The IRS Whistleblowers Come Forward — The Biden DOJ’s Interference in the Hunter Biden Investigation Is Manifest Corruption.

by Shipwreckedcrew

This article is a recap — with commentary from me — of the transcribe interviews of the two IRS whistleblowers who have come forward regarding the investigation of Hunter Biden and the sweetheart deal cut for him by the Biden DOJ. Please forgive in advance any remaining typos and use of shorthand references where they appear. Speed was a consideration in trying to get this article completed.

Part One is going to deal with a Whistleblower 1 (WB1) who is not named in the documents released. He is a 12 year IRS employee who is a Special Agent with the Criminal Investigation Division (CID). Those are armed special agents with the power to arrest, just like FBI or DEA Agents. But their investigatory jurisdiction is limited to tax laws and some related financial statues like money laundering. They tend to have finance and accounting backgrounds which play right into the investigative work they do.

WB2 is the supervisor of WB1, and his name has already been made public — Gary Shapely. He as the Supervisory Special Agent of the IRS investigative group that WB1 was a member of. He was not the squad supervisor in 2018 when the investigation was first started, but he took over the squad during the heart of the investigation and was the Supervisor at key times in 2022 when critical decisions were made the seemingly compromised the investigation. A detailed look at WB2’s interview transcript will be in Part Two coming shortly.

There were numerous members of both the GOP Majority and Dem. Minority Staff present for the interview. One thing that was noteworthy is the lack of any significant effort by the Minority staff during questioning to challenge the central claims made by WB1. They were either unprepared to do so, or members of the Dem. Minority on the Committee decided to exercise extreme caution in how far they would go in seeking to defend Hunter Biden without more information on where that path might lead them.

WB1 has been outed — both by name and the fact that he is a married gay man. He describes himself as not politically active but his views run in the direction of the Democrat party. In 2018 he was newly assigned to an international tax squad — focusing on foreign earned income of US citizens and businesses — that operated out of IRS offices in Washington DC. Because of the nature of the work, his squad did not focus on where venue for prosecution of their cases might end up. That was sometimes an issue not resolved until late in an investigation. As a result, the squad of 12 CID Agents had cases indicted in districts all across the country. But the squad had never worked case filed in the District of Delaware, and no one was familiar with the US Attorney’s Office in that district. The information they did get from others more familiar with the office was that it was small and tended to slow-walk cases in order to minimize the stress of a heavy workload.

Before I give you the recap of WB1’s testimony, let me preface what your are about to read with a few observations:

1. This information only scratches the surface of this matter. The whistleblower protections given to these two individuals have limitations with regard to what they can disclose to Congress and what can be made public. They are not allowed to disclose GJ information covered by Rule 6(e). They are limited in what they can disclose about the facts of their investigation. What they can discuss in some detail is the ways they allege their efforts were hampered, what government actors were involved, and why they think it happened.
2. As explained in some detail below, the information reported by them applies to only one limited aspect of the investigation of Hunter Biden — his failure to timely file personal and business tax returns, and filing false tax returns that constitutes tax evasion. This IRS investigation was only one part of a larger investigation that involved the FBI and other aspects of the investigation pursued by the IRS and FBI jointly — possibly money laundering, Foreign Corrupt Practices Act, and Foreign Agent Registration Act. The whistleblowers do not mention any information with regard to any such topics. They also do not mention any issues the FBI was investigating that might have arisen from the laptop that came into the FBI’s possession in late 2018.
3. Even with regard to the tax return issues, the whistleblowers only discussed the issue of whether Hunter Biden received more favorable treatment than would an ordinary citizen without his family connections. I suspect that is the only subject upon which they enjoy whistleblower protections under the statute — they are supposedly protected from any adverse job action based on their disclosure of this information to Congress.
4. It is the House Ways and Means Committee that received this information. Ways and Means has jurisdiction because that committee writes all tax laws, and has oversight responsibility for the IRS and how the tax laws are implemented and enforced. But that is the limit of Ways and Means jurisdiction. If the whistleblowers have additional information covered by the statute under which they are providing information, they will have to report that to a different committee. This is why they don’t give any information about the FBI or what the FBI is investigating. The House Judiciary Committee has oversight responsibility for the FBI and DOJ, so that Committee will have to receive that information.
5. The whistleblowers identify several government officials in the IRS and DOJ who were either allies or adversaries in their efforts to push forward the Hunter Biden investigation. In a real break with normal practice, the transcripts have been released without any redactions of those names. Congress is identifying for the American people the identities of government bureaucrats who the whistleblowers identify as either assisting their efforts or working to block their efforts.
6. This information could lead to multiple other Committee investigations into particular aspects of what happened. BUT, if McCarthy has any guts, he’ll establish a Select Committee to look into these allegations across the range of subjects rather than leave it to multiple committees. He can justify doing this based on AG Garland’s refusal to name a Special Counsel with a broad mandate.
7. The allegations made by WB1 only deal with funds that showed up in bank accounts identified with HB which he then spent. His allegations do not involve accounts in the names of more than a dozen entities and LLCs which have been connected to HB. WB1 was asked if he was familiar with numerous entities by name which the Committee staff had uncovered. WB1 stated that he was familiar with each of those entities, but provided no additional information. That means WB1’s information only involves realized income — money that HB spent on personal expenses which he should have declared as income on his taxes. The information from WB1 DID NOT address whatever business holdings HB might have that are not yet reportable as taxable income. Entities where HB might have an equity ownership stake are not part of WB1’s disclosures — particularly entities that are offshore.

