[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
AN UPDATE ON THE IRS RESPONSE TO IT'S TARGETING SCANDAL
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ECONOMIC GROWTH,
JOB CREATION AND REGULATORY AFFAIRS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JULY 23, 2014
__________
Serial No. 113-133
__________
Printed for the use of the Committee on Oversight and Government Reform
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Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan Vacancy
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Economic Growth, Job Creation and Regulatory Affairs
JIM JORDAN, Ohio, Chairman
JOHN J. DUNCAN Jr., Tennessee MATTHEW A. CARTWRIGHT,
PATRICK T. McHENRY, North Carolina Pennsylvania, Ranking Minority
PAUL GOSAR, Arizona Member
PATRICK MEEHAN, Pennsylvania TAMMY DUCKWORTH, Illinois
SCOTT DesJARLAIS, Tennessee GERALD E. CONNOLLY, Virginia
DOC HASTINGS, Washington MARK POCAN, Wisconsin
CYNTHIA LUMMIS, Wyoming DANNY K. DAVIS, Illinois
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina
KERRY BENTIVOLIO, Michigan
RON DeSANTIS Florida
C O N T E N T S
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Page
Hearing held on July 23, 2014.................................... 1
WITNESSES
The Hon. John Koskinen, Commissioner, Internal Revenue Service
Oral Statement............................................... 8
Written Statement............................................ 11
APPENDIX
Timeline for OGR hearing with Commissioner Koskinen, submitted by
Chairman Issa.................................................. 72
E-mail from TIGTA's Deputy Inspector for Investigations,
submitted by Rep. Connolly..................................... 73
Pages from transcribed interviews of DOJ Officials Richard Pilger
and Jack Smith, submitted by Rep. Horsford..................... 74
July 11, 2014 letter from IRS Commissioner Koskinen in response
to letter from Chairman Issa and Mr. Jordan, submitted by Mr.
Cummings....................................................... 84
AN UPDATE ON THE IRS RESPONSE TO IT'S TARGETING SCANDAL
----------
Wednesday, July 23, 2014,
House of Representatives,
Subcommittee on Economic Growth, Job Creation &
Regulatory Affairs,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2154, Rayburn House Office Building, Hon. Jim Jordan
[chairman of the subcommittee] presiding.
Present: Representatives Jordan, DeSantis, Meehan, Lummis,
Collins, Meadows, Bentivolio, Issa, Cartwright, Connolly,
Horsford, Kelly, and Cummings.
Also Present: Representative Gowdy.
Staff Present: Melissa Beaumont, Majority Assistant Clerk;
Molly Boyl, Majority Deputy General Counsel and
Parliamentarian; David Brewer, Majority Senior Counsel; Drew
Colliatie, Majority Professional Staff Member; Linda Good,
Majority Chief Clerk; Christopher Hixon, Majority Chief Counsel
for Oversight; Mark D. Marin, Majority Deputy Staff Director
for Oversight; Jessica Seale, Majority Digital Director; Andrew
Shult, Majority Deputy Digital Director; Sarah Vance, Majority
Assistant Clerk; Rebecca Watkins, Majority Communications
Director; Tamara Alexander, Minority Counsel; Portia Brown,
Minority Counsel; Aryele Bradford, Minority Press Secretary;
Susanne Sachsman Grooms, Minority Deputy Staff Director/Chief
Counsel; Elisa LaNier, Minority Director of Operations; Donald
Sherman, Minority Chief Oversight Counsel; and Katie Teleky,
Minority Staff Assistant.
Mr. Jordan. The committee will come to order.
I want to thank our witness for being here again.
We will start with some opening statements. I will start
first by recognizing the chairman of the full committee, the
gentleman from California, Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman, that is very kind.
Commissioner, I know that this is unprecedented, to have a
commissioner of the IRS in front of this committee so often,
and I appreciate the fact that you have been willing to be
briefed and participate even beyond our requests at times.
As we continue to explore a number of questions, the time
line of the crash, the inconsistency of the probability of lost
emails by multiple people within Government, we appreciate that
you were not in Government; you were not doing this at the
time. But as you can imagine, not just the Internet, not just
Fox, but America is beginning to question how convenient so
many emails of so many people at the heart of targeting
conservative groups for their views, for their politics, and
for the fact that Citizens United was objected to by the
President, how many of them had loss of data and how much is
not available to the American people.
A cover-up is normally described as something that happens
during an investigation around here. In other words, things go
missing during the investigation. But when it comes to the loss
of data, it is clear that data began disappearing and not being
able to be yet found at a time when Congress was just beginning
to look at wrongdoing that is now confirmed that began with the
President objecting to Citizens United, that began with
Democratic members of the House and Senate writing letters
asking for investigation of people that were politically the
opposite of their party, not asking for investigations about
all people who may be involved in political activities in
addition to their nonprofit work.
It is clear they were driven within the IRS, and perhaps
other areas, by political bias and a belief that the President
wanted a fix and that the fix had to occur.
Again, commissioner, you weren't in Government at that
time, but Government is today; it is their time, it is their
watch. It is their responsibility. Whether it is the FEC, the
IRS, the Department of Justice, or any and all of Government's
activities that led to the unfair treatment on the eve of
campaign elections of conservative groups, it is clear that
there was a convenient loss of far more data by far more people
than is explained by the normal arithmetic probabilities.
Today we will explore not only the time line, but when this
committee received that time line. It was your watch to give us
accurately and keep us up to date on developments related to
Lois Lerner and other parts of our investigation. It is my view
that you could have done better. You will and have paid a price
in public opinion for not being as forward-leaning and
proactive as you could have been.
But that was yesterday. Today what we are asking you to do
is to continue working with your IG, and, if we are fortunate
enough to get a special prosecutor, work with him or her and,
of course, work with the groups that now have Federal judges
ordering the IRS to show particular information and bringing it
all together back to this committee, because this committee has
an intent to make to the greatest extent possible public what
we can find is being done on behalf of the American people to
bring back the confidence in the IRS.
So, again, I appreciate your willingness to be here. These
are not easy hearings, and each time you come you leave with
more questions from us than you come with answers to us, and
that is the nature of an investigation that continues to
evolve.
So, Mr. Chairman, I want to thank you for recognizing me
early.
Commissioner, again, you need to be part of the solution. I
believe you have to a certain extent and I believe you are
committed to do more, and for that I thank you, and I yield
back.
Mr. Jordan. I recognize the member from Maryland, the
ranking member of the committee, Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman.
Commissioner Koskinen, I want to thank you for testifying
before this committee yet again. This is the third time in the
past month you have appeared before us, and that does not count
a fourth appearance you made before the Ways and Means
Committee last month on the same topic.
Unfortunately, it appears that you and other IRS employees
are now becoming collateral damage in a fight for the spotlight
among two Republican committee chairmen, Representative Issa
and Representative Camp. This is unseemly, it is embarrassing,
and is not a proper way to run an investigation or to spend
millions of dollars in taxpayer funds.
As the commissioner knows very well, when Chairman Camp was
informed about the crash of Lois Lerner's hard drive, he
quickly announced that he would be holding the first public
hearing before the Ways and Means Committee. Ten minutes later
Chairman Issa issued a unilateral subpoena compelling the
commissioner to testify first before our committee. You did not
contact the commissioner before issuing the subpoena and you
did not hold any debate on the vote or vote. In response,
Chairman Camp chose to move his hearing up several days so he
was the first one in front of the cameras.
It did not seem to matter to either chairman that the IRS
provided numerous contemporaneous documents showing that Ms.
Lerner's computer crash was a technological problem that she
and multiple IT officials attempted to remedy. Those facts
apparently were irrelevant. The goal was to stoke the fire and
to be the first to do so publicly. Chairman Camp has now asked
the inspector general to conduct an investigation into Ms.
Lerner's hard drive crash, which he has agreed to do.
Commissioner Koskinen testified last time he was here that the
inspector general asked him to make his investigation the top
priority, which meant not subjecting IRS employees to any other
interviews while the inspector general's interviews were going
on. That was the IG's request.
Rather than waiting a few weeks, Chairman Issa disregarded
the IG's request and demanded that the IRS make its employees
available to him now. Commissioner Koskinen explained that the
inspector general did not want IRS employees subjected to
multiple interviews, but Chairman Issa just began issuing more
unilateral subpoenas. He forced the IRS employees to appear
before the Oversight Committee and he excluded Chairman Camp's
staff from participating. When the commissioner testified here
before, Republicans accused him of obstruction, claiming that
he was hiding witnesses from the committee. When he again
explained that the inspector general asked him not to subject
IRS employees to multiple interviews, Chairman Issa said he was
going to follow up with the inspector general directly.
Well, that apparently didn't happen. Yesterday I asked my
staff to contact the inspector general's office to find out
exactly what was going on. They spoke with the Deputy Inspector
General for Investigations, and I can report what he told us.
The Deputy IG for Investigations confirmed that his office is
now conducting the investigation that Chairman Camp requested.
He confirmed exactly what Commissioner Koskinen told us, which
is that the inspector general prefers that IRS employees not be
subjected to multiple interviews in order to avoid ``tainting
their testimony.''
Without directly criticizing the chairman's actions, the
Deputy IG for Investigations stated that, as investigators
working for the inspector general, they want everyone to allow
them to complete their interviews first ``without
distraction.'' As he stated then, there is no confusion of
witness testimony and the integrity of the investigation is not
impaired.
Contrary to these requests, Chairman Issa has been forcing
IRS employees to come before our committee for transcribed
interviews, and since he is excluding Chairman Camp's staff,
IRS employees are also being forced to appear before Ways and
Means. Invariably, after each of these interviews, Chairman
Issa and Chairman Camp issue dueling press releases with
tidbits of information or cherry-picked transcript excerpts in
their effort to compete for more headlines, no matter how
unsubstantiated their claims are.
The Deputy IG for Investigations also told us something
else. Over the past year and a half, they have obtained no new
evidence that would change the conclusions in the audit from
2013.
As I close, there is simply no evidence whatsoever of any
White House involvement in the screening of tax-exempt
applications. The IRS has already spent $18 million responding
to the duplicative congressional investigations, and
Commissioner Koskinen is now testifying before Congress for the
fourth time in just over a month. Yet, Chairman Issa informed
committee members yesterday that he will be holding yet another
hearing on the topic next Wednesday. We have the notice here.
With that, I will yield back.
Mr. Jordan. I thank the gentleman.
Mr. Issa. Mr. Chairman?
Mr. Jordan. The chairman of the full committee is
recognized.
Mr. Issa. Point of privilege. There were a number of words
in the gentleman's statements that disparage me, and I object
to his words and debate, and ask that he withdraw or modify
them, and ask unanimous consent that among the terms that be
withdrawn would be not only the unseemly statement, but in fact
when the ranking member disparaged me for a number of areas,
including my intent and essentially said that the items I said
were not true.
Additionally, the ranking member, while objecting to
multiple claims of cherry-picking releases or interfering with
the IG, fails to mention that in June of 2013 he released the
entire John Schafer transcript, which has compromised this
investigation by statements made in future transcribed
interviews, saying that they had reviewed these in preparation
for those.
So I certainly would say that while questioning the intent
in some argument about Republicans not getting along, the
ranking member managed to go beyond the ordinary opening
statement and claiming the intent. In fact, the ranking member,
in June of 2013, went on national television claiming the
investigation was over. This investigation is not over. I would
ask that such items, including unseemly, be taken down.
Mr. Jordan. Without objection?
Mr. Cartwright. I object.
Mr. Jordan. Okay.
Mr. Issa. The gentleman objects. I understand, but I would
reiterate that the decorum of this committee should not lead to
personal attacks as to the intent of individuals on either
side. The fact is this committee is conducting vigorous
oversight. We do so as a matter of our obligation as a
committee.
And I would make one last request. I ask unanimous consent
that the staff be able to place the time line into the record
so that the ranking member's clearly erroneous claim that our
request for the first hearing came after the events, when in
fact the time line will show that the subpoena had been served
prior to the announcement from Ways and Means. And as the
ranking member would know if he had ever chaired this
committee, the fact is it takes a long period of time to
prepare a subpoena, to write a subpoena, to go to the clerk and
get it approved, and then to serve it. So I would hope that the
ranking member, once he sees that in the record, would
recognize that in fact he has been clearly erroneous in his
claims.
And I yield back.
Mr. Jordan. I thank the gentleman for yielding.
If we can, without objection, let's allow the time line in
and let's move to the next opening statement. Would that be
satisfactory with----
Mr. Connolly. Mr. Chairman?
Mr. Jordan. Would that be satisfactory?
Mr. Connolly. It certainly is satisfactory.
Mr. Jordan. I thank the gentleman.
Mr. Connolly. I just wonder, though, would just a brief
response to the distinguished chairman?
Mr. Jordan. Do you really have to?
Mr. Connolly. No, I don't really have to, other than to say
to you, Mr. Chairman, I certainly associate myself, and I know
my colleagues do on this side of the aisle as well, with the
sentiments expressed by the distinguished chairman that we
should always speak with respect about each other.
Mr. Jordan. Well said.
Mr. Connolly. We should never question each other's
intentions. That has not been the practice as often as I would
like on this committee. So I certainly hope that this would
reflect a new day dawning here in the committee and that we can
proceed civilly.
I thank the chair.
Mr. Jordan. Thank the gentleman for his comments.
Our subcommittee meets today to continue its oversight of
the IRS and the targeting of conservative tax-exempt
applicants. We welcome back our witness, IRS Commissioner John
Koskinen. All kinds of questions need to be answered, and that
is why, for the third time in a month, we have Mr. Koskinen
here to answer and address many of those unanswered questions.
First, we were promised that the IRS would produce all of
Lois Lerner's emails. Then we learned that some of Ms. Lerner's
emails had been destroyed and there was absolutely no way he
could produce all of Ms. Lerner's emails to Congress.
Second, we were told the IRS had confirmed that all backup
tapes with Lois Lerner's emails had been destroyed. Then we
learned last week from IRS attorney Thomas Cain that a backup
tape may in fact exist.
Third, we were told that there was one hard drive crash,
Lois Lerner's. Then the Ways and Means Committee disclosed that
there were seven or eight total crashes. And now we learn from
Mr. Cain that there may be as many as 20.
Now, think about this. The IRS has identified 83 custodians
of documents and information. The IRS has identified these
people associated with this targeting of conservative groups
and now almost a fourth of them may have had hard drive
crashes. Unbelievable.
Fourth, we were told that the IRS found out in April 2014
that Ms. Lerner's emails were lost. But then we learned from
Mr. Cain that the IRS knew on February 4th, 2014 about Ms.
Lerner's hard drive crash and that it found out just days later
that the hard drive had been recycled and its contents were
unrecoverable.
That is why we continue to have hearings. That is why we
have Mr. Koskinen back for the third time in a month. We would
like to get some straight answers.
We have convened this hearing because today, over a month
after the IRS first told Congress that it lost Ms. Lerner's
emails, there are still many unanswered questions. There are
still unanswered questions about why the IRS delayed for
several months in notifying Congress, the Justice Department
and the American people about the problems with Ms. Lerner's
emails.
Deputy Attorney General Cole told us last week that the
Justice Department learned of the missing Lois Lerner emails
from press accounts in the media. Imagine that. One of the
highest profile investigations in years, and the Justice
Department has to learn about critical evidence by the central
player in this investigation. They learn about that in news
accounts, not directly from the Internal Revenue Service. And
that is why last week, sitting at this very table where Mr.
Koskinen sits today, Deputy Attorney General Cole said he would
have liked to have known about the emails earlier and he
announced that the Justice Department was investigating why
Commissioner Koskinen failed to disclose the missing emails in
a timely manner.
Let me just reiterate that. James Cole, Deputy Attorney
General of the United States Department of Justice, said last
week, in that same chair, to this same committee, that they are
investigating why the Internal Revenue Service delayed months
in telling the Congress, the American people, and, most
importantly, the FBI and the Justice Department about the loss
of Lois Lerner's emails. Rather than the IRS coming to Congress
and informing us what it knew when it knew it, the IRS waited
four months. The IRS only came forward to finally acknowledge
the missing emails when it had no choice, and it disclosed the
news the only way it knows how, by burying the information on
page 7 of enclosure 3 in a Friday afternoon letter to the
Senate. Information obtained by the committee in the last few
days provides more questions than answers about the missing
emails.
But remember this isn't information the IRS is offering up
willingly. It has taken almost a month for the IRS to finally
start coming clean and it has taken subpoenas to get people to
talk. Mr. Cain, we tried for weeks to get Mr. Cain to come
talk. We finally had to subpoena him. The IRS wouldn't provide
him. We had to subpoena him to get him to come for the
deposition last Thursday.
The American people have this information only because the
committee has been asking questions, and that is why
Commissioner Koskinen is here today. He is the individual
handpicked by the President to clean up this agency, and that
is why he is here today, to answer our questions. Until we know
all the facts, until we clear up all the confusion and all the
misstatements about Lois Lerner's missing emails, the committee
will continue to press for the truth. That is the mission of
the oversight committee and, again, that is why we meet today.
With that, I yield to the ranking member of the
subcommittee, Mr. Cartwright. The gentleman from Pennsylvania
is recognized.
Mr. Cartwright. Thank you, Mr. Chairman.
First off, thank you, Mr. Koskinen, for coming today. You
know, we schedule these things on these little doohickeys, and
it asks you do you want to make this a recurring entry. And
when I see Koskinen, I want to say yes at this point.
At this point, I am concerned that committee Republicans
are no longer using these hearings for the purpose of
investigating what happened to the groups that were the subject
of the inspector general's May 14, 2013 report. This seems to
be something different. And I want to say we all ought to agree
that the point of this committee, the Oversight and Government
Reform Committee, is not publicly to harass Federal agency
heads, Mr. Koskinen; it is to conduct responsible oversight of
the legitimate critical issues within our jurisdiction. I
believe that these repeated hearings that we are seeing today
are both an abuse of authority and a dereliction of this
committee's duty. I think it is abundantly clear that Chairman
Issa and Chairman Camp are in some kind of taxpayer-funded
footrace over who can make the first headlines about Lois
Lerner's lost emails.
And we heard about requests for a time line, and we ought
to look at that time line because it was on June 16, shortly
after Chairman Camp, of Ways and Means, announced that he would
be holding a hearing with you, Commissioner Koskinen, on June
24th, that Chairman Issa of this committee issued a unilateral
subpoena compelling the commissioner to testify before this
committee on June 23rd. In response, Chairman Camp moved his
hearing up to June 20th. So it is something like a children's
fairy tale that we are looking at here.
In addition, Chairman Issa is no longer allowing staff from
the Ways and Means Committee to participate in the Oversight
Committee interviews. Chairman Issa's refusal to hold joint
interviews is resulting in wasted taxpayer money, as IRS
employees like you, Mr. Koskinen, are now being subjected to
multiple, duplicative interviews.
I also want to address Republican claims that the alleged
targeting of conservative groups is this Government-wide
conspiracy initiated after the Citizens United decision
involving the President, the IRS, a conspiracy including the
Department of Justice and other Federal agencies. This
committee has obtained no evidence linking these accusations to
what we all know now were inappropriate criteria used by IRS
employees in Cincinnati. Some of my colleagues on the other
side of the dais have chosen to overlook the funneling of dark
money into the political system of the United States.
Republicans have demanded accountability from the IRS, but have
not demanded the same from corporations who influence our
national elections.
In January 2010, the U.S. Supreme Court, in a five to four
decision on Citizens United, allowed for-profit corporations,
unions, and nonprofit groups to raise unlimited funds and
register for tax exempt status under the 501(c)(4) designation,
and the IRS then became flooded with applications for this kind
of status. The 501(c)(4) designation is exclusively meant for
organizations whose primary activity is social welfare, defined
in the tax code as making charitable, educational, and
recreational contributions to a community.
Now, while 501(c)(4)s are not barred from participating in
political campaigns, it is stated plainly and clearly that
political participation must be an insubstantial amount of the
group's overall activity, accounting for less than 50 percent
of expenditures. The IRS's job was to make sure these groups
were following the rules so they weren't taking tax breaks
meant only for groups contributing to the community, not hiding
the influence that a select few individuals have on our
nation's electoral politics.
