All-Star Panel: IRS going after conservatives again?

This is a rush transcript from "Special Report," November 27, 2013. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA, R-CALIF.: This president has asserted the ultimate in hypocrisy. Organizing for action his own many hundreds of millions of dollar 501-C4 continues to be active in politics without disclosing any of their contributions while attacking conservative groups in every possible way. Now that they can't win any longer, they can't forestall it any longer, they're looking to change the rules.

(END VIDEO CLIP)

DOUG MCKELWAY, GUEST HOST: That of course is the chairman of the House Oversight Committee Darrell Issa reacting to a rule announced late yesterday by the administration that would rein in the political activity of 501-C4, nonprofit groups. It would in fact end candidate-related political activity, including, and we put this up on the screen for you, communications that have advocate a clearly identified political candidate, communications that are made within 60 days of a general election, communication expenditures that must be reported to the Federal Election Commission. And Danny Werfel, the acting IRS commissioner, explained this rule today with a statement that read in part, "This is part of an ongoing effort within the IRS that are improving our work in the tax exempt area. Once final this proposed guides will continue moving us forward and provide clarity for this important segment of exempt organizations." Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, if there is any part of the First Amendment that is sacred above all others, speech above all other speeches, political speech. And this attempt to make rules and define what political speech is allowed in what window of time I think is a real attack on the First Amendment in principle.

Here, it is so cynical it's breathtaking. Here is the IRS, the Obama IRS, caught with its hand in the cookie jar, clearly discriminating against conservative 501C4s and 3s. And instead of looking into it, investigating it, reporting it, and making people responsible pay for it, they are now going to change the rules. Remember, the implication of their defense while the scandal was underway in being investigated was, well, the rules were unclear. Well, they were rather clear in attacking conservative groups. There was no lack of clarity here. It was a direct attack on conservatives and deliberately so. So, this is part of the argument that there was a lack of clarity, so, therefore, we now have to have a set of rules that will make it more clear. That was not the problem. It's not the problem now. And all this will do is restrict political speech. It's not healthy in a democracy, especially if the restrictions of speech are determined by a bureaucracy under the control of one party. That is ultimately in its essence a corrupt way to make rules.

MCKELWAY: Juan, I thought this case was settled by the Supreme Court and Citizens United.

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: That's right. That's why you have the rules as they are right now, which is a muddle. I mean, that's why you got into this situation where the IRS said that they were not pursuing a political agenda, but, in fact, just simply trying to apply rules and there were more of these independent Tea Party groups than Democrats at that time who were, you know, trying to create groups. That was their explanation. It was taken as trying to rationalize an attack on conservatives by conservatives you just heard from Charles.

But what I think you saw today was an effort by the Treasury Department, IRS, to lay out straight rules as you put up on the screen, Doug, which I don't see any problem with that. To me, it's not a matter of speech or any kind of impingement on free speech. It's a matter of me to disclosure. Remember, these groups can make donations, and they have made donations in the hundreds of thousands of dollars anonymously, influencing the political outcomes in the country. To me, that is not healthy.

MCKELWAY: Correct me if I am wrong, unions are exempt from that because they are 501C5s.

TUCKER CARLSON, FOX NEWS HOST: This applies to 501C4s. And I have to say this is the kind of change that ought to be made by the Congress, legislative branch, people elected to make these kinds of decisions and not unilaterally by the executive. This is part of a much larger pattern.

It's a little much getting a lecture on campaign finance reform from the first president in U.S. history to bust the caps and not take matching funds. This guy by the standards of finance campaign reform is complete outlaw.

But I would say goes further than stifling speech. It stifles political expression itself. This will prevent 501C4s from launching voter registration drives, which is pretty unbelievable considering the administration is against showing ID at the polling place because they don't want to curtail participation in the political process and now they are stopping voter registration drives? How can they justify that?

MCKELWAY: This is a rule that if it were to be challenged would have to be challenge long the courts, the D.C. circuit court of appeals, correct?

KRAUTHAMMER: Which is going to be packed with liberals as a result of something else the administration has done, well, at least has been done in the Senate, with the nuclear option. It means that the Democrats will be able to put anybody the Democrats want on that court, three of them, with a 51 vote, which, of course, they have, as opposed to in the past up until now, when you have to have at least some support from Republicans if you were going to get 60 votes.

So, yes, but I think it's a larger effort than just packing the court as a way to allow these rules to go ahead. It is a way to try to manipulate a system which was established in good faith in the 70s to restrain the overt influence of money. What we have discovered in 30 years, every time you try to make a restriction on this, there is always a loophole so it's always evaded. But what it does do is suppress legitimate political speech. I think it's an effort after 30 years that should be entirely abandoned.

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