Amid the revelations that the Internal Revenue Service targeted Tea Party groups for audits and that it improperly turned over unpublished information to the investigative news organization ProPublica, it is useful to remember a September, 2010 incident in which the administration divulged private tax information regarding Koch Industries. The Koch brothers, Charles and David, are prominent conservative/libertarian philanthropists who back a variety of groups and have been singled out for criticism by the administration for doing so:
[A] lawyer for Koch Industries now tells THE WEEKLY STANDARD that the administration may have crossed a line by revealing tax information about Koch Industries. According to Mark Holden, senior vice president and general counsel of Koch Industries, a senior Obama administration official told reporters at an August 27 on-the-record background briefing on corporate taxes:
So in this country we have partnerships, we have S corps, we have LLCs, we have a series of entities that do not pay corporate income tax. Some of which are really giant firms, you know Koch Industries is a multibillion dollar businesses. So that creates a narrower base because we’ve literally got something like 50 percent of the business income in the U.S. is going to businesses that don’t pay any corporate income tax. They point out [in the report] you could review the boundary between corporate and non-corporate taxation as a way to broaden the base. (Emphasis in original)
Holden tells THE WEEKLY STANDARD that this quotation from a senior administration official “came to our attention from different avenues. We are very concerned about why this would be said about us, particularly in this setting. We are concerned where this information would have been obtained from. We also are concerned in light of recent events that we have been singled out by the government and others as a campaign against us because of our political views.”
THE WEEKLY STANDARD asked White House press office officials in an email on Friday to verify the quotation’s accuracy, but 72 hours later they have not replied. A White House press aide reached this morning on the phone said she would look into whether a transcript of the call exists. The aide has not yet responded. (Correction: The press aide replied just prior to publication of this report to say, “I haven’t been able to track a transcript down.”)
But an independent source who participated in the briefing confirms to THE WEEKLY STANDARD that the quotation matches the source’s careful notes from the briefing.
Holden claims that the revelation of tax information could have been improper, depending on how the information was obtained by the White House:
“I’m not accusing any one of any illegal conduct. But it’s my understanding that under federal law, tax information, is confidential and it’s not to be disclosed or obtained by individuals except under limited circumstances. … I don’t know what [the senior administration official] was referring to. I’m not sure what he’s saying. I’m not sure what information he has. But if he got this information–confidential tax information–under the internal revenue code … if he obtained it in a way that was inappropriate, that would be unlawful. But I don’t know that that’s the case.”
Holden says that to his knowledge the tax status of Koch Industries has not been previously reported in the press.
The official who leaked the Koch industries data was later revealed to White House adviser Austan Goolsbee. He was probed by the Treasury Department for potential violations of confidentiality laws. I haven’t been able to find a news story on the result of the probe though. Presumably, if Treasury had found that Goolsbee had violated confidentiality laws that would have been news.
Incidently, the Bloomberg News story linked above noted that Goolsbee’s claim regarding Koch Industries was: “exaggerated because it counts so-called ‘pass-through’ businesses that are popular because they allow profits and losses to be reported on owners’ personal tax returns without a layer of corporate tax.”
Hat tip: IowaHawk