For the second straight day and the third time in one week, IRS officials will testify Wednesday in front of Congress about the agency's improper targeting of conservative groups.
Highlighting today's House Oversight Committee hearing is IRS official Lois Lerner's decision to invoke the Fifth Amendment and not answer questions. Lerner is still under subpoena to testify, meaning she will have to invoke her rights in person -- and likely repeatedly.
Also appearing is Douglas Shulman, the former IRS commissioner who also testified in front of a Senate committee on Tuesday. Rounding out the witnesses are the inspector general who investigated the wrongdoing -- J. Russell George -- and Deputy Treasury Secretary Neal S. Wolin, who learned of the investigation into the IRS's targeting last summer.
Stay tuned below for live updates on the key moments.
The hearing ended for the day shortly after 3:30 p.m. Eastern time -- about six hours after it began.
The hearing was not adjourned but was rather recessed in case Chairman Darrell Issa (R-Calif.) opts to recall IRS official Lois Lerner as a witness. Issa suggested Lerner might have waived her right to plead the Fifth Amendment by delivering an opening statement and answering a brief question.
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Rep. Elijah Cummings (D-Md.), the ranking member of the House Oversight Committee, raised concerns that the IRS targeting scandal could have a chilling effect on the agency’s employees who review tax-exemption requests.
Cummings suggested the backlash against the IRS’s wrongdoing could cause employees to shy away from scrutinizing applications that deserve a closer look. “We cannot have employees who are there shaking like a leaf on a windy day, believing if they fail to do what they’re properly supposed to do they’ll get in trouble, he said.
Treasury Inspector General J. Russell George said evidence exists that suggests such instances have occurred in the past.
Cummings asked George how new IRS acting commissioner Daniel Werfel could create an atmosphere in which agency personnel can do their jobs properly without feeling threatened.
“We are going to work with Mr. Werfel,”George said. “If he has the ability to make sure his employees are trained and they have confidence that he has their back, I think that’ll address some of your concerns.”
Committee Chairman Darrell Issa (R-Calif.) said at the close of Wednesday's hearing that he may recall IRS official Lois Lerner as a witness and that she might have waived her Fifth Amendment rights by delivering remarks at the outset of the hearing.
“I am looking into the possibility of re-calling her and insisting she answer questions in light of a waiver," Issa said. "For that reason, and with your understanding and indulgence, this hearing stands in recess, not adjourned.”
Leaving the hearing in recess means it can be continued at a later date.
Lerner delivered an opening statement and answered one brief question before invoking her Fifth Amendment right to not answer questions to avoid self-incrimination, at which point her request to be excused was granted by Issa.
But some Republicans -- led by South Carolina Rep. Trey Gowdy, a former prosecutor -- argued that she waived her Fifth Amendment right by delivering the brief remarks. Issa reserved his right to re-call her as a witness at the time.
He said at the close of Wednesday's hearing that he was led to believe she would not deliver an opening statement and that she might well have waived her Fifth Amendment right by doing do.
“It was brought up by Mr. Gowdy that, in fact, in his opinion, as a longtime district attorney, Mr. Lerner may have waived her Fifth Amendment rights by addressing core issues in her opening statement and the authentication (of a document) afterwards,” Issa said. “I must consider this.”
Shortly before the end of the hearing, Politico quoted Issa as having said definitively that Lerner had waived her right, but he tempered that position in his closing remarks.
Asked about the discrepancy, oversight committee spokesman Ali Ahmad referred Post Politics to the chairman’s comments at the end of the hearing.
Updated at 4:54 p.m.
Rep. Mark Meadows (R-N.C.) turned the focus of the hearing once again to the participation of Holly Paz, who was director of the IRS Exempt Organizations Guidance office, in interrogations of her subordinates.
Issa criticized Paz's involvement in the interrogations during his opening remarks.
Meadows said Paz was present during 36 of 41 interviews conducted during the audit. Treasury Inspector General J. Russell George said he was not aware of those numbers.
The congressman produced a document that showed the IG’s office had provided the information.
George indicated he was not familiar with the document and asked his staff to explain it. After consulting with his staff, he said it was a list produced by IRS auditors, many of whom are based out of Washington.
Meadows asked whether George would normally conduct an audit in that manner, with a supervisor in the room with subordinates.
George requested that he be able to report back to the committee on the question. “I really do not have knowledge of this,” he said.
Douglas Shulman just got a rare bit of help from freshman Rep. Thomas Massie (R-Ky.), who suggested that Shulman's failure to grasp the IRS's wrongdoing might have more to do with the IRS's "bloated bureaucracy" and the complex tax code than with his failures.
Massie noted that the IRS has 90,000 employees and suggested that its time for tax reform.
“I doubt any man or woman could be held responsible for a bloated bureaucracy (like the IRS)," Massie said. "But Congress created this monster. We have 70,000 pages of tax code."
Most other members have argued that Shulman should have known about the wrongdoing earlier than he did.
