IRS official Lerner: ‘I did nothing wrong’

WASHINGTON -- The Internal Revenue Service official at the center of the storm over the agency’s targeting of conservative groups told Congress on Wednesday that she had done nothing wrong in the episode, and then invoked her constitutional right to refuse to answer lawmakers’ questions.

In one of the most electric moments since the IRS controversy erupted nearly two weeks ago, Lois Lerner defended herself during a brief appearance before the House Oversight and Government Reform Committee. The committee is investigating the agency’s improper targeting of tea party and other conservative groups seeking tax-exempt status from 2010 to 2012, and Lerner oversees the IRS office that processes applications for that designation.

“I have done nothing wrong,” said a stern-looking Lerner, sitting next to three other witnesses and reading from a written statement. “I have not broken any laws. I have not violated any IRS rules or regulations and I have not provided false information to this or any other committee.”

Members of Congress have angrily complained that Lerner and other high-ranking IRS officials did not inform lawmakers that conservative groups were targeted, even though legislators asked the IRS multiple times about it after local tea party groups told lawmakers that they were being treated unfairly.

Lerner then said she would invoke her Fifth Amendment right to avoid incriminating herself. After Oversight committee Chairman Darrell Issa, R-Calif., asked her to reconsider, Lerner said, “I will not answer any questions or testify about the subject matter of this committee’s meeting.”

Nine minutes after she began speaking, Issa excused Lerner and she left the hearing room through a rear door, escorted by her lawyer and several other men. The men quickly whisked Lerner into an elevator, where several of the men physically pushed back television camera operators who were trying to film them.

Lerner’s refusal to answer questions was not a surprise. Her attorney, William W. Taylor III, wrote a letter to the committee this week saying she would do so.

Issa and other members of the committee were not pleased with Lerner’s decision to not testify. Even before she spoke, Rep. Stephen Lynch, D-Mass., warned the witnesses that their refusal to cooperate would result in the eventual appointment of a special prosecutor to examine the case.

“There will be hell to pay if that’s the route we choose to go down,” Lynch said.

Lerner revealed the agency’s targeting two weeks ago and apologized for the actions. Since then, Washington has been awash in questions about why the nonpartisan IRS focused on conservative groups, who instigated it and whether it was politically motivated - which many Republicans suspect but participants have rejected.

J. Russell George, the Treasury Department inspector general who focuses on taxes and who released a report last week detailing the targeting, has also said there is no evidence that the screening was politically motivated.

Lerner, 62, is an attorney who joined the IRS in 2001. She has come under fire from members of both parties, including Maryland Rep. Elijah Cummings, top Democrat on the Oversight Committee, who said in an interview Tuesday that she should lose her job.

At Wednesday’s hearing - Congress third since the controversy began - the No. 2 Treasury Department official said his agency played no role in the episode.

“There is no indication that Treasury was involved in the inexcusable behavior at the IRS,” said Deputy Secretary Neal Wolin.

Wolin told the committee that it was “absolutely unacceptable and inexcusable” that the IRS subjected tea party and other conservative groups seeking non-profit status to extra scrutiny from 2010 to 2012.

He said George told him last year “that he had undertaken an audit of the IRS’s review of tax-exempt applications.”

“I told him that he should follow the facts wherever they lead. I told him that our job is to stay out of the way and let him do his work,” Wolin said.

But Issa said his committee has privately interviewed another IRS official, Holly Paz, who said the IRS conducted an internal investigation that reached similar conclusions to George’s report, but a year earlier.

Issa was one of many members of the committee who complained Wednesday that IRS officials had ample opportunity to tell Congress earlier about the targeting but didn’t do so.

“Congress was misled. The American people were misled,” Issa said.

While the targeting began in early 2010, Lerner learned of it in June 2011 and ordered that the criteria be changed, according to George’s report. In early May 2012, Steven Miller, who was deputy commissioner, was told by staff that conservative groups were being inappropriately targeted, George’s report said. Miller later became acting commissioner but has been ousted by President Barack Obama in the wake of the disclosures.

Staff of the Oversight Committee questioned Lerner and other IRS officials last year after receiving complaints from Ohio tea party groups that they were being mistreated by the IRS. In responses to the committee, Lerner didn’t mention that tea party groups had ever been targeted, according to documents. Her responses included 45-page letters in May 2012 to Issa and Jordan.

Lerner also met twice in early 2012 with staff from the House Ways and Means oversight subcommittee to discuss the issue, according to a timeline constructed by committee staff. The timeline said she didn’t mention at either meeting that conservative groups had been targeted.

George’s report found that in June 2011, Lerner discovered that her unit was searching for organizations with words like “tea party” or “patriots” in their applications and subjecting them to tougher questions. She ordered the initial tea party criteria to be scrapped, but it later evolved to include groups that promoted the Constitution and the Bill of Rights, the report said. Lawmakers are curious about why the practice didn’t stop entirely.

A career civil servant who has run the division since late 2005, Lerner has not been disciplined for her role, IRS officials said.

Also coming under fire Wednesday for not telling Congress about the targeting was Douglas Shulman, who was IRS commissioner from 2008 until last November, while the screening was occurring. Shulman was appointed by President George W. Bush.

On Tuesday, Shulman told the Senate Finance Committee that he learned in the spring of 2012 about his agency’s targeting of conservatives and George’s probe. He said he didn’t tell lawmakers or officials at Treasury - of which the IRS is part - because he only had sketchy information about the situation, was told it was being handled and believed it proper to let George’s office conduct its investigation.

“When you learned that there was a list, you did nothing,” said Lynch, the Massachusetts congressman.