Category Archives: Choke Point

IMF Extends $17.5 Billion Credit To Kiev

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As the IMF bails our Kiev, the real winner is Russia, GAZPROM wants their money.

No sooner had the International Monetary Fund (IMF) extended $17.5 billion over four years in new credit to Ukraine, Russia’s private gas giant Gazprom was claiming $2.4 billion of it to settle Kiev’s gas debt.

That’s not exactly what the IMF had in mind. The international lender’s mission chief for Ukraine, Nikolay Gueorguiev, issued a statement on Feb. 13 saying the credit was meant to address “immediate macroeconomic stabilization as well as broad and deep structural reforms to provide the basis for strong and sustainable economic growth over the medium term.”

At the same time, Gazprom sent a letter to its Ukrainian counterpart, state-owned Naftogaz, seeking a payment of more than $2.4 billion, to cover $2.2 billion in debt, plus a penalty fee of about $200 million. The debt, which Kiev doesn’t acknowledge, will be the subject of hearings at the Stockholm Arbitration Institute in early 2016.

Discussing Gazprom’s demand on the Russian television station LifeNew, Kremlin Energy Minister Alexander Novak dismissed Ukraine’s stand on the status of the debt, saying, “Gazprom has every right to claim the funds” because the gas deliveries to Naftogaz are listed on invoices according to an active contract between the two gas companies.

So far, Naftogaz has been paying the $2 billion debt in installments. Now that Ukraine has received the IMF loan, Gazprom wants the entire debt paid now.

Ever since the autumn of 2013, when many Ukrainians were demanding closer ties with the European Union at the expense of Russia, its gross domestic product (GDP) has shrunk by about 7 percent, the IMF says. In February 2014, faced with a popular uprising, the country’s president, Viktor Yanukovich, fled to Russia, which responded by annexing Ukraine’s Crimean peninsula.

Since then, the Kremlin has been suspected of providing weapons and even personnel to pro-Russian separatists fighting to create their own state in eastern Ukraine. The EU and the United States responded with economic sanctions that have, along with low oil prices, damaged Russia’s economy as well. Russia’s GDP is expected to contract by between 3 percent and 5 percent in 2015.

Then there is Saudi Arabia

A network of gas pipeline in cities is the only viable solution to the cooking gas crisis that happened in Jeddah recently, according to Victor Zubkov, chairman of the board of directors of Gazprom in Russia.
In an exclusive interview, Zubkov, who is also the Russian president’s special representative for cooperation with Gas Exporting Countries Forum, told Arab News after his meeting with the Ministry of Oil that the price is expected to be higher than its current price. He said: “I cannot disclose the rate right now but it will be reasonable.”
To overcome the cooking gas problem in Jeddah, there is a need to build gas pipelines’ network in place of cylinders, which have become outdated. “A better way is to build network in order to supply much accessible gas available at their homes and accommodation,” he said.
The top Russian official was in the capital last Tuesday to address the International Energy Forum (IEF) at its headquarters in the Kingdom. He also had a meeting with the Ministry of Oil.
He said 90 percent of the people in Russia use the gasification network. With the pipeline network, gas will come directly to apartments and houses requiring the people to pay only the monthly gas bill.
Zubkov said Russia and Saudi Arabia need more cooperation not only in the energy sector but also the agricultural one. “While there are big efforts for water desalination here and such water has no use for agriculture, Russia can supply wheat and many other agricultural products. In this case Saudi Arabia can invest in Russia’s farm sector and get quality products.”
“Saudi people, especially businessmen, need sufficient knowledge about Russia. As such, we need to have many meetings and, maybe, hold a business forum as well. Russia is a stable and dependable partner. Of course, we guarantee that we will implement all our proposals,” he added.
During his meeting with Saudi officials, Zubkov briefed them on opportunities in Russia’s energy sector as well as on their short- and long-range plans that include stability and sustainable supply for the European market and the Asian Pacific market as well.


