Abuse of Government

IRS Brings Back Former Lerner Boss and Tea Party Targeting Team Member

Nikole Flax will be head of IRS office that will hire 87,000 new agents

September 2, 2022

(Washington, DC) – The Functional Government Initiative (FGI) expressed its concern over the assignment of an individual associated with an IRS targeting scandal to head the office overseeing the office in charge of the 87,000 new IRS agents. Reports that Nikole Flax, who was chief of staff to the IRS commissioner who was fired in the wake of the Tea Party targeting scandal, are sure to stoke fears that these new agents may be used to harass low- and middle-income taxpayers and those identified for political reasons. Contrary to the promises that no one who earns less than $400,000 a year will pay more taxes, the Congressional Budget Office analysis indicates at least $20 billion of the $124 billion in increased tax revenues projected to be gained from these additional agents will come from low- and middle-income Americans.

During the Tea Party targeting scandal, the IRS was forced to pay millions in settlements for improperly denying and slow-walking applications for nonprofit status from conservative groups. Flax was part of the group of IRS employees whose emails inexplicably disappeared due to hard drive crashes as Congress investigated. FGI has submitted numerous requests to obtain information regarding the previous IRS targeting scandal, as well as the proposal to beef up the IRS. In the case of one Freedom of Information Act (FOIA) request, the IRS bizarrely responded that it had “no records” discussing the proposal to add 87,000 new agents to its workforce and $80 billion to its budget.

Peter McGinnis, spokesman for FGI, issued the following statement:

“It’s fascinating, and indicative of the level of dysfunction in government, that the same folks who were part of the Tea Party targeting 10 years ago would be tasked with managing a controversial program with such a tremendous potential for abuse. At the very least, this move is tone-deaf. Most certainly, it serves to heighten the fears that the amping up of the IRS may result in a repeat of the earlier scandal.”

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CFPB sued over records related to attempted takeover of FDIC

FGI seeking to discover where this takeover originated and what special interests were involved

July 14, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Consumer Financial Protection Bureau (CFPB) to compel the release of records regarding an attempted CFPB takeover of the independent Federal Deposit Insurance Corporation (FDIC).

CFPB Director Rohit Chopra, also a board member of the FDIC, made unprecedented moves to undermine the longstanding independence of the FDIC. Chopra, a former Obama political appointee and a former member of Hillary Clinton’s transition team, attempted to circumvent the authority of Chairman McWilliams, including while she was on a nine-hour flight for FDIC business. After receiving a draft document produced by career employees and subject matter experts, Chopra again attempted to force a vote of the FDIC board on a controversial proposal related to bank mergers. Even the FDIC’s Office of General Counsel informed Chopra that his procedural maneuvers violated the by-laws of the FDIC and were not valid.

At its inception, the FDIC was designed to operate as an independent agency largely immune to the changing policies of new administrations. However, this attempted takeover broke nearly 90 years of tradition and may undermine the independence of other independent agencies across the US government. Whether this abolition of long-standing tradition originated from the White House or outside special interests remains an open question.

In January 2022, FGI opened an investigation, seeking documents about the CFPB’s role in the controversy, the long-standing authority of the FDIC chair, and the origins of this attempted FDIC takeover. The records FGI seeks, which the CFPB appears to be hiding, could provide some answers.
Initially, CFPB appeared to be willing to work with FGI but then abruptly ceased all communications, leaving FGI no other choice to but to file suit against CFPB.

Peter McGinnis, spokesman for FGI, issued the following statement:

“Trying to force independent agencies to function as partisan rubber stamps violates the historic norms of how these agencies were designed to function. Director Chopra’s attempt to takeover and turn the FDIC into a political tool is not only a threat to the FDIC itself but also an attack on the objectivity of other independent federal agencies. The American people deserve to know whether this coup was by Mr. Chopra’s own design or a calculated effort by the White House or outside special interests.”

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FGI’S MCGINNIS: ‘TAX DAY SHOULD REMIND EVERY AMERICAN OF THE NEED FOR ACCOUNTABILITY AT THE IRS’

By Emily Bevard (Georgia Business Daily)

April 19, 2022

Monday, April 18, was Tax Day here in the U.S. — a day Americans give the Internal Revenue Service (IRS) information about their sensitive financial matters, expecting the IRS to keep such information private. But in light of recent scandals at the IRS, the Functional Government Initiative (FGI) is concerned about the possibility of Americans’ private information being leaked.

