Scandal Cover-Up?

Interesting stuff on the past, with implications on the future – particularly for a HRC run at the Whitehouse in 2008…

BTW, on the cost of the investigation, $21 million – with an “m” – I think it’s a red herring – Congress spends more than that when it sneezes.

Wall Street Journal Editorial
An IRS Cover-Up?
April 22, 2005; Page A12

Perhaps you remember Henry Cisneros. He’s the former Secretary of Housing and Urban Development who pleaded guilty in 1999 to lying to FBI investigators during his pre-appointment background check about hush payments to a former mistress, on which it also happens he hadn’t paid the requisite taxes.

Well, the special counsel report investigating all this still hasn’t been made public, thanks largely to procedural roadblocks by Mr. Cisneros’s attorneys. And now, all of a sudden, a rash of news stories and editorials are urging Independent Counsel David Barrett to wrap up his investigation forthwith, without releasing his findings.

Then there’s the amendment that North Dakota Senator Byron Dorgan and co-sponsors John Kerry and Richard Durbin are trying to attach to the latest supplemental war appropriations bill that would de-fund Mr. Barrett immediately. This would have the practical effect of making sure that Mr. Barrett’s report never sees the light of day. After 10 long years and $21 million, don’t they think taxpayers deserve to see what the special counsel has learned?

We should add that any blame for this delay lies mainly with Mr. Cisneros’s lawyers at Williams and Connolly, who have filed more than 190 motions and appeals; one single appeal took some 18 months to deal with. The 400-plus page Barrett report has been largely done since last August, and awaits only a requisite period for review and response by those named in its pages. The only thing threatening a hold-up past June are further defense motions seeking still more delay.

So what don’t Democrats want everyone to know? We’re told that early on the Barrett probe moved away from Mr. Cisneros and his mistress and focused on an attempted cover-up by the Clinton Administration, especially involving the IRS.

Back in the early '90s Mr. Cisneros was considered the rising savior of the Democratic Party in Texas. “So there were people who wanted to save his political future,” a source tells us. To that end, when the IRS began investigating him for tax fraud an extraordinary thing happened: The investigation was taken from the IRS district office that would always handle such an audit and moved to Washington, where it was killed.

“Never in the history of the IRS has a case been pulled out of the regional office and taken directly to Washington,” our source continues. This information was originally provided to Mr. Barrett, some years into his investigation, by a whistleblower in the IRS regional office with 30 years of experience.

Using his subpoena power, Mr. Barrett also found that the IRS would not have been able to kill the case on its own. It had to have cooperation from the Justice Department, particularly the Public Integrity and Tax divisions. We’re told Mr. Barrett beat back several attempts by Justice to squelch or otherwise limit his investigation, and that a lot of important names from the Clinton era appear in the report. One key figure is likely to be former Clinton Administration IRS Commissioner Peggy Richardson, a prominent Texas Democrat, and a friend of both Mr. Cisneros and Senator Hillary Rodham Clinton.

With Mrs. Clinton likely to run for President in 2008, all of this obviously bears on the character of her potential Administration. (Bill Clinton pardoned Mr. Cisneros in 2001.) But just as important is the rare look the report may provide of how the IRS can be manipulated for political ends. This is the first time the IRS has been investigated with grand jury subpoena power, and it is likely to be revealing.

Abuse of the taxing power is about as serious as corruption can get in our democracy, and it should be of bipartisan concern. In the 1990s, conservative critics of the Clinton Administration such as the Heritage Foundation had to endure suspicious audits. And of course the Nixon Tapes reveal that the former Republican President ordered tax investigations of Democratic opponents and donors. These columns recently raised doubts about an IRS probe of the tax status of the NAACP.

Yet now three highly partisan Democrats want to de-fund this probe and prevent publication of the report. “There is no other way to characterize this but as obstruction of justice,” a source tells us, noting that Congress has never before tried to step on an Independent Counsel investigation like this. Surely given the ethical history of the Clinton years, the public deserves to see the report and judge for itself whether the IRS and Justice Department were misused for political purposes.

Investigation of Cisneros a Big Waste of Money
April 27, 2005; Page A15

Your April 22 editorial “An IRS Cover-Up?” seemed unlikely for your editorial page. We figured conservative defenders against government waste would applaud a bipartisan effort to end exorbitant use of taxpayer dollars on a 10-year, $21 million investigation of former Secretary Henry Cisneros.

