In a hearing on the IRS scandal, Rep. Jim McDermott (D-Wash.) questioned representatives from tea party groups that appeared to be political groups who oppose taxation whether they actually qualified as social welfare groups as required by law in order to receive tax exemptions. His prepared statement follows:
REP. JIM MCDERMOTT: Freedom of speech is, no doubt, one of most important fundamental rights. It is unacceptable in every way for a government agency to unfairly scrutinize any organization because of their political affiliations. The IRS has unequivocally made a mistake here. I am sorry your organizations were singled out like this, and while I think this was a case of foolish account management and dangerously careless shortcuts, I will not hesitate to say that the IRS was wrong.
But as I listen to this discussion, I’d like to remind everyone what we are talking about here. None of your organizations were kept from organizing or silenced. We are talking about whether or not the American taxpayers would subsidize your work. We are talking about a tax break.
I get the feeling that many of you and my Republican colleagues don’t just believe you should be free from political targeting, but that you should be free from scrutiny of any kind.
The purpose of C3 and C4 tax exemptions is to enable easier promotion of public good, not political work. It is the responsibility of the IRS to determine which groups are choosing the correct exempt status and which are trying to manipulate the system to avoid taxes and hide political organizations and their campaign donors. Without oversight, a status meant for charities becomes a machine for political money laundering. And if you think that’s farfetched, you can talk to Speaker Gingrich. He was fined $300,000 by the Ethics Committee for funneling money from a C3 to his Political Action Committee.
Each of your groups is highly political. From opposing the President’s healthcare reform, to abortion restrictions, to gay marriage, you’re all entrenched in some of the most controversial political issues in this country – and with your applications you are asking the American public to pay for that work. Many of you host and endorse candidates. The line between permitted political activity and non-permitted political activity can be very fine, and it’s important that tax payers know which side you fall on.
If there was an organization promoting taxpayer funding for abortions, wouldn’t you want to be sure they weren’t using their tax-free money to campaign for a candidate? What about a group that wanted to promote voting without I.D.’s? What if, in the midst of an increase of Communist candidates, new Communist clubs wanted tax-free status? Wouldn’t you want to be sure that the self-declared tax-free classifications of those groups were correct?
The mistake here was that the staff organizing the applications used the names of the groups rather than the work they do – and asked improper questions to figure that out. It was wrong.
But let’s not get lost. During the Bush administration liberal groups were targeted without any concern by Mr. Issa or anyone else in this committee. The Republicans are looking for a conspiracy where there isn’t one. Mr. Issa said he can feel in his gut that someone’s broken the law. Which is more likely: that midlevel employees took stupid, irresponsible shortcuts or that there’s an administration-wide plot to take down community organizers? Let’s not forget that this all happened under Republican IRS Commissioners and was investigated by a Republican Inspector General.
What happened to you was unfair and incredibly inconvenient, but it was a mistake. Our job is to make sure this never happens again. Anything else, like the circus happening at the Oversight and Government Reform Committee, is political theatre.”