By Pam Martens: May 22, 2013 

On February 25, 2013, James Hepburn, writing at Daily Kos, made the emphatic assertion in a headline that “Big Tobacco Had Nothing to Do With Tea Party Formation.” That is likely to be the one headline that will haunt Mr. Hepburn to his grave. 

I decided to follow in the treacherous footsteps of the IRS and engaged in that unforgiveable sin: I targeted the “tea party” as a key word search at the legacy tobacco document archive.  Resting quietly in the archive is full blown proof that Big Tobacco directly created multiple Tea Parties in 1994 as push back against a planned increase in the Federal Excise Tax (FET) on cigarettes.  

In fact, Big Tobacco not only created the Tea Party, it has promoted it over decades, pumped millions into marketing it, and pulled it out of its magic hat every time it needed to produce an overnight, spontaneous “grassroots” movement. 

Hepburn was nit-picking an article at Huffington Post by Brendan DeMelle that characterized  an exhaustive study by researchers at the University of California, San Francisco (UCSF) as confirming that the “Tea Party Was Created By Big Tobacco.” Hepburn writes: “This is unfortunate because one, it isn’t true, and two, it overshadows the true origins of the Tea Party which is still largely unknown and far more interesting.” 

DeMelle and the UCSF researchers were focusing on the hundreds of documents linking Big Tobacco with funding and plotting with third party nonprofits to create Tea Party groups – chiefly, the Koch brothers’ Citizens for a Sound Economy and its progeny, Americans for Prosperity and FreedomWorks. Hepburn believed the UCSF researchers had failed to show a Big Tobacco company had directly created a Tea Party group. But that wasn’t the thrust of the UCSF researchers’ work – they were investigating the corporate front groups posing as nonprofit grassroots movements. 

But direct links to Big Tobacco do exist as a simple search through the trove of tobacco documents obtained in court battles prove. On June 2, 1994, the Associated Press wrote: “Kentucky farmers, taking a cue from the Boston Tea Party, will pitch sulks of tobacco into the Kentucky River next week to show their disgust with efforts by President Clinton and others to raise federal tobacco taxes. About 3,000 growers and their families are expected….” The Associated Press reported that the Council for Burley Tobacco was sponsoring the demonstration. 

But that wasn’t who actually was behind the event. In a March 14, 1995 memo from Brian Waddle of the Jack Guthrie & Associates public relations firm, Waddle reveals that his client, the New York City division of Philip Morris under the supervision of Jay Poole, a Vice President of Philip Morris, had “orchestrated” the protest.  Waddle writes: 

“We’ve had tremendous success over the years in staging events to increase public debate and to generate coverage on the excise tax issue. Last year, we orchestrated ‘The Kentucky Tobacco Party,’ a rally and re-enactment of the Boston Tea Party at our state’s capitol on behalf of growers to protest the proposed FET [Federal Excise Tax] increase. Nearly 4,000 farmers attended the event which resulted in hundreds of stories across the country, including placement with The New York Times, USA Today, the CBS Evening News, CNN, PBS and many others. We were also the front-page story of every daily and weekly newspaper in the state of Kentucky.” 

The same year, on August 2, 1994, 400 tobacco growers and warehousemen staged a Tea Party in Greenville, Tennessee, throwing bales of tobacco into a creek. The event was widely covered by local broadcast media and the Associated Press. 

(Dumping tobacco into rivers and creeks? And this is supposed to be good public relations? What part of marine life ecosystems don’t these tobacco people understand?) 

An unsigned memorandum dated September 2, 1994 from public relations firm Ramhurst revealed that R.J. Reynolds was behind the Greenville demonstration.

The memo says it will summarize activities undertaken as part of the Federal Excise Tax effort, noting: 

“We received more favorable coverage from the ‘lost jobs, displaced farmer’ argument than any other. From the early meetings and accompanying publicity (400 growers in Greenville, NC, 600 in Danville, VA, Fairness for Farmers rally at the state capitol in TN) to the recent spate of ‘get-tough’ media hits (tea party in KY, tractor rally in VA, tea party in TN, tobacco burning in SC) there has been an ongoing effort to keep this story in the news. There’s no way tobacco congressman (sic) can miss the activity level (and the intensity) of this key constituency group.” 

