IRS and FBI Push Back at Republican Charges of Coverup

This story has been updated. 

The year-old imbroglio over alleged political targeting by the Internal Revenue Service continues apace, with the IRS and FBI resisting accusations that the Obama administration is withholding investigative documents, destroying relevant emails and reining in criminal prosecutors.

On Monday, House Oversight and Government Reform Committee Chairman Rep. Darrell Issa, R-Calif., released a compendium of quotations from President Obama and other Democrats that Issa says shows that the reason for the IRS’ processing delays and extra scrutiny of tax-exemption applications from primarily conservative nonprofits was anger over the Supreme Court’s campaign finance ruling in Citizens United.

“Certainly, the president and congressional Democrats have an absolute right to express policy concerns and advocate for policy changes,” Issa said. “But the causal relationship between this rhetoric and the IRS targeting is clear. The president declared repeatedly that conservative groups ‘posing’ as nonprofits with ‘benign-sounding’ names were ‘a threat to our democracy.’ The IRS listened and, in turn, it subjected conservative groups to systematic scrutiny and delay.”

Issa last week demanded that the Justice Department turn over documents relating to meetings in 2010 between the IRS official at the center of the controversy -- Exempt Organizations Division chief Lois Lerner, since retired -- and a Justice public integrity official to discuss possible prosecutions. They met soon after Lerner sent a computer disk to the FBI containing 1.1 million pages of nonprofit tax return information, which, the IRS later confirmed, contained some confidential taxpayer information.

Another shoe dropped on Friday when IRS officials working to prepare thousands of pages of documents demanded by congressional committees acknowledged that a “computer crash” had caused some of Lerner’s old emails to be irretrievable. “At the request of the Senate Finance Committee, the IRS today provided a summary of its production of email and materials to the committee related to the processing and review of applications for tax-exempt status,” the tax agency said. “The IRS has made unprecedented efforts in connection with this effort, producing more than 750,000 pages of documents to help complete the investigations. In total, the IRS’ efforts to respond to Congress have involved more than 250 IRS employees working more than 120,000 hours at a direct cost of nearly $10 million. As we advised the committee three months ago, we have completed the production of materials related to the investigation, including 11,000 emails sent or received by Lois Lerner.”

But the statement went on disclose that “in the course of collecting and producing Ms. Lerner’s additional emails, the IRS determined her hard drive crashed in 2011. At the time, Ms. Lerner asked IRS IT professionals to restore her hard drive, but they were unable to do so. Nonetheless, the IRS has or will produce 24,000 Lerner emails from this 2009-2011 time period, largely from the files of the other 82 individuals. The IRS’ production to Congress of the 67,000 Lerner emails is nearly complete.”

One IRS official, Leonard Oursler, national director for legislative action, went further. In a letter to the Senate Finance Committee, he attached a detailed description of the agency’s handling of the document review and delivery to Congress, describing the software issues and other obstacles to thorough searching for past correspondence.

Republicans pounced. “Today’s admission by the IRS that they cannot produce Lois Lerner’s emails is an outrageous impediment to our investigation,” said Sen. Orrin Hatch, R-Utah. “Even more egregious is the fact we are learning about this a full year after our initial request to provide the committee with any and all documents relating to our investigation. And while the IRS has agreed to turn over additional documentation, I am still greatly troubled that the administration failed to notify the committee of this when they first became aware of it.”

Ways and Means Committee Chairman Dave Camp, R-Mich., released an angry statement Friday attacking Commissioner John Koskinen and demanding that the administration investigate.

Camp immediately conducted interviews with IRS information technology staff and sent information requests to the Treasury Department. Issa on Monday announced he had subpeonaed Koskinen to testify to his panel June 23; the commissioner is already scheduled to appear before Ways and Means on June 24.

Finance Committee Chairman Ron Wyden, D-Ore., issued a statement saying, “We’re working to finalize the committee’s bipartisan investigation of the IRS’ review and processing of applications for tax-exempt status. To date, our effort has included a review of hundreds of thousands of related pages of documents and over 30 interviews. We are now working with the IRS to determine if any relevant documents were not provided and will continue to work toward a release of our bipartisan report.”

Meanwhile, House Judiciary Committee Chairman Bob Goodlatte, R-Va., on June 11 quizzed FBI Director James Comey on the state of the criminal probe of the IRS targeting episode at a hearing on the FBI. “Frustration is mounting over this scandal and basic facts are unknown or contradicted by this administration,” he said. “Is there an investigation? Has there been any progress? What is its status? Why do the Justice Department and FBI continue to assert that an investigation is ongoing despite the president’s assertion that no crime was committed? Do you disagree with him?”

Comey testified, “I mean no disrespect to the president or anybody else who has expressed a view about the matter, but I don’t care about anyone’s characterization of it. I care, and my troops care, only about the facts. There is an investigation because there was a reasonable basis to believe that crimes may have been committed, and so we’re conducting that investigation.”

Marcus Owens, a former director of the IRS Exempt Organizations Division now an attorney with Caplin and Drysdale, told Government Executive that the missing Lerner emails might be prosecutable under “destruction of property” laws, “but it would be tough to prove. When I was at IRS, none of the computers were state of the art, so it’s not surprising they would crash.”

He also said the Justice Department is within its duties to share information with the IRS in determining who to prosecute, enjoying access to some private information shielded from the general public. “The Justice Department is doing its job,” Owens said. “They know Congress is intensely focused on this, so they want a thorough, professional job.”