A confirmation hearing on the nomination of John McGarry to the Federal Election Commission stalled yesterday over how thoroughly the Internal Revenue Service audited McGarry from 1971 to 1976.
McGarry and his counsel insisted IRS conducted full-field audits, at least for 1973 and 1974, but a General Accounting Office tax expert assisting the Senate Rules Committee said the documents submitted by McGarry were not conclusive about the extent of the audits.
The issue is important because Republicans on the committee have questioned the property of McGarry's financial reporting, and McGarry has cited IRS approval of his reporting as part of his defense.
The committee will meet again this morning to continue questioning him.
Yesterday's hearing was forced to adjourn early because Sen. Howard H. Baker Jr. (R-Tenn.), who was not present, objected to the committee continuing past two hours after the Senate opened its session. Under Senate rules, committees can meet longer only if there is no objection.
Stymied by the issue of the IRS audits, the committee made little progress yesterday. Sen. Mark O. Hatfield (R-Ore.) indicated three transactions he still wants to question, and the GAO expert, Reka Hoff, indicated a fourth area.
Hatfield cited McGarry's commuting expenses from Boston to Washington, a dissolution agreement with a former law partner, and expenses related to a California restaurant he partially owned.
Hoff question McGarry's claims for accelerated depreciation on a computer leasing agreement and said, "There must be something wrong in Boston if an (IRS) agent will let that kind of transaction go through . . . I can't believe it."
No details were offered about any of these financial arrangements, and McGarry was not given a chance to respond.
McGarry, a special counsel to the House Administration Committee and a friend of House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), was nominated by President Carter for a Democratic seat on the FEC.
He was first nominated last September, but the Senate failed to act and the nomination lapsed at the end of the year. Carter resubmitted McGarry's name in April.