Rick Cohen is live blogging from the Committee On Oversight & Government hearing on political targeting at the IRS. The hearing is titled “The IRS: Targeting Americans for Their Political Beliefs,” and will begin at 9:30 am, May 22, in the Rayburn House Office Building, Washington D.C.
The following witnesses will testify:
- Neal S. Wolin, Deputy Secretary, Department of the Treasury
- J. Russell George, Treasury Inspector General for Tax Administration
- Lois Lerner, Director of Exempt Organizations, Internal Revenue Service
- Douglas Shulman, Former Commissioner, Internal Revenue Service
9:30 AM Just got in to the Committee on Oversight and Government Reform. Interesting thing: there were a number of homeless people hired by a firm called FiveFortySix holding 18 spaces in line in the hallway for people from the Tea Party Patriots. They charged TPP $35 an hour. Each person got to place a TPP marker on the floor for five people apiece. It’s not clear that they all showed. But it was odd that people who got up early to line up might not have gotten in because of TPP no-shows holding spaces.
9:35 AM: Rep. Issa introducing, defending Tea Party groups. His staff in March made formal request to the Treasury IG (TIGTA) to launch a formal investigation. “we knew then that there was smoke”; “an organizing and denying of hundreds of applications”
9:37 AM: Issa: “every single person who looked at these applications could have and should have been whistleblowers because they knew something was wrong”
9:39 AM: Issa: just yesterday the Committee interviewed Holly Hawes of IRS that she participated in an investigation in May of 2012 that TIGTA found a year later; for more than a year, the IRS knew
9:42 AM: Issa complaining that the IG didn’t inform the committee in a timely manner; shouldn’t have had to wait 10 months to find out from the IG
9:43 AM: Issa talking about culture of deniability in the administration; said IG said that the internal controls in the IRS are not there to say that this didn’t happen elsewhere in the IRS;
9:45 AM: Rep. Elijah Cummings: after reading the IG report, I think it goes well beyond that (“inappropriate”); there was gross incompetence and mismanagment
9:49 AM: Cummings talking about Crossroads GPS and Patriots USA (he means Priorities) that are operating in questionable way; IG will be examining; time to return to original statute which bans political activity by 501(c)(4) groups altogether; there are many great employees in the IRS, it is not our intention to take a broad brush;
9:52 AM: Cummings shares Issa’s concern why Shulman and Lerner didn’t share information with the Committee; doesn’t think the answers to date have been full and honest
9:53 AM: Cummings recommends hearing with new commissioner appointee, Werfel, about his plans to deal with the IG recommendations; defends Lerner’s right under the constitution to take the Fifth; wants to place Lerner’s answers to the IG questions into the record, Issa says no because that they weren’t given by the IG;
9:55 AM: Issa complaining that he wasn’t given the Lerner interview from the IG, tho had asked for all transcribed interviews; IG is working on them; revised and accepted the Lerner and Crowley transcripts for the record
9:58 AM: Rep McHenry (R-NC): IRS targeting started exactly when Obamacare came into action; Lerner had 14 opportunities to explain to committee and didn’t; systematic targeting; administration expects us to believe that this scandal was just the result of two rogue agents in Cincinnati;
10:01 AM: Looks like members like McHenry and now Lynch (D-MA) are making opening statements; this could take a long time if each member does this; at least at Senate Finance hearing yesterday, other than Baucus as the chair and Hatch as the ranking member, the committee members eschewed a lot of what is going on now and focused on questions
10:06 AM: Lynch–if IRS stonewalls, “there will be hell to pay”; will be need for special prosecutor
10:06 AM: going to the witnesses
10:11 AM: Shulman speaking, basically saying what he said yesterday at Senate Finance, re IRS responsibilities during his tenure on stimulus, off shore issues, and its core mission of collecting tax revenue
10:13 AM: Shulman was dismayed and saddened by reading the IG’s report that the Service hadn’t acted as a nonpolitical, nonpartisan agency; IRS must administer and must be perceived to administer our tax laws fairly and impartially; the actions outlined in the report have led to questions about the fairness of the approach taken
10:15 AM: Lois Lerner speaking; career employee for 34 years; director of exempt organizations unit; May 14 DOJ launched investigation into the IG matters; this committee’s members have accused me of providing false information;. “I have not done anything wrong” “I have not provided false information to this or any other committee” ; broke no laws and rules; following counsel’s advise not to testify; invoking Fifth Amendment protection for innocent individuals
10:19 AM: Issa says that Lerner is uniquely positioned to provide testimony how and why the IRS targeted these groups; asks her to reconsider; Lerner responds that she will not answer any questions of the committee; Issa dismisses Lerner and the counsel; Rep Gowdy (R-SC) demands she be cross-examined because she asserted her innocence; Cummings says she asserted her right not to answer
10:22 AM: Issa dismisses Lerner subject to whether Fifth Amendment right was properly waived, subject to recall
