Politics

07.07.13

A Tip of the Fedora to Elmer Lincoln Irey, the Patron Saint of the IRS

The T-Men collected when the stakes were highest and set a model for the IRS at its finest.

The Internal Revenue Service has few advocates in the best of times, and these days in Washington it seems the Tax Man hasn’t a friend in the world.

But the IRS has a patron saint. His name is Elmer Lincoln Irey. His life and legacy are reminders of the IRS’s long and largely unheralded effectiveness in taking down many of the most notorious gangsters, crooked politicians, and white-collar swindlers in American history.

“Our first chief, Elmer Lincoln Irey, foresaw a continual legacy of bringing to justice America’s criminal elite and wanted us to always have a profound sense of purpose,” says current IRS Chief of Criminal Investigation Richard Weber.

Not that the public knows much about Irey or his monumental impact on law enforcement. And thanks to an apparently isolated bout of bureaucratic bungling inside the Cincinnati office involving the targeting of Tea Party and Patriot groups seeking tax-exempt status, the IRS is being soaked in a Nixonian sepia lately. The nation’s tax collector has always been an easy target for headline-grabbing critics in Congress, the political body responsible for our convoluted and compromised tax code.

To date no facts flowing forth from Cincinnati come anywhere near the staggering corruption that plagued the Boston office of the FBI during the years it cozied up to reputed hitman James “Whitey” Bulger, whose racketeering trial has received back-page coverage outside New England despite its grisly testimony.

With everything from its weapons-training policy to its conference budgets and employee bonuses ricocheting through the press, the IRS makes an easy whipping boy these days. And the agency has some real challenges.

But it also has a rich legacy. That brings us to Irey, whom Life magazine called “one of the world’s greatest detectives.” The description was apt, but perhaps an understatement. As biographer William J. Slocum observed, “The story is that Elmer Irey’s Intelligence Unit was literally the last hope of the American people in our running battle with the underworld.”

Born in 1888 in Kansas City, Irey was raised in Washington, D.C. and began his career as a simple stenographer in the Post Office Department. While there he observed the highly scrupled efforts of the postal inspectors, meticulous sticklers for tracking every penny lost or stolen via the U.S. mail. Irey’s investigative skills and ability as a leader were so evident he was placed in charge of cleaning up the obvious corruption among Prohibition agents. Borrowing a half dozen top postal inspectors, he created Treasury’s Intelligence Unit in 1919, and a reluctant legend was born.

“Elmer Irey’s Intelligence Unit was literally the last hope of the American people.”

The humble civil servant—overshadowed in the press throughout most of his career by the Machiavellian and more media-savvy FBI Director J. Edgar Hoover—ran the IRS Enforcement branch. While Hoover was reluctant to acknowledge mobsters in his midst, Irey’s agents took on Al Capone’s street army and rolled up the courtroom victories by investigating their business fronts and comparing their lifestyles with their declared income.

In his 1945 book The Giant Killers, Alan Hynd portrayed Irey as fearless and fair: “His life has been devoted to his job and his wife and sons. He has never read a book on criminology. His dealings with criminals such as those in the Capone mob he regards merely as a by-product of a job essentially concerned with income tax … If Irey has any personal feelings about the criminals he jails, it is that he can’t excuse a big shot for cheating on his income taxes when little people, of whom Irey considers himself one, pay up dutifully. Everything else to Irey is beside the point.”

Irey was uncommonly aggressive. He worked closely with gifted agent Frank Wilson and sent legendary investigator Mike Malone undercover. Within months, Malone penetrated Capone’s inner circle. As the upper echelon of his gang fell one by one, the boss felt the heat and responded by putting out a hit on Irey’s T-Men. When that plot was discovered, Irey informed Capone that if he didn’t call off the contract those hoodlums would be shot on sight. Capone took the hint and tried a softer approach—a $1.5 million bribe offer to back off. Irey and his gang were unmoved.

Indicted in 1931, Capone was convicted for tax evasion for the years 1925 to 1929. He was sentenced to 11 years in prison. Although he survived a lengthy stint on Alcatraz, the effects of syphilis rendered him an oddball chatterbox incapable of returning to power. He retired to Palm Island, Florida, a shadow of his ferocious former self.

The Capone case is well known, but Irey’s boys also collected convictions against top bootleggers such as Waxie Gordon and crime-family bosses across the country. At a time Hoover’s men were busy chasing bank robbers, Irey’s Intelligence Unit recognized the structure and eminent danger of organized crime.

Irey and his agents solved the Lindbergh-baby kidnapping case, then known as the “Crime of the Century.” It was the IRS that took down the corrupt Pendergast political machine in Kansas City, knocked off Enoch “Nucky” Johnson in New Jersey, and hobbled Louisiana Gov. Huey P. Long’s political reign. Along the way his agents refined financial investigations techniques still in use today. He brought an unprecedented level of professionalism to the job as the country’s tax cop who was willing to go after the crime kings and the politically connected.

His tenure was occasionally controversial. The IRS at times was accused of being used as a bludgeon by President Franklin Roosevelt, most notably against former Treasury secretary Andrew Mellon. After an intense investigation and charges, Mellon was cleared of wrongdoing.

In an introduction to a history of the Intelligence Unit printed in 1937, the great detective who seemed incapable of boasting tried his best to snap his suspenders. The result was revealing in its quaintness.

“Successful results thus examined in retrospect have brought pardonable pride and satisfaction to the personnel,” Irey wrote, then felt compelled to add, “Unsuccessful and ineffective efforts have not been wholly without value; they have demonstrated the ‘ways not to do it’—the policies and methods to avoid.”

The prose was pure Irey: always mindful of his reputation, ever aware his words would be scrutinized by IRS critics.

As head of the Treasury Department’s law-enforcement branches, Irey was so publicly credible Roosevelt used him to help promote the need for a dramatic increase in the income tax to finance the American military effort in World War II. It was sometimes referred to as “Taxes to beat the Axis.”

In a March 9, 1942, letter, FDR took time to acknowledge Irey’s essential role: “On March fifteenth (the deadline to file taxes in those days) neither you nor I are particularly popular. On this coming March fifteenth we will be unpopular with more millions of taxpayers than ever before. Since we are to be companions in misery, I feel I should take a moment to tell you of my pride in the world of the Criminal Intelligence Unit.” FDR noted the “incorruptibility” and “A-1 efficiency” of Irey’s crew.

Irey retired from public service after the war and a decade after doctors warned him he had a serious heart condition. The great American detective died July 19, 1948.

In keeping with his character, Irey’s funeral service was filled with friends and family but little fanfare. (By contrast, Hoover received a state funeral befitting a president.) Even in his 1948 memoir The Tax Dodgers, Irey managed to shift the limelight from himself to his agents.

IRS veterans freely credit Irey’s tenacious spirit with imbueing another generation of agents’ efforts to take on La Cosa Nostra and bring down a powerful pantheon of tax scofflaws ranging from Vice President Spiro Agnew to hotel queen Leona Helmsley as well as corporate behemoths Georgia Pacific and General Electric. For IRS Criminal Investigation officials such as Paul Camacho, special agent in charge of Nevada and Utah, Irey is a hero worth of his pedestal.

“He led a group of people faced with Herculean challenges and little resources and accomplished what others thought was impossible,” says Camacho, an unabashed Irey aficionado. “He was an inspiration to many. Elmer’s leadership is marked by unwavering character, courage, and commitment to country. Elmer was a role model back then and is serving as a role model for us now.”

Perhaps it’s time for an Irey revival at IRS.