A live blog update from NPQ’s National Correspondent Rick Cohen from the hearings at the House Ways and Means Committee. The now fired head of the IRS and the IRS’s Inspector General will testify on the agency’s targeting of conservative organizations for special 501(c)(4) reviews.
8:54 AM: Welcome to our live blogging from the Ways and Means Committee hearing on the IRS controversy. Ton of press in Room 1100 of the Longworth House Office Building for the Ways and Means hearing. Recently resigned IRS acting commissioner Steve Miller chatting amiably with people up front.
8:59 AM: The panelists seem headed to sitting down, Charlie Rangel just entered the room to sit at the dais. Photo op at the beginning with Miller chatting is over, so now the hearing is heading toward getting down to business.
9:03 AM: Camp’s opening statement saying that the groups that were targeted were targeted simply for “trying to make America a better place to live.”
9:04 AM: Camp said that the Committee had been previously lied to. Says that the revelations are just “the tip of the iceberg.” Says that June of 2010 the targeting of conservative groups began. Cites information leaks of applications to the Huffington Post and ProPublica. Says to Miller that this can’t be fixed by one resignation or two.
9:07 AM: Camp says that all groups are at risk–Knights of Columbus, Rotary, etc. “trimming a few branches of the tree will not work when the roots of the tree are rotten”
9:08 AM: Camp is going straight to the who knew what when dynamic–and aiming at how high in the Administration. Says “it is time to end the corruption at the IRS”
9:09 AM: Sander Levin, ranking member: “management and ovesight of the IRS have completely failed the American people”; “the agency used totally inappropriate criteria” “with little management or oversight”
9:13 AM: Levin: ” if this hearing simply becomes a bootstrap to continue the campaign of 2012 and prepare for 2014, this will be a serioius serious mistake”
9:15 AM: Camp: usually doesn’t swear in witnesses, but because of preceding misinformation, he’s swears in J. Russell Geroge, the IG
9:16 AM: George is describing the IG report findings, look for Michael Wyland’s reports on the NPQ website if you want details on the report.
9:21 AM: some of the reviews were open for 3 years across two elections; cases had unnecessary questions; there was little or no supervisory review of the Cincinnati staff who were doing the 501(c)(4) reviews;
9:22 AM: George: was the IRS using inappropriate standards? yes; was the IRS delaying reviews? yes; did the IRS ask for inappropriate information? yes
9:23: Miller: says that the IRS was not able to prepare written testimony; mistakes were made; “partisanship or even the perception of partisanship has no place in the IRS” ; “I think what happened here is that foolish mistakes were made”; “foolish mistakes…not an act of partisanship”;
9:25: really really short statement by Miller, now being grilled by Camp
9:27: Camp: was Miller ever aware that a White House official disclosed tax information of a private company: Miller: seems to be aware, but unclear; seems to be an unrelated to this c4 issue
9:28: Miller didn’t become aware of the issues in the TIGTA report until 2012;
9:29: Miller: became aware of audits of conservative donors in May of 2010
———————
9:30 Miller says that the law wasn’t that clear;
Note: This involves the issue of gift taxes that should be paid by donors to c4s; Miller says the law wasn’t clear, so he stopped the audits
9:31: now Camp is questioning about the publication of confidential informaiton from the application of the National Organization for Marriage; Miller is saying that both this leak and the ProPublica leak, he won’t say when he learned, other than suggesting it was about the same time of the public press, but it’s not clear
9:33: Miller says he didn’t inform Congress about these leaks because they were in the press
9:39AM: Levin: asks George about any evidence of political motivation, answer is no from both George and Miller; Levin points out that previous commissioner Shulman was appointed by President Bush
9:42 AM: Boustany is speaking now,
Boustany playing video of Shulman’s testimony saying “absolutely no targeting”–March 22, 2012
9:43 AM: Boustany tries to get Miller to say that Shulman was lying; he responds that he was incorrect but not untruthful; Miller says that he thinks that Shulman didn’t know; even though others knew in 2011; Miller says in late March, after the hearing, that he asked about the list of groups; got briefing on May 3, 2012; was told at that time there was the use of the list, and the “list seemed obnoxious to us”
