Justice Dept.: No criminal charges for ex-IRS official

Eric Tucker, Associated Press

Washington — Neither Lois Lerner nor any other IRS official will face criminal charges in the political controversy over the processing of applications for tax-exempt status, the Justice Department announced Friday.

The decision closes a two-year investigation into accusations that stoked outrage among Republicans in Congress, who alleged bias in the tax agency’s treatment of conservative and tea party groups.

In a letter notifying members of Congress of its decision, the Justice Department said that while investigators had found “mismanagement, poor judgment and institutional inertia” within the agency, there was no proof that any IRS employee had targeted a political group based on its viewpoints or obstructed justice.

“We found no evidence that any IRS official acted based on political, discriminatory, corrupt or other inappropriate motives that would support a criminal prosecution,” the letter stated.

Lawyers for Lerner, who headed the division that processes applications for tax-exempt status at the time and has since retired, said their client had fully cooperated and was gratified but not surprised by the news.

“Anyone who takes a serious and impartial look at the facts would reach the same conclusion as the Justice Department,” the lawyers, Paul Hynes and William Taylor, said.

A political firestorm broke out two years ago with the release of an inspector general’s audit that said IRS agents had improperly singled out tea party and other conservative groups for extra scrutiny during the 2010 and 2012 elections.

The disclosure set off investigations by the Justice Department and multiple congressional committees, with Republicans routinely pressing FBI and Justice Department officials for updates on the probe — as recently as Thursday — during their visits to Capitol Hill.

“Americans’ faith in government and in the IRS in particular, has been greatly eroded by an administration that when confronted with instances of misconduct appears complicit in shielding those involved from responsibility,” Rep. Darrell Issa, R-Calif., said in a statement.

Rep. Jason Chaffetz, chairman of the House Oversight and Government Reform Committee, said “Congress will continue to seek accountability for the American people.”

Republicans said the decision to close the investigation without charges, though expected, was especially disappointing given that congressional reviews had identified serious problems with how applications were processed.

A bipartisan review from the Senate Finance Committee in August found management flaws at the IRS contributed to a “dysfunctional culture” that allowed agents to mistreat conservative groups when they applied for tax-exempt status.

The Justice Department’s own investigation echoed some of those same concerns, saying the IRS had used “inept labels” and keywords — including “progressive and “ACORN” — in deciding how to organize tax-exempt applications. And it found poor communication between employees in Cincinnati, who were responsible for identifying the applications for review, and headquarters in Washington — problems made worse by “oversight and leadership lapses by senior managers and senior executive officials.”

Lerner, who, became the public face of the controversy and was the first to publicly disclose that groups were mistreated. She was held in contempt of Congress by the House of Representatives after she refused to answer questions at two House Oversight Committee hearings.

Federal investigators repeatedly interviewed Lerner and looked into whether she should face charges, particularly after the discovery of emails from her personal IRS account that “expressed her personal political views,” according to the Justice Department letter.

But prosecutors said none of the IRS employees they interviewed suggested that Lerner discriminated against conservatives while on the job.

They said that while she used poor judgment to use her IRS account for personal messages, there was no evidence that Lerner had “exercised her decision-making authority in a partisan manner generally.”

And though they acknowledged that their probe was slowed by the crash of Lerner’s hard drive, causing the destruction of her email archives, investigators found no evidence that Lerner had intentionally crashed her hard drive or otherwise intended to hide documents.