Thursday, May 23, 2013











Our democracy was created by the people and for the people. When government power is used to target Americans for exercising their Constitutional rights, there is nothing we as representatives should find more important than to take it seriously, get to the bottom of it and eradicate the behavior.  Since 2010, there appears to be a targeting of people based on their beliefs.  These people, particularly those who use "Tea Party" in their name, were mocked by the liberal media, mocked by late night television and referred to by this administration regularly with disdain.  Even hear in the halls of Congress, people would talk about who the Tea Partiers were, who was Tea Party supported?  When, in fact, there is no Tea Party.  As the evidence has shown, there are hundreds and hundreds of organizations -- as independent as any single American -- who simply wanted to live up to the Constitution, to have their freedom and to have it protected by our country.  So last week when we received troubling complaints by groups across the country who received what appeared to be inappropriate and unnecessary questions -- in many cases after more than a year, in some cases two years of inaction by the IRS -- we went to the Inspector General -- who is here with us today.  In March of last year, upon the request of our staff  and later in a letter from Mr. Jordan, the Subcommittee Chairman, and myself, the IG launched a formal investigation.  We knew then that something seemed to be wrong.  We knew then that there was smoke.  We knew then that in fact something just didn't seem to be right. 

That's Committee Chair Darrell Issa speaking at today's House Oversight and Government Reform Committee hearing.  The Ranking Member is Elijah Cummings who observed, "This is more important than one election.  The revelations that have come forward so far provides us with a moment pregnant with transformation -- not transformation for a moment but for generations to come and generations yet unborn."  The issue was the targeting of various groups by the IRS.  The
witnesses appearing before the Committee were former IRS Commissioner Douglas Shulman, Deputy Secretary of the Treasury Neal S. Wolin, Lois Lerner who is both Director of Exempt Organizations of the IRS and a Marcel Marceau protege, and Treasury Dept Inspector General J. Russell George.

Chair Darrell Issa:  Mr. George, before the Ways and Means Committee hearing, you told Representative Danny Davis the following, "Our audit, sir, began with the request of Congressional staff in -- I want to give you the correct date, sir -- I do not have it here.  March 1, 2012 is when there was an initial contact with the Government Oversight and Reform Committee  and are audit began or roughly" -- and then you go on with May or March, etc., etc.  So essentially, this began in your mind when you were made aware of it in March by members of my Committee -- staff members of my Committee.  Correct?

J. Russell George:  Uh, yes.

Chair Darrell Issa:  So, oddly enough, we have with us, and put it up on the board, from Holly Paz, a document just released to us from -- I guess in preparation for yesterday's interview -- that says "Forward TIGTA document request, the following are issues that could indicate a case to be considered, a potential Tea Party case, and sent for secondary screening. One Tea Party Patriots of 9-12 Project [. . .] 4, Statements in the case file that are critical of how the country is being run."  Now that's May 20, 2013.  To your knowledge -- and that is the result of an internal investigation done by the IRS, not your investigation. Oh, I'm sorry.  That's July 23rd, I'm looking at e-mails which are, unfortunately, this year, but that's July 23, 2012.  It's your understanding that the IRS concluded they had wrong doing from their own internal investigation by July 2012?

J. Russell George:  I have no information on that but, uh, let me consult with my counsel. [. . .] I have been informed that they conducted an internal review, sir, that was completed before that period. 

Chair Darrell Issa:  Okay. So it's your testimony that, in fact, independent of your activity, Mr. Shulman's reports conducted and concluded wrong doing and could have, in fact, reported that up the chain and taken appropriate action independent of your activities.

J. Russell George: That is certainly an option, sir.

Chair Darrell Issa:  So, Mr. Shulman, before I go back to Mr. George, it was your watch, your people did an internal review.  How is it you did not know that things were rotten in your shop in time to not only make sure it stopped, and stayed stopped, but in fact the Treasury, your boss sitting next to you, was aware of it?

 Douglas Shulman:  Uhm, you know, I, uh, said that I learned about this sometime in the spring -- and by "this," I mean I learned the fact that there was a list and the fact that "Tea Party" was on it --

Chair Darrell Issa:  Okay, so you knew at that time you knew that you had mistreated Americans within your organization and you saw no need to report it up the chain?  Is that your testimony?