As I said before in previous hearings, this is about groups
doing everything they can do to hide where they get their
money, obscure their true intentions, and have undue influence
on the political system tax-free. Anonymous money in politics
is something we don't need in this Country, something that
disrupts the democratic process, and something that has to be
changed.
I commend Chairman Leahy and Senator Udall of the Senate
Judiciary Committee for advancing S. J. Res. 19, a joint
resolution proposing an amendment to the U.S. Constitution
which would negate these damaging effects of Citizens United.
I have cosponsored the House companion to that bill,
introduced by my friend, Representative Ted Deutch of Florida.
With that, I will conclude my comments and yield back to
you, Mr. Chairman.
Mr. Jordan. I thank the gentleman.
Members will have seven days to submit written statements
to the committee.
We are pleased to have with us today the Honorable John
Koskinen, Commissioner of the Internal Revenue Service.
Mr. Koskinen, you know how this works; you have done it a
few times before. Please stand and raise your right hand. Do
you solemnly swear or affirm that the testimony you are about
to give will be the truth, the whole truth, and nothing but the
truth, so help you, God?
[Witness responds in the affirmative.]
Mr. Koskinen, you are now recognized for your opening
statement, and then we will get right to questions.
STATEMENT OF THE HONORABLE JOHN KOSKINEN, COMMISSIONER,
INTERNAL REVENUE SERVICE
Mr. Koskinen. Thank you. Chairman Jordan, Ranking Member
Cartwright, members of the subcommittee, thank you for the
opportunity to appear before you today. With your permission, I
will provide a brief introductory statement and submit a copy
of my complete testimony for the record.
Before beginning my statement, I want to thank the
subcommittee for its willingness to work around my travel
schedule. In attempting to set the original hearing date, my
understanding was you were interested in an overview of IRS
interactions with the Department of Justice. I would like to
touch briefly on that subject, which is covered in more detail
in my prepared statement.
In general terms, the IRS regularly and routinely interacts
with the Department in the investigation and prosecution of
criminal and civil tax matters, and also other financial fraud.
Our Criminal Investigation Division investigates and develops
cases and recommends them to the Department's Tax Division for
prosecution. These cases represent a variety of tax issues,
including refund fraud, abusive tax shelters, return preparer
fraud, and international tax non-compliance.
The international area offers a good illustration of what
our coordinated efforts can accomplish. Recent examples include
the guilty pleas by Credit Suisse and BNP, two major financial
institutions that were found to be in violation of U.S. laws.
Routine interactions between the IRS and DOJ also involve
the IRS Office of Chief Counsel, which reviews all criminal tax
cases developed by our Criminal Investigation Division before
those cases are recommended for prosecution. In addition, when
the Department of Justice's Tax Division litigates a civil
matter, IRS Chief Counsel attorneys are actively involved,
collaborating on the arguments and positions taken.
Let me now turn to an update of the efforts that the IRS
has made to cooperate with the investigations into the use of
inappropriate criteria to evaluate applications for tax-exempt
status under section 501(c)(4) of the Revenue Code. These
include four investigations by Congress, one by the Department
of Justice, and one by the inspector general. Added to that has
been the recent new investigation by the inspector general of
circumstances surrounding the crash of Lois Lerner's hard drive
three years ago.
To date, we have now produced more than 960,000 pages of
unredacted documents to the tax writing committees and more
than 700,000 pages of redacted documents to the House Oversight
and Government Reform Committee. In addition, at the request of
the Oversight Committee and other committees, the IRS has been
working on the identification and production of Lois Lerner
emails. As part of this document production, the tax writing
committees have received 67,000 emails that we found involving
Ms. Lerner. We are continuing to provide redacted versions to
the Oversight Committee, which to date has received more than
54,000 emails from Lois Lerner. We are working to provide these
documents as quickly as we can.
In the course of collecting and producing Ms. Lerner's
emails, the IRS determined that her hard drive crashed in 2011.
At that time, Ms. Lerner had asked IT professionals at the IRS
to restore her hard drive, but they were unable to do so.
Nonetheless, the IRS has or will produce 24,000 Lois Lerner
emails from the period between 2009 and 2011, largely from the
files of other individuals.
The IRS provided information about the hard drive crash to
all six investigating entities in a public report we released
in June. I would note that our June report, to the extent that
it focused on Ms. Lerner's hard drive crash, was based in part
on emails we had already provided to the congressional
committees, the inspector general, and the Department of
Justice. Some of those emails were produced as long ago as last
fall. Those emails were provided in the normal course of
production related to the search terms agreed upon previously.
So all six investigators have had initial information about the
hard drive crash since last fall. Also, additional emails about
Ms. Lerner's hard drive crash were produced this spring to
investigators, prior to the release of our June report.
I also want to point out that, consistent with a bipartisan
congressional request, the inspector general has noted he is
proceeding with its own investigation regarding the crash of
Ms. Lerner's hard drive. The IG, as was noted earlier, has
asked the IRS not to do anything that would interfere with its
investigation, and we are honoring that request to the extent
possible.
In addition, on July 18 we responded to a recent court
inquiry with detailed information regarding the crash of Ms.
Lerner's hard drive. This information is consistent with what
was previously provided in the six investigations, but we have
provided the Oversight Committee and other investigating
entities with a copy of that information.
I understand that during last week's hearing with DOJ there
was a question as to what information the IRS gave to the
Department about the hard drive crash. We provided all
investigating entities with the same information in our June
report which we released to the public. DOJ did not receive any
additional information.
Since releasing our June report, we have continued to
cooperate with the investigations. Since mid-June we have
produced to the Oversight Committee more than 100,000 pages of
documents and made witnesses available for interviews with
congressional staff. Five of those interviews have already
occurred. Our deputy chief information officer has given three
briefings for congressional staff, including one for the
Oversight Committee, and, as noted, I have testified at four
hearings, including the one today.
This concludes my statement, and I would be happy to take
your questions.
[Prepared statement of Mr. Koskinen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Jordan. I thank the gentleman.
Now turn to the vice chair of the committee, the gentleman
from Florida, Mr. DeSantis.
Mr. DeSantis. Thank you, Mr. Chairman.
Good morning, Commissioner. Mr. Koskinen, are you aware
that you currently are under investigation by the Justice
Department regarding your role in determining when to produce
Lois Lerner's emails?
Mr. Koskinen. I am not aware of an investigation. I did see
the deputy attorney general's statement last week before this
committee that he would be interested in why we had not
provided him information in April, as opposed to June, but I
have not received any notice of an investigation.
Mr. DeSantis. Well, he told us that it was something that
the Justice Department would look into, and he said that it was
information that they did wish they had at the time that you
discovered it.
Let me ask you this. The committee interviewed IRS Deputy
Associate Chief Counsel Thomas Cain, and he testified that
senior IRS officials, including Catherine Duvall, the counselor
to the commissioner, realized that Lois Lerner's emails were
missing, that there was a hard drive crash on February 4th,
2014, and that by mid-February they realized that the emails
would not be recoverable off that hard drive. Yet, you
testified in front of this committee on March 26th, 2014, and
after being asked numerous times whether you would produce all
of Lois Lerner's emails consistent with the subpoena, you said
you would.
So if the senior IRS officials knew in mid-February that
the emails could not be recovered off the hard drive, why did
you tell this committee that you would produce them?
Mr. Koskinen. As I have testified before, when I testified
at previous hearings, when I testified in March, I said we
would provide all Lois Lerner emails, as I have also testified
since then. I did not mean to imply that if they didn't exist,
we would somehow magically provide them. We have provided you
all Lois Lerner emails we have.
With regard to when officials at the IRS knew the impact of
the hard drive crash, as I have testified several times in the
11 hours of hearing since June 13th, what I was advised and
knew in February was that when you took the emails that had
already been provided to this committee and other
investigators, and, instead of looking at them by search terms,
looked at them by date, it was clear that there were fewer
emails in the period up through 2011 and subsequently. And
there was also, I was told, there had been a problem with Ms.
Lerner's computer. It was not described to me in any greater
detail than that.
I was advised near the end of February that we were now
reviewing all of our production capacity to make sure nothing
had been done in the production capacity that would have
explained or would have caused the loss of any emails. That
process went forward, but at the same time I would remind
everybody we were focused primarily on the request from this
committee and the Finance Committee and the Ways and Means
Committee to complete the production of all documents we had
related to the determination process, and we did that and, in
mid-March, provided to the tax writing committees a letter
saying we had now produced all the documents we had regarding
the determination process.
Mr. DeSantis. Okay, I appreciate that. We even asked Mr.
Cole if someone responds to discovery requests and they say
they will produce all of them, they can't just do that,
represent that, and then know, well, gee, we are not going to
be able to produce all of them; and then once they figure that
out, they have to come immediately and tell the opposing party.
In this case it is a congressional investigation, so it is not
the same. And yet you guys sat on the information for several
months, and that caused this investigation, from our end, to be
obstructed.
Let me ask you this about these backup tapes. The IRS has
told Congress that backup tapes from 2011 no longer exist. Yet,
Mr. Cain testified in terms of the interview with this
committee that backup tapes may in fact exist. So can you now,
under oath, definitively state that the relevant backup tapes
that this committee has sought do not in fact exist?
Mr. Koskinen. As I understand from your press release, what
Mr. Cain said was the information we provided in June was
accurate to the best of everyone's knowledge at that time. What
he said since then is that the inspector general----
Mr. DeSantis. Well, wait. You said, too, with all due
respect, you said, on June 20th, 2014, to the Ways and Means
Committee, that we, meaning the IRS, confirmed that backup
tapes from 2011 no longer existed because they had been
recycled pursuant to the IRS's normal policy. So that was a
definitive statement on your part. Now we are getting
information from Mr. Cain, well, the IRS isn't exactly sure
that that is in fact true.
Mr. Koskinen. What Mr. Cain reported was information that
the inspector general has started to review tapes to see if
there is additional information on them. Mr. Cain said,
therefore, there may be backup tapes that were recycled, but
may be recoverable. We have no information, I have no
information what the inspector general is doing with those
tapes. In fact, the inspector general advised us that he was
reviewing those tapes and asked us not to do any further
investigation, not to have any further conversations. And I
understand he asked this committee as well not to make the
existence of their review of those tapes public. But at this
point I have no information as to whether there is anything
usable on those tapes.
Mr. DeSantis. We have been told obviously about Lerner's
hard drive failure, then Ways and Means has identified as many
as seven or eight additional individuals who are relevant to
the investigation whose hard drives also crashed during this
period. Now, based on testimony from Mr. Cain, it could be as
many as 18 or 19 different hard drives that have crashed that
would be relevant. So can you definitively state to this
committee the number of hard drives from relevant individuals
that crashed during the period in question?
Mr. Koskinen. I can tell you what I know at this time,
which is in the first six months of 2011, over 300 hard drive
crashes occurred, and there were over 5,000 reports of hardware
problems. In the first six months of this year, for example,
over 2,000 hard drives have crashed. Not every hard----
Mr. DeSantis. I understand. But that is your whole agency.
We are talking about people who happen to be relevant in a
relatively small universe of people, and the number of hard
drive crashes seem to be getting higher the more we
investigate.
Mr. Koskinen. Right. And in May I asked our people, once we
knew that there was an issue with Ms. Lerner's crash, I asked
for what the industry standards were for hard drive crashes,
was advised that 3 to 5 percent of hard drives crash. I asked
then for a review of the question you are asking, of
custodians, how many of those 83 had hard drive crashes.
We reported on June 16th to the Ways and Means Committee in
a staff interview that we knew there were probably at least six
or seven. The next morning, promptly on receipt of that
information, the Ways and Means Committee issued what turned
out to be an erroneous press release saying that all of those
emails had been lost, including the emails of Nicole Flax. It
turned out, in a little further investigation, that it appears
no emails for Ms. Flax were lost because the hard drive that
crashed was not her office computer.
Mr. DeSantis. But----
Mr. Koskinen. I am sorry, can I answer the question?
Mr. DeSantis. But my question was the number of hard drive
crashes. I understand you have mentioned the Ways and Means
press release in numerous statements that you have made before
Congress and I have read your other statements, but the
numbers. Where do we stand on the number of hard drive crashes?
Mr. Koskinen. Where we stand on the number is thereafter
the IG was requested by Congress to do an investigation and the
IG asked us not to do any further interviews or investigations,
so we have not pursued further what the additional implications
are, how many hard drive crashes of custodians or what the
implications are because the inspector general is investigating
that very issue. So I cannot give you a definitive answer at
this point as to either how many custodians had crashes or, if
they did, how many of them lost emails, because I would
emphasize not every crash leads to a loss of emails.
Mr. DeSantis. Well, Mr. Cain put the upper limit at 20, so
there seems to be a contradiction there.
My time is up. Mr. Chairman, thank you for indulging me,
and I yield back.
Mr. Jordan. I thank the gentleman.
The ranking member of the full committee is recognized.
Mr. Cummings. Commissioner, I want to thank you for
testifying before the committee today and for the third time in
a month. When you testified on June 23rd, 2014, and July 9th,
2014, you told us that the IG was investigating circumstances
of Ms. Lerner's computer crash. On June 11th, 2014, you wrote
to this committee reiterating that the IG is conducting an
investigation into the loss of Ms. Lerner's emails and that, as
you previously testified, you would honor the Inspector General
George's request to prioritize his investigation.
Has the inspector general expressed concern to you about
the release of non-public information about an ongoing IG
investigation?
Mr. Koskinen. When the inspector general first talked to me
and asked us to give a priority to his investigation and not to
do any further investigation or witness interviews ourselves,
he explained to me that they were concerned that they did not
want to muddy the waters, they wanted to have their ability to
talk to witnesses and then go back and talk to them again
without anyone having conversations in between time. So they
were very concerned that witnesses that they were interviewing
in the investigation be allowed to proceed with the inspector
general only.
Mr. Cummings. And do you know when that was that you had
that conversation with the inspector general?
Mr. Koskinen. The conversation was shortly after they were
asked by the Finance Committee and Congress to make the
investigation. I can't remember which the date was in mid-June.
Mr. Cummings. The IG has expressed similar concerns to our
committee. For example, on July 2nd, 2014, committee staff held
a conference call with the inspector general in which the IG
described the investigation into Lois Lerner's hard drive as
``very active, open, and ongoing,'' and asked our committee to
refrain from publicly disclosing the non-public information
regarding this ongoing investigation. Is the IG's investigation
into this matter still active and ongoing, to your knowledge?
Mr. Koskinen. To my knowledge, it is still active and
ongoing.
Mr. Jordan. Would the ranking member yield for just a
question?
Mr. Cummings. Yes.
Mr. Jordan. Were majority staff member present at that
briefing where the inspector general conveyed that information?
Mr. Cummings. Yes.
Mr. Jordan. Our staff says that they weren't. And if I
could, and you will get all your time plus some extra, if you
would like. The inspector general called our counsel yesterday,
he happened to be in my office with Mr. Meadows, and said that
they had talked to you but did not express any of the comments
you made in your opening statement or, frankly, any of the
comments you are making in your line of questioning now. So I
just wanted that on the record.
The gentleman is recognized.
Mr. Cummings. Well, why don't we have him here next week
under oath, since we are having all these IRS hearings, and see
what he has to say?
Mr. Jordan. I am open to that.
Mr. Cummings. Because we can go back and forth on this, and
I want to be very clear as to what he said. So when you are
talking about he say, she say, it is better that we have him
here and we will do that, if you so choose. But I would be
happy to.
The IG has expressed similar concerns, again, to this
committee. So it is your understanding that the IG's
investigation is still ongoing.
Mr. Koskinen. It is, as far as I know.
Mr. Cummings. So in spite of the inspector general's
request, on July 21st Chairman Issa issued a press release
stating that based on the interview of IRS Deputy Associate
General Counsel Thomas Cain, ``new developments'' have created
uncertainty regarding the existence of backup tapes.
Commissioner Koskinen, is it your practice to release non-
public information about an ongoing IG investigation?
Mr. Koskinen. No.
Mr. Cummings. And why not?
Mr. Koskinen. Because we made a commitment to the IG that
we would honor his priority, that we would not do anything that
would interfere with his investigation. He could talk to
anybody he wanted, they could look at any evidence they wanted,
and we would not have an ongoing discussion with any of the
witnesses he was talking to because we did not want to
interfere.
Mr. Cummings. Of course, Chairman Issa's press release
released statements from Mr. Cain and other witnesses that
undermine a partisan narrative. Mr. Cain told the committee
that he was aware of a ``potential issue'' regarding the backup
tapes, but he did not know any additional details. When asked
whether he had seen ``any evidence that any IRS employee
intentionally destroyed documents or emails to avoid their
disclosure,'' Mr. Cain said, ``I have not seen anything to that
effect.''
Have you seen any evidence of obstruction by IRS employees?
Mr. Koskinen. I have not.
Mr. Cummings. Yesterday the committee staff interviewed IRS
National Director for Legislative Affairs Leonard Oursler. He
told the committee staff that based on the information
available at the time, your June 13th, 2014 letter to the
Senate Finance Committee stating that backup tapes from 2011
had been recycled was accurate. Is that right?
Mr. Koskinen. I don't know what he said, but I understand
from the press release about Mr. Cain that he said the
information we had and provided on June 13th was accurate and
that is what everybody knew at the time.
Mr. Cummings. Now, Mr. Oursler also told us that earlier
this month he was made aware of an issue with a backup tape,
but that he did not know if the backup tape was from 2011 or
whether it was mislabeled. He said that even if the unrecycled
backup tapes exist from 2011, the IRS does not know whether
they contain emails from Ms. Lerner not previously produced to
the committee.
Sitting here today, do you know any additional details
regarding the backup tape issue that the IG is currently
looking at?
Mr. Koskinen. No. All I know is actually what Mr. Cain
said, that at this point nobody had any information as to what
was on those tapes or whether they were relevant.
Mr. Cummings. And until the IG determines the facts
regarding this backup tape issue, are you in a position to
correct your earlier statements?
Mr. Koskinen. No. My point has been that we are going to
honor the IG's investigation. I look forward, as everybody
does, to his completion, and we will see what his facts are and
what he determines happened three years ago and we will respond
accordingly.
Mr. Cummings. And you were asked earlier about computer
crashes and you said that you were not aware of the folks who
may have some relevance to this investigation concerning their
crashes. Would you normally have that kind of information?
Mr. Koskinen. Normally, if things had proceeded as they
might do, when I asked in May for the answers to this question,
that is, how many custodians had hard drive crashes in light of
the fact the industry says they crash regularly, I had asked
for a review of how many had crashed and what the implications
were. We had not completed that review when we provided our
June report, and basically we had that morning, the following
Monday, our IT people had been advised, I had not been advised,
that we knew there were six or seven custodians that had had
hard drive crashes. That information was actually provided to
the Ways and Means Committee. We have not been able to pursue
whether there are 6, 12, or 15 because, once the IG started, we
agreed that we would not pursue any of those issues until they
have completed their investigation.
Mr. Cummings. Now, just a last question. When the DOJ was
here the other day, and you were asked about this a bit
earlier, they talked about the fact that they had not gotten
information about the crash back in April. They got it in June,
I think, like everybody else.
Mr. Koskinen. Correct.
Mr. Cummings. Why is that?
Mr. Koskinen. When we, in April, determined that in fact
there had been a hard drive crash and some emails may have been
lost, our next step was to in fact investigate how many emails
did we actually have and could we find, and our plan and
proposal was that we would pull all of that information
together, including information about custodians, and make a
public presentation to the committees, including a description
of why it takes us so long in our archaic system to actually
respond to requests for documents.
We provided that information in the June 13 report, as I
testified earlier. We did that before the complete production
of Lois Lerner emails, which is when we originally intended,
because the Senate Finance Committee asked us for an update on
both the determination process documents as well as the other
searches we were doing. We gave them that. We noted that we had
found nothing beyond what we had noted in our March letter with
regard to the determination process, which was the subject of
the investigations when they started. But we had not completed,
at that time, the review of the custodians, nor had we
completed, until the end of June, the production to the tax
writers of all of Lois Lerner's emails and we are moving toward
producing the redacted version to this committee.
So our plan was when we pulled it all together, we would be
able to explain what our process was, the difficulties, what we
had learned about Lois Lerner's emails, what we had learned
about others, and what we had been able to determine. As I
noted, we were able to recover 24,000 Lois Lerner emails. We
thought all of that was important information for people to
have rather than simply saying, well, there is a problem with
her computer and we are now investigating how many emails there
were, which would have triggered hearings six weeks earlier,
but we would not have known nearly as much as we now know.
