House Oversight Committee digs for IRS answers but doesn't get many

Lawmakers predict lengthy investigation

WASHINGTON - Lawmakers held another hearing on Capitol Hill Wednesday about the Internal Revenue Service tea party targeting scandal and still didn't get the answers they sought.

Members of the House Committee on Oversight and Government Reform grilled former IRS Commissioner Douglas Shulman along with J. Russell George, the Treasury Inspector General for Tax Administration, and Neal Wolin, Deputy Secretary of the U.S. Department of the Treasury.

"It is the committee's work to find out what went terribly wrong," said Oversight Committee Chairman Darrell Issa, R-Calif., at the start of the proceeding. He urged members of the committee to keep partisan politics out of the proceeding, saying, "Let's all be Republicrats and Democans today."

But the political questions flew fast and furious as lawmakers continued to dig for answers to several basic questions, including: When did top IRS officials know that agents in the Cincinnati office were targeting conservative groups for extra scrutiny in their applications for tax-exempt status? And who gave the Cincinnati agents the directive to target those groups?

The Oversight Committee had planned to question Lois Lerner, the IRS division chief in charge of the Cincinnati workers who screen tax-exempt applications. But she invoked her constitutional right to refuse to answer. Lerner brought the scandal public on May 10 when she said low-level Cincinnati employees, acting on their own, had given greater scrutiny to hundreds of conservative groups.

"I have done nothing wrong," Lerner said in an opening statement. "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 committee."

Angry lawmakers argued that Lerner should be forced to answer questions. Issa asked her to reconsider. But when she refused, he excused her from the hearing, though Issa said afterward he might recall her. He and other Republicans say they believe she forfeited her Fifth Amendment privilege not to testify by giving an opening statement.

But several law professors were skeptical they could make that stick.

Lerner probably won't testify unless she gets immunity, former House counsel Stan Brand told POLITICO .

Issa later said he would consult with others — including Lerner's lawyer and House attorneys — before determining whether to summon her again, hopefully deciding by the time Congress returns from an upcoming recess early next month.

"She's a fact witness with a tremendous amount that she could tell us," Issa said.

Instead, lawmakers focused their attention primarily on Shulman and George with questions that implied they dragged their feet in alerting members of Congress about the problems in the Cincinnati office.

Lawmaker to Shulman: 'Not Good Enough'

Shulman acknowledged that he first learned of the targeting in spring 2012 after he had assured a different Congressional committee that there was "absolutely no targeting" of conservative groups.

Rep. Elijah Cummings, D-Md., the Ranking Member of the Oversight committee, questioned why Shulman didn't notify members of Congress when he learned that his earlier testimony was incorrect.

Shulman said it was because he didn't have all the facts surrounding the case and was relying on the Inspector General to get to the bottom of the problem with its audit.

"That's simply not good enough," Cummings said.

Republicans questioned whether the timing had something to do with the 2012 presidential election and grilled Shulman about whether he had ever discussed the controversy with anyone at the White House.

They found his response of "absolutely not" hard to swallow.

"You were at the White House 118 times, often to talk about implementation of the Affordable Care Act, and you never had a conversation about targeting groups that opposed the Affordable Care Act?" Rep. Jim Jordan, a Republican from Urbana, Ohio, asked during the hearing. "And the American people are supposed to believe that?"

More revelations to come?

George hinted that there may be more revelations to come. He told the oversight committee that his office has since uncovered other questionable criteria used by agents to screen applications for tax-exempt status. But he refused to elaborate.

"As we continue our review of this matter, we have recently identified some other BOLOs ("Be on the lookout" notices) that raised concerns about political factors," George said. "I can't get into more detail at this time as to the information that is there because it's still incomplete."

Committee members made it clear that they have many more questions to ask and more people they want to talk to about the scandal.

In an exclusive interview with the I-Team's Jason Law, Senate Minority Leader Mitch McConnell said he's confident the Republican leadership in the House will get to the bottom of the scandal.

"All the questions need to be asked, and the people who can shed light on it need to be asked to reply – unless, of course, they

take the Fifth Amendment," he said. "We need to know what they did, who asked them to do it, and who the higher ups are that might have been involved in it."

McConnell said he won't "pre-judge" where the investigation will lead. But he's certain it will take a while.

"It's going to be a lengthy and involved investigation," he said. "The truth will come out. It always does."

At issue is the improper targeting of conservative groups with "Tea Party," "Patriots" or "9/12 Project" in their names that had applied to the IRS for tax-exempt status around two election cycles. The practice apparently started in March 2010 in the Cincinnati IRS office and went on for 18 months, according to George's  audit.

The audit paints a picture of a disorganized Cincinnati IRS office that had little direct communication, leadership or oversight from managers in Washington.

The audit outlines - sometimes in painstaking detail - a nearly three-year period where managers and coordinators changed often and emails were not answered at a time when the applications for tax-exempt status more than doubled year-over-year. Auditors also documented a lack of training and uniformity in correspondence when communicating with potential political groups, which applied for tax-exempt status.

At one point, a group of specialists simply quit working on potential political cases for 13 months while waiting for help from Washington.

In response to the audit, the IRS said in a memo: "We believe the front line career employees that made the decisions acted out of a desire for efficiency and not out of any political or partisan viewpoint."

President Barack Obama forced Acting IRS Commissioner Steven Miller to resign and promised a full inquiry. He insists he learned about the practice from news reports.

The U.S. Department of Justice has launched an investigation to determine whether any crimes were committed. It likely will focus on potential civil rights violations or those related to the Hatch Act, which restricts political activities of government workers.

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