Former IRS chief: I didn't know details
Updated On: May 21 2013 07:44:03 PM CDT
The former head of the IRS said Tuesday that he was aware of some aspects of his agency's targeting of conservative groups in the spring of 2012, and took what he called the correct action of ensuring the situation would be independently reviewed.
However, Douglas Shulman denied full awareness of what was happening at the time, saying subordinates failed to inform him of the details.
"I agree that this was an issue that when someone spotted it, they should have run it up the chain," said Shulman, whose tenure as IRS commissioner coincided with the controversial targeting. "Why they didn't, I don't know."
Shulman was one of three witnesses who appeared under oath before the Senate Finance Committee at the second congressional hearing on the practice condemned by President Barack Obama and leaders of both parties.
In other new details disclosed at Tuesday's hearing, Shulman's successor as acting IRS commissioner admitted he helped engineer a clumsy public disclosure of the controversy through a planted question at an American Bar Association event on May 10.
The question prompted IRS official Lois Lerner to apologize at the event for the targeting, which was to be made public in coming days by the release of a report by the Treasury's inspector general on tax issues.
Steven Miller, who has been ousted as acting commissioner in response to the targeting issue, called the planted question a "bad idea" intended to create an initial IRS apology by Lerner before the story broke with the release of the inspector general's report.
Lerner, who heads the division involved in the political targeting, is scheduled to appear Wednesday before the House Oversight Committee in the third congressional hearing so far on the matter.
A spokesman for the committee said Lerner's lawyer informed the panel she would invoke her constitutional right against self-incrimination and refuse to answer questions.
Republicans contend the controversy is part of a pattern of a White House gone wild, while Democrats insist that what happened -- while unacceptable -- was initiated within the IRS instead of being a practice called for or supported by Obama.
In his first public comments since the matter came to light this month, Shulman said he properly notified the appropriate Treasury inspector general about the problem when he learned that IRS workers were categorizing groups seeking tax-exempt status according to criteria including whether they had "tea party" in their name.
His statement drew angry responses from members of the Senate panel.
Committee Chairman Max Baucus, D-Montana, asked why stronger action wasn't taken to halt the problem when IRS officials first became aware of it in June 2011.
Shulman replied he didn't know anything about it at that time.
"If you don't know, it sounds like somebody wasn't doing his job," Baucus shot back, calling the agency's response and the continued improper practices "outrageous."
Baucus also asked Shulman what it was about the IRS culture that allowed the situation to happen in the first place.
Senate panel in IRS grilling
Shulman responded that he left his post six months ago, adding: "I don't think I can answer that question."
"You certainly have more thoughts than that," Baucus said.
When questioned by GOP Sen. Orrin Hatch of Utah, Shulman said he was unaware of the "full set of facts" about what happened in his agency until the inspector general's report was made public on May 14.
However, he said that "some time in the spring of 2012," he was made aware that a list was being used to determine the scrutiny of groups seeking tax-exempt status and that the name "tea party" was one of the criterion.
"I didn't know the scope and the severity of this," Shulman said, adding that he took "at the time what I thought was the proper step" by making sure the inspector general looked into the matter.
Under tough questioning by another Republican, Sen. John Cornyn of Texas, Shulman said he regretted what happened on his watch but refused to take personal responsibility for it.
"I certainly am not personally responsible for creating a list that had improper criteria on it," he added.
Other Republicans took objection with Miller, who said the targeting was wrong and a mistake but denied it amounted to deliberate political targeting.
"There was political targeting here. I don't think there's any way to deny that," declared GOP Sen. John Thune of South Dakota.
What the White House knew
At the White House, spokesman Jay Carney revealed new details about the administration's response to the IRS controversy for a second straight day.
Carney told reporters that White House and Treasury officials discussed the timing of the release of the inspector general's report and its findings after General Counsel Kathryn Ruemmler learned about it on April 24 and told others, including Chief of Staff Denis McDonough.
However, Carney said Obama was deliberately kept out of any discussions on the issue to prevent any possible suspicion of presidential meddling in an upcoming report by an independent watchdog.