“Of course, we are all concerned about oil price as it affects us all because many of our long-term contracts are connected with the oil price. We want the price to be higher than what it is now,” he said.
Zubkov added: “It is not only because our budgeting is based on the oil price but also because a lot of investment plans are now doubtful not only inside Russia but also in different countries as well. The negative impact on this will be felt by consumers as they outnumber the producers by over 10 times.”
According to him, the price should not be either too low or too high. It should reflect the situation in producing and transporting expenses. It should be stable in the interest of economy and, of course, to also avoid creating social unrest.
“Our message to the Saudi government is price should be higher than the current level. And, of course, I will not disclose here the new figure that we have discussed,” he said.

 

Obama Approves Minsk Agreement, Great for Putin

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The new Minsk ceasefire agreement empowers Russia-backed separatists with a number of leverages over Ukraine. If implemented, the agreement could provide a functioning framework for a mutually acceptable political settlement. In the event of non-implementation, a re-eruption of hostilities is highly likely.

                          

In Minsk on 12th February, Ukrainian President Petro Poroshenko, Russian President Vladimir Putin, German Chancellor Angela Merkel and French President François Hollande managed to reach an agreement on the ceasefire in Eastern Ukraine, and the outlines of a conflict settlement.

Formally, the document was signed not by the heads of state, but by the Trilateral Contact Group (composed of representatives of Ukraine, Russia and the OSCE) as well as the leaders of the Donetsk and Luhansk separatists. This indirect scheme allowed Kyiv to reach an agreement with the separatists without formally recognizing them as legitimate partners.

The document, composed of thirteen points, refers to the separatist entities as “particular districts of Donetsk and Luhansk oblasts”, using the same wording as the September 2014 Minsk agreement. Hence, neither their self-proclaimed names, Donetsk and Luhansk People’s Republics, nor the Russian term Novorossiya are used, which is a strong signal that none of the parties questions that these regions belong to Ukraine.

                       

*** So what else needs to be known? Who is still supporting Putin and why….

The segments of the Russian population that, arguably, have the best chance to dissuade President Vladimir Putin from his actions in Ukraine are business leaders and the rich. But despite having lost millions of dollars because of sanctions against Russia , the falling ruble and low oil prices, they still rally behind their leader-both privately and publicly.

Despite a cease-fire announced Thursday , Western sanctions on Russia over its support of insurgents in neighboring Ukraine have already pushed Russia’s borrowing costs higher and crushed its currency (Exchange: RUBUSD=). The problems have been made worse by the price of oil, whose fall since September has further undercut the petro-state’s ability to fund itself. Yet Putin still enjoys broad domestic support, and experts tell CNBC that the country’s monied class is no exception. Timothy Ash, who heads emerging markets research at Standard Bank (Johannesburg Stock Exchange: SBK-ZA), summarizes the phenomenon in a few words: “Nationalism plays very well with many people,” he told CNBC

Alexander Kliment, director of Russia research at Eurasia Group, said the sanctions have actually strengthened elite support for Putin because they have bolstered the government’s position as a last-resort lender for them. “Also, sanctions have inflamed patriotic sentiment and been a convenient scapegoat for economic woes,” Kilment told CNBC.

“If you are an oligarch, it’s bad to suffer sanctions from the West,” he said, “but you’re still pretty well-off as part of the Russian system. It’s an awfully big leap to turn your back on that, which would risk literally everything you have.” Read More Total CEO: US will not become energy independent Edward Mermelstein, a New York-based attorney who works with Russian business clients, told CNBC that Putin’s popularity is no longer dependent on finance as much as the might of Russia.

“As long as the country is perceived as strong, he will continue to dominate domestically. The Russian citizen can withstand famine, but they cannot withstand the appearance of weakness,” he said.

While some companies are getting hit hard by what Russian Finance Minister Anton Siluanov has acknowledged is an economy in “dire straits,” others are finding ways to benefit.

*** Now comes the alternate banking system. Almost 91 domestic credit institutions have been incorporated into the new Russian financial system, the analogous of SWIFT, an international banking network.The new service, will allow Russian banks to communicate seamlessly through the Central Bank of Russia. It should be noted that Russia’s Central Bank initiated the development of the country’s own messaging system in response to repeated threats voiced by Moscow’s Western partners to disconnect Russia from SWIFT.

