The Missing Koch Report

Photo Credit: National Review

Photo Credit: National Review

In late September 2010, Iowa senator Chuck Grassley and six of his colleagues grew suspicious that a senior Obama administration official had improperly accessed the tax information of industrial behemoth Koch Industries. After Austan Goolsbee, then-chairman of the president’s Council of Economic Advisers, made an erroneous statement that implied direct knowledge of the company’s confidential tax status, the senators demanded that the Treasury Department inspector general for tax administration (TIGTA) investigate. Now, more than two years since the completion of that investigation, and despite repeated requests from Koch Industries and Senator Grassley himself, the results have yet to see the light of day.

Ironically, federal law is designed to keep that information from public view. Asked how taxpayers might discover whether their information has been accessed improperly, a spokeswoman for the House Ways and Means Committee tells National Review Online that, in most cases, “They won’t.”

In order for Koch Industries or the general public to see the TIGTA report, the IG’s office must refer the case to the Department of Justice for prosecution. If Justice declines to prosecute, all the relevant information remains under lock and key. Critics worry that a highly politicized Justice Department is unlikely to take up cases that have the potential to damage the Obama administration.

Koch Industries’ tax returns became the subject of controversy when, in an August 2010 briefing with reporters on a newly released tax-reform report, Goolsbee claimed that the company paid no corporate-income taxes. “We have a series of entities that do not pay corporate income tax,” he said, “some of which are really giant firms — you know, Koch Industries, I think, is one, is a multibillion-dollar business…”

Goolsbee’s assertion raised the eyebrows of a half-dozen GOP lawmakers, who subsequently called on Treasury Department inspector general J. Russell George to investigate whether Goolsbee had accessed the company’s tax returns in violation of federal law. In a letter to George, Grassley and his colleagues said they were “very concerned” by Goolsbee’s remarks. “The statement that Koch is a pass-through entity implies direct knowledge of Koch’s legal and tax status, which would appear to be a violation of section 6103,” they wrote, referring to the section of the Internal Revenue Code that protects the confidentiality of tax returns and all related information. George agreed to investigate.

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