The IRS, Benghazi, and the Republicans Who Cried Wolf

Every week, New York Magazine writer-at-large Frank Rich talks with contributor Eric Benson about the biggest stories in politics and culture. This week: The GOP finds a new Watergate, the Justice Department bullies the AP, and Bloomberg News gets caught snooping on Bloomberg clients.

By Frank Rich / New York Magazine- RSN / May 16, 2013

RICH: Last week, conservatives called Benghazi Obama’s Watergate. Now they’re applying that label to a new scandal in which IRS officials admitted applying special scrutiny to tea-party-affiliated groups applying for tax-exempt status. President Obama has condemned the IRS’s actions. The FBI has opened an investigation. Do you see this having a major impact on the administration and its credibility?

 BENSON: It would help the GOP’s political cause if it didn’t ratchet up to DEFCON 1 at every Obama White House mishap that lurches into its sights. Benghazi is the “most egregious coverup in American history” (in the words of Senator James Inhofe, R-Oklahoma), but if every other story is Watergate, too, then Inhofe and the rest become the Boys Who Cried Wolf.

With all due respect to George Will, who now refers to the Obama “regime” in his column and is citing Watergate articles of impeachment to indict the president, the IRS scandal only becomes Watergate if it turns out that the targeting of tea-party groups was under White House orders or direction. There is no evidence of this. Indeed, the IRS commissioner in charge at the time this happened was Douglas Shulman, a Bush appointee who testified before a House oversight committee in March 2012 that there had been “absolutely no targeting” of conservative groups. Why would a Republican official be part of an Obama cover-up?

The same question must be asked about the State Department spinmeister and Cheney factotum Victoria Nuland, whose fingerprints are all over the Susan Rice “talking points” at the heart of that “most egregious coverup in American history.” The conspiracy plot thickens – or does it thin?

Meanwhile, a bigger scandal hovers over all of this: the IRS’s granting of tax breaks to blatantly partisan political “public welfare” groups whether they be affiliated with the tea party, Karl Rove (Crossroads GPS), the Obama administration (Priorities USA), or fat-cat third-party movements (Americans Elect).

 The Justice Department informed the Associated Press last Friday that it had secretly seized phone records of reporters and editors, apparently to suss out the source of a leak on a CIA-foiled terrorism plot. This administration has indicted six current and former government officials on leak-related charges, far more than any previous administration. How much do you worry about a chilling effect on political and national-security reporting?

 This is the scandal with legs. It is not the work of lower level bureaucrats and is entirely consistent with the Obama White House’s efforts to shut out, intimidate, and manipulate the press. I don’t think Eric Holder’s explanation adds up – any of it. It doesn’t make sense that he would have recused himself from the broad investigation of the AP; his explanations of why he did so (e.g., because he has “frequent contact with the media”) sound like dissembling. Holder’s claim that the AP story “put the American people at risk” is also suspect. I believe Gary Pruitt, the AP’s chief executive, when he says that his organization “held that story until the government assured us that the national security concerns had passed.”

There’s nothing in Pruitt’s career or the AP’s past behavior to support the case that he would be making this up. So, yes, the Obama administration is and has been trying to chill reporters on national security and other areas. And, as we are seeing daily, its efforts at intimidation have done little to stop leaks. The sweeping assault on the AP’s phone lines demands a true investigation – not a dog-and-pony show by the Republican House.

 Politico says that these two scandals show that D.C. has turned on Obama, with congressional Republicans, Establishment Democrats, and the press all out for blood. Are they overplaying the importance of the last few days? Or has something indeed changed in the narrative of the Obama presidency?

 It’s way too early to tell, of course.

Wasn’t the BP spill supposed to end the Obama presidency? Or was it the revolt against Obamacare? Not for the first time, the GOP could overplay its hand.

In the accounting of Chuck Todd of NBC News, fully a third of House committees are now devoted to investigating the Obama administration. The Republicans see a golden opportunity to rev up their base in anticipation of the 2014 election. If scandal fever keeps escalating and we get anywhere near the frenzy of the impeachment crusade against Bill Clinton (perhaps unlikely, since the key ingredient of sex is missing), it could backfire.

That’s what happened in the second-term Clinton midterms of 1998, when Gingrich’s revolutionaries actually lost seats in the House because of their incessant fixation on scandal. In 2014, the Democratic base could well be moved to turn out, too, including Latino voters who will be reminded daily that Congress was too busy investigating the Obama White House to deliver immigration reform.

 Another journalistic imbroglio erupted over the past few days, when the New York Post broke a story that Bloomberg News reporters had been using the company’s data terminals to monitor the activities of Wall Street banks. Bloomberg News has been one of the rare journalism success stories during the industry’s downturn. Will this revelation set it back?

 From its response, it’s clear that Bloomberg realizes it has a serious problem. And it has every incentive to correct it. If its data terminals are viewed as Peeping Toms by its well-heeled customers, that could destroy its main business. Meanwhile, Bloomberg News’s serious reputation as a news organization – and they do lots of good work – could also be destroyed by the image of reporters illicitly invading the privacy of Bloomberg terminal customers. The big question mark out there is if this snooping extended to Bloomberg data terminals at the Federal Reserve and the Treasury Department. Investigations are under way. Let’s hope Eric Holder is not in charge.