In a release Monday, FGI Spokesperson Peter McGinnis noted that accountability begins with transparency, which the group is still waiting to obtain through their many requests to the IRS. FGI has launched multiple investigations into scandals associated with the IRS in recent years, pressing the agency for accountability.

“Tax Day may not be a fun day, and it certainly isn’t a cheap day, but it shouldn’t be a scary day,” McGinnis said in the release. “Yet with leaks of sensitive data, targeting of organizations based on their politics and an unprecedented power grab for more authority and IRS agents, this Tax Day should remind every American of the need for accountability at the IRS.”

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FUNCTIONAL GOVERNMENT INITIATIVE LOOKS INTO IRS ON TAX DAY IN NORTH CAROLINA: ‘ACCOUNTABILITY BEGINS WITH TRANSPARENCY’

By Laurie A. Luebbert (North Carolina Business Daily)

April 18, 2022

Considering that Americans have to provide sensitive and private financial information to the IRS, Tax Day (Monday this year) is becoming more of a concern.

The possibility of the IRS leaking private information looms for many, including the Functional Government Initiative (FGI). Against that backdrop, the group has opened investigations in an effort to achieve transparency from the Internal Revenue Service (IRS).

“Tax Day may not be a fun day, and it certainly isn’t a cheap day, but it shouldn’t be a scary day,” Peter McGinnis, spokesperson for the FGI, told North Carolina Business Daily. “Yet, with leaks of sensitive data, targeting of organizations based on their politics, and an unprecedented power grab for more authority and IRS agents, this Tax Day should remind every American of the need for accountability at the IRS.”

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Interior: Release of Twin Metals records to FGI not in public interest

Interior places obstacles to release of Twin Metals records in formal response letter to FOIA request

April 28, 2022

(Washington, DC) – This past week, the Department of the Interior (DOI) responded to the Functional Government Initiative regarding our investigation into the cancellation of the Twin Metals leases near the Boundary Water Canoe Area Wilderness in Minnesota. DOI determined that FGI’s request for records surrounding the cancellation would not enhance the public’s understanding of the agency’s controversial decision.

The stunning claim came in the context of a request for a fee waiver under the Freedom of Information Act (FOIA). Under FOIA, government agencies are not allowed to charge fees when the release of documents is “in the public interest because it is likely to contribute significantly to public understanding of government operations or activities.” This past week, Interior determined that releasing documents related to Twin Metals to FGI does not qualify, opening the door for Interior to hide the documents from the American people unless FGI agrees to pay ransom in the form of exorbitant fees.

The current Administration has made no secret of the fact that fighting climate change is one of their top priorities. However, they remain extremely inconsistent in their policy decisions surrounding the issue. One day they are handing out billions in new taxpayer loans and subsidies for electric vehicles (EV) and restricting federal approval of new pipelines, but the next day they are tapping the Strategic Petroleum Reserve and calling hostile foreign dictators to establish new lines of oil delivery. The shortage of critical minerals necessary to build wind turbines, solar panels, and EV batteries for the “great transition” has been well-publicized. It’s also well-established that we are overly reliant on China for many of these minerals.

Enter Twin Metals, one of the largest critical minerals mines in the country. If allowed to be developed, the mine could greatly reduce America’s long-term shortage of critical minerals and further the Administration’s renewable energy goals. The site sits on an estimated 95 percent of America’s nickel reserves and 88 percent of its cobalt reserves.

By canceling these leases, as the Department of the Interior did earlier this year, the government is forcing domestic EV companies to rely on China for the extraction of these essential minerals. China currently controls an estimated 85 percent of the global supply of these minerals. In light of the President’s recent invoking of the Defense Production Act to aid domestic production and ostensibly advance just this type of project, it is mystifying why Secretary Haaland and senior leaders at Interior and USDA have made the decisions they did. The bottom line is that with consequences as detrimental as these, allowing the public to review the records on the Interior Department’s actions on the Twin Metals mine is most certainly in the public’s interest.

