June 2nd, 2013
10:14 AM ET
1 year ago

Issa: Cincinnati IRS employees say direction came from Washington

Updated 5:56 p.m. ET Sunday 6/2

(CNN) - In an exclusive interview Sunday on CNN's “State of the Union” with Candy Crowley, Republican Rep. Darrell Issa said interviews with workers in the Cincinnati IRS office show targeting of conservative groups was "a problem that was coordinated in all likelihood right out of Washington headquarters - and we're getting to proving it."

“My gut tells me that too many people knew this wrongdoing was going on before the election, and at least by some sort of convenient, benign neglect, allowed it to go on through the election,” he said. “I’m not making any allegations as to motive, that they set out to do it, but certainly people knew it was happening.”

A bipartisan group of investigators from two House committees – Ways and Means, and Government Reform and Oversight – interviewed two front-line employees from the tax-exempt office last week.

One of the employees hit back against accusations that lower-level employees were responsible for the scrutiny of conservative groups seeking tax-exempt status in 2010, telling congressional investigators that the Ohio employees were being “thrown underneath the bus.”

A second "more senior" Cincinnati IRS employee said they began seeking other jobs when they were assigned to look out for applications from tea party groups, because they felt it was inappropriate.

According to excerpts released to CNN by the oversight committee, one of the employees said their supervisor told them the direction to single out conservative groups came from the Washington headquarters in March 2010.

By April, seven hard-copy versions of applications had been sent to Washington, the employee said. In addition, the employee said Washington had requested part of an application by two specific groups, though the excerpts do not disclose the names of those two groups.

Shortly after news of the scandal broke and IRS Commissioner Steven Miller announced his resignation, the IRS said two "rogue" employees in the agency's Cincinnati office were principally responsible for the "overly aggressive" handling of requests by groups with the words “tea party” and “patriot” in their names, a congressional source told CNN.

Issa’s committee released only excerpts and not the full transcripts of the interviews, citing the fact that the investigation is ongoing. CNN asked for the full transcripts, but the committee did not agree to the request. CNN has not seen the full transcripts or the context of the questions and answers.

Read the excerpts below.

However, Rep. Elijah Cummings, ranking member on the House oversight committee, described Issa's remarks based on the interviews as "reckless" and "unsubstantiated."

“So far, no witnesses who have appeared before the Committee have identified any IRS official in Washington DC who directed employees in Cincinnati to use ‘tea party’ or similar terms to screen applicants for extra scrutiny," Cummings said in a statement.

"Chairman Issa’s reckless statements today are inconsistent with the findings of the Inspector General, who spent more than a year conducting his investigation," he continued. "Rather than lobbing unsubstantiated conclusions on national television for political reasons, we need to work in a bipartisan way to follow the facts where they lead and ensure that the IG’s recommendations are fully implemented."

Cummings' spokeswoman Jennifer Hoffman said it was not "standard practice" for the majority in the committee to keep the transcripts rather than share it with the minority.

"The standard practice would have been for them to provide the transcripts to us when they got them. We have requested them, but have not gotten them," she said.

Issa said the full transcripts would be made public, and he has also subpoenaed the administration for more documents that he says will support claims made in the employee interviews. “As we get those documents ... we will learn the whole truth,” he said.

The oversight committee clarified after the interview that subpoenas have not been issued to the IRS.

For now, however, he has not said he has evidence to verify there was a direct link between Washington and the over-scrutinizing of tea party groups. But he points to the interview, in which one of the employees named an IRS attorney in Washington, D.C. (the name was redacted in the excerpts), who was heavily involved in the process of applying further scrutiny to conservative groups. The employee expressed frustration with the attorney’s “micromanagement,” according to the excerpts.

Citing the decision by IRS tax exempt director Lois Lerner to plead the Fifth in her recent congressional hearing appearance, Issa said “This is a problem that's coordinated in all likelihood right out of Washington headquarters, and we're getting to proving it. We have 18 more transcribed interviews.”

As the IRS began to disclose information about its admitted mistake, Lerner told reporters that the Cincinnati office, which handles the tax-exempt applications, was overwhelmed with applications in 2010 and began funneling documents from conservative groups into a file that called for further review as a “shortcut,” chalking it up to more of a clerical error.

"It was an error in judgment and it wasn't appropriate," Lerner said May 10 on a conference call with reporters. "But that's what they did."

But two Democratic congressional sources involved in the IRS investigation told CNN's Dana Bash that Issa's characterization of the interviews is misleading.

Their impression from the Cincinnati employees was that the Washington connection the employees were referring to were tax attorney specialists. These individuals answer questions from the tax-exempt division in Ohio about what level of political activity is acceptable for 501(c)(4) status, the sources said.