According to the UCSF researchers, Ramhurst was formed in 1993 with support from R.J. Reynolds  and was run by former RJR smokers’ rights group coordinators, James Ellis and Doug Goodyear.  By 1994, Ramhurst was executing various programs related to the tobacco company’s national “grassroots” program. 

Now that this is all cleared up, maybe we can get meaningful hearings in Congress.

By Pam Martens: May 21, 2013 

NYPD Forms a Human Barricade to Protect Area Surrounding New York Stock Exchange, Monday Morning, September 17, 2012

Yesterday, DBA Press and the Center for Media and Democracy released a stunning report showing how counter terrorism units and the Department of Homeland Security gathered intelligence on the Occupy Wall Street movement for the benefit of the very corporations targeted by the protesters. 

Titled, Dissent or Terror: How the Nation’s Counter Terrorism Apparatus, In Partnership with Corporate America, Turned on Occupy Wall Street, the year-long investigation is based on the collection of thousands of pages of records obtained from counter terrorism and law enforcement agencies.

One of the revelations of the report is that Koch Industries, as well as billionaire Charles Koch and his son, Chase Koch, hired off-duty Wichita, Kansas police officers that served as their own private security force at the company and their personal residences in mid February 2012.  According to the report: “These dates coincide with Occupy Wichita’s  ‘Occupy Koch Town’ events, held from February 17 through 19, 2012.” Koch Industries, one of the largest private and most secretive corporations in the world is headquartered in Wichita. Charles Koch and his brother, David, are majority owners of Koch Industries and regularly pilloried in the press for funding corporate front groups that use the taxpayer subsidized nonprofit structure to push a deregulatory agenda. 

Wichita police receive their training, guns, equipment, uniforms and benefits from the taxpayer. Lawsuits and liability borne from their activities also accrue to the taxpayer. Setting up a program which allows billionaires to hire armed, off-duty municipal police with the power to arrest is akin to the Praetorian Guard that protected Roman Emperors; do the police owe their fealty to the billionaires or the public interest? 

On October 10, 2011, we reported on a similar program in New York City called the Paid Detail. The program began under Mayor Rudolph Giuliani in 1998. It permits the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to hire municipal police. At the time of our 2011 report, the corporations were paying an average of $37 an hour (no medical, no pension benefit, no overtime pay) for a member of the NYPD, with uniform, gun, handcuffs and the ability to arrest.  The officer is indemnified by the taxpayer, not the corporation.

When Wall Street investment bank, Lehman Brothers, collapsed on September 15, 2008, its bankruptcy filings in 2009 showed it owed money to 21 members of the NYPD’s Paid Detail Unit.  Other Wall Street firms that are known to have used the Paid Detail include Goldman Sachs, the World Financial Center complex which houses financial firms, and the New York Stock Exchange. 

When Occupy Wall Street protesters attempted to demonstrate near the New York Stock Exchange, they were clubbed with night sticks, kicked in the face and carted off to jail. We don’t know if some of these brutal actions were conducted by the Paid Detail showing their fealty to their Wall Street masters. A deeply unsettling video of the NYPD suppressing dissent and brutalizing peaceful protesters was provided to the court in the Federal civil rights case, Rodriguez v. Winski. In 2004, Robert Britz, then President and Co-Chief Operating Officer of the New York Stock Exchange, told a congressional committee that the Stock Exchange had “established a 24-hour NYPD Paid Detail monitoring the perimeter of the data centers.” 

The report released yesterday by DBA Press and the Center for Media and Democracy, showing coordination between law enforcement and corporate interests to suppress the public’s right to dissent and to seek a realignment of their democracy away from those very corporate interests, builds on the frightening fusion of police power and Wall Street interests described in our 2011 investigation of the Lower Manhattan Security Coordination Center. Built with hundreds of millions of taxpayer dollars, Wall Street personnel sit alongside the NYPD and other law enforcement, using the most advanced surveillance equipment to spy on law abiding citizens on the streets of Manhattan. 

 By Pam Martens: May 20, 2013

US Tea Party Was Formed by Koch's Citizens for a Sound Economy in 2002.

The Justice Department is investigating the investigators of the Tea Party at the IRS while leaving a 29-year criminal conspiracy against the American people by the Tea Party cabal untouched. That’s not surprising, given that the U.S. Attorney General, Eric Holder, and the former head of his criminal division, Lanny Breuer, came from the law firm Covington and Burling which played a seminal role in the conspiracy.