But we don't know everything we would like to know because
we have in fact stopped asking people about it while the IG is
doing his investigation, which we fully support. I have
confidence that the IG is independent of us, he was appointed
by a different administration. He has 15 people working on it,
according to the filings they made last Friday, and we have
told him and I have told him personally whatever he needs,
documents, whatever people he wants to find, he can have access
to and we will stay out of the way. So we have gone out of our
way not to talk to anyone who potentially he might want to
interview about what happened three years ago when the hard
drive crashed.
Mr. Cummings. Thank you, Mr. Chairman.
Mr. Jordan. Mr. Koskinen, real quick. Russell George told
you that he did not want this committee and Congress
interviewing the same witnesses he was interviewing?
Mr. Koskinen. No. He told me that he did not want us
interviewing any witnesses----
Mr. Jordan. Well, that is fine. That is not the same as
Congress. Why did you make it so difficult for us to get--why
did we have to subpoena Mr. Cain?
Mr. Koskinen. Because the IG, in our discussions, had said
he did not want us to do anything that would cause any of our
employees to be interviewed before he had a chance to interview
them.
Mr. Jordan. Just for the record, so the inspector general
did not tell you that it would hinder his investigation if
Congress interviewed the same people he was interviewing.
Mr. Koskinen. No, the inspector general told us if we
started providing names, let alone witnesses, it would
interfere with their investigation, and that is why we did not
testify----
Mr. Jordan. That is not my question.
Mr. Koskinen. I testified two weeks ago and said that we
were trying to cooperate with the IG, and as I recall Chairman
Issa said he understood that, which is why you all don't
release full transcripts, and that you would work----
Mr. Jordan. You have conveyed to this committee that the
inspector general told you he didn't want this committee
interviewing the witnesses he was interviewing. And he did not
say that to you.
Mr. Koskinen. No, what I----
Mr. Jordan. Okay, that's all I need.
Mr. Koskinen. Okay.
Mr. Jordan. That is all I need.
The gentleman from North Carolina is recognized, Mr.
Meadows.
Mr. Meadows. Thank you, Mr. Chairman.
Mr. Commissioner, I want to go back to one thing that the
gentleman from Maryland just asked and make sure I heard you
correctly. So if you know the testimony that you have given to
Congress is not correct, you are not going to correct that
until we get a final report from the IG? Did I hear that
correct? Because that is I thought what you said.
Mr. Koskinen. No. No, what I said was the testimony I have
given in the past was accurate as of the time with what I knew.
I testified as to what I knew. Right now the question is do I
know anything more about tapes, backup tapes, and the answer is
I don't know any more other than the IG is investigating
whether there are backup tapes and whether in fact they are
recoverable.
Mr. Meadows. So if you find, during the course of your
normal business, that what you have told Congress is incorrect,
you will come immediately to us and let us know, is that
correct?
Mr. Koskinen. I am happy to correct. In fact, the chairman,
with regard to----
Mr. Meadows. So within 24 hours of you finding that you
have given us incorrect testimony, you will come and let us
know?
Mr. Koskinen. Yes, sir. If I know it is incorrect, and, in
fact, if the committee has any questions, Chairman Issa was
very thoughtful and said, when Lois Lerner's lawyer talked
about what she did with records, he sent me a letter and said
here is what she said, here is what you said, take a look at it
and correct it, and I appreciated that.
Mr. Meadows. Well, we appreciate the fact that you will
come back to us, because I thought you were saying you were
going to wait until the IG gave you a report.
Mr. Koskinen. No, no. I said I wouldn't know until the IG
investigation is complete what the answer is in terms of how
many custodians had----
Mr. Meadows. But you won't know what they found until they
come back, but you will know what you--so are you saying that
you are not talking to Mr. Cain or anybody?
Mr. Koskinen. I am not----
Mr. Meadows. So you are not talking to anybody in the IRS
about any of this?
Mr. Koskinen. I am not talking to any potential witnesses
for the inspector general about what happened three years ago
in the investigation----
Mr. Meadows. All right. So when you read the reports about
Mr. Cain, did you talk to him and say, hey, this doesn't jive
with what I know?
Mr. Koskinen. No, because Mr. Cain is someone that I assume
the IG is going to be talking to in terms of what did he know
and when, and what do we know about----
Mr. Meadows. So did you talk to somebody who talked to him?
Mr. Koskinen. No. All I did was I read the release that
this committee put out.
Mr. Meadows. All right. So did you read the release of the
Ways and Means press release that talked about a scratched hard
drive?
Mr. Koskinen. I saw that this morning. It was put out last
night, I understand.
Mr. Meadows. Does that concern you, that it was scratched,
and not crashed? Would that concern you? It concerns me. Does
it concern you, if that is accurate?
Mr. Koskinen. I don't know--if it is accurate. As I say, I
haven't talked. I don't know the gentleman, I don't know what
he said. All I know is----
Mr. Meadows. But if it is accurate, would that concern you?
Mr. Koskinen. I understand----
Mr. Meadows. That it was scratched. Let me tell you why it
concerns me.
Mr. Koskinen. Okay, good.
Mr. Meadows. And this is an HP laptop. To get to the hard
drive, it is no easy task. You have multiple screws that have
to be taken to get to it. Then once you get to that, you
actually have a hard drive inside that has seven more screws
that have to be taken off to get to the hard drive in order for
it to be scratched. Would that concern you that if it were
indeed scratched, that there may be some other motive?
Mr. Koskinen. It would be a piece of information that I
assume----
Mr. Meadows. Would it concern you, yes or no?
Mr. Koskinen. I wouldn't know whether to be concerned or
not.
Mr. Meadows. Okay.
Mr. Koskinen. I don't know anything about whether--as I
understand from the press release----
Mr. Meadows. Well, it concerns me, and I am going to ask my
staff to go and see how long it would actually take to get to
that hard drive to make--if indeed it were scratched.
Mr. Koskinen. I know. But I assume there are a lot of ways
hard drives get scratched.
Mr. Meadows. I can assume that too.
Mr. Koskinen. I know nothing about that. I am sure the IG
is going to look into that and I am sure he has already talked
to that witness, or would like to have talked to him before----
Mr. Meadows. Well, I hope so. So let me go back to the
numbers. I think earlier you just said you had 2,000 hard drive
crashes this year?
Mr. Koskinen. Yes.
Mr. Meadows. Is that correct? All right, so let me ask you
about numbers. And you know that I am a numbers guy, because I
just did the numbers real quickly. If you look at your entire
body of some 84,000 to 90,000 IRS employees, depending on which
year, but let's take that, that is a 2.2 percent failure rate.
Mr. Koskinen. Correct.
Mr. Meadows. All right. In the people that truly are
involved in this, in that sphere of 80 people, if indeed we had
16 to 18 hard drive crashes, why would the hard drive crash of
that group of people be 10 times greater than what you have
throughout the agency? Can you explain? What would be the
probability of that happening?
Mr. Koskinen. First of all, I have no information as to
know whether that is the actual number or not.
Mr. Meadows. All right. Well, let's take the number that
you do know, seven, that you testified.
Mr. Koskinen. Right.
Mr. Meadows. All right? That still would be four times
greater than your overall average. Can you explain that?
Mr. Koskinen. I don't know what the details were. I do
know, when I asked for the industry statistics, once you get
beyond the warranty period, the failure rate goes to 10 to 15
percent.
Mr. Meadows. But Lois Lerner's laptop was a new laptop, it
was not an old one. And, actually, the probability of her hard
drive failing at that time was at the lowest, according to
industry standards, was at the lowest possible time. Does that
surprise you?
Mr. Koskinen. No.
Mr. Meadows. All right. But it does surprise you that her
hard drive failed?
Mr. Koskinen. No. I tell you, my understanding about it is,
from the industry, it is 2 to 5 percent, depending on the
computers, are regularly----
Mr. Meadows. So out of this circle, if you have 10 times
that amount, would you say that is an anomaly?
Mr. Koskinen. If you had 10 times the amount, that would be
an anomaly. I don't know whether we----
Mr. Meadows. Well, I am giving you the numbers, so that
would be an anomaly.
Mr. Koskinen. If you stipulate you have 10 times as many as
the industry average, that would be an anomaly.
Mr. Meadows. All right, thank you.
I yield back.
Mr. Jordan. The gentleman from Pennsylvania, Mr.
Cartwright.
Mr. Cartwright. Thank you, Mr. Chairman.
Mr. Koskinen, the very first question you got in your
testimony today was something to the effect Mr. DeSantis, my
colleague, put the question to you whether you were aware you
were under investigation by the Department of Justice. You
know, this is a very public hearing. This is a very, very
public. We invite members of the press to come to these
hearings, and these hearings are televised, and I think it is
important that we don't lead the public down the wrong path on
what the truth is here.
Mr. Koskinen, have you received a target letter from the
Department of Justice to say that you are under investigation?
Mr. Koskinen. No.
Mr. Cartwright. Has anyone, anyone told you verbally that
you are under investigation by the Department of Justice?
Mr. Koskinen. No.
Mr. Cartwright. Has anyone, anyone said to you verbally
anything that would hint to you that you are under
investigation by the Department of Justice?
Mr. Koskinen. No.
Mr. Cartwright. Has anyone, anyone said anything to you to
hint to you that you might be the target of a Justice
Department investigation sometime in the future?
Mr. Koskinen. No.
Mr. Cartwright. Thank you for that.
Another thing that you have been trying to get out, and you
are continually interrupted in your answers, were comments
about industry statistics about computer failures. I want to
give you a chance now to make full sentences.
Mr. Koskinen. In May, when I was advised we had this
problem and we were proceeding to find how many Lois Lerner
emails we could have, I asked, A, what are the industry
standards for hard drive crashes, and I was told it is
somewhere between 2 to 3, sometimes 5 percent within the
warranty period. If you have older computers, which a lot of
our employees have, it goes as high as 10 to 15 percent. I then
asked that we do a review of all of the 82 other custodians to
determine what, if any, of them had hard drive crashes and, if
they had them, whether it caused any loss of emails. We have,
as I said, over 2,000 crashes already this year, but all of
those didn't result in loss of emails. In fact, you can lose
emails without your hard drive crashing.
So at the time we were starting down that road to complete
our review of exactly what were the situations with regard to
the production of documents. As I say, that has stopped from
coming to closure because the IG himself is actually looking at
all of that.
Mr. Cartwright. Thank you.
Now, Mr. Koskinen, on June 20th you testified before the
Ways and Means Committee that even after discovering Ms.
Lerner's 2011 hard drive crash you said, ``The IRS took
multiple steps over the past months to assess the situation and
produce as much email as possible for which Ms. Lerner was an
author or recipient. During this time and into May we were also
identifying and reviewing Lerner emails to and from 82 other
custodians. By mid-May, as a result of these efforts, the IRS
had identified the 24,000 Lerner emails between January 1 and
April 2011.''
Commissioner Koskinen, why did the IRS take these steps to
recover Ms. Lerner's emails?
Mr. Koskinen. It was an attempt on our part to produce as
many Lois Lerner emails, either from her accounts or other
accounts, as possible in response to the request of this
committee and the Ways and Means Committee to produce all of
Lois Lerner's emails. So we were trying to make sure that there
were no emails anywhere in the system to or from Lois Lerner
that we had not located and had not provided.
Mr. Cartwright. All right. So despite the hard drive crash,
the IRS has still produced 24,000-plus additional emails from
Ms. Lerner, is that right?
Mr. Koskinen. That is correct.
Mr. Cartwright. All right. Now, witnesses have told this
committee that in February of 2014 IRS employees discovered
that there were fewer of Lois Lerner's emails from January 2009
to April 2011 than there were for other periods, and upon this
discovery IRS officials immediately took steps to determine the
reasons for this discrepancy and whether they could locate
additional emails from Ms. Lerner during that time period.
The question there is why didn't you inform us about the
discrepancy in Ms. Lerner's emails when you testified before
this committee in March?
Mr. Koskinen. Because in March I did not know and we didn't
know whether we had lost emails or not. One of the first things
that was investigated in February and into March was to review
all of our production processes to see if anything in the way
we had reached into the system to produce the emails, put them
into our search method had caused us to in fact misplace those
emails, because it wasn't clear initially as to whether,
whatever her problems with her computer were, had resulted in
any loss of emails.
So the first process while we were producing all the other
documents regarding the determination process was to make sure
that we hadn't ourselves done anything in the process to cause
emails in that period to be lost. And we determined ultimately
into April and May that nothing that we had done in the search
process had caused the emails to be not producible.
Mr. Cartwright. All right. I thank you, Mr. Commissioner.
I yield back.
Mr. Jordan. I thank the gentleman.
Now recognize the gentleman from Pennsylvania, Mr. Meehan.
Mr. Meehan. I thank the gentleman.
Commissioner, thank you for taking the time to come up and
be with us again today. I know you came here before and I know
we are going through a lot of detailed testimony, but the
baseline is accurate, that to the best of your knowledge, when
you testified before that the emails were not available from
Ms. Lerner during the period that they had been, to the best of
your knowledge, that they had been destroyed because they had
been recycled on the tape. And I am not questioning that at
this particular moment.
But I think what has people interested is Mr. Cain came up
here not so long ago and he is a pretty sophisticated guy. His
job is to produce documents for investigations and litigation
and other kinds of thing and, therefore, he not only has a very
detailed understanding of the process, but a deep appreciation
of the implications to do or failure to do, including exposure
for failure to do things. He also has a very sophisticated
understanding of how to answer questions with respect to this,
appreciating that when he is under oath, anything that he says
would put him in a particular position in which, if it is known
to be wrong, it could expose him to further scrutiny. Let's
just put it that way.
So I am curious as to why he would come and testify that, I
don't know if there is a, and this is his words, I don't know
if there is a backup tape with information on there or there
isn't; that he was now unsure about whether there were some
backup tapes from the period of time that may not have been
erased. I am using his direct testimony. There is an issue as
to whether or not there is a--that all of the backup recovery
tapes were destroyed on the six-month retention schedule. I
don't know whether they are or they aren't, but it is an issue
that is being looked at.
What do we know about this issue and why would he have made
that statement?
Mr. Koskinen. What we know about that, or what I know about
that issue is I was advised by the inspector general that they
had taken tapes they had found, I don't know how they found
them, and they were reviewing those tapes to see if they had
been totally recycled or whether they were not recycled and
usable. I was advised about that because the inspector general,
again, wanted us not to do any--because he knew, however they
had found them, somebody knew that the IG had them. He didn't
want us to in fact do anything to investigate further what
those tapes were, where they were found, who found them, what
they did with them.
So our guy said that was fine, and at this point, I haven't
talked to Mr. Cain about this, but according to his testimony,
what he has said is what he knows is, because, as you say, he
has been involved in it, is that the inspector general is
looking at some tapes, I don't know how many and which ones, to
see whether in fact any of them turned out not to be recyclable
or any of them have information that is recoverable. But at
this point, as Mr. Cain's testimony states, it is not clear
whether they do or don't.
Mr. Meehan. Or whether in fact substantively there is
information, when he gave you that identification that they
are, as you said, it was believed that they had all been
produced, but now maybe some of them have been found. Weren't
you concerned about what procedure they used to potentially
come up with new tapes?
Mr. Koskinen. When the inspector general advised me of
that, I was interested as to why they were looking at tapes
that we had been advised had all been recycled, but I didn't
cross-examine the inspector general about it, I agreed with him
that they would do the investigation, we wouldn't do anything
to interfere with that; I wouldn't and none of our people would
talk to anybody about it. So I can't tell you how they found
them, what they are, and, as Mr. Cain said, whether there is
anything on them or not. At this point, we are supporting the
inspector general.
Mr. Meehan. Do you have any idea about what the issue is
that he referred to? Because that was the very specific thing.
There is an issue as to whether all of the backup tapes had
actually been recycled.
Mr. Koskinen. Yes. And the issue, as I just said, is that
he obviously is aware of what the inspector general advised me,
which is the inspector general has taken some tapes, I don't
know which ones, and is reviewing those to see if they have
been recycled, if there is information on them that can be
found or used. That is all I know and I assume that is all he
knows. But beyond that I haven't talked to anybody about this,
I haven't asked anybody about it because, again, our position
with the inspector general is he is doing the investigation.
Mr. Meehan. Just one follow-up question. But why are these
not available from a third party vendor who, in the event of a
cyber attack, would protect us against the destruction of all
records which would put our Government in a remarkably perilous
situation, so we take steps to ensure that essential documents
are preserved by having them in third-party data storage
situations? Why were the documents that are relevant to this
period, particularly the documents relevant to the 2009, 2011
area, why were they not backed up and available today?
Mr. Koskinen. That is a very good and important question.
As I have testified earlier, there has been no loss of any
information and no actions taken since this investigation
started with regard to any information and production of
documents. We have frozen and saved and backed up all emails
from six months before the start of the investigation forward.
What we are talking about is what happened three years ago,
and three years ago the process was to use backup tapes for
basically disaster recovery purposes and recycle them every six
months. That was the protocol and the process that had gone on
for some years and, in fact, it used to be they only kept them
for one month, and it was increased to six months. But that was
the process three years ago. Whatever emails were lost three
years ago were not lost. They were lost then. Nothing has been
lost, as far as I know, since this investigation started. We
have gone out of our way to protect all of the data and all of
the documents.
Mr. Meehan. Thank you. I have other questions, but my time
has expired. Thank you.
You are an attorney, and you talked about these documents
having been missed. But at the period of June 29th, 2011, Lois
Lerner is informed that some of the activities that she has
been associated with may have been involved with discriminatory
practices. Now, you are a Yale lawyer, and you understand the
situation in which there is a potential for litigation and the
requirements that when there is a potential for litigation,
that there is a requirement consistent with the record-keeping
responsibilities to preserve the documents that may be relevant
to that. All of this occurred before the period of time that we
are now looking some years down the road.
So if you were informed that somebody was holding your
agency, or you in particular, as having potentially engaged in
discriminatory practices, would you preserve the documents from
that era?
Mr. Koskinen. We have, any time there is an investigation,
we have litigation document hold policies and procedures. As I
say, we have done our best to protect every document for the
last year and a half, almost two years now, and anytime anyone
raises a serious question about the production of evidence, we
go out of our way to protect it. I don't know what the
circumstances were three years ago.
Mr. Meehan. Well, this was knowledge that there were
discriminatory practices and she was informed that she was
central to the potential that there were complaints about
discriminatory practices on the part of the IRS. Would that be
the kind of a document that you would preserve in anticipation
of potential litigation?
Mr. Koskinen. Again, our protocol is if there is going to
be an investigation, if there is a serious issue raised, we
protect and preserve documents. As I have testified, one of the
things I had asked about early in this investigation is we need
to have an email system of record so that it would be easier to
protect official records, preserve them, and it would be much
easier to search them.
As I have said, we should not have to spend $18 million
answering straightforward questions for documents, but that is
the system we have. The constraints on the budget have been
significant over three or four years. Going forward, we are
looking again at is there a way to get out of the late 20th
century and into just the early part of the 21st century,
because we should have an email system that is, as I say, much
more searchable and a system that is a system of record.
Mr. Meehan. Thank you, Mr. Chairman.
Mr. Jordan. Well, I thank the gentleman. I think his
question cuts right to the chase. She was on notice that there
was a problem and suddenly her computer crashes. But it is
worse than that. The IRS has identified 82 custodians of
information that are relevant to the investigation, and now we
know from Mr. Cain's testimony last week up to 20 may have had
computer hard drive crashes. So this is way beyond the 3 to 5
percent that the commissioner keeps citing; this is approaching
25 percent of the relevant people that they have identified
have had computer problems and may not be able to get us the
documents. I appreciate the gentleman's questioning.
We recognize the gentlelady from Illinois for her time.
Ms. Kelly. Thank you, Mr. Chair.
Good morning, Commissioner.
Mr. Koskinen. Good morning.
Ms. Kelly. On July 7th, 2014, you testified that since you
were confirmed in December 2013, the IRS has ``probably
provided 300,000 to 400,000 documents to Congress.'' To date,
how many pages of documents has the IRS produced to Congress in
furtherance of the ongoing investigation about the IRS's review
of tax-exempt applications?
