Will real villains in IRS scandal ever be punished?

(REUTERS/Molly Riley)

Bloodletting,  in the form of firings, dismissals, resignation, and expulsions, is a tribal rite in political Washington. It is most often used by the powerful on anyone less powerful as a symbolic sacrifice .

Steven Miller, the now former acting commissioner of the Internal Revenue Service, is the latest victim of ritual sacrifice.

This week the Obama White House demanded his resignation to demonstrate the president’s “anger” at news that the IRS targeted conservative groups applying for tax-exempt status for added review and slow approval.

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Next, we’ll watch as Congress takes up the bloodletting knife. They will hold half a dozen hearings featuring sheepish IRS officials trying to explain how and why some conservative groups got what one California conservative told The Washington Post was a “proctology exam through your earlobe.”

While Miller and low-level IRS folks are being led to symbolic, professional slaughter the rich and the politically powerful have a “Get-Out-of-Jail- Free” pass.

The biggest player going scot-free here is the Supreme Court. They stand far from the spotlight of shame in the IRS scandal but any honest account of what happened points to them.

Make no mistake about it: the original sin of the IRS scandal is the Supreme Court’s ruling on campaign finance that opened the floodgates to unlimited “dark money” contributions to influence elections.

In their 2010 decision in the “Citizens United” case, they ruled in favor of unlimited political donations by corporations, unions and others with specific and clear special interests in the outcome of elections.

The law, including the tax code, is the law as interpreted by the courts.

That is their job.

But the High Court’s ruling erased the old rules and did not establish any new ones.

In doing so, they sent an engraved invitation to political elites to rewrite the rules to their benefit and have Uncle Sam effectively foot the bill.

Millions of dollars were spent (and are still being spent) to influence elections under the guise of  “social welfare.” And the people doing it are underwriting it using loopholes in the tax code.

The calculating, big money players have long wanted to keep their donations secret. Citizens United allowed them to give all the money they wanted without having their names attached to it.

They don’t want to deal with the public fall-out of being seen as a puppet master puling the strings of the politician they helped elect with their contributions. They don’t want to be seen as supporting corporate welfare or the gutting of labor and environmental regulations or any other unpopular causes that will line their corporate coffers.

They combined the Supreme Court’s ruling with the existing a non-profit status under IRS rules to create a devilish vehicle for their political tricks.

But the political moneyman and high-power consultants are not being hauled in front of Congress.

They are the reason why the number of applications doubling in a few months after the court ruling from political groups seeking to be designated as “social welfare” advocates, a 501 c-4 finding by the IRS. Those groups are allowed to engage in some political activity for their cause. But in the Citizens United case the court never set the limits to what constitutes political activity by social welfare groups.

It was left to middle managers at the IRS to come up with the rules for who properly qualified and who was perpetrating a hoax because the Supreme Court did not do its job.

The IRS managers inappropriately came up with a “Be On the Look-Out” list for groups with names such as “Tea Party,” and “Patriot,” names often used by conservative groups.

They should have been equally suspicious of liberals, conservatives and everyone else trying to game the system. But they wrongly focused on those conservative groups.

They tried to justify it by saying most of the applicants for the tax-free status came from newly formed right-wing groups and the IRS lacked clear rules for separating the frauds from the legitimate applicants.

It is important to note that of the 296 groups that got added scrutiny from the IRS no applications were denied but over half were left open.

The inappropriate scrutiny of conservative political groups began under a Bush Administration appointee, former IRS commissioner Douglas Shulman. He knew of the rogue targeting by May of 2012 but did not reveal the bad behavior to Congress.

And Lois Lerner, who is in charge of the IRS’s tax-exempt division, also never said a word to Congress even after letters from Congress – as early as June of 2012 --asking about complaints of IRS giving unfair scrutiny to conservative applicants.

The right wing groups, and some liberal groups, too, wanted a tax code status that freed them from paying taxes. They also wanted their donors to remain anonymous. And the Supreme Court ruling allowed them to have that tax status even as bought political ads and supported political candidates.

Miller, the acting IRS commission, has been forced out. There will be more firings and resignations of IRS staff members.

There is blood on the floor. But it is incredible how none of it ever seems to end up on the fancy shoes of the rich and powerful and their protectors on the Supreme Court and in Congress.