By Kim Barker and Justin Elliott

In the furious fallout from the revelation that the IRS flagged applications from conservative nonprofits for extra review because of their political activity, some points about the big picture – and big donors — have fallen through the cracks.  

Consider this our Top 6 list of need-to-know facts on social welfare nonprofits, also known as dark money groups because they don’t have to disclose their donors. The groups poured more than $256 million into the 2012 federal elections.

1. Social welfare nonprofits are supposed to have social welfare, and not politics, as their “primary” purpose.

A century ago, Congress created a tax exemption for social welfare nonprofits. The statute defining the groups says they are supposed to be “operated exclusively for the promotion of social welfare.” But in 1959, the regulators interpreted the “exclusively” part of the statute to mean groups had to be “primarily” engaged in enhancing social welfare. This later opened the door to political spending.

So what does “primarily” mean?  It’s not clear. The IRS has said it uses a “facts and circumstances” test to say whether a group mostly works to benefit the community or not. In short: If a group walks and talks like a social welfare nonprofit, then it’s a social welfare nonprofit.

This deliberate vagueness has led some groups to say that “primarily” simply means they must spend 51 percent of their money on a social welfare idea — say, on something as vague as “education,” which could also include issue ads criticizing certain politicians. And then, the reasoning goes, a group can spend as much as 49 percent of its expenditures on ads directly advocating the election or defeat of a candidate for office.

Nowhere in tax regulations or rulings does it mention 49 percent, though. Some nonprofit lawyers have argued that the IRS should set hard limits for social welfare nonprofits — setting out, for instance, that they cannot spend more than 20 percent of their money on election ads or even limiting spending to a fixed amount, like no more than $250,000.

So far, the IRS has avoided clarifying any limits.

2. Donors to social welfare nonprofits are anonymous for a reason.

Unlike donors who give directly to politicians or even to super PACs, donors who give to social welfare nonprofits can stay secret. In large part, this is because of an attempt by Alabama to force the NAACP, then a social welfare nonprofit, to disclose its donors in the 1950s. In 1958, the Supreme Court sided with the NAACP, saying that public identification of its members made them at risk of reprisal and threats.

The ACLU, which is itself a social welfare nonprofit, has long made similar arguments. So has Karl Rove, the GOP strategist and brains behind Crossroads GPS, which has spent more money on elections than any other social welfare nonprofit. In early April 2012, Rove invoked the NAACP in defending his organization against attempts to reveal donors.

The Federal Election Commission could in theory push for some disclosure from social welfare nonprofits — for their election ads, at least. But the FEC has been paralyzed by a 3-3 partisan split, and its interpretations of older court decisions have given nonprofits wiggle room to avoid saying who donated money, as long as a donation wasn’t specifically made for a political ad.

New rulings indicate that higher courts, including the Supreme Court, favor disclosure for political ads, and states are also stepping into the fray. During the 2012 elections, courts in two states – Montana and Idaho – ruled that two nonprofits engaged in state campaigns needed to disclose donors.  

But sometimes, when nonprofits funnel donations, the answers raise more questions. It’s the Russian nesting doll phenomenon. Last election, for instance, California’s election agency pushed for an Arizona social welfare nonprofit to disclose donors for $11 million spent on two California ballot initiatives. The answer? Another social welfare nonprofit, which in turn got the money from a trade association, which also doesn’t have to reveal its donors.

3. The Supreme Court’s Citizens United decision meant that corporations could pay for political ads, anonymously, using social welfare nonprofits.

In January 2010, the Supreme Court ruled that corporations and unions could spend money directly on election ads. A later court decision made possible super PACs, the political committees that can raise and spend unlimited amounts of money from donors, as long as they don’t coordinate with candidates and as long as they report their donors and spending.

Initially, campaign finance watchdogs believed corporations would give directly to super PACs. And in some cases, that happened. But not as much as anyone thought, and maybe for a reason: Disclosure isn’t necessarily good for business. Target famously faced a consumer and shareholder backlash after it gave money in 2010 to a group backing a Minnesota candidate who opposed gay rights.

Many watchdogs now believe that large public corporations are giving money to support candidates through social welfare nonprofits and trade associations, partly to avoid disclosure. Although the tax-exempt groups were allowed to spend money on election ads before Citizens United, their spending skyrocketed in 2010 and again in 2012.

A New York Times article based on rare cases in which donors have been disclosed, sometimes accidentally, explored the issue of corporations giving to these groups last year. Insurance giant Aetna, for example, accidentally revealed it gave $3 million in 2011 to the American Action Network, a social welfare group founded by former Sen. Norm Coleman, a Republican, that runs election ads.

Groups that favor more disclosure have so far failed to force action by the FEC, the IRS, or Congress, although some corporations have voluntarily reported their political spending. Advocates have now turned to the Securities and Exchange Commission, which is studying a proposal to require public companies to disclose political contributions.

The idea is already facing strong opposition from House Republicans.

4. Social welfare nonprofits do not actually have to apply to the IRS for recognition as tax-exempt organizations.

With all the furor over applications being flagged from conservative groups — particularly groups with “Tea Party,” “Patriot” or “9/12″ in their names — it’s worth remembering that a social welfare nonprofit doesn’t even have to apply to the IRS in the first place.

Unlike charities, which are supposed to apply for recognition, social welfare nonprofits can simply incorporate and start raising and spending money, without ever applying to the IRS.

The agency’s nonprofit wing is mainly concerned about ferreting out bad charities, which are the biggest chunk of nonprofits and the biggest source of potential revenue. After all, the IRS’s main job is to collect revenue. Charities allow donors to deduct donations, while social welfare nonprofits don’t.

Most major social welfare nonprofits do apply, because being recognized is seen as insurance against later determination by the IRS that the group should have registered as a political committee and may face back taxes and disclosure of donors. A recognition letter is also essential to raise money from certain donors — like, say, corporations.

But some of the new groups haven’t applied.

The first time the IRS hears about these social welfare nonprofits is often when they file their first annual tax return, not due until sometimes more than a year after they’ve formed.

In many cases, the first time the IRS hears about these groups is a full year after an election.   

5. Most of the money spent on elections by social welfare nonprofits supports Republicans.

Of the more than $256 million spent by social welfare nonprofits on ads in the 2012 elections, at least 80 percent came from conservative groups, according to FEC figures tallied by the Center for Responsive Politics.

None came from the Tea Party groups with applications flagged by the IRS. Instead, a few big conservative groups were largely responsible.

Crossroads GPS, which this week said it believes it is among the conservative groups “targeted” by the IRS, spent more than $70 million in federal races in 2012. Americans for Prosperity, the social welfare nonprofit launched by the conservative billionaire brothers Charles and David Koch, spent more than $36 million. American Future Fund spent more than $25 million. Americans for Tax Reform spent almost $16 million. American Action Network spent almost $12 million.

Besides Crossroads GPS, each of those groups has applied to the IRS and been recognized as tax-exempt. (You can look at their applications here.)

All of those groups spent more than the largest liberal social welfare nonprofit, the League of Conservation Voters, which spent about $11 million on 2012 federal races. The next biggest group, Patriot Majority USA, spent more than $7 million. Planned Parenthood spent $6.5 million. VoteVets.org spent more than $3 million.

None of those figures include the tens of millions of dollars spent by groups on certain ads that run months before an election that are not reported to the FEC.

6. Some social welfare groups promised in their applications, under penalty of perjury, that they wouldn’t get involved in elections. Then they did just that.

Much of the attention when it comes to Tea Party nonprofits has focused on their applications and how the IRS determines whether a group qualifies for social welfare status.

As part of our reporting on dark money in 2012, ProPublica looked at more than 100 applications for IRS recognition. One thing we noted again and again: Groups sometimes tell the IRS that they are not going to spend money on elections, receive IRS recognition, and then turn around and spend money on elections

The application to be recognized as a social welfare nonprofit, known as a 1024 Form, explicitly asks a group whether it has spent or plans to spend “any money attempting to influence the selection, nomination, election, or appointment of any person to any Federal, state, or local public office or to an office in a political organization.”

The American Future Fund, a conservative nonprofit that would go on to spend millions of dollars on campaign ads, checked “No”in answer to that question in 2008. The very same day the group submitted its application, it uploaded this ad to its YouTube account:

Even before mailing its application to the IRS saying it would not spend money on elections in 2010, the Alliance for America’s Future was running TV ads supporting Republican candidates for governor in Nevada and Florida. It also had given $133,000 to two political committees directed by Mary Cheney, the daughter of the former vice president. 

Another example of this is the Government Integrity Fund, a conservative nonprofit that ran ads in last year’s U.S. Senate race in Ohio. Its application was approved after it told the IRS that it would not spend money on politics. The group went on to do just that.

For more on the IRS and nonprofits active in politics, read our story on how the IRS’s nonprofit division got so dysfunctional, Kim Barker’s investigation, “How nonprofits spend millions on elections and call it public welfare” and our Q&A on dark money.    

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The suspect brags about the killing

UPDATE: The name of the victim and one of the suspects has been released. From the BBC:

The soldier killed in an attack in London has been named as Drummer Lee Rigby of the 2nd Battalion the Royal Regiment of Fusiliers.

Drummer Rigby, 25, from Manchester, leaves behind a two-year-old son.

Two suspects shot by police after Wednesday’s attack in Woolwich remain under arrest. A further two people have been arrested on conspiracy to murder.

The suspects, one of whom is said to be Islamist protester Michael Adebolajo, were known to security services.

Drummer Lee Rigby

UPDATE: Here is footage of the suspected killer speaking to passerby moments after the killing. WARNING: Highly disturbing images

From the Independent:

A man believed to be a soldier has been beheaded in an attack on a street near the Woolwich barracks in London, witnesses report.

The Guardian has an eyewitness account of the murder:

Julia Wilders,51, a local resident, said that she saw a car had crashed into a lamppost when she went to investigate. “My husband said there’s two people trying to resuscitate someone. We parked and walked back to have a look and all of a sudden a tall black bloke come up with a gun. My husband said, ‘Get back, get back’ and we called the police.”

She said that one man was dressed all in black with a black cap whilst the other was dressed in a green jumper.”They looked like they were on drugs,” she said.

She said the black hand gun was pointed down and a crowd soon gathered.

Her husband Graham, 50 called the police to alert them to what they believed was an accident.

“After we called the police I went over to the school to let the school know so the kids wouldn’t come out,” she said.

“I walked back up there and the tall black bloke had changed the gun to the other guy and he had two meat cleavers in his hand. And the response police turned up and he’s ran towards them with meat cleavers before I could even get out of the car so they shot him. And then the other one lifts the gun up and they shot him as well.

She did not know how many shots the police fired but said both assailants fell to the ground after being hit.

She didn’t believe the assailants weapons were fired. “He looked like he was going to, sort of like he was going to lift it up towards the police.”

Her husband said that it looked like the two men were trying to revive the man they’d run over. “They looked like they were pumping his chest but they said that they were trying to cut his head off.”

“A guy in a car told people to ring 999 and then taller guy started waiving the gun at him.”

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By Richard Tofel

ProPublica’s job is to report the news rather than to make news ourselves, but sometimes we find an article of ours to be itself a subject of public debate. Last week was such a time, when two articles we had published back in December and January became the subject of significant attention in light of the uproar over IRS oversight of the process for granting tax exemption to so-called “social welfare” groups under section 501(c)(4). We triggered that attention, with a third article we published on May 13, setting out everything we knew about the circumstances of our previous stories.

Largely ignored in a public outcry last week—radio rants, Twitter storms, congressional, presidential and prosecutorial posturing– were the following:

Our pieces in December and January raised very serious questions about whether six different “dark money” political groups seeking tax exemption had made false statements on their applications. Those applications are signed under penalty of perjury . If any false statements were made knowingly, the groups— including Karl Rove’s Crossroads GPS —may have committed a crime. There is no indication, however, that either the IRS or the Department of Justice has done anything since January to investigate whether such crimes were indeed committed. The groups in question happen all to be conservative. Not one congressional Republican has, to my knowledge, expressed any concern about this possible criminality.

Even more remarkably, leading public figures have asserted as fact that they know how we came to receive nine documents in the mail—statements that appear to have little basis (and in some cases, no basis at all).