Mr. Koskinen. As I testified earlier, we have produced
960,000 pages to the tax writing committees; redacted documents
we have produced 700,000 pages to this committee.
Ms. Kelly. I would imagine amassing a document production
of this magnitude takes an extraordinary amount of time and
money, as you talked about the money.
Mr. Koskinen. Yes. It has been a significant distraction.
We spent, as I noted, at last count, $18 million responding. We
continue to produce documents. We hope shortly to be able to
complete the production of redacted Lois Lerner emails to this
committee. But in an area of declining resources, most of it is
done in our Office of Chief Counsel. There are 500 fewer people
in the chief counsel's office now than there were four years
ago, so it has been a significant strain on our chief counsel's
office.
Ms. Kelly. And how many employees have been involved in
this process and how many hours have been logged in to comply
with all of these requests, to comply with Congress?
Mr. Koskinen. We have had over 250 employees at various
times involved, we have had over 100,000 or 120,000 hours of
efforts devoted to it, and we continue to work on the
production of those documents.
Ms. Kelly. I understand that current agency staff, many of
whom have other job responsibilities, have been tasked with
complying with congressional document requests. Is that
correct?
Mr. Koskinen. That is correct. Our IT department has been
asked for information. We have witnesses that are being
interviewed as we go. As I have noted, the entire issue about
the (c)(4) investigation and the (c)(4) operations involved
about 800 employees in the entire exempt organization; only a
portion of them work on this. That means we have 89,000 other
hardworking, dedicated IRS employees working on matters of
importance to the Government and to taxpayers.
Ms. Kelly. The individuals working on this, they have had
to put their, I would imagine, current workload aside.
Mr. Koskinen. Yes. And particularly lawyers is a problem
for us because they have obligations to represent the agency in
tax cases. They have an obligation to continue to work with
Treasury on the development of rules and regulations and
procedures, so it is a constraint.
Ms. Kelly. Thomas Cain, the IRS Deputy Associate Chief
Counsel for Administration and Procurement, was interviewed by
committee staff on July 17, 2014. He said that the IRS
currently exists ``with an increased workload and a reduced
staff from where we were several years ago. We have taken these
people from their day jobs. They have no replacements for them
because there are no replacements, so we have pulled together
people from all parts of the organization to contribute to the
project, again, on a full-time basis. But there is no one to
backfill the work that continues to exist and pile up, and that
is particularly critical when you are dealing with people in
the field that ordinarily are trying cases that have deadlines.
So that type of staffing commitment and resource commitment has
been a drain on the entire Office of the Chief Counsel.''
Commissioner, would you agree with Mr. Cain's assessment of
investigations impact on your agency's workload?
Mr. Koskinen. I would.
Ms. Kelly. Mr. Cain was also asked about the impact that
Chairman Issa's subpoena for his testimony had on the morale of
his team. He said that his employees have been working
tirelessly to help the IRS comply with Congress who are
``visibly impacted in a very negative way.'' Commissioner, I
would like to give you an opportunity to address any concerns
you may have about the impact the various congressional
investigations are having on your agency's morale and ability
to perform its core functions.
Mr. Koskinen. Well, as Mr. Cain apparently noted, we have a
large number of people who have day jobs who have been in part
or totally devoted to this who have been trying to be
responsive. When they then are subject to depositions and
recorded interviews, it sends, these are all career people, a
deleterious effect on morale because they thought they were
actually doing what they were asked to do, they were trying to
provide information. Most of them have never had a deposition
of theirs taken; they haven't spent six, eight hours under
cross-examination. So for everybody else who is working on this
project, they are now looking over their shoulder, worrying
about, well, am I going to get called up next; and all they
have been doing is producing documents.
Ms. Kelly. Okay, thank you. Thank you for your time.
Mr. Cummings. Would the gentlelady yield?
Ms. Kelly. Yes, I will.
Mr. Cummings. I was sitting here listening to some
questions that the chairman asked you, and I got convinced that
you are damned if you do and you are damned if you don't, and
this is what I am talking about. The IG, appointed by a
Republican, asked you not to engage in, I don't want to take
words out of your mouth, but what did the IG ask you not to do?
Mr. Koskinen. Not to do any further investigations or
interviews or discussions with employees about anything having
to do with the hard drive crash, any other hard drive crashes
while they did their investigation.
Mr. Cummings. And the chairman went on to say that he
didn't tell you that this committee was under the same
restrictions. That is accurate, right? He didn't tell you, the
IG didn't say to you, what I am telling you about your
restrictions does not have anything to do with the committee.
You understand my question?
Mr. Koskinen. Yes.
Mr. Cummings. I am going back to what the chairman said
because I am trying to figure out how do you obey the law and
obey the wishes of the IG.
Mr. Koskinen. No, the question was, and I answered it, was
that the IG didn't tell you that he was telling the committee,
giving any instruction to the committee. The only conversation
I know he had with the committee was when he told me about the
existence of the backup tapes and asked us not to do any
further questioning about that. He said he had provided that
information to the investigative committees and had asked them
to treat it confidentially while his investigation was going
on.
Mr. Cummings. So if something came up now where we
contacted you and said we want to meet with X person in the IRS
because we think, that is, this committee thinks that that
person has something relevant to our investigation, is there
any way you would treat that differently now than you would
have if you had never had the conversation with the IG? You
follow what I am saying?
Mr. Koskinen. No. Actually, we have tried to be responsive
as best we can to the wide range of requests we have. We have
six investigations and a number of requests coming in, and
requests for interviews. While we have tried with more success
in some areas than others to try to figure out what the
priorities are so that we can do it in the right order, which
is at my hearing in March we agreed the next priority after we
completed the determination issue was to provide all the Lois
Lerner emails we had, and we had a long discussion back and
forth and committed that would be our next priority, and we are
getting close to completing that.
Mr. Cummings. I guess what I am getting at is that I assume
you wouldn't have a discussion, based upon what the IG told
you, you wouldn't have a discussion with an employee of the IRS
now because the IG told you not to.
Mr. Koskinen. That is correct. So when we have had
witnesses coming to testify and give depositions here and Ways
and Means, we have not talked to them beforehand, they have
simply come up. Again, we don't feel that we want to do
anything that would interfere with the IG's investigation or
this committee's investigation, so people have come up and, to
the extent they have been interviewed, they have done that on
their own, without any conversations with me.
Mr. Cummings. Now, the gentlelady just asked you about
morale at the IRS. The IRS is a kind of tough position because
nobody seems to like the IRS.
Mr. Koskinen. That is right.
Mr. Cummings. On the other hand, if you don't get revenue,
you have a problem. We have a problem as a Nation.
Mr. Koskinen. Right.
Mr. Cummings. But when you think about the reduction in
employees, and based upon what Mr. Cain said that the
gentlelady just read, it seems like something has to give, and
I am just curious as to what is giving. You follow what I am
saying? In other words, if you have, based upon what Mr. Cain
said, you are pulling people from different areas to do certain
things, you said that some of them have quit responsibilities
and deadlines. The point is something has got to give,
something.
Mr. Koskinen. Right.
Mr. Cummings. Can you tell us what we are losing?
Mr. Koskinen. Well, what has to give is obviously we have
10,000 fewer employees than we had four years ago; we have 500
fewer in the Office of Chief Counsel. So what happens is people
either have to spend a lot longer working. At some point you
run out of things you can do. We have done our best and taken
people from around the agency, particularly around Chief
Counsel, and put them on the production effort. To do that
means that the work that they otherwise would have done doesn't
get done because we have no capacity to add more people, to
hire more people. We are only replacing one in every five
people who leave the agency, so we continue to shrink rather
than expand.
So we haven't complained about it, we basically simply
produce documents as fast as we can. We have explained that our
biggest problem and obstacle is that we have this sort of
arcane, archaic system where you have to search each hard drive
to pull out data to actually get it into a search machine,
which we would like to change going forward. But it does mean
that, particularly in the Office of Chief Counsel, you put them
under more stress, it makes it much more difficult with the
other ongoing day jobs they have.
My concern, more importantly, though, is over the course of
certainly the three and a half years I am left, we will have
other issues, and as we ask people to do productions and just
respond to congressional inquiries, if they become subjects of
depositions and cross-examinations, it is going to be harder to
get people to decide they want to leave their day job and help
us respond to Congress. So that is our only broader concern.
But, again, we think it is appropriate and we are happy to
cooperate with the committee as best we can.
Mr. Cummings. Thank you.
Mr. Jordan. I would just make one point. The witness
testified that they don't talk about this issue and prepare and
discuss and prep for it. That is just not accurate. We
interviewed Mr. Oursler yesterday, and he told us specifically
that when Steve Manning came and briefed the Ways and Means
Committee, there was prep sessions done for Mr. Manning to get
ready to come in front of Congress. So to portray it as you are
not talking about this issue as you bring people before
Congress is just not accurate.
And regarding the morale issue, if the IRS would have been
willing to let Tom Cain come and be interviewed, we wouldn't
have had to issue the subpoena. One thing that impacts morale
is when you get a subpoena. I get that. But that is your cause.
You caused the subpoena, Mr. Koskinen, we didn't. We tried for
weeks to get Mr. Cain to come and be interviewed, and you guys
said, no, can't do it, so we had to issue the subpoena; and we
got all kinds of information that contradicts testimony you
have given in front of Congress.
So that is the issue. If we are talking about morale, you
could have helped morale of the very employees you represent if
you had let him be interviewed by us without a subpoena.
Mr. Koskinen. We actually agree. Subpoenas sound different,
but when they come for an interview, it is still under oath and
it is still a transcribed interview and it looks just like a
deposition, and that is, for people who have never done it
before, of concern; they get nervous.
Mr. Jordan. And my point is by you making it so we had to
subpoena, that only adds to the anxiety of the employee. So
that is your creation on your employees, not ours.
Mr. Koskinen. And that is why we were delighted to work out
with you a schedule where there won't be subpoenas, but people
will still come----
Mr. Jordan. We appreciate that. But it took a subpoena to
get that rolling.
The gentleman from South Carolina is--oh, I am sorry.
Mr. Cummings. I just asked you for a--because we have a
tendency to ask questions and not let him answer. I want to
understand this, and I think it is for the benefit of the
entire committee. Why did Mr. Cain have to be subpoenaed? Why
is that?
Mr. Jordan. Because we tried----
Mr. Cummings. No, no, no, I didn't ask you. I asked him.
Mr. Jordan. Oh. I didn't know who you were asking.
Mr. Cummings. No, I am asking him.
Mr. Jordan. That is fine. He can answer.
Mr. Cummings. Thank you.
Mr. Koskinen. We were in the process of discussing
production of witnesses. We, as I say, were concerned about
interfering with the IG's investigation, and while we were
doing that, as the chairman said, then Mr. Cain got a subpoena,
which did, A, allow him to appear without any further ado and
did allow us to basically have a conversation about setting up
a production schedule of witnesses. So the chairman is right,
we were in the process of trying to do this, but I would say we
take some responsibility for the fact that you had to do a
subpoena. I would agree with that.
Mr. Jordan. You take all of it. We asked. Mr. Cain told
during his deposition, because he had to be subpoenaed, he told
committee staff that he wasn't even notified by you, Mr.
Koskinen, or Ms. Duvall or whoever, that we had requested an
interview. He didn't even know that. All he knew was he got the
subpoena. So you didn't even tell him that we were trying to
interview him. That is what he told us in the deposition last
Thursday. So it is all on you. You are the reason we had to
subpoena the individual to get his testimony.
Mr. Cummings. But he eventually came voluntarily, is that
right?
Mr. Jordan. Yes. After he hired private counsel after we
went his subpoena.
Mr. Cummings. All right.
Mr. Jordan. The gentleman from South Carolina is
recognized.
Mr. Gowdy. Thank you, Mr. Chairman.
It is good to see you again, commissioner. I want to read a
quote to you from June of 2014. I want you to tell me if you
know who said it, okay? ``We confirmed the backup tapes from
2011 no longer existed because they had been recycled pursuant
to the IRS normal policy.'' Do you know who said that?
Mr. Koskinen. Sounds like me.
Mr. Gowdy. It is you. Can you tell us who ``we'' is in that
quote?
Mr. Koskinen. The ``we'' is the IRS. I tend to take
responsibility for the agency and talk about it. I was advised,
when the draft report was submitted to me, that people had
talked to everyone in the agency to ensure that in the course
of our several months of looking for backup tapes----
Mr. Gowdy. So ``we'' is the royal we, just speaking on
behalf of the entire IRS. How about the word ``confirmed?''
What does the word ``confirmed'' mean to you, that you
``confirmed'' the backup tapes no longer exist?
Mr. Koskinen. Confirmed. When I read that, I asked the
question, was told----
Mr. Gowdy. By whom?
Mr. Koskinen. I don't remember who; we had four or five
people who were working on the report. And was told, and I
gather Mr. Cain said in his testimony, that that was accurate
as of June 13th.
Mr. Gowdy. What does the word ``confirmed'' mean to you?
Mr. Koskinen. Confirmed means that somebody went back and
looked and made sure that in fact any backup tapes that had
existed had been recycled.
Mr. Gowdy. Are you still confirmed?
Mr. Koskinen. At this point, I have no basis for not being
confirmed. I do understand the IG advised me that they were
looking at tapes. I have not been advised as to whether any of
those tapes----
Mr. Gowdy. Well, confirmed is a pretty strong word,
commissioner. Are you still confirmed that no backup tapes
exist?
Mr. Koskinen. Well, at this point, I know the IG is looking
and he hasn't found anything, so as far as I know.
Mr. Gowdy. I am glad you mentioned the IG. And I find this
confounding, I find it vexing, that once the IG is involved,
nobody else can do anything. That is not supported by the law.
Can there be a criminal investigation while there is an IG
investigation?
Mr. Koskinen. There can be all sorts of investigations.
What I was talking about was the IG.
Mr. Gowdy. Right. And there could be a congressional
investigation while there is an ongoing IG investigation also,
correct?
Mr. Koskinen. Of course.
Mr. Gowdy. And there can be an IRS investigation. If there
were sexual harassment or discrimination in the workplace, are
you telling this committee that you would wait until the IG
investigated it before you would stop some insidious practice?
Mr. Koskinen. We would take whatever action was necessary.
Mr. Gowdy. Precisely. You would not wait until an IG
concluded his or her investigation.
Mr. Koskinen. Can I answer that question?
Mr. Gowdy. Sure.
Mr. Koskinen. Our policy, and it has been my understanding
when I chaired the Council of Inspectors General across the
Government, that if the IG starts an investigation, the agency
will not themselves run a competing investigation to try to get
there first. Basically, the IG advises us what the
investigations are. When they advise us about those
investigations, we allow them to proceed. If there are----
Mr. Gowdy. Let me give you possibly an alternative view,
commissioner, which is that people cite ongoing IG
investigations when it suits them to not cooperate, and they
don't cite ongoing IG investigations when it doesn't suit them.
Mr. Koskinen. That is not my policy.
Mr. Gowdy. Well, you can certainly understand how a cynic
might view it that way, right? Because there is nothing about
an ongoing IG investigation that would keep you from doing your
job. Just like there is nothing about an ongoing IG
investigation that keeps the Department of Justice from a
criminal investigation or a committee of Congress from a
congressional investigation. There is nothing talismanic about
an IG investigation.
Mr. Koskinen. In this particular case, as a general matter,
my policy has always been if the IG is doing an investigation
wherever I am, we won't interfere with that investigation; we
want it to be independent.
Mr. Gowdy. Words have consequences, Mr. Koskinen. Nobody is
asking you to interfere. You can have a dual investigation
without interfering, can't you?
Mr. Koskinen. I think it is very difficult.
Mr. Gowdy. So you are saying that if there is an allegation
of sexual harassment or racial discrimination within the IRS,
you would not look into that until the IG had completed his or
her investigation? Is that what you are telling me?
Mr. Koskinen. I am not telling you that. I am telling you,
as a general matter, that is not what the IG would be
investigating. As a general matter, those claims would come to
personnel; they would be immediately investigated by our legal
department.
Mr. Gowdy. Well, the IG doesn't have criminal jurisdiction;
the IG doesn't have jurisdiction over legislative policy; the
IG doesn't have jurisdiction over appropriations. All three of
those are very important areas. So those should be ongoing even
while an IG is doing his or her investigation, correct?
Mr. Koskinen. Actually, the IG does do criminal
investigations.
Mr. Gowdy. No, sir, they refer to an entity that actually
has the power to indict, which does not include the IG.
Mr. Koskinen. They actually, my understanding, mark our
criminal investigations----
Mr. Gowdy. It might be the same people who gave you the
understanding that you were confirmed that the tapes don't
exist, so my advice is to be very careful who you take your
advice from. And I am going to say this in conclusion, Mr.
Koskinen. I really could not believe the colloquy that you had
with one of our colleagues about the morale at the IRS. It
takes a lot to stun me, but that stunned me. Here's a piece of
advice I would give. If the folks like Lois Lerner and others
would have spent more time working on the backlog, more time
working on their caseload, and less time targeting groups and
less time trying to overturn Supreme Court decisions they
didn't agree with, maybe morale would be better and maybe their
backlogs would be lessened.
Mr. Issa. Would the gentleman yield?
Mr. Gowdy. I would be thrilled to.
Mr. Issa. Commissioner, I just want to maybe summarize what
the gentleman was asking you with a question. Do you have full
faith and trust that your IG is doing a thorough investigation
at the same level as would be done if you were doing it as the
commissioner?
Mr. Koskinen. I do. I said earlier I have a lot of
confidence in the inspector general. They have far more
capacity in some of these areas; they have 15 people working on
this. I am very comfortable and confident that they are doing a
thorough job, and I have told them we will do whatever we can
to----
Mr. Issa. So at least as to your own investigation, you
consider the IG's investigation to be your investigation.
Mr. Koskinen. I do not. We do not control the IG; he is
very independent. He is doing an independent investigation of
all of this. I am satisfied that when he gets done we will have
an independent review and investigation of what went on.
Mr. Issa. Thank you.
Mr. Jordan. The gentleman from Virginia is----
Mr. Meadows. Will the gentleman from Virginia yield for
just one follow-up question?
Mr. Jordan. You will get time added if the gentleman--it is
his call, but if you yield, I will give you some additional
time. I have been very generous.
Mr. Connolly. I thank the chair. Of course I would be glad
to yield.
Mr. Meadows. I thank the gentleman from Virginia.
I want to follow up on the gentleman from South Carolina's
point, because what you are just saying is that your belief is
that it is wrong for you to do an investigation at the same
time as an IG is doing an investigation, is that correct?
Mr. Koskinen. As a general matter, if we were doing an
investigation, it would interfere with his investigation.
Mr. Meadows. So what you are saying is that your
predecessors who did exactly that in 2012 were wrong, because
when the IG started it, they did their own--under sworn
testimony, they did their own investigations. So what they did
was not right.
Mr. Koskinen. Everybody has their own policies. I don't
know what they did or didn't do.
Mr. Meadows. But in your opinion that would not be right.
Mr. Koskinen. If the IG----
Mr. Meadows. I just want to show the hypocritical point
there that it is not consistent with what IRS has already done.
Mr. Koskinen. My point only was it is consistent with how I
have behaved in the past and how I will behave in the future.
My view is that the IG is an important independent source of
investigations. Whenever the IG is doing an investigation, I
think it is important to cooperate with it and not interfere
with it.
Mr. Meadows. All right, I thank the gentleman from Virginia
for yielding.
Mr. Jordan. Great question.
Mr. Meadows. I ask unanimous consent that all his time be--
--
Mr. Jordan. He has it.
Mr. Connolly. I thank my friend from North Carolina and I
thank the chairman.
Welcome back, Mr. Koskinen.
Mr. Koskinen. Always a pleasure to be here.
Mr. Connolly. I can tell. It must be a thrill and the
highlight of your week. And I guess we are going to do this as
long as we are in session.
By the way, just sort of a sidebar, I wish my friend from
South Carolina was still here, because his concern for morale
at the IRS is really touching. And, gosh, if we were really
that serious about it, maybe we wouldn't have slashed eight
hundred and something million dollars from your budget in the
last four years and recommended another $350 million this year.
But that is a different matter.