9:46 AM: Miller: politics is an area where we always ask more question; Boustany wants to know why only conservative groups targeted; Boustany says that Miller misled Congress in his previous testimony;
9:48 AM: Joe Crowlley (D_NY) gets George to repeat that no outside entities were involved in affecting the IRS reviews; points out that Shulman and his predecessor were appointed by Bush; notes that Miller is a career civil servant, not a political appointee; says that can’t link these to the White House, objects to Camp’s questions; says that Lerner revealed only after she was asked a “planted” question at a press event
9:52 AM: Crowley expresses anger about Lerner, who he said never told Congress because no one ever asked her; he was outraged; tells the Republicans to just focus on the facts
9:53 AM: Kevin Brady (R-TX) talks about Tea Party applicant from his district, 3 year review by IRS; then got personally audited and business audited; suggested that none of these reviews ever happened to her until she applied for her 501(c)(4) status; asks who in the IRS is responsible for targeting conservative organizations; asks Miller who is responsible; Miller takes exceptoin to the concept of “targeting”; Brady says that there are no names in the IG’s report; Miller says he doesn’t have an answer; Brady says, “you’re telling us you have no knowledge of who initiatied this…”; Miller doesn’t believe that there was any sharing of information from these applications with other agencies; Miller said, “I would be shocked”
9:56 AM: Charlie Rangel (D-NY): did this occur under appointees appointed by Bush and Obama? Miller says yes; Rangel: “This outrage is not Democratic or Republican”; “the president has indicated outrage, you have indicated outrage”
9:58 AM: Rangel: “not too late for the government to get its reputation cleaned up for America” ; asks about whether donors can make political contributions to c4s; can do this if the primary activty is not political; after Citizens United, applications increased; Miller says yes, they doubled; “almost an invitation as the law is written for abuse by corporations”, Rangel says;
10:02 AM: Rangel: “help us to restore the confidence americans should have in their government:”
10:02: AM: Paul Ryan: says Miller came to subcommittee on July 25 2012 re discriminatory actions against conservative groups, was asked whether actions where being taken, though knowing filters were being used, Miller gave answer that wasn’t acknowledging the targeting; says that testimony cannot cover up a material fact; suggests that Miller misled the committee; Miller says he stands by his answer then, that there was no political motivation;
10:06 AM: Ryan said that Miller testified that there was grouping of the c4s for consistency, but didn’t acknowledge political targeting; Miller says he didn’t mislead the Congress; why didn’t IRS use targeting words like “progressive”; Miller says he centralized cases based on political activity;
10:08 AM: MdDermott (D-WA): “difference in my mind between stupid mistakes and malicious mistakes”
10:09 AM: McDermott: thinks that the IRS was wrong in its delays and questions; George: we have no evidence that anyone acted out of political motivations or malice
McDermott: said this all started after Citizens United; a small group of people in the Cincinnati office “simply screwed up”; “Congress didn’t give any clear criteria for what a real charitable organization really is”
10:11 AM: McDermott: IRS cannot access your private medical informaiton, true? true. McDermott is referring to yesterday’s efforts by Republicans to repeal again national health care insurance reform; says that “Obamacare is not a fascist takeover”
10:14 AM: Nunes (R-CA): says that Lerner testified before the committee a week earlier and didn’t reveal this, even though that the IRS was aware; Miller said that the question at the ABA was a prepared Q&A; says that Celia Roady (who asked the question of Lerner at the ABA conference, and is a member of an IRS advisory body) … says that “they had talked about the Q&A”; though not clearly answered, it seems that he was acknowledging that the Roady question to Lerner was teed up
10:16 AM: Nunes recommends that Camp gets Lerner and Roady to testify; asks why Miller resigned; Miller says that what happened in the IRS while he was acting commissioner makes him accountable; Nunes wants submission of all of his emails, meetings, etc.
