According to a whistleblower, the IRS and Congress were profiting off of insider trading information given to the government agency in the course of its duties.
The Internal Revenue Service is a powerful government agency, and that power, if abused, can do everything from benefitting corrupt government officials to allowing them to arbitrarily harass political opponents who just happen to be conservative. However, according to a whistleblower, workers at the IRS abused their power to make money, hand in hand with Congress.
Members of the IRS were tipping off people in elected office, in Congress, according to this whistleblower’s claims. Together, the group was profiting from insider trading, utilizing knowledge not available to the general public to make trading decisions on the stock market, the same thing that landed Martha Stewart in prison. In other words, the federal government was tipping off politicians so they could make fortunes.
According to this unnamed inside source, higher-level employees at the IRS were tipping off members of Congress concerning corporate takeovers, and together both were enriching themselves by making appropriate investment decisions.
While John Crudele over at the New York Post admits that this sounds insane, he also brings up a good point.
It was only a few years ago that Congress first passed a law, stating that they could not use information that they learned during their work as public officials to guide their trading decisions.
That occurred in 2012, while Barack Obama was president.
However, according to Crudele, the difference between that and what’s going on with the IRS and Congress is great.
For a long time, many people have assumed that elected officials were using insider information to get rich. After all, it seems strange to many citizens that so many people go to elected office in Washington D.C. and see explosive growth in their wealth before they leave.
These people are much more likely to be aware when the Food and Drug Administration is about to reach a conclusion about a new medication, or when a company is asking around to feel out whether they would be able to legally merge with another company or not.
What this whistleblower said is far worse, however.
According to this un-named whistleblower, in 2003-2005, a memo was created and circulated within the government agency that oversees taxation for the federal government.
The memo stated that all IRS employees who were in the executive branch, and those who were one step lower on the totem pole, such as territory managers, were allowed to participate in insider trading.
The whistleblower, who was what the government bureaucracy called a ‘large case manager’ at the agency, was one step too low to actually engage in the practice.
He claimed that on his evaluation, he was told that he was supposed to inform his manager, who was able to take advantage of insider trading information, about “any and all mergers.”
According to the insider, he was actually fired for failing to do so, and even retaliated against.
Obviously, this took place a number of years ago. At this point, the only person who could actually look into the whistleblower’s accusations would be the people in the Office of the Inspector General at the agency.
Interested in following the story up, the NY Post reporter called the IRS Office of the Inspector General media contact number.
The person on the phone didn’t seem to be very interested in the claims of insider trading, or interested in the idea that there could be insider trading at the highest levels of the agency.
The IG agent suggested that the source call the IRS hotline, which the source was not interested in doing.
When asked if there was an insider trading exemption for the IRS, or for its high-ranking employees, she sent the reporter a brochure, then gave him a canned response, thanking him for contacting the IRS and asking if the caller needed anything else.
The reporter saved the juiciest tidbit for last, however.
The whistleblower stated that when he was working at the IRS, he was made aware of a large merger between two large businesses.
As the whistleblower was the case manager on the audit for the merger, he was supposed to inform his manager, who would then inform the manager another level up.
However, he refused to inform them.
This led him to lose his job. The manager above him produced a memo, the suspended Mr. Whistleblower for refusing to inform the chain of managers about the merger.
Allegedly, the manager had planned to use the information concerning the merger to make a million dollars or more, with which he planned to pay off his home mortgage.
Even worse, the manager was placed so that he could inform members of Congress about the merger, thus allowing them to invest and profit off of this insider information.
The whistleblower said that by using information in that way, high-ranking members of the government organization could secure cushy jobs on the boards of places like the Smithsonian once they retired from government ‘service.’
According to the whistleblower, he was pushed out in 2004, on what he called “trumped-up” charges.
This kind of incestuous relationship between regulatory agencies and the people who should be overseeing them is exactly what many Americans are afraid of, and why they fear that the government has too much power.
The IRS IG should be investigating the claims, as they represent a breach of not just ethics, but seem to represent a breach of law that has sent other people to federal prison for years on end.
Instead, it seemed like they didn’t much care to investigate, and gave the reporter a blow-off response.