On February 8 of this year, the peer-reviewed health professionals’ journal, Tobacco Control, published an exhaustive study of the roots of the Tea Party dating back to the 1980s.  Researched and written by Amanda Fallin, Rachel Grana and Stanton A. Glantz, the study was funded by the National Institute of Health (NIH) and titled ‘To Quarterback Behind the Scenes, Third Party Efforts’: The Tobacco Industry and the Tea Party.

The authors explain how Citizens for a Sound Economy (CSE), which split into Americans for Prosperity and FreedomWorks in 2004, “was co-founded in 1984 by David Koch, of Koch Industries, and Richard Fink, former professor of economics at George Mason University, who has worked for Koch Industries since 1990.” According to the study, “CSE supported the agendas of the tobacco and other industries, including oil, chemical, pharmaceutical and telecommunications, and was funded by them.”

Long before the Tea Party had gained traction in the media, CSE started the first online Tea Party in 2002, calling it the US Tea Party. The federally funded NIH study shows that between 1991 and 2002, Philip Morris and other tobacco companies gave CSE at least $5.3 million.

CSE, a Koch created organization, was considered an integral part of Philip Morris’ strategy to thwart Federal regulation of cigarettes and second hand smoke. The authors write that Philip Morris  designated CSE a “Category A” organization for funding and it was assigned its own Philip Morris senior relationship manager. They cite a 1999 internal email at Philip Morris which asked if CSE was worth its current level of funding. Philip Morris’ vice president of federal government affairs, John Scruggs, replied:

“They are adding this level of value. They have provided significant grassroots assistance, in the nature of several thousand calls to the Hill on the lawsuit, direct lobbying on the lawsuit, some media as well as continuing a very useful level of activity on FET [federal excise tax]/prescription drugs [a proposal to expand Medicare and fund prescription drugs with a tobacco tax]. Throughout the August Recess they have been very active on our behalf in the field in key states with key Members. The communications plan they have implemented has very creatively mixed work on the lawsuit, FET and Medicare prescription drugs. As our focus shifts to securing our success on the $20 million in conference to defending against being the pay-for for prescription drugs, their help will be of continuing value.”

Could there be a more perfect description of a taxpayer subsidized nonprofit operating as a covert front for Big Tobacco.

What was the benefit to David Koch and Koch Industries to be fronting for Big Tobacco? Koch Industries is one of the largest private companies in the world with interests in oil refining, chemicals, paper products manufacturing and trading. Regulation of air pollutants would crimp its bottom line.

According to the study, in the early 1990s, Big Tobacco tried to block the Environmental Protection Agency in designating second-hand smoke a human carcinogen. In August 1992, CSE sponsored a conference to emphasize that the Federal government was over-regulating. CSE featured Vice President Dan Quayle who had previously expressed interest in the effort to change the risk assessment for second hand smoke.

Legacy tobacco documents not included in the NIH-funded study include this 1994 Philip Morris document listed at SourceWatch which outlines the company’s plans for “co-op efforts with third party tax organizations.” Titled “Tobacco Strategy,” the memo describes the role of CSE as follows:

“We are funding a major (400K) grassroots initiative in the districts of House Energy & Commerce members to educate and mobilize consumers, through town hall meetings, radio and print ads, direct mail, patch-through calls to the Capitol switchboard, editorial board visits, polling data, meetings with Members and staff and the release of studies and other educational pieces. The goal of this effort is to show the Clinton plan as a government-run health care system replete with higher taxes and government spending, massive job losses, less choice, rationing of care and extensive bureaucracies. CSE is taking aim at the heart of the plan — employer mandates, new entitlements, price controls, mandatory health alliances, heavy load of new taxes and global budgets — and, with the program well underway, is by all accounts getting rave reviews in the respective districts.” 

In late 1994 and 1995, Philip Morris and other tobacco companies launched an attack, using nonprofit front groups including CSE, to undermine the credibility of the Food and Drug Administration (FDA) which was attempting to regulate second-hand smoke. The media assault has an eerie resemblance to the current assault on the IRS, which is being pilloried every day on the right-wing OpEd pages of the Wall Street Journal as an out of control government bureaucracy.