Russian Prime Minister Dmitry Medvedev meeting with miniters

SWIFT (The Society for Worldwide Interbank Financial Telecommunication) is a Belgium-based international organization that provides services and a standardized environment for global banking communicating that allows financial institutions to send and receive messages about their transactions. Earlier this month Russian Deputy Prime Minister Igor Shuvalov expressed confidence that Russia would not be disconnected from SWIFT. In her turn, Russian Central Bank First Deputy Chair Ksenia Yudaeva called upon Russian civilians and financial institutions not to dramatize the current situation.Russian experts point to the fact that Western businesses would face severe losses if they expelled Russia from the international SWIFT system. On the other hand, the alternative system launched by Russia might reduce the negative impacts caused by measures imposed by the West, including possible disconnection from SWIFT, and diminish Western financial dominance over Russia.

 

It’s Your Money and the Democrats Don’t Care

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Do you know how legislative bills begin and then what happens? Do you know what they may cost the taxpayers?

Sponsors of 700 bills in Congress didn’t put price tags on their proposals

Almost half of the bills introduced in the last Congress authorized spending tax dollars, but not specifically how many dollars. Instead, the proposals simply provided that “such sums as necessary” should be spent.All 20 congressmen who most frequently used the “such sums as necessary” formulation are liberals and among the most ardent proponents of expanding the federal government. House Republicans were advised by their leaders not to use the phrase, but some of them ignored the advice.Vermont Sen. Bernie Sanders, a self-proclaimed “Democratic socialist,” led the list as the sponsor of 19 such bills.

His 10 Million Solar Roofs Act of 2014, for example, would require “the Department of Energy (DOE) to establish a program to provide rebates for the purchase and installation of photovoltaic systems with the goal to install 10 million systems.”

The Sanders bill provided specific instructions for what the government would need to do, and the cost of the solar panels would be known to his staff. The goal of the bill — increasing alternative energy sources — has significant public support. But Sanders didn’t include how much his proposal would cost, thus depriving his congressional colleagues and taxpayers of the means to weigh benefits versus costs.Nowhere in the bill is there a cost figure. It simply says “there are authorized to be appropriated such sums as are necessary to carry out this Act.”Florida Democrat Rep. Alan Grayson’s Fiscal Sanity Act for Appropriations bill is another whose cost is simply as much “as necessary.”

“It shows they aren’t serious fiscal stewards — they aren’t concerned with how much it costs, often-times. If they were, they could write in offsets saying ‘this fund over here will be decreased by the amount necessary,’” said Demian Brady, who tracks individual congressmen’s spending propensities for the National Taxpayers Union.

“It could also be a way to avoid accountability. If they did say $20 million for a gun buyback program, media and everyone would say she wants to spend $20 million. If you leave it blank, it’s a shield you can hide behind, even if they know how much it’s going to cost,” he said.  Some were token efforts that sponsors never expected to go anywhere — they were introduced only so their sponsors could tell campaign backers that they tried. But occasionally those proposals wind up becoming policy anyway.“They say, ‘we didn’t bother to get an estimate because we didn’t expect it to go anywhere,’ but then soon we’ll find it as part of bigger legislation,” Brady said.When Rep. Maxine Waters wanted a “minority diabetes initiative,” the California Democrat didn’t care how much it cost, and didn’t attempt to measure it, craft a budget estimate or find a way to fund it. Instead, she asked colleagues to essentially vote for a blank check.

Pennsylvania Democratic Sen. Bob Casey’s Caregiver Corps Act of 2014 would require the Department of Health and Human Services to “contract with a nonprofit” and “[a]llows the Secretary to award grants for the operation of local Corps programs.”Yet there is no mention of cost anywhere. At the very end of the description of the proposed program, it says simply, “There is authorized to be appropriated to carry out this section, such sums as may be necessary.”“It’s very bad practice to put these things in place because they also lead to bloated appropriations. The authorizers have kind of punted,” said a senior Senate Republican aide. “We’d like to have all the authorizers be more accountable to things.”