The tax attorneys work in what is known as the EO Technical Unit–which is in Washington.

According to the sources, an employee identified a tea party case in February 2010 with a problem: The group had checked the box saying it engaged in political activity, but the line agent was not sure how much political activity was allowed for tax exempt status.

(IRS rules dictate that tax exempt groups are allowed to do some type of political advocacy as long as social welfare is their primary activity.)

The employee's question was sent up through the line to Washington, the sources said, where the tax attorney experts were asked to develop future guidance to answer that question, as multiple tea party groups were beginning to take shape in 2010.

The Democratic sources said that's why Washington asked for more cases, like in the example of the Cincinnati employee who was asked to send two specific cases.

However, the sources maintained this was not when the actual targeting began, nor who did it. They're hoping to get more answers in interviews with two other employees next week.

When pressed by reporters in briefings last month, White House Press Secretary Jay Carney–whom Issa referred to as a "paid liar"–reiterated the IRS statement that the activity came from line employees in the Cincinnati office.

Asked by the congressional investigators about the allegations, one employee said, “It’s impossible.”

“As an agent we are controlled by many, many people. We have to submit many, many reports. So the chance of two agents being rogue and doing things like that could never happen,” the employee said.

Further pressed to give a reaction to reports that the blame lies within the Cincinnati office, the employee said: “Well, it's hard to answer the question, because in my mind I still hear people saying we were low-level employees, so we were lower than dirt, according to people in D.C. So, take it for what it is.”

The employee maintained that the office was following directions from Washington. Asked again if the directions to single out tea party applications specifically came from Washington, the employee gave a less certain answer, saying, “I believe so.”

The "more senior" employee told the investigators they were searching for another job in July 2010 after feeling uncomfortable with the task.

“The subject area was extremely sensitive and it was something that I didn't want to be associated with,” the employee said.

Ultimately, Issa said, the employees shouldn’t get a pass.

“Ethically, they clearly knew this was wrong. They should have become whistle-blowers. They should have done something on behalf of the American people,” he said.

The IRS has told House GOP investigators it has identified 88 IRS employees who may have documents relevant to the congressional investigation into targeting of conservative groups.

The agency has so far missed two deadlines to provide documents requested by Congress, but said in a statement Friday that the new acting commissioner, Danny Werfel, is “moving aggressively and taking the data requests very seriously.”

“As a precautionary measure, the IRS is casting a wide net to capture any potentially related materials. Our goal is to be exceedingly thorough during this process to ensure we identify any and all pertinent records," the IRS statement said. "The IRS has received numerous congressional requests involving an extensive set of questions and calls for data. Responding to these requests is a top priority for us. We have been in contact with committee staff, and we continue to provide them updates as we diligently work through these requests."

Read the excerpts below:

One Cincinnati IRS employee interviewed by the Oversight Committee rejects the White House assertion (that the Cincinnati office was responsible) and points to Washington as being responsible for targeting effort (from 5/30 interview):

Q In early 2010, was there a time when you became aware of applications that referenced Tea Party or other conservative groups?
A In March of 2010, I was made aware.

******

Q Okay. Now, was there a point around this time period when [your supervisor] asked you to do a search for similar applications?
A Yes.
Q To the best of your recollection, when was this request made?
A Sometime in early March of 2010.
******
Q Did [your supervisor] give you any indication of the need for the search, any more context?
A He told me that Washington, D.C., wanted some cases.

******

Q So as of April 2010, these 40 cases were held at that moment in your group; is that right?
A Some were.
Q How many were held there?
A Less than 40. Some went to Washington, D.C.
Q Okay. How many went to Washington, D.C.?
A I sent seven.

******

Q So you prepared seven hard copy versions of the applications to go to Washington, D.C.?
A Correct.

******

Q Did he give you any sort of indication as to why he requested you to do that?
[…]
A He said Washington, D.C. wanted seven. Because at one point I believe I heard they were thinking 10, but it came down to seven. I said okay, seven.
Q How did you decide which seven were sent?
A Just the first seven.
Q The first seven to come into the system?
A Yes.

*****

Q Did anyone else ever make a request that you send any cases to Washington?
A [Different IRS employee] wanted to have two cases that she couldn't ¬¬ Washington, D.C. wanted them, but she couldn't find the paper. So she requested me, through an email, to find these cases for her and to send them to Washington, D.C.
Q When was this, what time frame?
A I don't recall the time frame, maybe May of 2010.

******

Q But just to be clear, she told you the specific names of these applicants.
A Yes.
Q And she told you that Washington, D.C. had requested these two specific applications be sent to D.C.
A Yes, or parts of them.

