, enabling transparency, robust
debate, and improving regulatory governance going forward.
Thank you for the opportunity to testify, and I look
forward to your questions.
[The prepared statement of Ms. Hammond follows:]
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__________
Mr. King. Thank you for your testimony, Ms. Hammond.
The Chair would now recognize Mr. Grossman for his
testimony.
TESTIMONY OF ANDREW M. GROSSMAN, ADJUNCT SCHOLAR, CATO
INSTITUTE, AND PARTNER, BAKER & HOSTETLER LLP
Mr. Grossman. Thank you, Mr. Chairman, Mr. Ranking Member,
and Members of the Subcommittee.
I'd like to address three questions today, if I could. The
first, what is executive overreach? The second, why does it
matter? And the third, what can we do about it? To begin with,
what are we talking about here?
Now, in a very general sense, when the executive asserts
authority to make decisions of major economic and political
significance that have not been authorized by Congress, in a
certain constitutional sense, that may comprise executive
overreach. Likewise, overreach may involve enacting new
policies that Congress has not enacted, or received and
rejected, or it may involve refusing to faithfully execute the
law that has, in fact, been legislated.
Now, that's one set of overreach, and that's a sort of
qualitative view of it. But overreaching is typically
facilitated and accompanied by other abuses, including
arbitrary enforcement policies to achieve political or policy
ends, the use of guidance to set forth new legal requirements,
and structuring actions in such a way as to evade or delay
judicial review.
Now, let me give two examples that take these general
principles and, perhaps, make them a bit more concrete. The
first is the Department of H--Health and Human Services' 2012
guidance that requested States apply to the Department to waive
the work requirements that were the centerpiece of the 1996
Welfare Reform Act. That Act, in particular, requires two
things.
First, it requires that States require a certain number of
the able-bodied persons on their roles to engage in work
activities and, second, it requires that those work activities
be particular activities, not made-up work, not busy work, but
specific things that actually look and feel and seem like work.
The President asserted authority under section 1--1115 of
the Social Security Act, but that section actually specifically
does not reply to the provision of the Welfare Reform Act that
concerns the welfare work requirements.
Indeed, that statute expressly conditions funding to the
States for the welfare programs on adherence to the work
requirements. The section 115--I'm sorry--1115 waiver authority
applies only to other items concerning State plans: Areas of
State plans where States have discretion, where they can
experiment, where they can do different things, where they get
to make choices. The work requirements were not among those
things.
There are three or four different features of the statutory
scheme that confirm that particular interpretation. The 2012
guidance addressed none of this. In fact, it barely provided
any legal rationale whatsoever. Why? Well, the reason was, was
that the Administration recognized that there was basically no
possibility that anybody could challenge this measure in court.
The Administration knew that this was a blatant attempt to
circumvent Congress' commands.
It engaged in what appears, to me, to be unusually
aggressive statutory interpretation. It blew up a very limited
waiver authority to something that the waiver authority plainly
does not contemplate or countenance. And then it did all of
this with the expectation that it would be able to evade any
kind of judicial review.
And, indeed, the thing that surprised me during this
particular episode, is that the Administration's defenders in
this particular action chiefly argued simply that nobody would
ever be able to take the Administration to court to prove their
point. In other words, there was very little defense of this
particular action on the merits.
Likewise, the clean power plan to regulate carbon dioxide
emissions from existing power plants relies in an obscure all
but forgotten provision of the Clean Air Act to seize authority
over electricity production across the Nation. According to the
Administration, the provision allowing EPA to determine the
``best system of emission reduction'' applicable to a
particular kind of source--in this case, power plants--
authorized its required generation shifting; in other words,
running some kinds of plants less or closing them in favor of
other types of sources that are preferred by the EPA.
Now, that abandons 30 years of consistent EPA
interpretation of that statute, 30 years of judicial
interpretation of that statute. And it clashes with plain
statutory requirements, for example, that a particular standard
be achievable by sources to which its applicable. In short, it
could provide a basis to shut down any plant, any source of
emissions in the entire country in favor of some other thing
that EPA might prefer. And that's exactly the kind of
discretion that Congress sought to deny EPA, due to the
economic consequences that would be involved. Congress wanted
to retain that authority for itself.
Again, this is all of the hallmarks of overreach. It's a
blatant attempt to circumvent Congress, which rejected the
Administration's plans to regulate greenhouse gas emissions.
It's enormously aggressive statutory interpretation. And,
moreover, the Administration attempted to rush the rule into
force so as to evade judicial review. Well, it didn't work. The
Supreme Court stayed the rule, recognizing that it was likely
illegal.
Why does any of this matter? Well, I don't think this is
about partisan politics at all. It implicates the rights and
the liberties of all Americans. The Constitution provides for
separation of powers to protect individual liberty and it
provides for checks and balances to confine each branch of
government to its proper place, and, therefore--thereby enforce
the separation of powers.
The precedents that are set by this Administration would
provide a basis for future executives to carry out policies
that could never pass Congress. In this way, departing from the
constitutional design because it might be convenient today
jeopardizes Americans political freedoms and individual
liberties over the long term.
So, finally, let me address what Congress can do about
executive overreach. In my written testimony, I offer a number
of different proposals that Congress should, to my mind,
consider. Let me briefly address three of them here.
The first, as Ms. Mitchell described, is to rethink
judicial deference, the agency interpretations of statutes and
regulations. Doctrines like Chevron and Auer have facilitated
overreaching across the board. In too many instances, the
search for meaning in written law has been replaced with the
hunt for ambiguities that might allow the agency to escape the
legal confines of the law. Congress can and should rethink
these doctrines.
Second, Congress should act to ensure that judicial review
is always available and as much as possible is effective. That
may include automatically pausing certain agency actions so
that agencies can't force compliance with legally questionable
rules before courts have a chance to review their merits.
And, third, the court should--sorry--Congress should
reconsider broad delegations of authority. At one time,
Congress could reasonably expect that the executive branch
would not seek to take advantage of unclear or ambiguous
statutory language as a basis for launching broad policy
initiatives. Those kinds of issues, it was well understood,
would be left to Congress. But that time has long passed and
the open-ended language remains in the books. Congress should
take care to ensure that new laws reserve its policymaking
authority and, as possible, should act to clarify older
statutes.
In conclusion, executive overreach is a serious problem,
and the Task Force should be commended for its efforts to
identify the scope of the problem as well as potential
solutions.
I thank the Subcommittee for the opportunity to testify on
these important issues.
[The prepared statement of Mr. Grossman follows:]
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__________
Mr. King. Thank you, Mr. Grossman.
I thank all the witnesses for your testimony.
And we'll now proceed under the 5-minute rule with
questions. And I'll begin by recognizing myself for 5 minutes.
First, Mr. Grossman, the recommendations that you've
discussed here, consider the judicial review in, I wanted to
pose this: That as I've watched our executive branch's
overexuberance on regulations that are emerging, if we go to
the courts and appeal to the courts when they've overreached,
it looks to me like an Administration can come and go before we
can get resolution on the courts, listening to Ms. Mitchell's
testimony this morning. How do we deal with that?
Mr. Grossman. Right. Well, I mean, there are certain ways
to structure judicial review so as to avoid the kind of
gamesmanship that has plagued agency actions in recent years.
One example that Ms. Hammond noted was the Utility Air
Regulatory Group decision. But I will note that the major rule
that came after that, that really drew a lot of controversy,
was the so-called Utility MACT rule, which was the major
regulation of power plants that the Administration rushed into
force, despite lots of opposition, not merely by power plant
operators, but by grid regulators and the like, arguing that
there should be a more gradual implementation period so as to
reduce costs, so as to allow for judicial review, and so as to
protect the integrity of our electrical grid.