The former acting Commissioner of Internal Revenue said on May 17 that the agency’s inspector general had found that the disclosure to us was “inadvertent”—we had requested the applications, but they should not have been sent to us before they were approved. The IRS followed later the same day with a statement to the same effect—but then refused to answer questions about who had made the mistake, and why they should be believed when they denied having acted intentionally (and thus likely denied committing a crime).

What really seems to have happened at the IRS in Cincinnati, across the last three presidencies (a Democrat, then a Republican, then a Democrat), and across two turns of the partisan screw in the House of Representatives, from Republicans to Democrats to Republicans again, is that the agency has been starved of resources, and badly mismanaged.

But while it took the IRS four long days to tell people about their conclusion of “inadvertence” and the same four days for ProPublica to report out the dysfunction , people like Rush Limbaugh, and their followers and fellow travelers on Twitter and in the fringe press, rushed headlong to judgment. Here’s what Limbaugh said about the mid-level federal employees at the IRS in Cincinnati on Tuesday: “The people at these government agencies have been stocked with leftists for decades now, and they’re all activists.” What evidence did he offer for this? None. How could he know that someone in a large bureaucracy, shuffling thousands of pieces of paper, didn’t make a mistake? He couldn’t, and he didn’t.

Well, you might say, that’s Limbaugh. But it wasn’t just Limbaugh. Stephen Moore writes for the Wall Street Journal (where I worked for 15 years, and where Mr. Rove also writes). Yet, he called the documents we were sent “ illegally leaked .” He knew nothing more than Limbaugh. “What is the motivation,” Moore asked, “for leaking these documents? The answer is that the left is trying to dry up the money of tea party and conservative groups by intimidating donors.” He noted that another group, in another case, had its donor list released. But in our case, there were no donor lists, and we had redacted the limited financial information on the forms we published. Moreover, these applications are completed with the expectation that they’ll eventually be made public—because they are when they are approved. Never mind all that; presumably no need to mention it.

And what of the investigators? Congressional committees leapt into action. The inspector general for the IRS had apparently already investigated. The President demanded another investigation; the Department of Justice said it had commenced a criminal inquiry.

Knowing that such is the way in Washington, we waited at ProPublica for someone to send us a subpoena, show up on our doorstep, or maybe just call. Nothing. Nothing since December 13, when we told the IRS we had these documents they weren’t supposed to have sent us—or since the next day, when we published that fact. Nothing before the inspector general reached his conclusion, nothing before the congressional hearings started televising their demands for answers and their righteous indignation, nothing since.

In point of fact, the investigators would have found out that we have nothing of value to them. But the fact that they didn’t even ask tells you a lot. And it reinforces the point that much of the heat generated last week on this subject is just the latest expression of Washington cynicism and its consequences—that the talk show hosts and their fellow travelers, and the representatives and senators and officials in the executive branch, aren’t really looking for answers here. They’re just putting on a show.

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By Robert Parry

The Washington Post’s Bob Woodward has popped up on TV recently affirming a key Republican talking point, likening the “scandal” over the Obama administration’s Benghazi talking points to Richard Nixon’s Watergate scandal, which Woodward helped make famous.

But, as he joins in hyping the GOP’s Benghazi scandal-mongering, Woodward doesn’t appear to know that new documentary evidence has transformed our understanding of Watergate and especially its tie-in to the Vietnam War – and how those documents make comparisons between Watergate and Benghazi both ludicrous and obscene.

Journalist and author Bob Woodward.

During an appearance on MSNBC’s “Morning Joe” on May 17, Woodward compared the administration’s development of talking points for TV appearances by UN Ambassador Susan Rice in 2012 to Nixon’s mendacious editing of his Oval Office tapes to conceal the role of his reelection campaign in the break-in at the Democrats’ Watergate headquarters in 1972.

“You were talking earlier about kind of dismissing the Benghazi issue as one that’s just political and the president recently said it’s a sideshow,” Woodward said. “But if you read through all these e-mails, you see that everyone in the government is saying, ‘Oh, let’s not tell the public that terrorists were involved, people connected to al-Qaeda. Let’s not tell the public that there were warnings.’”

Then, noting that four U.S. diplomatic personnel died in the attack on the U.S. consulate in Benghazi, Libya, on Sept. 11, 2012, Woodward added, “I would not dismiss Benghazi. It’s a very serious issue. As people keep saying, four people were killed.”

But Woodward appears to have been relying on Republican talking points in his understanding of why Obama administration officials decided to leave out some details from Rice’s talking points, specifically a concern that divulging certain specifics would compromise the ongoing investigation to catch the Islamic terrorist believed responsible.

At the time, there also remained genuine confusion over the connection between the Benghazi attack and angry demonstrations sweeping the Middle East over an American video mocking the Prophet Muhammad. Indeed, the recently released e-mails buttress then-CIA Director David Petraeus’s testimony about concerns over the possibility of harming the investigation.

By contrast, Nixon systematically reviewed tape transcripts of his Oval Office conversations to remove sections that incriminated him and his top aides in a felonious cover-up. We also now know what Nixon’s most dangerous secret was, i.e., why he hired ex-CIA officer E. Howard Hunt to organize an espionage team in the first place.

Nixon was terrified that a missing file might surface revealing FBI wiretaps of his 1968 campaign’s sabotage of President Lyndon Johnson’s Vietnam peace talks, a politically motivated case of obstruction that Johnson privately called “treason.”

In other words, the ultimate secret of Watergate – one that apparently still remains a mystery to Woodward – was that Nixon was terrified that the American people might learn that he had extended the Vietnam War for an additional four years to get an edge in a political campaign.

As a result of LBJ’s failed peace initiative, some 20,000 more U.S. soldiers died along with an estimated one million Vietnamese and countless more dead in Cambodia. The war also tore apart America’s political and social fabric.

So, to put the flap over the Benghazi talking points in the same sentence with Nixon’s Watergate crimes suggests either a complete lack of proportionality or some self-serving agenda. It’s possible that Woodward doesn’t want to acknowledge the new evidence because it would show that he missed the most important element of a scandal that made his career.

Recognition of the fuller Watergate scandal also would shatter a favorite saying of Official Washington, “the cover-up is worse than the crime.” That surely wouldn’t be true if the Watergate scandal were understood to encompass Nixon’s treacherous scheme to block Johnson’s Vietnam peace deal.

Memoirs and Documents

We now know based on memoirs of principals and documents available at the LBJ Library in Austin, Texas, that in 1969, Johnson ordered his national security aide, Walt Rostow, to remove the wiretap file on Nixon’s peace-talk sabotage from the White House and that Nixon later learned of the file’s existence from FBI Director J. Edgar Hoover

However, Nixon’s senior advisers, Henry Kissinger and H.R. “Bob” Haldeman, were unable to locate the missing file, not realizing that it was in Rostow’s personal possession. Nixon’s concern about the incriminating wiretaps grew into a panic after June 13, 1971, when the New York Times began publishing the top-secret Pentagon Papers, which detailed the mostly Democratic lies that had drawn the United States into the Vietnam War from 1945 to 1967.

As those stories dominated the front pages of newspapers across the nation and the world, Nixon realized something that few others knew, that there was a sequel that was arguably even more scandalous, a file containing evidence of his campaign’s successful sabotage of Johnson’s peace talks, which could have negotiated an end to the war in 1968.

As the Pentagon Papers dominated the news, Nixon summoned Kissinger and Haldeman into the Oval Office again on June 17, 1971, and ordered them to redouble their efforts to locate the missing file. Nixon’s panic is captured on an Oval Office tape that was made public decades ago but not fully understood.

“Do we have it?” Nixon asked Haldeman about Johnson’s file. “I’ve asked for it. You said you didn’t have it.”

Haldeman: “We can’t find it.”

Kissinger: “We have nothing here, Mr. President.”

Nixon: “Well, damnit, I asked for that because I need it.”

Kissinger: “But Bob and I have been trying to put the damn thing together.”

Haldeman: “We have a basic history in constructing our own, but there is a file on it.”

Nixon: “Where?”

Haldeman: “[Presidential aide Tom Charles] Huston swears to God that there’s a file on it and it’s at Brookings.”

Nixon: “Bob? Bob? Now do you remember Huston’s plan [for White House-sponsored break-ins as part of domestic counter-intelligence operations]? Implement it.”

Kissinger: “Now Brookings has no right to have classified documents.”

Nixon: “I want it implemented. … Goddamnit, get in and get those files. Blow the safe and get it.”

Haldeman: “They may very well have cleaned them by now, but this thing, you need to –“

Kissinger: “I wouldn’t be surprised if Brookings had the files.”

Haldeman: “My point is Johnson knows that those files are around. He doesn’t know for sure that we don’t have them around.”

But Johnson did know that the file was no longer at the White House because he had ordered Rostow to remove it in the final days of his own presidency.

On June 30, 1971, Nixon again berated Haldeman about the need to break into Brookings and “take it [the file] out.” Nixon even suggested using former CIA officer E. Howard Hunt to conduct the Brookings break-in.

“You talk to Hunt,” Nixon told Haldeman. “I want the break-in. Hell, they do that. You’re to break into the place, rifle the files, and bring them in. … Just go in and take it. Go in around 8:00 or 9:00 o’clock.”

Haldeman: “Make an inspection of the safe.”

Nixon: “That’s right. You go in to inspect the safe. I mean, clean it up.”

For reasons that remain unclear, it appears that the Brookings break-in never took place. Also unclear to historians was the full significance of the missing file. They knew that it had a connection to Johnson’s peace initiative in October 1968 but they assumed, mistakenly, that it was a file containing policy papers, not wiretap evidence.

The ‘X’ Envelope

The missing link to the story was filed away at the LBJ Library, where Rostow eventually deposited what he labeled “The ‘X’ Envelope.” Rostow transferred the file to the library after Johnson’s death in 1973 but with instructions that it not be opened for 50 years. Library officials eventually overrode Rostow’s mandate but not until 1994 when the envelope was opened and declassification of its contents began.

But the two-decade delay caused serious damage to the historical record because, in the interim, a distorted narrative of the Watergate scandal had taken shape and solidified. Not knowing the contents of the missing file – the one that Nixon thought might be at Brookings – led Woodward and other Watergate reporters to concentrate on the cover-up, not the underlying crime.

Because of that mistaken focus, an entire generation of journalists cut their teeth saying, “The cover-up is worse than the crime.” There also grew an animosity toward evidence suggesting that Republicans would go behind the back of a Democratic president to undermine an important foreign policy initiative like, say, trying to end the Vietnam War. Somehow disclosing such facts was deemed not “good for the country.”

So, my discovery of the missing piece of the Watergate mosaic in 2012 was unwelcome news in many quarters, easier to ignore than to explain. However, the false narrative of Watergate is not old news; it has become a current reference point for Republican efforts to undermine another Democratic president on a foreign policy incident.

Because of the lack of proportionality – made possible by the distorted Watergate narrative – Sen. John McCain and other leading Republicans can breezily call the Benghazi story “worse” than Watergate. Then, by recycling some bad history, Bob Woodward contributes to the problem. [For details on Rostow’s “X Envelope,” see Robert Parry’s America’s Stolen Narrative.]

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

(Originally posted at Consortium News)

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By Robert Parry

Racism has been a consistent thread weaving through the American Right from the early days when Anti-Federalists battled against the U.S. Constitution to the present when hysterical Tea Partiers denounce the first African-American president. Other factors have come and gone for the Right, but racism has always been there.

Though definitions of Right and Left are never precise, the Left has generally been defined, in the American context, by government actions – mostly the federal government responding to popular movements and representing the collective will of the American people – seeking to improve the lot of common citizens and to reduce social injustice.

President Thomas Jefferson in a portrait by Rembrandt Peale.

The Right has been defined by opposition to such government activism. Since the Founding, the Right has decried government interference with the “free market” and intrusion upon “traditions,” like slavery and segregation, as “tyranny” or “socialism.”

This argument goes back to 1787 and opposition to the Constitution’s centralizing of government power in the hands of federal authorities. In Virginia, for instance, the Anti-Federalists feared that a strong federal government eventually would outlaw slavery in the Southern states.

Ironically, this argument was raised by two of the most famous voices for “liberty,” Patrick Henry and George Mason. Those two Virginians spearheaded the Anti-Federalist cause at the state’s ratifying convention in June 1788, urging rejection of the Constitution because, they argued, it would lead to slavery’s demise.