Peter McGinnis, spokesman for FGI, issued the following statement:

“Interior’s suggestion that releasing the records surrounding the cancellation of the Twin Metals leases to FGI is not in the public’s interest is extremely concerning given the magnitude of Secretary Haaland’s decision. By seeking to impose fees for documents produced by public servants, on public time, and with public resources, the agency is throwing up unjustified barriers to the public learning which special interests stopped the domestic production of much-needed critical minerals. In the meantime, China seems to be the primary beneficiary. FGI is appealing this decision and will notify the public as we actively fight for transparency.”

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Report: IRS Has ‘No Records’ on Proposal to Increase Funding for More Agents

By Paul Bois (Breitbart)

April 21, 2022

Conservatives readied their battle stations in 2021 when President Joe Biden’s Build Back Better plan included a provision to require banks to give information to the IRS on accounts with $600 or more in annual transactions. The policy would have also applied to peer-to-peer apps like Venmo, CashApp, and Zelle.

At the time, Treasury Secretary Janet Yellen said the proposal would close a $7 trillion tax gap over the next decade.

“The proposal involves no reporting of individual transactions of any individual,” Yellen told CBS News. “The big picture is, look, we have a tax gap that over the next decade is estimated at $7 trillion. Namely, a shortfall in the amount the IRS is collecting due to a failure of individuals to report the income that they have earned.”

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IRS: “No records” Analyzing or Discussing Proposal to Increase Agents and Reporting Requirements”

IRS claims no internal communications over controversial changes in Biden budget

April 20, 2022

(Washington, DC) – Earlier this year, the Functional Government Initiative (FGI) sought records surrounding the proposal to dramatically increase IRS agents and resources amidst political targeting and the leaking of sensitive financial data. A particularly controversial proposal, since abandoned, sought to impose a reporting requirement on US banks for accounts involving more than $600 in a year. Today, FGI announced an alarming new development in our investigation: the IRS stated they had no such records involving the request for more resources, new agents, or any analysis that would justify the controversial policy items.

The response from the IRS is not only surprising but also highly unusual for a large government agency requesting an additional $80 billion in taxpayer resources. Their response raises concerns about whether the IRS is behind an effort to withhold public records that could expose damaging internal reactions and analysis underlying the agency’s actions. Other implications are that the agency was left out of the analysis and projections submitted by high-ranking political appointees, leaving the IRS to defend policies they had no part in constructing. Either way, this situation is not an example of a functional government.

The formal response by the IRS opens the door to a multitude of questions surrounding an already controversial policy. Which agency, if any, conducted the analysis justifying the controversial bank reporting requirement to $600? Who at the IRS discussed this policy with Treasury or the White House? Were records properly kept under the Federal Records Act? It is FGI’s mission to shine a spotlight on government dysfunction and we will continue to do just that. FGI is appealing this response and will keep the public updated.

Peter McGinnis, spokesman for FGI, issued the following statement:

“It is astonishing and frankly unbelievable to hear that the IRS claims to have zero records on a budget request and controversial policy proposal personally defended by the Treasury Secretary, one linked to a price tag of $80 billion and more intrusion into Americans’ private bank records. Given the congressional scrutiny and media attention on these proposals, one would think that the IRS conducted a thorough review before rolling it out. Based on their response, the IRS essentially just told us that they had no hand in the review or implementation of a policy that would affect hundreds of millions of Americans. This is exactly the type of government dysfunction Americans are fed up with.”

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Tax Day 2022: IRS Delivers Less Transparency from Themselves, Less Security with Your Information

FGI continues to investigate IRS, Treasury for apparent misconduct

April 18, 2022

(Washington, DC) – Today is Tax Day, and many Americans find themselves scrambling to provide the Internal Revenue Service (IRS) all types of information about their sensitive financial affairs, with the expectation that the IRS will keep this information private. Recent experience has shown, however, that whether this information will someday be illegally shared with outside activists or used to obstruct the constitutional rights of Americans to freely associate remains an open question. These concerns remain prevalent as the lack of accountability or availability of public records concerning these abuses continues. This is why over the past several months the Functional Government Initiative has opened multiple investigations into major scandals that have plagued the IRS in recent years. The agency has grown to become one of the most powerful and mysterious actors in the federal government but has proven to provide little transparency into its own activities and little privacy with Americans’ personal information.

Among the investigations, FGI is seeking agency records around the unauthorized leak of sensitive financial information of wealthy American citizens to ProPublica. Even last Wednesday we were reminded of the lasting impact of this unlawful leak when ProPublica published an article with an accompanying database containing the leaked information. Since the leak was discovered last year, the IRS has not made any headway into discovering the source of the leak nor revealed any effort to hold bad actors accountable.

