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. dj

    Right 2 low level employees directed this whole scandalous IRS affair. Just like it was this phoney video in Benghazi, another lie in the Fast and Furious scandal, yet another made up lie regarding the Press Scandal, and another made up lie on the Fox reporter. One scandal and cover up after another lie and cover up. The GOP made it all up too....you Obama/Clinton koolaid drinkers better face reality, your idols are false profits and lying criminals. This makes watergate look like a Mr. ROGERS film festival...

    June 2, 2013 03:05 pm at 3:05 pm |
  2. Anton

    Issa what a Rethuglican...

    Have open hearings or it is all hearsay...

    June 2, 2013 03:07 pm at 3:07 pm |
  3. NameTodd A

    Impeach the corrupt liar president now

    June 2, 2013 03:07 pm at 3:07 pm |
  4. sammy750

    Of course, the Republicans never did any of these things. They are the angels and innocent of the politicians. Republicans just continue the to press on against Obama and his administrations. In doing so, they are not doing nothing else. This is the same continual do nothing Republicans since 2010. We pray they will be defeated in 2014 and 2016. Fired the Republicans and send them back home. We need productive lawmakers in office. Once that make their wages and benefits.

    June 2, 2013 03:08 pm at 3:08 pm |
  5. jason

    The whole tax system is flawed and need major revamping. IRS has turned the American dream to the American

    June 2, 2013 03:11 pm at 3:11 pm |
  6. Danram

    Well, well .... So it wasn't just a few "rogue field agents in the Cincinnati office" after all, huh?

    I hope that the Republicans keep pulling on this string and unraveling this conspiracy. It smells worse with each passing day.

    Does it reach all the way to the White House? That remains to be seen. But seeing Lois Lerner "plead the fifth" before Congress and hearing that the head of the IRS has visited the White House over 150 times in the past 4 1/2 years certainly makes one think that could well be the case.

    June 2, 2013 03:12 pm at 3:12 pm |

    Give me a break. I don't think any organization with any political ties should be entitled to a tax exempt status. My company just finished with a year of scrutinizing claims that turned out were billed incorrectly. Had we not subjected the claims to this scrutiny we would have lost money. Naturally, there was a certain criteria that we used to narrow down the amount. They were usually the customers that were repeat offenders. All in all, I have yet to hear that groups that should have been granted the exception were denied, so politics aside, what is the big deal?

    June 2, 2013 03:13 pm at 3:13 pm |
  8. Ar45

    Mr Issa should give precise names or shut up. Just innuendo is not sufficient. If he has documents present it get it out in public and get to the end. This nonsense of some unnamed sources should stop.

    June 2, 2013 03:14 pm at 3:14 pm |
  9. thomas tyrrell

    He promised us a river of subpoenas and here it is. Perhaps the public needs to remember the summer of subpoenas which another Republican Congress to try and cripple Clinton. Investigations have become the GOP's approach to governance. Their motto should be "Don't legislate, investigate".

    June 2, 2013 03:14 pm at 3:14 pm |
  10. jennifer in Houston

    The nicest thing I can say about rep Issa is "he's full of it".

    June 2, 2013 03:15 pm at 3:15 pm |
  11. myway

    Again, there's still no evidence of anyone getting harmed by these actions. It's troublesome applications were held up for nebulous reasons but that doesn't add up to a massive which hunt by the IRS against Tea Party groups the republicans are advertising. The only issue at hand is whether the scrutinized groups receive tax exempt status or not. Since they were applying under an unclear regulation with respect to political groups the IRS should hold their ground. Unless they disapproved applications for the wrong reasons they should be in the clear no matter who directed the show.

    June 2, 2013 03:16 pm at 3:16 pm |
  12. Whome

    The orders came directly from the White House.

    June 2, 2013 03:16 pm at 3:16 pm |
  13. Bob

    Issa has no credibility at all. None of his "investigations" have born any good fruit. "...[Issa] has not said he has evidence to verify there was a direct link between Washington and the over-scrutinizing of tea party groups" And he will not find any direct link to anybody higher up than an attorney at the IRS headquarters in Washington? Are you kidding me? This is so utterly embarrassing for Issa. He will once again be a laughing stock throughout the nation. His witch hunt days will be over soon.

    June 2, 2013 03:21 pm at 3:21 pm |
  14. sonnie3

    Dear reganrepublican,
    Benghazi is an ongoing SCANDAL, And that is a fact.
    The IRS is a scandal/ And that is a fact
    The Gun Running fiasco is a scandal/ and that is a fact/
    obama has so many scandals going at this time, he holds the worlds record. Time to get it entered into the book.
    It is quite certain you are blowing smoke up the annual canal with the none scandal bs.
    Get Real.