The irony of Henry and Mason scaring fellow Virginians about the Constitution’s threat to slavery is that the two men have gone down in popular U.S. history as great espousers of freedom. Before the Revolution, Henry was quoted as declaring, “Give me liberty or give me death!” Mason is hailed as a leading force behind the Bill of Rights. However, their notion of “liberty” and “rights” was always selective. Henry and Mason worried about protecting the “freedom” of plantation owners to possess other human beings as property.

At Virginia’s Ratification Convention, Henry and Mason raised other arguments against the proposed Constitution, such as concerns that Virginia’s preeminence might not be as great as under the weak Articles of Confederation and that population gains in the North might erode Virginia’s economic welfare.

But the pair’s most potent argument was the danger they foresaw regarding the abolition of slavery. As historians Andrew Burstein and Nancy Isenberg wrote in their 2010 book, Madison and Jefferson, the hot button for Henry and Mason was that “slavery, the source of Virginia’s tremendous wealth, lay politically unprotected.”

The Slavery Card

At the center of this fear was the state’s loss of ultimate control over its militia which could be “federalized” by the President as the nation’s commander in chief under the new Constitution.

“Mason repeated what he had said during the Constitutional Convention: that the new government failed to provide for ‘domestic safety’ if there was no explicit protection for Virginians’ slave property,” Burstein and Isenberg wrote. “Henry called up the by-now-ingrained fear of slave insurrections – the direct result, he believed, of Virginia’s loss of authority over its own militia.”

Henry floated conspiracy theories about possible subterfuges that the federal government might employ to deny Virginians and other Southerners the “liberty” to own African-Americans. Describing this fear-mongering, Burstein and Isenberg wrote:

“Congress, if it wished, could draft every slave into the military and liberate them at the end of their service. If troop quotas were determined by population, and Virginia had over 200,000 slaves, Congress might say: ‘Every black man must fight.’ For that matter, a northern-controlled Congress might tax slavery out of existence.

“Mason and Henry both ignored the fact that the Constitution protected slavery on the strength of the three-fifths clause, the fugitive slave clause, and the slave trade clause. Their rationale was that none of this mattered if the North should have its way.”

At Philadelphia in 1787, the drafters of the Constitution had already capitulated to the South’s insistence on its brutal institution of human enslavement. That surrender became the line of defense that James Madison, a principal architect of the new governing structure, cited in his response to Mason and Henry.

Burstein and Isenberg wrote, “Madison rose to reject their conspiratorial view. He argued that the central government had no power to order emancipation, and that Congress would never ‘alienate the affections five-thirteenths of the Union’ by stripping southerners of their property. ‘Such an idea never entered into any American breast,’ he said indignantly, ‘nor do I believe it ever will.’

“Madison was doing his best to make Henry and Mason sound like fear-mongers. Yet Mason struck a chord in his insistence that northerners could never understand slavery; and Henry roused the crowd with his refusal to trust ‘any man on earth’ with his rights. Virginians were hearing that their sovereignty was in jeopardy.”

Despite the success of Mason and Henry to play on the fears of plantation owners, the broader arguments stressing the advantages of Union carried the day, albeit narrowly. Virginia ultimately approved ratification by 89 to 79. However, the South’s obsession over perceived threats to its institution of slavery remained a central factor in the early decades of the Republic.

Arming Whites

Though today’s Right pretends that the Second Amendment was devised to give individual Americans the right to own and carry any weapon of their choice – so they can shoot policemen, soldiers and other government representatives in the cause of anti-government “liberty” – it was primarily a concession to the states and especially to the South’s fears that were expressed at the Virginia convention.

Approved by the First Congress as part of the “Bill of Rights,” the Second Amendment explained its purpose as the need to maintain “the security of a free State,” an echo of Mason’s concerns about “domestic safety,” i.e. a Southern state’s ability to maintain slavery by force and defend against slave uprisings.

As the amendment emerged from various committee rewrites, it stated: “A well-regulated Militia being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” But that right, of course, did not extend to all people, not to people of color.

The Second Congress put substance to the structure of state militias by passing the Militia Acts, which specifically mandated that “white men” of military age obtain muskets and other supplies for participation in state militias. At the time, the concerns were not entirely over rebellious slaves, but also over rebellious poor whites.

Part of the backdrop of the Constitutional Convention in 1787 had been Shays’ Rebellion in western Massachusetts in 1786-1787, an uprising of white farmers led by a former Continental Army officer, Daniel Shays. After ratification of the Constitution, the first significant use of federalized militias was in 1794 to crush an anti-tax revolt in western Pennsylvania led by poor whites known as the Whiskey Rebellion.

That uprising was treated as an act of treason as defined by the U.S. Constitution, although President Washington used his pardon power to spare rebel leaders from execution by hanging. Similar mercy was not shown when Southern states confronted actual or suspected slave revolts. In 1800, Virginia Gov. James Monroe called out the militia to stop an incipient slave uprising known as Gabriel’s Rebellion. Twenty-six alleged conspirators were hanged.

Jeffersonian Influences

Of course, slavery and racism were not the only defining characteristics of the Right during the country’s early years, as economic interests diverged and political rivalries surfaced. James Madison, for instance, had been a key protégé of George Washington and an ally of Alexander Hamilton during the fight for the Constitution.

Madison had even advocated for a greater concentration of power in the federal government, including giving Congress the explicit power to veto state laws. However, after the Constitution was in place, Madison began siding with his Virginian neighbor (and fellow slave-owner) Thomas Jefferson in political opposition to the Federalists.

In the first years of the constitutional Republic, the Federalists, led by President Washington and Treasury Secretary Hamilton, pushed the limits of federal power, particularly with Hamilton’s idea of a national bank which was seen as favoring the financial interests of the North to the detriment of the more agrarian South.

The Jeffersonians, coalescing around Jefferson and Madison, fiercely opposed Hamilton’s national economic planning though the differences often seemed to be driven by personal animosities and regional rivalries as much as by any grand ideological vision regarding government authority. The Jeffersonians, for instance, were sympathetic to the bloody French Revolution, which made a mockery of the rule of law and the restraint of government power.

Nevertheless, history has generally been kind to Jefferson’s enthusiasm for a more agrarian America and his supposed commitment to the common man. But what is left out of this praise for “Jeffersonian democracy” is that Jefferson’s use of the word “farmers” was often a euphemism for his actual political base, the slave-owning plantation aristocrats of the South.

At his core, despite his intellectual brilliance, Jefferson was just another Southern hypocrite. He wrote that “all men are created equal” (in the Declaration of Independence) but he engaged in pseudo-science to portray African-Americans as inferior to whites (as he did in his Notes on the State of Virginia).

His racism rationalized his own economic and personal reliance on slavery. While desperately afraid of slave rebellions, he is alleged to have taken a young slave girl, Sally Hemings, as a mistress.

Jefferson’s hypocrisy also surfaced in his attitudes toward a slave revolt in the French colony of St. Domingue, where African slaves took seriously the Jacobins’ cry of “liberty, equality and fraternity.” After their demands for freedom were rebuffed and the brutal French plantation system continued, violent slave uprisings followed. Hundreds of white plantation owners were slain as the rebels overran the colony. A self-educated slave named Toussaint L’Ouverture emerged as the revolution’s leader, demonstrating skills on the battlefield and in the complexities of politics.

The ‘Black Jacobins’

Despite the atrocities committed by both sides of the conflict, the rebels – known as the “Black Jacobins” – gained the sympathy of the American Federalists. L’Ouverture negotiated friendly relations with the Federalist administration under President John Adams, and Alexander Hamilton, a native of the Caribbean himself, helped L’Ouverture draft a constitution.

But events in Paris and Washington soon conspired to undo the promise of Haiti’s emancipation from slavery. Despite the Federalist sympathies, many American slave-owners, including Jefferson, looked nervously at the slave rebellion in St. Domingue. Jefferson feared that slave uprisings might spread northward. “If something is not done, and soon done,” Jefferson wrote in 1797, “we shall be the murderers of our own children.”

Meanwhile, across the Atlantic, the chaos and excesses of the French Revolution led to the ascendance of Napoleon Bonaparte, a brilliant and vain military commander possessed of legendary ambition. As he expanded his power across Europe, Napoleon also dreamed of rebuilding a French empire in the Americas.

In 1801, Jefferson became the third President of the United States – and his interests at least temporarily aligned with Napoleon’s. The French dictator wanted to restore French control of St. Domingue and Jefferson wanted to see the slave rebellion crushed. President Jefferson and Secretary of State Madison collaborated with Napoleon through secret diplomatic channels. Napoleon asked Jefferson if the United States would help a French army traveling by sea to St. Domingue. Jefferson replied that “nothing will be easier than to furnish your army and fleet with everything and reduce Toussaint [L’Ouverture] to starvation.”

But Napoleon had a secret second phase of his plan that he didn’t share with Jefferson. Once the French army had subdued L’Ouverture and his rebel force, Napoleon intended to advance to the North American mainland, basing a new French empire in New Orleans and settling the vast territory west of the Mississippi River.

Stopping Napoleon

In 1802, the French expeditionary force achieved initial success against the slave army, driving L’Ouverture’s forces back into the mountains. But, as they retreated, the ex-slaves torched the cities and the plantations, destroying the colony’s once-thriving economic infrastructure. L’Ouverture, hoping to bring the war to an end, accepted Napoleon’s promise of a negotiated settlement that would ban future slavery in the country. As part of the agreement, L’Ouverture turned himself in.

But Napoleon broke his word. Jealous and contemptuous of L’Ouverture, who was regarded by some admirers as a general with skills rivaling Napoleon’s, the French dictator had L’Ouverture shipped in chains back to Europe where he was mistreated and died in prison.

Infuriated by the betrayal, L’Ouverture’s young generals resumed the war with a vengeance. In the months that followed, the French army – already decimated by disease – was overwhelmed by a fierce enemy fighting in familiar terrain and determined not to be put back into slavery. Napoleon sent a second French army, but it too was destroyed. Though the famed general had conquered much of Europe, he lost 24,000 men, including some of his best troops, in St. Domingue before abandoning his campaign. The death toll among the ex-slaves was much higher, but they had prevailed, albeit over a devastated land.

By 1803, a frustrated Napoleon – denied his foothold in the New World – agreed to sell New Orleans and the Louisiana territories to Jefferson, a negotiation handled by Madison that ironically required just the sort of expansive interpretation of federal powers that the Jeffersonians ordinarily disdained. However, a greater irony was that the Louisiana Purchase, which opened the heart of the present United States to American settlement and is regarded as possibly Jefferson’s greatest achievement as president, had been made possible despite Jefferson’s misguided – and racist – collaboration with Napoleon.

“By their long and bitter struggle for independence, St. Domingue’s blacks were instrumental in allowing the United States to more than double the size of its territory,” wrote Stanford University professor John Chester Miller in his book, The Wolf by the Ears: Thomas Jefferson and Slavery. But, Miller observed, “the decisive contribution made by the black freedom fighters … went almost unnoticed by the Jeffersonian administration.”

Consequences of Racism

Without L’Ouverture’s leadership, the island nation fell into a downward spiral. In 1804, Jean-Jacques Dessalines, the radical slave leader who had replaced L’Ouverture, formally declared the nation’s independence and returned it to its original Indian name, Haiti. A year later, apparently fearing a return of the French, Dessalines ordered the massacre of the remaining French whites on the island. Jefferson reacted to the bloodshed by imposing a stiff economic embargo on Haiti. In 1806, Dessalines himself was brutally assassinated, touching off a cycle of political violence that would haunt Haiti for the next two centuries.

Even in his final years, Jefferson remained obsessed with Haiti and its link to the issue of American slavery. In the 1820s, the former president proposed a scheme for taking away the children born to black slaves in the United States and shipping them to Haiti. In that way, Jefferson posited that both slavery and America’s black population could be phased out. Eventually, in Jefferson’s view, Haiti would be all black and the United States white.

While the racism of Jefferson and many of his followers may be undeniable, it is not so easy to distinguish between Right and Left in those early years of the American Republic. Though Hamilton was more open-minded toward freedom for black slaves, there were elements of his government intervention on behalf of the fledgling financial sector that might today be regarded as “pro-business” or elitist as there were parts of Jefferson’s attitude toward greater populism that might be seen as more “democratic.”

Stumbling toward War

Yet, as the first generation of American leaders passed away and the nation expanded westward, the issue of slavery remained a threat to America’s unity. The South’s aggressive defense of its lucrative institution of slavery opened violent rifts between pro-slave and pro-free settlers in territories to the west.