Rep. Cynthia Lummis (R-Wyo.) didn’t use her allotted time to ask any questions of the officials testifying before the committee, but she issued some harsh words for the IRS regarding its targeting campaign.
“This is far worse than anything we've seen in Watergate or that the government has done to the government, because this is the government turned against the very people who hired them, who trusted them,” the congresswoman said.
Lummis described the IRS as a Goliath that had turned on the people.
“You have people relying on trust, and that trust is absolutely gone,” she said. “I have no idea how we can restore the trust that has been destroyed as a result of this. The IRS has let down the very people they are supposed to serve.”
A White House spokesman defended inconsistencies in the administration’s public accounting of the Internal Revenue Service scandal by saying officials are trying to answer questions as fast as possible without always having all the information.
“There's been some legitimate criticisms about how we're handling this,” press secretary Jay Carney said. “The approach we take is we get the information to you that we have as soon as we can, and we try to get that information to you as quickly as possible and as comprehensively as possible. Now, quickly and comprehensively are not objectives that always meet.”
Carney has come under fire from reporters and Republicans for changing stories over when senior White House officials learned that the IRS had been improperly targeting conservative groups seeking tax exempt status.
The spokesman initially told reporters that White House counsel Kathryn Ruemmler learned only that the Inspector General’s office was investigating the matter. This week, Carney acknowledged that the IG informed Ruemmler about the basic findings and she informed other senior aides, but they did not tell President Obama because the report was not finalized.
“We get the information we have to you, and as we get more information, we fill in the details,” Carney said Wednesday. “And if it turns out that the new information we have requires a correction, we do that. That's what I did on Monday when it came to the so-called timeline.”
That said, Carney stood by the administration’s handling of the matter, saying officials were right to wait until receiving a final report from the IG before Obama took action last week to remove the acting IRS director and order reforms.
“That's the approach we took,” he said. “And there's been criticism of that. I think it was the right call, personally.”
Rep. Rob Woodall (R-Ga.) continued a popular line of attack on Douglas Shulman, arguing that Shulman's testimony in March 2012 that there was "absolutely no targeting" of conservative groups by the IRS was apparently based on no evidence or research by him.
Shulman has said his testimony was true based on what he knew at the time -- even though targeting of conservative groups had already begun. Committee members have suggested that either he misled Congress or that Shulman didn't know something he should have known if he had simply asked his staff about it.
"You made not one inquiry before testifying before Congress about what the truth of that is," Woodall said. "I’m not saying you were lying; I’m saying you were derelict in inquiring about what the truth was.”
This is a key unanswered question in all of this: How did Shulman -- the head of the IRS -- not know of the wrongdoing months after others were aware of it? And if he hadn't sufficiently checked it out before testifying, why would he offer such a definitive answer that there was "absolutely no targeting?"
Expect more questions along these lines.
Rep. Peter Welch (D-Vt.) criticized the Supreme Court over its decision in the Citizens United case, calling it “what I believe to be an absurd decision.”
Welch added that the Supreme Court essentially ruled that “corporations are people.”
The congressman, who said the justices have made bad decisions in the past regarding civil rights cases, continued talking for several minutes about skyrocketing levels of campaign funding and spending on political ads in recent years.
Welch said that outside groups are starting to spend more than the candidates themselves. He added that elected officials can no longer work toward agreements in the common interest of the nation because outside groups will criticize the compromises.
"Let’s get to the bottom of this [IRS targeting issue], but let’s also acknowledge that this money coming into the system is a threat to our ability to do our job," Welch said.
Rep. Scott DesJarlais (R-Tenn.) goaded Douglas Shulman into giving his own actions a vote of confidence.
Asked by DesJarlais whether he considers himself a good leader, Shulman said, "I do."
Shulman later added, in relation to the IRS's targeting of conservative groups: "I feel very comfortable with my actions."
Previously, Shulman declined an invitation from another member to provide a letter grade for his performance as IRS commissioner.
Rep. Patrick McHenry (R-N.C.) pressed Deputy Treasury Secretary Neal S. Wolin on whether he shared any information about the IG investigation with the White House -- including White House counsel or the White House chief of staff -- after the inspector general’s office notified Treasury that it was conducting the review.
Wolin said that he did none of the above.
A recent report from the Post revealed that senior White House officials knew about the findings of the IG report earlier than the White House had initially indicated when the details first became public.
Henry also asked whether the deputy treasury secretary mentioned anything about the IG audit to the Obama campaign.
"I never had any contact with the campaign," Wolin said.
Treasury Inspector General for Tax Administration J. Russell George told the committee at one point that none of the groups he reviewed as part of his audit were ever denied tax-exempt status.
Instead, a decision on their status was delayed.
"They were delayed for years, at times," George said. "But not a single one of the -- of the ones that we examined, were denied."
Douglas Shulman, the former IRS commissioner, and Treasury Deputy Secretary Neal Wolin said they had no direct knowledge of the review of those groups.
House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) sought to clarify that even though none of the groups were denied tax-exempt status, "by definition, not granting them is, in fact, not allowing them to happen."