Our amendment passed overwhelmingly with support from Democrats and Republicans and without a single objection. The amendment doesn’t prevent the publication of the report, it just closes the outrageously expensive Independent Counsel’s office. The substantive work of the Independent Counsel was completed when it submitted its report to the three-judge panel in August 2004. The decision to make the report public rests solely in the hands of that panel, not with the Independent Counsel or Congress. Further, the underlying law allows for the transfer of cases that are “substantially completed” to the Department of Justice. Any remaining responsibilities should be completed by Attorney General Gonzales’s department.

Finally, despite your ominous implication of a vast conspiracy, Independent Counsel David Barrett has been unable to bring any charge against anyone for the past six years. None. We’re glad Congress said enough is enough. Mr. Barrett has spent $21 million of taxpayers’ money with little to show for it. The report should be made public, and we hope that it will be, but the federal government doesn’t need to keep Mr. Barrett on the payroll to make that happen.

Sen. Byron L. Dorgan (D., N.D.)
Sen. John F. Kerry (D., Mass.)
Sen. Richard J. Durbin (D., Ill.)

Wall Street Journal Editorial
IRS Coverup – II
April 27, 2005; Page A14

In the small victories department, we’ll chalk up the nearby letter from Senator Byron Dorgan and his two Democratic sidekicks. They’re now saying they want the independent counsel report investigating IRS abuses related to the Henry Cisneros tax-fraud case to be made public. Glad to hear it.

The only problem is that for that to happen with any certainty their amendment de-funding Independent Counsel David Barrett shouldn’t become law. As the Senators concede, their provision could end up putting the fate of the report in the hands of the Justice Department, which just happens to be one of the two main departments that we hear are accused of major wrongdoing in the Barrett report. That outcome would defeat the whole point of having an “independent” counsel in the first place.

There’s also the matter of this sudden Congressional alarm about the costs of the 10-year, $21 million investigation, just before the final report is scheduled to come out. The law requires Mr. Barrett to wait out the review and comment period ending May 31, and provides no mechanism for him to finish the report pro-bono were he de-funded June 1, even if he wanted to. So the Senators are saying they want the report released even as their actions could well have the effect of keeping it under wraps.

The Dorgan amendment passed the Senate by voice vote last week just about the time our editorial was going to press Thursday night. But the lack of any objection probably means only that most GOP Senators were unaware of the stakes. Unlike leakers who’ve raised alarms about portions of the report they’ve been allowed to review because they or their clients are named in it, Mr. Barrett has been scrupulously quiet (as the law requires) during an admittedly long investigation.

The fate of the funding amendment now rests in the hands of the House and Senate conferees reconciling the Iraq appropriations bill, where we hope someone will have the good sense to object.

A little more info. Think what you will, but this seems slightly more important than House Ethics Rules (which, btw, seem to have a knowledge clause, which means most the Delay stuff will go away as soon as hearings are held).

Republican Sen. Tom Coburn is circulating a letter today in an effort to stop a Democratic amendment that would cut off funds to the office of Independent Counsel David Barrett.

Barrett spent years investigating the case of Henry Cisneros, the Clinton administration Secretary of Housing and Urban Development. Cisneros was accused of lying to the FBI about payments he made to a former girlfriend. In September 1999, Cisneros pleaded guilty to a misdemeanor. Barrett, who has finished his final report, is said to have uncovered evidence of Internal Revenue Service officials’ efforts to protect Cisneros over allegations Cisneros had not paid taxes on the money he gave to the former girlfriend. Democrats are attempting to cut off Barrett’s funds to keep the report from being made public.

Here is the Coburn letter, in full:
The Honorable Thad Cochran
Chairman, Committee on Appropriations
United States Senate
Washington, D.C.

Dear Chairman Cochran:

We are writing to express our concern regarding Senate Amendment 399 that was adopted by unanimous consent during recent debate over the emergency supplemental appropriations bill (H.R. 1268). This amendment prohibits any additional funds from being spent on the Independent Counsel investigation of Henry Cisneros, former Secretary of the Department of Housing and Urban Development. If the language from this amendment is enacted into law, there is the risk that the final report on this investigation will not be released. Given the extraordinary amount of time and public funds that have already been expended on this matter, we do not believe that the Cisneros investigation should be prematurely terminated before its final findings are made public.