    June 2, 2013 03:21 pm at 3:21 pm |
  15. Logic N LA

    WOW MAN- Let's be clear -When these employees say" Washington" they are not saying the White House. Let's also be clear that the questions asked and statements made are all "do you think", not do you "know". They THINK conservatives were targeted. They THINK it was Republicans targeted. Interestingly, now Tea Party is being equated as Republican by this committee. Remember the reason for these applications , which escalated drastically after the Supreme Court United ruling, was for tax exempt status and to take advantage of the 501.4 law allowing for undisclosed donors. Since we are only using conjecture here- Let's assume Washington ( IRS headquarters) was looking to see what was happening after the SC ruling to figure out how to manage such requests.

    June 2, 2013 03:22 pm at 3:22 pm |
  16. Ancient Texan

    Dems prefer that all "mistakes" be swept under the rug and covered up...even the detailed attacks on their "enemies" list. Issa is doing the job he is supposed to do. The Obama administration tromps on the Constitution and the law everyday and insist thy have to answer to no one including the American people.

    June 2, 2013 03:24 pm at 3:24 pm |
  17. oracle

    Typical liberal response. If you can't argue the facts, desparage the fact-finder. If you don't like the results, re-assign th blame political expendables.

    Issa is the Chairman of the Commitee for GOVERNMENT REFORM AND OVERSIGHT ... he's is doing exactly what he is supposed to be doing ... oversight.

    June 2, 2013 03:25 pm at 3:25 pm |
  18. Rudy NYC

    Anonymous wrote:

    Of course it seems many of these groups are using 501(c)4 status as cover for their political agendas, The controversy isn't whether or not the conservative groups should be investigated, it's that ONLY conservative groups were audited. they were TARGETED.
    That's not accurate. Liberal groups were investigated, too. Liberal groups were declined. I'm still waiting to hear about a conservative group that's been targeted and denied. The lists were created to EXPEDITE the conservative groups' applications. Unfortunately, wiith a name like "NorCal Tea Party Patriots" and others like it you're begging for trouble, and you deserve to be scrutinized.

    June 2, 2013 03:26 pm at 3:26 pm |
  19. Indy for all

    Wow! The drones are out today! Left, right or center everyone should be alarmed, saddened and demanding answers. At the very least we have serious issues with competency in several areas of our "know nothing" govt. It appears to be more though as the employees themselves are fleshing out. If you condemn one side for making a big deal of it you should also condemn the other for acting like all this is nothing ( called being independent). If you can't look at this and see there are problems and instead look for excuses to support the corruption stop commenting as your politically brainwashed mind will not help solve anything. Always be critical of govt, if you're not you will end up with a dictatorship as history has shown time and time again. Independent or nothing folks

    June 2, 2013 03:26 pm at 3:26 pm |
  20. RuiningAmerica

    The Republicans have nothing to offer 99% of the people so they focus on endless lies, fabrications, and utter nonsense to distract. It is truly anti-American and they are worse than all our foreign enemies combined.

    June 2, 2013 03:27 pm at 3:27 pm |
  21. Thaddius

    News flash: Partisan hack is partisan.

    June 2, 2013 03:27 pm at 3:27 pm |
  22. mick

    Obama is a political thug and will go down in history as just that. He stole his second term!

    June 2, 2013 03:28 pm at 3:28 pm |
  23. CR

    Sorry mike but there is going to have to be actual evidence that Obama was behind this until that impeachment you have dreamed of since he was first sworn in will happen.
    But hey keep hope alive, it might happen one day just like one day they might find those elusive WMDs in Iraq.

    June 2, 2013 03:32 pm at 3:32 pm |
  24. Hawk in Texas

    WoW MaN, Issa is a crook and there is no doubt about it. if you would get down off your soapbox and fox news long enough to google issa car theft. gun charges and arson you just might learn something. Issa has been on a witch hunt from the day those california isiots in his district elected him. out of the few hundred investigations he has conducted none have worked out for him. he just jumps from one to the other hoping something sticks.

    June 2, 2013 03:34 pm at 3:34 pm |
  25. Yvonne Edelman

    If Mr Issa wants a scandal to investigate – why not delve into the Iraq war among other things – or better yet- his past own record in California. There is no There in There in any of these "investigations". The IRS has not been allowed to have a director – nevertheless– any organization wanting tax deferral or exemption should not be granted such if they are using that status to spread racial hatred and lies about our President. It is treasonous to see these right wing nuts trying to bring the country down.

    June 2, 2013 03:34 pm at 3:34 pm |
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