The US asked a judge to dismiss a lawsuit by hedge fund manager Ken Griffin against the Internal Revenue Service after the billionaire accused the agency of failing to protect his confidential financial information.
(Bloomberg) — The US asked a judge to dismiss a lawsuit by hedge fund manager Ken Griffin against the Internal Revenue Service after the billionaire accused the agency of failing to protect his confidential financial information.
The Citadel founder seeks financial damages over a data breach that led to ProPublica’s publication of private data about some of the wealthiest US taxpayers. Griffin accused the IRS of failing to establish appropriate safeguards, saying on “information and belief” that unidentified IRS workers leaked his tax returns and return information to ProPublica between 2019 and March 2022.
In a filing Tuesday in Miami federal court, US lawyers said Griffin filed a “textbook shotgun pleading” that speculates IRS workers leaked his information even though ProPublica said it didn’t know the source of the tax information it published about Griffin and other wealthy Americans.
“Griffin speculates that some unknown individual(s) in an organization of nearly 80,000 employees, using unknown methods and exploiting unspecified security weaknesses, wrongfully obtained his return information,” US lawyers wrote. Griffin infers that someone at the IRS “gave that information to ProPublica, while omitting or discounting all other possibilities or explanations.”
While it’s “certainly understandable” that Griffin would want to know how his return information became public, the section of the Internal Revenue Code dealing with privacy bars release of “the existence or details of any investigations” related to the case, the US said.
Lawyers for Griffin, 54, didn’t immediately respond Wednesday to a request for comment.
‘Needle in Haystack’
Finding a culprit among the vast IRS workforce requires the US to “search for a needle in a haystack,” the US wrote. “But the needle may not even be in the haystack,” the government said. “ProPublica does not know if the source of the information was the IRS and acknowledges that the source may be a hostile state actor.”
Both Treasury Secretary Janet Yellen and former IRS Commissioner Charles Rettig said they referred publication of Griffin’s return information to the US Treasury Inspector General for Tax Administration.
If events reveal “beyond speculation and conjecture” that his return information violated the Internal Revenue Code, “then Griffin can file suit,” the government said.
In a statement at the time he filed the lawsuit, Griffin said: “IRS employees deliberately stole the confidential tax returns of several hundred successful American business leaders.”
He said it’s “unacceptable that government officials have failed to thoroughly investigate this unlawful theft of confidential and personal information. Americans expect our government to uphold the laws of our nation when it comes to our private and personal information — whether it be tax returns or health care records.”
Read More: Thiel Gets Tax Edge With $5 Billion in Roth IRA, ProPublica Says
Republicans, who control the House of Representatives, have pledged to use their power to investigate the breach and the IRS response.
The ProPublica report said billionaires including Jeff Bezos and Elon Musk had in some years paid minimal or no income tax even as their fortunes soared. It outlined the tax strategies available to the top 0.1%.
Griffin reported an average annual income of almost $1.7 billion between 2013 and 2018 and paid an average federal tax rate of 29.2% during that time, ProPublica reported.
Griffin has a net worth of $34.8 billion, according to the Bloomberg Billionaires Index.
Michael Bloomberg, majority owner of Bloomberg News parent Bloomberg LP, was also among those included in the reporting.
In its filing, the US said that Griffin failed to allege actual damages, which is necessary under the Privacy Act.
The case is Griffin v. Internal Revenue Service, 22-cv-24023, US District Court, Southern District of Florida.
(Updates with details of US filing)
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