"So you can actually deny better by not denying, because if you deny, they have a right of appeal," Issa said. "If you just let them sit in limbo, they're screwed. And some are still screwed today."
Issa then joked that "screwed" was a "term of art."
Rep. Tammy Duckworth (D-Ill.) pressed Treasury Inspector General J. Russell George to explain the root of the IRS wrongdoing.
George said determining how the search criteria came about is at the heart of the question over the IRS targeting campaign, but that he did not have a definitive answer.
“My response at this stage would be a lack of oversight, a lack of follow-up on the part of Ms. Lerner and the people within her immediate chain of command,” George said. “No one went back to make sure that what was being told by them to do in Cincinnati was being done, and that's inexcusable."
This is perhaps the first time during the IRS hearings that George has mentioned Lerner’s name in relation with the root of targeting campaign.
Rep. Tammy Duckworth (D-Ill.), a freshman congresswoman and war veteran who lost her limbs in battle, told Douglas Shulman that his failure to take responsibility for what happened wouldn't fly in the military.
"We have 25-year- old buck sergeants and second lieutenants who know you can delegate authority, you can never delegate responsibility, and that you're always responsible for the performance, the training, the actions of the men and women under you," Duckworth said. "And I hope that you remember that in the next position you go to."
Shulman has repeatedly expressed "regret" and said he was "very sorry" that the targeting happened on his watch. But he has added the caveat that he wasn't directly responsible for the wrongdoing -- a clarification that has rubbed members of Congress the wrong way.
Treasury Inspector General for Tax Administration J. Russell George told lawmakers that he's scheduled to meet next week with Danny Werfel, the new acting commissioner of the Internal Revenue Service.
Under questioning by Rep. Robin Kelly (D-Ill.), George said Werfel has requested a meeting. George said he's committed to work with Werfel "to help him become familiar with the problems within the IRS that we’ve identified."
George said the meeting is scheduled for next week.
Rep. Matthew Cartwright (D-Pa.) asked Treasury Inspector General J. Russell George whether a doubling of applications after 2010 for tax-exempt status could have led to the IRS’s targeting campaign.
George said he wanted to be clear that the IG report did not say the search criteria came about as a result of a doubling of applications after the Citizens United Supreme Court decision that year.
“There are certainly valid reasons for the Internal Revenue Service to try to be more efficient, however it is entirely inappropriate to use certain categories to accomplish that,“ George said.
To be clear, there was no doubling of applications in 2010. In fact, the number of applications from social welfare groups actually dropped during the 2010 calendar year, as Post Politics mentioned in a recent blog item and The Post’s Fact Checker pointed out in a recent column — which awarded Four Pinocchios to Lois G. Lerner.
The doubling of applications did not occur until the 2012 calendar year, after the IRS had taken steps to end its targeting campaign.
Here's a key exchange from earlier that we should point out.
Del. Eleanor Holmes Norton (D-D.C.) asked Treasury Inspector General for Tax Administration J. Russell George to clarify whether officials at the Treasury Department or the White House ever directed IRS employees in the tax-exempt unit to target certain groups.
"We did pose that question," George said in response to Holmes "And again, the response was that there was no direction from the department itself to those in the determinations unit in Cincinnati, nor their affiliate office in Washington."
Norton then asked whether George had any evidence of White House officials pushing IRS employees to target certain groups.
"No," George said. "But in all honestly, we didn't look at the White House. We didn't question anyone as to whether or not they'd received any direction from the White House."
"So that specific question was not asked?" Norton asked.
"That's correct," George said.
Norton urged George to probe potential White House involvement in his ongoing inquiries into the matter.
"We'll go wherever the facts take us," he said in reply.
At about noon, Douglas Shulman offered slightly more of an apology than he previously had, saying he's "very sorry" that the targeting of conservative groups happened on his watch.
Previously, Shulman had avoided the words "apologize" or "sorry." But he still couched the apology somewhat, noting that it was others who were directly responsible for the targeting.
“I don't take personal responsibility for there being a list with criteria put on it, but I do accept the fact that this did happen on my watch.," the former IRS commissioner said.
Pressed the clarify by Rep. Jackie Speier (D-Calif.), Shulman added: "I recognize that this happened on my watch and I'm very sorry that this happened while I was at the Internal Revenue Service."
Members of the Senate Finance Committee on Tuesday prodded Shulman to offer an apology. Two other IRS officials -- former acting commissioner Steven Miller and tax-exempt division head Lois Lerner -- have apologized directly.
Here's the entire exchange between Speier and Shulman:
REPRESENTATIVE JACKIE SPEIER (D-CA): Mr. Chairman, thank you. Mr. Shulman, you have been the head of the IRS for over five years. You're in charge of the Internal Revenue Service, correct?
MR. SHULMAN: I was head of the IRS for four years about eight months.
REP. SPEIER: All right, four years and eight months. You get 132 letters from members of Congress concerned about targeting, and you send them to leg affairs to deal with. Did you feel any responsibility to go to the Cincinnati office and find out for yourself what was going on? Did you ever make a visit to the Cincinnati office?