Douglas Shulman:  My testimony is that I -- at that point I'd had a preliminary verbal report.  I'd been told at that same point that the activity was being stopped and I was told that the IG was looking at --

Chair Darrell Issa:  Okay, stop there.  I don't really care about the IG right now. The IG probably prompted the internal report.  The IG has been the reason, in fact, that we didn't hear about this until long after the election, till months or actually a year had gone by.  I'm asking you a question.  It was your job to make sure people weren't abused.  It was your job to stop abuse but also to report it.  Americans had been injured by the activity -- wrongful activity -- of your organization.  You say that you got it "vocal."  I don't care that the IRS doesn't keep paperwork.  I know that when I have to pay my taxes, I don't do it based on what I say I made or what I say my deductions are, that I need paper.  However, you knew.  You did not report up or did you report up to anyone else within your chain?

Douglas Shulman:  I had some of the facts, not all of the facts.  I had no idea of the scope and severity.  I didn't know the full list, I didn't know who was on the list.  I --

Chair Darrell Issa:  Okay, well I'm not going to belabor that because "I don't know" has been your answer previously.  I'm going to move back to the IG.  Mr. George, September 24, 2012, you mentioned your report would be ready in September.  These are exchanges we're putting up [on the screen] here. They're back and forth, they're not all personally with you.  So September 24, 2012, the answer to our request about this IG report was, "Field work for this audit is still ongoing."  Meaning we still don't get an answer.  December 18, 2012, "Any update on this?"  [Reply] "Sorry for the delayed response, I was studying for a final."  Okay.  That's when it was pushed off to March.  Just wanted to  check on the progress of this -- this is February 20, 2013 -- are you at a point where you can schedule a briefing?" From your organization, "We are leaving no stone unturned" -- this is February 22, 2013 -- "we won't be able to provide a detailed, substantive briefing until late April/early May."  My time is limited so I'll put the rest in for the record.  Mr George, I could go on as late as May 19th -- I'm sorry, May 9th -- where the Committee staff then sent on the 8th, "Can we go ahead and schedule a briefing?"  May 9th [reply], "I'll get back to you." And it goes on.  Mr. George, this Committee and the entire Congress has existing laws. Yesterday, I spoke before all of your fellow IGs.  Under existing law, you have a peer-level report of substantial misconduct or problems including waste, fraud and abuse.  The act describes your establishment -- meaning in this case, the IRS -- and Congress in the same sentence.  On August 3rd, I sent you a letter explaining the seven day rule, explaining the statute as it has been written for decades.  You have  responsibility to keep us continuously and -- according to statute -- equally informed. In this case it appears as though you certainly did not.  Would you agree with that?

J. Russell George: Uh, no, actually.

Chair Darrell Issa:  Okay, so when you conducted, day-after-day-after day, with Mr. Schulman's subordinate Ms. Paz, one after another interviews in which she's in the room, she's listening to all of these.  You're doing that.  You know, at some time, and I'm going to close with just a question, on what day did you know -- over this year period -- did you know personally that the IRS had abused Americans in the process of approval?  What was that day?  What was the a-ha moment?  And didn't you have an obligation to report that to Congress at that time?

J. Russell George:  Mr. Chairman, I have a detailed timeline which goes almost from month to month as to the interactions that we had with your staff  and then subsequently with the [IRS] commissioner as well as with officials at the Dept of the Treasury.  And I would appreciate the opportunity to give you a sampling of that.

Chair Darrell Issa:  We're going to accept that.  And I just want to close and then I'll let you take as much time as you need.  If your timeline essentially says you kept us informed so that we knew that in fact there was a pattern and could speak to Ways and Means to find out that 100s of organizations still languished not being approved after "the abusive behavior began," they still didn't get their answer in a timely fashion.  And if you're saying that you informed Mr. Wolin so that he would understand what is going on or others at Treasury and you informed us and Mr. Shulman, here's my problem.  Mr. Shulman has already said under oath, he didn't know.  Mr Wolin has already said under oath they didn't know.  And although I'm not under oath, I have reviewed my Committee staff documents, and of course it's a bipartisan relationship, we certainly did not have the information in any way, shape or form that could be understood so that Congressional action could occur until practically today.