The Administration turned a blind eye to all of that in its
response, and as a result, by the time the Supreme Court ruled
that that rule was illegal, it had already been in force and
basically everybody had complied. I think----
Mr. King. I recognize that point. I'm just watching my
clock tick down here. So do you have knowledge of the drafting
of the work requirement in the TANF regulations? I mean, it's
my recollection that it was written as tight as possible with
the idea that it would prevent a President from circumventing
or waiving the work requirement. Would that be true? And is it
possible to write something tight enough that perhaps the
President would recognize that it's too tight for him to jump
out of the boundary?
Mr. Grossman. Well, I think in this Administration, it
seems like almost anything's fair game. But if you take an
honest and fair view of the statute, there simply is no waiving
those particular work requirements. The waiver provision does
not extend to them. The language simply isn't there.
Mr. King. We have to have an honest and fair view or we're
caught up in forever litigation.
I turn to Mr. Bernstein. And just thinking about your
comments that had to do with the auto companies. And I recall a
witness we had here from the State of Indiana testified, seated
where Ms. Hammond is right now, and he testified that as the
bankruptcy of Chrysler, as I recall, went before the court,
that there was only one appraisal, the White House's appraisal
and, let's see, there was only one proposal that went before
the Chapter 11 court, and that there was only one bidder on the
tail end of that. And in all cases, the appraisal, the Chapter
11 proposal, and the--and the bidder on it were all the White
House, that there was only one proposal in each one of those
three cases. And I recall asking him, were there any Is
crossed--and Is dotted differently or any Ts crossed
differently as a result of the testimony before the court? And
his answer was, no.
Is that a fair picture of the package that was offered by
the White House that you described?
Mr. Bernstein. That's fair. It is also the case that it was
designed to benefit the oil workers union that supported the
Democrats in the 2008 election and beyond and to harm other
stakeholders, such as the Indiana pension fund that was
probably represented by the person that you had here.
The Bankruptcy Court just deferred to everything the
Administration did; said, well, almost everyone who was a
bondholder agreed to it. The problem was the bondholders were
all big financial institutions that were being threatened with
criminal and civil prosecution for their role in the 2008
financial crisis, and they were given one of these a-deal-you-
can't-refuse choices.
So the Supreme Court, though, upheld everything but said,
well, we vacated the lower courts actual legal finding, this is
not going to be precedent. It was too late. The companies
already merged. So it was already moot by the time it got to
the Supreme Court, so we don't know what the Court would have
said.
Mr. King. It would be nice to be in a business deal and
have that kind of leverage. Thank you.
And I turn to Ms. Mitchell. And I appreciate your
recommendations. They were clear, concise, and compact.
I wanted to propose, in return to one of your proposals
here, a bill called, it's H.R. 2778, the Sunset Act. It's a
bill that I offered several cycles ago and probably need to
push harder in the next Administration. What it does is it
sunsets all regulations phase in 10 percent a year for 10
years. So the agencies are required to offer up all of their
regulations to Congress, requiring an affirmative vote for them
to have the force and effect of law. And it says that any new
regulation, regardless of its value, has to have the
affirmative vote of Congress, and then it also sunsets at the
end of 10 years.
Would something that I've described here, would that
conform to one of your proposals?
Ms. Mitchell. It's certainly a step in the right direction.
I think that the only way that Congress is going to restore its
role as the Article I branch of government is for Congress to
take some serious and seemingly radical positions. I mean, I'm
pleased to hear Ms. Hammond describe the Administrative
Procedures Act and this nirvana that could exist. It's just
that that isn't reality.
I'll give you an example with the IRS, one of the things
I've learned, having dealt with them now for 7 years on the
scandal and its ongoing tentacles. When the IRS unveiled its
proposed regulations to basically enshrine the discriminatory
activities that they had undertaken with the application
process and proposed new regulations that they had developed in
secret, off plan, no notice, they were sprung on the citizenry
on Black Friday, the day after Thanksgiving of 2013.
One of the things that I've learned since then is the IRS
takes the position, has taken the position in judicial
proceedings that the Administrative Procedures Act is not
applicable to IRS regulations, the IRS regulations are not
subject to the Regulatory Flexibility Act; they're not subject
to the Paperwork Reduction Act, and that it can basically do
whatever it wants.
Now, if Congress is going to sit by and let the IRS
continue to take that position, that's a pretty frightening
prospect. And I think that something--Congress has to take
dramatic steps to curb specific excesses in agencies and to do
the kind of general repeal of the unfetterred regulatory power
that has been, in my view, unconstitutionally delegated to the
executives.
Mr. King. Thank you, Ms. Mitchell. Of course, I would just
abolish them and simplify this considerably.
The Chair would recognize the Ranking Member from the State
of Tennessee.
Mr. Cohen. Thank you, Mr. Chair.
You know, I agree that there's executive overreach that's
been by all executives. I think, you know, power is taken, not
given as in the Machiavelli rule that continues and will live
forever, I guess. We had it when Bush was President, the IRS.
Nixon's the champion. He's number one with the enemy's list. It
was awful.
And, Ms. Mitchell, you had some good comments, but--and I
could understand them, but you talked about all these groups
that had ``patriot'' in their names. There were other groups
that were looked at too. And I've got some information, because
I asked as we started, there were some of these groups that
were more Democratic type groups. ``Progress'' was in their
names, and so they got picked. Progress Missouri and, I think,
Progress Texas. And they were a California group too. It was
set up primarily for the benefit of a political party, and they
were looked into, Emerge America. And so, you know, are you
familiar with those cases?
Ms. Mitchell. Yes, sir, I am.
Mr. Cohen. Don't you think it would have been a little
better for you to mention those cases in your testimony as well
to show that--that the IRS--it was an IRS problem? It was not a
political assault on Tea Party folk, but it was an effort by
some people that was bad policy to go after a bunch of
different people, some of who were considered liberal. And if
we--I think if we approach it that way, I think it'd be better
to deal with the issue than just pick out the one groups.
Ms. Mitchell. Well, Congressman, that would be fine, except
that that is not a correct characterization of what happened.
And I can give you a specific example with Progress Texas.
If you look at the data, which the Committee on Oversight
and Government Reform has compiled and which the testimony of
the Treasury Inspector General for Tax Administration
specifically provided to the House Ways and Means Committee,
you will find that those assertions in that New York Times
article about how the IRS was an equal opportunity
discriminator, turns out that that is not exactly correct.
And I'll give you just the example of Progress Texas.
Progress Texas showed up on a list. There were, I think, 85
groups in September of 2011. Progress Texas showed up on that
list along with--as one of three or four liberal sounding
groups. The commentary about Progress Texas said that it
appeared that they had anti-Rick Perry propaganda on their Web
site. Now, contrast that with King Street Patriots, one of my
clients, or Tea Party Patriots, one of my clients, where they--
the commentary would say by their names ``appeared to have
anti-Obama propaganda.'' That was September or November,
sometime in that timeframe, the fall of 2011.
In June of 2012, Progress Texas got its 501(c)(4) letter of
exempt status. Tea Party Patriots did not get its (c)(4) status
until February 29th of 2014, the day that its president
testified before the House Committee on Oversight and
Government Reform. And King Street Patriots didn't get its
exempt status until the fall of 2014.
So the disparate treatment is documented, and anyone who
thinks that's not true just hasn't studied the record. I'm
sorry.