MR. SHULMAN: I guess I don't accept the premise that I got 132 letters about targeting. I certainly wasn't aware of that number till now. I knew about two questions about how --
REP. SPEIER: Well, regardless, when Congress contacts you -- whether it's 12 senators or members of this committee -- I mean, doesn't it alert you to the fact that, you know, maybe -- if there's smoke, maybe there's fire? So did you ever visit the Cincinnati office?
MR. SHULMAN: I visited early in my tenure the Cincinnati office, which has, you know, many different operations. But I don't believe I went to Cincinnati, you know, during this 2012 time frame.
REP. SPEIER: You take responsibility for what happened in the Cincinnati office?
MR. SHULMAN: Do I take responsibility for the list being done?
REP. SPEIER: Yes.
MR. SHULMAN: You know, I don't take personal responsibility for there being a list with criteria put on it, but I do accept the fact that this did happen on my watch.
REP. SPEIER: So you don't take responsibility, but you recognize the fact that it happened under your watch?
MR. SHULMAN: Look, I recognize that this happened on my watch and I'm very sorry that this happened while I was at the Internal Revenue Service.
REP. SPEIER: You know, one of the problems we have here is people are unwilling to take responsibility for actions that happened under their command. And you had a duty, as far as I'm concerned, to find out what was going on in the Cincinnati office when members of Congress -- 132 of them or 50 of them or 10 of them -- inform you that they think that there's some kind of targeting going on. And if that doesn't elevate your concern and interest, then something's fundamentally wrong between the way Congress interacts with the administration and the bureaucracy.
Updated at 12:36 p.m.
Douglas Shulman said that he didn't discuss the IRS's targeting of conservative groups with the White House during more than 100 visits there in 2010 and 2011.
Rep. Jim Jordan (R-Ohio) noted that the former IRS commissioner went to the White House 118 times during that time, according to the White House log, and he asked whether the issue of IRS targeting ever came up during his visits.
Shulman said he did not think so and that it shouldn't have.
"Not to my memory, and it wouldn’t be appropriate, so I certainly believe I did not have any conversations" with the White House, Shulman said.
He later clarified that he did not bring it up: "No, I did not."
Shulman also said that he doesn’t recall having discussed two other related issues with the White House. The first is 501(c)(4) nonprofits – the tax-exempt groups that were the subject of the targeting – and the second is the Citizens United Supreme Court case, which lifted campaign finance restrictions and led to the proliferation of outside groups.
“Not that I remember,” Shulman said in response to Rep. Jason Chaffetz (R-Utah).
Under questioning by Rep. Gerald E. Connolly (D-Va.), Shulman said that he visited the White House for a variety of reasons.
"The Easter Egg Roll with my kids … administrability of tax laws … our budget … us helping the Department of Education streamline application processes for financial aid," Shulman said.
Jordan also asked Shulman whether he was "being straight" with Congress.
"I'm absolutely telling you the truth today," Shulman said.
Jordan noted that Shulman used similar language — "absolutely no targeting" — when he testified in March 2012 that the IRS was not targeting conservative groups.
Updated at 11:57 a.m.
Admitting that workers have faced "a difficult last few days," Werfel gave a stern, direct message to the rank-and-file:
"The missteps uncovered in the recent Inspector General report are inexcusable and cannot be tolerated by any of us," he wrote. "We have a solemn duty to act as responsible, fair and impartial stewards of the taxpayers’ dollars. As someone who has spent my entire career as a civil servant in government, this is a duty that I hold dear, and any deviation from it is unacceptable to me, as I know it is to you."
Here is Werfel's full message:
From: *Acting Commissioner Werfel
Sent: Wednesday, May 22, 2013 10:32 AM
To: &&Employees All
Subject: Restoring Trust and Charting a Path ForwardTeam – As we start on a new journey together here at the IRS, I wanted to take a moment to talk about the path forward.It has obviously been a difficult last few days for all of you. There is rightly concern among the public about the trust that they place in the IRS to administer the tax code fairly and help America’s taxpayers understand and meet their tax responsibilities. Working together, it is up to us to restore that trust and ensure that the IRS remains the exceptional, indispensable organization it has always been.The first step in this effort must be to get to the bottom of the recent allegations regarding the criteria to determine eligibility for tax-exempt status. The missteps uncovered in the recent Inspector General report are inexcusable and cannot be tolerated by any of us. We have a solemn duty to act as responsible, fair and impartial stewards of the taxpayers’ dollars. As someone who has spent my entire career as a civil servant in government, this is a duty that I hold dear, and any deviation from it is unacceptable to me, as I know it is to you. That is why we must work together with the Inspector General, the Justice Department, and Congress to ensure that responsible parties are held accountable for the inappropriate activities that occurred and that we correct the breakdowns in process and oversight that allowed them to occur.At the same time, we must keep our eyes on our critical missions of fair application of the tax laws and effective operation of the systems that fund our government. That mission, and your work, are of critical importance. With that in mind, in the coming days, I plan to begin a review of our operations, processes and practices to focus on how we deliver on our mission today and how we can make improvements in the future. The American people expect the IRS to operate efficiently, effectively, transparently and with the utmost accountability to the taxpayer. And where that is not the case, we will take swift actions to correct it.The President and Secretary Lew have asked for a report by the end of next month about our progress on these efforts. And my first step in that process is to begin meeting with many of you and ask for your ideas, advice and counsel. The people of the IRS are what make this organization what it is and guide the incredibly important work that we do on behalf of the American people. Particularly at this time, we have an indispensable role to play in ensuring the nation’s tax system is administered with the utmost fairness and integrity. Our path forward must be with this priority front of mind. We all take tremendous pride in what we do for the American public, and it is that pride and commitment that I trust will guide us going forward. For example, as the nation comes together to support the victims of the devastating tornados in Oklahoma, we should all feel a sense of pride that IRS is actively supporting the recovery effort and doing our part to help.I look forward to meeting many of you in the coming days. In the meantime, please do not hesitate to reach out to me directly with any thoughts and perspective on what we can do together to help this organization continue to thrive and serve the public.Regards –Danny WerfelActing Commissioner
Who is Danny Werfel? Read our recent profile of him here.