Congress must first pass a bill “authorizing” money to be spent, and then another, separate appropriation bill officially funds it — generally one of a few major bills passed by the appropriations committee.

The handful of powerful congressional “appropriators” who meet in back rooms and until recently were able to dole out earmarks as favors have been the subject of significant ire as poster children for what is wrong with Washington.

But when lawmakers write bills that “authorize” funding without specifying amounts, they are ceding authority to the appropriations committees, who will have to fill in an amount, even though they’re much less acquainted with the purpose.

The Examiner analyzed legislation from the two-year congressional session that ended last month. Dollar amounts — or lack thereof — were extracted from the bill text by the Cato Institute as part of the libertarian think tank’s Deepbills project.

One reason for the Democratic dominance of the “such sums as necessary” list is that Democrats introduce more bills in general than Republicans. But another is that House Republican leadership cautioned its members not to use “such sums as necessary” at the beginning of last Congress, as one of nine “legislative protocols.” “Any bill or joint resolution authorizing discretionary appropriations shall specify the actual amount of funds being authorized,” the protocol says. “This protocol is designed to improve transparency and accountability in the authorization of discretionary programs.”

But it only discourages, not forbids, House Republicans from using the technique. The House Select Committee on Benghazi, formed to investigate Hillary Clinton’s State Department, was funded by “such sums as necessary,” leading Democrats opposed to the investigation to protest that it is irresponsible to allocate open-ended amounts of money with no end date.

And it doesn’t bind senators, who lead the list in bills introduced.

Sanders and Sen. Bob Menendez, D-NJ. the most frequent users, didn’t respond to the Examiner’s requests for comment.

WRITING THE MOST BLANK CHECKS

Name Bills
Sen. Bernard Sanders (I-VT) 19
Sen. Robert Menendez (D-NJ) 14
Sen. Tom Harkin (D-IA) 13
Sen. Mark Begich (D-AK) 13
Sen. Patty Murray (D-WA) 11
Sen. Richard Blumenthal (D-CT) 10
Sen. Tom Udall (D-NM) 10
Sen. Al Franken (D-MN) 10
Rep. Sheila Jackson Lee (D-TX) 9
Sen. Ron Wyden (D-OR)

But Barack Obama does not care either. His budget was presented last week and has zero chance of advancing with good reason.  Obama’s Budget Hikes Taxes by $1.6 Trillion   In his budget, Obama also proposes that over the next 10 years, tax cuts of $349 billion be accompanied by tax increases of $1.9 trillion, for a net 10-year tax increase of $1.6 trillion. 

The president’s budget would repeal, let expire or limit:

  • the Lifetime Learning Credit;
  • the student loan interest deduction (for new borrowers);
  • Coverdell accounts; and
  • 529 education savings plans.

The president’s budget would:

  • triple the maximum Child and Dependent Care Tax Credit (CDCTC);
  • expand the American Opportunity Tax Credit;
  • create an auto-enroll IRA for workers without an employer-based retirement plans (with an option to opt out);
  • create a new second earner credit of up to $500 for families where both spouses work; and
  • expand the Earned Income Tax Credit (EITC) for workers without children and for non-custodial parents.

The president’s budget would raise taxes in many ways. For example, it would:

  • increase the capital gains and dividend tax rate to 28 percent (inclusive of the net investment income tax);
  • end stepped-up basis by treating bequests and gifts as realization events that would trigger tax liability for capital gains;
  • raise estate and gift taxes;
  • limit the value of itemized deductions to 28 percent;
  • create an additional alternative minimum tax designed to ensure certain high income taxpayer pay at least 30 percent of income —after charitable contributions—in taxes;
  • impose a 19 percent on the foreign earnings of U.S. companies;
  • raise tobacco taxes; and
  • impose a tax on the debt of financial institutions.

