The chairman of the House Oversight and Government Reform Committee, Darrell Issa, R-Calif., revealed new testimony from IRS employees in Cincinnati who were purportedly involved with the IRS’s screening of Tea Party groups and conservative organizations applying for tax-exempt status.

The committee released excerpts from bipartisan transcribed interviews between Committee investigators and Cincinnati IRS employees. In these interviews, Cincinnati IRS employees rejected the White House’s claim that the targeting was merely the work of “rogue” agents and say targeting of conservative political groups came from Washington, D.C.

“As late as last week, the administration was still trying to say the [IRS targeting scandal] was from a few rogue agents in Cincinnati, when in fact the indication is that they were directly being ordered from Washington,” Issa told CNN’s “State of the Union” program on Sunday.

Issa’s Democratic counterpart on the committee, Rep. Elijah E. Cummings, D-Md., said Issa had gone too far in his allegations. Cummings, who is ranking member of the House Committee on Oversight and Government Reform, issued the following statement regarding Issa’s claim that interviews with workers in the IRS Cincinnati office showed targeting of conservative groups was a problem that was coordinated out of Washington headquarters:

“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,” said Cummings. “Chairman Issa’s reckless statements today are inconsistent with the findings of the Inspector General, who spent more than a year conducting his investigation. 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. We must have a sincere effort to uncover the truth so that we can restore the public’s trust in the IRS.”

Below is an excerpt from the transcribed interviews between committee investigators and Cincinnati IRS employees:

One Cincinnati IRS employee interviewed by the Oversight Committee rejected the White House assertion and pointed to Washington as being responsible for targeting effort:

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.

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 [Washington, D.C], 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.

Conference Spending

Issa also discussed an upcoming hearing that his committee plans to hold Thursday, June 6, entitled “Collected and Wasted: The IRS Spending Culture and Conference Abuses.” The hearing will focus on the Treasury Inspector General for Tax Administration report on excessive IRS conference spending and abuses of taxpayer dollars. Issa sent a letter about excessive spending to then-IRS Commissioner Douglas Shulman in April, 2012.

Between 2010 and 2012, the IRS held at least 220 conferences, which cost approximately $50 million. A separate hearing is scheduled for Monday in the House Appropriations Committee, with the new IRS Acting Commissioner, Danny Werfel, appearing alongside Treasury Inspector General for Tax Administration J. Russell George, whose reports uncovered the screening of tax-exempt applications using terms such as “Tea Party” and “patriot,” and who is expected to release a report on lavish spending at IRS conferences.

In one example, the IRS spent $4 million dollars on a manager’s conference for 2,600 people in Anaheim, Calif. in August, 2010. Contrary to established government contracting practices, the outside event planners did not negotiate lower room rates and instead focused on “perks” for IRS employees. Several IRS employees stayed in presidential suites, which rate at $1,500-$3,500 per night. Moreover, 15 outside speakers were paid $135,000, including one speaker who lectured on “leadership through art” for $17,000.

In addition, multiple videos were produced for the conference. A previously unreleased video, referred to as the “Cupid shuffle,” and featured employees learning the popular dance as part of preparation for the Anaheim management conference (see IRS Music Dance Video Released by Congress).

In addition to the two hearings scheduled this week by the House Appropriations Committee and the House Oversight and Government Reform Committee he House Ways and Means Committee also plans to hold a hearing Tuesday in which lawmakers will hear from representatives of some of the conservative groups that had their tax-exempt status applications scrutinized by the IRS's Exempt Organizations division.

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