- Senators Balk at 2008 Call for Probing Tax-Exempt Organization
- Group Targets Ban on Candidate Endorsements by Non-Profits
President Barack Obama’s nominee to serve as the top U.S. tax prosecutor has stalled over an obscure letter he wrote seven years ago questioning the legal tactics of a group that wants pastors to speak out on politics.
The standoff involves Cono Namorato, a Washington defense attorney and former government lawyer, who was nominated Feb. 24 to serve as the assistant attorney general over the Justice Department’s tax division. The outcome will determine the leadership of the division’s 370 criminal and civil lawyers, who pursue offshore tax evasion and other investigations.
Namorato, 73, won bipartisan praise at his July 22 hearing in the Senate Judiciary Committee, but never got a confirmation vote from that panel. In response, a group of former Justice Department and Internal Revenue Service officials wrote this week to urge the committee to approve Namorato.
“We know of no one who cares more than Mr. Namorato about the use of proper criminal and civil tax enforcement measures to deter tax cheats and to promote and foster voluntary compliance with the country’s tax laws,” said the Dec. 7 letter.
Behind the scenes, some members of the judiciary panel have concerns. After Namorato’s hearing Republican Senator Charles Grassley, the panel’s chairman, asked him about a 2008 letter he co-signed that urged the IRS to investigate the actions of lawyers at the Alliance Defense Fund, based in Scottsdale, Arizona.
Seeking a Challenge
The group, now known as the Alliance Defending Freedom, had founders including James Dobson, who created Focus on the Family, a Colorado Springs, Colorado-based Christian organization that describes its mission as “nurturing and defending the God-ordained institution of the family and promoting biblical truths worldwide.”
ADF seeks to use the legal system to promote Christian values like religious freedom, the sanctity of life and marriage and family. It opposes a 1954 change to the tax code that bars tax-exempt organizations from taking a stand on political candidates. The group is looking for the IRS to enforce the law, which would lay the groundwork for a legal challenge on First Amendment grounds. The IRS has demurred. A spokesman for the group didn’t respond to requests for comment.
ADF encourages pastors to speak “freely and boldly from their pulpit about the issues of the day,” according to its website. It says the “IRS controls pulpits” because it can “tell pastors what they can and cannot preach.” The ADF claims that 4,100 pastors agree the 1954 law must be changed, that 2,032 have violated it since 2008 and that 1,600 preached an election sermon in October 2014.
In September 2008, when the group was starting its “Pulpit Initiative,” Namorato and two other lawyers at his Washington firm, Caplin & Drysdale, wrote to the IRS Office of Professional Responsibility. They said the ADF was “explicitly soliciting churches across America to violate Federal law” for tax-exempt organizations in section 501(c)(3) of the Internal Revenue Code.
By encouraging “mass violation of Federal tax law,” the ADF engaged in “incompetent and disreputable conduct” under regulations governing behavior for lawyers who practice before the IRS, they wrote. The letter urged an investigation into whether the lawyers violated the conduct rules, and advocated “immediate and appropriate action to address this flagrant disregard of the ethical rules for practice before the IRS.”
The IRS took no action against the ADF. Namorato, a former prosecutor, declined to comment. Grassley did not respond to requests made through a spokesman for comment.
“Mr. Namorato’s documented involvement in encouraging the IRS to investigate lawyers working with the Pulpit Initiative is quite concerning to a number of members, including the chairman,” said committee spokesman Taylor Foy.
“The committee thoroughly vets all nominees,” Foy said. “When questions arise during that deliberative process, those concerns are dealt with before proceeding. At this point, those concerns have not been addressed for this nominee.”
In 19 written questions and responses dated July 31 and August 14, Grassley pressed Namorato on the 2008 letter. The senator asked what guidance Namorato, if confirmed, would give the IRS about whether it should monitor the content of sermons. Namorato said the Tax Division’s role on that question is limited.
Grassley asked Namorato how he would view the Pulpit Initiative.
“If I am confirmed and the IRS were to determine that a church or pastor violated the restrictions on political activity and referred the matter to the Tax Division, I would ensure that the merits of the litigation were evaluated in the same manner as any other referral,” Namorato responded.
In response to Grassley, Namorato also said he didn’t believe the lawyers acted criminally. Yet, he said, his concern was with the ADF’s “active solicitation of clients for the purpose of assisting them in committing a violation of law.”
Caplin & Drysdale is a prominent tax firm whose clients include tax-exempt organizations.
Namorato, a native of Brooklyn, New York, graduated summa cum laude from Iona College and worked for several years as an IRS special agent while he attended Brooklyn Law School at night.
He spent a decade in the Justice Department’s tax division in Washington, rising to chief of the criminal section and deputy assistant attorney general over criminal tax enforcement.
In 1978, Namorato joined Caplin & Drysdale, representing corporations and individuals in criminal probes, civil examinations and voluntary disclosures. He has worked at the firm since then, except for a two-year stint from 2004 to 2006, when he ran the IRS Office of Professional Responsibility.
The Justice Department’s tax division is now run by Acting Assistant Attorney General Caroline Ciraolo.