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Conservatives 'Won' the Phony IRS Scandal. And Democrats Helped Them.

If, like me, you are in that curious band of Americans who still faithfully read Peggy Noonan’s column, you know that she was back at it this past weekend with her latest idee fixe: the IRS scandal. It was her eighth column on that subject in less than three months. The week prior, she had written one hollering about a new “bombshell” revelation that turned out, on closer inspection, to be two months old. This weekend, she was more contemplative, taking quiet stock of the epic scale of what she calls the “biggest IRS scandal since Watergate”:

In all the day-to-day of the IRS scandals I don't think it's been fully noticed that the overall reputation of the agency has suffered a collapse, the kind from which it can take a generation to recover fully. In the long term this will prove damaging to the national morale—what happens to a great nation when its people come to lack even rudimentary confidence in the decisions made by the revenue-gathering arm of its federal government?

It will also diminish the hope for faith in government, which whatever your politics is not a good thing. We need government, as we all know. Americans have a right to assume that while theirs may be deeply imperfect, it is not deeply corrupt. What harms trust in governmental institutions now will have reverberations in future administrations.

…The effect in terms of public approval can be seen in the polls. Fox News, in May, compared its recent IRS polling with its polling 10 years ago. In May 2003, just under a third of all respondents said they had little or no faith in the IRS—a high number, perhaps, but a cantankerously American one. In May 2013, that number had jumped to 57%. Around the time of Fox's 2013 poll, Gallup had 60% of Americans seeing the IRS as an agency that "frequently abuses its powers." And Gallup had 42% of respondents saying the IRS did a "poor" job, more than double the figure from 2009.

What’s strange about the column is that Noonan somehow takes the evident toll of the allegations against the IRS as proof that the Obama administration has gotten away with something: that this was a real and damaging scandal that is being dismissed by the media as overhyped. But what she is describing is in fact proof of the exact opposite: the allegations have taken a great toll on the agency (and, polls suggest, on Obama himself) precisely because they were overhyped and not dismissed by the media. In other words, Peggy Noonan won. She just doesn’t seem able or willing to admit it.

The fact is, the more we learn about the scandal, the more egregiously and irresponsibly overwrought the initial coverage of it appears. It’s easy to forget, just a few months on, just how much the media lost its head over the story, fueled by, and in turn reinforcing, statements of outrage from panicked Democrats, including those at the White House. Politico, to cite just one example, had more than a dozen pieces on the scandal on its home page the day after it broke, far outweighing even its hyperventilation over the two concurrent scandals du jour, Benghazi and the Department of Justice’s monitoring of AP phone records. The hysteria was not abated by reporting in the days immediately following that strongly suggested that the scandal amounted more to bureaucratic bungling in attempting to enforce the muddled law around 501(c)(4) organizations than a grand conspiracy to suppress conservative groups.

In the weeks since, even more has emerged to put the outrage in dubious light. We know that one key staffer in the Cincinnati office overseeing the 501(c)(4) evaluations, a self-described conservative Republican, avowed to congressional investigators that there was no political motivation behind the scrutiny for Tea Party groups, testimony that Rep. Darrell Issa, the Republican leading the charge against the agency, tried to keep from getting out. We know that the IRS Inspector General who produced the report that touched off the whole scandal, a former Republican Hill staffer, had overlooked signs that some non-conservative groups were getting flagged for extra scrutiny as well. We know that the IRS office did nothing to stop the big election spending by large conservative groups like Crossroads GPS, hardly what you would expect to see if there was a conspiracy to suppress activity on the right.

More and more, it looks as if what happened in Cincinnati was that agency staffers lacking direction from their Washington superiors on how to enforce an unworkable law amid a wave of applications from groups that seemed to be testing the vague bounds of that law did what bureaucrats in such situations tend to do: stalled for time, kicked the problem upstairs and sent out more and more paper in the form of needlessly nettlesome questionnaires to the applicants.

But that is not what we’re talking about now, about how to fix the law so that this delay and confusion doesn’t happen again. No, instead we’re still looking for the conspiracy, the orders from above. The tragicomedy was accurately captured in a letter to the editor that ran one week ago in the Washington Post, tucked away on the paper’s Saturday “Free for All” page usually dominated by missives from grammarian cranks. There, Conrad Rosenberg, a Silver Spring resident who retired 16 years ago as a branch chief in the IRS’s tax-exempt organizations division, had this to say:

Still another article in The Post ["House GOP bills intended to push White House on scandals," The Fed Page, July 10] used the phrase "the Internal Revenue Service's targeting of conservative political groups."

Notwithstanding IRS official Lois Lerner's disastrous and inexplicable "admission" to the contrary, there has been no evidence yet adduced that the IRS "targeted" conservative groups. To the contrary, the facts so far tell us that the IRS's exempt organizations division did exactly what it is supposed to do. It must attempt to implement properly a 100-year-old provision of the tax code that requires the service to differentiate between organizations that are primarily "social welfare" organizations, hence properly exempt under the statute, from ones that are primarily political - conservative or not - and hence not exempt.

Regrettably, repeated use of phrases such as "targeting conservative organizations" and "IRS scandal" implants those notions in the public consciousness, and subsequent revelations are unlikely to change that. The only scandal is the way the news media leap on incomplete "facts" and parrot unsupported accusations to churn controversy. Good people's jobs and reputations have already been damaged, if not destroyed. Words matter. But then you don't need me to tell you that.

When I called up Rosenberg to chat about the letter, he elaborated on his dismay over the way the story had been blown up, particularly the latest furor over Noonan’s “bombshell” that the IRS chief counsel’s office had been involved in the scandal. “Bottling things up in the [IRS chief counsel’s office] when there’s a controversy isn’t a new thing—it’s been going on forever. When you don’t want to make a decision you send it to the to the chief counsel’s office and hope the problem goes away. This was typical bureaucratic foot-dragging and bungling,” he said. “It was a case of timidity -- no one wanted to make a decision so they kept finding out a way to drag things out.” The delays were excessive, Rosenberg said, but the agency was right to be vetting the applicants to see if they violated the election-activity limits for 501(c)(4) “social welfare” status: “They were doing what they were supposed to be doing to scrutinize these cases. The problem is that ‘social welfare’ is such a nebulous concept.”

Rosenberg was together with some other IRS retirees on a recent evening and they found themselves lamenting the hit their agency had taken. “At the IRS, you’re used to not being beloved, but this is awful,” he said.  One of his former colleagues, he said, was particularly distraught. “He said, ‘this is absolutely terrible, and I don’t know what we can do about it.’ Well, I wrote a letter, but I’m not sure what that’s going to do.”

Move along, Peggy. You won.

Alec MacGillis is a New Republic senior editor. Follow him @AlecMacGillis.