One Philip Morris memo in late 1994 said that CSE, the Competitive Enterprise Institute, and the Washington Legal Foundation were working “to define the FDA as an agency out of control and one failing to live up to its congressional mandate regarding regulation of drugs and medical devices.” Beginning in December 1994, the memorandum stated, “these groups conducted an aggressive media campaign toward these goals, incorporating the issuance of policy papers, conducting symposia, filing petitions with FDA and taking other steps to keep the public and media focus on the agency.” CSE developed a 15-page strategy plan for gutting the FDA’s funding and keeping it under siege in the media. 

In 1999, the U.S. Department of Justice sued the largest tobacco companies under the Racketeer Influenced and Corrupt Organizations Act (RICO).  The government charged that the tobacco companies engaged in a four-decade conspiracy to mislead the public about the dangers of smoking, distort the dangers of secondhand smoke, lie about the addictiveness of nicotine, deceitfully market cigarettes as light or low tar while fully aware that these products were as hazardous as regular cigarettes, and unconscionably target the youth market as “replacement smokers.” 

Following a nine-month bench trial, on August 17, 2006, Judge Gladys Kessler of the U.S. District Court for the District of Columbia issued a 1,683 page opinion.  The Court found that “Cigarette smoking causes disease, suffering, and death. Despite internal recognition of this fact, Defendants have publicly denied, distorted, and minimized the hazards of smoking for decades.” The Court also found that lawyers for Big Tobacco had played a core role in the conspiracy, writing: 

“Finally, a word must be said about the role of lawyers in this fifty-year history of deceiving smokers, potential smokers, and the American public about the hazards of smoking and second hand smoke, and the addictiveness of nicotine. At every stage, lawyers played an absolutely central role in the creation and perpetuation of the Enterprise and the implementation of its fraudulent schemes. They devised and coordinated both national and international strategy; they directed scientists as to what research they should and should not undertake; they vetted scientific research papers and reports as well as public relations materials to ensure that the interests of the Enterprise would be protected; they identified ‘friendly’ scientific witnesses, subsidized them with grants from the Center for Tobacco Research and the Center for Indoor Air Research, paid them enormous fees, and often hid the relationship between those witnesses and the industry; and they devised and carried out document destruction policies and took shelter behind baseless assertions of the attorney client privilege.”  

The Court stated in a footnote that “Despite the apparent conflict of interest, a few law firms, particularly Covington & Burling and Shook, Hardy & Bacon, represented the shared interests of all the Defendants and coordinated a significant part of the Enterprise’s activities.”  

Today, a partner from Covington & Burling, Eric Holder, sits at the helm of the U.S. Department of Justice. Until his return to his former law firm in March of this year, following a devastating portrayal on PBS’ Frontline over his failure to prosecute Wall Street crimes, the head of the criminal division of the Justice Department was Lanny Breuer, also a partner at Covington & Burling. How exactly did such a discredited law firm seat its partners as the top law enforcement in the country. 

Perhaps the law firm has changed the way it does business. That is difficult to reconcile with the fact that John Rupp, the partner at Covington & Burling that was singled out in Judge Kessler’s decision, is still employed at Covington & Burling, helping corporations handle their bribery and money laundering issues from his London office according to the firm’s web site. Also, the Court noted in its 2006 decision that it believed the wrongdoing on the part of lawyers for the tobacco industry was continuing into the present. 

In 2004, David Koch’s Citizens for a Sound Economy split into FreedomWorks and Americans for Prosperity. David Koch remains Chairman of the Americans for Prosperity Foundation.  In this video, David Koch appears before an annual convention of chapters of Americans for Prosperity and states “…my brother Charles and I provided the funds to start the Americans for Prosperity.” Later in the video, members of the state chapters of Americans for Prosperity report to David Koch on how many Tea Party groups they have created. One man states: “…hey folks, we’ve held 29 Tea Parties”; another says his chapter has “organized dozens of Tea Parties.” Another woman reports her Americans for Prosperity group turned out 10,000 people at a Tea Party rally in California. 

According to the Center for Responsive Politics, Americans for Prosperity infused $33,542,051 into the 2012 election cycle, while being registered with the IRS as a 501(c)(4) social welfare organization. 

But Americans for Prosperity is just one piece of a massive juggernaut of interconnected nonprofits created, overseen or funded by oil billionaires Charles and David Koch. The nonprofits have words like liberty or freedom or tea party in their names but preach an anti-regulation, anti-union, anti-social security/medicare mantra. Their goals are neatly aligned with corporate interests. 

