[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





        THE IRS: TARGETING AMERICANS FOR THEIR POLITICAL BELIEFS

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 5, 2014

                               __________

                           Serial No. 113-99

                               __________

Printed for the use of the Committee on Oversight and Government Reform











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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 
        THE IRS: TARGETING AMERICANS FOR THEIR POLITICAL BELIEFS

                              ----------                              


                        Wednesday, March 5, 2014

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 9:33 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Turner, Duncan, 
McHenry, Jordan, Walberg, Amash, Meehan, DesJarlais, Gowdy, 
Farenthold, Hastings, Lummis, Massie, Meadows, Bentivolio, 
DeSantis, Cummings, Maloney, Norton, Tierney, Lynch, Connolly, 
Cartwright, Duckworth, Horsford, and Lujan Grisham.
    Staff Present: Molly Boyl, Deputy General Counsel and 
Parliamentarian; Lawrence J. Brady, Staff Director; David 
Brewer, Senior Counsel; Sharon Casey, Senior Assistant Clerk; 
Steve Castor, General Counsel; Drew Colliatie, Professional 
Staff Member; John Cuaderes, Deputy Staff Director; Adam P. 
Fromm, Director of Member Services and Committee Operations; 
Linda Good, Chief Clerk; Tyler Grimm, Senior Professional Staff 
Member; Frederick Hill, Deputy Staff Director for 
Communications and Strategy; Christopher Hixon, Chief Counsel 
for Oversight; Mark D. Marin, Deputy Staff Director for 
Oversight; Ashok M. Pinto, Chief Counsel, Investigations; Katy 
Rother, Counsel; Laura L. Rush, Deputy Chief Clerk; Jessica 
Seale, Digital Director; Jonathan J. Skladany, Deputy General 
Counsel; Rebecca Watkins, Communications Director; Meghan 
Berroya, Minority Counsel; Aryele Bradford, Minority Press 
Secretary; Susanne Sachsman Grooms, Minority Deputy Staff 
Director/Chief Counsel; Jennifer Hoffman, Minority 
Communications Director; Adam Koshkin, Minority Research 
Assistant; Elisa LaNier, Minority Director of Operations; Juan 
McCullum, Minority Clerk; Suzanne Owen, Minority Senior Policy 
Advisor; Brian Quinn, Minority Counsel; Dave Rapallo, Minority 
Staff Director; Donald Sherman, Minority Counsel; and Mark 
Stephenson, Minority Director of Legislation.
    Chairman Issa. The committee will come to order.
    We are here today to continue a hearing that began on May 
22nd, 2013, called ``The IRS Targeting Americans for Their 
Political Beliefs.'' The purpose of the hearing is to gather 
facts about how and why the IRS improperly scrutinized certain 
organizations that applied for tax-exempt status.
    Today, we have recalled Ms. Lois Lerner, the former 
director of Exempt Organizations at the IRS. Ms. Lerner 
appeared for the May 22nd, 2013, hearing under a subpoena, and 
that subpoena remains in effect.
    Before we resume our questioning, I am going to briefly 
state for the record a few developments that have occurred 
since the hearing began 9 months ago. These are important for 
the record and for Ms. Lerner to know and understand.
    On May 22nd, 2013, after being sworn in at the start of the 
hearing, Ms. Lerner made a voluntary statement under oath 
discussing her position at the IRS and professing her 
innocence.
    Ms. Lerner did not provide the committee with any advance 
notification of her intention to make such a statement.
    During her self-selected and entirely voluntary statement, 
Ms. Lerner spoke in detail about core issues under 
consideration at the hearing when she stated, ``I have not done 
anything wrong. I have not broken any laws. I have not violated 
any IRS rules or regulations, and I have not provided false 
information to this or any other congressional committee.''
    Ms. Lerner then stated her intention to invoke the Fifth 
Amendment, and then, in response to a request by Ranking Member 
Cummings, she confirmed orally the authenticity of a document 
that was entered into the record. She subsequently re-invoked 
her Fifth Amendment rights in response to several questions. 
She then refused to provide any substantive response to those 
questions.
    At that hearing, a member of the committee, Mr. Gowdy, 
stated that Ms. Lerner had waived her right to invoke the Fifth 
Amendment because she had given a voluntary statement 
professing her innocence.
    I temporarily excused Ms. Lerner from the hearing and 
subsequently recessed the hearing to consider whether Ms. 
Lerner had in fact waived her Fifth Amendment rights.
    Meanwhile, the committee's investigation proceeded without 
Ms. Lerner's testimony. To date, we have conducted 33 
bipartisan transcribed interviews of witnesses from the IRS. We 
have heard witnesses' testimony during five committee and 
subcommittee hearings.