In addition, Obama’s budget increases the corporate welfare provided through the tax code, with substantially higher subsidies for alternative energy and politically favored infrastructure.

The budget does contain a constructive provision that would permanently extend section 179 expensing allowing small business to deduct up to $1 million of capital expenses.

 

Have You Met Christiana?

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  • She is a member of the Carbon Finance Advisory Panel
  • She is an Advisory Committee Member of Green Cross International, founded by Pres. Gorbachev
  • She is an invited member of the Clinton Global Initiative
  • She is a member of the Global Roundtable on Climate Change led by Jeffrey Sachs at Columbia University
  • She is a technical advisor to the Prototype Carbon Fund at the World Bank
  • She was personally trained by Al Gore to deliver his presentation of ‘An Inconvenient Truth’
  • She is the Executive Secretary of the United Nations Framework Convention on Climate Change
  • She even blogs at the UNFCCC

Are you beginning to see a crusader here because there is notoriety and money and power involved? Wonder how many times she has visited the White House…

UN Climate Chief: We Are Remaking The World Economy

The United Nation’s climate chief says that reordering the global economy to fight climate change is the “most difficult” task the international body has ever undertaken.

“This is probably the most difficult task we have ever given ourselves, which is to intentionally transform the economic development model, for the first time in human history,” Christiana Figueres, who heads up the U.N.’s Framework Convention on Climate Change, told reporters.

“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for the, at least, 150 years, since the industrial revolution,” Figueres said.

Figueres’s remarks come ahead of a meeting in Geneva next week where delegates will pour over draft treaty texts that the U.N. hopes countries will agree to in December. She doesn’t expect global warming to be solved by one treaty, but was optimistic in will be solved in the coming years. “That will not happen overnight and it will not happen at a single conference on climate change, be it COP 15, 21, 40 – you choose the number,” she said. “It just does not occur like that. It is a process, because of the depth of the transformation.”

The climate chief even held up President Obama as a shining example of steps countries can take to tackle global warming.

“The international community is quite grateful for the fact that in his second term, President Obama has turned his attention quite clearly and quite decisively to climate change,” Figueres told reporters.

“He has not only spoken about his commitment both to his national agenda on climate change, but also to the international process, and has been quite clear in his political leadership,” Figueres said, touting the EPA’s success cutting carbon dioxide emissions from power plants.

The EPA will finalize rules to cut carbon emissions from new and existing power plants this summer. Critics of these rules say they will hurt the economy through job losses and higher energy prices. Supporters, however, say it will spur green energy development and set an example for other countries to follow.

Obama’s 2016 budget proposal boosts EPA funding to help it finalize emissions rules for power plants. The budget would also give the EPA $4 billion to reward states that reduce emissions even more than federal mandates require.

Figueres also cheered Obama’s agreement with China to reduce carbon emissions by 2030 and to give the U.N.’s climate fund a $3 billion boost.

“So for all of these reasons, certainly a very welcome leadership from the United States as a single nation,” Figueres said. “Countries can attain a certain level of emission reductions on their own, but they can do much more if they collaborate with each other, in particular with certain specific sectors.”

But while Figueres seems rosy about a deal, there are already signs of countries backing away from a tough international climate treaty.

France’s foreign minister, Laurent Fabius, told an audience at an event in New Delhi, India that a climate treaty should not hurt national economic growth. “An agreement that would leave some countries to consider their growth hampered by its provisions will not be accepted,” Fabius said. *** If you can stand this nonsense and fleecing of policy and global threats, you can read more here about Christiana. One more thing, controlling climate change brings gender equality….really?

 

What Would Loretta Lynch Do on IRS Targeting?

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The Obama administration is refusing to publicly release more than 500 documents on the IRS’s targeting of Tea Party groups.

Twenty months after the IRS scandal broke, there are still many unanswered questions about who was spearheading the agency’s scrutiny of conservative-leaning organizations. The Hill sought access to government documents that might provide a glimpse of the decision-making through a Freedom of Information Act (FOIA) request.

