White House knew IRS probe findings earlier


White House press secretary Jay Carney is questioned by the press during the daily briefing at the White House on Monday. (JASON REED/REUTERS)

The White House offered a new account Monday of how and when it learned that the Internal Revenue Service had improperly targeted conservative groups, saying that some senior officials were informed of the findings but that President Obama was not.

The assertions came as the White House struggled to contain a political uproar over the IRS, which targeted conservative organizations for extra scrutiny, as well as over the administration’s aggressive pursuit of journalists in leak investigations and its handling of the deadly attacks in Benghazi, Libya, in September.

White House counsel Kathryn Ruemmler told White House Chief of Staff Denis McDonough and other top officials about the IRS findings nearly a month ago, press secretary Jay Carney said Monday. Ruemmler decided the information should not be transmitted to the president because the IRS inspector general’s report was not finished, he said.

“The judgment of the White House counsel was that this is not a matter that she should convey to the president,” Carney told reporters during a tense news briefing. “This is not the kind of thing, when you have an ongoing investigation or an ongoing audit, that requires notification to the president, because what is important is that we wait until that kind of process is completed before we take action.”

The new account goes well beyond what officials had said as recently as Sunday, when senior adviser Dan Pfeiffer said in television interviews that the White House did not know the results of the inquiry until the inspector general’s report was released last week. Carney had said previously that Ruemmler was told “only about the fact that the IG was finishing a review” of the IRS’s conduct, and he portrayed it as a “normal sort of heads-up” notification.

White House spokesman Jay Carney said Denis McDonough, President Obama's chief of staff, was among a handful of senior aides informed of the Treasury inspector general's findings that the IRS was targeting conservative groups for heightened scrutiny in their tax-exempt application process.

But Carney said Monday that a member of the White House counsel’s staff learned of the IG report the week of April 16, a week earlier than previously disclosed. He also said Ruemm­ler had briefed McDonough and other senior aides on the findings.

The Treasury Department was informed on three separate occasions that the IRS planned to disclose that it targeted conservative groups for scrutiny, and on one occasion, Treasury expressed concern about the nature of the disclosure, a Treasury official said on Monday night. In all cases, the official said, the department ultimately deferred to the IRS.

In late April, the IRS told Treasury that senior tax official Lois Lerner was considering making a speech in which she would publicly apologize for inappropriate conduct at the IRS in advance of an inspector report documenting how tax agency officials gave extra scrutiny to conservative groups.

“Treasury expressed some concern about the idea of a speech, but ultimately deferred to the IRS on that issue,” the Treasury official said Monday. Treasury officials also discussed the potential disclosure with the White House and said it planned to defer.

Later, Treasury was told ahead of time that Lerner would be asked a question about whether the IRS was screening conservative groups at an American Bar Association conference on May 10. “Treasury again deferred to the IRS on their interest in making a public apology,” the official said.

The revelations were the latest in a series of disclosures about what officials knew about the IRS scandal before it became public on May 10, when the agency apologized for singling out right-leaning groups.

The string of disclosures added to a growing sense of a White House under siege, struggling to contain multiple controversies at once.

Administration officials were on the defensive Monday about a Washington Post report that the FBI had tracked the phone calls, e-mails and movements of James Rosen, a diplomatic correspondent for Fox News Channel, as part of a leak probe.

In the IRS case, White House officials said Obama would not have acted any differently had he known ahead of time about the inspector general’s findings. Obama has said he learned of them in the media on May 10.

“It’s somewhat ironic that there has been some suggestion that action should have been taken because we were aware that an independent IG was reaching the conclusion of a report,” Carney said. “These kinds of independent investigations need to be independent. There should be no intervention by a White House, and, of course, there was not in this case.”

The IRS began to target conservative groups seeking tax-
exempt status in early 2010, first scrutinizing organizations with “tea party” and other conservative-sounding names. After a long bureaucratic struggle, agency officials finally put the targeting to rest in 2012. The Treasury Inspector General for Tax Administration soon began an audit of the practices, releasing its results last week.

The revelations have prompted a criminal investigation by the Justice Department, multiple congressional investigations and a succession of hearings, including one scheduled for Tuesday by the Senate Finance Committee. IRS officials have said that they were wrong to use the criteria they did to screen conservatives but that they were not motivated by partisan interests.

Obama fired the acting IRS commissioner last week and named a budget aide, who has served in Republican and Democratic administrations, as his successor.

No evidence has emerged that any White House official knew of the conduct until last month, but Treasury Deputy Secretary Neal Wolin and other political appointees learned about the IG probe last year. Lawmakers were also aware of it: The inspector general on the case, J. Russell George, wrote about it in a July 2012 letter to House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), who initially requested the investigation. The IG also gave a brief outline of the inquiry in a recent semiannual report.

The administration’s accounts of what it knew about the IRS inquiry have shifted markedly over the past week. Officials initially maintained that the administration knew an inspector general’s report was forthcoming but suggested that they did not know about its findings.

But on Sunday night, the White House acknowledged that Ruemmler’s office knew details of the report’s conclusions before it was released. Then on Monday, Carney revealed that officials outside the counsel’s office were also in the loop.

Communications between the Treasury Department and the White House also have turned out to be broader than initially acknowledged. At one point, Mark Patterson, the Treasury chief of staff, talked about the timing of the report with Mark Childress, deputy White House chief of staff, according to a person familiar with the discussions.

Tony Fratto, who served as deputy press secretary to George W. Bush, said one of the challenges the White House ­faces is “they actually don’t know everything” when it comes to the unfolding IRS scandal.

“They’re going to be persistently one step behind the story, and always in the position to react, to some extent, to unknowable facts,” said Fratto, now managing partner at Hamilton Place Strategies, a communications and crisis-management firm. “From the White House perspective, having to manage the story and say something every day, it just becomes very challenging for them.”

Typically, an agency’s inspector general informs the White House counsel’s office of the findings of a given inquiry, although this is at the discretion of the agency inspector general, experts said. At the time of a report’s release, the White House counsel generally circulates a summary of its conclusions and talking points to both senior staff and the communications office, said lawyers who have worked in the White House.

Jack Quinn, who served as White House counsel under Bill Clinton, said it made sense that Ruemmler would notify McDonough of the inspector general’s findings before the report was publicly released. But he also said it would have been inappropriate for Ruemmler to inform the president about the conclusions.

Glenn A. Fine, who served as the Justice Department’s inspector general from 2000 to January 2011, said an inspector general may alter the findings of a report at the last minute, especially after receiving feedback from agency officials.

“The IG report is not completed till it’s finished, and it can change any time,” Fine said, adding: “It is critical not to interfere with the investigation as it’s ongoing.”

But Joe Newman, a spokesman for the Project on Government Oversight, said he could think of no legal restriction that would stop the White House counsel from telling the president about an impending audit. “Once the president knows about some wrongdoing, he shouldn’t be prevented from taking remedial action,” Newman said.

Also Monday, the Senate Finance Committee asked the departing acting IRS commissioner, Steven T. Miller, to document any communication with top Obama administration officials about the controversy.

Sens. Max Baucus (D-Mont.) and Orrin G. Hatch (R-Utah) are seeking documentation of all attempts to elicit information from groups seeking tax-exempt status, a list of all the words and phrases used to target applicants for additional scrutiny, how IRS officials discovered that employees were inappropriately targeting certain groups, and all internal communications among employees working to review the groups.

Josh Hicks and Ed O’Keefe contributed to this report.

Zachary A. Goldfarb is a staff writer covering the White House, focusing on President Obama’s economic, financial and fiscal policy.
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