The modern distinctions between America’s Right and Left also became more pronounced, defined increasingly by race. The North, building a manufacturing economy and influenced by the emancipationist movement, turned increasingly against slavery, while the South, with a more agrarian economy and much of its capital invested in slaves, could see no future without the continuation of slavery.

Politically, those distinctions played out not unlike what Anti-Federalists George Mason and Patrick Henry had predicted at Virginia’s ratification convention in 1788. The North gradually gained dominance in wealth and population and the South’s barbaric practice of slavery emerged as a hindrance to America’s growing reputation in the world.

So, a key divide of U.S. politics between Right and Left became the differences over issues of slavery and race. The racist aspects of the Anti-Federalists and the “Jeffersonian democrats” became a defining feature of the American Right as captured in the argument for “states’ rights,” i.e., the rights of the Southern states either to nullify federal laws or to secede from the Union.

Though the concentration of power in Washington D.C. gave rise to legitimate questions about authoritarianism, the federal government also became the guiding hand for the nation’s economic development and for elimination of gross regional injustices such as slavery. Federal action in defense of national principles regarding justice eventually helped define the American Left.

But the slave-owning South would not go down without a fight. After the election of Republican Abraham Lincoln in 1860, 11 Southern states seceded from the Union and established the Confederate States of America with the goal of perpetuating slavery forever. It took four years of war to force the Southern states back into the Union and finally bring slavery to an end.

However, the Southern aristocracy soon reclaimed control of the region’s political structure and instituted nearly a century more of racial oppression against blacks. During this Jim Crow era, racism – and the cruel enforcement of racial segregation – remained central elements of the American Right.

An Anti-Government Coalition

In the latter half of the Nineteenth Century and the early Twentieth Century, other political and economic factors bolstered the Right, particularly a class of Northern industrialists and financiers known as the Robber Barons. Their insistence on laissez-faire economics in the North – and their opposition to reformers such as Theodore Roosevelt – dovetailed with anti-federal attitudes among the South’s white aristocracy.

That coalition, however, was shattered by a string of Wall Street panics and other economic catastrophes culminating in the Great Depression. With millions of Americans out of work and many facing starvation, Franklin Roosevelt’s administration initiated the New Deal which put people back to work building national infrastructure and imposing government regulations on the freewheeling ways of Wall Street.

Under Roosevelt, laws were changed to respect the rights of labor unions and social movements arose demanding greater civil rights for blacks and women. The Left gained unprecedented ascendance. However, the old alliance of rich Northern industriasts and Southern segregationists saw dangers in this new assertion of federal power. The business barons saw signs of “socialism” and the white supremacists feared “race-mixing.”

After World War II – with the United States now a world superpower – the continued existence of institutionalized racism became an embarrassment undermining America’s claim to be a beacon of human freedom. Finally, spurred on by Martin Luther King Jr. and other civil rights activists, the federal government finally moved against the South’s practice of segregation. That reignited the long-simmering conflict between federal power and states’ rights.

Though the federal government prevailed in outlawing racial segregation, the Right’s anger over this intrusion upon Southern traditions fueled a powerful new movement of right-wing politicians. Since the Democratic Party led the fight against segregation in the 1960s, Southern whites rallied to the Republican Party as their vehicle of political resistance.

Opportunistic politicians, such as Richard Nixon and Ronald Reagan, deftly exploited the white backlash and turned much of the Dixie-crat South into solid Republican Red. This resurgence of white racial resentments also merged with a reassertion of “libertarian” economics as memories of the Great Depression faded. In essence, the late Nineteenth Century alliance between segregationist whites in the South and laissez-faire businessmen in the North was being reestablished.

This right-wing collaboration reached a new level of intensity in 2008 after the election of the first African-American president whose victory reflected the emergence of a multi-racial electorate threatening to end the historic white political domination of the United States. With the election also coming amid a Wall Street financial collapse – after years of reduced government regulation — Barack Obama’s arrival also portended a renewal of federal government activism. Thus, the age-old battle was rejoined.

Yet, given the cultural tenor of the time, the Right found it difficult to engage in overt racial slurs against Obama, nor could it openly seek to deny voting rights to black and brown people. New code words were needed. So Obama’s legitimacy as an American was questioned with spurious claims that he had been born in Kenya, and Republicans demanded tighter ballot security to prevent “voter fraud.”

Today’s Right also recognized that it could not simply emphasize its Confederate heritage. A more politically correct re-branding was needed. So, the Right shifted its imagery from the “Stars and Bars” battle flag of the Confederacy to the “Don’t Tread on Me” flag of the American Revolution. That way, Americans who don’t overtly see themselves as racist could be drawn into the movement. [See Consortiumnews.com’s “The Right’s Re-Branding: 1860 to 1776.”]

However, the historical narrative that the Right constructed around the nation’s Founding was not the one that actually happened. In seeking to present themselves as the true defenders of the Constitution, the Right had to air-brush out the failed experiment with the Articles of Confederation, which had made the states “sovereign” and “independent” with the central government just a “league of friendship.”

The Constitution represented the nation’s greatest transfer of power into federal hands in U.S. history, as engineered by Washington, Madison and Hamilton. Indeed, Madison favored even greater dominance by the central government over the states than he ultimately got in the Constitution.

However, in the Right’s revisionist version, the Articles of Confederation are forgotten and the Framers were simply out to create a governing system with strong states’ rights and a weak federal government. That fabrication played well with an uneducated right-wing base that could then envision itself using its Second Amendment rights to fight for the Framers’ vision of “liberty.”

As this right-wing narrative now plays out, Barack Obama is not only a black Muslim “socialist” oppressing liberty-loving white Christian Americans but he is a “tyrant” despoiling the beautiful, nearly divine, God-inspired Constitution that the Framers bestowed upon the nation — including, apparently, those wonderful provisions protecting slavery.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

(Originally posted at Consortium News)

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By Beverly Bandler

Appropriate questions should be asked and answered about the controversies over the IRS screening of 501-c-4 applications, the subpoenas for AP phone calls, and the Benghazi attack. Abuse of power should be checked with vigor, but hysteria should be avoided. These issues require calm and reasoned perspective. Outrage should be reserved for real scandals of which there are plenty.

However, as some commentators rush to judgment especially about the IRS “scandal,” a review of some genuine scandals – past and present – may be in order:

A real scandal is the lying to the American people by George W. Bush and his administration about non-existent WMD that led us into the illegal and immoral Iraq War (and the related scandals of torture, Guantánamo, Abu Ghraib, and Afghanistan). Bush’s actions caused hundreds of thousands of deaths, millions of horrific injuries and the destruction and destabilization of Iraq. The United States will pay for that scandal for generations, not only in money but in loss of respect.A real scandal is the complicity of Ronald Reagan in “grotesque human rights crimes including genocide in Central America, his tolerance of drug trafficking by his anticommunist clients, and his support for sophisticated propaganda operations to destroy troublesome journalists and other investigators,” as journalist Robert Parry reported after Reagan’s ally, ex-Guatemalan dictator Efrain Rios Montt, was found guilty of genocide in an extermination campaign backed by Reagan in the 1980s.

A real scandal is the extent to which radical right-wing conservatives have managed to corrupt, to some extent, every single agency in the Executive Branch, for instance: restrictions placed on the Center for Disease Control by the National Rifle Association, the constant right-wing threats against the Environmental Protection Agency, and the latest threat of the GOP to render the National Labor Relations Board inoperative. There’s also been the ideological corruption of the Judicial Branch.

A real scandal is the magnitude of air and water pollution across the nation along with worsening threat of global warming, while government efforts to address these problems are obstructed by GOP corporatists.

A real scandal is the conservatives’ use of one “study,” the Reinhart/Rogoff report to push for an austerity budget when the “study” has now been exposed as fraudulent – and the austerity theory itself revealed to be fraudulent – while the rich get richer and millions of Americans face long-term unemployment.

A real scandal is the extent of poverty in the United States with almost half of Americans dying close to penniless, in a nation in which the top one-hundredth of one percent average some $27 million per household while the average income for the bottom 90 percent is a little over $31,000.

A real scandal is how consistently the United States lags in international measurements for education (17th in the developed world) and for health care (37th out of 191 countries). Increasingly, ignorance shapes the national discourse with many Americans who rate the Benghazi case a major scandal not even knowing where it is.

A real scandal is the deliberate misinterpretation of the Second Amendment by the Right for political purposes and to serve the firearms industry, a distortion compounded the failure of the Left and centrist politicians to challenge the falsehoods. General citizens and corporate journalists apparently don’t read history and the Constitution – or are unfamiliar with the English language.

A real scandal is the continued takeover of the United States political and economic system by the military-industrial complex and by corporations, a power grab facilitated by five right-wing justices on the U.S. Supreme Court and their 2010 decision in Citizens United v. Federal Election Commission. That decision also laid the groundwork for the current IRS “scandal” because so many right-wing groups rushed to exploit the 501-c-4 tax-exempt “social welfare” category to carry out their political agendas.

The “social welfare” category was established for civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare. In 1959, under the administration of Dwight Eisenhower, the meaning of this section was changed dramatically when the IRS decided the word “exclusively” could, in effect, be read as “primarily.”

“For 54 years, the IRS has gotten away with the crime of changing the word ‘exclusively’ to ‘primarily,” said Lawrence O’Donnell on The Last Word Monday. “The IRS took a hard, clear word like ‘exclusively’ and changed it into a soft word ’primarily’ and then left it to the IRS agents to determine if your organization was primarily concerned with the promotion of social welfare.”

Thus, when the Supreme Court issued Citizens United in 2010 — prompting a flood of new 501-c-4 applications — some IRS bureaucrats sought ways to detect which of the applicants were likely exploiting the loophole. That led to the controversial use of word searches that were viewed as targeting Tea Party groups.

“The IRS does need some kind of test that helps them weed out political organizations attempting to register as tax-exempt 501(c)4 social welfare groups,” wrote Ezra Klein in the Wonkblog Monday. “But that test has to be studiously, unquestionably neutral.”

A real scandal is how the Bush administration and the Republican Party cratered the economy, giving the nation a full decade without net jobs growth and leaving behind a crippling depression. A real scandal is how the Republican Party held the debt ceiling hostage in 2011 and may well try it again.

A real scandal is how the GOP has been taken over by anti-democratic, anti-rational, anti-science, neo-confederate, nihilist, obstructionist, corporatist forces – becoming a political party unlike one ever seen in U.S. history. Conservatism is one thing, crazy is another.

Former Republican Mike Lofgren describes the GOP as “less and less like a traditional political party in a representative democracy and … more like an apocalyptic cult,” one that is “ideologically extreme, scornful of compromise, and ardently opposed to the established social and economic policy regime.”

It is also a party of liars and one ruthlessly determined to destroy a president because he’s a Democrat – along with the Democratic Party – to impose an authoritarian, neo-fascist regime on the United States.

A real scandal is how the right-wing propaganda juggernaut has manipulated the corporate media and exploited American naïveté, lack of information and fear, and how the listless Left with its “learned helplessness” has let right-wing extremists get away with it by failing to “step up to the plate” with an effective investment in public outreach.

Below, I have provided a list of links related to the IRS story. I don’t pretend to have them all, but have tried to provide a decent selection. ThinkProgress and Mother Jones are particularly informative and rational as usual. I hope they are helpful to you.

Oh, by the way, the Congressional Budget Office reports that the deficit “crisis” is solved for the next ten years. Now there’s a story.

Beverly Bandler’s public affairs career spans some 40 years. Her credentials include serving as president of the state-level League of Women Voters of the Virgin Islands and extensive public education efforts in the Washington, D.C. area for 16 years. She writes from Mexico.