The Hill asked for 2013 emails and other correspondence between the IRS and the Treasury Inspector General for Tax Administration (TIGTA). The request specifically sought emails from former IRS official Lois Lerner and Treasury officials, including Secretary Jack Lew, while the inspector general was working on its explosive May 2013 report that the IRS used “inappropriate criteria” to review the political activities of tax-exempt groups.

TIGTA opted not to release any of the 512 documents covered by the request, citing various exemptions in the law. The Hill recently appealed the FOIA decision, but TIGTA denied the appeal. TIGTA also declined to comment for this article.

Will anyone be charged?

In its written response to The Hill, TIGTA cited FOIA exemptions ranging from interagency communication to personal privacy. It also claimed it cannot release relevant documents “when interference with the law enforcement proceedings can be reasonably expected.”

Yet, congressional Republicans say there is no evidence of any prosecution in the works, and media outlets have indicated that the Department of Justice and the FBI have already determined that no charges will be filed.

Rep. Jim Jordan (R-Ohio) notes that eight months after Lerner was held in contempt of Congress for not testifying at two hearings, the matter has not yet been referred to a grand jury. The contempt citation is in the hands of Ronald Machen, the U.S. attorney for the District of Columbia who was appointed by President Obama.

Asked for comment on the administration’s FOIA response to The Hill, Jordan said, “It’s par for the course. We’ve had a difficult time getting information from the IRS and the Department of Justice.” Jordan, a senior member of the House Oversight and Government Reform Committee, has held numerous hearings on the IRS scandal.

Last week, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said the IRS recently delivered 86,000 pages of new documents to the panel. Hatch added, “These documents … were given to us without notice or explanation roughly twenty months after we made our initial document request [on the targeting].”

Republicans in both the House and Senate are stepping up their investigations of the IRS. They have criticized the IRS and TIGTA for not informing Congress about the Tea Party targeting before the 2012 presidential election. GOP lawmakers say the administration has largely stonewalled them, while Democrats have called the probes “a witch hunt.”

 

Who knew what when?

The crux of the GOP’s IRS targeting investigations is: Who knew what when?

On Friday, May 10, 2013, Lerner famously planted a question at an American Bar Association (ABA) conference where she acknowledged “inappropriate” handling of tax-exempt applications in 2012. Lerner, who has since said she did nothing wrong, released the news before the TIGTA report came out the following week.

The Obama administration considered several other options on how to release the information, including an April conference at Georgetown University and an April 25, 2013, Ways and Means subcommittee hearing. Then-Treasury chief of staff Mark Patterson told Republican investigators that he informed the White House about the IRS plan to disclose the targeting “so that the White House wouldn’t be surprised by the news.”

Soon after Lerner’s comments attracted national attention, White House officials acknowledged they knew about the report but didn’t tell Obama about it.

Lew told Congress he first heard about the IRS matter at a “getting to know you” meeting with TIGTA chief J. Russell George in March 2013. But he said he didn’t learn the full extent of the findings until the media reported Lerner’s remarks at the ABA meeting.

Lew served as White House chief of staff before succeeding Treasury Secretary Timothy Geithner in 2013. Republicans on Capitol Hill are considering asking Geithner questions later this year on what he knew about the IRS’s targeting.

 

Weekly activity reports

TIGTA sends the Treasury secretary “weekly activity reports” on what it is working on. These reports, which are common in the executive branch and obtained through a FOIA request, serve as a “heads up” to Cabinet heads from inspectors general. They include categories such as “potential or expected press stories,” “upcoming hearings” and TIGTA reports that are awaiting public release.

From January through early May 2013, TIGTA referenced 25 reports that were subsequently issued in the weekly activity reports to Lew. But the agency’s most explosive report was not included in any of these weekly memos. It is unclear why, though a government official pointed out that Lerner spoke about the targeting at the ABA conference before TIGTA released its report. Her comments likely accelerated the Treasury Department’s clearance process.