******

Q Okay. So she asked you to send particular parts of these applications.
A Mm¬hmm.
Q And that was unusual. Did you say that?
A Yes.
Q And she indicated that Washington had requested these specific parts of these specific applications; is that right?
A Correct.

******

Q So what do you think about this, that allegation has been made, I think as you have seen in lots of press reports, that there were two rogue agents in Cincinnati that are sort of responsible for all of the issues that we have been talking about today. What do you think about those allegations?
[…]
A It's impossible. As an agent we are controlled by many, many people. We have to submit many, many reports. So the chance of two agents being rogue and doing things like that could never happen.

******

Q And you've heard, I'm sure, news reports about individuals here in Washington saying this is a problem that was originated in and contained in the Cincinnati office, and that it was the Cincinnati office that was at fault. What is your reaction to those types of stories?
[…]
A Well, it's hard to answer the question because in my mind I still hear people saying we were low¬level employees, so we were lower than dirt, according to people in D.C. So, take it for what it is. They were basically throwing us underneath the bus.

******

Q So is it your perspective that ultimately the responsible parties for the decisions that were reported by the IG are not in the Cincinnati office?
A I don't know how to answer that question. I mean, from an agent standpoint, we didn't do anything wrong. We followed directions based on other people telling us what to do.
Q And you ultimately followed directions from Washington; is that correct?
A If direction had come down from Washington, yes.
Q But with respect to the particular scrutiny that was given to Tea Party applications, those directions emanated from Washington; is that right?
A I believe so.

And another more senior IRS Cincinnati employee complained about micromanagement from D.C.:

Q But you specifically recall that the BOLO terms included "Tea Party?"
A Yes, I do.
Q And it was your understanding ¬¬ was it your understanding that the purpose of the BOLO was to identify Tea Party groups?
A That is correct.
Q Was it your understanding that the purpose of the BOLO was to identify conservative groups?
A Yes, it was.
Q Was it your understanding that the purpose of the BOLO was to identify Republican groups?
A Yes, it was.

******

Q Earlier I believe you informed us that the primary reason for applying for another job in July [2010] was because of the micromanagement from [Washington, DC, IRS Attorney], is that correct?
A Right. It was the whole Tea Party. It was the whole picture. I mean, it was the micromanagement. The fact that the subject area was extremely sensitive and it was something that I didn't want to be associated with.
Q Why didn't you want to be associated with it?
A For what happened now. I mean, rogue agent? Even though I was taking all my direction from EO Technical, I didn't want my name in the paper for being this rogue agent for a project I had no control over.
Q Did you think there was something inappropriate about what was happening in 2010?
A Yes. The inappropriateness was not processing these applications fairly and timely.

******

Q You have stated you had concerns with the fairness and the timeliness of the application process. Did you have concerns with just the fact that these cases were grouped together and you were the only one handling them?
A I was the only one handling the Tea Party's, that is correct.
Q Did that specifically cause you concern?
A Yes, it did. And I was the only person handling them.
Q Were you concerned that you didn't have the capacity to process all of the applications in a timely manner?
A That is correct. And it is just ¬¬ I mean, like you brought up, the micromanagement, the fact that the topic was just weirdly handled was a huge concern to me.


Filed under: Darrell Issa • IRS
soundoff (572 Responses)
  1. Donkey Party

    More wild allegations and accusations from the convicted felon Issa and the morally corrupt, low-intellect GOP. Can't wait for 2014 to run them all out of office. The GOP are the biggest government moochers there are.

    June 2, 2013 10:33 am at 10:33 am |
  2. Ray E. (Georgia)

    Uh,
    After the Sequester was passed it was, and is, no secret that The Obama Adminstration tried to make it as Painful as Possible for the people trying to get some Fiscal Responsibility into the Government. While it will be difficult to prove any cupability by the current Adminstration the "Foot prints" are there in Spades. The current Adminstration is far from Lilly White. Obama sond a lot of Snake Oil. And it is all starting to unravel.

    June 2, 2013 10:42 am at 10:42 am |
  3. Joe

    The climate in the IRS is the very thing that is trying to be created by this administration. You send down direction ambiguous in it's origin and inappropriate in it's nature and then you add an atmosphere of fear (job security and attacking whistleblowers) to those executing the orders and you have a recipe for corruption by implied intimidation.

    June 2, 2013 10:43 am at 10:43 am |
  4. Rick McDaniel

    That was OBVIOUS! Low level employees do NOT do things that require higher level approval. The high levels simply use the lower levels as scapegoats, so the higher levels can escape punishment for wrongdoing!

