June 2nd, 2013
10:14 AM ET
9 years 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.”

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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. Erik in Houston

    Issa making idiotic statements as usual ...

    June 2, 2013 02:21 pm at 2:21 pm |
  2. Quixote

    If you honestly see any parallel between any of this baseless hooey and Watergate, you have to go back and repeat high school and maybe even middle school history.

    June 2, 2013 02:22 pm at 2:22 pm |
  3. Robrob

    "a problem that was coordinated in all likelihood right out of Washington headquarters – and we're getting to proving it."

    - In all likelihood?

    “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.”

    - His gut tells him?
    - Some sort of?
    - Not making any allegations?

    June 2, 2013 02:24 pm at 2:24 pm |
  4. John

    If I was in charge of collecting taxes, the very first people I would be looking at are those political groups thumbing their noses at the very concept of taxation. Tax-exempt status indeed! The only groups who should be exempt from taxation are true non-profits doing charitable work.

    June 2, 2013 02:26 pm at 2:26 pm |
  5. WM

    It's not possible to rationally deny that this was a deliberate effort to target and destroy Tea Party groups, and that the Obama administration was behind it. People who are denying wrongdoing on the part of the administration are being dishonest.

    June 2, 2013 02:26 pm at 2:26 pm |
  6. thisisyourbestyear

    Now you know how the NAACP, Urban League, SLC and others felt.

    June 2, 2013 02:28 pm at 2:28 pm |
  7. nc_mike

    Why are we getting only GOP controlled excerpts from Issa's committee?

    June 2, 2013 02:28 pm at 2:28 pm |
  8. Marie

    Oh Mr. Issa, Get off your high horse and stop making up stories and creating more turmoil. You're searching for a needle in a haystack so be careful you don't get pricked.

    June 2, 2013 02:30 pm at 2:30 pm |
  9. gripples

    Just watched Van Holland trying to defend Holder on FOX. What a piece of crap!!!!!! Mr. Van Holland, what would you say if the IRS targeted your donors????? This boy needs to be voted out.

    June 2, 2013 02:30 pm at 2:30 pm |
  10. Just Stopping Through

    Is it just me or did the questions seem like they were leading and drawing conclusions? Just seems like if the questioning were happening in a court of law lawyers would be objecting & judges would be sustaining & overruling because of the way the questions are being asked, they really seem like leading to me. And before anyone starts throwing the liberal, democrat, republican stuff my way I trust not too many of any of these politicians – Democrat or Republican.

    June 2, 2013 02:30 pm at 2:30 pm |
  11. Bob Ross

    Why does Issa have to continually prove that he is a blithering idiot? If he wants "transparency," then have open hearings and quit hiding behind closed doors. The bottom line here is that Issa is showboating, and absolutely nothing more. The man is a nitwit, and HE who is transparent.

    June 2, 2013 02:31 pm at 2:31 pm |
  12. Dave Allen

    I don't buy for a second that an IRS agent can't go rogue! If a CIA or FBI agent or military person can go rogue, an IRS agent sure could!! More repulicknuts witch hunting!!!!!

    June 2, 2013 02:35 pm at 2:35 pm |
  13. Fish

    Issa is an embarrassment to the nation cherry picking only that which is attacking the President. Can't these elected officials do what we elected them to do??? While I know that oversight of the government is our right as citizens, we elect these goons to do other things than obstruct the government at every turn. This has gotten very old and our nation is failing because of it!!! Get a life Issa!!!

    June 2, 2013 02:36 pm at 2:36 pm |
  14. BillInLA

    Obviously, SOMEONE decided wrongly to target the Tea Party. But the claim that the President did it is simply wildly unbelievable. He's a Constitutional lawyer and the most skilled politician to have occupied a high place in government since Bill Clinton. He knows better.

    This "investigation" is like all Issa "investigations" - Try to make the facts smear the President personally. So far, we have two IRS employees who resent being singled out and want to blame "Washington," but don't have anyone to name except some "micromanaging" attorney - a convenient foil for an Issa witch-hunt. Who? Micromanaging what? Say who the attorney is.

    It's a fair guess that this will end up going as high as Lois Lerner, who took the 5th. She'll be granted immunity and forced to testify, and what she'll say is: "A member of my staff dd this. I knew about it and I let it happen."

    And that will be where it ends ... except for Daryl Issa getting away with smears and looking to spread slime on another subject.