10:24 AM: Issa says committee has 10 additional witnesses it intends to interview or call; this committee is not investigating wrongdoing for political purposes by high ranking government officials; wrongdoing has been admitted; this is not new to government, it has happened before;
10:27 AM: Issa twice referred to Lerner as “this young lady”; maybe he doesn’t know that Lerner is over 60 and the characterization of “young lady” is more than a bit demeaning
10:30 AM: Dep Sec Wolin of Treasury: Treasury wasn’t involved in this; when briefed by IG, he offered his assistance; Wolin told IG to follow the facts whereever they lead; Treasury only learned of the facts of the IG’s review after the facts had ended;
10:33 AM: Issa–never heard a defense of “not knowing:
10:36 AM: Issa–Shulman, you did an internal review which found things were “rotten”, why didn’t you take action; Shulman learned about list, had preliminary verbal report, was told that the activity was being stopped; Issa says “it was your job to stop abuse and report it”; did you report up; Shulman: I had some of the facts, not all of the facts, I didn’t know the scope or severity;
10:40 AM: Issa ripping IG for failing to respond to the Committee, failing to inform the committee in a timely manner; IG George said it wouldn’t have been practical to provide partial information to the committee; Issa said, for Wolin to say Treasury didn’t know is “astounding”;
10:45 AM: Issa says this administration maliciously leaked this information (apparently meaning the IG report);
10:47AM: Cummings says all of this activity occurred on Shulman’s watch; asks Shulman if the administration to target conservative groups; asks Shulman if he’s biased against conservative groups, asked them to target groups, received instructions from White House or Treasury to target Treasury groups, Shulman answers no to all; Shulman says he never heard about this practice until the spring of 2012;
10:50 AM: Cummings: why did Shulman never correct the record after having testified that there was no targeting; Shulman: learned about the list after his testimony to Ways and Means, learned that the activities/criteria had been stopped and that it was in the hands of the IG; his standard practice was that when it was in the hands of the IG, when he had all of the facts, the IG would report to Congress; Shulman said that he didn’t have a full set of facts; Cummings: that answer would be OK if he hadn’t already testified that there was no targeting;
10:54 AM: Cummings is ripping Shulman in a pretty tough way; asks who told Shulman that the issue had been resolved; Shulman: this was a unit in a 90,000 person agency; my general operating style as one of only two presidential appointees in the building to ask career people to handle issues involved with political groups; Steve Miller informed Shulman about the list; Miller told him that the list wasn’t being used any more, and we put extra people on their and we’re moving cases (that had been languishing); practice was to support and review IG investigaitons; Cummings–this had nothing to do with interfering with IG investigations;
10:59AM: Rep Mica (R-FL): waiving pocket copy of the Constitution; says that that IRS closed down people from talking for 27 months about this; Shulman: interactions on this were with Miller, not Lerner; Mica raising questions about Lerner’s salaries and bonuses; Mica asking Shulman for his history of political involvement (Note: This was a silly line of questioning)
11:05 AM: Rep Maloney (D-NY): asking George whether it should be illegal for targeting people for their political beliefs; George says that these activities in the report do not appear to have been illegal; Maloney–believes it should be illegal; troubled that IRS withheld information from this committee;
11:12 AM: George attributes the problems to very inadequate training of the staff reviewing the applications, though IG is continuing its analysis to see if criminal actions were involved
11:13 AM: Rep. Turner (R-OH): being told that this was a spontaneous action, doesn’t believe it; need to know who directed this targeting;
11:16 AM: Turner saying that legislation is being introduced that targeting people for their political beliefs means that they should go to jail; should be criminal
11:18 AM: Rep. Lynch: again going over Shulman’s testimony before Ways and Means in 2012; says he spoke to Milelr before the testimony, doesn’t recall speaking to Lerner before the testimony
11:23 AM: Shulman said that he understood that more than conservative groups had been targeted; was never given the impression that these questions were only being asked of conservative groups
11:25 AM: Issa, Maloney, Cummings gone at this momnent; Rep. Jordan (R-OH) is chairing at this moment
11:28 AM: Wolin learned about the IRS targeting only after the IG report was issued;
11:31 AM: DC Delegate Eleanor Holmes Norton speaking; confirms with IG George that there was no evidence that there was anyone from Treasury or the White House that the IRS target conservative organizations or play any role in selecting the criteria; George, no, but we didn’t question the White House;
11:37 AM: Jordan says 132 members of Congress wrote to the IRS about 501(c)(4) status issues, asks Shulman about it; Jordan says that there were 42 major news stories about it during the time period in question; asks if Shulman is being absolutely truthful with the committee; challenges whether he discussed any of this with White House people during Shulman’s more than 100 visits to the White House