Another FGI inquiry concerns the economic analysis, key players, and supporting materials related to the proposal to increase IRS resources for enforcement personnel and impose a now-discarded $600 threshold allowing the IRS to peer into hundreds of millions of Americans’ bank accounts. This unprecedented power grab and request for more resources has only heightened the public’s scrutiny of the IRS.

Peter McGinnis, spokesman for FGI, issued the following statement:

“Tax Day may not be a fun day, and it certainly isn’t a cheap day, but it shouldn’t be a scary day. Yet with leaks of sensitive data, targeting of organizations based on their politics, and an unprecedented power grab for more authority and IRS agents, this Tax Day should remind every American of the need for accountability at the IRS. And, as with most aspects of government, accountability begins with transparency, which we are still waiting to obtain through our many requests into the agency. Stay tuned as we demand the records the American people are entitled to.”

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Think Infrastructure Funds Were for Roads and Bridges? April Fools!

Department of Transportation fools Americans, attempts to divert highway funding to projects that do nothing to expand highway capacity

April 1, 2022

(Washington, DC) – Happy April Fools’ Day! The $1.2 trillion (with a “t”) Bipartisan Infrastructure Law (BIL), passed by Congress and signed into law by President Biden in November, was sold to the American people as a commitment to rebuild the nation’s roads and bridges.

And for those who believed that: April Fools! A Department of Transportation policy memo released in December prioritizes BIL funds for bike lanes and climate resiliency instead of maximizing investment in highway expansion and new bridges.

This memo contradicts what its supporters initially promised Americans when promoting the bill. While the memo allows for use of funds for the repair of infrastructure, it sets priorities for such things as projects “that maximize the existing right-of-way for accommodation of non-motorized modes.” It does not, for example, prioritize funds for new infrastructure needed in states where people are flocking to escape high crime and COVID lockdowns. The memo directs staff of the Federal Highway Administration (FHWA) to promote “construction of bicycle and pedestrian lanes, paths, and facilities” by pointing out that those projects can be completed more quickly due to exclusions under environmental regulations. DOT’s policy also prioritizes projects that “help combat the climate crisis” and accommodate technologies such as electric vehicle charging stations and renewable energy generation.

The surprising memo comes during our nation’s ongoing supply chain crisis. Many grocery store shelves are devoid of food, packages take weeks to be delivered, and essential everyday items are nowhere to be found. It makes one wonder: why does the federal government not maximize the infrastructure funds for actual infrastructure? The Functional Government Initiative is announcing an investigation into this policy to uncover the answers.

Peter McGinnis, spokesman for FGI, issued the following statement:

“The federal government appears to have pulled a bait-and-switch on Americans when it promised funding for roads and bridges but gave them bike paths instead. We find it alarming that instead of expanding highways that would help fix the growing supply chain crisis Americans face, the government is prioritizing funds to projects that do not address this crisis. FGI is determined to investigate this bait-and-switch and help make sure we don’t get fooled again.”

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McGinnis: ‘FGI will be appealing the FTC’s decision to withhold all documents related to a possible investigation into the oil and gas industry’

By Andy Nghiem (DOJ Newswire)

March 29, 2022

The Biden administration is continuing to place the blame on the oil and gas industry for sky-high American gas prices, but the Functional Government Initiative (FGI) believes that the administration’s own energy policies is causing gas prices to skyrocket.

The FGI recently requested access to Federal Trade Commission (FTC) documents regarding their ongoing investigation of the oil and gas industry to determine how the Biden administration’s energy policies may be impacting the cost of oil and gas, according to the FGI’s website. The request was denied, which leads the FGI to believe that gas prices are a result of the administration’s energy policies, not profiteering or price gouging by the oil and gas industry.

In recent weeks, President Joe Biden repeated his belief that the oil and gas industry may be price gouging or profiteering, this time citing the war between Russia and Ukraine. The FGI asserted that this statement simply reflects broader opposition to the domestic oil and gas industry, or an attempt to shift blame from the federal government’s role in driving inflation higher over the past year. Although there is proof of pump prices being on the rise before the war in Ukraine, FGI said the domestic oil and gas industry appears to be a constant bogeyman for the Biden administration.

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