Rep. Stephen Lynch (D-Mass.), who previously warned that there would be "hell to pay" for not answering the committee's questions, went after Douglas Shulman for his March 2012 testimony that there was "absolutely no targeting" of conservative groups.
The former IRS commissioner was pressed on what was the basis for that statement and couldn't satisfy Lynch with his answers.
"I answered truthfully based on the information I had at the time," Shulman assured, adding: "At no time, to the best of my memory, was I ever given the impression that these were only (looking) at conservative groups."
Lynch repeatedly cut off Shulman, accusing him of hogging the available time and not answering the question.
"You misled Congress. Make no question about it," Lynch said. "You did nothing. You abdicated your responsibility."
Shulman, who grew testy with Lynch and pleaded for more time to answer his questions, suggested he didn't know that the targeting of conservative groups was unusual in March 2012.
"I had said that it's normal to have this kind of back and forth," Shulman said. "The second is my understanding at the time was that conservative groups ... were not the only ones getting these questions. That was my memory."
A perfect example of why committee members are frustrated with Douglas Shulman:
Rep. Mike Turner (R-Ohio), whose home area is also home to Shulman, asked the former IRS commissioner whether the IRS's targeting is consistent with their hometown values and American values.
Rather than answering the question and affirming that it isn't, Shulman restated what he had said before about the report being troubling.
Rep. John Mica (R-Fla.), one of the longest-serving members on the Oversight Committee, arguably best summed up why lawmakers are so intensely focused on this situation: Because their constituents care.
"I don't think I've ever seen any investigation or review by this committee or subject that has so riveted and shocked the American people," he said earlier. "I went home last weekend and almost to a person everyone asked me about this."
In other words — as if we needed a reminder — amid chatter about the attack on the U.S. consulate in Benghazi, Libya, and the Justice Department's collection of the phone records of certain reporters — it's the IRS scandal that will continue to resonate with the American public. And it's the one lawmakers will worry about the most.
Rep. Elijah Cummings (D-Md.), ranking member of the House Oversight Committee, criticized Douglas Shulman for not correcting his March 2012 testimony after learning that the IRS had indeed targeted conservative groups, contradicting statements Shulman had made before Congress.
“It seems to me that you would come back even if it were a phone call or a letter," Cummings said. "I mean, common sense.”
Cummings came back to the issue several times during his questioning of the former IRS commissioner.
“Come on, Mr. Shulman, help us help the taxpayers," Cummings said. "Am I missing something?”
Cummings also asked Shulman whether he was upset after learning from Steven Miller, who worked under Shulman at the time, that the IRS had targeted conservatives, an issue that members of Congress were concerned about at the time.
"I felt comfort that the IG was going to look into this and report back to Congress at the appropriate time,” Shulman said.
House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) noted that very few witnesses have ever invoked their Fifth Amendment right not to incriminate themselves.
So when was the last time someone chose to do so?
Just a little more than a year ago, when Jeff Neely, a career official with the General Services Administration, declined to testify before the committee about why agency officials authorized more than $800,000 in spending for a Las Vegas conference.
Here's what we wrote about it last year:
“Mr. Chairman, on the advice of my counsel, I respectfully decline to answer based upon my Fifth Amendment constitutional privileges,” Jeff Neely said in response to several questions about his role with GSA and whether he was involved in planning the October 2010 conference.
Members of the House Oversight and Government Reform Committee voiced outrage at the spending scandal that led to the ouster of top agency officials and the at least temporary removal of several top career staffers.
Chairman Darrell Issa (R-Calif.) briefly recessed the hearing after Neely declined to testify and ordered the Neely and his attorney to a side office. When the hearing resumed, Issa said it was the first time in his congressional career that a witness had declined to testify.