Mr. Cohen. Well, but the fact is what is true, and we have
studied the record, is groups with the name ``progress'' were
looked at as well. And they did not just automatically get
their exemption. And groups that were liberal got it, same kind
of examination. And I don't know about----
Ms. Mitchell. No, they didn't.
Mr. Cohen. I don't know about your situation. Maybe they
hired you early and maybe the other groups didn't. And because
you were hired and were so thorough, that they had a little bit
more difficulty and took a little more time, or maybe they had
more people or didn't respond as quickly. I don't know. But the
fact is the IRS was bipartisan in the way they did it. They
weren't right with either side and the IRS corrected it. And
there were no criminal investigations and no reason for
criminal investigation because there was no probable cause.
Ms. Mitchell. Well, I----
Mr. Cohen. Ms. Hammond, I would like to ask you about your
proposal to deal with the Administrative Procedures Act. How do
you think we could do that?
Ms. Hammond. I'm sorry, sir.
Mr. Cohen. You had a suggestion we should change the law to
make it----
Ms. Hammond. In fact, I do not suggest that we should
change the law. I don't agree that the APA is nirvana. It is
not perfect. It is functional. And what it attempts to do is
strike this balance that I was discussing by trying to ensure
that agencies do have the flexibility to exercise their
expertise but that we ensure that they remain faithful to their
statutory mandates. And so I don't propose that we change the
APA in any way, not because I think it's perfect, but because I
think it's pretty good.
Mr. Cohen. And are you familiar with Progress Texas, Emerge
America, and some of the groups that were considered more
liberal that were also given extra scrutiny by the IRS?
Ms. Hammond. Yes, it is my understanding that some of those
groups were targeted as well.
Mr. Cohen. Thank you very much.
I yield back the balance of my time.
Mr. King. The gentleman yields back.
The Chair will now recognize the gentleman from Texas, Mr.
Gohmert.
Mr. Gohmert. Thank you, Mr. Chairman.
And thank the witnesses that are here.
So much to correct with so little time. My colleague on the
other side of the aisle said this was political theater, said
an effort to brand the President illegitimate. That struck a
memory nerve. And I recall when Bill Posey filed a bill, and I
thought it was a good bill. It was a good bill, just over two
pages. And it was going to require that in future years, future
election, had nothing to do with 2008, that since there was no
enabling statute for the constitutional requirements of age and
being a natural-born citizen, it would provide enabling statute
to do that and require the parties to resolve, in advance,
whether somebody meets those two constitutional requirements.
Now, those are great ideas, especially since the Washington
Post and New York Times had questioned John McCain's viability
to meet those. I have never, ever said the President was not a
natural-born citizen. I've been branded a birther because I
signed on to Bill Posey's bill.
But through that, reporter after reporter after reporter
asked, ``So why are you now trying to delegitimize the
President in getting thrown out of office?'' And one, one of
the best reporters here in town, I said, ``Have you read the
bill?'' She said, ``No, but I got my information from the
highest level of the White House. I got a memo. It says you are
the newest guy trying to delegitimize the President getting
thrown out of office.'' I said, ``Read the bill, and if you
have questions, then ask me.''
She read the bill. Next time I saw her she said, ``That was
nothing like the White House said it was.'' I said, ``Yeah,
it's a good bill.'' It was a good bill then. It's a good bill
now. Even with Obama going out of office, it would be a good
bill. But that word, illegitimate, delegitimize, it is an
effort to brand legitimate efforts to fix things that are
wrong.
Now, the Obama administration--despite the comments that
everything's fine, this is no different, all the
Administrations are the same--23 times have been told that
you've gone too far. And it's unprecedented. Nobody's ever come
close to having 11 unanimous Supreme Court decisions, including
the extreme liberals, saying, Obama administration, you have
gone too far.''
So as far as being illegitimate, this is legitimate stuff.
And as far as the Justice Department finding that the IRS did
nothing wrong, they said, well, now, we found mismanagement,
uncovered substantial evidence of mismanagement, poor judgment,
and institutional inertia.
On over they say, now, although Ms. Lerner exercised poor
judgment in using her IRS email account to exchange personal
messages that reflected her political views, yeah, that was
inconvenient because it showed that she was acting in
accordance with her political positions. There was plenty of
evidence.
Just like this Administration, after both a United States
District Court and the Fifth Circuit Court of Appeals said,
``There is substantial evidence to find that these other Muslim
organizations are acting in conspiracy with the Holy Land
Foundation that was found guilty of supporting terrorism,''
this Administration came back and says, ``We find no evidence,
after courts had already said, `There's plenty of evidence
here. We're not striking their names.' ''
So it is really unfair to say that this Administration
finds no evidence and try to relate to that, to there being no
evidence.
Now, I appreciated very much the recommendations, Ms.
Mitchell. Those were terrific. And I'm sorry, I always did well
on national testing because I ask questions when I don't know.
And I'm curious, what is the associate dean for public
engagement? Is there a dean of public engagement that's over
you? What does public engagement do?
Ms. Hammond. There is a dean of the law school. That's Dean
Blake Morant.
Mr. Gohmert. But there's no dean of public engagement?
Ms. Hammond. That's correct.
Mr. Gohmert. So the associate dean is the top dean of
public engagement?
Ms. Hammond. That's correct, but underneath the full dean
of the law school.
Mr. Gohmert. Gotcha. Okay. Thank you.
With regard to the TARP overreach, I've got to say, that
was such a horrible bill. It gave them all kinds of ability.
That's why I was so opposed to it. But I would just like to
encourage each of you, because our time is so limited here.
Ms. Mitchell, you've given great recommendations.
I would encourage each of you--I know Professor Hammond
doesn't see any needs--but we've got to fix this system. You've
made some great recommendations. Any others that you could
recommend, things to do, please recommend them. We've got to do
these things.
Thank you.
Mr. King. The gentleman from Texas yields back.
The Chair would now recognize the gentleman from Florida,
Mr. Deutch.
Mr. Deutch. Thank you very much, Mr. Chairman.
First, thanks to the witnesses for being here.
Ms. Mitchell, just one question: Since we're using this
admittedly flawed criteria that the IRS used, how many
organizations were ultimately denied their tax-exempt status as
social welfare organizations for compliance with 501(c)(4)?
Ms. Mitchell. Congressman, now, that is part of what the
Sixth Circuit excoriated the IRS about in that opinion----
Mr. Deutch. Well, I don't think any.
Ms. Mitchell. I don't think we know yet.
Mr. Deutch. Right. So----
Ms. Mitchell. I don't think we know yet.
Mr. Deutch. I appreciate that. So given that, I just would
like to make a few observations. We find ourselves here during
what has been much publicized as the GOP tax week, and I
suppose during tax week we're here to commemorate the 150
million tax filings that flood into the IRS, 5 million coming
in just yesterday after the deadline passed.
The majority, no doubt, thinks the best way to curry favor
with the American public is to blame the IRS. I don't buy it,
frankly. I would point out that Congress gets the money to fund
this hearing from IRS tax revenue, that we earn our salaries as
Members of Congress thanks to the IRS collecting tax revenue.
And so while the IRS absolutely and legitimately needs
reform, the majority refuses to acknowledge what the agency
does right, how to fix what actually needs to be fixing, and
instead looks to generate headlines this week by blaming the
IRS for seemingly everything wrong with the government.
So here's the question: Were social welfare groups handled
inappropriately at the IRS? Yes.
