IRS Scandal: Focus Shifts to White House

White HouseReuters

Two senior aides to President Barack Obama knew weeks ago about a watchdog report on the U.S. Internal Revenue Service targeting of conservative groups, a spokesman said on Monday, shifting the focus to the White House in a fast-moving controversy.

White House Counsel Kathryn Ruemmler was told on April 24 about an upcoming report by the Treasury's Inspector General for Tax Administration (TIGTA) on the IRS practice, which an IRS official apologized for on May 10, triggering the controversy.

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Soon after she learned of the report, Ruemmler briefed White House Chief of Staff Denis McDonough and other members of the senior staff, White House spokesman Jay Carney told reporters at 7a news briefing.

Ruemmler decided there was no need to inform the president, Carney said, as the administration struggled to put a lid on the IRS affair which has become a major distraction early in Obama's second term.

Carney defended White House inaction prior to the completion of the inspector general's probe, saying any intervention would have been inappropriate. In any case, he said, there was no urgency because the activity in question had stopped about a year earlier.

Carney last week said Ruemmler had not necessarily been told of the contents of the TIGTA report, which found IRS agents had targeted conservative groups for extra scrutiny based on the use in their names of key words, such as "Tea Party" and "Patriot."

Ruemmler was told on April 24 the report would address "line IRS employees improperly scrutinizing ... organizations by using words such as Tea Party and Patriot," Carney said on Monday.

"While we had an indication of the likely findings, until the IG finalizes his report, the findings and conclusions are subject to change," Carney said.

"That's why we had to wait, appropriately, until the report was publicized or published for the president to be able to review it and respond, as he did very quickly," Carney said.

Obama fired acting IRS Commissioner Steven Miller on Wednesday and called the inspector general's findings outrageous. The report found no evidence of political motivation for the targeting or of any White House involvement.

There was no White House intervention at any time into the contents of the report, Carney said.


As the White House fought to contain the political damage, two congressional committees were preparing to hold hearings on the report, with some lawmakers calling for the Obama administration to fire more people linked to the scandal.

Lois Lerner, chief of the IRS tax-exempt unit, was scheduled to testify on Wednesday to a Republican-controlled investigative committee of the House of Representatives, along with other officials. Lerner's apology on May 10 for the IRS targeting at a legal conference in Washington set off the furor.

Representative Sander Levin called for Lerner's resignation on Friday, saying she had recently testified to a House subcommittee and failed to disclose what she knew about the targeting. "This is wholly unacceptable," he said.

Levin is the top Democrat on the House Ways and Means Committee, which writes tax law and oversees the IRS.

Senate Republican leader Mitch McConnell's office on Monday drew attention to a Washington Post article that questioned Lerner's statements, including her contention that applications for tax-exempt status by groups had doubled during the time period in question.

Republican Vern Buchanan, another member of the Ways and Means panel, last week called for Lerner to be dismissed.

Joseph Grant, acting commissioner for the IRS tax-exempt and government entities division and Lerner's boss, said last week that he will retire.

"I don't see how Lois makes it (survives in her post???). It's saddening to me," said Philip Hackney, assistant law professor at Louisiana State University who worked until 2011 at the IRS with Lerner. "She is nonpartisan; I say that with great confidence."


Lerner was scheduled to testify on Wednesday to the House Oversight and Government Reform Committee alongside Deputy Treasury Secretary Neal Wolin, former IRS Commissioner Douglas Shulman and Treasury Department Inspector General for Tax Administration J. Russell George.

On Tuesday, George, Miller and Shulman were set to testify before the Democrat-controlled Senate Finance Committee.

As the IRS scandal as widened, Republicans have focused on what officials knew about the targeting and when they knew it.

The inspector general's report showed that the targeting got under way in mid-2010. In 2011, Lerner was told about how the practice was being handled at a Cincinnati field office. She halted the use of the controversial key words, but lower-level employees by January 2012 had resumed using them.

At a first congressional hearing on the matter last Friday, Republicans made clear they are looking beyond the IRS.

"This appears to be just the latest example of a culture of cover-ups and political intimidation in this administration," Republican House Ways and Means Chairman Dave Camp said on Friday.

Democratic Senate Finance Committee Chairman Max Baucus and top committee Republican Orrin Hatch on Monday requested documents on possible White House involvement and sought nearly 300 tax-exempt status applications delayed by the targeting.

Baucus and Hatch also asked for documentation of any disciplinary action taken, and whether some lawmakers' calls for the IRS to crack down on tax-exempt groups played any role.