10:18 AM: Neal (D-MA): says that there were Democratic leaning organizations that were the focus of the IRS as well; complaining about a nonprofit in his district that was told by the IRS that they didn’t need to file a 990 because they were so small and subsequently lost its 501(c) status;
10:21 AM: Neal: still an underlying problem of 501(c)(4)s being engaged in politics; Super PACs must disclose their donors, but 501(c)(4)s do not; as part of our scrutiny, “we should all agree that the simple act of transparency and disclosure would alleviate much of what happened here”
10:23AM: Neal asks about whether disciplinary actions were taken and corrections made; Miller asked people to be reassigned;
10:24 AM: can’t tell who’s asking now, maybe it’s Pat Tiberi, but is waving the questions that were given to the Liberty Twp Tea Party group; dozens of questions; organization hasn’t received approval since its application in January 2010; citing liberal groups allied with Democratic governor Strickland that got an approval in 9 months
10:28AM: says he can’t imagine how this can’t be perceived as political;
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10:30AM: Xavier Becerra (D-CA): says it was a “foolish mistake,” president is “even more right that it was outrageous and intolerable”; “inexcusable activity took place that erodes the confidence of the American people”;
10:32AM: Becerra points out that IG report says that applicants had some difficulty in understanding the rules of 501(c)(4) re political and social welfare activity; George confirms that lack of clarity is problem, if clarity re social welfare, some of these delays could have been alleviated; Becerra says that these c4 groups are really just political organizations; Miller says that the c4 status is not clear; says that though c4 political activity is supposed to be less than 527 activities, still difficult; Becerra says that we need to not have proliferation of groups misusing the status at taxpayer expense
10:36AM: Dave Reichert (R-WA): asks to clarify whether groups were treated differently because of their politics; Miller said that 70 of the organizations had Tea Party in their names; out of some 300 applicants reviewed; silly argument between Reichert and Miller about whether Miller believes that the Committee had a right to know what Miller knew; Miller says he answered all questions truthfully; Reichert says that Miller isn’t cooperating
10:40AM: Reichert asks who was responsible for the list, Miller says he doesn’t know; Miller says he doesn’t remember;
OK, now it’s a recess as they run to the House floor for a vote. What’s obvious is that the Republicans are aiming for a who knew what when investigation of the IRS inner workings with the hope that they’ll find partisan political motivations and maybe intervention from either outside entities or the White House. The Democrats are raising the issue of the lack of clarity in the 501(c)(4) rules. Becerra as always had the issue most clearly articulated. If the Democrats can move from raising the c4 question to actually pushing for some action on what constitutes “social welfare” or even better, reminding their committee peers that the law says c4s should be operated exclusively for social welfare purposes, we’re better off. Becerra has them pinned–c4s are basically operating, after Citizens United, as PACs that don’t have to declare their donors. That also gets to the issue of the bigger c4s. These Tea Party groups were for the most part tiny, local groups, with little capital behind them (even though big money is behind Tea Party allies like FreedomWorks, etc.). There are real issues to be discussed and examined. This committee, given the Republicans’ strategy, won’t get there. But that’s clearly the needed step–fixing the c4 problem.
11:01AM: committee reconvenes, a little sparser than at the outset; Doggett (D-TX): asks about evidence of corruption at the IRS, George says no evidence of corruption; that IRS is “not rotten at the core”; Doggett says that “inflammatory” statements made at the beginning of the hearing (Camp) “have no basis in fact”;
11:04AM: Doggett says there is no lack of clarity in the c4 statute; cites Lawrence O’Donnell who asked CREW which confirmed that the statute says you must be “exclusively” engaged in social welfare activity; George demurs on the answer; Doggett pushing for a clear reading of the statute, that there should be a denial of c4 status for groups that aren’t exclusively engaged in social welfare; IRS long ago changed the regulation to be “primarily” rather than “exclusively”; Doggett: if there were a clear reading of the statute, this problem would not be here today
11:07AM: Roskam (R-IL); asks about Miller’s conversation with Roady; Miller says he didn’t talk to Roady; asks why they thought it would be a public disclsoure to the ABA rather than to the committee; Miller doesn’t remember when he spoke to Lerner about the plan to reveal the information at the ABA; Miller says at the same time they reached out to the Committee and called to “get on the calendar”