But is that the real scandal, Mr. Chairman? The real
scandal, I would suggest, is the fact that political spending
by so-called social welfare groups is exempted from taxation
and is subsidized by the American people. These groups are some
of the biggest players in politics. And the--my friends on the
other side of the aisle should not be complicit in their
attempt to hide their donors or agendas behind some hollow
outrage at the IRS.
The poor handling of tax-exempt applications at the IRS was
a direct result of the Supreme Court's obliterating our
campaign finance system in Citizens United. After that
decision, thousands of new applications flooded the IRS. These
groups were specifically created to skirt disclosure
requirements and contribution limits. That's the scandal that
we ought to be focused on.
Consider that just after Citizens United came down,
thousands of new applications came in for social welfare tax-
exempt status, a 92 percent increase from 2009 before Citizens
United to 2012. Many of these groups were created at the
direction of sophisticated, well-connected, and well-funded
Beltway campaign funders, who went to work to create all kinds
of complicated webs of tax-exempt groups to funnel money,
unlimited contributions from one organization to another.
Why? Why was that done? What is the scandal here? It's to
hide the identity of donors, to make it seem as though campaign
season ads are speaking for the people when they're really
speaking for the wealthy individuals and corporations that fund
these super-PACs that so often we don't even know about because
of these 501(c)(4)s, to obscure connections to corporations
that don't have the best interest of the people at heart.
Corporations who want to stop clean energy requirements;
corporations who want to prevent gun efforts to stem the tide
of gun violence; corporations who want to protect subsidies,
tax breaks, and loopholes. And many of these social welfare
organizations are nothing more than a post office box in
Alexandria, Mr. Chairman.
Why do we have to continue to waste the resources of this
Congress to conduct this hearing after internal and external
IRS reviews, FBI and Department of Justice investigations, a
partisan contempt proceeding, and multiple investigations by
House Committees, including hundreds of interviews and hundreds
of thousands of pages of documents collected? We find ourselves
just where we started.
The real scandal is the scandal this Congress is doing
nothing about, and it's the overwhelming influence of money in
politics. The true scandal is that Congress refuses to accept
responsibility for putting the IRS in the position of
evaluating tax-free political activity. The actual scandal is
that Congress refuses that the American people shouldn't be
forced to subsidize the political activities of sham groups.
The scandal that I'm most ashamed of, though, Mr. Chairman,
is that this House of Representatives will do nothing except
hold these show trials. Today's hearing won't do a thing to
stop a system that protects big money in politics, but it will
help to continue the dominance of the wealthy few over the will
of the people in our American democracy. That, Mr. Chairman, is
the scandal that we ought to be focused on, and I hope one day
we will.
And with that, I yield back.
Mr. King. The Chair thanks the gentleman from Florida and
now recognizes the gentleman from Ohio, Mr. Jordan.
Mr. Jordan. Thank you, Mr. Chairman.
The gentleman from Florida mentioned the real scandal.
Here's the real scandal: The IRS systemically targeted
conservatives for exercising their First Amendment political
speech rights. They did it in a systematic way, and they did it
for a sustained period of time.
They get caught. Lois Lerner gets caught, and she does what
all kinds of people do when they get caught with their hand in
the cookie jar: She lies about it.
Isn't it true, Ms. Mitchell, she went to a bar association
speech, May 10, 2013, planned a question from one of her
friends, and said, wasn't me, it wasn't us, it was folks in
Cincinnati. Isn't that true?
Ms. Mitchell. That's true, but it wasn't true.
Mr. Jordan. Right. Exactly.
Ms. Mitchell. I'm sure she said it, but it wasn't true.
Mr. Jordan. She said it, but it wasn't true. The facts show
it was all in Washington. So she lies. And then when she gets
caught lying, she does what happens sometimes. She's brought in
this Committee room, at that same table you're all sitting
there, and she takes the Fifth.
So now here's what happened: The central figure lies when
the story first breaks, then she takes the Fifth. Now, this
sort of--any criminal investigation, any congressional
investigation, there's a premium on getting the documents,
information, emails, communications, all the stuff that went
on. But when you have the central figure taking the Fifth, it
really emphasizes the need for the documents.
So Mr. Koskinen is brought in. The President says he's the
fixer. He's the professional guy brought in to fix this system
and clean up the IRS. And under his watch, I think he breached
every duty he had.
Would you say, Ms. Mitchell, that he had a duty to preserve
the documents that were there relevant to the congressional and
criminal investigations that were going on?
Ms. Mitchell. He absolutely did. They were under subpoena
from the House Committee on Oversight and Government Reform in
August of 2013, and they weren't produced. A subpoena was
reissued in February of 2014, and he----
Mr. Jordan. Two subpoenas.
Ms. Mitchell. Two subpoenas. And not only that, but there
was ongoing litigation with respect to--as early as May of
2013.
Mr. Jordan. From your clients.
Ms. Mitchell. My clients, and the Z Street case, which had
been filed in 2010, and involved the very same factors and
subpoenas and documents.
Mr. Jordan. Two subpoenas, three preservation orders. The
IRS themselves, they sent a preservation order to themselves.
They said preserve all documents.
So Mr. Koskinen, his IRS had a duty to preserve all the
documents. They had a duty to produce them to the Committee
because we subpoenaed them. And they had a duty to inform us if
they couldn't preserve them or didn't preserve them and
couldn't produce them. And so all three of those duties were
breached when they allowed 400 backup tapes to be destroyed.
Would you agree, Ms. Mitchell?
Ms. Mitchell. I agree. And I think that for that reason
alone, but certainly for many others, I think that Commissioner
Koskinen has lied to the Congress repeatedly and he should be
impeached and removed from office.
Mr. Jordan. I hadn't even got to that, but you're exactly
right. You're exactly right. Duty to preserve; they failed
that. Duty to produce documents; they failed that. Duty to
inform us in a time--he knew that problems with Ms. Lerner's
email, or with her server and her emails, he knew about that
and waited 4 months to tell us. He waited 4 months to tell us
that some of the backup tapes had been destroyed.
Four hundred backup tapes destroyed, potentially 24,000
emails, and he comes and testifies and says nothing. And then
he said, oh, when it came to the backup tapes in the later
testimony, that they were all destroyed. Some of them weren't.
Some of them were. So they had a duty to testify accurately, a
duty to correct the record.
And it seems to me when we're talking about executive
overreach, one of the things the legislative branch can do is
impeach this guy. I mean, that's the record.
Now, we can add to it. Let me do one other--if I could, Mr.
Chairman, one other area.
Are you familiar with StingRay technology, Ms. Mitchell?
Ms. Mitchell. A little bit. I'm conversant.
Mr. Jordan. So StingRay technology, my understanding, is
this is the capability that certain law enforcement and, in
this case, the Internal Revenue Service has to bring this
technology into an area and find--geolocation technology. What
happens is this device mimics the cell phone tower, and all the
cell phone numbers in that area come to this. They can find out
where you're at, your number and collect. It's a net. It's not
a fishing line; it's a fishing net.
Last week, testimony in this Committee, we learned that the
IRS has employed this technology 37 times, and each time did it
without a probable cause warrant. Do you think that's
appropriate for the agency with the track record we now know
that they have relative to conservative groups is employing
this kind of technology without a probable cause warrant?
Ms. Mitchell. Absolutely not, and that's why I think that
the--that Congress needs to establish an individual cause of
action to be--for individuals whose--in the cases that I've
been talking about where First Amendment rights were violated.
If your Fourth Amendment rights are being violated by the IRS
and by individual IRS agents and employees, you ought to be
able to have the ability to file a lawsuit and get damages.
We have to find ways to hold the individual people
accountable for violating the constitutional rights of the
American people. And if Congress doesn't do that, we are never
going to get control of them.