Beckel, Michael. “IRS Employees Back Obama. Democrats.” The Center for Public Integrity, 2013-05-15.
http://www.huffingtonpost.com/the-center-for-public-integrity/irs-employees-back-obama_b_3278655.html
Bernstein, Jared. “Blame Citizens United for the IRS scandal. The real outrage is why these political groups have tax-exempt status in the first place. Salon, 2013-05-15. http://www.salon.com/2013/05/15/blame_citizens_united_for_the_irs_scandal_partner/
Bouie, Jamelle. “Is the IRS ‘Scandal’ Even a Scandal?” The IRS made a political blunder, but not a bureaucratic one. The American Prospect, 2013-05-15. http://prospect.org/article/irs-scandal-even-scandal
Dickerson, John. IRS, AP, EPA, President Obama is doing more to help the cause of conservatism than anyone since Reagan.”
2013-05-14. http://www.slate.com/articles/news_and_politics/politics/2013/05/barack_obama_irs_and_associated_press_scandals_the_president_s_administration.html [I find Dickerson’s hyperbole ridiculous, but I’ll include it for reference.]
Figueroa, Alyssa. WATCH: “Stewart Ridicules Obama for Apparent Cluelessness on Administration’s Latest Scandals.” Obama on when he learned about IRS targeting conservative groups: “I think it was on Friday.” AlterNet, 2013-05-15. http://www.alternet.org/economy/watch-stewart-ridicules-obama-apparent-cluelessness-administrations-latest-scandals
Goodman, Peter S. “The IRS Was Dead Right to Scrutinize Tea Party.” The Huffington Post, 2013-05-15. http://www.huffingtonpost.com/peter-s-goodman/irs-tea-party_b_3280063.html
Hartmann, Thom. “The Real IRS Scandal.” Campaign for America’s Future, 2013-05-15. http://blog.ourfuture.org/20130515/the-real-irs-scandal?utm_source=rss&utm_medium=rss&utm_campaign=the-real-irs-scandal
Klein, Ezra. “The IRS report: Insubordination and incompetence, but not much of a conspiracy.” Washington Post, 2013-05-14. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/14/the-irs-report-insubordination-and-incompetence-but-not-much-of-a-conspiracy/
_______ “CBO says deficit problem is solved for the next ten years.” Washington Post, 2013-05-14. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/14/cbo-says-deficit-problem-is-solved-for-the-next-10-years/
Kroll, Andy. “5 Things You Need to Know in the Inspector General’s IRS Tea Party Scandal Report.” How and why IRS staffers subjected conservative nonprofits to special scrutiny. MotherJones, 2012-05-15. http://www.motherjones.com/politics/2013/05/irs-tea-party-ig-report-congress
_______“Ex-IRS Director: Tea Party Groups Deserved Scrutiny, But IRS Bungled the Job.” Mother Jones, 2013-05-15. http://www.motherjones.com/mojo/2013/05/irs-director-marcus-owens-tea-party-scandal
_______“The IRS Tea Party Scandal, Explained.” It’s Washington’s new outrage. What exactly happened and who is responsible?MotherJones, 2013-05-14. http://www.motherjones.com/politics/2013/05/irs-tea-party-scandal-congress-nonprofit-obama
Maddow, Rachel. VIDEO. IRS “scandal.” Rachel Maddow & Dan Rather discuss. 2013-05-15. http://americablog.com/2013/05/rachel-maddow-irs-scandal-dan-rather-video.html
Matthews, Dylan. “Everything you need to know about the IRS scandal in one FAQ.” Washington Post, 2012-05-14.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/14/everything-you-need-to-know-about-the-irs-scandal-in-one-faq/
Nuzzi, Olivia. “Joe Scarborough and Other Republicans’ Complete Hypocrisy on the IRS and Political Speech.” ‘Morning Joe’ once demanded IRS investigate NAACP. AlterNet, 2013-05-15. http://www.alternet.org/joe-scarborough-and-other-republicans-complete-hypocrisy-irs-and-political-speech
Palmer, Brian. “Taxing One’s Enemies: A brief history of scandals at the IRS.” Slate, 2013-05-14. http://www.slate.com/articles/news_and_politics/explainer/2013/05/irs_targeting_the_tea_party_a_history_of_tax_agency_scandals.html
Parry, Robert. “The Right’s ‘Scandal’ Funhouse Mirror.” ConsortiumNews, 2013-05-14. http://consortiumnews.com/2013/05/14/the-rights-scandal-funhouse-mirror/
Rayfield, Jillian. “Holder: IRS probe to look at possible civil rights violations, false statements .” Salon, 2013-05-15. http://www.salon.com/2013/05/15/holder_irs_probe_to_look_at_possible_civil_rights_violations_false_statements
_______ IRS: Two “rogue” employees targeted the Tea Party. Acting IRS chief Steven Miller reportedly blamed two “overly aggressive” employees for the reviews. http://www.salon.com/2013/05/15/irs_two_rogue_employees_targeted_the_tea_party/
Rich, Frank. Frank Rich on the National Circus: “The IRS, Benghazi, and the Republicans Who Cried Wolf.” New York Magazine, 2013-05-13. http://nymag.com/daily/intelligencer/2013/05/frank-rich-gop-finds-a-new-watergate.html
Rosenfeld, Steven. “The Real Scandal: Official Washington Goes Nuts Over IRS Doing Its Job.” Voter intimidation groups say they were intimidated by the IRS. AlterNet, 2013-05-14. http://www.alternet.org/news-amp-politics/real-scandal-official-washington-goes-nuts-over-irs-doing-its-job
Seitz-Wald, Alex. “When the IRS targeted liberals.” Under George W. Bush, it went after the NAACP, Greenpeace, and even a liberal church. Salon, 2013-05-14. http://www.salon.com/2013/05/14/when_the_irs_targeted_liberals/
Sirota, David. “Stop holding Democrats to a different standard.” The recent IRS flap shows an obvious double standard in Washington’s reactions to Bush era and Obama era misconduct. Salon, 2013-05-14. http://www.salon.com/2013/05/14/on_scandals_obama_held_to_higher_standard_than_bush/
Stein, Sam. “Obama on IRS Scandal: ‘I have No Patience’ for It.” The Huffington Post, 2013-05-13. http://www.huffingtonpost.com/2013/05/13/obama-irs-scandal_n_3266577.html
Toobin, Jeffrey. “The Real I.R.S. Scandal.” The New Yorker, 2013-05-14. http://www.newyorker.com/online/blogs/comment/2013/05/irs-scandal-tea-party-oversight.html
Walsh, Joan. “Meet the group the IRS actually denied: Democrats!” Although Tea Party applicants got unfair IRS scrutiny, only one known group had status revoked. They’re Democrats. Salon, 2013-05-15. http://www.salon.com/2013/05/15/meet_the_group_the_irs_actually_revoked_democrats/
Weigel, David. “Here’s the Troublesome Part of the IG Report That Rescues Top Democrats from the IRS Scandal.” Slate, 2013-05-15. http://www.slate.com/blogs/weigel/2013/05/15/here_s_the_troublesome_part_of_the_ig_report_that_rescues_top_democrats.html
Weisman, Jonathan and Matthew L. Wald. “I.R.S. Focus on Conservatives Gives G.O.P. An Issue to Seize On.” New York Times, 2013-05-12. http://www.nytimes.com/2013/05/13/us/politics/republicans-call-for-irs-inquiry-after-disclosure.html?gwh=03147B1C5B13A21B8DD76700F48AA2E1

(Originally posted at Consortium News)

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By Paul Kiel, ProPublica, and Mitchell Hartman, Marketplace

This story was co-produced with Marketplace. Listen to their coverage.

Seven years after Congress banned payday-loan companies from charging exorbitant interest rates to service members, many of the nation’s military bases are surrounded by storefront lenders who charge high annual percentage rates, sometimes exceeding 400 percent.

The Military Lending Act sought to protect service members and their families from predatory loans. But in practice, the law has defined the types of covered loans so narrowly that it’s been all too easy for lenders to circumvent it.

“We have to revisit this,” said Sen. Dick Durbin, D-Ill., who chairs the defense appropriations subcommittee and is the Senate’s second-ranking Democrat. “If we’re serious about protecting military families from exploitation, this law has to be a lot tighter.”

Members of the military can lose their security clearances for falling into debt. As a result, experts say, service members often avoid taking financial problems to their superior officers and instead resort to high-cost loans they don’t fully understand.

The Department of Defense, which defines which loans the Military Lending Act covers, has begun a process to review the law, said Marcus Beauregard, chief of the Pentagon’s state liaison office.

The act mainly targets two products: payday loans, usually two-week loans with annual percentage rates often above 400 percent, and auto-title loans, typically one-month loans with rates above 100 percent and secured by the borrower’s vehicle. The law caps all covered loans at a 36 percent annual rate.

That limit “did do a great deal of good on the products that it covered,” Holly Petraeus, the Consumer Financial Protection Bureau’s head of service member affairs, said in an interview. “But there are a lot of products that it doesn’t cover.”

Representatives from payday and other high-cost lenders said they follow the law. Some defended the proliferation of new products as helpful to consumers.

A 400 Percent Loan

In June 2011, when Levon Tyler, a 37-year-old staff sergeant in the Marines, walked into Smart Choice Title Loans in Columbia, S.C., it was the first time he’d ever gone to such a place, he said. But his bills were mounting. He needed cash right away.

Smart Choice agreed to lend him $1,600. In return, Tyler handed over the title to his 1998 Ford SUV and a copy of his keys. Tyler recalled the saleswoman telling him he’d probably be able to pay off the loan in a year. He said he did not scrutinize the contract he signed that day.

If he had, Tyler would have seen that in exchange for that $1,600, he’d agreed to pay a total of $17,228 over two and a half years. The loan’s annual percentage rate, which includes interest and fees, was 400 percent.

Tyler said he provided his military ID when he got the loan. But even with an annual rate as high as a typical payday loan, the Military Lending Act didn’t apply. The law limits the interest rate of title loans — but only those that have a term of six months or less.

In South Carolina, almost no loans fit that definition, said Sue Berkowitz, director of the nonprofit South Carolina Appleseed Legal Justice Center. The reason? Ten years ago, the state legislature passed consumer protections for short-term auto-title loans. In response, lenders simply lengthened the duration of their loans.

Today, plenty of payday and auto-title lenders cluster near Fort Jackson, an army base in Columbia, legally peddling high-cost loans to the more than 36,000 soldiers who receive basic training there each year.

Tyler’s loan showcases other examples of lenders’ ingenuity. Attached to his contract was an addendum that offered a “Summer Fun Program Payoff.” While the loan’s official term was 32 months, putting it outside both South Carolina’s regulations and the Military Lending Act, the “Summer Fun” option allowed Tyler to pay off the loan in a single month. If he did so, he’d pay an annual rate of 110 percent, the addendum said.

Michael Agostinelli, the chief executive of Smart Choice’s parent company, American Life Enterprises, told ProPublica he wants his customers to pay off their loans early. “They’re meant to be short-term loans,” he said. He also said that customers who pay on time get “a big discount.” In Tyler’s case, he would have paid an annual rate of 192 percent if he had made all his payments on time.

But Tyler fell behind after only a couple of payments. Less than five months after he took out the loan, a repo company came in the middle of the night to take his car. Three weeks later, it was sold at auction.

“This was something new, and I will never do it again,” Tyler said. “I don’t care what type of spot I get in.”

American Life Enterprises companies operate nine title-lending branches in Nevada and South Carolina. Agostinelli said loans to members of the military are rare for his companies but that service members might go to a title lender for the same reason anybody else does: They need money immediately and discreetly.

Loans similar to the one Tyler took out are broadly and legally available from stores and over the Internet. QC Holdings, Advance America, Cash America and Ace Cash Express — all among the country’s largest payday lenders — offer loans that fall outside the definitions of the Military Lending Act, which defined a payday loan as lasting three months or less.

The annual rates can be sky high, such as those offered by Ace Cash Express in Texas, where a five-month loan for $400 comes with an annual rate of 585 percent, according to the company’s website.

Ace Cash is among a number of payday lenders just outside the gates of Lackland Air Force Base in San Antonio, and it has four stores within three miles of Fort Hood in Texas.

A 2012 report on the Military Lending Act by the Consumer Federation of America found there had been no drop in the number of payday lenders around Fort Hood since the 2006 law went into effect.

Amy Cantu of the Community Financial Services Association of America, which represents the payday industry, said payday lenders are careful to screen out service members for their short-term products. But she acknowledged that payday companies may provide soldiers and their families with other types of loans. “We welcome more products in the market,” she said of the trend of payday lenders increasingly offering longer-term loans. “Options are good for consumers.”

Earned a Purple Heart, Lost a Car

Some lenders apparently haven’t bothered to change their loan products in response to the law.