11:11AM: Roskam: you’re saying that the IRS is not corrupt, but you’re generally saying that it’s incompetent; that’s a perilous pathway to go down
11:13AM: Mike Thompson (D-CA): thinks the IRS behavior was outrageous and intolerable; gets George to say that the use of the screening criteria was inappropriate but not illegal; the substantial delays inappropriate but not illegal; the questions inappropriate but not illegal
11:15AM; George says that he publishes an audit plan each year, using ideas from Congress and the Administration; plans to follow-up with Congress on this matter; (in response to question from Thompson about how the committee will find out about this kind of thing in the future)
11:18AM: Gerlach (R-PA): questioning about release of confidential information, such as release of National Organization for Marriage returns to the Human Rights Committee; asks whether there is any sharing of taxpayer information outside of the IRS; Miller says he never talked to anyone in the White House about sharing confidential information;(Gerlach clarifies about whether he knew of information being shared, Miller says no); asks about speaking with anyone in Treasury outside of IRS about shared confidential information; Miller says he doesn’t believe so; Gerlach and Miller are confused about whether Miller talked about the topic or talked about specific sharing of information;
11:23AM: Ron Kind (D-WI): “the optics of what happened in the Cincinnati office…” Miller says that the “perception is bad”; asking about instances of accountability in the Cincinnati office–one instance of reassignment, he said something else that sounded like “counseling”, couldn’t tell
11:25AM: Kind: part of the problem is the definition of criteria for c4; no bright clear lines; George agrees; George says that the IRS has the ability to make these clarifications; Kind pledges that the Committee will work with IRS to make sure this gets done;
11:27AM: Price (R-GA): Miller continues to resist the use of the term “targeting,” Price points out that the IG report does use that term; Price points out that there were religious organizations targeted, Miller says that he wasn’t aware, looked at the list only very quickly
11:30AM: Miller says that the person who had been in charge of the oversight of c4s has now been promoted (by him) to head the ACA compliance; he says he never asked her whether she knew about the targeting; Sarah Ingram? Price is trying to link the “expansive nature” of what the IRS did with “unnecessary” information sought about c4s to the potential it might seek “unnecessary” information about patients’ health records under the ACA
11:35AM can’t see who’s speaking, but it’s a Democratic Congressman: Congress has expanded the code and made it more complex, but cut the number of IRS staff; says Congress has slowly been starving the budget of the IRS when each employee of the IRS gives the nation about $214 in revenue;
11:39AM: Buchanan (R-FL) attacking the veracity of IRS, suggests a “massive PR problem”; Miller says he was asked to resign, and chose to retire; Buchanan asks what’s being done about Lerner and Ingram;
11:43: Allyson Schwartz (D-PA): talking about backlog re approvals of 501(c)(3)s, groups coming to her office unclear about why approvals take so long and don’t know what’s wrong with their applications; why are applications taking so long, what questions can be asked and shouldn’t be asked; Miller: we have a limited number of people working on the 70,000 applications looking for tax exempt status; most are 501(c)(3)s;
11:48AM: Smith (R-NE): asking about nature of what constitutes political activity as a flag for looking at applications; Mliller says, “donors can be relevant” (in response to questionabout asking for donors lists), such as donors with a specific contract with the organization or using it for a specific political purposes, but just asking for donors lists is not appropriate; George says 27 donors lists were requested;
11:53AM: Milller says taht before anyone gets a political examination, it goes through a committee, no one person can do that; seems to be discussing audits or other special reviews
11:54AM: George says that the audit began with a request from a Gov’t Reform Committee staff member in March of 2012; Miller knew of the audit from the beginning;
11:57AM: Davis (D_IL) “I am not convinced that this is a great big political conspiracy”; suggests some “ineptitude”
11:58AM: Shock (R-IL): IRS apology is “proverbial tip of the iceberg”; has 150 page from Thomas More Society talking about pro-life groups that were mistreated by IRS; wants the Committee to examine the degree of abuse that these organizations received from IRS;
12:00 NOON: the prolife groups Shock is citing seem to be 501(c)(3) applicants; one group said that the IRS asked for the content of the group’s members’ prayers; another asked about the content of signs that might have been held up outside a Planned Parenthood facility;
12:02PM: Shock asking if letlters from Senators asking for stronger reviews of c4s affected IRS behavior; George doesn’t know