Mr. Koskinen. Actually, you actually recommended another
billion on top of the $350 million. So at this point we are a
billion 350 under water.
Mr. Connolly. A billion 350. But the morale, we will keep
on flogging people until the morale is improved. That seems to
be the philosophy of some of my friends on the other side of
the aisle.
At any rate, I am glad we are talking about the IG, because
I am amazed that J. Russell George, the TIGTA, would have
thought it wise or prudent to completely omit from the May 14th
final audit report any mention of a critical, and I think
astonishing, analysis that was conducted by TIGTA's own head of
investigations the weeks leading up to the release of the May
14th report.
Mr. Chairman, without objection, I would like to enter into
the record the conclusion of TIGTA's Deputy Inspector for
Investigations, Tim Camus, which was sent in a May 3rd, 2013
email to TIGTA's Acting Principal Deputy IG Michael Phillips,
Acting Deputy Inspector General for Audit Michael McKinney,
Chief Counsel Michael McCarthy, Assistant IG for Exempt
Organizations Gregory Kurtz, and two TIGTA employees whose
names have been fully redacted. It is just a one-pager.
Mr. Jordan. Without objection.
Mr. Connolly. I thank the chair.
This astounding email from TIGTA's chief investigator
concluded that after obtaining and reviewing 5,500 IRS emails
from identified staff members of the Exempt Organizations
Division in Cincinnati, that in addition to there being no
email directing staff to target Tea Party or other political
organizations and no conspiracy or effort to hide emails about
such a directive, according to Mr. Camus, ``Review of these
emails revealed that there was a lot of discussion between the
employees on how to process the Tea Party and other political
applications. There was a be-on-the-lookout list specifically
naming those groups.''
``However, the emails indicated the organizations needed to
be pulled because the IRS employees were not sure how to
process them, not because they wanted to stall or hinder the
application. There was no indication that pulling these
selected applications was politically motivated. The email
traffic indicated there were unclear processing directions and
the group wanted to make sure they had guidance in processing
the applications, so they pulled them. This is, he says, a very
important nuance.''
Would you agree with that finding, Mr. Koskinen?
Mr. Koskinen. It sounds right to me.
Mr. Connolly. Have you any idea why the inspector general
would not include such a critical finding after all of the
strum and drum, and after the press compliantly giving the
headline to my friends on the other side of the aisle every
single time, Tea Party targeted, here is a critical piece of
information, maybe even a smoking gun if we are looking for
exoneration, from the head of investigations in TIGTA's own
office. Why would that not be included in the May 14th final
audit report?
Mr. Koskinen. I have no idea.
Mr. Connolly. Is it worthy of your time to ask that
question, respecting the independence, of course, of the two
offices?
Mr. Koskinen. I would not ask the IG that question. He has
done his report; he has done his investigation. When they do
investigations, they have any number of them going on. When
they do the reports, we agree most of the time, sometimes
disagree with recommendations, sometimes disagree with the
process, but we do that in the orderly course of responding to
their report. Thereafter, we don't go back and question them.
Mr. Connolly. But, Mr. Koskinen, here you are for the third
time before this committee, and probably not the last, and your
reputation and that of your organization has been called into
question with a charge that has unfortunately not been
critically examined as often as I would like by the media,
despite our efforts on this side of the aisle. Here is the head
of investigations in your organization under TIGTA that says
otherwise, that directly challenges the propounded thought that
only Tea Party and conservative groups were challenged, and it
was deliberate and it was targeted. He says otherwise and the
TIGTA doesn't put it in his final audit report.
By the way, an inspector general who has been questioned by
a number of us up here, and we have formally requested an
investigation of his conduct before the Council of IGS, so he
is under a cloud myself. And I have heard my friend, the
chairman, Mr. Jordan, question other employees of the IRs
because of their political giving, while Mr. George was a
Republican staff member on this committee, he has given
political contributions to Republican candidates, he is a Bush
appointee, and he met solely with the Republican side of the
aisle in getting ready for his audit. That raises serious
questions. If it is sauce for the goose, it is sauce for the
gander about his independence. But this is a critical piece of
information, it seems to me, and I can't imagine you could be
copacetic with its elimination from an audit report that is a
pretty critical audit report for your organization and, indeed,
for your leadership.
Mr. Koskinen. Well, it is an interesting piece of
information that obviously is useful for people to review. As I
have said, I do have confidence in Mr. George that he is
independent. He actually is the Treasury Department inspector
for IRS, and we have supported him the past and he is doing an
independent review of all of this, and I look forward to his
response and findings about what happened with regard to the
hard drive crash.
Mr. Connolly. Well, how about his response to why he didn't
include this important missive from his head of investigations
in the final audit report of May 14th?
Mr. Koskinen. That is a question that I am probably not
going to ask him.
Mr. Connolly. I yield back, Mr. Chairman.
Mr. Jordan. I would just ask the gentleman which way do we
want it. Do we want to say this committee can't get access to
witnesses because there is an ongoing inspector general's
investigation and at the same time we are waiting for the
inspector general to do his good work and at the same time
criticize the work he did before where he identified the
targeting of conservative groups? It seems to me you can't have
it both ways.
Mr. Connolly. Well, Mr. Chairman, there are a number of us
who have been raised and been quite consistent in raising
questions about the objectivity and professionalism, frankly,
of Mr. George. Mr. Cartwright and I have both filed a
complaint, formal complaint, and I would be glad to share it
with the chairman because----
Mr. Jordan. With all due respect, then you should be
advocating we get access to the witnesses and not wait until
the inspector general has them first.
Mr. Connolly. Well, actually, maybe a new inspector general
is really the answer.
Mr. Jordan. Well, relative to this idea that somehow it was
just mismanagement, 80 percent of the applicants in the backlog
were filed by conservative groups, less than 7 percent were
filed by liberal groups. According to the Ways and Means
Committee, the IRS approved every single group with the word
progressive in its name. USA Today reported the IRS did not
approve a single tax-exempt application filed by a Tea Party
group from September 2010 to May 2012. During the same time
they approved dozens of liberal and progressive groups. The
idea that was just how--if it was mismanagement, it was
mismanagement in a targeted way, because none of the treatment
to conservative groups was given in the same way to progressive
groups.
Mr. Connolly. Mr. Chairman, I have a memo from Gregory Kutz
saying targeted is actually not accurate. I also have materials
that were presented to IRS for training that have elephants and
donkeys, they have Tea Party, they have Patriots, they have
progressive----
Mr. Jordan. 298 cases in the IRS backlog. Only three had
the word progressive; four used the word progress and none used
the word occupy. No progressive group was denied its (c)(4)
status. Hundreds of Tea Party conservative groups were in fact
denied. Some still waiting. Some still waiting, just for the
record.
Mr. Connolly. Well, I guess you and I could argue that all
day, Mr. Chairman, and we need to get on with this hearing and
allow Mr. Koskinen to get back to his job.
Mr. Jordan. Mr. Koskinen, why June 13th? Why that date? Let
me ask you this. Why not February 2nd, when you first learned
there was a big gap in a bunch of emails that looked like they
were missing? Why not February 4th, when, as Mr. Cain
testified--and, Mr. Koskinen, you know Mr. Cain. Do you know
Tom Cain?
Mr. Koskinen. I do know Mr. Cain.
Mr. Jordan. Is Mr. Cain a solid lawyer, professional good
employee at the Internal Revenue Service?
Mr. Koskinen. Certainly is.
Mr. Jordan. All right. So why not February 4th, when Mr.
Cain, who testified just last Thursday, said they knew her hard
drive had crashed? Why not tell us, look, we may have a
problem? Why not come and disclose that to someone on February
4th? Or how about this? How about mid-February, when Mr. Cain
said last Thursday that we know, we knew then in mid-February
that the data on her computer was unrecoverable? Why didn't you
tell us in mid-February? Or how about the hearing we have
talked a lot about, Mr. DeSantis raised in the opening
questions, why not at March 26th? Why not disclose on March
26th, when you were in front of this committee and everyone on
both sides of the aisle asked you about Lois Lerner's emails
and you assured us that you would produce all her emails, and
yet you knew, according to Mr. Cain's testimony, a good
professional employee, lawyer at the IRS, you knew that in mid-
February her emails were unrecoverable?
Mr. Koskinen. You should be careful to note that is what
Mr. Cain knew, that is not what I knew.
Mr. Jordan. Well, that is a problem too. That is something
you should have known. Mr. Cain is a high-ranking official in
charge of documents, and you didn't know?
Mr. Koskinen. I did not know. I have testified----
Mr. Jordan. Do you know Kate Duvall?
Mr. Koskinen. Pardon?
Mr. Jordan. Do you know a person named Kate Duvall?
Mr. Koskinen. Kate Duvall I do know.
Mr. Jordan. And what is Kate Duvall's responsibilities,
what is her title at the Internal Revenue Service?
Mr. Koskinen. She is counselor to the commissioner.
Mr. Jordan. So she is counselor to you.
Mr. Koskinen. Yes.
Mr. Jordan. She is your lawyer.
Mr. Koskinen. Yes.
Mr. Jordan. She knew in mid-February, according to Mr.
Cain's testimony, and she didn't tell you?
Mr. Koskinen. What she told me, and I have testified at
some length at at least a couple hearings on this, and I am
happy to stand by that testimony. If you want to go over it
again, basically, what I have told you is in mid to late
February I knew that we had taken the Lois Lerner emails that
had been produced and instead of looking at them from search
terms----
Mr. Jordan. That is not the point. Tom Cain said they were
unrecoverable.
Mr. Koskinen. I did not----
Mr. Jordan. And he said he told Kate Duvall. Did she tell
you that they were unrecoverable?
Mr. Koskinen. She did not tell me they were unrecoverable.
Mr. Jordan. Well, that is a problem.
Why not tell us April 4th, when Ms. Duvall briefs this
committee, both Republican and Democrat staff members, and the
briefing was about how we would deal with how the IRS was going
to deal with committee requests for producing Lois Lerner's
emails, they didn't know they were lost at the time? Why didn't
you tell us April 4th? Ms. Duvall could have told the committee
at that time.
Mr. Koskinen. I have testified at some length in the past,
and earlier today, that----
Mr. Jordan. Well, here is the key question. Let me jump in
here a second. Why not mid-April, when you knew? In fact, let's
put up the slide. This is a question we had earlier in one of
our hearings. Why not, when you knew, what date did you learn
you could not get all of her email? I learned that in April.
Why not April?
Mr. Koskinen. As I testified then, and I have testified on
numerous occasions, my judgment was, A, we needed to find out
what emails we did have; we needed to put them together in a
full report, which we did, and----
Mr. Jordan. Why not any time in April? Someone at the IRS
told someone at Treasury, who then told someone at the White
House, according to press reports. So if it was good enough to
pass on to Treasury and the White House, why not tell us
sometime in April?
Mr. Koskinen. Because I thought that at that point we did
not have the full information as to what was involved, how many
emails there were----
Mr. Jordan. You learned in April they were unrecoverable.
Your chief lawyer in charge of document production knew in mid-
February they were unrecoverable. Kate Duvall knew in mid-
February they were unrecoverable. And you wait until June 13th.
Mr. Koskinen. Right.
Mr. Jordan. Why June 13th?
Mr. Koskinen. First of all, I would note all of those
emails that determine whether they were--that she had a hard
drive crash or not, what she had tried to do, our emails were
provided to this committee, and the tax writers knew as early
as the fall she had had a hard drive crash. The materials were
produced. The materials about the email chain, about her trying
to restore her hard drive were produced to the tax writers in
April and to this committee in May. So there was no secret that
we were hiding. We were processing through----
Mr. Jordan. No, no, no. You were giving us emails, but you
didn't tell us there were emails you couldn't give us. That is
my question. Why didn't you tell us the IRS had destroyed
emails that belonged to Lois Lerner? Why didn't you tell us
that?
Mr. Koskinen. It is not clear--first of all, emails from
Ms. Lerner may or may not haven lost; they were not destroyed
as a conscious effort by the IRS to destroy them.
Mr. Jordan. The tapes were recycled and----
Mr. Koskinen. Right. Backup----
Mr. Jordan. When backup tapes are destroyed and they are
recycled, so at some point they are destroyed. Why didn't you
tell us you could not produce those emails, that they were
lost, in April?
Mr. Koskinen. This hearing is noted to be an update on what
we are doing. I have given you, on at least two different
occasions----
Mr. Jordan. Okay, then answer the question. Why June 13th?
Why not June 12th? Why not June 10th? Why not May 10th? If you
couldn't do it in April, why did you have to wait two more
months?
Mr. Koskinen. We are going to be here a long time if you
want to repeat all of the questions I have answered in the 11
and a half hours of hearings before.
Mr. Jordan. Do you know what I think?
Mr. Koskinen. But let me just answer this question. But I
have answered it before and I am happy to answer it again, but
it is in the testimony I have given before that you have read
closely. We were producing Lois Lerner emails. Our strategy and
thoughts were and I thought the most efficient way to proceed
was to complete the production so we would know how many Lois
Lerner emails we had from her account, how many Lois Lerner
emails we had been able to retrieve from other accounts so you
would have a full idea what the universe was. I had hoped that
we would be able to find out how many other problems we had
with custodians, and we would produce all of that as a report
to the committees and a public report that would explain what
our email process is, why it is so complicated, what we had
determined about Lois Lerner's emails and her crashes, and what
the emails would have been able to recover, and it would be a
full report.
June 13th was a Friday. I should have known Friday the 13th
was going to be an interesting day. We had been asked by the
Finance Committee, which was considering trying to come to
closure on their report, whether we would give them an update
on our March letter in which we advised the tax writing
committees that we had completed the production of all of the
information we had about the determination process, which was
the start of the investigation. That was the IG was focused on,
as you have just discussed. We said we would do that.
They then called and we were going forward, we didn't know
when. They then called and said they would like that report no
later than that Friday because they were going to have a
meeting the following week. So we pulled the document together
at that point. We had not completed, as I noted earlier, the
review of how many custodians were involved with hard drive
crashes and what the impacts were. We had no idea if you lost a
hard drive, one of the custodians, and in fact one of the
custodian hard drive crashes was in February of this year, not
very relevant.
So to meet the Friday deadline we actually produced that
document and shared it with everybody on Friday, June 13th, and
it was to meet a request from the Finance Committee, which was
having a meeting the next week and wanted to consider whether
they had enough information to do a report.
Mr. Jordan. So your testimony is the Senate Finance
Committee drove the timing of when you disclosed that you had
lost Lois Lerner emails.
Mr. Koskinen. Yes, because we were actually going to
produce that report----
Mr. Jordan. I think it is something different, I just do.
Obviously, you are going to disagree, but I think you were
never going to tell us. You have to remember what happened
here. Judicial Watch does a FOIA request and they learn on
April 18th of this year that the IRS and the Department of
Justice had been working on possible ways to bring false claims
action against Tea Party groups, and there was an email from
that FOIA request, Richard Pilger, a lawyer at the Justice
Department, and Ms. Lerner had an exchange in 2013 after a
Senate hearing. We saw that email. We said, you know what, we
are going to talk to Mr. Pilger, the lawyer at the Justice
Department, who was meeting with Ms. Lerner just days before
the TIGTA report went public, in May of 2013.
So on May 6 we interview Mr. Pilger and we learn, in Mr.
Pilger's opening statement in that deposition, we learn this:
he said--I am reading straight from Mr. Pilger's statement:
``Turning to my contacts with Ms. Lerner, in the fall of
2010''--shocked us. We didn't know that they were meeting clear
back in 2010, that the Justice Department was meeting with the
IRS clear back in 2010. ``In the fall of 2010, at the direction
of the chief of the Public Integrity Section at the Justice
Department, Jack Smith, I contacted the Internal Revenue
Service. When I contacted them, they directed me to Lois
Lerner, who met once at the Public Integrity Section offices
for about an hour with some of her staff, my chief, Jack Smith,
other personnel from my section, and the FBI.''
So now we learn in 2010 the Justice Department, with the
FBI, is meeting with Lois Lerner, and so we said, you know
what, we better subpoena documents from the Justice Department.
And we said to the Justice Department we want any
communications with Lois Lerner that you have had. And we get
this slide. We get this email. Let's put this up, if we can. We
get this communication from Lois Lerner and Richard Pilger.
Now, Mr. Koskinen, did you give us this email, do you know?
Mr. Koskinen. I don't know.
Mr. Jordan. Well, I can tell you you didn't. We got it from
the Justice Department. And after we got this from the Justice
Department, we contacted you all on June 9th and we said, hey,
how come we didn't get this email from you? There is no 6103
issue with this email. We were concerned. This is an email from
clear back in 2010. So we contact you, Mr. Koskinen, in a
letter and we said, you know, we are wondering why the IRS
hasn't sent us this email from four years ago. And then,
suddenly, four days later you tell the Finance Committee, the
Congress, more importantly, the American people, you know what,
we lost Lois Lerner emails. We have lost a bunch of Lois from
that time period.
My theory is this, Mr. Koskinen: You guys weren't ever
going to tell us until we caught you. And we caught you because
Judicial Watch did a FOIA request; they found out there was
this collaboration going on between the Justice Department and
the IRS. We took that email, we interviewed Mr. Pilger. Mr.
Pilger told us he met with Lois Lerner in 2010. We then
subpoenaed Justice. They complied with our subpoena, gave us
the email. We contact you and say why didn't you give it to us,
and then you knew you were caught.
You didn't tell us this, but you knew, we didn't give it to
you 'cause we don't got it. Now we have to tell the whole world
we lost them. And what better time to do it than Friday, June
13th, saying we are complying with some Senate concern, said it
in a letter, put it on page 7 of the third addendum, and say,
you know what, we may have a problem with Lois Lerner emails?
That is what I think.
Mr. Koskinen. Good. If you find----
Mr. Jordan. I think all kinds of people logically going
through this would say, you know what, that is what prompted
these guys. Four days after they get a letter from this
committee saying why didn't you send us these emails, you just
say, well, we better come clean. Plus, you have already told us
you knew clear back in April that you lost them. So you wait
two months and then you say, wow, we better do it June 13th,
just four days after they figured out Justice and the IRS were
working together in 2010, and they got an email that indicates
that and we can't produce it.
Mr. Koskinen. When you find any direct evidence to support
that assertion, I would be happy to see it. If you think that
this organization, in four days, could produce that report, you
don't understand how large organizations function. You could
ask anybody who worked on that report; there is a whole series
of people. That report was under production for a long time
since----
Mr. Jordan. I am not saying it wasn't. I am saying
including the statement we lost Lois Lerner emails was put in
that report.
Mr. Koskinen. It was in that report and it was in that
report----
Mr. Jordan. And one thing I have learned in these
investigations, it is always important to look at the time
line.
Mr. Koskinen. Look at the time line----
Mr. Jordan. Look at the time line. You knew in April; you
didn't tell us until June 13th. What events happened between
April, when you knew, and June 13th? One key event was the FOIA
request from Judicial Watch, finding this collaboration between
the IRS and the Justice Department, us getting that email
because we subpoenaed the Justice Department; they give it to
us, it is in the relevant time frame, 2010 to 2012, when you
lost Lois Lerner emails, and suddenly you say, you know what,
they got us. We have to come clean.
Mr. Cummings. Mr. Chairman?
Mr. Jordan. And then you do the letter on June 13th.
Mr. Koskinen. Can I respond? That is a very serious charge.
Mr. Jordan. Sure.
Mr. Koskinen. There were a whole set of serious staff
people in the Senate Finance Committee who will dispute your
assertion. And if you find any direct evidence of this to
anybody who worked on that report, in terms of the timing of
it, the fact that we were otherwise not going to deliver it, I
will be not only surprised, I will be astounded, because there
is no such evidence. And it seems to me, and I have been very
patient about all of this, but before you make that kind of
charge and claim, you ought to have better evidence than a
single email dated June 9th.
Mr. Cummings. Mr. Chairman?
Mr. Jordan. We have a few other emails from that exchange.
Mr. Koskinen. That is fine.
Mr. Cummings. Would the chairman yield for one moment?
Mr. Jordan. I would be happy to yield.
Mr. Cummings. I know a lot has been said about what Thomas
Cain said. Well, last week Thomas Cain told our staffs that the
IRS always intended to alert us about Ms. Lerner's lost emails.