A 2011 federal class-action suit filed in Georgia’s Middle District alleges that one of the largest auto-title lenders in the country, Community Loans of America, has been flouting the law. The suit names among its plaintiffs three soldiers who took out what appeared to be classic title loans. All agreed to pay an annual rate of around 150 percent for a 30-day loan. All had trouble repaying, according to the suit. One, an Army staff sergeant and Purple Heart recipient, lost his car. The other two managed to pay interest but almost none of the principal on their loans for several months.

The company was fully aware that its customers were soldiers, because they presented their military identifications, said Roy Barnes, a former governor of Georgia who is representing the plaintiffs.

Community Loans, which boasts more than 900 locations nationwide, argued in court that the transactions were not covered by the Military Lending Act because they weren’t loans but sales. Here’s how Community Loans said the transaction worked: The soldiers sold their vehicles to the company while retaining the option to buy back the cars — for a higher price. In early 2012, the judge rejected that argument. The case is ongoing.

Community Loans, which did not respond to numerous calls and emails, has been making loans to service members through businesses with various names.

Leading up to the gates of Fort Benning in Columbus, Ga., Victory Drive is crowded with lenders. Among them is Georgia Auto Pawn, a Community Loans of America storefront where one of the plaintiffs in the class action, an Army master sergeant, took out his loan.

Just another half-mile down the road is a lender advertising “Signature Loans for the Military.” The lender goes by the name of Title Credit Finance, but the parent company is Community Finance and Loans, which shares the same corporate address as Community Loans of America.

A billboard for Title Credit Finance promises to rescue borrowers: Showing a picture of a hamster on a wheel, it says, “Avoid the title pawn treadmill,” referring to customers who get caught paying only interest month after month.

Title Credit Finance offers installment loans, a product which, as the company advertises, does seem to provide “CASH NOW The Smart Way” — at least when compared to a title loan. Interest rates tend to be lower — though still typically well above 36 percent. And instead of simply paying interest month upon month, the borrower pays down the loan’s principal over time.

But the product comes with traps of its own. Installment lenders often load the loans with insurance products that can double the cost, and the companies thrive by persuading borrowers to use the product like a credit card. Customers can refinance the loan after only a few payments and borrow a little more. But those extra dollars typically come at a far higher cost than the annual rate listed on the contract.

At TitleMax, a title-lender with more than 700 stores in 12 states, soldiers who inquire about a title loan are directed to InstaLoan, TitleMax’s sister company, which provides installment loans, said Suzanne Donovan of the nonprofit Step Up Savannah. A $2,475 installment loan made to a soldier at Fort Stewart near Savannah, Ga., in 2011 and reviewed by ProPublica, for example, carried a 43 percent annual rate over 14 months — but that rate effectively soared to 80 percent when the insurance products were included. To get the loan, the soldier surrendered the title to his car. TMX Finance, the parent company of both TitleMax and InstaLoan, did not respond to multiple calls and emails seeking comment.

Another lender on Victory Drive is the publicly traded World Finance, one of the country’s largest installment lenders, with a market capitalization of about $1 billion and more than 1,000 stores around the country. World was the subject of an investigation by ProPublica and Marketplace earlier this week. Of World’s loans, about 5 percent, approximately 40,000 loans, are made to service members or their families, according to the company. Active-duty military personnel and their dependents comprise less than 1 percent of the U.S. population, according to the Defense Department.

Bill Himpler, the executive vice president of the American Financial Services Association, which represents installment lenders, said the industry’s products had been rightfully excluded from the Military Lending Act. The Pentagon had done a good job preserving soldiers’ access to affordable credit, he said, and only “tweaking the regulations here or there to tighten them up” was necessary.

The Commander and the Collectors

It’s not known how many service members have high-priced loans. The Pentagon says it intends to conduct a survey on the matter soon and issue a report by the end of the year.

But some commanders, such as Capt. Brandon Archuleta, say that dealing with soldiers’ financial problems is simply part of being an officer. Archuleta, who has commanded soldiers in Iraq and Afghanistan, recalled fielding numerous calls from lenders trying to track down soldiers who were delinquent on debts.

“In the last 12 years we’ve seen military officers as war fighters, we’ve seen them as diplomats, we’ve seen them as scholars,” Archuleta said. “But what we don’t see is the officer as social worker, financial adviser and personal caregiver.”

While some soldiers seek help from their superior officers, many don’t. That’s because debt troubles can result in soldiers losing their security clearance.

“Instead of trying to negotiate this with their command structure, the service member will typically end up refinancing,” said Michael Hayden, director of government relations for the Military Officers Association of America and a retired Air Force colonel. “It’ll typically start out with some type of small crisis. And then the real crisis is just how you get that loan paid off.”

Soldiers who hide their debt often forego the military’s special aid options. Army Emergency Relief and the Navy-Marine Corps Relief Society offer zero-interest loans. But in seeking that help, a soldier risks alerting the commanding officer to his or her troubles, particularly if the sum needed is a large one.

Russell Putnam, a legal-assistance attorney at Fort Stewart, says he often finds himself making a simple argument to soldiers: “A zero percent loan sure as heck beats a 36 percent plus or a 25 percent plus loan.”

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A hall of mirrors. (Photo credit: ŠJů)

By Robert Parry

The modern American news media operates like a giant right-wing funhouse mirror reflecting back some large things as small and some small things as large. The Right gets to decide which items will be misshapen in which ways – and the mainstream press then reinforces the distortions.

Though not very funny, this funhouse mirror has been in operation since at least the 1980s and is now so well established that most mainstream journalists and many politicians assume the exaggerations and minimizations are the way things really are.

This funhouse effect was first noticeable during the scandals of Ronald Reagan, when it didn’t seem to matter how much evidence was compiled about his complicity in grotesque human rights crimes including genocide in Central America, his tolerance of drug trafficking by his anticommunist clients, and his support for sophisticated propaganda operations to destroy troublesome journalists and other investigators.

The Right, as it built this hall of mirrors during those years, was determined to transform Reagan’s shocking crimes into something insignificant. Meanwhile, careerists in the mainstream news media learned to behave as if these distortions were just normal, the way things should be seen. If you insisted the funhouse reflections weren’t real, you quickly became an outcast.

For instance, the New York Times’ Raymond Bonner detected politically motivated massacres in El Salvador, including the extermination of entire villages in the area of El Mozote, but the Reagan administration and its right-wing allies simply explained that there had been no massacres and that Bonner was just a biased reporter who needed to be removed, which he soon was.

You might think that a cover-up of mass murder in El Salvador – as also was occurring in nearby Guatemala – would be a big scandal, especially since President Reagan was facilitating the slaughters by providing modern equipment to the killers and by discrediting brave journalists who tried to reveal the truth. But that was not how things appeared in the funhouse mirrors of Official Washington. The troublesome reporters were just getting what they deserved.

Similarly, Reagan’s Nicaraguan Contra rebels appeared – to human rights investigators and other independent observers – to be thugs who swept through Nicaraguan towns killing peasants, torturing prisoners, raping women and engaging in a variety of practices that one might, in other circumstances, call terrorism. But reflected in the funhouse mirror, these ugly images were made to disappear, along with well-documented evidence of Contra cocaine smuggling.

Even when reality occasionally intruded on Official Washington with outside disclosures about Reagan’s White House illegally shipping weapons to the Contras (because one of the U.S. planes was shot down over Nicaragua) and about Reagan’s team paying for some of those weapons by secretly selling missiles to Iran (as revealed by a Lebanese newspaper), the Iran-Contra scandal was quickly downsized into a legalistic dispute over whether it was ever okay to lie to Congress.

Trashing Gary Webb

The mainstream Washington news media became so accustomed to the funhouse mirrors that when Gary Webb of the San Jose Mercury News revived the Contra-cocaine story in 1996, the big newspapers – the New York Times, the Washington Post and the Los Angeles Times – knew exactly what to do: reshape Webb from a respected investigative journalist into a conspiracy nut.

That distortion remained in place despite a CIA inspector general’s report that not only confirmed that the Nicaraguan Contras were deeply involved in the cocaine trade but that the Reagan administration knew about the problem and systematically covered it up. But Webb lost his job at the Mercury News, could not find a decent-paying position anywhere in journalism and, in 2004, committed suicide. [See Consortiumnews.com’s “The Warning in Gary Webb’s Death.”]

The funhouse mirror even affects how Official Washington understands historic scandals like the two October Surprise operations – the one in 1968 when Richard Nixon’s campaign sabotaged President Lyndon Johnson’s Vietnam peace talks to give Nixon an edge in that tight election and the one in 1980 when Ronald Reagan’s campaign used similar tactics to frustrate President Jimmy Carter’s efforts to free 52 American hostages then held in Iran.

Again, no matter how much proof is piled up, Official Washington won’t see what’s lying there in front of it – even though the two October Surprise cases also appear to have been the starting points for the Watergate scandal for Nixon and the Iran-Contra scandal for Reagan, respectively. [See Consortiumnews.com’s “Rethinking Watergate/Iran-Contra” or Robert Parry’s America’s Stolen Narrative.]

The Right’s funhouse mirror also means that tiny or fabricated scandals implicating Democrats and progressives are turned into something huge. When Bill Clinton was in office, it was Whitewater and “Clinton’s Mysterious Deaths.” After Barack Obama took office, it was “Fast and Furious,” the Benghazi talking points and now the Internal Revenue Service asking extra questions to Tea Party groups that wanted to get tax-exempt status.

Yet, even as the Republicans insist that the IRS asking Tea Party groups some extra questions is equal to or worse than Watergate, it’s been noted that Republican voiced no such protests in 2004 when George W. Bush’s IRS – responding to Republican demands – instigated a two-year audit of the NAACP and threatened to take away the historic civil rights group’s tax-exempt status because NAACP chairman Julian Bond had criticized Bush’s Iraq War and his trampling of the Constitution.

In other words, even in parallel cases (although asking a couple of dozen extra questions isn’t nearly as intrusive or expensive as a two-year audit), the funhouse mirror makes right-wing political groups the victims of “tyranny” under President Obama while the NAACP was just getting its comeuppance under President Bush.

But the larger question is: Can a democratic Republic long survive with such systematic distortions of reality. What will happen if one side of America’s political equation – the Right – continues to possess a vast and sophisticated media apparatus, a vertically integrated structure meshing newspapers, newsmagazine and books with radio, TV and the Internet in a synergy that spreads the right-wing message and maximizes profits, while the other side – the Left – has nothing comparable, just scattered and underfunded outlets that have to fend for themselves?

Compounding this situation is the fact that the careerist mainstream media knows that there’s no risk – and a great benefit – to leap onto the Right’s “scandal” bandwagons when they roll by and there’s virtually no upside and a big downside to report on real scandals that get in the Right’s way.

There have been too many good reporters, like Raymond Bonner and Gary Webb, crushed under the wheels of the right-wing juggernaut. For average Americans, the only advice is that they must realize that they are inside a media funhouse and that the mirrors don’t reflect the real story.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

(Originally posted at Consortium News)

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By Kim Barker and Justin Elliott

The same IRS office that deliberately targeted conservative groups applying for tax-exempt status in the run-up to the 2012 election released nine pending confidential applications of conservative groups to ProPublica late last year.

The IRS did not respond to requests Monday following up about that release, and whether it had determined how the applications were sent to ProPublica.

In response to a request for the applications for 67 different nonprofits last November, the Cincinnati office of the IRS sent ProPublica applications or documentation for 31 groups. Nine of those applications had not yet been approved—meaning they were not supposed to be made public. (We made six of those public, after redacting their financial information, deeming that they were newsworthy.)

On Friday, Lois Lerner, the head of the division on tax-exempt organizations, apologized to Tea Party and other conservative groups because the IRS’ Cincinnati office had unfairly targeted them. Tea Party groups had complained in early 2012 that they were being sent overly intrusive questionnaires in response to their applications.

That scrutiny appears to have gone beyond Tea Party groups to applicants saying they wanted to educate the public to “make America a better place to live” or that criticized how the country was being run, according to a draft audit cited by many outlets. The full audit, by the Treasury Department’s inspector general for tax administration, will reportedly be released this week. (ProPublica was not contacted by the inspector general’s office.)  

Before the 2012 election, ProPublica devoted months to showing how dozens of social-welfare nonprofits had misled the IRS about their political activity on their applications and tax returns. Social-welfare nonprofits are allowed to spend money to influence elections, as long as their primary purpose is improving social welfare. Unlike super PACs and regular political action committees, they do not have to identify their donors.

