Hooked on Phoniness

Back when the Internal Revenue Service’s targeting of “tea party” and other conservative groups was said to be the work of a few rogue agents in the far-flung outpost of Cincinnati, President Barack Obama said that he was “angry” about the “inexcusable” misconduct and that “Americans are right to be angry about it.” Now that a high-level IRS employee has given testimony that brings the matter as high up as the presidentially-appointed chief counsel’s office, the official administration line is that it’s just another “phony scandal.”
The White House press secretary introduced the phrase a few times before Obama himself took it up in a speech about the economy, suggesting that anyone who cares about the IRS’ harassment of his political enemies simply doesn’t care about the unemployed, and now Treasury Secretary Jack Lew is gamely using the slogan. In an enjoyably confrontational Sunday morning interview with Fox News’ Chris Wallace, which demonstrates why the administration hates that network with such a white-hot intensity, Lew stubbornly insisted that both right-wing and left-wing groups had been treated with equal “very bad judgment,” that those responsible have been removed and the need reforms instituted, and that “There’s no evidence of any political decision maker who was involved in any of those decisions.”
Wallace was admirably feisty with his follow-up questions, but time constraints apparently prevented him from noting that an Inspector General’s investigation finds that conservative groups were subjected to “very bad judgment” by the IRS far more frequently than their liberal counterparts, that the only people removed from the agency were an agency head set to retire anyway and a Fifth Amendment-pleading director of the exempt organizations division who continues to draw her sizeable paychecks. Nor was he able to ask exactly what reforms have been instituted, or why they should be any more successful than the rules already in place to prevent such abuses. Having already noted the sworn testimony by a highly-placed veteran agent that puts the scandal in the chief counsel’s office, but without noting the chief counsel’s intriguingly timed meeting at the White House just two days before a directive was issued on how to handle “tea party” applications, Wallace asked about the investigations that Lew insisted had found no evidence of political motive.
In the same speech that included his “anger” about the “inexcusable” IRS scandal the president also said he had personally directed to Lew get to the bottom of the matter, so Wallace naturally wondered if Lew’s dogged digging had included asking the chief counsel about his involvement. Following some hemming and hawing, Lew eventually conceded that he had not because “I am leaving the investigation to the proper people who do investigations, I don’t think it’s appropriate for me to do the investigation.” So the person that the president picked to investigate the matter doesn’t think he should be investigating it, but he does assure the public that he and his department will cooperate with all other investigations, although so far his department has only provided less than a percent of the documents that the Senate investigating committee has requested.
Somehow it all sounds, well, phony.

— Bud Norman

How to Qualify for a Cabinet Post

There are no doubt many fine people in the Cayman Islands, and we hear it’s a pretty place with a pleasant climate, but the only reason this tiny British territory ever seems to appear in the news is its rich folk-friendly banking system. The now infamous tax haven showed up yet again in reports about the confirmation hearings for Treasury Secretary nominee Jack Lew, who once parked a portion of his sizeable fortune there, and even the Washington Post could not resist quoting Sen. Charles Grassley’s astute observation that “the irony is thick.”
We have no objections to anyone availing himself of the legal advantages of the Cayman Islands’ financial rules, and would be reluctant to entrust the Treasury to anyone who isn’t savvy enough to do so, but the hypocrisy of Lew’s nomination is galling nonetheless. He’s being appointed by a president who has long railed offshore tax shelters, singling out the very Ugland House institution Lew used as “the largest building in the world or the largest tax scam in the world,” and who pilloried his Republican opponent in the past election for once holding a Cayman Islands account. Obama is clearly eager to keep American money in America, where the government can more easily help itself to an ever-increasing share, but he seems to have a more cosmopolitan attitude about the money of well-connected Democrats.
Asked by the Post to explain such a blatant double standard, White House spokesman Eric Schultz strained to say that “Jack Lew paid all of his taxes and reported all of the income, gains and losses from the investment on his tax returns. He played no role in creating, managing or operating the fund, and he sold his investment in 2010 at a net loss.” The first part of this apologia could just as easily have been said about the much-maligned Mitt Romney, who also paid all of his taxes and fully reported all the relevant details of his Cayman Islands dealings, so we assume it is only the second part that actually absolves Lew of his financial sins. It is entirely consistent with the economic philosophy of the Obama administration that having no role in a business and winding up with a financial loss is considered an essential qualification for a post such as Secretary of the Treasury.

— Bud Norman