Civil-regulatory complex

Dwight Eisenhower didn’t coin the phrase “military-industrial complex,” but he solidified its presence in our national vocabulary when he warned us to guard against its influence during his farewell address in 1961. What no president has formally cautioned us against is the influence-and injustice-inflicted by the more recent expansion of the civil-regulatory complex.

Long the subject of anecdotal protestations and complaints, the sweeping risk of oppressive power of government agencies over individuals has come to full attention with the revelation that the Internal Revenue Service used its influence to interfere with Tea Party organizations between 2010 and 2012.

The president says he is outraged—Outraged!—to learn that the IRS may not have acted with “absolute integrity.”

He’s a poor historian if he believes that. The IRS’ long, sordid history is rife with abuse, arrogance, harassment and intimidation. Its shameful historical record includes numerous instances of complicity in FBI witch hunts, political activism, partisan shenanigans and even presidential misconduct. Nobody who knows anything about the “infernal” revenue service would be shocked about the recent news.

Everybody, by contrast, ought to be motivated now to demand real reform. There is no better time than during the income tax’s centennial to abolish the IRS as we know it, and replace its antiquated and irrevocably tainted structure with something more in line with 21st Century taxation technology.

But the IRS is hardly alone in its abuse of power to cower individuals and trample their rights.

The National Review Online published a profile this week documenting the astonishing and troubling ordeal of one woman and her family after she said she witnessed voter fraud in the 2008 elections and decided to form a nonprofit organization to preserve voter integrity.

Catherine Engelbrecht and her husband Bryan have operated a small manufacturing business in Texas for more than 20 years, with a meticulous record regarding taxation, collection and compliance with work-force and environmental laws.

Just months after filing for tax-exempt status for her political organizations in July 2010, however, the FBI showed up inquiring about an attendee to an event hosted by one of the groups she organized. The IRS also visited her family’s shop in January 2011 to conduct three-day on-site audits of both personal and business tax returns, taking extraordinary efforts to validate the Englebrechts’ self-described “squeaky clean” business practices—even counting the cattle on the family’s farm.

Ironically, the audit resulted in a small refund. Two months later, the IRS initiated the first of several requests for information, the last of which arrived in February 2012 and included “hundreds and hundreds of questions,” Catherine said. Agents wanted to know the most minute of details, requesting documentation of every single Facebook post and Tweet she had ever written.

The FBI kept inquiring throughout 2011 as well, with separate calls in May, June, November and December. Concurrent with the onerous IRS questionnaire in early 2012, the Bureau of Alcohol, Tobacco, Firearms and Explosives arrived for an unscheduled audit of the Engelbrechts’ machine shop.

In July 2012, the Occupational Safety and Health Administration conducted an exhaustingly thorough inspection of their factory while the Engelbrechts were out of town. Though no major infractions were found, OSHA imposed a $25,000 fine against the company, which was eventually reduced to $17,500.

Then in November 2012, the Texas Commission on Environmental Quality, acting on an anonymous complaint,conducted an unscheduled audit of its own, and required an additional permit costing $2,000 annually.

Three years of immeasurable harassment later, Catherine is still waiting for IRS nonprofit approval. In light of the IRS acknowledgements of wrongdoing, the Engelbrechts’ tale all but confirms that conspiracy theories are, indeed, sometimes conspiracy facts.

Fifty years ago, Ayn Rand made the following observation in her essay, “The Nature of Government”: “We are fast approaching the stage of the ultimate inversion: the stage where government is free to do anything it pleases, while the citizens may act only by permission.”

The civil-regulatory complex now employs politburo-style practices neither the military-industrial complex nor the criminal-justice system could ever get away with, usually against individuals and entities whose rights the government is supposed to protect.

Courts and legislators have gone to great lengths to safeguard the rights of all citizens-even known criminals-against improper prosecution. But precious little has been done to protect Americans against regulatory persecution. The IRS, ATF, OSHA et al. and their sister state agencies need no warrant to show up on a fishing expedition. They run no risk of the Miranda exclusionary rule regarding evidence. Accused violators get no court-appointed attorney, or automatic appeals.

Just before her famous quote above, Rand wrote this: “Instead of protecting men from injury by whim, the government is arrogating to itself the power of unlimited whim.”

Whether political or not, arbitrary regulatory enforcement by bureaucratic whim is oppression in the worst degree. We should apply Ike’s warning to the civil-regulatory complex, too: We must never let the weight of misplaced power endanger our liberties.


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