John Kerry’s “Spendometer” and Those Treasury Department Tax Analysts

A critique of the tax policies proposed by Sen. John Kerry led to allegations Treasury Department employees violated the Hatch Act. OSC conducted an investigation of the incident.

Politics can be a brutish sport. And, at the national level, it usually is.

Federal employees are affected by politics. And, while some may look at the Hatch Act as making them "second class citizens" because it restricts some political activity on their part (See Trick or Treat as a recent example), it also protects them from some of the direct effects of politics that employees on a local level know all too well. Federal employees can’t be forced to campaign for a candidate to keep their jobs, for example, or can’t be forced to contribute to a political campaign in order to keep their jobs.

But politics is still omnipresent. Here is an unusual example of how some employees were impacted by the 2004 presidential election but ultimately cleared of any wrongdoing.

Back in 2004, as the presidential election campaign was heating up, Democrats criticized Republicans for using career federal employees working in the Treasury Department to critique tax policies proposed by Senator John Kerry. The critique was subsequently used to attack the policies of Senator Kerry who became the Democrats’ nominee for president.

Nancy Pelosi, the House Democratic leader, went in front of news reporters and TV cameras and demanded that the White House stop the "inappropriate use of taxpayer funds to research a Democratic tax plan." A Treasury Department representative said at the time that the report was prudent and appropriate and that "It’s our obligation to do it."

The study was subsequently used by the Republican National Committee as the premise behind a web site entitled the "John Kerry Spendometer." The analysis concluded that "hardworking individuals and married couples could have their taxes raised" in amounts ranging from $201 billion to $477 billion.

At the time, Republicans defended the analysis by the Treasury Department and said that similar analyses were conducted during the Clinton administration and used to attack tax plans proposed by Republicans.

The Office of Special Counsel (OSC) investigated the critique. OSC is responsible for investigating possible violations of political activity by federal employees under the Hatch Act. In this case, the issue was whether federal employees violated the Hatch Act when they did the analysis of the Kerry tax proposals.

The Office of Special Counsel concluded that there was no violation of law in this case and concluded that the General Counsel’s office within the Treasury Department has given "problematic" guidance to employees for a number of years by essentially asking Treasury tax analysts to ignore potential violations of the Hatch Act.

The results of the investigation were obtained under the Freedom of Information Act and reported in the Wall Street Journal which first reported the analysis of Kerry’s tax plan had been done by the Treasury Department.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47