Mr. Jordan. I appreciate it, Mr. Chairman. I thought I
was--I see my time has expired. Thank you.
Mr. King. The gentleman returns the time.
And the Chair would now recognize the gentleman from South
Carolina, Mr. Gowdy.
Mr. Gowdy. Thank you, Mr. Chairman.
I am going to barely resist the temptation of asking
questions of law professors, other than to just note, Professor
Hammond, at some point I would like to discuss with you In Re:
Aiken County, which is a case on prosecutorial discretion, as
you probably know better than I do, because I am somewhat vexed
as to whether or not there are any limits on prosecutorial
discretion. Some of my colleagues on the other side don't seem
to think there are.
And you also mentioned oversight. And at some point I'd
like to discuss with you, when Congress sends a subpoena and
that subpoena is not honored, or when Congress seeks to do
oversight and the executive branch does not cooperate, what
tools we have and the order in which you would use those tools.
But I am going to save all of that for a later date because
my attorney from Ohio, Jimmy Jordan, is here, and I would like
to give the remainder of my time to my attorney, Mr. Jordan.
Mr. Jordan. Well, I appreciate the gentleman yielding.
And let me go to this. And let me go to Mr. Grossman here.
Are you familiar with the tax gap that exists at the Internal
Revenue Service, in other words, the difference between what
they're supposed to be collecting for the Federal Treasury and
what they actually do collect?
Mr. Grossman. I'm afraid I am not.
Mr. Jordan. Anyone familiar with how much that is? $385
billion, according to the GAO study that was released in the
last 2 weeks. $385 billion that the--this is the fundamental
mission of the Internal Revenue Service, is actually to collect
the tax revenue due to the Federal Treasury. That's what their
job is, and they're failing to the tune of $385 billion a year.
You think about our deficit this year, I think it's $500
billion. I mean, this is a huge amount of money. So a $385
billion tax gap.
The GAO also recommended that the Internal Revenue Service
employ 112 recommendations, 112 specific things the IRS can do
to help them comply in accomplishing their fundamental mission,
collecting revenue for the Treasury to fund the things--the
services and things that we have in our government. And to
date, the IRS has only implemented 62.
So less than half of the recommendations to help accomplish
their fundamental mission they've actually put into practice.
And it sort of begs the obvious question: You've got time to
harass conservative groups, ask them all kinds of intrusive
questions, privacy-violating questions, infringe on--this is
something I think gets lost in this debate too.
Remember what the underlying offense was here. They were
going after people's most cherished right, your right under the
First Amendment to speak out against the policies of your
government, fundamental and central to who we are as a country.
So the very agency that has a $385 billion tax gap can't even
do half of the recommendations GAO says you should do to
accomplish your fundamental mission, has time to target people
for exercising their First Amendment liberties.
Mr. Bernstein, do you want to comment on any of that? I got
a little speech there. It was not really a question, but I'll
let you comment. And I have got one other question I want to
ask too. Go ahead.
Mr. Bernstein. I could comment briefly, because I do
discuss this in my book. They were under a lot of pressure
also. I don't know that much about Ms. Lerner's own political
views, except what I've seen in the media, but they had letters
from various senators, from congressmen. There was political
pressure coming from the White House that after Citizens
United, we think this stuff is going to benefit Republicans,
and we need to have you guys crack down on it somehow.
Mr. Jordan. Right. Ms. Lerner did. And she gives this now
somewhat famous speech at Duke University where she says
everyone is after us to fix it now. She gave the speech in the
fall of 2010. Fix it now meant before the election. The
pressure she was getting and letters she was receiving from all
kinds of Democrats in the Congress, so she felt some obligation
to try to address the situation.
Now, you know, do you think--back to the StingRay
technology, Ms. Hammond, do you think any of the 112
recommendations made by GAO to help the IRS accomplish their
mission, do you happen to know if any of those 112 included the
IRS buying and employing StingRay technology? Do you know?
Ms. Hammond. I don't know.
Mr. Jordan. Does anyone know?
Mr. Grossman, do you know?
Mr. Bernstein, do you know? One of the recommendations was
to buy this StingRay technology and use it on citizens to
accomplish the fundamental mission.
Ms. Mitchell?
Ms. Mitchell. I'm assuming the GAO did not instruct the IRS
to go buy StingRay technology.
Mr. Jordan. You would be absolutely right. You can move to
the front of the line.
I mean, think about that. One hundred and twelve
recommendations. The IRS has one StingRay. They're in the
process of buying another. One hundred and twelve
recommendations to help you actually do what you're supposed to
do, collect revenue for the Treasury. They can't implement even
half, but they're buying a second StingRay. They're going to
potentially use that and infringe on American citizens' Fourth
Amendment liberties.
This is the IRS that John Koskinen is commissioner of. This
is the IRS that allowed documents to be destroyed, violating
people's First Amendment liberties when the targeting took
place. And now, using our tax revenue, the limited amount that
they're collecting--or actually not limited, a lot of money
they're collecting but not the full amount--to buy technology
to infringe on our Fourth Amendment liberties. Again,
underscoring why Mr. Koskinen should have articles of
impeachment move forward against him.
With that, I yield back, Mr. Chairman.
Mr. King. The gentleman from Ohio yields back to the
gentleman from South Carolina, who yields the balance of his
time.
And the Chair now recognizes Mr. Issa of California.
Mr. Issa. Thank you, Mr. Chairman. And I apologize, the
Wounded Warriors got between us and part of this.
Ms. Mitchell, it's good to see you as always. You did a
good job of listing more things than I could write down, and
they were all good. But I want to ask you sort of a--I don't
want to be rhetorical. I want to be as straightforward in the
question. If it's been asked already, I want to apologize.
But as you know, the Ways and Means Committee referred a
criminal referral to the Department of Justice that--against
Lois Lerner, which said--and I'll paraphrase as close as I can
18 U.S.C.--the U.S. attorney for the District of Columbia shall
present to the grand jury these, you know, these accusations.
They didn't do that. If that is the case--which it is--what
would you suggest in the way of reforms?
If we have the IRS with an individual adjudicated by the
Committee of jurisdiction--which was not my Committee. It was
Ways and Means that did it, based on all of our
investigations--that, in fact, she criminally conspired to
withhold people's rights and did so in a number of areas and
then lied about it, which the lie was actually part of it.
What do we do if, in fact, a congressional referral that
has the weight of law that ordered the U.S. attorney to do
something and the U.S. attorney didn't do it? Are we to impeach
the U.S. attorney? Should we get the U.S. attorney disbarred?
It's still out there. The fact is Loretta Lynch could do it
today, but if I see her in the hallway, I'm not going to ask
her when.
So perhaps you could opine on that. Because, to me, all
your suggestions may be for not if government refuses to do
that which is already on the books.
Ms. Mitchell. Well, Congressman, as you know, this
Department of Justice has been documented as being the most
politicized Department of Justice in American history. And not
only did the Department of Justice fail to proceed with the
criminal referral from House Ways and Means with regard to Ms.
Lerner, the U.S. attorney for the District of Columbia failed
to and refused to proceed to enforce the contempt citation that
the House enacted for contempt of the House.
And the thing that I always come back to is, well, the
President of the United States went on national television in
prime time, on May 14 of 2013, right after the IRS scandal
broke and the TIGTA report was issued, and he said, I'm mad
too, and I'm directing Eric Holder and the Justice Department
to conduct a complete, full investigation.