11:43 AM: Rep. Connolly (D-VA) clarifying with Shulman that he had many reasons to go to the White House, but didn’t discuss the issue of targeting with anyone in the White House; no one ever told Shulman to target groups
11:44 AM: George says that he has had some difficulty in figuring out what happened to trigger this; Connolly says it was that Citizens United triggered a doubling of (c)(4) applications between 2010 and 2012; Shulman confirms that the agency was not “flooded” with resources after Citizens United;
11:46 AM: Connolly says that 202 groups weren’t Tea Party, 9/12, or Patriot; George can’t characterize the 202; George says that it was a lack of oversight from Washington over the Cincinnati IRS staff;
11:49AM: Now Jordan is asking Shulman about 118 meetings at the White House and what he talked about; Shulman says that budget, tax policy, and ACA were the most frequent topics; Jordan says that the targeting started the very month the Affordable Care Act became law, one of the key subjects was enforcement of the ACA, the targeting aimed at groups opposed to the ACA; Shulman denies it
11:51 AM: Rep. Chaffitz (R-UT): asks Shulman for a letter grade on his performance; Shulman refuses; asks about whether he discussed 501(c)(4)s in his visits to the White House; Shulman said he doesn’t remember any discussion about Citizens United or 501(c)(4)s in his White House visits
Note: Truth be told, the committee hearing is largely focused on whether the White House knew anything or directed something and why Congressional committees weren’t informed in a timely manner. They aren’t asking the really fundamental question: how should practices and procedures be fixed going forward. This is political theater, but second rate in a way. They aren’t even getting to the issues of investigating the agency to figure out who initiated these reviews and how, and how the agency was so out of control re management and oversight that the situation wasn’t corrected for two years. There’s an issue for the American people that’s sitting front and center before this committee and others, how to repair the review and approval of c4s, particularly under the moneyed environment post Citizens United.
12:00 PM: George admits that he has had trouble getting clarity from IRS employees to figure out who initiated the BOLO (targeting) list; people were interviewed, but not under oath; Rep. Speier (D-CA) said that Holly Hawes said she was the first person in Washington to learn of this practice in Washington in June 2011
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12:03 PM: Issa points out that Center for American Progress and Organizing for America are c4s; Speier says that a statute was trumped by regulation; Issa says that a whole lot of water has gone over the dam since 1959; Ways and Means has authority to trump a law and pass legislation; this committee’s lane is not unlimited, not jurisdiction to pass tax law
12:06 PM: Rep. Walberg (R-MI): again focused on committees writing to the IRS about 501(c)(4) issues be examined;
12:09 PM: Walberg waves Politico to say that headline is that “heads won’t roll at IRS” due to labor protections; asks what it takes for someone to get disciplined at the IRS;
12:11 PM: Rep. Cartwright (D-PA): says IG received no evidence that there were political motivations, but asks that it doesn’t square with the targeting; if it wasn’t for political reasons, why did they do it? we know that the applications doubled starting in 2010 (after Citizens United), no additional resources were given for this work; is it possible that staff were doing this to streamline their work; George–there are valid ways to be more efficient, but inappropriate to use these criteria; did the IRS targeting lead to any incorrect determinations? George–this action led to not a single application for this status was denied; they were delayed, but not denied;
12:17 PM: Issa–not denied, but still sitting in limbo, that means they’re screwed; 479 Tea Party groups were in the BOLO (IG’s report is a sample); says that there was a BOLO (be on the lookout) for Tea Party groups, but not for progressives such as MoveOn etc.;
12:21 PM: Rep. Lankford (R-OK): IG George says that his understanding is that he hasn’t gotten full cooperation from IRS staff and management; asks how many people were involved in generating the question lists, George says he doesn’t know
12:28PM : Rep Pocan (D-WI) says that this issue has brought Democrats and Republicans closer than ever before; Wolin says IG report recommends new guidance in this area (re c4 reviews); no specific timeline, but sec. has charged new acting commissioner to report in 30 days how to address recommendations of IG; Pocan–because of Citizens United, doing this soon is important
12:32 PM: Jordan asking Wolin who was involved in White House discussions (referenced in today’s NPQ Newswire) re how this would be revealed; Wolin says that Treasury was involved, not him, but doesn’t know who;
Issa pointed out that Citizens United was announced in January 2010, the IRS targeting started in March 2010, both before the significant increase in c4 apps that might have been spurred by Citizens United
12:36 PM: Rep. Gosar (R-AZ): questioning about release/disclosure of application information to outside entities; such as ProPublica re applications provided that were still pending; re Shulman not following up on “leaks” of proprietary information, “shame on you”
Issa and Cummings are back
