IRS workers turn to elite D.C. lawyers for defense
By: Lauren French
September 17, 2013 12:03 AM EDT
They’ve defended the likes of WikiLeaks founder Julian Assange and former International Monetary Fund chief Dominique Strauss-Kahn.
Next up for the heavy hitters of Washington’s legal community: embattled Internal Revenue Service workers.
Even as the tea party-targeting scandal dies down, the staffers at the center of the mess are turning to some of the city’s top lawyers to defend themselves against ongoing investigations and congressional inquiries.
Lois Lerner, who became the public face of the scandal as the former head of the IRS tax-exempt unit, turned to William Taylor. He’s a founding partner of Zuckerman Spaeder LLP, where he has represented, among others, Strauss-Kahn and Kenneth Langone, who successfully fought prosecution in a high-profile executive compensation case.
Holly Paz, a former senior-level IRS director, hired Roel Campos, a partner at Locke Lord LLP. He served on President Barack Obama’s Presidential Intelligence Advisory Board and spent two terms as a commissioner of the SEC.
And Joseph Grant, a senior IRS official who retired in the early days of the scandal, hired Barry Pollack, who previously represented Assange and Kevin Howard, Enron’s former broadband finance chief.
The moves are an indication of how seriously the IRS workers are taking the battles that lie ahead even as the intensity of the scandal fades.
“Anybody who has held high-level positions in the government and knows Washington understands that you want to take congressional inquiries seriously and you want to make sure that you have somebody who is experienced to guide you,” Pollack said.
It’s clear that Republicans aren’t about to ease the pressure on IRS employees. Just last week, House Ways and Means Committee Chairman Dave Camp released a series of emails from Lerner where she called the tea party applications “dangerous.”
Republicans said the emails were proof that political motives were behind the targeting, something that the IRS has denied and an independent inspector general has said hasn’t been proved.
Lerner also remains under subpoena from the House Oversight and Government Reform Committee. Rep. Darrell Issa (R-Calif.), the panel’s chairman, called her to testify in May but she asserted her Fifth Amendment right to avoid self-incrimination after giving a statement contending that she is innocent of any wrongdoing.
Republicans on the committee voted that her statement voided her Fifth Amendment rights and said she will be called back to testify. Issa has not set a date for that hearing yet.
Issa and Rep. Jim Jordan (R-Ohio) sent a letter to Paz in August pointing out four inconsistencies between her May testimony and later interviews and evidence uncovered by the committee.
Meanwhile, Rep. Charles Boustany (R-La.), chairman of the House Ways and Means subcommittee that oversees the IRS, also has a standing request for email from Grant.
The IRS employees may also have to contend with a Department of Justice investigation into the targeting.
And if any of the IRS employees are convicted of lying to Congress, there is a risk of heavy fines or up to five years in prison — though it is unlikely any of the IRS employees will see those charges.
The IRS placed Lerner and Paz on administrative leave in the wake of the scandal.
The IRS general counsel’s office defends the agency during criminal or congressional investigations. Once on administrative leave, Paz and Lerner needed private lawyers. Since Grant retired from the agency in May, he also required outside counsel.
Lawyers with experience similar to Campos, Taylor and Pollack keep their fees private but experts said they likely charge around $1,000 an hour, raising questions about how civil servants might be able to afford such high-powered representation.
It’s likely that the lawyers are working at a lower rate for their IRS clients, said Robert Luskin, a partner at Patton Boggs who isn’t directly familiar with any of the IRS cases.
“It would not surprise me if folks are doing this on a significantly reduced fee basis,” Luskin said. “There are these situations … where folks just get caught up in these political scandals and the collateral damage falls to people who are tier 13, 14, 15.”
For now, no criminal charges have been filed and the damage to the workers seems mostly limited to their reputations.
“Administratively, within the agency, they are not considered to have been damaged. … However, there are serious consequences … in that status because it appears that [Paz] is being punished and it hurts her reputation,” Campos told POLITICO.
The real risk is if the IRS moves forward and fires Lerner or Paz as government employees. They would lose their pensions if they are fired for cause.
Lerner has worked in civil service for more than three decades and could retire with her pension now. Paz, who worked at a private law firm before joining the IRS and is hoping to be reinstated, is years away from retirement.
Neither Paz nor Lerner is appealing their administrative leave and will wait until the IRS finishes the investigation into the tea party targeting before taking action on their employment status.
Campos said that leaves Paz in “limbo.”
A source close to the Lerner case told POLITICO that she wants to “move on with her life.”