In 2012, nonprofits that didn’t have to report their donors poured an unprecedented $322 million into the election. Much of that money — 84 percent — came from conservative groups. 

As part of its reporting, ProPublica regularly requested applications from the IRS’s Cincinnati office, which is responsible for reviewing applications from nonprofits.

Social welfare nonprofits are not required to apply to the IRS to operate. Many politically active new conservative groups apply anyway. Getting IRS approval can help with donations and help insulate groups from further scrutiny. Many politically active new liberal nonprofits have not applied.  

Applications become public only after the IRS approves a group’s tax-exempt status.

On Nov. 15, 2012, ProPublica requested the applications of 67 nonprofits, all of which had spent money on the 2012 elections. (Because no social welfare groups with Tea Party in their names spent money on the election, ProPublica did not at that point request their applications. We had requested the Tea Party applications earlier, after the groups first complained about being singled out by the IRS. In response, the IRS said it could find no record of the tax-exempt status of those groups — typically how it responds to requests for unapproved applications.)

Just 13 days after ProPublica sent in its request, the IRS responded with the documents on 31 social welfare groups.

One of the applications the IRS released to ProPublica was from Crossroads GPS, the largest social-welfare nonprofit involved in the 2012 election. The group, started in part by GOP consultant Karl Rove, promised the IRS that any effort to influence elections would be “limited.” The group spent more than $70 million from anonymous donors in 2012.

Applications were sent to ProPublica from five other social welfare groups that had told the IRS that they wouldn’t spend money to sway elections.  The other groups ended up spending more than $5 million related to the election, mainly to support Republican presidential candidate Mitt Romney. Much of that money was spent by the Arizona group Americans for Responsible Leadership. The remaining four groups that told the IRS they wouldn’t engage in political spending were Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now. 

The IRS also sent ProPublica the applications of three small conservative groups that told the agency that they would spend some money on politics: Citizen Awareness Project, the YG Network and SecureAmericaNow.org. (No unapproved applications from liberal groups were sent to ProPublica.)

The IRS cover letter sent with the documents was from the Cincinnati office, and signed by Cindy Thomas, listed as the manager for Exempt Organizations Determinations, whom a biography for a Cincinnati Bar Association meeting in January says has worked for the IRS for 35 years. (Thomas often signed the cover letters of responses to ProPublica requests.) The cover letter listed an IRS employee named Sophia Brown as the person to contact for more information about the records. We tried to contact both Thomas and Brown today but were unable to reach them.

After receiving the unapproved applications, ProPublica tried to determine why they had been sent. In emails, IRS spokespeople said ProPublica shouldn’t have received them.

“It has come to our attention that you are in receipt of application materials of organizations that have not been recognized by the IRS as tax-exempt,” wrote one spokeswoman, Michelle Eldridge. She cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both.

In response, ProPublica’s then-general manager and now president, Richard Tofel, said, “ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication.”

ProPublica also redacted parts of the application to omit financial information.

Jonathan Collegio, a spokesman for Crossroads GPS, declined to comment today on whether he thought the IRS’s release of the group’s application could have been linked to recent news that the Cincinnati office was targeting conservative groups.

Last December, Collegio wrote in an email: “As far as we know, the Crossroads application is still pending, in which case it seems that either you obtained whatever document you have illegally, or that it has been approved.”

This year, the IRS appears to have changed the office that responds to requests for nonprofits’ applications. Previously, the IRS asked journalists to fax requests to a number with a 513 area code — which includes Cincinnati. ProPublica sent a request by fax on Feb. 5 to the Ohio area code. On March 13, that request was answered by David Fish, a director of Exempt Organizations Guidance, in Washington, D.C. 

In early April, a ProPublica reporter’s request to the Ohio fax number bounced back. An IRS spokesman said at the time the number had changed “recently.” The new fax number begins with 202, the area code for Washington, D.C. 

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By Robert Parry

The conviction of former Guatemalan dictator Efrain Rios Montt on charges of genocide against Mayan villagers in the 1980s has a special meaning for Americans who idolize Ronald Reagan. It means that their hero was an accessory to one of the most grievous crimes that can be committed against humanity.

The courage of the Guatemalan people and the integrity of their legal system to exact some accountability on a still-influential political figure also put U.S. democracy to shame. For decades now, Americans have tolerated human rights crimes by U.S. presidents who face little or no accountability. Usually, the history isn’t even compiled honestly.

By contrast, a Guatemalan court on Friday found Rios Montt guilty of genocide and crimes against humanity and sentenced the 86-year-old ex-dictator to 80 years in prison. After the ruling, when Rios Montt rose and tried to walk out of the courtroom, Judge Yasmin Barrios shouted at him to stay put and then had security officers take him into custody.

Yet, while Guatemalans demonstrate the strength to face a dark chapter of their history, the American people remain mostly oblivious to Reagan’s central role in tens of thousands of political murders across Central America in the 1980s, including some 100,000 dead in Guatemala slaughtered by Rios Montt and other military dictators.

Indeed, Ronald Reagan – by aiding, abetting, encouraging and covering up widespread human rights crimes in El Salvador, Honduras and Nicaragua as well as Guatemala – bears greater responsibility for Central America’s horrors than does Rios Montt in his bloody 17-month rule. Reagan supported Guatemala’s brutal repression both before and after Rios Montt held power, as well as during.

Despite that history, more honors have been bestowed on Reagan than any recent president. Americans have allowed the naming of scores of government facilities in Reagan’s honor, including Washington National Airport where Reagan’s name elbowed aside that of George Washington, who led the War of Independence, oversaw the drafting of the U.S. Constitution and served as the nation’s first president.

So, as America’s former reputation as a beacon for human rights becomes a bad joke to the rest of the world, it is unthinkable within the U.S. political/media structure that Reagan would get posthumously criticized for the barbarity that he promoted. No one of importance would dare suggest that his name be stripped from National Airport and his statue removed from near the airport entrance.

But the evidence is overwhelming that the 40^th president of the United States was guilty as an accessory to genocide and a wide range of other war crimes, including torture, rape, terrorism and narcotics trafficking. [See Robert Parry's Lost History.]

Green Light to Genocide

Regarding Guatemala, the documentary evidence is clear that Reagan and his top aides gave a green light to the extermination campaign against the Mayan Ixil population in the highlands even before Rios Montt came to power. Despite receiving U.S. intelligence reports revealing these atrocities, the Reagan administration also pressed ahead in an extraordinary effort to arrange military equipment, including helicopters, to make the slaughter more efficient.

“In the tortured logic of military planning documents conceived under Mr. Ríos Montt’s 17-month rule during 1982 and 1983, the entire Mayan Ixil population was a military target, children included,” the New York Times reported from Rios Montt’s trial last month. “Officers wrote that the leftist guerrillas fighting the government had succeeded in indoctrinating the impoverished Ixils and reached ‘100 percent support.’”

So, everyone was targeted in these scorched-earth campaigns that eradicated more than 600 Indian villages in the Guatemalan highlands. But documents from this period indicate that these counterinsurgency strategies predated Rios Montt. And, they received the blessing of the Reagan administration shortly after Reagan took power in 1981.

A document that I discovered in the archives of the Reagan Library in Simi Valley, California, revealed that Reagan and his national security team in 1981 agreed to supply military aid to Guatemala’s dictators so they could pursue the goal of exterminating not only “Marxist guerrillas” but people associated with their “civilian support mechanisms.”

This supportive attitude took shape in spring 1981 as President Reagan sought to relax human-rights restrictions on military aid to Guatemala that had been imposed by President Jimmy Carter and the Democratic-controlled Congress in the late 1970s. As part of that easing, Reagan’s State Department “advised our Central American embassies that it has been studying ways to restore a closer, cooperative relationship with Guatemala,” said a White House “Situation Room Checklist” dated April 8, 1981.

The document added: “State believes a number of changes have occurred which could make Guatemalan leaders more receptive to a new U.S. initiative: the Guatemalans view the new administration as more sympathetic to their problems [and] they are less suspect of the U.S. role in El Salvador,” where the Reagan administration was expanding military aid to another right-wing regime infamous for slaughtering its political opponents, including Catholic clergy.

“State has concluded that any attempt to reestablish a dialogue [with Guatemala] would require some initial, condition-free demonstration of our goodwill. However, this could not include military sales which would provoke serious U.S. public and congressional criticism. State will undertake a series of confidence building measures, free of preconditions, which minimize potential conflict with existing legislation.”

In other words, the Reagan administration was hoping that the U.S. government could get back in the good graces of the Guatemalan dictators, not that the dictators should change their ways to qualify for U.S. government help.

Soliciting the Generals

The “checklist” added that the State Department “has also decided that the administration should engage the Guatemalan government at the highest level in a dialogue on our bilateral relations and the initiatives we can take together to improve them. Secretary [of State Alexander] Haig has designated [retired] General Vernon Walters as his personal emissary to initiate this process with President [Fernando Romeo] Lucas [Garcia].

“If Lucas is prepared to give assurances that he will take steps to halt government involvement in the indiscriminate killing of political opponents and to foster a climate conducive to a viable electoral process, the U.S. will be prepared to approve some military sales immediately.”

But the operative word in that paragraph was “indiscriminate.” The Reagan administration expressed no problem with killing civilians if they were considered supporters of the guerrillas who had been fighting against the country’s ruling oligarchs and generals since the 1950s when the CIA organized the overthrow of Guatemala’s reformist President Jacobo Arbenz.

The distinction was spelled out in “Talking Points” for Walters to deliver in a face-to-face meeting with General Lucas. As edited inside the White House in April 1981, the “Talking Points” read: “The President and Secretary Haig have designated me [Walters] as [their] personal emissary to discuss bilateral relations on an urgent basis.

“Both the President and the Secretary recognize that your country is engaged in a war with Marxist guerrillas. We are deeply concerned about externally supported Marxist subversion in Guatemala and other countries in the region. As you are aware, we have already taken steps to assist Honduras and El Salvador resist this aggression.

“The Secretary has sent me here to see if we can work out a way to provide material assistance to your government. … We have minimized negative public statements by US officials on the situation in Guatemala. … We have arranged for the Commerce Department to take steps that will permit the sale of $3 million worth of military trucks and Jeeps to the Guatemalan army. …

“With your concurrence, we propose to provide you and any officers you might designate an intelligence briefing on regional developments from our perspective. Our desire, however, is to go substantially beyond the steps I have just outlined. We wish to reestablish our traditional military supply and training relationship as soon as possible.

“As we are both aware, this has not yet been feasible because of our internal political and legal constraints relating to the use by some elements of your security forces of deliberate and indiscriminate killing of persons not involved with the guerrilla forces or their civilian support mechanisms. I am not referring here to the regrettable but inevitable death of innocents though error in combat situations, but to what appears to us a calculated use of terror to immobilize non politicized people or potential opponents. …

“If you could give me your assurance that you will take steps to halt official involvement in the killing of persons not involved with the guerrilla forces or their civilian support mechanism … we would be in a much stronger position to defend successfully with the Congress a decision to begin to resume our military supply relationship with your government.”

In other words, though the “talking points” were framed as an appeal to reduce the “indiscriminate” slaughter of “non politicized people,” they embraced scorched-earth tactics against people involved with the guerrillas and “their civilian support mechanisms.” The way that played out in Guatemala – as in nearby El Salvador – was the massacring of peasants in regions considered sympathetic to leftist insurgents.

Reporting the Truth

U.S. intelligence officers in the region also kept the Reagan administration abreast of the expanding slaughter. For instance, according to one “secret” cable from April 1981 — and declassified in the 1990s — the CIA was confirming Guatemalan government massacres even as Reagan was moving to loosen the military aid ban.

On April 17, 1981, a CIA cable described an army massacre at Cocob, near Nebaj in the Ixil Indian territory, because the population was believed to support leftist guerrillas. A CIA source reported that “the social population appeared to fully support the guerrillas” and “the soldiers were forced to fire at anything that moved.”

The CIA cable added that “the Guatemalan authorities admitted that ‘many civilians’ were killed in Cocob, many of whom undoubtedly were non-combatants.” [Many of the Guatemalan documents declassified in the 1990s can be found at the National Security Archive’s Web site.]

Despite these atrocities, Reagan dispatched Walters in May 1981 to tell the Guatemalan leaders that the new U.S. administration wanted to lift the human rights embargoes on military equipment that Carter and Congress had imposed.

