More Obama aides knew of IRS audit; Obama not told

By JULIE PACE and CHARLES BABINGTON
Associated Press

WASHINGTON (AP) -- White House chief of staff Denis McDonough and other senior advisers knew in late April that an impending report was likely to say the IRS had inappropriately targeted conservative groups, President Barack Obama's spokesman disclosed Monday, expanding the circle of top officials who knew of the audit beyond those named earlier.

But McDonough and the other advisers did not tell Obama, leaving him to learn about the politically perilous results of the internal investigation from news reports more than two weeks later, officials said.

The Treasury Department also told the White House twice in the weeks leading up to the IRS disclosure that the tax agency planned to make the targeting public, a Treasury official said.

The apparent decision to keep the president in the dark about the matter underscores the White House's cautious legal approach to controversies and reflects a desire by top advisers to distance Obama from troubles threatening his administration.

Obama spokesman Jay Carney defended keeping the president out of the loop on the Internal Revenue Service audit, saying Obama was comfortable with the fact that "some matters are not appropriate to convey to him, and this is one of them."

"It is absolutely a cardinal rule as we see it that we do not intervene in ongoing investigations," Carney said.

Republicans, however, are accusing the president of being unaware of important happenings in the government he oversees.

"It seems to be the answer of the administration whenever they're caught doing something they shouldn't be doing is, `I didn't know about it'," Sen. John Cornyn, R-Texas, told CBS News. "And it causes me to wonder whether they believe willful ignorance is a defense when it's your job to know."

Obama advisers argue that the outcry from Republicans would be far worse had McDonough or White House Counsel Kathryn Ruemmler told the president about the IRS audit before it became public, thereby raising questions about White House interference.

Still, the White House's own shifting information about who knew what and when is keeping the focus of the IRS controversy on the West Wing.

When Carney first addressed the matter last week, he said only that Ruemmler had been told around April 22 that an inspector general audit was being concluded at a Cincinnati IRS office that screens applications for organizations' tax-exempt status. He said the audit was described to the counsel's office "very broadly."

But on Monday, Carney said lower-ranking staffers in the White House counsel's office first learned of the report one week earlier, on April 16. When Ruemmler was later alerted, she was told specifically that the audit was likely to conclude that IRS employees improperly scrutinized organizations by looking for words like "tea party" and "patriot." Ruemmler then told McDonough, deputy chief of staff Mark Childress, and other senior advisers, but not Obama.

The Treasury official said Monday that the department twice passed on information to the White House about the IRS' plans to disclose the political targeting, both after the Ruemmler and other senior Obama aides had been told about the matter.

In the first instance, Treasury officials told the White House that Lois Lerner, who heads the IRS division that oversees tax-exempt groups, was considering making a public apology in a speech.

Around the same time, Treasury relayed to the White House that Acting IRS Commissioner Steven Miller expected to be asked about the matter in congressional testimony on April 25, but the issue was not raised.

However, the Treasury official said the department did not tell the White House about the IRS' final decision for Lerner to apologize for the targeting during a conference on May 10. The official was not authorized to discuss the matter publicly and insisted on anonymity.

Despite the notifications from the Treasury Department, which oversees the IRS, the White House insists it did not know the conclusions of the inspector general report until it was made public. Members of Congress sent the IRS at least eight letters since 2011 asking about complaints from tea party groups that they were being harassed by the IRS. Many of those lawmakers are livid that the IRS chose to reveal that conservative groups were being targeted at a legal conference instead of telling Congress.

A new Pew Research Center poll shows 42 percent of Americans think the Obama administration was "involved" in the IRS targeting of conservative groups, while 31 percent say it was a decision made solely by employees at the IRS.

The IRS matter is one of three controversies that have consumed the White House over the past week. In each instance, officials have tried to put distance between the president and questionable actions by people within his administration.

As with the IRS investigation, the White House says Obama learned only from news reporters that the Justice Department had subpoenaed phone records from journalists at The Associated Press as part of a leaks investigation. And faced with new questions about the deadly attacks in Benghazi, Libya, Obama's advisers have pinned responsibility on the CIA for crafting talking points that downplayed the potential of terrorism, despite the fact that the White House was a part of the process.

Former White House officials say a president has little choice but to distance himself from investigations and then endure accusations of being out of touch, or worse.

"It's a tough balance," said Sara Taylor Fagen, who was White House political director for President George W. Bush from 2005 to 2007.

"With a scandal, there's no way to win," said Fagen, whom the Senate Judiciary Committee subpoenaed and sharply questioned in a probe of dismissed U.S. attorneys. "There may never have been any wrongdoing by anyone in the White House, on any of these issues," she said, "but once the allegations are made, you can't win."

A White House peeking into an ongoing investigations can trigger a political uproar. A well-known case involved President Richard Nixon trying to hinder the FBI's probe of the Watergate break-in.

In a less far-reaching case in 2004, the Bush White House acknowledged that its counsel's office learned of a Justice Department investigation into whether Sandy Berger -- the national security adviser under President Bill Clinton -- had removed classified documents from the National Archives. Democrats said the White House hoped to use the information to help Bush's re-election campaign.

In the current IRS matter, two congressional committees are stepping up their investigations this week with hearings during which IRS and Treasury officials will be questioned closely about what they knew and when.

Former IRS Commissioner Douglas Shulman heads to Capitol Hill on Tuesday, giving lawmakers their first opportunity to question the man who ran the agency when agents were improperly targeting tea party groups. The Senate Finance Committee wants to know why Shulman didn't tell Congress -- even after he was briefed in 2012 -- that agents had been singling out conservative political groups for additional scrutiny when they applied for tax-exempt status.

Also testifying will be Steven Miller, who took over as acting commissioner in November, when Shulman's five-year term expired. Last week, Obama forced Miller to resign.

On Wednesday, Deputy Treasury Secretary Neal Wolin will testify before the House oversight committee.

Treasury inspector general J. Russell George says he told Wolin about the subject of the IRS inquiry last summer.

In a related matter, the IRS acknowledged Monday that an official testified to Congress about tax-exempt matters long after her duties supposedly had shifted to the rollout of Obama's health care law.

Republicans point to Sarah Hall Ingram's history at IRS as they question the agency's ability to properly oversee aspects of Obama's health care overhaul. The IRS will play a major role in determining benefits and penalties under the new law.

The IRS had said last week that Ingram shifted to overseeing the health care law rollout in December 2010, well before alarm bells went off at headquarters that a unit of the tax exempt division was targeting tea party groups for extra scrutiny.

But records show she testified to Congress in her capacity as head of the tax-exempt office as recently as last year.

Monday the IRS said in a statement that Ingram "was in a unique position to testify" about tax-exempt policies in May 2012. It said Ingram "still formally held" the title of IRS commissioner of tax exempt and government entities, even though "she was assigned full-time to (health care law) activities since December 2010."

Sen. Orrin Hatch, R-Utah, says Congress needs to find out what Ingram and other officials knew, and when they knew it.

Associated Press writers Stephen Ohlemacher, Ricardo Alonso-Zaldivar and Jim Kuhnhenn and researcher Monika Mathur contributed to this report.

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