And the Justice Department interviewed Lois Lerner for 12
hours. She talked to them. They have the ability to put her in
jail. They talked to IRS employees and agents. But to my
knowledge, they didn't talk to any of the victims of the
targeting. And then they concluded that there was nothing to
pursue. I mean, it was a sham investigation. And so the
Department of Justice is--that's a huge problem.
Mr. Issa. Well, this Committee, broadly, has the authority
to change the Department of Justice in pretty profound ways, if
we choose.
Let me ask a question. I'll open it up to all of you. In
light of the fact that before this Committee, in a question
that I asked former Attorney General Eric Holder, his answer--
and I have to be honest. I don't fully remember the question,
but I can tell you the answer. He told me he wore two hats: One
is the highest law enforcement officer in the land; the other,
quite evidently, is a political appointee to the President. And
that includes consulting to the President, even though the
President has its own lawyers, and it includes, in fact,
strategizing with the President over politics.
And we've now learned that the attorney general in his
emails, in pretty good detail, led an attempt to withhold from
the Oversight Committee in the Fast and Furious case specific
discovery. They planned what not to give and when not to give.
So I'm going to ask you all a question I'd like you to
opine on now and in writing, if you would. Isn't it time for
this Committee to consider depoliticizing the attorney
general's position? The FBI director has a single 10-year term
where he's put up, he's confirmed, and, in fact, he does not
serve in the ordinary pleasure of the President.
Should this Committee consider depoliticizing the attorney
general, taking it out of being dual-hatted--the President can
have all the advisers and political people he wants--but make
once and for all, in a post-Nixon, post-Obama period, make the
attorney general's position as nonpartisan as we can by making
it a term appointment and not, in fact, a pure pleasure of the
President?
And we'll go right down the aisle.
Ms. Mitchell. Well, Congressman, I've thought about this a
lot, actually. But I would tell you that, in my experience, in
my lifetime, I don't believe there's any such thing as
depoliticizing something. The IRS has 90,000 employees. Only
two of them are political appointed by the President, one for a
set term and one, the chief counsel serves at the pleasure of
the President. All the rest are career employees.
Mr. Issa. I don't want to disagree with you because you're
very good, but when we looked at the imbeds, some of whom were
working for Mr. Cummings on the oversight staff and had been at
the IRS for the previous years, there are a lot more political
appointees than are official.
But if I can go down the aisle for each of you just to get
your view on----
Ms. Mitchell. Could I just say this one thing? Just because
they're supposed to be nonpolitical doesn't mean they are. We
saw with the IRS and we will see it in the Justice Department.
Mr. Issa. I have no doubt that even the FBI is not what we
would hope it to be. But I'd like to see, is this a direction
we should go to eliminate, if you will, the dual hat that the
attorney general spoke of here? Please.
Mr. Bernstein. That's a very interesting proposal. I think
it might pose some constitutional problems to have an executive
officer who's not accountable to the President. We do have such
officers. As a matter----
Mr. Issa. It is statutorily done in other areas.
Mr. Bernstein. It is statutorily done, but from an
originalist point of view or from a proper separation-of-powers
point of view, I'm not sure that I could defend it. There might
be some way of splitting some of the attorney general's duties
with the judicial branch, because there are judicial functions
that are part of the judicial--that are part of--that could
possibly be delegated there. Judiciary is allowed to appoint
certain people, like with certain kinds of special prosecutors
and whatnot. So there might be some room to try to split some
of the responsibilities.
Mr. Issa. Briefly, Ms. Hammond.
Ms. Hammond. I do believe that there would be separation of
powers problems with changing the way these people would be
removed. And I agree with Ms. Mitchell; I don't think that it's
possible to depoliticize in that kind of way.
Mr. Issa. All right. Look, the FCC and the SEC obviously
have their examples, but--and I'll agree that they're not
completely depoliticized.
Mr. Grossman.
Mr. Grossman. And I would tend to agree with Professor
Bernstein; it would raise serious constitutional questions.
With that said, I think the underlying premise of the idea, the
frustration at the lack of accountability in oversight that's
been possible in this Administration is something that can be
addressed and should be addressed in a variety of different
ways.
Mr. Issa. Thank you, Mr. Chairman. Thanks for your
indulgence.
Mr. King. The gentleman from California yields back.
And the Chair would now recognize the Chairman of the full
Committee, Mr. Goodlatte of Virginia.
Mr. Goodlatte. Thank you, Mr. Chairman.
And thank you all for your testimony today.
Mr. Bernstein, can you describe this Administration's abuse
of power in ways that hurt religious liberty?
Mr. Bernstein. Sure. Well, I think the most outrageous
example of the Administration's abuse of religious liberty,
which really didn't get that much attention, is that every
court in the United States that has ever reached the issue said
that churches and other religious organizations have a right to
choose their ministers, have a right to choose the people who
serve them in a religious function. And it's a First Amendment
right, under both the establishment clause and the free
exercise clause. Every single court.
There was a case that came before the Supreme Court in
2011, and the only issue that was in the lower courts was does
this particular teacher at a religious school qualify as a
minister under the broad definition of minister for the
ministerial exemption or not? Shockingly, when the case
actually reached oral argument at the Supreme Court--this was
not in the briefs even--the counsel for the Justice Department
actually argued that there is no ministerial exception; that
the government could, in fact, tell religious organizations who
their ministers, rabbis, priests, imams, and what have you
could be, with no--with the only possibility of defense that
you have the First Amendment expressive association defense
under Boy Scouts of America v. Dale.
But the people in this particular Administration would have
been against the decision in Dale. It was 5 to 4. And we know
the courts, the balance now. So if Dale gets reversed, then you
have no possibility of religious freedom.
So that was really a shocking argument. In fact, Justice
Kagan said, are you really arguing that? That's shocking even
to her. And it's really an extreme view that we associate, even
in the legal academy, which is very left wing, we're sort of
the extreme left-wing fringe of the legal academy. And if the
court had bought that, it would have been a really serious
threat to religious liberty. Fortunately, nine to zero the
court said absolutely not.
Mr. Goodlatte. Very fortunately.
Mr. Grossman, can you explain in more detail the problem
caused when a regulatory action is challenged in court but is
allowed to remain in effect for years until a final judgment on
the regulation is reached by the courts?
Mr. Grossman. Sure. Well, you know, in many instances, of
course, parties do seek to stay regulations, but the standard
to obtain a stay is very, very high. And in many instances, the
kind of--the cards that you need, the information you need, the
facts that you would need to obtain a stay are frequently
things that are in the position of the agency, which, of
course, has no interest in seeing its hard-fought rule put to
the side while litigation continues.
And so what this means, as a practical matter, is that in
almost every instance an agency can come forward with a legally
aggressive, perhaps legally indefensible rule that imposes
billions or tens of billions of dollars worth of cost, and they
can, in fact, through sheer force will it into being,
irrespective of whether or not it is ultimately wound up being
struck down by the court, as the Utility MACT rule was by the
Supreme Court.
Mr. Goodlatte. And this was taking an old law and rewriting
the regulations without ever consulting the Congress or, in
fact, failing to get the Congress to take the action that the
Administration thought should be taken and then going ahead and
doing this. And the end result is that after years of
litigation and the Administration losing, they've actually
really won because of all the changes that have already been
made.
Mr. Grossman. That's exactly right. And in that sense, it
short circuits the normal judicial process and short circuits
what we all think of as the rule of law. And somebody has to
comply with the law and does so at enormous expense in a sort
of one-way fashion. Others, they might retire a facility they
own, they might bear some unusually large cost, they might
suffer in some sense. That can't be undone. It can't really be
fixed, and as a practical matter, it isn't.
