The IRS probed the environmentalist group Greenpeace in 2003, apparently looking to see if it comingled funds from two different tax-exempt organizations it runs. Greenpeace says the allegation of comingling came from Public Interest Watch, a group the Wall Street Journal three years later discovered was funded almost entirely by oil giant ExxonMobil.
During the audit, said Mark Floegel, a senior investigator for the environmental group, an IRS agent looked at a Greenpeace photo of an activist chained to an Exxon gas pump and said, Thats not going to happen anymore. That was particularly chilling for us.
He added, Circumstantially on the face of it, it is a pretty damning case. But we never got the explanation from the IRS, other than our books were in order.
Greenpeace operates two distinct tax-exempt organizations, one to which citizens can donate and deduct the donation from their taxes, and another in which donations arent deductible but are anonymous. On Sept. 7, 2005, the environmental group was hit with a double whammy. Both tax-exempt groups were told in writing by IRS Agent Charles Walker that theyd be audited.
In documents shared with McClatchy, the IRS asked Greenpeace for everything from bank statements to support documentation for all 2002 expenditures to emails over a period of three years from officers and key employees pertaining to compensation and all related-party activities.
Code Pink, a peace and social activism group that actively opposed the Iraq war and urged the impeachment of George W. Bush, also said it was audited on political grounds.
Its parent Environmentalism Through Inspiration & Non Violent Action was audited by the IRS in 2008. Code Pink Co-founder Jodie Evans said her auditor later told her the audit was politically motivated.
Hes since contacted me and said it was, but I am not going to out the auditor, said Evans. The auditor would not talk to McClatchy.
The questions asked by the IRS of the Code Pink-affiliated group did sound similar to what conservative groups are today complaining about. In a June 25, 2008, letter shared with McClatchy, IRS Agent Andrew Hay asked for training manuals, contracts, leases and a timeline of all the groups events over 18 months in 2007 and 2008. He also sought Publications or newsletters produced by your organization for the Campaigns. The IRS also asked for Letters soliciting funds that identify the nature of the Campaigns to be financed or supported.
The questions were fair game, said Prowler, the former IRS agent.
The process of obtaining an exemption is a privilege. Not everyone in the United States is exempt from taxation . . . you have to meet highly specific criteria, that Congress decided, not the IRS . . . and jump through hoops and answer questions, he said, adding that he never witnessed political motivation but worked in Washington during the Nixon revelations and was shocked. I knew a lot of people and nobody I know has ever had that experience.
David Lightman of the Washington Bureau contributed.