12:43 PM: Rep. Duckworth (D-IL): most troubled by violation of the public trust by IRS; you can delegate authority, but you can never delegate responsibility; Issa: says will work with Cummings to invite comissioner designate to appear about plans to fix
12:50 PM: Rep. Meehan (R-PA): has group that has been waiting since 2009 for response after having submitted 39 questions, doesn’t know who’s vetting these questionnaires; says more than one agent in Cincinnati informed local group that questions about Tea Party groups were coming from Washington
George–the technical unit in washington took an enormous amount of time to respond to questions posed by field staff
12:57 PM: Rep Kelly (D-IL): says Hawes revealed to committee that disclosure of information to ProPublica was inadvertent; asks George about his advise for new commissioner: George has been contacted with the designated commissioner and has pledged to work with him; meeting with him next week;
1:03 PM: Rep. McHenry (R-NC): asks Wolin and others about their “feelings”, pointing out that the witnesses are human and must have feelings
1:11 PM: Rep. Davis (D-IL): 1/3 of the groups selected for further review had Tea Party, 9/12, and Patriot; several progressive groups have now come forward to say that they were included in process for extensive reviews; IRS asked them the questions and experienced substantial delays and in some cases were denied c4 status; George says that he has received subsequent information that that may have reviewed and plans to look into it
1:18 PM: Rep. DesJarlais (R-TN): what should be done to restore the faith of the American people in the IRS? Shulman: don’t have all the facts; DesJarlais asks about capacity of IRS to carry out the health care law; Shulman says that IRS is not adequately funded, DesJarlais questions their competence;
1:22 PM: Rep Welch (D-VT): have first amendment rights been infringed; has equal protection of the law been infringed; oversight function requires asking what is going on in the campaign finance world; this “mess” goes back to the Citizens United dcision;
1:29 PM: Rep. Gowdy (R-SC): askes why Shulman can’t name anyone who was involved in establishing the targeting/criteria for c4s; did you do anything personally to verify that this insidious discriminatory practice was stopped, yes or no; Shulman: learned that it was stopped, the deputy told me it was being stopped, I had no reason to go beyond;
1:45 PM: Rep. Horsford (D-NV): pushes to get George and Wolin to acknowledge that additional guidance in the c4 interpretations is needed; IRS has been asked for this, but the agency has failed to respond;
1:50 PM: Rep. Farenthold (R-TX): pushed George to say that IRS staff told him that they destroyed donor information that they received, but statements weren’t made under oath;
1:53 PM: George said that the standard for processing applications is 121 days, but the average is actually over 500 days;
1:56 PM: Rep. Woodall (R-GA): 60-65000 501(c)(3) and (c)(4) applications received by IRS; how many flow through Cincinnati; all go through Cincinnati, or at least vast majority;
2:03 PM: Issa is still going even though everyone but Woodall is the only other committee member left. Questioning George about IRS issuing a press statement about the IG report without the IG’s knowledge; George had “absolutely no inkling” that IRS/Lerner was going to do that; George won’t say it was illegal but says it has never happened before; Issa says Lerner’s behavior was illegal; (Representative Lummis has come in, so the hearing will continue) after Issa finishes;
2:06PM: Issa: give us a timeline of the maximum time an applicant would have to wait if they’ve already waited for years; asks George whether Werfel’s plan for 30 days to review the IG recommendations is appropriate; George said he will work with Werfel, he realizes the high priority that they’ve put on this issue to expedite these issues
2:12 PM: Lummis (R-WY): says trust in the IRS has not been eroded, but has been destroyed; that her constituents believe that government is out to get them; in this matter, the politically empowered going after the people who hired them; “I have no idea of how we can restore the trust that has been destroyed as a result of this”; “the people think the IRS has turned against them…”the federal government has turned against them”…Note: she’s making an odd allusion, says that the IRS is the “Goliath” hired to do their work and turned against them; says that this is worse than Watergate
Members of the committee are filtering in and out. Now the commiteee is Issa, Cummings, Jordan, Hastings, Lummis, Clay, Massie, and Lujan Grisham. The questioning is 90 percent aiming at Shulman and his management and oversight practices plus a number of feints to try to show a link to the White House. It is terribly disappointing that the committee is so focused on trying to find a diabolical plot at work–rather than what seems to be so obvious that the agency (and the Exempt Organizations unit) was mismanaged or worse, and as a result unbelievably ill-prepared to deal with the ambiguities and contradictions of the 501(c)(4) problem. Even beyond the debate over the interpretation of (c)(4)s’ focusing “exclusively” or “primarily” on social welfare, it would be so practical for the committee to work through the IG’s list of recommendations one by one and examine them for whether they meet the scope of the problems, seem to be within the IRS’s capacity, and do not omit other possible fixes.