And it seems to me, though, that's simply contrary to the
way that everybody understands that the rule of law ought to
work, which is that you shouldn't have to comply with unlawful
commands.
Mr. Goodlatte. And what is the solution to that?
Mr. Grossman. Well, I think there are two things. In a
narrow sense, Congress certainly could prescribe, particularly
in certain areas, that in certain circumstances a stay is
appropriate for rules when they raise certain types of issues
or when they're challenged in certain kinds of ways. Look,
there are a lot of parameters to do it, but I think a lot of
that harm could be ameliorated.
But the second thing is, there needs to be a change in the
relationship at this point between the executive branch and the
legislative. The executive branch needs to be much more
solicitous of what it is that Congress has actually legislated.
We don't want people in the executive branch being aggressive
and inventing new authorities that this body never intended.
Mr. Goodlatte. Now, that sounds very attractive to many of
us here on the dais. How do we accomplish that?
Mr. Grossman. Well, gosh, that's a serious question. My
testimony does, you know--my written testimony, that is, does
suggest a few different ways of accomplishing that. And I think
one of them would be looking at the deference canons that are
applied by the courts in determining whether or not it is that
the agencies are following the law or not.
You know, as I testified, and as I've explained in numerous
examples, the search for meaning has largely been replaced with
the search for escape hatches in the law. In other words, the
executive looks where is there an ambiguous word that I can use
to do whatever it is that I would like. If courts got less into
the business of rubber-stamping that kind of reasoning and more
in the business of scrutinizing whether actions comply with the
law, I think you would see a different relationship between the
branches.
Mr. Goodlatte. Agreed.
Thank you very much, Mr. Chairman.
Mr. King. I thank you, Mr. Chairman.
The Chair now recognizes the gentleman from Texas, Judge
Poe.
Mr. Poe. I thank the gentleman.
Thank you all for being here.
Ms. Mitchell, it's good to see you again.
I want to follow up on Mr. Issa's comments about abuse of
power with the Administration bureaucrats. It's been a long
time ago, but the House of Representatives held Eric Holder,
the Attorney General of the United States, the chief law
enforcement officer in the U.S., in contempt of Congress for
hiding information. It's been 4 years later, not much has been
said about it.
But last week, 2 weeks ago, Federal judge--Ms. Jackson, I
believe, Federal Judge Jackson ruled that, hey, the
Administration has got to turn over those emails to Congress,
and the whole thing now has kind of gone away. Indicative of,
you know, when this happened, all from the other side, we heard
this hue and cry about, oh, this is so awful about holding the
attorney general in contempt. But he got his day in court and
he lost. The attorney general was wrong in not turning that
information over to Congress, even though it took 4 years to
uphold what Congress did. Abuse of power, as I see it.
Let's narrow it down to the IRS. Federal judge, I don't
know this guy, David Sentelle, last week said, ``It's hard to
find the IRS to be an agency we can trust.'' Well, no kidding.
Federal judge has got it right. We can't trust them. You can
talk to taxpayers, non-taxpayers out there in the fruited plain
about the IRS. You know, they don't say nice things about the
IRS. And the bottom line is, they don't trust the IRS. They
feel like the IRS uses its authority to go out and use it for
political persecution of individuals, one of which was your
client, Catherine Engelbrecht.
Now, I know you have attorney-client privilege, and I don't
want to interfere with that, but it's been testified before
this Committee that the King Street Patriots, Catherine
Engelbrecht's organization, that all--True the Vote--that's all
they want to do, is have honest voting. Started in 2010, had
six visits by the FBI, one visit by ATF to her organization,
one visit by the Texas Environmental Quality Agency, one visit
by ATF.
In some of those visits, the FBI was accompanied by people
from Homeland Security, Harris County Sheriff's Office
Terrorism Task Force. The FBI or the IRS wanted to know who
attended these meetings, wanted to know where Catherine was
going to make speeches, wanted to know who was in the audience
when Catherine Engelbrecht made speeches, and wanted to know
what her speech was about and what her future speeches were
about. And it is all persecution of this organization by the
IRS because they don't like what they are doing.
Now, assume that's all true, Ms. Mitchell. Is that a fair
statement, that it was--would you call it persecution, or what
would you call all that?
Ms. Mitchell. Well, I don't think it was a coincidence, if
you're asking that. And I might add that the IRS also
subjected--and I can say this because Catherine, Ms.
Engelbrecht testified before the House, one of the House
Committees about this. She and her husband were subjected to
individual personal audits by the IRS, as well as their family
business being subject to audit by the IRS. And all that came
about----
Mr. Poe. And never had been audited before ever in their
entire lives with the business.
Ms. Mitchell. It all came about after she submitted
applications for the (c)4 status for King Street Patriots and
the (c)3 application for True the Vote.
Mr. Poe. And they were investigated by OSHA as well, were
they not? Never before happened.
Ms. Mitchell. All surprise visits. Surprise visits.
Mr. Poe. And right now, today, is there law to prevent the
IRS from doing that again to somebody else out there?
Ms. Mitchell. Well, that's exactly what I'm saying. The
Constitution, the First Amendment--and we have an action
pending. And Judge Sentelle from the D.C. Circuit, it was our
appeal last week at the oral argument on our appeal in which he
made those comments. We were before a three-judge panel. I
mean, we've sued the IRS and we've also sued on behalf of True
the Vote and we've sued individual employees of the IRS.
Now, one of the things that really, I have to tell you,
galls me is not only has no one been held accountable, but we
the taxpayers are paying the legal fees of the private
attorneys who are defending the individual IRS agents in this
litigation. So, you know, until--we have to find ways to hold
individual Federal employees accountable and responsible when
they violate the constitutional rights of citizens.
Mr. Poe. Reclaiming my time because I'm about out of it.
Nobody's been fired, to your knowledge, in the IRS? Some people
might have gotten bonuses. Nobody's gone to jail?
Ms. Mitchell. No.
Mr. Poe. And don't you think this is, I mean, appalling
that our government would use Soviet-style persecution of
people who disagree and want to exercise the First Amendment
freedom of speech? Don't you think that's a sad state of
affairs with the IRS?
Ms. Mitchell. It's outrageous.
Mr. Poe. I yield back, Mr. Chairman.
Mr. King. The gentleman from Texas yields back.
The Chair now recognizes the patient gentleman from Idaho,
Mr. Labrador.
Mr. Labrador. Thank you, Mr. Chairman.
Mr. Grossman, we've been following the ongoing waters of
the U.S. regulations. The internal memos from the Army Corps of
Engineers have stated that the EPA's definition is likely
indefensible in court. Yet the EPA is continuing to move
forward. Does this constitute, in your opinion, an overreach by
the Administration?
Mr. Grossman. Yes, it does. You know, the key precedent in
this area is the Supreme Court's Rapanos decision. And while
fractured, the controlling opinion was arguably Justice
Kennedy's. And I think, as most legal analysts who view this
rule have recognized, the waters of the United States rule goes
well beyond anything that would be authorized by Justice
Kennedy's opinion, to the point that isolated puddles and
things like that would be subject to Federal jurisdiction.
Mr. Labrador. Thank you.
Do you think that Chevron provides the EPA the apparent
authority to act in this manner?
Mr. Grossman. You know, look, Chevron puts a thumb on the
scale in favoring an agency in basically every case involving
statutory interpretation, or at least a lot of them. But in
this instance, it simply goes well beyond anything that would
be acceptable, even giving the agency Chevron deference.