So I know you have all these theories. Unfortunately, our
committee has been going when we put out these headlines and
then we go chasing facts that never exist.
Mr. Jordan. All I am saying----
Mr. Cummings. But I am just saying include everything when
you are asking your questions.
Mr. Jordan. Great point. All I am saying is this. They get
a letter from us on June 9th, where they know we now have this
email from the Justice Department that they can't produce, and
four days later they tell the world we have lost Lois Lerner
emails, when they knew that, according to Mr. Koskinen's
testimony in questioning from me, that he knew in April they
couldn't get Ms. Lerner's emails. So they waited two months.
And then when they decided to tell us, it was four days after,
on a Friday, four days after we knew there were emails we were
getting from Justice that we weren't getting from the Internal
Revenue Service.
Now, all I am saying is that timing is pretty suspect,
particularly in light of the fact all the other things we have
heard from the IRS. One computer crash. No, it was seven. No,
it was eight. Now may be up to 20. We can confirm that there
are no backup tapes that are available. Oh, we can't confirm
that, now there may be one available. In light of everything we
have heard from the IRS, when you start looking at the time
line, it looks pretty suspect.
Mr. Cummings. Well, Mr. Chairman----
Mr. Jordan. And all I am saying is I am not sure they were
going to tell us.
Mr. Koskinen. You didn't say I am not--I am sorry----
Mr. Cummings. Would the chairman yield?
Mr. Jordan. I would be happy to yield.
Mr. Cummings. Mr. Chairman, this has been very interesting
because one member on your side, the gentleman, I don't know
his name, said that the man was under investigation. I was in
that entire hearing and he never said that. By the way, the
Justice Department never said that. Then you, Mr. Chairman, of
course, have made some strong accusations, and when you make
these kind of accusations, I would appreciate it if you would
just give the witness an opportunity to answer, because these
are the kind of allegations that tarnish one's reputation, and
you have come up with this theory, and I am not saying your
theory is--your theory is what it is, but he ought to be able
to answer, please. That is all I am asking.
Mr. Jordan. Appreciate the ranking member.
Mr. Koskinen. As I said, I haven't seen Mr. Cain's
testimony, but it doesn't surprise me that he would say that we
had been producing this report for some time and clearly
planned on making it public. You can talk to people. We would
be happy to give you those contacts, the people we talked to at
Finance who were in fact did have a meeting the following week,
had asked us for an update that we did provide. They asked for
it no later than that Friday.
I am confident and I am very confident that no one working
on this report had any idea about it other than that we were
going to produce it and provide all of the information to the
public. I think any other assumption is not based on facts.
Mr. Jordan. Well, are you willing to make those witnesses
available or are you going to make us subpoena them so they can
come here under oath and testify that, yes, in fact, from mid-
April, when the commissioner knew that Lois Lerner emails were
lost, we were planning on telling the Congress as soon as we
got all the information? They will come and testify to that or
will they come and testify, you know what, after the June 9th
letter we decided we better put in the information that we lost
Lois Lerner emails?
Mr. Koskinen. I don't think you will find anyone will make
that latter testimony.
Mr. Jordan. But my question to you is are you willing to
have those people come testify. Tell us who they are, who the
people who worked on this report.
Mr. Koskinen. We will be happy to talk with you. You have
already talked to some of them and you have others on your
schedule.
Mr. Jordan. All right.
The gentleman from Nevada is recognized, Mr. Horsford.
Mr. Horsford. Thank you, Mr. Chairman.
You know, I do share concerns by some of my colleagues on
the other side about why the IRS delayed in providing Congress
with notification regarding the unrecoverable emails, because
it raises questions. I don't share in the chairman's or other
members' conspiracy and rush to judgment about any motives as
to why there was a delay, and I feel, again, as I have said in
previous meetings, that we fail to get all the facts in order
to then make a proper decision. I am not a defender of the IRS
or any other Federal agency. I have said from the beginning
that I believe that there was wrongdoing, but the chairman and
others want to conclude or make conclusions about that
wrongdoing without justification or evidence to support their
assertion.
Now, Mr. Chairman, you just read into the record some
comments by Mr. Pilger that I had asked to be entered into the
record the full transcripts, so I am going to ask again for
unanimous consent that the transcribed interview opening
statements of DOJ officials Richard Pilger and Jack Smith be
allowed to be entered into the record, particularly since you
just handpicked certain statements, and I am requesting the
full transcript be entered. Will the chairman please provide
that courtesy for this to be entered into the record under
unanimous consent?
Mr. Jordan. If the gentleman would yield for just a second.
I read from the opening statement that Mr.----
Mr. Horsford. That is what this is, the transcribed----
Mr. Jordan. If you are just asking for the opening
statement, not the full questions from Democrat staff,
Republican staff, but just the opening statement from Mr.
Pilger and Mr. Smith, we would be happy to do that.
Mr. Horsford. Thank you.
Mr. Jordan. All right.
Mr. Horsford. I also want to follow up to some of the
claims that have been made by my Republican colleagues and give
you an opportunity to respond. It has now been stated twice
today that Mr. Cain testified during his July 17th interview
that in mid-February 2014 the IRS realized that Lois Lerner's
emails would not be recoverable. I want to clarify here,
because I don't want Mr. Cain's statements to be taken out of
context. It is true that Mr. Cain told us that he had
discovered that Ms. Lerner's hard drive had crashed and that
the contents of the hard drive were unrecoverable.
However, that does not mean that Mr. Cain said that he
thought, in February of 2014, that the IRS would never be able
to produce those emails to Congress. In fact, Mr. Cain was
asked, ``And as of March 2014, you were not aware that the IRS
would be unable to recover all of Ms. Lerner's documents,'' and
he answered, ``That is correct.'' He further explained, as you
have, that the IRS was engaged in an extensive process to find
Ms. Lerner's emails from other sources at the IRS; and, in
fact, those efforts were successful and yielded the production
of an additional 24,000 Lois Lerner emails. Is that correct,
Mr. Koskinen?
Mr. Koskinen. That is correct.
Mr. Horsford. Mr. Cain also explained that the IRS's goal
with respect to the document productions to Congress was to
fully comply with those requests as expeditiously as possible.
He stated with respect to fulfilling that goal, ``I have tried
my best, and everyone that I work with have tried their best.''
Commissioner Koskinen, do you share that belief that every
effort was made to provide this committee and others with those
emails that were you able to recover?
Mr. Koskinen. I do.
Mr. Horsford. And beyond the issue of failing to notify us
in a timely manner, then the question becomes what can be made
of why that time line was delayed.
Mr. Koskinen. Right. And as I have said, first of all, all
of the emails in question had been provided in the normal
course to this committee and the other investigators, so there
was no attempt to not produce information that showed that in
fact there had been a problem with Lois Lerner's hard drive. In
fact, none of us at the IRS or investigators noted that in the
fall productions there were emails from Lois Lerner saying she
had problems with her hard drive and had lost emails.
But everybody then was looking at subject matter. But it is
not as if any of these emails were withheld or not produced in
a regular manner. So that as we were working in April and May
pulling all the information together, trying to determine how
many emails we actually had, we were producing emails as a
regular matter, and the emails that were the basis of our June
13 report had all been provided previously to all of the
investigators.
Mr. Horsford. Thank you.
Mr. DeSantis. [Presiding] The gentleman's time has expired.
The chair now recognizes the chairman of the committee, Mr.
Issa.
Mr. Issa. Thank you.
Commissioner, I really wish we had your IT guys here
instead, because it is inherently a little hard when we are
asking you so many questions that are not related directly to
your past experience. But I appreciate your continuing to
volunteer to come up. Hopefully, as we interview some of your
IT professionals and others involved, it will make it easier to
direct questions.
But a lot has been done to talk about this, a drive this
large that apparently went so bad that not a single piece of
information could be saved, and you have asked us to believe
that your very special experts couldn't save one piece of data
from this drive, or one just like it, correct?
Mr. Koskinen. That is what I was advised, yes. And that is
what the email strain that we produced and I testified about at
previous hearings says.
Mr. Issa. The American people don't believe that. You
realize that the idea that we can recover the last 17 or 18
seconds from Challenger exploding above our atmosphere, falling
to the sea and being left under the sea for a year that we
could recover the voice from that makes people wonder why a
product that simply came in and out of the office with Lois
Lerner every day, suddenly, not one piece of data could be
recovered. It doesn't surprise you the American people just
have a hard time believing that, does it?
Mr. Koskinen. Well, I don't know whether the American
people broadly believe that, but I do understand that when our
Criminal Investigation Division, which our experts at
extracting information say they could not recover any emails,
that seems probative on the one hand, but on the other hand I
could understand people saying, well, if you kept trying----
Mr. Issa. But do you think it is reasonable for us to check
with your Criminal Investigation people, interview people
involved to see if that passes the reality check, in spite of
what the American people may think or the doubts they may have?
Do you think it is fair for us to check into that?
Mr. Koskinen. Yes. In fact, those interviews are being
scheduled. Some of them, I gather from the press release I saw
from Ways and Means, that some of those IT people have already
been interviewed.
Mr. Issa. So it is fair for us to do an interview and to
investigate on our own in order to bring the credibility that
we bring as if, you will, a doubting Thomas, to the process.
You would agree with that?
Mr. Koskinen. Yes. I have never had any concern or
objection to the oversight. As I said, I spent four years in
the Senate that Senator Ribicoff was on, the Government
Operations Oversight, chaired that committee. I am a big
believer in congressional oversight.
Mr. Issa. And I appreciate that you are. One of the things
that we discovered that was not made available to us early on
was the existence of what is called OCS, this chat capability
that exists within the IRS's network, is that right?
Mr. Koskinen. That is correct. I spent some time testifying
a couple weeks ago about that.
Mr. Issa. Right. And you wrote me back a letter when I
asked about it, and in the letter it said, basically, that no
records were kept because it was the equivalent of visits or
phone calls. Do you remember that in the letter?
Mr. Koskinen. Yes.
Mr. Issa. Now, would it surprise you to know that we
disagree with you? That in fact it is the opinion of this
committee that the Federal Records Act, unless you can train
and guarantee that no policy decisions, none of the kinds of
activities we are discovering in email could be done on OCS,
that in fact you should turn on that switch and you should
collect and you should retain OCS chat unless you can assure us
that it is not doing the equivalent. And I will be brief, but I
will explain something to you.
Years ago, when I was a subcommittee chairman and President
Bush was in office, we investigated the Mineral Management
Service, and what we discovered there was that they had
systematically signed leases that were simply wrong and cost
the American people billions of dollars; and we could find not
a shred of evidence in emails to show the absurdity of how this
came to pass. So after we deposed people repeatedly, we finally
discovered that they all admitted that only the cover sheet was
brought to them, that they signed or initialed, and they never
read the leases; so that one mistake was passed through
multiple signatures.
But, more importantly, as we went through the process, what
we discovered was, at Mineral Management Service, a now-defunct
and disgraced organization to a certain extent after the BP
disaster, they had a policy of what they called talking over
the transom. Lawyers made no memos for the record. Lawyers went
out of their way to have no paper trail of things they did in
their consultation.
I will tell you today that has to end; that the American
people expect that the Federal Records Act, the Presidential
Records Act is not something to be avoided, and you should not
be trying or allowing the bypassing of future oversight that
you said rightfully so, with your experience, you believe in.
Maintaining data so that it can be analyzed by your
inspector general, who is conducting your primary
investigation, you have full confidence in, activities going on
in Ways and Means, which are slightly different than ours, our
activities, or anything in the Senate are hampered by policies
of any part of Government that allow the use of something that
clearly bypasses future oversight.
So I hope today that in addition to your willingness to
cooperate and help us in getting to the answers I mentioned on
this, that you will recognize that your letter is not
acceptable; that email is a substitute not just for the old-
fashioned letter, but it is a substitute for a visit, it is a
substitute for a phone call; and that, in fact, the reason that
those are important is that the phone call and the visit, in
the old days you would have done a memo for the record if in
fact you wanted to do your job. That isn't being done. Emails
and these chats are extremely important.
And I would like to have a second round at some time, but I
would yield back at this time.
Mr. Cartwright. Mr. Chairman, I have a point of
information. Yesterday Chairman Issa informed committee members
that he will be holding yet another hearing on this topic next
Wednesday. We have the notice. Could the chairman please inform
us who will be testifying at that hearing on Wednesday?
Mr. Issa. Pursuant to the rules, we will inform at the
appropriate time. But at this time they haven't sent anything
out and I appreciate your inquiry.
Mr. Cartwright. So you don't know or you won't tell us?
Mr. DeSantis. I think we will----
Mr. Issa. Regular order, please.
Mr. DeSantis. We will do regular order and the chair, at
this point, will now recognize the gentleman from Michigan, Mr.
Bentivolio, for five minutes.
Mr. Bentivolio. Thank you very much, Mr. Chairman.
Commissioner, if any of my constituents were not as
forthcoming as the IRS, there would be a presumption of guilt,
they would be fined and/or have their wages garnished and/or
liens laid on their home and/or savings accounts seized.
When I go back to the district, I had the opportunity to
talk to many IRS former employees at the IRS, now retired, and
I asked them what they thought of what was going on at the IRS,
and I heard despicable behavior every step of the way. The IRS
no longer credible.
I think at this point, Mr. Chairman, I would like to yield
back.
Mr. Issa. Would the gentleman yield?
Mr. Bentivolio. Yield to the gentleman from California.
Mr. Issa. Thank you. I appreciate that. In regular order,
this is helpful not to need a second round.
Commissioner, there has been approximately a year of
production of emails. In your earlier hearing I remember that
it might take two years, sort of an estimate. But let me ask
you a question. Have you reviewed the time line when this
committee issued lawful demands for Lois Lerner's emails? Have
you reviewed the time line of who did what and when?
Mr. Koskinen. No.
Mr. Issa. Would you be prepared to deliver to us a time
line, meaning calendars, activities of individuals who were
charged with going out and finding those emails, what they did,
and when they did it?
Mr. Koskinen. As I say, we have approximately 250 people
doing that work.
Mr. Issa. Well, no. Actually, you have had people redacting
and you have had people legal reviewing. I am only talking
about who went and got the information, the emails, who
accumulated them, the gathering.
Mr. Koskinen. Yes. That is not just one or two people, that
is a set of people. But we would be happy to provide you the
information in any form that would be usable.
Mr. Issa. Well, here is the inquiry I will ask you today.
And, again, we appreciate your coming, but you are not the IT
guy, you are not any of the 200 people, per se. It is clear,
now, from this side of the dais, that we issued requests and
subpoenas. Two things were to occur: one, at the moment we
issued our first letter, it required that you preserve
information. There is a question about whether that was
preserved, because in order to preserve it you would have to go
look for it. So the tapes that now your own people have
admitted they are not sure whether they exist or not, they have
undercut your claim that you are very comfortable that they
were gone at the end of six months, that means that nobody went
out to say where are the tapes, what are the tapes, are there
any.
Additionally, in order to not know that Lois Lerner had
this gap, either you weren't looking extensively all at once
or, and this is one of my concerns, people just didn't want to
admit that they weren't going out and looking for emails by
essentially what we expected, was to do a key word search on a
server and deliver the data.
Remember that for months, even before you came onboard, we
were being told, well, here are some key words and we want to
search on these key words; and the IRS was adding key words
that allowed them to deliver the false narrative that
progressives were being targeted. They were adding self-serving
words and they were searching them.
This committee had a reasonable expectation that you were
searching the entire database, you were searching not six
months worth of emails, not 6,000 emails or less that had been
preserved, but you were searching the historic emails. Not
until recently, the last six weeks, did we understand that if
that was how you were getting all of your information, you were
knowingly looking at a small fraction of the historic two-or
three-year email selections.
We now understand no more than 6,000 emails, only six
months of record, so it is now appropriate for us to understand
your employees' search techniques, what they did, because at
some point they must have started searching, okay, who has
PSTs? Send us your PSTs. Or did they, and this is why we have
to ask directly, did they send out one of these do you have any
information relevant and please send it to us. Because the key
word search would imply that in fact they were accumulating all
these PSTs, these downloaded local files and then searching
them.
If in fact that process didn't begin in earnest in the
first week or month, if in fact your predecessor was delivering
selected data from what was basically the last six months of
things still preserved, we need to know that, because it does
appear as though, in this long investigation, there has been
either an absence of a willingness to disclose problems or an
absence of real fact-finding, getting these emails quickly, or
deliberate obstruction.
We don't know which and we would like to know, as I said in
the beginning of this, who went looking for what when. Not
interested in who read them, not interested in who edited them,
who redacted them or who released them. And that information
would be equally valuable whether it was pursuant to the House
or Senate's request or to Ways and Means or this committee's
request.
But giving us that gives us a time line of who was involved
in going and looking so we know who knew that in fact something
like Lois Lerner's email on her personal hard drive was of any
relevance, because this committee didn't know that there was a
lack of a central database for the first almost year of this
investigation.
I thank the chairman and yield back.
Mr. DeSantis. The gentleman yields back.
The chair now recognizes the gentlelady from Wyoming for
five minutes.
Mrs. Lummis. Thank you, Mr. Chairman.
I have no doubt, Mr. Koskinen, that morale at the IRS is
low. I want to tell you about morale in Wyoming. The people of
Wyoming, who I work for, all feel targeted. They think the IRS
is out to get them. They are lower than a snake's belly about
the IRS because they know that Lois Lerner was brought into the
IRS from the Federal Elections Commission, where she had a
history of political targeting, political bias. They know that
she was tapped to enforce the largest tax increase in history,
Obamacare, after, after she targeted conservative groups while
overseeing 501(c)(4)s, tax-exempt organizations. They saw her
come to this committee and say I have broken no laws and then
take the 5th. They know that we subsequently found out that she
did break a law, that she provided confidential taxpayer
information to another Federal agency, which is against the
law.
And they know that so far she has gotten away with that,
that the Justice Department isn't doing anything about it and
that she got away scot-free. They know that when they get
letters from the IRS, that they are being targeted. I have a
constituent who got a letter and an investigation from the IRS
that has cost her $50,000 just to close her estate, because
they keep asking her what make and model is your bed. Your bed?
They think her bed is some expensive antique. Incidentally, she
is a very active member of the Republican party. She feels
targeted.
Morale is low in Wyoming because our government has turned
against us. So this is a legitimate investigation. I hope it
continues at length. I hope it goes on until we get to the
truth, because the people we work for feel like the Government
is getting away with their tax dollars that they don't know;
they feel like the Government is denying them tax-exempt status
that they deserve; they feel like they can't trust the IRS.
That is why this investigation. That is why you are here and
asked the same questions over and over. I am sure it is
frustrating. We are frustrated too, but it is because our
constituents are mortified and scared, and are going to take
matters into their own hands, because they don't feel we have
the ability to do it ourselves.
So, with no apologies for the morale at the IRS and no
apologies for how many times we are asking you the same
questions over and over, Mr. Chairman, While I thank you for
your attendance, I do yield back the balance of my time.
Mr. Issa. Would the gentlelady yield?
Mrs. Lummis. I will.
Mr. Issa. Some people just don't have enough questions for
you, commissioner.
I mentioned the time line and my interest in that. Let me
just ask you one other question, which is when you look at this
investigation and you look at the fact that a Federal judge is
now ordering you to show certain things, you look at your IG's
investigation, you look at our investigation, are you aware and
do you recognize the three separate channels are perceived and
in reality are very different as to what your responsibilities
are and how you approach them?
Mr. Koskinen. My response to all of them is the same; if
people have, from any branch of Government, questions, we have
an obligation to respond to them in response to----
Mr. Issa. I appreciate that, but the IG does in fact work
under you; he has limited authority.
Mr. Koskinen. Absolutely not.
Mr. Issa. I understand his independence, but in fact----
Mr. Koskinen. He is the Treasury Department IG. We have no
control, influence over him. He doesn't work in the IRS.
Mr. Issa. But in fact he has testified that when he wants
information, he has to ask for it and he may not always get it,
that in fact there is a process and sometimes it is very
frustrating for him to get information. Even though you say he
is independent, he doesn't have the authority to demand things
and automatically get them, isn't that true?
Mr. Koskinen. I have never had, in my time here or other
places, an experience with an IG not able to get the
information he needs, and I am committed, as Mr. George knows,
that whatever information he wants in any investigation, he is
welcome to have.