Neely’s seat at the witness table remained empty for the rest of the hearing.
Before Neely invoked his Fifth Amendment right to avoid self-incrimination, former GSA administrator Martha N. Johnson said she was “extremely aggrieved by the gall of a handful of people to misuse federal tax dollars, twist contracting rules and defile the great name of the General Services Administration.”
Speaking publicly for the first time on the scandal, Johnson told lawmakers that her deputy administrator first requested an investigation into the conference spending in late October 2010, just days after the conference. Johnson said she received a briefing on the preliminary findings in May 2011. She decided not to launch her own investigation “as such action would have entailed a terrific duplication of government resources.”
Committee Chairman Darrell Issa (R-Calif.) pressed the inspector general who audited the IRS, J. Russell George, on why he didn't disclose the wrongdoing before the report came out.
"Mr. Chairman, there are established procedures for conducting an audit," George said, stressing that the IRS needs to be given a chance to respond to his findings.
Issa then suggested that there is no law that prevented George from doing so. George granted him that but said the process is important.
"It would be counter-productive, sir, if we were to do that," George said, adding: "Once again, I think it would behoove all of us to make sure that accurate information is given to Congress so that we don't act precipitously."
Deputy Treasury Secretary Neal S. Wolin said repeatedly that his department had no involvement with the IRS's targeting of conservative groups.
He also noted that President Obama and Treasury Secretary Jack Lew have “taken decisive action” to help address the issues raised in the IG report.
Wolin noted that Obama asked for and accepted the resignation of outgoing IRS acting commissioner Steven Miller and then appointed Daniel Werfel as the new acting commissioner of the agency.
The deputy treasury secretary added that Lew has instructed Werfel to implement all nine recommendations from the IG report and to complete a larger review within 30 days to determine whether the IRS requires systematic change.
Wolin also said that a core principal of the Treasury Department is to never interfere in any way with a report from an inspector general. He added that he told the IG to "follow the facts where they lead” when told of the audit of the IRS's practices.
Lois G. Lerner was dismissed from the committee room by Oversight Committee Chairman Darrell Issa (R-Calif.) after she refused to answer questions about her involvement in the inappropriate targeting of certain groups seeking tax-exempt status.
But not before at least one member of the panel raised objections to her dismissal.
After Lerner gave her opening statement, during which she declined to answer questions, Issa asked Lerner, head of the IRS’s tax-exempt organizations division, to review a transcript of her interview with the office of Treasury Inspector General for Tax Administration J. Russell George. After reviewing a copy of transcript, she confirmed to the committee that it was a copy of her transcribed interview.
Issa then asked Lerner several times to reconsider her position, noting that she had asserted her innocence and did nothing wrong. “Additionally, you have authenticated earlier answers to the IG.”
“At this point, I believe you have not asserted your rights, but have effectively waived your rights,” Issa added.
“I will not answer any questions or testify about the subject matter,” Lerner said.
“We will take your refusal as a refusal to testify. The witness and the counsel are excused,” Issa said.
But as Lerner rose to leave, Rep. Trey Gowdy (R-S.C.) objected.
“She waived her right to testify by issuing an opening statement. She ought to stay and answer questions,” Gowdy said.
Several people in the audience applauded in response.
Issa then conferred with aides, while Rep. Elijah Cummings (D-Md.), the committee’s ranking Democrat, spoke up: “Unfortunately this is not a federal court and she does has a right. And we have to adhere to that.”
When Issa asked again whether she would be willing to reconsider, Lerner replied: “I will not answer any questions or testify today.”
When Issa asked if she’d be willing to answer questions about oral testimony already given during the hearing, Lerner stood firm: “I decline to answer that question for reasons I’ve already given.”
“For this reason, I have no choice but to excuse the witness subject to recall after we seek specific consult on the question of whether the constitutional right of the Fifth Amendment has been properly waived,” Issa said, adding that he might consult with the Justice Department about giving Lerner “limited immunity” in order to testify.
“The witness and counsel are dismissed,” Issa said.
With that, Lerner left and her attorney left the room.
After she left, Issa noted that Lerner "was entitled to assert her Fifth Amendment" rights, "although there were some questions about how it was done."
"This is a committee that is investigating, more than anything else, the ultimate right of free speech and the First Amendment," Issa told his colleagues. "So as we go on with the rest of this hearing, I would admonish all of us to remember that it's not the First Amendment or the Second Amendment or the Fifth Amendment or the 10th Amendment in a vacuum. We have to respect them all."
"I believe that this committee has a long history of very few, during my tenure of 12 years, of these occasions, and we should not use this either for political gain or for any indication that it is anything other than somebody's right," Issa added.
With that the committee moved ahead with questioning the other witnesses.
Lois G. Lerner, head of the IRS’s tax-exempt organizations division, broke her silence Wednesday before the House Oversight and Government Reform Committee, insisting she did nothing wrong, but declining to answer the panel's questions.