This case raises at heart serious constitutional issues
about limits on Federal power and about limitations under the
Clean Water Act. The Supreme Court has recognized that as broad
as that act may be, it is not infinitely capacious. And the
waters of the United States rule simply goes well above and
beyond anything that the courts have recognized as legitimate.
Mr. Labrador. Thank you. While the waters of the U.S.
regulations are a big issue today, there are smaller areas
where the EPA is acting in the same manner. Can you name any of
those areas where the EPA is acting in the same manner in
impacting Americans without bothering to wait for congressional
authority?
Mr. Grossman. Well, gosh, you know, obviously the foremost
one is the EPA's, you know, many headed set of actions
regarding greenhouse gas emissions. You know, the Congress in
2009 rejected a cap-and-trade scheme that was put forward by
the Administration, and the Administration has subsequently
discovered that it can impose the same regulations on the U.S.
economy simply by fiat under statutory authority that's been
buried in the Clean Air Act since the 1970's.
I think this came as a surprise to many Members of
Congress, but it also came as a surprise to people familiar
with the Clean Air Act, given that the agency's understanding
of its statutory authority under that act never encompassed
these kinds of actions at all.
While the Supreme Court in Massachusetts v. EPA may have
given the agency some license to peek into greenhouse gas
regulations under certain Clean Air Act programs, the type of
cap-and-trade system that the agency is trying to implement in
its clean power plan just is insupportable, and, to my mind, is
the kind of thing that, you know, really demonstrates what's
wrong with the current aggressive posture of agency statutory
interpretation that we now live with.
Mr. Labrador. Excellent.
I was also made aware that the EPA admitted wrongdoing in
funding a social media campaign to support its waters of the
U.S. regulations. This is a clear violation of Federal law, but
yet the EPA still went forward with the campaign, as you know.
This is another example of an agency exercising far too much
authority. How can we reign in these agencies?
Mr. Grossman. Well, first, I would say, you know, the
social media campaign operated by EPA, it's not only that it
was illegal; it was also wrong. EPA was acting, in effect, to
mislead the public about support for its own actions. And, you
know, there should never be a circumstance when an agency of
the United States Government is acting to mislead the public.
You know, as to what Congress can do about this, you know,
my testimony describes a number of different possible
alternatives. But, you know, at heart, Congress needs to step
forward and it needs to reclaim its legislative authority. You
know, the executive branch is always going to be the portion of
government that has the greatest agility, but this branch of
government is the one that actually wields the power. It has
the power of the purse and it has the legislative power, and
those are very powerful things indeed.
Too often Congress has delegated to the executive branch,
particularly legislative authority, and has been unwilling to
exercise its power of the purse in any forceful fashion.
Congress can certainly do a lot of things to change the balance
of power between the branches, but those are really at the
heart of it, you know, where efforts should be directed.
Mr. Labrador. Mr. Bernstein, I think the administrative
state has swelled to proportions well beyond the original
intent of the Administrative Procedures Act. Can this or any
other Congress regain its authority without a major overhaul of
the APA?
Mr. Bernstein. That's a very profound question. I think the
first thing we need to do is to enforce the APA itself, and I
think there needs to be a way for--like these universities, for
example, the example I gave earlier that are subject to this
Dear Colleague letter--to be able to challenge that.
Right now the problem is you get guidance from the agency
or you get sort of informal prosecutions from the agency. We'll
go after you if you don't do this or that. And you want to go
to court, but there's no formal regulation that the courts can
review. The agency claims, we're not acting in an official
legal matter so there's nothing for the courts to do.
So I think part of the answer has to be, as other people
mentioned, less Chevron deference on that hand, but also more
of a willingness of courts to be more--to allow people to
proactively say, look, the agency is saying it's not official
rule, but they're telling us that we have to comply. Don't look
at the formality. Look at what the agency is actually doing.
And once we get to that stage, if the courts can do that, I'm
not sure how much more changes to the APA itself we necessarily
need.
Mr. Labrador. Thank you.
I yield back.
Mr. King. The gentleman from Idaho yields back.
Seeing no further business to come before this--oh, the
gentleman from Georgia has arrived. In that case, we'll
recognize the gentleman from Georgia, my friend, Mr. Hank
Johnson.
Mr. Johnson. Thank you, Mr. Chairman.
The Preamble of the Constitution of the United States of
America lists one overarching theme, which is to establish a
more--or to ensure a more perfect union. So--and then five
things that they wanted to do in order to ensure a most--a more
perfect union, which was to establish justice, ensure domestic
tranquillity, provide for the common defense, promote the
general welfare, and ensure the blessings of liberty to
ourselves and our posterity.
And I'm going to express my complete dismay in this Task
Force's disregard of those ideals by targeting the legal
administrative agency action created to clarify the previously
complex and rigid work requirements in the Temporary Assistance
for Needy Families program, otherwise known as TANF. The laser
focus of this Task Force is to dismantle guidelines that would
provide States greater flexibility in determining its work
requirements in the program, and this is nothing more than just
conservative politics against poor people.
In my home State of Georgia, the TANF program has assisted
over 50,000 low-income families in obtaining food and basic
necessities. That's what it does right now. Prior to the
issuance of the 2012 human--Health and Human Services guidance,
TANF was the only employment program in which getting
participants into permanent paid employment was not a key
measure of success.
States have devoted significant time to tracking hours
rather than providing direct service to individuals which could
help them improve their prospects for securing employment or
helping them become more job ready. Moreover, participation in
basic education was not a priority. Finishing college degree
requirements did not count as a stand-alone activity that would
allow single-parent households to continue receiving benefits.
The previous work rate requirements heavily constrained the
States' ability to use training and education, even where the
evidence shows stronger employment outcomes for those who
complete those programs. The Administration's lawful changes to
the TANF program challenge--the lawful changes to the TANF
program challenged States to engage in a new round of
innovation that sought to find more effective mechanisms for
helping families succeed in employment.
I was mistaken. I would hope that this Task Force would
immediately cease wasting taxpayer dollars debating legal
rhetoric and start assisting everyday Americans.
And with that, I would like to ask of Ms. Emily Hammond,
were there any questions that were asked of you that you were
not able to answer fully and which you desire to address while
you have the time right now?
Ms. Hammond. Thank you very much, sir.
I would like to just respond to some of the suggestions
that we do away with Chevron deference as a way of constraining
agencies. I've previously, again, testified here that doing
away with Chevron deference is a piecemeal and likely
unrealistic approach to trying to enhance legislative oversight
of what the executive branch does.
What I would ask this institution to do is something that I
think my co-panelists would agree with, which is to draft
statutes clearly in the first place so that agencies can follow
that direction. Right now, the agencies are doing the best they
can, for example, with the waters of the United States. I
disagree with my co-panelists. I do believe that that rule
stays within the bounds of Justice Kennedy's opinion and should
be upheld on review.
The point is, the courts are doing their job. Chevron
enables them to do their job but still polices those statutory
boundaries. Thank you.
Mr. Johnson. Thank you. And I'll note that you are hailing
from Georgia. Welcome to Washington, D.C., once again. Good to
see you.
Ms. Hammond. Thank you.
Mr. Johnson. Thank you.
And I yield back, Mr. Chairman.
Mr. King. The Chair thanks the gentleman from Georgia.
And this concludes today's hearing.
I thank all the witnesses for your testimony here today.
And without objection, all Members will have 5 legislative
days to submit additional written questions for the witnesses
or additional materials for the record.
I thank the witnesses again, and I thank the Members and
the audience. This hearing is adjourned.
[Whereupon, at 4:22 p.m., the Subcommittee was adjourned.]
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