    June 2, 2013 02:39 pm at 2:39 pm |
  15. jcruz2013

    wow what corruption!! abolish the IRS, arrest shulman easter bunny man, arrest holder for perjury, arrest obamabinlyin for calling "innocence of muslims" the culprit instead of calling for help for our guys dyin, axelrod is right big govt is too big, put the ax to the root of the tree

    June 2, 2013 02:40 pm at 2:40 pm |
  16. Gregory

    Issa is a man of extremely questionable morals. Of course he did say that he would be spending most of his time investigating the White House after the repubs recaptured the house. Interesting, rather than do the business of the people, he decided that constant, ongoing investigations were best for the country.

    June 2, 2013 02:41 pm at 2:41 pm |
  17. ILikeCrackpots

    Cinncinati is John Boehner's backyard. Southwest Ohio is a very conservative demographic. Everything is controlled by Republicans and is directed by Republicans, that is Traditional Republicans. These Traditional Republicans are scared to death of the Tea Party rebels. So I suspect that the IRS employees felt it necessary to sandbag these Tea Party groups to protect the primaries for Traditional Republicans.

    June 2, 2013 02:45 pm at 2:45 pm |
  18. Everyman

    Most likely the Bush appointee was told by his GOP masters to start a controversy so they could blame it on Obama. Can't trust a conservative.

    June 2, 2013 02:47 pm at 2:47 pm |
  19. Smeagel4T

    So once again Issa is trying to mislead the public about what happened. The lawyer requested SEVEN(!!!) for review to see what was going on. The lawyer never requested that all Tea Party applications be set aside. This is precisely the type of thing that might happen in business. A manager or lawyer would ask for a "representative sample" in order to evaluate and understand what was happening. This is entirely different than saying "set them all aside". Given the fact that 501(c)(4) Tea Party groups had already demonstrated a failure to function legally as 501(c)(4)'s and the GOP had previously politically interfered in LEGITIMATE IRS investigations into those groups, it would have been the job of an IRS lawyer to start figuring out what was going on. Allowing a bunch of groups claiming 501(c)(4) status while not fulfilling the requirements of 501(c)(4) groups, as had already been demonstrated by numerous Tea Party groups, would have been dereliction of duty by the IRS.

    June 2, 2013 02:52 pm at 2:52 pm |
  20. ally buster

    My how the republicans have fallen.

    The party of Reagan is now forced to squeal and yell over non-issue "scandals" like the IRS and Benghazi, when the reality is that neither has anything to do with the administration. Trust me, nothing will become of either; This summer, the American people will see Obama accomplishing things such as gay rights all while the economy booms. Yet...there will the republicans be, on TV, squealing and squealing about nothing.

    And the elections in 2014 and 2016? The largely apathetic public won't remember the IRS fiasco, and "Ben Ghazi? Wasn't he on Survivor last year?". The republican party is marginalized and will stay that way for the foreseeable future, trust me.

    June 2, 2013 02:54 pm at 2:54 pm |
  21. splassher6

    WOW CNN welcome to the reality!!!

    June 2, 2013 02:58 pm at 2:58 pm |
  22. jnpa

    Issa has to go, not Obama!

    June 2, 2013 02:58 pm at 2:58 pm |
  23. jlbrandt45@verizon.net

    Can they impeach Issa – they have my vote and I am 80 years old!

    June 2, 2013 02:59 pm at 2:59 pm |
  24. LouieD

    So according to Issa:

    – IRS scrutiny of Tea Party groups was " *in all likelihood* right out of Washington headquarters."
    – *[His] gut tells [him]* that too many people knew this wrongdoing was going on before the election.
    – *[He's] not making any allegations* as to motive, that they set out to do it.

    Then he releases select quotes from a supposed anonymous IRS employee, incidentally a week or so after Republicans were caught altering Benghazi e-mails to better reflect their anti-Obama narrative. These select quotes only specifically name "Washington", meaning IRS headquarters, rather than any one person.

    In other words, Issa pretends to talk a good game, but cowardice prevents him from committing to what he's implying. He knows that the gullible anti-Obama mouth-frothers, as seen on this very message board, will take his cues to connect the dots the way he wants them to. They then feel the need to compare Obama's supposed "high crimes" to those of a Republican (Nixon), which is hilarious on several levels.

    I wish Mr. Issa and his supporters good luck with their continuing investigations, and look forward to watching them keep on embarrassing themselves.

    June 2, 2013 03:01 pm at 3:01 pm |
  25. g.r.r.

    I seriously doubt it. Issa used to be a birther. That alone should disqualify him from this. BUT, more importantly, it is known that Ms. Lerner is a long-time republican. I suspect that nothing will come of this or Benghazi.

    June 2, 2013 03:04 pm at 3:04 pm |
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