Regardless, TIGTA officials briefed IRS and Treasury officials in 2012 and 2013, according to TIGTA memos provided to Congress. On May 30, 2012, TIGTA informed then-IRS Commissioner Doug Shulman and his deputies that criteria targeting Tea Party groups “were being used. …”

Jordan said neither the IRS nor TIGTA informed the Congress at that time — less than six months before the 2012 elections. He also pointed out Shulman didn’t correct his March 22, 2012, testimony to the Ways and Means oversight subcommittee where he said “there is absolutely no targeting” of Tea Party groups.

TIGTA’s FOIA practices have come under criticism before. In the fall of last year, the U.S. District Court for the District of Columbia admonished the agency for its use of FOIA exemptions. Cause of Action, a nonprofit group that has sued TIGTA, announced in December that the agency declined to fork over more than 2,000 documents related to a FOIA request.

Judicial Watch, another group that has sued the Obama administration on FOIA, said in December that the DOJ withheld 832 documents pertaining to meetings between the IRS and the Justice Department’s Public Integrity Section and Election Crimes Division.

Some of the documents that The Hill requested were released to Judicial Watch last year after a judge ruled in favor of the conservative group’s lawsuit.

Attorney General Eric Holder said last week that the DOJ will soon release a report on the IRS targeting that will include “some final recommendations.”

Lerner, who pleaded the Fifth Amendment before Congress, has given a lengthy interview to DOJ officials.

*** Let’s go deeper. DOJ Emails Suggest IRS Counsel’s Office Slowed Investigation

WASHINGTON, DC, Feb 05, 2015 (Marketwired via COMTEX) — Judicial Watch today released new internal Department of Justice (DOJ) documents revealing that the Internal Revenue Service Office of Chief Counsel’s office delayed approval of an IRS employee’s meeting with DOJ and FBI investigators into the Obama IRS targeting scandal. The emails also detail the involvement the Public Integrity Section of the Justice Department’s Criminal Division with the investigation. The documents show the Public Integrity Section was investigating the IRS scandal only a month after it reached out to Lois Lerner about prosecuting targeted tax-exempt entities. This is the first window into the criminal investigation of the alleged IRS abuses.

The Public Integrity Section previously has been tied to an effort to work with the Obama IRS in an effort to prosecute the very groups and individuals critical of the Obama administration and the president’s reelection that the IRS has admitted to illicitly targeting.

The new documents were released by the DOJ as result of a court order in Judicial Watch Freedom of Information Act (FOIA) lawsuit (Judicial Watch v. U.S. Department of Justice (No. 14-cv-01239)). The lawsuit was filed after the DOJ failed to respond to a FOIA request seeking:

Any and all records concerning meetings and/or communications between the Department of Justice Criminal Division Public Integrity Section and the Internal Revenue Service Tax Exempt and Government Entities Division, the White House, Members of Congress and/or congressional staff, and any non-government entity, regarding 501(c)(4) or other tax-exempt organizations.

The emails show that, on June 12, 2013, the lawyer for a cooperating IRS employee in Cincinnati complained to a DOJ prosecutor about the IRS Counsel’s office delaying approval of a meeting between the IRS employee and Justice Department prosecutors: “[W]e find it amazing that they didn’t immediately respond giving us the green light to meet with you.”

The DOJ prosecutor wanted to know who the contact in the IRS Counsel’s office was and wrote back: “Let’s talk in am if they don’t get back to you. Thanks.” The new emails suggest that investigators had wanted to meet quickly but it was nearly a month before the unnamed IRS employee met to proffer evidence to two Justice Department prosecutors, two FBI officials, and an investigator from the Treasury Inspector General for Tax Administration. The proffer session seems to have taken place in the IRS’ Cincinnati office on July 11, 2013, and included the IRS employee’s attorney, who the documents suggest works at the Cincinnati area law firm Adams, Stepner, Woltermann & Dusing PLLC. The documents detail that the proffer took place after a Garrity immunity waiver was secured for the IRS witness. Garrity immunity assures the right of public employees not to be compelled to incriminate themselves.

The email exchanges show that a trial attorney from the Public Integrity Section was partnered with an unnamed attorney from the Civil Rights Division of the Justice Department.