His comments followed Miller's disclosure earlier Tuesday about the planted question at the ABA meeting on May 10 that provided Lerner, who oversaw the IRS division handling requests for tax-exempt status, to publicly apologize for targeting conservative groups ahead of the report's release.
Asked if the White House had any involvement in the planted question, Carney said "we were not aware of what ultimately led to the first reporting of this on May 10th."
On Monday, Carney had first revealed the date Ruemmler learned details of the upcoming report and that she told McDonough, among others. It was the first time the White House acknowledged that McDonough was aware of the report before it became public more than two weeks later.
Carney insisted no one -- including Ruemmler and McDonough -- told Obama anything about the inspector general's pending report before media reports about it began appearing on May 10.
However, the new information on Monday and Tuesday continued a perception of a White House on the defensive over the issue.
A second conservative group filed a lawsuit Tuesday against the IRS over the political targeting. True the Vote asked a federal court in Washington to grant its request for tax-exempt status that has been held up by the IRS for three years, and to award damages.
On Monday, a Northern California tea party group has filed the first lawsuit against the U.S. government stemming from the IRS targeting.
Baucus and Hatch sent a letter to the IRS on Monday seeking an exhaustive list of information about the case as part of a full investigation by their committee. Their panel's hearing followed a similar grilling of Miller and Treasury Inspector General J. Russell George last week by the House Ways and Means Committee.
Worry about impact and public trust
At Tuesday's hearing, senators from both parties worried that the controversy destroyed public trust in the IRS and wondered how the improper acts could have continued for so long without detection or correction.
George, who wrote the report on the targeting, explained that his mission was to conduct an audit that would examine if wrongdoing occurred, rather than to necessarily identify who was responsible.
George said further examination of the case would take place, but he refused to provide any details.
Carney noted Monday that the inspector general's report found that there was no outside intervention regarding what he called "inappropriate scrutinizing of conservative groups" seeking tax-exempt status, and that no one in the White House intervened in the inspector general's review or "did anything that could be see as intervening."
In addition, Carney said, the misconduct had stopped in May 2012, almost a year before Ruemmler or anyone else at the White House was told of it by anyone at Treasury.
For his part, Miller denied deliberate discrimination for the targeting cited by the inspector general's report, calling the acts "foolish mistakes" made by overworked staffers struggling to enforce unclear regulations involving what political activity is permissible by tax-exempt groups.
"We are down a billion dollars over the last couple of years, the IRS is, and that's caused us to cut training in some areas," he said, adding that the agency deals with 70,000 applications for tax-exempt status. "Do we have the resources to get the job done. I don't believe we do at this point."
Democratic senators also focused on the ambiguity in the tax code and IRS regulations on the matter, saying the tax code needs to be altered. Republicans also called for tax code reforms, but with the goal of slashing the responsibilities of the agency as part of the party's longstanding push for smaller government and a reduced taxing authority.
IG blames a faulty policy
According to the inspector general's report, the IRS developed and followed a faulty policy to determine whether the applicants were engaged in political activities, which would disqualify the groups from receiving tax-exempt status.
The controversial move began in early 2010 and continued for more than 18 months, the report said, declaring that "the IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention."
The conservative groups complain their requests were delayed for months or even years through the review process, which is intended to prevent ineligible political groups from getting tax-exempt status.
Miller told the House Ways and Means Committee on Friday that determining the political nature of groups was one of the hardest tasks of IRS officers responsible for assessing requests for tax exempt status.
The investigation by the Treasury inspector general for tax administration was initiated after congressional complaints began to surface in the media in 2012 that the IRS was targeting conservative groups and holding up applications.
In a written response included in the report, the IRS commissioner of the Tax Exempt and Government Entities Division said there was no criminal behavior behind the actions of the agents, but rather inefficient management.
Obama called practices described by the inspector general outrageous and forced Miller's resignation. In addition, the commissioner of the IRS Tax Exempt and Government Entities Division also announced his retirement Thursday. Joseph Grant will leave in June, according to an internal IRS memo provided to CNN. Miller also is scheduled to exit then.
Obama has appointed Danny Werfel, a White House budget office official who has served in both Democratic and Republican administrations, to succeed Miller through the end of the fiscal year on September 30.
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