President Donald Trump still hasn’t nominated anyone to lead the Justice Department’s tax division, which could pose problems for him if FBI special counsel Robert Mueller approaches the division to pursue charges against the president or his associates for tax violations.
The Daily Beast reported Thursday that Mueller has enlisted the IRS’s criminal investigations unit (IRS-CI) as part of his probe into possible collusion between the Trump campaign and Russia.
The move indicates that Mueller is continuing to take a follow-the-money approach to the investigation in an attempt to determine whether Trump or anyone in his orbit was compromised by Russian or Russian-linked entities during the election. It is also an indication that he’s spotted something in someone’s tax returns – which federal investigators typically obtain early on in their probes – that he believes is worth pursuing.
“A federal prosecutor can bring in IRS-CI whenever he or she is investigating tax charges,” said Renato Mariotti, a former federal prosecutor in the Securities and Commodities Fraud Section of the United States Attorney’s Office.
Mariotti said tax returns tell federal prosecutors to whom a person of interest owes money – and who owes them money – making the returns invaluable not only in identifying potential conflicts of interest, but also in revealing potential tax crimes. That Mueller has enlisted the IRS-CI, Mariotti wrote on Thursday, “very strongly indicates” that he has uncovered evidence of a tax crime and is investigating it.
“If a federal prosecutor wants to investigate a tax crime, he or she must involve the IRS,” Mariotti said. “You can’t charge tax cases without them.”
The IRS has sole jurisdiction over pure tax crimes. But when an investigation moves past that, there are crimes the IRS works with the FBI on, like money laundering.
Mueller also couldn’t charge tax cases without permission from the DOJ’s tax division, which is currently being run by career officials rather than a Trump appointee.
“The fact that there is not a Senate-confirmed assistant attorney general for the tax division, and that the Trump people have disregarded it despite warnings as far back as December that they needed to fill the AAG’s spot … shows what a self-created mess the Trump administration has found itself in,” a former tax division prosecutor told The Daily Beast.
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That person told the publication that the absence of a Senate-confirmed assistant attorney general means Trump has “no one to keep Mueller and his Brooklyn team honest.”
Former attorneys who served in the DOJ’s tax division disagreed with that assessment in interviews on Friday, asserting that there is noreason to believe that career DOJ officials wouldn’t keep Mueller “honest” – and that the position is supposed to be apolitical anyway.
“I cannot disagree with the statements made by this anonymous former prosecutor more strongly than I do,” said Andrew Strelka, a former trial attorney in the DOJ’s tax division. “The implication of those statements is that a political appointee would intercede in an ongoing investigation on behalf of the administration.”
To do that, Strelka explained, would be tantamount to obstruction of justice.
“A politically appointed AAG is not there to serve as a shield for an administration,” he said.
Strelka praised David Hubbert, the current acting assistant attorney general of the tax division who was appointed the division’s deputy assistant attorney general for civil trial matters in 2012.
“I can’t imagine a better attorney in the workforce to run the division,” said Strelka, who worked under Hubbert at the DOJ.
Jan Geht, another former tax division attorney, largely echoed that sentiment: “The Tax Division has always been the most apolitical and the most well-run Division within US Department of Justice,” he said in an email.
“As [Deputy Attorney General] Rod Rosentein himself was a political appointee and he made the decision to appoint a special counsel in the first place, I am not prepared to conclude that any political appointee to the Tax Division would have been (or would be) more deferential to the administration than a career servant.”
- Thomson Reuters
Joe Rillotta, a former trial attorney in the DOJ’s tax division who later served in the IRS’ office of chief counsel, said it was concerning Trump hadn’t appointed anyone yet – if not just because political appointees are generally instrumental in resolving tensions between the administration and the DOJ.
“I disagree with any notion that the tax division attorneys are going to play politics here,” Rillotta said. “If they have a case before them for review – particularly a sensitive, high-profile case – they are going to play it straight.”
But political appointees, “who have credibility both with the administration and with the institutions that they lead,” are adept at mediating the interactions between political staff and civil servants, Rillotta said – interactions that can sometimes be difficult given the politicos’ lack of familiarity with the DOJ rules “that protect the independence and integrity of government operations.”
“For this reason (among others), it’s a real issue that there aren’t political appointees leading the tax division,” he said. “In the absence of an appointed AAG or Criminal Tax Enforcement DAAG, there may be all the more pressure on Rod Rosenstein to protect the integrity of any Tax Division operations relating to the special counsel’s investigation.”
The concern, in other words, is that political staff may cross lines that could compromise the independence and integrity of DOJ operations. Ideally, the appointee has a relationship with the division or the department he or she is running, and therefore is inclined to protect the career officials under his or her direction.
But not all of Trump’s appointees have a warm relationship with their personnel – Environmental Protection Agency secretary Scott Pruitt waged repeated legal battles against the agency while he was Oklahoma’s attorney general, and Department of Energy secretary Rick Perry has argued the DOE should be scrapped. State Department employees, meanwhile, have complained that Secretary of State Rex Tillerson has insulated himself from career diplomats and their staff.
It is not clear whether the president or his aides have interviewed anyone to lead the tax division, which may prove central to how Mueller’s investigation unfolds. The White House did not return a request for comment.