Barbara Bosserman, an attorney at the Civil Rights Division, has been reported to be leading the IRS investigation at Justice. The DOJ, in court filings in another Judicial Watch lawsuit about Bosserman’s role in the case, confirmed that she is one of the attorneys investigating the IRS matter. According to Federal Election Commission records, Bosserman contributed $6,750 to Obama’s campaigns and the DNC from 2004 to 2012, including 12 separate contributions to Obama for America between 2008 and 2012.

William J. Wilkins, the Chief Counsel for the IRS, is a political appointee of President Obama’s. Wilkins was a former Democratic staffer the U.S Senate, a donor to Democratic candidates and committees, and was a lobbyist for several years. The May 14, 2013, Treasury Inspector General report that revealed that the IRS had singled out groups with conservative-sounding terms such as “patriot” and “Tea Party” in their titles when applying for tax-exempt status details that the “Chief Counsel” was involved in the IRS’s Tea Party and conservative targeting.

In this second “rolling production,” the Justice Department released 34 pages of heavily redacted emails, while admitting that it had reviewed 938 pages of responsive records related to its contacts with the IRS concerning the criminal prosecution of targeted tax exempt entities. As of today’s date, the DOJ has reviewed 1,772 pages of records in this case, but only produced 36 heavily redacted pages. Held in their entirety are 1,736 pages.

The new documents also provide detail on what the investigators were examining and the nature of the documents it wanted from the IRS witness. On July 12, 2013, the DOJ attorney (whose name is blacked out) emails:

First, we would appreciate receiving the time line related to the “TAG spreadsheet” and “BOLO” that [REDACTED] prepared. As we stated, that timeline will be covered by the proffer agreement she executed yesterday. Second, we would also appreciate obtaining the email communications that you obtained from [REDACTED-BLACKED OUT] pertaining to the 501(c)-application issues we discussed yesterday, i.e., the public allegations that the IRS “targeted” certain groups based on their political viewpoints, in particular groups associated with the ‘Tea Party.” As I explained yesterday, due to the filter procedures we have in place, could you please divide the communications into two groups, those dated before and those dated on or after March 1, 2012? To the extent practical, the emails dated on or after March 1, 2012, should be placed in a sealed envelope or otherwise clearly separated from the first batch (i.e., if they are scanned and emailed, please do so in separate files). To the extent any of these applications contain taxpayer information, return information, and/or taxpayer return information, the Department of Justice and the FBI have referral authority under 18 U.S.C. 6103(h) to view this information by virtue of our participation in a joint investigation with TIGTA.

The documents do not detail why the emails needed to be “filtered” according to the March 1, 2012, date, though there is a reference to Justice Department “filter team” elsewhere in the material.

“The IRS scandal is getting worse. These documents show that the Obama IRS Counsel’s office, run by an Obama political appointee, was stonewalling a federal criminal investigation. And only in the Holder Justice Department would it be deemed appropriate that the offices implicated in the IRS abuses should investigate the IRS abuses,” said Judicial Watch President Tom Fitton. “And one might wonder why the Justice Department was so quick to offer an immunity deal to an IRS employee. This is an ugly mess and it is no surprise that, after nearly two years, the criminal investigation of the Obama IRS by its co-conspirators at the Obama Justice Department is widely acknowledged as a farce.”

In early December 2014, Judicial Watch released the first batch of internal DOJ documents revealing that former IRS official Lois Lerner had been in contact with DOJ officials about the possible criminal prosecution of tax-exempt entities two full years before what the IRS conceded was its “absolutely inappropriate” 2012 targeting of the organizations. According to the documents, Lerner met with top Obama DOJ Criminal Division officials as early as October 2010.

In April 2014, Judicial Watch forced, through a federal court order, the release of IRS documents revealing that the Department of Justice’s Public Integrity Section reached out to former IRS official Lois Lerner on May 8, 2013, about whether it was possible to criminally prosecute targeted tax-exempt entities. The documents were obtained as a result of an October 2013 Judicial Watch FOIA lawsuit filed against the IRS.