Here is her opening statement:
"I have been a government employees for over 34 years. I initially practiced law at the Department of Justice and later at the Federal Elections Commission. In 2001, I moved to the IRS to work in the exempt organizations office and in 2006 I was promoted to director of that office.
"Exempt organizations oversees about 1.6 million tax exempt organization and process over 60,000 applications for tax exemption every year. As director, I’m responsible for about 900 employees nationwide and administer a budget of almost $100 million. My professional career has been devoted to fulfilling responsibilities for which I have worked and I am very proud of the work I have done in government.
"On May 14, the Treasury Inspector General released a report finding that the exempt organizations field office in Cincinnati, Ohio used inappropriate criteria had used inappropriate criteria to identify for further review applications from organizations that planned to engage in political activity, which may or did not qualify for tax exemption.
"On that same day, the Department of Justice launched an investigation launched into to the matters described in the inspector general's report. In addition, members of this committee have accused me of providing false information when I responded to questions about the IRS processing of applications for tax exemption.
"I have not done anything wrong. I have not broken any laws, I have not violated any IRS rules or regulations and I have not provided false information to this or any other congressional committee. And while I would very much like to answer your committee’s questions today, I have been advised by my counsel to assert my constitutional right not to testify or answer questions related to the subject matter of this hearing. After very careful consideration, I have followed my counsel's advice and not testify or answer any questions today.
"Because I’m asserting my right not to testify I know people will assume I’ve done something wrong. I have not. One of the basic rights of the Fifth Amendment is to protect innocent individuals and that’s the protection I’m invoking today, thank you."
Oversight Committee Chairman Darrell Issa (R-Calif.) then asked Lerner to review a transcribed copy of an interview conducted by J. Russell George, the Treasury inspector general for tax administration. After given a copy, she said that the document appeared to be a copy of her testimony.
Issa then asked Lerner to reconsider her position, noting that she had asserted her innocence and did nothing wrong. "Additionally, you have authenticated earlier answers to the IG."
"At this point, I believe you have not asserted your rights, but have effectively waived your rights," Issa said.
"I will not answer any questions or testify about the subject matter," Lerner said.
"We will take your refusal as a refusal to testify. The witness and the counsel are excused," Issa said.
But as Lerner rose to leave, Rep. Trey Gowdy (R-S.C.) objected.
"She waived her right to testify by issuing an opening statement. She ought to stay and answer questions," Gowdy said.
Several people in the audience applauded in response.
Issa then conferred with aides, while Rep. Elijah Cummings (D-Md.), the committee's ranking Democrat, spoke up: "Unfortunately this is not a federal court and she does has a right. And we have to adhere to that."
When Issa asked again whether she would be willing to reconsider, Lerner replied: "I will not answer any questions or testify today."
When Issa asked if she'd be willing to answer questions about oral testimony already given during the hearing, she said: "I decline to answer that question for reasons I've already given."
"For this reason, I have no choice but to excuse the witness subject to recall after we seek specific consult on the question of whether the constitutional right of the Fifth Amendment has been properly waived," Issa said, adding that he might consult with the Justice Department about giving Lerner "limited immunity" in order to testify.
"The witness and counsel are dismissed," Issa said.
With that, Lerner left and her attorney left the room.
Former IRS commissioner Douglas Shulman in his opening statement continued to offer no direct apology for the IRS's wrongdoing.
Shulman said he was "dismayed and saddened" by the "inappropriate and damaging" acts, but he stopped short of apologizing, as other top IRS officials have.
"While the inspector general's report did not indicate that there was political motivation involved, the actions described in the reports have justifiably led to" these questions, Shulman said.
Members of the Senate Finance Committee on Tuesday criticized Shulman for not offering an apology. Shulman instead said he "regretted" that it happened on his watch.
Rep. Stephen Lynch (D-Mass.) told IRS officials on the panel that there will be "hell to pay" if they refuse to answer the committee's questions — a message clearly targeted at Lois Lerner, whose lawyer has said she will plead the Fifth Amendment and not answer questions.
“If you refuse to answer,” Lynch said, “you will leave us no choice but to ask for a special counsel or the appointment of a special prosecutor to get to the bottom of this."
Lynch added: "I hope that’s not the approach of the IRS going forward, because there will be hell to pay.”
Lynch's superior on the committee, Rep. Elijah Cummings (D-Md.), previously asked the committee to respect Lerner's right to plead the Fifth.
Rep. Jim Jordan (R-Ohio), who chairs an oversight subcommittee on regulatory affairs and government spending, sought to tie the situation at the Internal Revenue Service to the panel's ongoing investigation into the Sept. 11, 2012 attack at the U.S. diplomatic outpost in Benghazi, Libya that killed four Americans.
Jordan dismissed statements by the Obama administration and IRS officials that just a handful of employees were aware of and conducted improper review of organizations seeking tax-exempt status, saying he didn't believe those explanations since the same officials worked together to decide how the agency would reveal the improper actions at a May 10 conference hosted by the American Bar Association.
Then, Jordan tied the ongoing woes at the IRS to the Benghazi attack, another subject under review by the committee.
