Two IRS officials put on administrative leave for accepting gifts at Calif. conference

June 5, 2013
(Susan Walsh/AP)
(Susan Walsh/AP)

The Internal Revenue Service said Wednesday that two managers who attended a conference the agency held in Southern California in 2010 have been placed on administrative leave for accepting free food and other gifts in violation of government ethics standards.

Top IRS officials were notified of  the misconduct three months ago by the Treasury Department inspector general, whose office discovered the gifts in the course of an audit of the conference held in Anaheim, Calif., government sources said. But it was not until Tuesday night that Acting Commissioner Danny Werfel was made aware of the case.

Werfel said in a statement that he has begun the process of firing the employees, who allegedly held an after-hours party in their private hotel suites during the three-day training conference. It was not immediately clear who gave the managers the food.

“There was clearly inappropriate behavior involved in this situation, and immediate action is needed,” Werfel said in a statement, a day before he is scheduled to testify at a House hearing on conference spending at the embattled tax agency, which flew 2,600 managers in the small business and self-employed division to the conference, which cost $4.1 million.

“The agency stands ready to confront any problems that occur, hold accountable anyone who acted inappropriately and permanently fix these problems so that such missteps do not occur again.”

One of the managers put on administrative leave is Fred Schindler, an attorney and director of implementation oversight for the 2010 health-care reform law for the IRS, according to a congressional source. The other is Donald Toda, a California-based manager in the small-business, self-employed division.

Toda’s home phone in Torrance, Calif., appeared to be disconnected. Schindler did not return a call to his Maryland home seeking comment.

The free food came to $1,162, according to the congressional source.

The Treasury Department’s inspector general, in a new audit Tuesday, revealed that the IRS paid top dollar for hotel rooms, tens of thousands of dollars for free gifts for managers in attendance and $135,000 for outside event planners to book hotel rooms and speakers, one of whom cost taxpayers $27,500 — plus $2,000 for a first-class plane ticket.

Conference spending by the IRS and other government agencies has dropped sharply since then, but the audit drew new scrutiny to an agency already under fire for its targeting of conservative groups applying for tax-exempt status. The targeting has prompted a criminal investigation and forced out the agency’s then-acting commissioner. Another official was pushed to retire early and another was placed on administrative leave.

Werfel, appointed by President Obama three weeks ago to clean house at the IRS, has pledged to conduct a thorough review of the agency’s operations.

Juliet Eilperin and Ed O’Keefe contributed to this report.

This post has been updated.

Lisa Rein covers the federal workforce and issues that concern the management of government.
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