The IRS investigation began in Nov. 2018. WB1 was reviewing bank records from another investigation of a foreign based online pornography and prostitution website, and those records showed substantial payments by Hunter Biden (HB) for prostitutes connected to the international ring. The amounts in question reflected that HB was living a lavish lifestyle through his corporate bank account the funds were coming from — something that is commonly found in tax investigations.

WB1’s supervisor — the second Whistleblower named Gary Shapley who I will summarize in Part Two — directed WB1 to do more background work than would ordinarily be required before he would consider referring the case to DOJ Tax for approval to open a formal criminal GJ investigation. WB1 says the reason for this was because it was a “political family” so it was necessary to do more than just have an allegation backed up by some evidence. Here the allegation was that HB was spending large amounts of money from his corporate account while public filings in his divorce proceedings by wife claimed that family obligations were not being paid. So he had no personal income to pay ordinary debts, but was still spending large amounts of money on non-business expenses from his corporate account. That is the type of allegation and evidence that would normally warrant opening a criminal investigation. But WB2 wanted more so WB1 dug further into HB’s finances.

It wasn’t until April 2019 that WB1 finally obtained approval to send the referral to DOJ Tax seeking authorization to open a criminal investiation. The response he received was that AG Barr decided to join two investigations together, and base them both in Delaware. It as only at that point that WB1 learned that Delaware FBI had opened an investigation based on bank records in January 2019 — two months after he first opened his IRS investigation as an off-shoot of the online prostitution case he was pursuing.

WB1 was unhappy about the venue selection — he thought the case belonged in DC because HB resided in DC, not Delaware. If two investigations were to be joined then it should be in DC, not Delaware. But he lost that argument. Delaware FBI had named the investigation “Sportsman.”

WB1 was concerned about working with the Delaware US Attorney’s Office because it was a small USAO without experience in investigations of this type. The Biden family was extremely well known and connected. Joe Biden, after being elected, even visited the office and joked with the prosecutors investigating HB.

In this same time frame — late spring 2019 — WB1 learned that his then-supervisor, Matt Kutz, was inserting memos into the case file suggesting that Trump’s comments and tweets about HB were violating HB’s Sixth Amendment rights, and might be compromising the investigation. WB1 was getting emails with news articles linked from Kutz about Trump’s comments, and WB1 felt not only was that inappropriate, but his supervisor was showing a pro-HB bias. WB1 eventually went around his supervisors and asked the next level up supervisor to tell Kutz to stop sending emails.

There was a disagreement early on with the prosecutors about whether to seek an early interview with HB. IRS policy is to seek an interview within 30 days of case being elevated to a criminal investigation. Most tax cases are historical so there is not generally a concern about ongoing criminal activity and interfering with other investigations by going overt with an interview request.

He raised this issue in several meetings, finally getting to the point that the attorneys became upset if he brought it up so he just stopped. He was told that the need to remain covert related to the FBI side of the investigation.

NOTE — The FBI has authority to investigate tax crimes. But with the IRS already doing that, and given that the FBI was in possession of the laptop, it is likely that the FBI’s investigation extended into other areas involving HB’s foreign investment activity and movement of funds between various entities. WB1 says later that normally the IRS would be invited in to assist in that separate investigation — mixed teams comprised of investigators from different agencies is very typical — but for reasons he did not know, the FBI limited IRS involvement in what the FBI had begun in January 2019. It is also possible that the FBI management — more on that below — didn’t want WB1 and his supervisor WB2 to have much transparency into what the FBI was doing, or NOT DOING, because WB1 and WB2 had adopted an aggressive approach to the HB investigation.

Even though WB1 wanted to go overt shortly after his investigation was approved by DOJ Tax in April 2019, the attorneys in both DOJ Tax and the Delaware USAO would not approve any overt investigative actions until after the Nov. 2020 election. The investigation did not go overt — with witness interviews — until Dec. 8, 2020. To get tot that point — as detailed below — the attorneys in both offices “slow-walked” numerous investigative requests, claiming they needed to obtain multiple levels of approval before they could authorize the steps WB1 and WB2 wanted to take. All of these steps were covert — they would not have alerted HB or anyone else to the investigation.

All during this period there were meetings every other week by the team — FBI, IRS, USAO. These are the meetings where he repeatedly brought up the issue of going overt, only to be told “no” by the attorneys.

In unfiled return cases, particularly where there is evidence of excessive spending from a business account, an early investigative step is often a search warrant on residences where financial records or evidence of return preparations, bank records, spending records, etc., might be found showing the defendant had actual possession. And search warrant meant going overt, and that would not happen until after the Nov. 2020 election.

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