The nonprofits are funded through a growing roster of Koch foundations: the Charles G. Koch Charitable Foundation, the David H. Koch Charitable Foundation, the Claude R. Lambe Charitable Foundation. The Charles Koch family also controls  the Knowledge and Progress Fund which has infused at least $8 million since 2005 into a super secretive black hole known as Donors Trust. Each year, Donors Trust and its sister organization, Donors Capital, provide tens of millions of dollars to the same nonprofits long supported by the Koch brothers. When the money is distributed, the names of the actual donors remain a deep, dark secret. 

In 2010 this writer exposed how Donors Capital with Charles Koch’s fingerprints all over it bankrolled a $17 million project carried out by the nonprofit Clarion Fund to distribute 28 million DVDs of a race-baiting, Islamophobic documentary titled “Obsession: Radical Islam’s War Against the West” in swing voter states just seven weeks before the Presidential election of 2008. The DVDs were inserted into approximately 100 major newspapers and magazines in the U.S., along with a direct mail campaign. At the time, there was an ongoing smear campaign suggesting the election of Barack Obama would put a Muslim in the White House and elevate Islam in the U.S. 

Just as the Justice Department found no crimes it could prosecute against Wall Street, it similarly finds nothing to prosecute within this 29-year conspiracy of Big Tobacco, Koch brothers, and the Tea Party cabal. 

At a House hearing last week, Eric Holder said he has opened a criminal investigation into the IRS. The potential crime is that the IRS used the words “Tea Party” to search for potential frauds among organizations applying for nonprofit status; like there is not a mountain of evidence supporting that connection. 

Mainstream media should redirect its doltish focus on key word searches at the IRS and get to the root of the real conspiracy.

Connections between the tobacco industry, third-party allies and the Tea Party, from the 1980's (top) through 2012 (bottom). The thick black line connects CSE, founded by David Koch, with its direct successor organizations, Americans for Prosperity, FreedomWorks and the Tea Party. Source: Tobacco Control, February 8, 2013: ‘To Quarterback Behind the Scenes, Third Party Efforts’: The Tobacco Industry and the Tea Party.

By Pam Martens: May 17, 2013

To rational folks, the real scandal at the IRS is that corporate front groups – who want to bust unions, pollute the water and air with impunity, and kill Social Security in order to eliminate the corporate match of the Social Security tax – are allowed to register with the IRS as social welfare organizations, receive tax-exempt status, and then funnel tens of millions of dollars into political attack ads in order to elect candidates sympathetic to their corporate deregulatory agenda. These so-called social welfare organizations are allowed to do all this while drawing a black curtain around the names of their corporate donors.

On April 9, 2013, the watchdog group Citizens for Responsibility and Ethics in Washington (CREW) filed a petition with the IRS that mapped out the real scandal taking place at the IRS – the scandal that right wing media don’t want you to think about as they work to spin the IRS story into Watergate – without the break-ins.

As CREW outlines to the IRS in their petition to correct the rules, in the Revenue Act of 1913, Congress provided a tax exemption for organizations “operated exclusively for the promotion of social welfare.” Under the many recodifications over the years, Congress maintained that pivotal word “exclusively.” The current version of the code reads as follows:

“Civil leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare…and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.”

Before 1959, the IRS enforced its rules in line with the law and Congressional intent. But even though the law did not change in 1959, the IRS changed its interpretation of what that law actually meant. It wrote regulations that removed the “operated exclusively for the promotion of social welfare” requirement and flipped it on its head to mean “primarily engaged.”

Today, every manner of corporate front group is interpreting that loophole to mean they can spend up to 49 percent of their total expenditures in a tax year on political campaign activities. At the same time, these tax exempt groups, known as 501(c)(4) organizations, do not have to publicly disclose the names of their donors.

The next corporate coup came in 2010 when the U.S. Supreme Court enshrined unlimited spending in political campaigns by corporations with its Federal Elections Commission v Citizens United decision.

According to the Center for Responsive Politics, Karl Rove’s Crossroads GPS – structured as a 501(c)(4) “social welfare” organization spent $70,968,744 on political activities in the 2012 election cycle. Four 501(c)(4) organizations dominated outside spending in the 2012 election cycle and not one was backing a progressive candidate.