Mr. Issa. Well, we will certainly hold you to that. Thank
you.
Mr. Koskinen. I am happy to be.
Mr. Issa. Yield back.
Mr. DeSantis. Thank the chairman.
For the other members who do want to do a second round, we
will do that, so I will kick it off and recognize myself.
I just want to reiterate people mentioned the morale, and,
granted, a lot of the things that happened were before you were
there, but I do think it is worth mentioning that there are a
lot of taxpayers who have had their morale hit. When they see
some of the conference spending that has gone on, $50,000 for a
Star Trek parity video and other lavish expenses on their dime,
and, again, that was before you were there, but that really
irks a lot of folks and certainly our constituents. And I think
the same goes for the targeting. When people feel like they
were being targeted or in fact were targeted simply from
exercising their constitutional rights, I think that hurts
their morale too. So I just think it is important that we
mention that.
Now, a lot has been going on about when you knew there was
a problem, why you delayed telling Congress, and I think it is
the case that the standard that would be applied to an official
such as yourself is not simply what you actually knew, but what
you should have known. In other words, you can't bury your head
in the sand and not be apprised of what people in your
organization know. So I think that is going to be a question.
Clearly there were people at the senior leadership level at the
IRS early February, mid-February, who knew that the problems
were more substantial than what you indicated to us that you
personally knew, so the question is going to be why did you not
know more.
And I think that goes into what I and some other folks have
raised. And I know my friend Mr. Cartwright disputed the notion
that this is being investigated by the Justice Department. And
just so we are clear, because I don't want to be lobbing
charges that aren't true, here is the transcript from last
week's hearing with James Cole, DOJ Deputy AG.
Chairman Jordan: The fact that the commissioner, meaning
you, at the Internal Revenue Service delayed telling Congress,
the American people, the FBI, and the Justice Department is a
matter that you are going to investigate?
Mr. Cole replied, We are going to look into what the
circumstances were around that, yes.
So we are concerned about it and the DOJ seems also to be
concerned about it, and I think that that is important to know.
Let me ask you this. You mentioned that you have seen the
Ways and Means press release about their conducting interviews
with different IRS technical witnesses about what in fact
happened to the hard drive, so they told Ways and Means that
the hard drive was scratched and that data was likely
recoverable from it; and, of course, the IRS, just last week in
Federal court, has filed a declaration saying, consistent with
what I think you have testified to, that the hard drive was
destroyed and in fact no data was recoverable for it.
So my question is what is an American to think when they
see some witnesses telling a congressional committee scratched,
may be recoverable, but yet the IRS is representing in Federal
court that it was destroyed and completely unrecoverable?
Mr. Koskinen. I wasn't there and I haven't talked to those
people, and I don't know what that interview yesterday----
Mr. DeSantis. But they were the technical people, would be
the ones that we would most want to talk to about that,
correct?
Mr. Koskinen. All I know is the emails that actually I have
testified at a couple previous hearings about show that there
were efforts made by Ms. Lerner and the IT department to
restore the hard drive. It went to the Criminal Investigation
Division, and they are experts and they said they were not able
to retrieve information from that hard drive. That is all I
know and that is what the emails contemporaneously at the time
showed and said, was that they had tried, the experts in the
IRS had tried; they were unable to recover any information.
Mr. DeSantis. Okay. And I read the pleadings and I take
that point, but we are getting conflicting information, it
seems, in the Congress at this point, so I think it is going to
be important that that be resolved, because clearly you can't
be telling the court one thing and then having people in the
organization who are on the ground and maybe had intimate
knowledge telling the Congress the other thing.
I am almost out of time, but just very quickly, switching
gears a little bit. The D.C. Circuit issued an opinion about
the IRS's regulation as respects to Obamacare subsidies, taxes,
and mandates in the States that have exchanges not run by a
State, but run by the Federal Government. Given that right now
there is a circuit split, where you have the 4th Circuit saying
that basically it was either a close call or a scrivener's
error, you have the D.C. Circuit saying actually the IRS didn't
have the authority to issue that ruling, are you going to
rescind that rule until this can be resolved by the Supreme
Court, or what is the IRS's position in light of the Halbig
case?
Mr. Koskinen. The rule about the granting of advanced
premium tax credit all is run by HHS. Our regulation said that,
in fact, it was appropriate and acceptable to go through the
Federal marketplace. We have no plans, until the issue is
revolved in court, to rescind or change that rule or change our
preparation for the next filing season.
Mr. DeSantis. And is it your position, as the IRS, that you
have construed that to be that there may have been a drafting
error on the statute, but the intent of Congress was that the
subsidy should go, and is that why the IRS has taken the
position that they have taken?
Mr. Koskinen. I am fully supportive of the Justice
Department opinion, which was upheld in the 4th Circuit, not
upheld in the D.C. Circuit. I don't have a different view of
the legality; I think the Justice Department puts it very well
that they think the statute is enforceable and the regulations
are appropriate.
Mr. DeSantis. Okay, I am out of time, and I will now yield
to the ranking member of the full committee, Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman.
On July 9th you appeared before the Subcommittee on
Government Operations for a hearing entitled Solutions to Close
the $106 Billion Improper Payments Gap. Even though it was
clearly not the stated purpose of the hearing, Republican
members of the committee asked you a number of questions
regarding the committee's investigation into the IRS treatment
of applications for tax-exempt status.
At the hearing, Chairman Issa also released emails from
Lois Lerner regarding the IRS instant messaging system, called
OCS, that he claims proved that Ms. Lerner ``intentionally
sought to hide information from Congress.'' Despite your
testimony that you were unfamiliar with the system and would be
happy to look into its use, Republican members repeatedly
questioned you about the specifics of OCS.
Commissioner, now that you have learned of the system, can
you describe what OCS is?
Mr. Koskinen. Yes. I actually provided a letter to the
committee that Chairman Issa referenced earlier. What I have
been advised is OCS is a system that exists in Microsoft
systems and it basically allows people around the Country, its
primary use is to have a teleconference and you can put the
same information up on the screen and everybody looks at it at
the same time, and it is a way to have a telecommunications
gathering in a meeting.
It allows you also to, in effect, have an instant messaging
capacity for those who use it--not everybody uses it; I don't
use it because I didn't know it existed--that much like your
cell phone, somebody, if they see you are online, can send you
a text message and it is like calling you on the phone. So like
all text messages, it is a sometimes faster and more efficient
way to communicate than picking up the phone and calling
someone.
Mr. Cummings. Despite the fact that the email exchange
occurred on April 9th, 2013, nearly two years after Ms.
Lerner's computer crashed, and more than one year after the
inspector general's audit began, Chairman Issa declared that
the email exchange was a ``smoking gun.'' On July 11th, the IRS
sent a letter to the committee explaining that OCS messages
``are substitutes for telephone calls and in-person meetings''
and ``the IRS does not currently preserve communications sent
and received through OCS.'' Is that accurate?
Mr. Koskinen. That is accurate.
Mr. Cummings. The IRS further explained that the Federal
Records Act ``does not require recording or retention of
telephone calls or meetings as a substitute for telephone calls
and in-person meetings that would not normally be recorded.
Communications sent through OCS are not considered records
subject to Federal records or other retention requirements.''
I ask unanimous consent that the letter be entered into the
record, Mr. Chairman.
Mr. DeSantis. Without objection.
Mr. Cummings. Commissioner Koskinen, does the Federal
Records Act require retention of the OCS messages?
Mr. Koskinen. It is my understanding it does not. In fact,
it is my understanding that now our review, our record-keeping
process and in 2011 we got a score of 93 and in 2012 got a
score of 99. But we are meeting with NARA. We have reached out
to them to try to work with them to ensure, A, that we are
complying with the Act now and if there are ways we can improve
our official records-keeping, we are very anxious to do that.
As I say, ultimately we hope some day to be able to afford to
have, in effect, an email system that is a system of record.
Mr. Cummings. Are you aware of any evidence that Lois
Lerner used the OCS system to intentionally hide information
from Congress or the inspector general?
Mr. Koskinen. I am not. As note, we produced 43,000 emails
from her account, so she obviously used email significantly.
Mr. Cummings. To the best of your knowledge, has any IRS
employee used the OCS system to intentionally hide
communications from Congress or the inspector general?
Mr. Koskinen. I have no knowledge of any such activity.
Mr. Cummings. Once again, your testimony is corroborated by
the results of the committee's investigation. After receiving
hundreds of thousands of pages of documents and interviewing
dozens of IRS employees, the committee has not identified any
evidence supporting the chairman's allegation that Ms. Lerner
or any other IRS employee used the OCS system to intentionally
hide information from Congress.
I want to thank you, Mr. Koskinen, for your testimony. I
have 14 seconds left. Is there anything else you wanted to tell
us?
Mr. Koskinen. No. I would just add to the congresswoman
from Wyoming, talking about she works for taxpayers, my view is
we all work for taxpayers. I, as the head of the agency, am
basically employed by the American people. We have important
responsibilities to be careful stewards of the money we spend;
it is ultimately money that comes from the American people.
And we have an obligation to ensure that everyone is
treated fairly and the same, and to the extent that there are
people who have lost trust and confidence in the IRS to do
that, one of our major challenges is to restore that trust.
Whenever we are going to continue and audit people, as I have
said in the past. Some of them will be Democrats, some will be
Republicans, some may not belong to a party, some may have
voted for one person or another, some may be active in
politics; and what they need to be confident of is when they
hear from the IRS, it is not because of any of that, it is all
irrelevant.
When they hear from us, it is because of some question in
their tax return. And if somebody else had that same question,
they would be heard from us as well. But we have an obligation
and a commitment to treat everybody fairly and evenly across
the board. I have met with over 11,000 IRS employees across the
Country, and I have never seen a more dedicated workforce
dedicated to the mission to the IRS, to providing taxpayer
service to enforcing the Internal Revenue Code, and I am
delighted to be part of that workforce.
Mr. Cummings. Thank you, Mr. Chairman.
Mr. DeSantis. Before I recognize the chairman of the
subcommittee, I just will, with respect to Lois Lerner's emails
in terms of OCS, when she initially wrote the email to Maria
Hooks saying she had a question about OCS, she said she was
cautioning folks about email and that we have had several
occasions where Congress has asked for emails and there have
been an electronic search for responsive emails, so we need to
be cautious about what we say in emails. Someone asked if OCS
conversations were also searchable. I didn't know, but told
them I would get back to them.
So I just think it is important the context, when she was
asking about OCS, was to try to evade congressional oversight.
With that, I will recognize the chairman of the
subcommittee, Mr. Jordan.
Mr. Jordan. I thank the chairman.
Let me go to the Helbig decision, Mr. Koskinen. Does the
IRS have an obligation to now tell taxpayers the tax credit may
in fact not be available?
Mr. Koskinen. I think we have an obligation to keep
taxpayers informed about all aspects of the Affordable Care
Act, all aspects of the Internal Revenue Code. We have a
program of public information to advise taxpayers now, if they
are getting premium tax credits, before these decisions. If
their information changes, they should go back and make sure
the credit is correct. To the extent that we go forward----
Mr. Jordan. Are you going to educate taxpayers on the
potential ramifications of the Halbig decision?
Mr. Koskinen. We actually will put out information
regarding it. As I say, right now, at this point, two courts
have come to different conclusions, so we don't intend to make
any different changes. Therefore, I think our advice, although
it is not totally in my control because it is a policy issue of
how to deal with it and we are just tax administration, but my
general assumption is people will and should continue to
operate as they have thus far until we get to a final court
decision. And the courts have not indicated that anyone should
do anything differently.
Mr. Jordan. Let me go to the Ways and Means statement
yesterday, their press statement. One of the things they say in
the lead paragraph, it says, in-house professionals at the IRS
recommended the agency seek outside assistance in recovering
the data. Are you going to do that, or have you done that
already, outside professionals to recover data lost or that may
be recoverable on the scratched hard drive or the tape that now
in fact may be available? Is that something the IRS is going to
do?
Mr. Koskinen. As you know, my understanding is that that
hard drive is the normal process. Once the Criminal
Investigation Division determined they could not restore any
information from it, that hard drive was recycled and no longer
exists.
Mr. Jordan. When that took place, when you were trying to
get to the data, did you in fact go get outside assistance in
trying to recover the data?
Mr. Koskinen. I was not around at that time, but I am not
aware of any attempt to go outside the IRS.
Mr. Jordan. So even though in-house professional says, you
know what, this might be a little above our pay scale, we
should go get the outside tech experts, the super wiz kids who
can do this stuff, we should bring them in, to your knowledge,
that was not done?
Mr. Koskinen. To my knowledge, I don't know even about that
statement. I haven't seen his transcript as to whether--I was
not aware that that recommendation has been made, but I have no
information indicating that that was done, i.e., that outside
experts were sought. All I have seen is the emails that I
actually have testified about in which Criminal Investigation
Division reported they could not restore the hard drive. But I
have no information that the IRS at that time did anything
else.
Mr. Jordan. They did not. I just want to be clear. It is
your understanding that there was not outside professionals who
were brought in to try to recover the data.
Mr. Koskinen. That is right. I have no indication that was
done, and it is my assumption by the emails that I saw when I
testified that when the Criminal Investigation Division----
Mr. Jordan. So no outside experts were brought in, even
though in-house experts recommended they be brought in.
Mr. Koskinen. I had no information about the in-house
recommendation.
Mr. Jordan. I am going by what the Ways and Means Committee
is reporting, that they said in-house professionals said in
fact we should go get some outside experts. This is beyond our
scope; we need someone else to come get this because this is
such important information. And you are saying you don't think
that was done.
Mr. Koskinen. I don't think it was done. But I haven't seen
the full context of what that gentleman said, either.
Mr. Jordan. Okay. You don't think it was done and you don't
know if it was asked for. They are reporting that it was asked
for and it wasn't done.
Mr. Koskinen. It wasn't done. Right.
Mr. Jordan. Which is a problem. Which is a big problem,
when your tech experts say we need outside tech experts to come
in and get the data, no, no, no, we don't want to do that, it
is unrecoverable. As reported by what you have said in
testimony and what has been filed with the court that it is
unrecoverable.
Mr. Koskinen. You have to remember this was three years
ago, and there were no investigations ongoing at that time. In
fact, the IRS had already taken extraordinary attempts even to
go to the CID people----
Mr. Jordan. But that is the point. If it is three years
ago, that is why they said we need the outside experts. That is
why they wanted the help. And you are saying it didn't happen.
Mr. Koskinen. Right.
Mr. Jordan. Which is a concern.
Let me just do one other question, if I could.
So, according to your testimony, a month ago the Ways and
Means Committee said the IRS, in February, identified documents
that indicated Ms. Lerner had experienced computer failure in
2011, consistent with Mr. Cain. You knew in February there was
a problem, February 2nd, February 4th you knew there was a big
problem, according to Mr. Cain's testimony. In mid-February you
knew it was unrecoverable. Your testimony says in mid-March
2014, this review, we learned the data stored on her computer
hard drive was determined to be unrecoverable. So Mr. Cain says
he knew in February; you knew in mid-March.
Mr. Koskinen. That is right. I actually knew----
Mr. Jordan. But you were kept abreast----
Mr. Koskinen. I actually knew in mid-April, and that is a
misstatement on my part. If you read my testimony before this
committee in the now three hearings I have had----
Mr. Jordan. This is your written testimony in Ways and
Means. This is not accurate?
Mr. Koskinen. My written testimony?
Mr. Jordan. This is your opening statement, what you said
to the Ways and Means Committee. The IRS, in February,
identified documents that indicated Ms. Lerner experienced a
computer failure in 2011. Mid-March review, 2014, the data
stored on her computer hard drive was determined to be
unrecoverable.
Mr. Koskinen. No, I am sorry, that is correct. That was
what the IRS knew----
Mr. Jordan. So here is my question.
Mr. Koskinen. Yes.
Mr. Jordan. Mr. Cain says on February 4th he knew. You
indicate in your testimony mid-February we knew there were big
problems, and you indicated in mid-March we knew it was
unrecoverable. You knew, even though your key staff people, Mr.
Cain and Ms. Duvall, knew in mid-February. You testified
February 5th to the House Ways and Means Committee, February
26th to the House Appropriations Committee on Financial
Services, March 26th to this full committee, and April 8th to
the Senate Finance Committee.
In those hearings you were asked about Ms. Lerner and email
and different things. You had four different opportunities in
front of Congress. So I am wondering, in the back of your mind,
were you wondering, when you answered these questions, that we
are going to produce all of Lois Lerner emails, when we are
going to comply, in the back of your mind, were you thinking
maybe I should let these guys in on the little kind of
important fact that, you know what, we have already determined
that her hard drive is unrecoverable?
Was that ever in the back of your mind when you were
answering questions from members of Congress in four different
committees over the time period when you have already learned
significant facts. Even though in your mind, according to your
testimony, you didn't fully know that we had lost them all for
good, even though you sort of knew that it was pretty darn
likely you had lost them all for good, in the back of your
mind, did you think, you know what, maybe I should fully
disclose what the real status is of Ms. Lerner's emails?
Mr. Koskinen. No. As I have testified several times in the
past----
Mr. Jordan. That didn't enter your mind at all?
Mr. Koskinen. I didn't know that there were emails lost. I
personally didn't know, and that is what I was testifying
about, until the middle of April. When I testified, and I have
said this before in several hearings, when I testified on March
26th, I did not know that her emails were not recoverable.
Mr. Jordan. But this is your testimony right here. I am
reading. This is John Koskinen testimony.
Mr. Koskinen. Right.
Mr. Jordan. In the mid-March 2014 time frame, we learned
the data stored on her computer hard drive was determined to be
unrecoverable. So that is certainly before the March 26th
hearing and the April 8th hearing in front of the Senate
Finance Committee. So you had two opportunities where you
already know it is unrecoverable. That means you are not going
to get what is there.
Mr. Koskinen. No, I am sorry. I take, and I go to the point
earlier, I take responsibility for the agency. When I said, in
that, trying to report to people what we knew, that is what the
IRS knew. When you ask me specifically what did I know, I knew
and didn't know until April. If you told me now that Tom Cain
said he knew in February, I would henceforth say we, as the
IRS, knew in February. I myself, personally, did not know.
When I testify, I tell you what I know.
Mr. Jordan. This goes right to the chairman's point. When
our chief counsel knows in February, mid-February, that it is
unrecoverable, you can't come in front of Congress and say I
didn't know, that is why I didn't answer. Your chief counsel
knows. You should have known.
Mr. Koskinen. I should have known.
Mr. Jordan. And you should have disclosed that, and you
didn't.
Mr. Koskinen. I didn't know and I, therefore, couldn't
disclose. And you are exactly right. I have not hidden behind
the fact that somehow this is somebody else's responsibility. I
am perfectly prepared to take full responsibility for exactly
what we did with the production of the information to the
Congress.
Mr. Jordan. But you didn't tell us that in your testimony.
You didn't tell us, on March 26th, when you answered, you
didn't tell us that. It would have been nice if we had known at
that point. Kate Duvall and Tom Cain already knew it was
unrecoverable, but somehow they didn't tell you because you
would have to disclose that when asked about it in Congress,
was that why they didn't tell you?
Mr. Koskinen. I have no idea. This was an iterative
process. At that point we were spending most of our time trying
to produce all of the information for the determination
process, which we were able to do by the middle of March.
Mr. Jordan. This is what no one can figure out. Something
this important, Lois Lerner, the lady who sat in your chair and
took the Fifth, the central figure in this investigation, you
lose her emails; your chief counsel knows in February, the
lawyer in charge of document production knows in February, and
they don't tell you, and you can come in front of Congress four
times and not disclose that. And then when you do learn in
April, you can wait until June 13th. That is what the American
people are like, no wonder there is some morale concern and no
wonder there is a distrust. That is unbelievable.
Mr. Koskinen. Well, can I just add one point?
Mr. Jordan. We didn't know, your chief counsel knew.
Mr. Koskinen. You are going to talk to the chief counsel,
and she will tell you what she knew or didn't know.
Mr. Jordan. We already talked to Tom Cain, and he told us
she knew.
Mr. Koskinen. Right. He knew that, if you go back through
there, that the hard drive had a significant problem. We did
not know what emails we had. We, in fact, discovered and found
24,000 additional emails from Lois Lerner to other people----
Mr. Jordan. I appreciate the chairman's indulgence.