J. Russell George:  Mr. Chairman, there are established procedures for conducting an audit and once again this is an audit.  And to ensure fairness and to ensure that we are completely accurate in the information that we convey to Congress, we will not report information until the IRS has had an opportunity to take a look at it to ensure that we're not misstating facts --

Chair Darrell Issa:  Mr. George, that is not the statute. That is not the statute.

J. Russell George:  But it would be incorrect for us to give you partial information which may not be accurate.  It would be counterproductive, sir, if we were to do that.

Ranking Member Elijah Cummings called out Shulman for not coming back to Congress after he was informed there was a problem and correcting his earlier pronouncement to the Committee that no targeting was taking place,  "It seems to me that after saying to the Congress 'absolutely no targeting,' it seems to me that you would come back even if it was a phone call or a letter or something.  Common sense."  Shulman repeated that he felt he was doing the right thing by being silent.

Ranking Member Elijah Cummings:  Well I'm sorry, that's simply not good enough.  It's simply not good enough, Mr. Shulman.  The IRS conducting an internal investigation of its own.  Not the IG investigation, but there own investigation.  You personally knew there was a target list.  You knew it said "Tea Party" on it.  You put new processes in place and you took personnel actions.  You reassigned at least one individual back in 2012.  Come on, Mr. Shulman.  Help us help the taxpayers.  Am I missing something?

 Douglas Shulman: So as I --

Ranking Member Elijah Cummings:  Did you have an investigation?  Was there an internal investigation?

 Douglas Shulman:  I never understood that word of internal investigation.

Ranking Member Elijah Cumings:  Did you reassign at least one person back in 2012?

Douglas Shulman: Not that I was aware of.

Ranking Member Elijah Cummings:  You don't -- You don't know that?

 Douglas Shulman:  To the best of my knowledge, I was not involved in the reassignment of people in the uh determinations unit.  I have no recollection of that.


Ranking Member Elijah Cummings:  So when you learned about the targeting, apparently, you made some kind of inquiry because you said you found out that it had been resolved.  Who did you go to and who told you that it had been resolved?  And what did they say the resolution was?  You were the head of the IRS.

Douglas Shulman: I was the head of the IRS -- 

Ranking Member Elijah Cummings: And you've got Congress people that were upset about targeting.  They had been asking questions.  You had come [before the Committee] and said there was "absolutely no targeting."  And so help me with this.

 Douglas Shulman: First of all, let me express this is a very serious matter and I fully recognize that.

Great.  It only took Shulman 80 minutes into the hearing to 'express' that.  He had a lengthy opening statement that missed that point.

With few exceptions, the Democrats only focused on Shulman.  There are two reasons for that.  The secondary reason is that it's because Shulman was a Bully Boy Bush appointee.  The primary reason is that Fridays Ways and Means House Committee hearing resorted in blistering comments to Democrats on the Committee.  From their supporters in their districts.  One member told me he couldn't believe that an elderly woman who block walks and phone banks for him every two years when he's up for election felt he was letting the IRS off.  The IRS, because it collects money from people and few are thrilled to fork over money, has a built-in hostility factor with voters.  Fridays meeting struck many Democratic voters as if their elected officials were defending the IRS after it was caught in wrong doing.  They didn't do it astro-turf wise.  They did it by contacting the local offices in their districts and making it clear to people who knew them from previous campaign work just how offended they were.  It doesn't poll well with independents, sticking up for the IRS in this case, but four Dems on House Ways and Means and on Oversight told me that the complaints were coming from the core of their volunteer staff for re-election campaigns.  These are strong supporters and their offense is why you saw more action on the part of the Dems this hearing.

Focusing on Shulman allowed them to land blows on the IRS that they need to going into the re-election campaign.  My question for Oversight was if this were a DoD scandal and it was 2010, would they really think going after Robert Gates and terming him a Bully Boy Bush appointee would have made a difference?  Because while some will grab "Bush appointee" and wrap themselves in it like a safety blanket, the reality is that Shulman could have been asked for his resignation in 2009, in 2010, in 2011 . . .