According to the CREW petition to the IRS, Rove’s Crossroads GPS, “Americans for Prosperity, founded by the Koch brothers; Americans for Tax Reform, founded by Grover Norquist; and the American Future Fund, founded by Nick Ryan, a longtime political advisor to former Republican Iowa Congressman Jim Nussle,” all formed as 501(c)(4)s, and together with the U.S. Chamber of Commerce, a 501(c)(6) trade association, spent $295 million on political activities since the beginning of 2011.

It is impossible for the average citizen to compete with corporate money in elections; to have their voice heard above the cacophony of corporate funded attack ads. To allow corporate front groups to masquerade as social welfare organizations is nothing less than Orwellian.

The IRS should act quickly on CREW’s petition and conform its rulemaking to the law.

————-

To give you an idea of where the country is headed under Citizens United and the IRS recognizing corporate political fronts as social welfare organizations, we asked photographer Michael Cline of ClineFoto.com if we might use one of his photos taken outside the posh resort in Rancho Mirage, California during the January 2011 secret political strategizing conference held by billionaires Charles and David Koch – majority owners of one of the largest private corporations in the world, Koch Industries, and each worth $34 billion according to Forbes. Mr. Cline has graciously allowed us to publish this photo of taxpayer-funded police guarding a billionaires’ gathering to keep the public in the dark about the hundreds of millions of dollars they planned to funnel into the 2012 election — much of it through “social welfare” organizations.

Riverside County Sheriff officers guard the entrance to a Rancho Mirage, California luxury resort where the Koch brothers held their January 2011 political strategy confab. Photo courtesy of Michael Cline, ClineFoto.com

By Pam Martens: May 16, 2013 

Attorney General Eric Holder Testifying Before the House Judiciary Committee on May 15, 2013

The President Obama of 2013 who is feigning outrage over the IRS adding extra scrutiny to nonprofit applications being filed with the words Tea Party in their title is not the same man who singled out Americans for Prosperity in a speech in 2010. Americans for Prosperity was founded and funded by billionaires Charles and David Koch, who have funneled money into politics through front groups for over four decades to advance their corporate deregulatory agenda that powers their profits and personal wealth. The Kochs are majority owners of Koch Industries, one of the largest private corporations in the world. (According to Forbes, the brothers’ wealth has almost doubled in just three years to $34 billion each – while 46 million Americans without lobbyists and clever tax attorneys live below the poverty level, including one in five children.) 

Americans for Prosperity is a front for creating Tea Party groups around the country to project an outpouring of grassroots’ momentum for the Koch agenda. 

The President had this to say in 2010:

“Right now, all across the country, special interests are planning and running millions of dollars of attack ads against Democratic candidates. Because last year there was a Supreme Court decision called Citizens United – they’re allowed to spend as much as they want without ever revealing who’s paying for the ads. That’s exactly what they’re doing. Millions of dollars. And the groups are benign sounding – Americans for Prosperity, who’s against that…None of them will disclose who’s paying for these ads. You don’t know if it’s a Wall Street bank, you don’t know if it’s a big oil company, you don’t know if it’s an insurance company, you don’t even know if it’s a foreign controlled entity. In some races they are spending more money than the candidates…They want to take Congress back and return to the days where lobbyists wrote the laws. It is the most insidious power grab since the monopolies of the gilded age.”

Later in the speech, the President promises that “We are not about to allow a corporate takeover of our democracy.” But at the very moment that the Nation is galvanized around a right-wing fueled media frenzy involving IRS scrutiny of nonprofit applications coming from groups with Tea Party in their name, the President folds like a cheap suit, calling the conduct “outrageous” and throwing the acting Commissioner of the IRS, Steven Miller, under the bus. 

The role of the President to lead and focus the Nation on the overarching issues was left to Congressman Ted Deutch, a Democrat from Florida’s 21^st District, who correctly sized up the real problem in yesterday’s House Judiciary Committee hearing with U.S. Attorney General Eric Holder. 