All I am saying is this, when Tom Cain, the lawyer in
charge of document production, the professional who you said
does good work at the IRS, when he says unrecoverable, and they
knew that in mid-February, and you come to Congress three times
after they knew that, both he and your chief counselor, and you
don't disclose that, you should have known that and you should
have told us. And then when you do find out, you wait two more
months. Come on. Come on, we are supposed to buy that?
I yield back.
Mr. DeSantis. I thank the chairman.
I would point out, before I recognize my friend from
Pennsylvania, here we are in, say, February, March, saying you
didn't know how many Lerner emails were out there; and,
granted, you were not commissioner during this whole time, but
we have been asking for these things for over a year now. A
subpoena was sent in August, reissued under your watch, so the
IRS dragged its feet on that.
And I realize a lot of that is not necessarily on your
watch, but don't tell me nine, ten months after we request this
stuff and five or six months after a subpoena is issued, that
somehow you just don't know how many emails you have. That
should have been something that should have been ascertainable.
Thank you for the indulgence, and I will recognize Mr.
Cartwright.
Mr. Cartwright. Thank you, Mr. Chair pro tem.
Speaking of things that would be nice to know and things
not disclosed, Mr. Koskinen, I asked the chairman of this full
committee who the witnesses are supposed to be next Wednesday
from the IRS. He declined to tell me. He declined to tell me
whether he even knew who the witnesses next week will be. But I
didn't ask you, Mr. Koskinen. This is your department. Do you
know? Have you been informed by anybody on this committee who
the witnesses sought for next week's hearing will be?
Mr. Koskinen. Until I came to this committee meeting, I had
no idea that the committee was going to hold yet another
hearing next week.
Mr. Cartwright. And would you agree with me that those are
among the things that would be nice to know?
Mr. Koskinen. It is always nice to know in advance when we
are supposed to show up for a hearing. I don't know whether I
am expected to show up again next Wednesday.
Mr. Cartwright. Well, neither do I.
Well, let's delve into the IRS forensic lab together, shall
we? There were comments today about scratches on hard drives,
and that is not my area of expertise, and I dare say it is not
yours either.
Mr. Koskinen. Right.
Mr. Cartwright. But we did have John Minsek, an analyst
from the IRS Criminal Investigations Unit, meet with Ways and
Means staff on Monday. He told them he did not find anything
suspicious about how a scratch got on Ms. Lerner's hard drive.
The analyst, Mr. Minsek, said that he tried to recover Ms.
Lerner's documents on two occasions, first with a normal tool
set and then, using more advanced tools, he still couldn't
recover any data.
Mr. Commissioner, contemporaneous emails confirm that the
IRS Criminal Investigations Unit could not recover her
documents. Am I correct in that?
Mr. Koskinen. That is correct.
Mr. Cartwright. And the CI analyst, Mr. Minsek, then told
Ways and Means Committee staff that he gave his colleague in
the IRS IT shop the name of a third-party vendor that he used
on rare occasions to recover information, but IRS IT staff had
already consulted with outside experts at HP.
Mr. Koskinen, do you know if IRS officials consulted with
IT experts a second time in 2011 to recover Ms. Lerner's
emails?
Mr. Koskinen. I do not know.
Mr. Cartwright. Okay.
All right, finally, I want to touch on something that the
gentlelady from Wyoming mentioned. She just said that her
constituents are going to take matters into their own hands.
And I say this because about an hour ago somebody walked into
the Cannon House Office Building with a handgun, according to
Chad Pergram, our friend from Fox News locally.
Knowing that there are over 4,000 staffers and interns at
risk here on the House side of the Capitol, and recalling the
horrible Gabby Giffords tragedy and the loss of staffer Gabriel
Zimmerman, I would ask that members refrain from making
statements that could even possibly be misconstrued by the
public as an invitation to do anything like that. It is obvious
that Representative Lummis meant no such thing, but I think it
behooves all of us to be very careful about the way we phrase
things, because there are people out there ready and able to
misconstrue things.
With that, Mr. Chairman, I yield back.
Mr. DeSantis. The gentleman yields back.
The chair now recognizes the gentleman from Georgia, Mr.
Collins.
Mr. Collins. Thank you, Mr. Chair, I appreciate it.
Mr. Koskinen, here we go again. I told the story last time,
and it was the story of my young son, who, to some media
reports, became famous, I guess, or infamous, however you want
to describe it, on the stories that he used to tell, and I
recounted this time line, and I wish I could sit here today and
see you again and say that what was not plausible then has now
gotten a little bit plausible. It actually just seems to not
have gotten any more plausible. People ask why are we
continuing to do this? Because it just looks like there is
something new comes out all the time. One request will say
this, then another request.
It was asked earlier--I had to leave and come back, and it
was said how much paperwork that you have put to the committee
and how many hours are being worked on. To restore trust in a
relationship, whether it is between two people or whether it is
between Government and the people that they serve, it should
really be of no limit to restore that trust, especially with
the IRS.
So, frankly, to tell me that you gave a million documents
and that your hours you are spending, because of the issues
that have been raised and the lack of trust on both sides, I
have Democrats and Republicans in my district who are appalled
at this; and they want it solved, they want the real answers
and they want to continue, and they don't want to continue
reading every week in the paper that something new has come up.
I think that is an issue of trust that has to be maintained
here; and, frankly, the plausibility story is just, again,
getting to the level of unbelievable in a lot of ways.
But I do have some questions, because we have talked a lot
about the Lois Lerner emails, but in addition to those the
committee has also asked for other emails, and I want to talk
to you about those for just a second and see the status of
those, is that okay?
Mr. Koskinen. Sure.
Mr. Collins. Okay.
Holly Paz, emails responsive to the committee's request
from August 2nd, 2013 to February 14th, 2014. Have you gathered
all of those emails?
Mr. Koskinen. We have provided all of the emails with
regard to the determination process. And, again, pursuant to
what I thought were the agreed upon search terms, but
apparently not totally agreed with the investigative
committees, that we would select 83 custodians who were the
ones most likely to be involved and that we would search----
Mr. Collins. Are those the same 83 that a quarter of their
hard drives crashed?
Mr. Koskinen. It is not clear a quarter. At this point,
nobody knows what that answer is.
Mr. Collins. Oh, so we could have more that have crashed.
Mr. Koskinen. We could have more, we could have less. I
don't know until we find out.
Mr. Collins. I mean, does that just not boggle mind that of
a small number, one about a quarter, and we can argue about a
quarter, not a quarter, I am not a mathematician, neither are
you, but that there may be others in that subset that deals
with the areas we are asking for?
Mr. Koskinen. Yes. And that is a perfect example as to why
it would be very helpful, had we been able to complete the
investigation of what happened to the custodians, we could tell
you. The reason I actually decided we would continue to find
out how many Lois Lerner emails we had was because if we hadn't
been able to do that, people would be talking about----
Mr. Collins. Let's not change the question. I asked about
Holly Paz. We can get away form Lerner. I asked about Holly.
Mr. Koskinen. No, no, but my point is that to the extent we
can provide the full story, your point, then it is a lot easier
to know and you can disagree about it. But it is a lot better
to know what the total picture is. So when you get the
custodians, because the IG is now doing that, we don't know
what the answer is, so it may be 10, it may be 20, it may be 5,
it may be 25. I don't know, and at this point we aren't able to
investigate that, and we are hoping the IG, when he completes
his investigation, would include, will conclude with the
custodians as well.
Mr. Collins. Well, that is another source of contention.
Mr. Koskinen. That is the problem. Anyway, it is part of
the problem we are doing this in dribs and drabs----
Mr. Collins. I understand.
Mr. Koskinen.--and every day having a press release about
some aspect of some interview.
Mr. Collins. Thank you for saying drips and drabs, because
that is what this investigation seems like it has been every
since we started it, and especially even from your comments and
others, that every day we get drips and drabs and drips and
drabs, and the people are tired of it, this Congress is tired
of it. And this is the problem we have because I am going to
assume from your question--I am an attorney as well--that that
is a no. After all you said, you have not gathered all her
emails, or you don't know if you have gathered all her emails.
Mr. Koskinen. No, no, exactly right. I didn't mean to be
evasive. We provided all of the emails that were determined to
be relevant to the determination process. We have not yet
provided all of her emails because our first priority, agreed
with this committee in March, was we would find all of Lois
Lerner's emails.
Mr. Collins. So, no. So the question on William Wilkins,
same question, yes or no?
Mr. Koskinen. Same answer. You got all of his emails that
are responsive to the investigation that started all of this.
Mr. Collins. Okay, but no to all. Jonathan Davis, same
question.
Mr. Koskinen. Again, you got all of his----
Mr. Collins. No. I mean, because all is all. I mean, we had
this conversation three months ago.
Mr. Koskinen. That is right. And as I said in March, we are
happy to keep working with you to figure out what your next
priority is. Obviously, thanks to the system, we can't produce
it all at once. We have actually produced a lot of stuff, and
it takes us a long time. Part of the background on the June
13th public report was to try to explain why, with our system,
it takes so long to produce this stuff. We should not have to
spend $18 million. We should have a better system. There is no
doubt about that.
Mr. Collins. I don't disagree. The question I have, though,
is we need them all, in the sense of the clarification issue
here, and we have just got that.
I do have one quick--I want to go back to something that
was asked a lot earlier and it was, I believe, from my friend
from South Carolina. He said we confirmed, and you said I don't
now who told me. And I have sat through this will be my third,
I guess, with you listening, and there has been a lot of
meetings in which you were told information, but you don't
remember who was in the meeting or you don't know who told you
that, and it hit me as I was sitting here. Maybe there were
multiple people in the room and you are not sure who said it
first or who told you first, so I am going to ask it
differently. I don't want to know who told you first or last. I
am not being specific in that nature. I want to know who was in
the room when you were told that we have confirmed all that.
And surely you are a very bright individual. You would know at
least who was in the room.
Mr. Koskinen. I have 12 meetings a day, on average.
Mr. Collins. I do as well. I know most of the ones in the
meeting, especially when it is senior staff on something of
this nature.
Mr. Koskinen. And those meetings average probably 8 to 10
people, so I cannot tell you about any meeting who was actually
in the room. But I can tell you who was likely in the room, and
that is the people who have been working on the production with
your staff. Obviously, my counselor was in the room, probably
my chief of staff was in the room. But I can't tell you, and I
don't recall because it wasn't significant at the time, who
else was in the room. We were reviewing the document.
Mr. Collins. It wasn't significant at the time that you may
have lost emails? That was not a significant meeting?
Mr. Koskinen. The issue here was whether we could confirm,
your question was whether we could confirm.
Mr. Collins. Confirm. But you are dealing with a bigger
issue. I said is that not significant?
Mr. Koskinen. This entire issue was significant, but I am
actually running an agency that has to deal with filing
seasons; we have overseas voluntary disclosure programs; we
have voluntary tax return programs we have been putting out; we
have been simplifying for small charitable organizations----
Mr. Collins. And, look, I understand that and that is a
great diversion to what we are asking right here. I get that
the IRS has other issues, but I also get that the American
people, even over years of making fun and doing everything else
that unfortunately the IRS has had in the past. It is not now
just the fact that they don't like the IRS because they have to
send their money in.
They are now at an issue both party line irregardless, they
are not sure about the IRS because they don't trust the IRS
anymore. And when that is an issue, everything should be
focused on that. And this is the question that makes it just
completely implausible and we keep getting dribs and drabs. I
appreciate what you said on dribs and drabs, because that is
the problem we have right now.
Mr. DeSantis. The gentleman's time has expired.
Mr. Collins. I will yield back.
Mr. Koskinen. Can I just make one point clear, and that is
nobody has a greater interest of getting you all the
information you need and getting closure on this than I do and
the people at the IRS. If we could conclude one of these six
investigations, find out what the determination of facts are
and the recommendations are, we are delighted to take those
recommendations. We have accepted all of the inspector
general's recommendations. The last thing in the world that
benefits us is to have this go on any longer than necessary. So
whatever we can do, as fast as we can produce documents. The
relevance of the 960,000 pages isn't, gee, isn't that a big
amount. It takes a lot of time to get all that done in our
system.
Mr. Collins. The one thing we will agree upon is getting to
the end of this is the end result so that we can move and the
people can restore the trust in a Government agency in which
they need to have trust that they don't have now.
With that, I yield back.
Mr. DeSantis. The gentleman's time has expired.
I am going to recognize the gentleman from California for
five minutes.
Mr. Koskinen. This is round four?
Mr. Issa. No, no. When people yielded me time under our
arcane rules, that doesn't count.
Mr. Koskinen. Okay.
Mr. Issa. But I will be brief.
Commissioner, we have a history, and I want to make sure I
get the history straight today, because it does matter for this
committee. You constantly talk about this agreement and
discovery and so on. Were you aware that we considered that the
IRS was stonewalling us and giving us information we didn't
want and giving it to us in an order we didn't like it in the
months of May, June, and July of 2013?
Mr. Koskinen. I was not aware of that.
Mr. Issa. Well, we have a number of letters basically
showing our dissatisfaction, including what we now know to be
erroneous information, misleading information that would imply
that progressive were being targeted, the false narrative that
continues to be used at times.
On May 22nd, 2013, Lois Lerner took the Fifth. Shortly
after that she became a person of extreme interest for this
committee because in fact she had made statements outside of
her assertion of the Fifth that she broke no rules, she broke
no regulations. She additionally authenticated earlier
testimony in statements again. After she took the Fifth, she
then went back on the record. So under oath she made a number
of statements.
As we began investigating, we became very aware that Lois
Lerner was an active participant in Washington of targeting
conservatives. In addition, in evaluating her history, we
became very aware that she did not like conservatives and she
had that sort of predisposition. Plus, her public speeches made
it very clear that on behalf of the President ``they want us to
fix this'' and certainly the President had been the outgoing
spokesperson again Citizens United, that we had every reason to
focus our investigation on her as the hub in a hub and spoke
system of deliberately targeting conservatives for their
values.
Therefore, I issued, if the ranking member were here, he
would call it unilateral, but pursuant to the committee rules I
issued a subpoena and made it very clear that our first
priority was to have all of Lois Lerner's emails, and that that
was the priority. Were you aware of that?
Mr. Koskinen. I am aware of that subpoena, yes.
Mr. Issa. And you were aware that that was our goal?
Mr. Koskinen. You have eight items on that subpoena, and
that is at the top of the list.
Mr. Issa. Very good. Therefore, when we interviewed Thomas
Cain and we asked him, so is it fair to say this subpoena had
no--and this was the subpoena of August 2nd--this subpoena had
no impact on the process that you were following or the
documents that you were reviewing. That was our question. His
answer: It didn't impact our production process, that is
correct. Question: Did it have any impact on which documents
were chosen to review? Answer: No.
Additionally throughout that transcribed interview, what we
discovered was that you all met, had a discussion, if you will,
and decided that you were not going to prioritize any aspect of
delivery of Lois Lerner's documents, even though she had taken
the Fifth before this committee, even though she clearly had
public statements and she had been a person who had already
unlawfully leaked, by planting a question, the outcome of an
IRS TIGTA investigation. All of that is undeniable.
Why in the world should the American people believe that
you are cooperating with us when I issue a subpoena, our
committee makes it clear in multiple letters that these are our
priorities, and now we have sworn testimony or testimony under
penalty of perjury that you didn't make any changes, you
basically continued business as usual, which was delivering us
based on you call it mutually agreed, but they were your
criteria, primarily, as to search terms, and never disclosed to
us that those search terms were searching but a small portion
of what should have been the entire database? Do you have an
answer for that?
Mr. Koskinen. I wasn't there. My understanding is there are
five other investigations that are now going on and were going
on then, that there were a wide range of requests for documents
from the Senate Finance Committee, Ways and Means, Permanent
Subcommittee.
Mr. Issa. Did any of them issue binding subpoenas?
Mr. Koskinen. And I don't think anyone else had a binding
subpoena. My understanding, and I wasn't there, was that----
Mr. Issa. But after February 2014 we issued another
subpoena. Did anything change then?
Mr. Koskinen. At that point, we were, as I have testified
before, we began to pull the rest of Lois Lerner's emails. We
started with the analysis of the emails already produced, and
that is where it was discovered that there were fewer emails in
the 2011 period.
One of the priorities at that time, though, competing
priorities was to complete the production of the determination
documents that everybody was interested in. There was kind of
a, I gather, a process by which, with all of the conflicting
questions to try to respond to documents that met as many of
the requests as possible, and most of the requests certainly
for Finance and, at that time, Ways and Means were for
documents around the determination process.
That was completed, and then since that time the full court
press has been to produce all of Lois Lerner's emails, whether
in her account or any other account.
Mr. Issa. Thank you. Earlier on I asked you for a discovery
process of who was looking for when throughout a time line, and
your assistant took it in very copious notes there. I want to
just add one clarification to that process. Obviously, we are
interested in what you did during subpoenas, but we are getting
that. You have delivered some, I guess we are looking at an
exorbitant number of documents that you constantly and many
people constantly cite.
What we don't understand that I think the committee has an
absolute obligation to understand, is in this process of what
you looked and where you looked, understanding the sources that
this has come from, because we are a committee of oversight
reform, we are a committee that has an obligation to see that
you spend the American people's money properly.
It appears, from this side of the dais, as though the
process is very fragmented, that in fact you are looking sort
of under cookie jars, to use an expression of my youth; that
you are providing large amounts of data from certain periods
that based on a six-month backup and a very small server
capacity wouldn't exist. So that means that they probably came
from other places. And we need to understand all the places
they came from, where you went.
You have sent us, in many cases, hugely redundant emails.
In other words, the same emails can come from multiple places.
Understanding that so that we can figure out how to prevent it
in the future is important, because this is not the last time
that a Federal judge, an IG, or a congressional committee is
going to want to know details. I think we can all agree to
that, just as corporate America receives countless subpoenas
for document production, so much so that they develop software
explicitly to do these kinds of searches and retention policies
for that reason.
Can we have your agreement that we will receive some
accounting of how that happens?
Mr. Koskinen. Yes. And we would be glad to talk further
with your staff to make sure we give you exactly what you need.
But you are exactly right, we looked in the logical places, and
I understand we looked under every cookie jar. We actually were
dedicated to making sure that we found every existent Lois
Lerner email on her account or anybody else's so that we would
be able to say these are all the Lois Lerner emails we have,
and that has led to 67,000.
Mr. Issa. And I will make a rather unusual request in this
case. We are more than happy to have a small group briefing
meeting, bipartisan meeting, with the individuals who have been
involved in this so that separate from the investigation, which
is important and ongoing, the question of efficiency, the cost-
effect of fragmented data, the cost-effect of having, and I
have held it up several times, individual drives like this that
people have, notebooks that have been taken offline, all the
other things that I suspect are one of the reasons this has
become so expensive and difficult.
That meeting is not exactly on course with this
investigation, but it is separately a question from a
standpoint of the management of the $82 billion worth of funds
that Government spends to see if in fact policy changes with
OMB and others should be instituted and funding allocated so
that this kind of fragmentation doesn't happen in the future.
So as one person who has worked in private America to
another, that is something that your briefing can be informal,
off the record, doesn't have to be definitive, but our
committee, I think, really has to have an understanding so we
can be part of policy formation, because what I know about how
corporate America does it and what I am beginning to glean you
have to do are very different.
Mr. Koskinen. They are very different. As I have said, I
asked that question some time ago, that we should not have to
spend $18 million and this amount of time responding to
document and email requests. But I think if we could kind of
get two birds with one stone, we could, as you say, have that
briefing that would answer your questions about how did this
discovery process go and then what are the problems with that
going forward, because it is my understanding that there has
been a tremendous amount of effort made to make sure that we
found every document responsive to the committee. It is a
lengthy process.
Again, the June 13th report starts out trying to explain to
all of the investigators what the process is and why it is so
anachronistic and so difficult. And I agree with you totally,
going forward it would certainly help all of us if we had a
more efficient system for preserving and finding documents and
emails.
Mr. Issa. Thank you, commissioner.
I yield back.
Mr. DeSantis. The gentleman yields back and that concludes
our hearing today.
Thank you, Mr. Commissioner, and the hearing is adjourned.
[Whereupon, at 1:20 p.m., the subcommittee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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