And while Lois Lerner refused to testify, pleading the Fifth, it should be noted that everyone
assumes that had Congress dropped rounds of questioning and instead offered a round of charades,
she would have really shined.

Kat will cover the hearing at her site tonight, Wally will cover it at Rebecca's site, Ava will cover US House Rep Stephen Lynch in the hearing at Trina's site (Lynch was one of the strongest members in the hearing).

On the topic of Congress, Senator Patty Murray is the Chair of the Senate Budge Comittee and she and Senator Maria Cantwell and US House Rep Cathy McMorris Rogers are expressing disappointment over a decision announced today:

For Immediate Release
Murray: (202) 224-2834
Cantwell: (202) 224-8277
McMorris Rodgers: (509) 353-2374
MAY 22, 2013

Murray, Cantwell, McMorris Rodgers Disappointed By Air Force Decision on KC-46A Tanker Program

WASHINGTON, DC — Today, U.S. Senators Patty Murray (D-WA) and Maria Cantwell (D-WA) and U.S. Representative Cathy McMorris Rodgers (R-WA) expressed their disappointment with the Air Force’s decision to base the KC-46A tanker program at McConnell Air Force Base in Kansas, despite the strong bid from Fairchild Air Force Base in Eastern Washington.

“Today’s decision by the Air Force is extremely disappointing, and seems to ignore the obvious advantages Fairchild has to support the military’s regional and global priorities and major flight programs like the KC-46A,” said Senator Murray.  “While pressing the top levels of the Pentagon for answers on today’s decisions, I will continue to work with the full delegation for future investments in Fairchild, including new tankers in the next rounds of basing decisions.”

"The Secretary of the Air Force stated today that Fairchild will be a strong contender for future tanker basing decisions,” said Senator Cantwell. “While today’s preliminary tanker decision is disappointing, I will work with the Washington delegation and local leaders to bring new tankers to Fairchild and ensure it remains a vital asset for our nation's tanker program. With Fairchild's 50-year history as a vital resource in the U.S. tanker refueling program, Spokane remains a strong choice for locating future refueling tankers.”

“This is not a loss. The Air Force has plans to procure 179 KC-46A refueling tankers. It is important to remember that this is only the first installment of 36 tankers. While it was our hope that Fairchild would be the preferred base to host the next-generation refueling tankers, today’s announcement continues to bolster Fairchild’s vibrant mission. In the next few years, the Air Force will continue to base KC-46A refueling tankers at additional installations,” said Rep. McMorris Rodgers. “Moving forward, Fairchild will compete very well and is in an excellent position to receive them. “For over a decade, our community has worked together to let the Air Force know we would welcome the tankers at Fairchild. Today’s decision demonstrates that our hard work was appreciated by the Air Force. I want to thank our community leaders – civilian and military; public sector and private sector; and by officials in both parties – for their commitment and teamwork. We have a lot to be proud of, and our efforts for Fairchild will continue.” 

In December 2011, May 2012, and most recently in April 2013, Murray, Cantwell, and McMorris Rodgers led Washington state delegation letters to U.S. Air Force Secretary Michael Donley, highlighting the unique benefits that Fairchild offers the Air Force and the KC-46A tanker program, specifically.  Fairchild, which is ideally situated to support the Department of Defense’s broad-based focus on the Asia-Pacific region, is already home to the Active Duty 92nd Air Refueling Wing and the Washington Air National Guard's 141st Air Refueling Wing, which both fly the KC-135 aerial refueling tankers, and has continually modernized its facilities through more than $400 million in military construction investments.

The Washington state delegation strongly advocated for Fairchild’s bid for the tanker program and has helped direct significant federal investments to the base. Those investments have included:

·         $11 million to fund a new Survival, Evasion, Resistance, and Escape (SERE) Force Support Complex

·         $4.15 million for a Refueling Vehicle Maintenance Facility

·         Funding for a redesigned hangar, energy efficient improvements, mission support complex, resistance training facility, and Armed Forces Reserve Center

·         Funding for a new 14,000 foot runway, a new, state-of-the-art fitness center, and a new wing command headquarters to better integrate active-duty Airmen and Air National Guardsmen


Sean Coit

Press Secretary

Office of U.S. Senator Patty Murray




RSS Feed for Senator Murray's office

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