Playing Politics with Tax Returns

Part of the Nixon Administration's hubris was a conviction that every federal agency, no matter how strong its tradition of independence, should snap to attention at a call to the service of the White House. That included the Internal Revenue Service, whose activity touches intimately the lives of almost all Americans. So John Dean told the Watergate committee last week, shredding the last vestige of the myth that Watergate was simply a matter of politicians doing things to other politicians.

Dean submitted a series of memos to back up his testimony that White House aides had tried (and to the credit of the IRS, largely failed) to get the IRS to use tax audits as a means of harassing liberal organizations, journalists, politicians, businessmen, labor leaders -- the range of people perceived as "enemies" of the Administration.

One undated memo, prepared by Dean as a briefing paper for former Nixon Chief of Staff H.R. Haldeman, suggested that then IRS Commissioner Johnnie M. Walters be told that "discreet political actions and investigations on be half of the Administration are a firm requirement and responsibility on his part." The memo complained that Walters seemed no more willing to let the IRS be used for political purposes than had been his Nixon-appointed prede cessor, Randolph Thrower.

A second undated memo, which Dean said was another briefing paper for Haldeman but was prepared by for mer White House Aide John Caulfield, complained that Republican appointees at IRS "lack guts and effort" and "appear afraid and unwilling to do anything that could be politically helpful." As a result, the document said, the White House staff was unable to crack down on tax-exempt foundations that "feed left-wing political causes," to obtain information from the IRS "regarding our political enemies," to "stimulate audits of persons who should be audited" or to place Nixon supporters in the IRS bureaucracy. A third memo, from Security Specialist Tom Charles Huston to Haldeman, suggested IRS audits to turn up information about "leftist organizations taking advantage of tax shelters."

Another memo, from Presidential Special Counsel Charles Colson to Dean, suggested that the IRS audit the tax return of Harold J. Gibbons, a Teamsters Union vice president in St. Louis, and identified him as "an all-out enemy, a McGovernite, ardently anti-Nixon." Gibbons' tax return for 1971 was later audited, and he said he had to pay a small additional tax on items involving travel expenses. Dean also testified that Caulfield succeeded in getting IRS to audit the 1970 tax return of Robert Greene, a Newsday editor who investigated the business dealings of Nixon friends Charles G. ("Bebe") Rebozo and George Smathers. Greene said that the audit cost him $100 in accounting fees, but the review showed "I did not owe them a nickel."

Last week's revelations brought an admission from Thrower that the White House had attempted to get him to take on Caulfield in a sensitive IRS top job, and that Thrower had refused. Walters had a "No comment" on Dean's story. Present IRS Commissioner Donald C. Alexander, who has had the job only since May 17, promised to resist any attempts to use the IRS for political purposes. Dean's testimony also set in motion an investigation by the Joint Committee on Internal Revenue Taxation, chaired by the formidable Wilbur Mills. The IRS has launched a probe to find out who authorized the audits of Gibbons and Greene. That may be impossible to discover. Dean said he had been told that all that is required for an audit is an expertly worded anonymous letter to a regional IRS office.

This file is automatically generated by a robot program, so reader's discretion is required.