Congressman Ted Deutch of Florida's 21st District Speaking at the May 15, 2013 Judiciary Committee Hearing on the IRS Controversy

“Since the Supreme Court’s Citizens United decision,” said Deutch, “the number of groups applying for this tax exempt status to the IRS has more than doubled…That’s because these so-called social welfare organizations don’t have to disclose their donors; they can still maintain their 501(c)(4) status even if they write huge checks and even if they write them to Super PACs. In 2012, when a record $1.28 billion was spent by Super PACs and outside groups to influence the election and a quarter of that money cannot be traced to any source, the evidence shows that many of the (c)(4)s are being established for the sole purpose of funneling anonymous cash to Super PACs. Now, the IRS should not automatically accept all applications for tax exempt status when groups are increasingly being established for explicit political purposes. So as part of the investigation, part of the discussion, we need to know whether the tax exempt status of any (c)(4), whatever its politics, was either denied or revoked, not because of politics, but because they’re ripping off taxpayers by gaining this tax exempt status.” 

Deutch continued: “Of course the American people should be outraged that IRS employees would scrutinize specific groups based on political affiliations but I’m sure that my colleagues would all agree that the American people – the hardworking taxpayers of the Nation – should also be outraged that they are likely subsidizing tax breaks for the makers of the malicious Super PAC ads that poisoned our airwaves during the 2012 election season.” 

In fact, the Tea Party is not a “political affiliation.” The Tea Party is not the Republican Party, the Democratic Party, the Greens or the Libertarians. It is a name that has become so heavily aligned with the Koch brothers that if you search Koch brothers together with the words Tea Party in the Google search engine, you find 1.4 million links. Those links are backed with facts, starting with this video. In the video, David Koch appears before an annual convention of chapters of Americans for Prosperity and states “…my brother Charles and I provided the funds to start the Americans for Prosperity.” Later in the video, members of the state chapters of Americans for Prosperity report to David Koch on how many Tea Party groups they have created. One man states: “…hey folks, we’ve held 29 Tea Parties”; another says his chapter has “organized dozens of Tea Parties.” Another woman reports her Americans for Prosperity group turned out 10,000 people at a Tea Party rally in California.  

If the rank and file employees of the IRS decided to use the phrase “Tea Party” to digitally search for illegal political fronts in the mountain of nonprofit applications they received, they had hard facts on the ground for their suspicions. On August 30, 2010, Jane Mayer penned a 10,000 word investigative report for the New Yorker on the Kochs and their political front groups. The title of the article summed up the scam: “Covert Operations.” Mayer writes as follows:

“Americans for Prosperity has worked closely with the Tea Party since the movement’s inception. In the weeks before the first Tax Day protests, in April, 2009, Americans for Prosperity hosted a Web site offering supporters ‘Tea Party Talking Points.’ The Arizona branch urged people to send tea bags to Obama; the Missouri branch urged members to sign up for ‘Taxpayer Tea Party Registration’ and provided directions to nine protests. The group continues to stoke the rebellion. The North Carolina branch recently launched a ‘Tea Party Finder’ Web site, advertised as ‘a hub for all the Tea Parties in North Carolina.’

“The anti-government fervor infusing the 2010 elections represents a political triumph for the Kochs. By giving money to ‘educate,’ fund, and organize Tea Party protesters, they have helped turn their private agenda into a mass movement.”

In the same month of August 2010, the New York Times ran an article headlined “The Billionaires Bankrolling the Tea Party” singling out the Koch brothers. The article was bylined by Frank Rich, who wrote:

“Tea Partiers may share the Kochs’ detestation of taxes, big government and Obama. But there’s a difference between mainstream conservatism and a fringe agenda that tilts completely toward big business, whether on Wall Street or in the Gulf of Mexico, while dismantling fundamental government safety nets designed to protect the unemployed, public health, workplace safety and the subsistence of the elderly.”

Later in the article, making a reference to the nonprofits in the shadows of the corporate front groups, Rich writes: “The Koch brothers must be laughing all the way to the bank knowing that working Americans are aiding and abetting their selfish interests.”

Rank and file IRS agents didn’t create their suspicions about the Tea Party out of thin air; they got their best leads from the media – much of which is now showing the same lack of courage to clarify the issues as the President. 

U.S. Attorney General Eric Holder acknowledged at the hearing that he has quickly opened a criminal investigation of the IRS employees’ conduct. This is the same U.S. Attorney General who has sat for five years on a mountain of evidence of criminal wrongdoing by Wall Street firms without indicting one major player  – despite the fact that the country came close to financial collapse from this industry’s systemic corruption. 

To borrow the phrase from Frank Rich, the Koch brothers must be laughing all the way to the bank.