Former IRS chief can't say how conservative targeting happened

ALAN FRAM and STEPHEN OHLEMACHER, Associated Press

WASHINGTON (AP) — The man who led the Internal Revenue Service when it was giving extra scrutiny to tea party and other conservative groups seeking tax-exempt status told Congress on Tuesday that he knew little about what was happening while he was still commissioner.

Douglas Shulman, who vacated his position last November when his five-year term expired, told the Senate Finance Committee he didn't learn all the facts until he read last week's report by a Treasury inspector general confirming the targeting strategy.

In his first public remarks since the story broke, Shulman said: "I agree this is an issue that when someone spotted it, they should have brought it up the chain. And they didn't. I don't know why."

Shulman was testifying at Congress' second hearing on the episode that has largely consumed Washington since an IRS official acknowledged the targeting and apologized for it in remarks to a legal group on May 10.

Shulman said he first learned that something was happening in the spring of 2012.

He said that at that time, he learned that IRS workers were using a list to help decide which groups seeking tax-exempt status should get special attention and knew the term "tea party" was on that list. But he said he didn't know what other words were on that list or the scope and severity of the activity.

He said he took what he thought were the proper steps -- making sure the inspector general was looking into the situation.

"I was dismayed and I was saddened" to read the about the details of the targeting in the inspector general's report, Shulman said.

Shulman was appointed by President George W. Bush and served from March 2008 until last November.

Finance panel chairman Max Baucus, D-Mont., and top Republican Orrin Hatch of Utah both criticized the agency and said they would investigate how and why the improper screening occurred.

"I intend to get to the bottom of what happened," Baucus said.

The IRS is an independent agency within the Treasury Department. Because of that independent status, the official said Treasury deferred to the IRS in its decision about how to make the targeting public.

A new poll by the Pew Research Center says 42 percent of adults think the Obama administration was involved in targeting conservative groups. Thirty-one percent said the decision was made by IRS employees, while the rest said they didn't know.

For more than a year, from 2011 through the 2012 election, members of Congress repeatedly asked Shulman about complaints from tea party groups that they were being harassed by the IRS.

Shulman's responses, usually relayed by a deputy, did not acknowledge that agents had ever targeted tea party groups for special scrutiny. At a congressional hearing March 22, 2012, Shulman was adamant in his denials.

"There's absolutely no targeting. This is the kind of back and forth that happens to people" who apply for tax-exempt status, Shulman said at the House Ways and Means subcommittee hearing.

The IRS has said Shulman did not know about the targeting at the time of the hearing.

The agency's inspector general says he told Shulman on May 30, 2012, that his office was auditing the way applications for tax-exempt status were being handled, in part because of complaints from conservative groups. However, the inspector general, J. Russell George, said he did not reveal the results of his investigation.

George was also testifying at Tuesday's hearing. So was Steven Miller, who took over as acting commissioner in November, when Shulman's term expired. Last week, Obama forced Miller to resign.

George issued a report last week blaming ineffective management for allowing agents to inappropriately target conservative groups for more than 18 months during the 2010 and 2012 elections.

The agents were trying to determine whether the groups were engaged in political activity. Certain tax-exempt groups are allowed to engage in politics, but politics cannot be their primary mission. It is up to the IRS to make the determination, so agents are supposed to look for clues when reviewing applications for tax-exempt status.

In March 2010, agents starting singling out groups with "Tea Party" or "Patriots" on their applications. By August 2010, it was part of the written criteria for identifying groups that required more scrutiny, according to George's report.

Agents did not flag similar progressive or liberal labels, though some liberal groups received additional scrutiny because their applications were singled out for other reasons, the report said.

On Monday, the White House revealed that chief of staff Denis McDonough and other senior presidential advisers knew in late April that an upcoming inspector general's report was likely to find that IRS employees had inappropriately targeted conservative political groups.

The White House says McDonough and the other advisers did not tell President Barack Obama about the impending report, leaving him to learn the results from news reports on May 10. White House press secretary Jay Carney said Obama was comfortable with the fact that "some matters are not appropriate to convey to him, and this is one of them."

Gallery

Fullscreen SlideshowPrevious Slide

1 of 1

Next Slide