According to a State Department cable on Oct. 5, 1981, when Guatemalan leaders met again with Walters, they left no doubt about their plans. The cable said Gen. Lucas “made clear that his government will continue as before — that the repression will continue. He reiterated his belief that the repression is working and that the guerrilla threat will be successfully routed.”

Human rights groups saw the same picture, albeit from a less sympathetic angle. The Inter-American Human Rights Commission released a report on Oct. 15, 1981, blaming the Guatemalan government for “thousands of illegal executions.” [Washington Post, Oct. 16, 1981]

But the Reagan administration was set on whitewashing the horrific scene. A State Department “white paper,” released in December 1981, blamed the violence on leftist “extremist groups” and their “terrorist methods” prompted and supported by Cuba’s Fidel Castro.

Fully Onboard

What the documents from the Reagan Library make clear is that the administration was not simply struggling ineffectively to rein in these massacres – as the U.S. press corps typically reported – but was fully onboard with the slaughter of people who were part of the guerrillas’ “civilian support mechanisms.”

U.S. intelligence agencies continued to pick up evidence of these government-sponsored massacres. One CIA report in February 1982 described an army sweep through the so-called Ixil Triangle in central El Quiche province.

“The commanding officers of the units involved have been instructed to destroy all towns and villages which are cooperating with the Guerrilla Army of the Poor [the EGP] and eliminate all sources of resistance,” the report said. “Since the operation began, several villages have been burned to the ground, and a large number of guerrillas and collaborators have been killed.”

The CIA report explained the army’s modus operandi: “When an army patrol meets resistance and takes fire from a town or village, it is assumed that the entire town is hostile and it is subsequently destroyed.” When the army encountered an empty village, it was “assumed to have been supporting the EGP, and it is destroyed. There are hundreds, possibly thousands of refugees in the hills with no homes to return to. …

“The army high command is highly pleased with the initial results of the sweep operation, and believes that it will be successful in destroying the major EGP support area and will be able to drive the EGP out of the Ixil Triangle. … The well documented belief by the army that the entire Ixil Indian population is pro-EGP has created a situation in which the army can be expected to give no quarter to combatants and non-combatants alike.”

The reality was so grotesque that it prompted protests even from some staunch anticommunists inside the Reagan administration. On Feb. 2, 1982, Richard Childress, one of Reagan’s national security aides, wrote a “secret” memo to his colleagues summing up this reality on the ground:

“As we move ahead on our approach to Latin America, we need to consciously address the unique problems posed by Guatemala. Possessed of some of the worst human rights records in the region, … it presents a policy dilemma for us. The abysmal human rights record makes it, in its present form, unworthy of USG [U.S. government] support. …

“Beset by a continuous insurgency for at least 15 years, the current leadership is completely committed to a ruthless and unyielding program of suppression. Hardly a soldier could be found that has not killed a ‘guerrilla.’”

Rios Montt’s Arrival

But Reagan was unmoved. He continued to insist on expanding U.S. support for these brutal campaigns, while his administration sought to cover up the facts and deflect criticism. Reagan’s team insisted that Gen. Efrain Rios Montt’s overthrow of Gen. Lucas in March 1982 represented a sunny new day in Guatemala.

An avowed fundamentalist Christian, Rios Montt impressed Official Washington where the Reagan administration immediately revved up its propaganda machinery to hype the new dictator’s “born-again” status as proof of his deep respect for human life. Reagan hailed Rios Montt as “a man of great personal integrity.”

By July 1982, however, Rios Montt had begun a new scorched-earth campaign called his “rifles and beans” policy. The slogan meant that pacified Indians would get “beans,” while all others could expect to be the target of army “rifles.” In October, Rios Montt secretly gave carte blanche to the feared “Archivos” intelligence unit to expand “death squad” operations in the cities. Based at the Presidential Palace, the “Archivos” masterminded many of Guatemala’s most notorious assassinations.

The U.S. embassy was soon hearing more accounts of the army conducting Indian massacres, but ideologically driven U.S. diplomats fed the Reagan administration the propaganda spin that would be best for their careers. On Oct. 22, 1982, embassy staff dismissed the massacre reports as a communist-inspired “disinformation campaign.”

Reagan personally joined this P.R. spin seeking to discredit human rights investigators and others who were reporting accurately about massacres that the administration knew were true. On Dec. 4, 1982, after meeting with Rios Montt, Reagan hailed the general as “totally dedicated to democracy” and added that Rios Montt’s government had been “getting a bum rap” on human rights. Reagan discounted the mounting reports of hundreds of Mayan villages being eradicated.

In February 1983, however, a secret CIA cable noted a rise in “suspect right-wing violence” with kidnappings of students and teachers. Bodies of victims were appearing in ditches and gullies. CIA sources traced these political murders to Rios Montt’s order to the “Archivos” in October to “apprehend, hold, interrogate and dispose of suspected guerrillas as they saw fit.”

Despite these facts on the ground, the annual State Department human rights survey praised the supposedly improved human rights situation in Guatemala. “The overall conduct of the armed forces had improved by late in the year” 1982, the report stated.

Indiscriminate Murder

A different picture — far closer to the secret information held by the U.S. government — was coming from independent human rights investigators. On March 17, 1983, Americas Watch condemned the Guatemalan army for human rights atrocities against the Indian population.

New York attorney Stephen L. Kass said these findings included proof that the government carried out “virtually indiscriminate murder of men, women and children of any farm regarded by the army as possibly supportive of guerrilla insurgents.”

Rural women suspected of guerrilla sympathies were raped before execution, Kass said, adding that children were “thrown into burning homes. They are thrown in the air and speared with bayonets. We heard many, many stories of children being picked up by the ankles and swung against poles so their heads are destroyed.” [AP, March 17, 1983]

Publicly, senior Reagan officials continued to put on a happy face. In June 1983, special envoy Richard B. Stone praised “positive changes” in Rios Montt’s government, and Rios Montt pressed the United States for 10 UH-1H helicopters and six naval patrol boats, all the better to hunt guerrillas and their sympathizers.

Since Guatemala lacked the U.S. Foreign Military Sales credits or the cash to buy the helicopters, Reagan’s national security team looked for unconventional ways to arrange the delivery of the equipment that would give the Guatemalan army greater access to mountainous areas where guerrillas and their civilian supporters were hiding.

On Aug. 1, 1983, National Security Council aides Oliver North and Alfonso Sapia-Bosch reported to National Security Advisor William P. Clark that his deputy Robert “Bud” McFarlane was planning to exploit his Israeli channels to secure the helicopters for Guatemala. [For more on McFarlanes's Israeli channels, see Consortiumnews.com's "How Neocons Messed Up the Mideast."]

“With regard to the loan of ten helicopters, it is [our] understanding that Bud will take this up with the Israelis,” wrote North and Sapia-Bosch. “There are expectations that they would be forthcoming. Another possibility is to have an exercise with the Guatemalans. We would then use US mechanics and Guatemalan parts to bring their helicopters up to snuff.”

Hunting Children

What it meant to provide these upgrades to the Guatemalan killing machine was clarified during the trial of Rios Montt with much of the testimony coming from survivors who, as children, escaped to mountain forests as their families and other Mayan villagers were butchered.

As the New York Times reported, “Pedro Chávez Brito told the court that he was only six or seven years old when soldiers killed his mother. He hid in the chicken coop with his older sister, her newborn and his younger brother, but soldiers found them and dragged them out, forcing them back into their house and setting it on fire.

“Mr. Chávez says he was the only one to escape. ‘I got under a tree trunk and I was like an animal,’ Mr. Chávez told the court. ‘After eight days I went to live in the mountains. In the mountain we ate only roots and grass.’”

The Times reported that “prosecution witnesses said the military considered Ixil civilians, including children, as legitimate targets. … Jacinto Lupamac Gómez said he was eight when soldiers killed his parents and older siblings and hustled him and his two younger brothers into a helicopter. Like some of the children whose lives were spared, they were adopted by Spanish-speaking families and forgot how to speak Ixil.”

Elena de Paz Santiago, now 42, “testified that she was 12 when she and her mother were taken by soldiers to an army base and raped. The soldiers let her go, but she never saw her mother again,” the Times reported.

Even by Guatemalan standards, Rios Montt’s vengeful Christian fundamentalism had hurtled out of control. On Aug. 8, 1983, another coup overthrew Rios Montt and brought Gen. Oscar Mejia Victores to power.

Despite the power shift, Guatemalan security forces continued to murder with impunity, finally going so far that even the U.S. Embassy objected. When three Guatemalans working for the U.S. Agency for International Development were slain in November 1983, U.S. Ambassador Frederic Chapin suspected that “Archivos” hit squads were sending a message to the United States to back off even mild pressure for human rights.

In late November, in a brief show of displeasure, the administration postponed the sale of $2 million in helicopter spare parts. The next month, however, Reagan sent the spare parts anyway. In 1984, Reagan succeeded, too, in pressuring Congress to approve $300,000 in military training for the Guatemalan army.

By mid-1984, Chapin, who had grown bitter about the army’s stubborn brutality, was gone, replaced by a far-right political appointee named Alberto Piedra, who favored increased military assistance to Guatemala. In January 1985, Americas Watch issued a report observing that Reagan’s State Department “is apparently more concerned with improving Guatemala’s image than in improving its human rights.”

Reagan’s Dark Side

Despite his outwardly congenial style, Reagan – as revealed in the documentary record – was a cold and ruthless anticommunist who endorsed whatever “death squad” strategies were deployed against leftists in Central America. As Walters’s “Talking Points” demonstrate, Reagan and his team accepted the idea of liquidating not only armed guerrillas but civilians who were judged sympathetic to left-wing causes – people who were deemed part of the guerrillas’ “civilian support mechanisms.”

Across Central America in the 1980s, the death toll was staggering — an estimated 70,000 or more political killings in El Salvador, possibly 20,000 slain from the Contra war in Nicaragua, about 200 political “disappearances” in Honduras and some 100,000 people eliminated during the resurgence of political violence in Guatemala. The one consistent element in these slaughters was the overarching Cold War rationalization emanating from Ronald Reagan’s White House.

It was not until 1999, a decade after Ronald Reagan left office, that the shocking scope of the atrocities in Guatemala was comprehensively detailed by a truth commission that drew heavily on U.S. government documents declassified by President Bill Clinton. On Feb. 25, 1999, the Historical Clarification Commission estimated that the 34-year civil war had claimed the lives of some 200,000 people with the most savage bloodletting occurring in the 1980s. The panel estimated that the army was responsible for 93 percent of the killings and leftist guerrillas for three percent. Four percent were listed as unresolved.

The report documented that in the 1980s, the army committed 626 massacres against Mayan villages. “The massacres that eliminated entire Mayan villages … are neither perfidious allegations nor figments of the imagination, but an authentic chapter in Guatemala’s history,” the commission concluded. The army “completely exterminated Mayan communities, destroyed their livestock and crops,” the report said. In the northern highlands, the report termed the slaughter “genocide.” [Washington Post, Feb. 26, 1999]

Besides carrying out murder and “disappearances,” the army routinely engaged in torture and rape. “The rape of women, during torture or before being murdered, was a common practice” by the military and paramilitary forces, the report found. The report added that the “government of the United States, through various agencies including the CIA, provided direct and indirect support for some [of these] state operations.” The report concluded that the U.S. government also gave money and training to a Guatemalan military that committed “acts of genocide” against the Mayans. [NYT, Feb. 26, 1999]

During a visit to Central America, on March 10, 1999, President Clinton apologized for the past U.S. support of right-wing regimes in Guatemala dating back to 1954. “For the United States, it is important that I state clearly that support for military forces and intelligence units which engaged in violence and widespread repression was wrong, and the United States must not repeat that mistake,” Clinton said.

Despite the damning documentary evidence and now the shocking judgment of genocide against Rios Montt, there has been no interest in Washington to hold any U.S. official accountable, not even a thought that the cornucopia of honors bestowed on Ronald Reagan should cease or be rescinded.

It remains unlikely that the genocide conviction of Rios Montt will change the warm and fuzzy glow that surrounds Ronald Reagan in the eyes of many Americans. The story of the Guatemalan butchery and the Reagan administration’s complicity has long since been relegated to the great American memory hole.

But Americans of conscience will have to reconcile what it means when a country sees nothing wrong in honoring a man who made genocide happen.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

(Originally posted at Consortium News)

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