We understand that many people have very strong feelings about the propriety of the Independent Counsel itself. We also understand that others have concerns about the use of taxpayer dollars to fund these types of investigations. We share these same concerns.

The Independent Counsel, which began its investigation in May 1995, was appointed to investigate false statements by Mr. Cisneros to the Federal Bureau of Investigation. However, according to myriad news reports, the scope of the Independent Counsel?s investigation later included both the Justice Department and the Internal Revenue Service. According to one of the judges overseeing the Independent Counsel, the investigation was ?an apparently wide-ranging probe of government officials who might?have sought to shield Mr. Cisneros.? If there is any truth to the charge that Mr. Cisneros was shielded by any federal official or department, both the Congress and the public deserve to know.

Accordingly, we respectfully urge you to not include any language regarding the Independent Counsel investigation of Mr. Cisneros in the final conference agreement for H.R. 1268.


Tom Coburn

Everyone is so interested in their hoped-for scandal with l’affaire de Plame, but more attention should be paid to the censoring of David Barrett’s report, which seems to address some very troubling abuses of power in the executive branch. Of course, they occurred during the previous administration, which may explain the lack of media attention…

We’ll see if everyone can keep ignoring it once it’s actually released.


There is major news in the fight over the report of independent counsel David Barrett’s investigation into the Henry Cisneros matter. Late today, the three-judge panel overseeing Barrett ordered that parts of his report be released to the public – and that all of the report be given to Congress.

“The Court orders that the independent counsel, with all deliberate speed, prepare for release and make release of the now pending Final Report, except for that portion designated as Section V,” the order says. It is not clear what is contained in Section V, but it is known that several Clinton-era figures have sought to prevent the Barrett report from being released, and perhaps the material in Section V relates to that. In any event, the Court further ordered Barrett to prepare a version of the report containing the publicly-withheld sections and deliver it to the leaders of Congress and the chairmen and ranking members of several committees.

But there is a catch – the judges stipulated that their order be stayed for at least ten days in the event that any figures involved in the matter should petition the Supreme Court for a stay. “If no such stay is sought within the period granted by this paragraph, then this stay shall be lifted,” the order says. One unspoken aspect of that provision is that whoever has been blocking the report’s release in private – under seal – would, if a petition is made to the Supreme Court, have to do so publicly.

“I am extremely pleased with the decision of the court,” Barrett told National Review today. “The Congress and the public have a right to know the contents of the entire report, and this is a step in that direction.”

An editorial from today’s WSJ - can’t wait to see what’s in this report that would make all those luminaries want to bury it. Now they can work toward getting Section 5…

Sunshine for the Barrett Report
October 26, 2005; Page A18

So it looks as if Independent Counsel David Barrett’s report will see the light of day after all. On Monday the so-called Special Division of the D.C. Circuit Court of Appeals ordered the release (10 days from now) of all but one section, leaving its fate in the hands of Congress.

Mr. Barrett, readers may recall, is the last of the Clinton-era independent counsels. Originally appointed to investigate a tax-fraud case involving former Housing and Urban Development Secretary Henry Cisneros, he later expanded his probe to include alleged attempts at a cover-up by officials at the Justice Department and the IRS.

The report has been done for more than a year, but a lot of worried Democrats have been doing their best to keep it from being published. One strategy has been repeated delaying motions by the law firm of Williams & Connolly, which represents Mr. Cisneros and other relevant figures. Meanwhile, Democratic Congressmen kept complaining about the costs of Mr. Barrett’s operation and introduced bills that would defund him.

Monday’s release order would likely not have come without a different kind of pressure from this page and from Congress – particularly Senate Finance Committee Chairman Charles Grassley. Last week the Senate passed an amendment he sponsored that would defund Mr. Barrett, as the Democrats wanted. But it would also require publication of his report. In other words, no more delaying tactics.

Senator Grassley also wrote a letter to the Special Division requesting that he be given access to a copy, which only seems reasonable given that the independent counsel and Special Division are creatures of Congress in the first place. “The Congress and the taxpayers have a right to know its contents,” he wrote.

The only catch here is that Monday’s release order does not apply to Section 5 of the Report – which is said to be the most interesting section, as it’s the one dealing with the Justice Department and the IRS. That’s why it’s still imperative for Congress to go ahead and pass the Grassley Amendment, which is currently attached to an appropriations bill in the House-Senate conference committee. After 10 years and $21 million, we think the taxpayers have a right to judge Mr. Barrett’s findings in full.