James O'Keefe has had a mixed blessings week. The IRS has granted his ridiculously hacky "investigative" group C3 (non-profit) status.

In its application, Project Veritas said it planned to pursue as many as a half-dozen journalism projects and conduct five two- to three-day training sessions for people interested in learning how to do such projects on their own. “I can’t tell you the secret sauce of it, but we do have a training method,” Mr. O’Keefe said. “There are many people learning this method and learning how to expose abusive power in creative ways.”

He said he would work as the organization’s “muckraker in chief,” for which he will be paid about $120,000 a year, according to the group’s application.

It raised $2,367 last year, according to the filing, and expects that figure to grow to $1.65 million over the next three years, though Mr. O’Keefe described that as “a sort of dream.” The group has hired a firm led by Richard Viguerie, a conservative strategist, to help it raise money.

Charities are constrained by law from participating in lobbying and political campaigns, and in response to a question posed by the I.R.S., Project Veritas specifically said it had no plans to lobby on behalf of specific legislation.“We’re designed to expose malfeasance, waste, fraud and corruption, to expose things for what they are,” Mr. O’Keefe said. “That’s not policy work, that’s educational work.”

Jeffrey S. Tenenbaum, a lawyer specializing in nonprofit matters, looked at the Project Veritas Web site and said he could see nothing that would cause the group to run afoul of the rules on politicking.

I don't know, seems to me that illegal acts like attempting to break and enter into Sen. Mary Landrieu's office for the purpose of illegally wiretapping her and whatever creepy plans he had with CNN journalist Abbie Boudreau on the boat might have tipped off the IRS that O'Keefe deserves no such classification. It's not his partisanship; Heritage Foundation is a C3 organization too. It's his fast and loose playing with ethics and rules that should work against him.

But luckily for all of us, a federal judge is not so easily persuaded by O'Keefe's machinations. O'Keefe and his partner Hannah Giles are being sued in San Diego by ACORN employee Juan Carlos Vera. Giles previously tried to get out of the suit by claiming that all the recording was done by O'Keefe and she was there merely as a prop. O'Keefe, for his part, claimed that his First Amendment right as a "citizen journalist" absolved him of liability. The judge didn't buy either argument. Bradblog:

According to Maria Dinzeo of Courthouse News Service: Juan Carlos Vera claimed James O'Keefe III and Hannah Giles visited his office in August 2009, and conspired to create video and audio tapes of him, even after asking him if their conversation would be confidential.
...
[Lorenz ruled] that the law "is directed to the surreptitious recording of confidential communications and not the manner or method of recording the conversation." Given the meaning of the word "record," Lorenz found Giles equally responsible.

Lorenz also rejected O'Keefe's motion for judgment on the pleadings, in which he argued that First Amendment protections for journalists supersede the California Privacy Act. Since there was a mutual understanding that the conversation was confidential, Lorenz found that the privacy law "is not an overbroad intrusion on exposé newsgathering in which O'Keefe participates."

"Exposé newsgathering" is not what O'Keefe traffics in, as demonstrated again most recently by, ironically enough, the "news" website of Fox "News" host Glenn Beck after a similarly deceptive and secretly video taped smear of an NPR employee by O'Keefe last March.

But O'Keefe's long track record of deceptive video hit-jobs was not at issue in this particular legal argument.

In his ruling [PDF], Judge Lorenz highlighted specific portions of the CA law which is violated by "Every person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrops upon or records the confidential communication."

The ruling goes on to further cite the statute which reads "The term 'confidential communication' includes any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto."

"California's law is quite clear," Lorenz wrote in response to the First Amendment arguments by O'Keefe and Giles, "that persons who engage in news gathering are not permitted to violate criminal laws in the process."

Now the question remains if the IRS will continue to allow Project Veritas (a misnomer if ever there was one) its C3 status with a convicted criminal at its helm.