"This administration, which told us and told the American people that the attack that killed four Americans in Benghazi was the work -- was caused by a video -- is now the same administration who expects us to believe was just the result of two rogue agents in Cincinnati," Jordan said. "The people don’t buy it, the American people get it. They just want this administration to give them the truth. And that’s why this hearing is so important."
House Oversight Committee ranking member Elijah Cummings (D-Md.) in his opening statement suggested that members of the committee should respect IRS official Lois Lerner's decision to plead the Fifth Amendment and not answer questions that may be self-incriminating.
"Of course I am disappointed that we will not be able to ask her questions today. I believe she could shed much light on" the truth, Cummings said. "This is Ms. Lerner's right under the Constitution, so I will honor her decision, and I will respectfully urge my colleagues to do the same."
It remains to be seen how many times Lerner will be forced to invoke the Fifth Amendment. The committee has compelled her to appear even as her lawyer has said she won't answer questions, invoking her right to avoid self-incrimination.
"This committee should act on the level of a federal court, and I think we should be very careful not to let partisanship undermine the integrity not only of the committee but of the investigation," Cummings said.
In his statement, Cummings also cited "gross incompetence and mismanagement" at the IRS, but also focused on the slow approval process for tax-exempt groups and alleged abuse of tax-exempt status by political groups.
"I believe that there was gross incompetence and mismanagement in how the IRS determined which organizations qualify for tax-exempt status," Cummings said.
But rather than re-hashing the IRS's targeting of conservative groups, Cummings focused more on how applications have taken so long to process — including some applications lying dormant for a year.
He also argued that that groups like Republican-supporting Crossroads GPS and Priorities USA, a pro-Obama organization from the 2012 campaign, should be looked at more closely.
Democrats have often argued that such groups are thinly veiled political action committees, abusing tax-exempt status so they can hide their donors.
House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) on Wednesday raised doubts not only about the Internal Revenue Service, but also raised concerns about a watchdog report that detailed the improper targeting of certain groups seeking tax-exempt status.
During his opening remarks, Issa also sought to defend the conservative-leaning groups that were targeted by IRS employees.
"These people particularly those who use 'tea party' in their name, were mocked by the liberal media, mocked by late-night television and referred to by this administration with disdain," Issa said. "Even here in the hallows of Congress, people would talk about who the 'tea partyers' were … when in fact there is no tea party. As the evidence has shown, there are hundreds and hundreds of organizations who are independent as any single American who simply wanted to live up to the Constitution, who wanted to have their freedom and have it protected by their government."
Issa noted that his committee asked Treasury Inspector General for Tax Administration J. Russell George to launch a formal investigation last year after hearing concerns from constituents.
"We knew then that something seemed to be wrong. We knew then that there was smoke. We knew then that in fact something just didn’t seem to be right," Issa said. "What we didn’t know what was really wrong, and we never could have suspected an organized and pervasive denying of hundreds of organizations. Not by a reject stamp, but by deliberate inaction."
Issa then turned his attention to rank-and-file IRS employees, saying that those in the tax-exempt unit "could have and should have been a whistleblower" and alerted their bosses and lawmakers to potential inappropriate actions.
"During this period of time of more than a year, we had an intervening election," Issa noted later. "Many people want to talk about this relative to the election. I will not do that here today. This is more important than any one election. We need to look at this relative to our democracy. The power to tax is the power to destroy. The power to grant tax status is in fact an enhancement of the right and liberties of our speech. That is what was at stake here and it wouldn’t matter one bit if a different group was targeted. It is wrong."
Turning to concerns with the watchdog report, Issa noted that many interviews George's staff conducted were observed by Holly Paz, who was director of the IRS Exempt Organizations' Guidance office based in Washington. Issa said he was "shocked" that Paz participated "in virtually in every one of the interrogations with her own subordinates."
Issa said it's unclear why George didn't inform the committee about his initial findings last summer when his investigation began to yield troubling results.
Issa made clear that his committee will continue probing the situation "until we know that the IRS is fixed," noting that George had said that "internal controls" don't exist at the IRS to ensure that similar problems don't occur again in some other part of the agency.
A little perspective as IRS officials try to explain themselves today: Americans don't like the IRS, but maybe they don't hate it as much as one might think.
As Scott Clement of the Post's Capital Insight polling team tells me:
The latest CNN/Opinion Research poll finds nearly two-thirds of Americans have an unfavorable opinion of the IRS (65 percent). This is a far more negative review than in a Washington Post-ABC News poll conducted in April, when 49 percent were favorable and 48 percent were unfavorable. The surveys use somewhat different question wording, but the contrast in results is stark.
Also, the new Post-ABC poll finds 74 percent thought the IRS acted inappropriately, but there’s a split among this group on whether the action was illegal (51 percent) or just inappropriate (44 percent).
The question of legality is likely to be touched on several times today. As we've noted before, lawyers and the inspector general who wrote the IRS report haven't seen proof of criminal conduct.