Wednesday, May 15, 2013

I.R.S. Chief Out After Protest Over Scrutiny of Groups


President Obama announced Wednesday night that the acting commissioner of the Internal Revenue Service had been ousted after disclosures that the agency gave special scrutiny to conservative groups. Attorney General Eric H. Holder Jr., meanwhile, warned top I.R.S. officials that a Justice Department inquiry would examine any false statements to see if they constituted a crime.


Speaking in the White House's formal East Room, Mr. Obama said Treasury Secretary Jacob J. Lew had asked for and accepted the resignation of the acting commissioner, Steven Miller, who as deputy commissioner was aware of the agency's efforts to demand more information from conservative groups seeking tax-exempt status in early 2012.

"Americans have a right to be angry about it, and I'm angry about it," Mr. Obama said. "It should not matter what political stripe you're from. The fact of the matter is the I.R.S. has to operate with absolute integrity."

Mr. Miller, who told agency employees that he would leave the administration in early June, is scheduled to testify Friday before the House Ways and Means Committee in the first of a series of hearings on the I.R.S. activities.

The president acted as his administration broadly stepped up pressure on the I.R.S. — and sought to insulate itself from the outcry over the agency's conduct. Mr. Obama spoke to reporters after an Oval Office meeting with Mr. Lew and his deputy, Neil Wolin, who will be responsible for carrying out the president's orders to install safeguards to prevent a similar effort.

In an internal message to employees, Mr. Miller, a 25-year veteran of the I.R.S., wrote: "This has been an incredibly difficult time for the I.R.S., given the events of the past few days, and there is a strong and immediate need to restore public trust in the nation's tax agency. I believe the service will benefit from having a new acting commissioner."

Mr. Holder's warning came as lawmakers stated unequivocally that I.R.S. officials had lied to them in failing to disclose the added screening despite being pressed repeatedly.

At a hearing of the House Judiciary Committee on Wednesday, Mr. Holder said the Justice Department would investigate whether the civil rights of groups or individuals, and statutes governing I.R.S. conduct, had been violated. But Mr. Holder also said, "False-statement violations might have been made, given at least what I know at this point."

Members of Congress from both parties, meanwhile, prepared a gantlet of hearings for I.R.S. leaders in the coming days. The House Ways and Means Committee will hold the first hearing on Friday, featuring Mr. Miller, who was aware of the problem in March 2012, yet told Republican senators a month later that no such singling out had occurred.

On Tuesday, the Senate Finance Committee will hold its first hearing on the matter, and the next day, the House Oversight and Government Reform Committee will hear the testimony of Lois Lerner, who heads the I.R.S.'s division on tax-exempt organizations and was aware of the issue nearly from the beginning, in 2010, yet told reporters on Friday that she had learned of it from news reports in 2012.

"Lois Lerner lied to me," said Representative Jim Jordan, Republican of Ohio, who helped initiate the Congressional investigation of the I.R.S.

The House Oversight Committee requested five senior I.R.S. officials be made available for interviews by May 20, including the director of rulings and agreements, Holly Paz; a former screening group manager in the exempt-organizations determinations division, John Shafer; and a former advocacy group manager, Joseph Herr.

"Potentially dozens of I.R.S. employees are involved with the original targeting, the failure to correct the problem and the failure to promptly report the truth to Congress and the American people," said Meghan Snyder, a spokeswoman for Mr. Jordan.

Republicans made it clear that they would focus their inquiries on false statements, violations of the civil liberties of conservative groups and whether information on the I.R.S.'s conduct reached Obama administration officials outside the independent I.R.S. but was kept under wraps during an election year.

Senator Mitch McConnell of Kentucky, the Republican leader, on Wednesday noted that the president was beginning to take action, but said Republicans wanted to know whether "there was an effort to bring the power of the federal government to bear on those the administration disagreed with, in the middle of a heated national election. We are determined to get answers and to ensure that this type of intimidation never happens again at the I.R.S. or any other agency."

The I.R.S. pushed back on the idea that knowledge of its activity had reached higher levels of the Obama administration, saying for the first time that its chief counsel did not tell Treasury superiors of the I.R.S. targeting efforts, nor did he participate in a 2011 meeting when the issue was discussed with the I.R.S. chief counsel's office.

House and Senate aides investigating the agency's actions said they were focusing on an Aug. 4, 2011, meeting in which, according to a report by the Treasury inspector general, the I.R.S.'s chief counsel conferred with agency officials to discuss the activities of a team in the Cincinnati field office. The team had been subjecting applications for tax-exempt status from Tea Party and other conservative groups to a greater degree of review than those from other organizations.

Under I.R.S. rules, the agency's chief counsel, William J. Wilkins, reports to the Treasury Department's general counsel. But the I.R.S. statement Wednesday said the notation on which the report relied was referring to the chief counsel's office, which employs 1,600 lawyers, not Mr. Wilkins himself.

However, the I.R.S. statement was less clear about when Mr. Wilkins learned of the added scrutiny, saying instead the counsel "did not learn about specific groups being singled out by name until earlier this year."

Mr. Holder made it clear that the criminal investigation he said he ordered on Friday was just beginning. He said it would be based in Washington to give it the broadest possible scope and would not be concentrating solely on the service's field office in Cincinnati, where the handling of nonprofit applications was largely based.

"The facts will take us wherever they take us," he said, adding "this will not be about parties. This will not be about ideological persuasions. Anyone who has broken the law will be held accountable."

The I.R.S. released a list of 176 groups that have been granted tax-exempt status through the review process, which centralized operations in Cincinnati in order to deal with a crush of applications that began in 2010 with the Tea Party movement. That list included organizations with names like American Patriots Against Government Excess; Rebellious Truths; the Coalition for a Conservative Majority; and Friends of the Constitution; as well as dozens of Tea Party chapters.

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