2:43: Rep Massie (R-KY); pushing George on his 143 investigations last year on unauthorized releases of information at IRS; Massie–Congress needs to shrink the tax code to restore trust
2:39 PM: Lujan Grisham (D-NM): 1959 regulation shifted the 501(c)(4) law from exclusively to primarily on social welfare activities; 2:47 PM: thinks that if c4s violate the rules, their donors should be revealed and taxed; says same should apply to (c)(3)s
2:50 PM: Rep Meadows (R-NC): asking if separate criteria was used for Tea Party groups; George says yes; says that Holly Haws was in 36 of 41 interviews conducted by the IG; George says this was first time he was made aware of this
2:54 PM: Rep. Cardenas (D-CA): asking about process for reviewing the IG’s recommendations; George says he will meet with Werfel on Tuesday; Cardenas asking about where the IG and the EO didn’t agree on recommendations; George said it was before the Prsident and the Treasury secretary directed EO to adopt the recommendations; but EO had said that they thought they had dealt with the recommendaitons, but now they are implementing all because of the order from Obama and Secretary Lew
3:00 PM: Rep Bentivolio (R-MI): asks Shulman if he felt intimidated or threatened in this hearing; Shulman says no, but Bentivolio says that he and his constituents feel threatened and intimidated by IRS attacking people for their belief in the constitution and Bill of Rights;
Bentivolio is questioning Shulman on his knowledge of the Constitution. This is the kind of questioning that is purely for show. Now he’s asking what the word “Tea” in “Tea Party” stands for.
Issa is back on the IRS person who sat in on all the IG interviews. Not clear whether the person’s name is Hawes or something that sounds like that, such as Pause. But Issa is reading that she sat in on all interviews.
3:08 PM: Cummings: criticizes the presence of that woman (sp.) in the meetings as geared to defending the agency or herself
3:12 PM: Rep. DeSantis: says 46 of Shulman’s 118 meetings at White House were about the Affordable Care Act; DeSantis questioning whether IRS being asked to have functions re ACA takes away from its ability to carry out its core functions
3:15PM: Cummings: in theory, there wouudl be some organizations currently operating that would not really meet the test; concerned that all of this will have a chilling effect on (IRS) employees; George: says that there’s evidence that there was a dropoff in IRS enforcement after past acts (the 10 deadly sins list); how to help Werfel (incoming commissioner) to create an atmosphere where employees are confident about what they need to do; George: training is important; Wolin: it starts with leadership, and Werfel has an impeccable record;
3:19 PM: Cummings: It’s not enough to investigate; we have to repair and reform
3:22 PM: Jordan: Audit was compromised due to presence of Miss (sp) in all of the interviews
Meeting is adjourning. Very little discussion of how to repair and reform the IRS, how to repair and reform the c4 process, how to ensure that the IRS gets the competent management and oversight needed to give confidence to the American public about the federal government’s oversight of 501(c) tax exempt entities.
3:27 PM: Issa talking about Lerner: says that Lerner may have waived her fifth amendment rights by making statements under oath in her opening statement; thus the hearing stands in recess as Issa says he may recall her. By making an opening statement on issues under review and by affirming that the interview transcript of her interview with the IG was accurate, Issa says that she may have effectively waived her Fifth Amendment rights. In other words, this hearing–in recess–is hardoy over, there will be more.
