IRS scandal less than it seemed; Liberal groups also scrutinized

It was the little scandal that couldn't.

Despite considerable effort from Republicans to fan the flames all the way to the White House, the Internal Revenue Service scandal has been definitively snuffed.

The kerfuffle began in May, when a report by a Treasury Inspector General concluded that the IRS had inappropriately singled out conservative groups applying for tax-exempt status for additional scrutiny.

But that report has since been proven to be critically flawed.

The Inspector General's office had knowingly excised mention of the IRS' scrutiny of groups with the words "progressive," "Occupy," "healthcare legislation" or "Israel" in their names.

Instead, the report portrayed the IRS as exclusively targeting "Tea Party" or "patriot" organizations, prompting criticism from this editorial page and righteous indignation from Republicans and Democrats alike.

Rep. Darrell Issa, R.-Calif., the powerful chairman of the House Oversight Committee, whose raison d'etre appears to be pinning any scandal — real or imaginary — on President Barack Obama, began a comprehensive investigation.

But the results did little to corroborate his conspiratorial worldview.

Testimony released by Rep. Elijah Cummings, D.-Md., the ranking member on the committee, refuted any allegations of Nixonian overreach.

Instead, the released interview with IRS official John Shafer, a conservative Republican who launched the screening program, recorded him as saying, "what I did was not targeting."

When asked whether the White House was involved, Shafer replied "I have no reason to believe that."

And contrary to cries of governmental tyranny, no one was denied the freedom to exercise their political beliefs — they simply had to wait a little longer for a tax credit.

Dejected Republicans, having only recently moved on from the similarly imploded Benghazi non-scandal, would do better to focus on needed investigations into the Department of Justice's wiretapping of the Associated Press and the unprecedented and seemingly uninhibited capabilities of the National Security Agency.

Yet, obscured by all the optics is a real reason for IRS scrutiny of these seemingly political groups.

The targeted groups were filing for tax-exempt status as 501(c)(4) or "social welfare" organizations, which do not have to disclose their donors and are supposed to use all funds "exclusively" for education or community betterment.

But the IRS' actual enforcement of these rules is lax enough to allow such groups to make political contributions as long as they account for less than half of total expenditures.

Accordingly, savvy operatives have taken advantage of 501(c)(4) status to funnel vast sums of money from secret donors into election campaigns.

In 2012, Republican strategist Karl Rove's social welfare organization, Crossroads GPS, spent more than $70 million, all collected secretly, on behalf of Republican candidates, an illustration of how farcical campaign finance laws have become.

The IRS' attempts to uphold whatever shredded campaign finance laws exist would naturally require stricter scrutiny for overtly political groups that might be masquerading as social welfare organizations.

As keen as Issa and the Republicans were to spin the IRS revelations into a scandal, their indifference towards the unregulated torrents of money flooding our elections is surprising.

Or perhaps not, once you remember how the politicians got here.