    June 2, 2013 10:53 am at 10:53 am |
  5. Xavier

    Seriously, who can believe anything that comes out of the mouth if Issa? This is the same idiot that was misquoting reports regarding Benghazi... and never admitted to doing it when he was called on it.

    June 2, 2013 10:55 am at 10:55 am |
  6. PtBarnumBoy

    Where is Eugene McCarthy when you really need him? Oh, I see, he's been re-incarnated.

    June 2, 2013 11:11 am at 11:11 am |
  7. Name king

    Hey where in Washington did these folks got their marching orders to target conservative groups. Was it the white house, the congress, the president himself or the media, where are the evidence, was it a tea partier that said this, since 60 percent of the irs is conservative, where are the investigative reporting by the conley. Should we just take the words of a repub saying this happened, since nothing has panned out with all these fake scandals been pushed. Come on folks when will the media hold the repub party in some kind of backlash since they've been pushing lies after lies and watch our country fall apart. When will their fake conspiracy theories end.

    June 2, 2013 11:13 am at 11:13 am |
  8. Ioldman

    No evidence yet, but with citing the FIFTH from a high ranking woman, with the 157 visits to the WH from the top guy and the time frame, anyone with an average IQ is not hard to understand that it was not the work of low level employees. Please stop insulting the intelligence of average Americans.

    June 2, 2013 11:14 am at 11:14 am |
  9. ollie

    Of course it was. Look at what we have in the WH.

    June 2, 2013 11:15 am at 11:15 am |
  10. John Vance

    Good grief. A bazillion lawyers in Washington who believe you are guilty until proven innocent. The facts will eventually be dragged out, see what they show.

    June 2, 2013 11:16 am at 11:16 am |
  11. barbara

    Rogue employees responsible..... yeah right. More like a rogue President who thinks he can do anything he wants. Obviously the only kind of "organizing" that Obama did in Chicago has translated into organized corruption in the WH.

    June 2, 2013 11:16 am at 11:16 am |
  12. David

    George Washington hasn't been POTUS for a long time. How stupid does Issa think we are?

    June 2, 2013 11:17 am at 11:17 am |
  13. mikec

    And Mr. Issa only investigates Democrats.

    June 2, 2013 11:19 am at 11:19 am |
  14. Leoncio Estevez

    Is "my gut feel" the best argument this imbecile has? Good luck defending
    his case in court...

    June 2, 2013 11:19 am at 11:19 am |
  15. william Giunta

    Would anyone please tell me why the IRS should/would/is buying over a billion round of ammo. Is this ammo needed to enforce their charter of collecting income taxes from the citizens of the USA?

    June 2, 2013 11:19 am at 11:19 am |
  16. Sarah/VA

    That Issa is a liar,by the way his name is not pronounced like he says,his name is a muslim name,Republicans are just using him ,he started the whole IRS thing & he knew about it from the start so whats the liar talking about

    June 2, 2013 11:19 am at 11:19 am |
  17. Kyle

    I'm not a republican, but this does not look good for the Obama Administration.

    June 2, 2013 11:20 am at 11:20 am |
  18. DC Johnny

    Looks like Clinton may not be the next president afterall. Biden in 3... 2... 1...

    June 2, 2013 11:22 am at 11:22 am |
  19. Chutzpah

    Issa, the King of Smear. "My gut tells me"... "In all likelihood".

    Just make it up as you go along, clown.

    June 2, 2013 11:23 am at 11:23 am |
  20. Kathy

    Hope Americans are paying attention to this IRS & Washington DC scandal-Thank you Rep Issa !

    June 2, 2013 11:24 am at 11:24 am |
  21. Gordon Jones

    Issa = Bachman

    June 2, 2013 11:24 am at 11:24 am |
  22. glorydays

    Something's seriously wrong when our politicians care more about fighting each other than running the country.

    June 2, 2013 11:25 am at 11:25 am |
  23. The REAL TRUTH...

    Nice misleading headline CNN – what Issa actually said – per your own reporting was "a problem that was coordinated in all likelihood right out of Washington headquarters – and we're getting to proving it.".
    Yawn, more witch hunt rhetoric.
    You gotta love how politicians want to "find the truth" and :get to the bottom of things" when the only benefit is to their side. ZZZzzzzz.
    Nothing to see here but more witch hunt. Move along folks.

    June 2, 2013 11:25 am at 11:25 am |
  24. penguin

    The LAW allows tax exemption for groups EXCLUSIVELY social. Even under the regs "primarily", any group associated with Tea Party should receive extra scrutiny since the Tea Party is primarily political

    June 2, 2013 11:25 am at 11:25 am |
  25. Doc1

    Is this dude the most useless person in Washington, or what? And that's saying a lot.

    June 2, 2013 11:27 am at 11:27 am |
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