by Fred Stokeld and Lindsey McPherson
A summary of interviews congressional investigators conducted with IRS employees in the Cincinnati office responsible for handling exemption applications shows that the targeting of conservative groups originated in Cincinnati, as IRS officials had initially claimed.
The summary was provided in a June 9 memo from the office of Rep. Elijah E. Cummings, D-Md., ranking minority member of the House Oversight and Government Reform Committee, to fellow committee members. Its release followed Cummings's June 9 appearances on CNN's State of the Union and CBS's Face the Nation, during which he disputed suggestions from Oversight Committee Chair Darrell E. Issa, R-Calif., that the IRS National Office in Washington was likely involved in selecting exemption applications from conservative groups for extra scrutiny.
According to Cummings's summary, the manager of a group of screeners at the IRS determinations unit in Cincinnati told congressional investigators during a June 6 interview that after one of his screeners in February 2010 reviewed the exemption application of a Tea Party group indicating that the group would be engaged in political activity, he forwarded it to the IRS Exempt Organizations office in Washington because it was a "high-profile issue." Based on the Washington office's acceptance of the case for further review, the manager instructed his team to identify similar cases for consistency, according to the summary. He told the investigators that "no one said to make a search."
Though Cummings did not release the manager's name, he identified him as one of five IRS officials the committee has interviewed. Based on the names of the five individuals the Oversight Committee had requested interviews with as cited in a May 15 letter, and the details provided in the summary, it can be determined that the screening manager is John Shafer.
One of the screeners on the Cincinnati team, who was interviewed by investigators on May 30, said he adhered to Shafer's request to identify how many Tea Party cases had been processed and how many remained open, according to the summary. The screener told investigators that he came up with the idea of using the search terms "patriot" and "9/12 Project" to identify additional applications. Cummings also did not release the name of the screener, but details reveal him to be Gary Muthert.
The IRS did not respond to a request for comment.
Shafer said he did not learn that the terms were used until June 2, 2011, when the head of the Cincinnati office asked him for a list of criteria screeners were using to identify Tea Party groups.
Shafer, a self-described "conservative Republican" who has worked at the IRS for 21 years, said he was not aware of White House involvement in the targeting or political motivation behind the extra scrutiny given to exemption applications from Tea Party groups. According to the summary, he said the extra screening of conservative groups' applications was based on "consistency and identifying issues that needed to have further development."
Cummings said on CNN that the interviews "go a long way toward showing that the White House was not involved in this." He told CBS that Issa was "absolutely wrong" in making that assumption.
"Based on everything I've seen, the case is solved," Cummings said on CNN. "If it were me, I would wrap this case up and move on."
Issa issued a statement in which he disagreed with Cummings's assessment that the case is solved. "His extreme and reckless assertions are a signal that his true motivation is stopping needed Congressional oversight and he has no genuine interest in working, on a bipartisan basis, to expose the full truth," Issa said. "The American public wants to know why targeting occurred and who was involved."
Issa added that the interview excerpts Cummings provided in the memo to committee members "did not provide anything enlightening or contradict other witness accounts."
Cummings also wrote a letter to Issa asking him to release the full transcripts -- not just excerpts -- of investigators' interviews with the Cincinnati employees. He said he will release the transcripts by the end of the week if Issa does not.
Issa has previously said he plans to make all of the transcripts public but he has not provided a timeline for doing so.
Interviews Consistent With Lerner Statements to TIGTA
The accounts from Shafer and Muthert are largely consistent with the explanation Lois Lerner, exempt organizations director, IRS Tax-Exempt and Government Entities Division, who is now on administrative leave, gave the Treasury Inspector General for Tax Administration in November 2012. According to written answers Lerner provided to TIGTA that were released at a May 23 Oversight Committee hearing, Lerner said the Cincinnati determinations office had long used e-mail to alert specialists to emerging issues that merited coordinated processing or situations that warranted additional review.
"Because it was difficult to keep track of all of these separate email alerts, EO Determinations staff requested a consolidated list of all such alerts," Lerner wrote to TIGTA. "EO Determinations was developing the Be On the Lookout (BOLO) list in early 2010. The BOLO, which is an Excel spreadsheet, provides a centralized source of regularly updated information to EO Determinations specialists about potentially abusive organizations or fraud issues, issues and cases requiring coordinated processing, emerging issues and issues for which to watch."
Lerner said an entry was put on the BOLO list under the emerging issues tab that noted "various local organizations in the Tea Party movement are applying for exemption under 501(c)(3) or 501(c)(4)." That language "was selected by Determinations specialists with the involvement of a front-line manager in EO Determinations," Lerner wrote to TIGTA. She did not provide the names of the specialists or the manager.
Lerner told TIGTA she first became aware that the BOLO list made reference to Tea Party organizations and that the Cincinnati determinations unit was using political criteria to flag applications for further review on June 29, 2011, when she was briefed on the matter by the acting director of rulings and agreements for TE/GE, which at the time was Holly Paz. The IRS recently appointed a new acting director of rulings and agreements to replace Paz.
Lerner said Paz, whom she did not refer to by name in her written response to TIGTA, prepared for the briefing by asking the program manager of the determinations unit, who at the time was Cindy Thomas, to provide her with the criteria the unit was using to determine whether a case was a Tea Party case. Thomas asked Shafer for the criteria because it was not listed in the BOLO, Lerner said.
Lerner's account of Shafer's response to Thomas's inquiry was the same as the answer Shafer provided to the congressional investigators. He identified four criteria that screeners used, one of which involved looking for references to "Tea Party," "patriots," or "9/12 Project" in the case file.
What Lerner did not address in her written answers to TIGTA, which were partially redacted, was the exchange of e-mails between the Cincinnati determinations office and the EO office in Washington that Shafer referred to in his interview with congressional investigators.
Shafer said he told his supervisor -- which appears to be Thomas -- about the Tea Party application Muthert reviewed in February 2010 and the political activity highlighted in it. He said he received a response from one of his supervisors saying that the EO office in Washington, which Lerner led, "would like the case."
Grassley Questions Roady
Meanwhile, a Republican senator wants answers from the attorney whose question to Lerner exactly one month ago sparked the uproar over IRS targeting.
In a June 6 letter, Senate Judiciary Committee ranking minority member Chuck Grassley, R-Iowa, who also sits on the Senate Finance Committee, asked Celia Roady of Morgan, Lewis & Bockius LLP how she came to ask Lerner about the IRS's treatment of Tea Party groups at the end of a question-and-answer session at a May 10 American Bar Association tax conference. Grassley asked Roady why she initially told a reporter and a law professor that the question was not arranged in advance but later acknowledged in a statement that Lerner had asked her to pose the question.
Grassley is asking the questions on his own behalf, his spokesperson confirmed. Though it has the jurisdiction to investigate the IRS matter, the Senate Judiciary Committee has not launched a formal investigation.
- Release from House Oversight and Government Reform Committee.
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