12;04PM: Jenkins (R-KS): “i’m sad and I’m sick to my stomach that Americans can be targeted” for their political views;gets George to acknowledge that the IG office didn’t talk to anyone in Treasury; Jenkins trying to get Miller and George to acknolwedge talks with Treasury officials; Miller said he informed but didn’t really consult or discuss in depth
12:12PM: George says 27 donors list requested, 13 from Tea Party organizations;
12:14PM: Miller denying that he personally talked to Celia Roady before she asked Lerner at the ABA the planted quesiton
12:18PM someone on the dais (Republican) discussing the questions one group was asked–for every tweet, for every email, relationship with True the Vote, more;
12:22PM: I think Diane Black (R-TN) is speaking; basically asking that all of the filter words for targeting c4 applicaants were conservative terminology; asking how low level people in IRS could have done this, with implication that no one was watching this, no managerial oversight;
12:27PM: Republican Congressman (I think it’s Tom Reed from NY) says that Miller should have been fired, not just allowed to resign and retire; “you’re allowed to retire, that’s the level of accountability in Washington right now”; wants names of who had the responsibility ; George says Lois Lerner and Jospeh Grant; in Cincinnati, various people, pledges can supply the list;
12:31PM: half the committee is now gone; looksl ike most of the senior Democrats, though Sander Levin is still on the dais
12:32PM: Young (R-IN): charges taht the special reviews of c4s started in 2010, before there was an uptick in 2012; in fact 2010 # was lower than 2009; Young says that Lerner learned in 2011 of the reviews, says she tried to stop the practice, but a year later sent a lette to a group demanding that it fulfill the rquest for information including donors; c4 application of hte IN group was denied in 2013 but then subsequently without providing more information the application was then granted 4 days after the denial
12:37: Kelly (R-PA): how did Cincinnati develop this strategy, “a couple of rookies just showed up”? confirms that “they can do almost anything they want to anyone they want at any time they want”–that’s close to the quote; calls this controversy “a Pandora’s box”
12:41PM: Kelly: “this is a huge blow to the faith and trust of the American people in their government”;
(gets a standing O and applause from a corner of the audience)
12;43PM: unidentified Republican Congressman: “our most extensive powers are given to our most instrusive agency” ; charges George with not having done a real investigation, an audit, but not an investigation; charges Senator Levin’s letter mentioning the groups that the IRS targeted; “you all were doing what Democratic senators were asking”; talking about promotion of the woman in charge of this targeting, who got bonuses and promoted the section 1414 ACA; whoever it is is now attacking “Obamacare” which he says can share taxpayer information with HHS; says that this is a perfect example of why you need tax reform
12:47PM: Renacci (R-OH): cites Ohio Christian Alliance, applied for a (c)(3) advocatikng life, faith, and freedom, asks Miller what the IRS would have been concerned about in that applicatioin; took over 13 months; questions Miller about the questions theywere asked, Miller says that one ofhte difficult challenges for the IRS is determining what is politics and what is education; Renacci asks why there was such a large number of approvals of c4s after the election
The hearing is over. What is clear is that on the Republican side, there is going to be continuing pressure on IRS officials about who knew what and who spoke to whom. There’s clear interest in seeing if conversations went upwards in Treasury beyond the IRS. Miller’s answers indicate an agency that by some dimensions was lacking in management and oversight,with pieces of the agency going in their own directions, with directives from higher ups that, if they were understood at all, might or might not have been followed. But distinctively, what comes across as a major impression is that the IRS was poorly equipped to actually figure out what to ask about c4s and why. Listening to the hearing, it is hard to imagine that the IRS staff had a cogent analysis of what should and should not be asked about c4s not matter what their poltical leanings. You’d swear that they let this question fester and were trying to learn how to dance as they went. It would seem like the answer is, after the questions of competence are addressed, time for an overhaul of the c4 political system and maybe, given the questions about c3 applications, c3 overview as well. Oddly, the committee membgers talked about the size of the IRS overall, but not the size of the tax exempt division (tiny in comparison) and whether the tax exempt division is in any way properly resourced for its functions. Hearingscoming next at Senate Finance (Tuesday) and Government Operations (Wednesday). Nonprofit sector leaders should be teeing up their legislators to ask quesitons that move the conversation so that the problem of c4s gets fixed, not maintained as a continuing festering sore.