    Because the IRS has not fully cooperated with the 
committee's investigation, I have issued three subpoenas for 
documents. The IRS continues to withhold some of Ms. Lerner's 
emails from the committee. Documents and testimony show that 
Ms. Lerner is uniquely positioned to provide testimony that 
will help the committee better understand how and why the IRS 
targeted conservative groups.
    At a business meeting on June 28, 2013, the committee 
approved a resolution rejecting Ms. Lerner's claim of Fifth 
Amendment privilege based on her waiver at the May 22nd, 2013.
    After that vote, having made the determination that Ms. 
Lerner waived her Fifth Amendment rights, the committee 
recalled her to appear today to answer questions pursuant to 
rules. The committee voted and found that Ms. Lerner waived her 
Fifth Amendment rights by making a statement on May 22nd, 2013, 
and additionally, by affirming documents after making a 
statement of Fifth Amendment rights.
    If Ms. Lerner continues to refuse to answer questions from 
our members while she is under a subpoena, the committee may 
proceed to consider whether she should be held in contempt.
    Since it has been 9 and a half months since we started the 
hearing, I am going to ask Ms. Lerner to please rise and take a 
reaffirming oath pursuant to the committee rules.
    Raise your right hand, please.
    Do you solemnly swear that the testimony you are about to 
give will be the truth, the whole truth and nothing but the 
truth?
    Please be seated. Let the record indicate that the witness 
did answer in the affirmative.
    Ms. Lerner--put up slide 1, please.
    On October 10--on October--in October 2010, you told a Duke 
University group, and I quote, ``The Supreme Court dealt a huge 
blow overturning a 100-year-old precedent that basically 
corporations couldn't give directly to political campaigns. And 
everyone is up in arms because they don't like it. The Federal 
Election Commission can't do anything about it. They want the 
IRS to fix the problem.''
    Ms. Lerner, what exactly ``wanted to fix the problem caused 
by Citizens United,'' what exactly does that mean?
    Ms. Lerner. My counsel has advised me that I have not----
    Chairman Issa. Would you please turn the mic on?
    Ms. Lerner. Sorry. I don't know how.
    My counsel has advised me that I have not waived my 
constitutional rights under the Fifth Amendment, and on his 
advice, I will decline to answer any question on the subject 
matter of this hearing.
    Chairman Issa. So, you are not going to tell us who wanted 
to fix the problem caused by Citizens United?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, in February 2011, you emailed 
your colleagues in the IRS the following: ``Tea Party matter, 
very dangerous. This could be the vehicle to go to court on the 
issue of whether Citizens United overturning the ban on 
corporate spending applies to tax-exempt rules. Counsel and 
Judy Kindell need to be on this one, please. Cincy should 
probably NOT,'' all in caps, ``have these cases.''
    What did you mean by ``Cincy should not have these cases''?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer the 
question.
    Chairman Issa. Ms. Lerner, why would you say Tea Party 
cases were very dangerous?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, in September 2010, you emailed 
your subordinates about initiating a, parenthesis, (c)(4) 
project and wrote, ``We need to be cautious so that it isn't a 
per se political project.''
    Why were you worried about this being perceived as a 
political project?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, Mike Seto, manager of EO 
Technical in Washington, testified that you ordered Tea Party 
cases to undergo a multi-tier review. He testified, and I 
quote, ``She sent me email saying that when these cases need to 
go through''--I say again--``she sent me email saying that when 
these cases need to go through multi-tier review and they will 
eventually have to go to Ms. Kindell and the Chief Counsel's 
Office.''
    Why did you order Tea Party cases to undergo a multi-tier 
review?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, in June 2011, you requested that 
Holly Paz obtain a copy of the tax-exempt application filed by 
Crossroads GPS so that your senior technical advisor, Judy 
Kindell, could review it and summarize the issues for you.
    Ms. Lerner, why did you want to personally order that they 
pull Crossroads GPS, Karl Rove's organization's application?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, in June 2012, you were part of 
an email exchange that appeared to be about writing new 
regulations on political speech for 501(c)(4) groups, and in 
parenthesis, your quote, ``off plan'' in 2013.
    Ms. Lerner, what does ``off plan'' mean?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, in February of 2014, President 
Obama stated that there was not a smidgeon of corruption in the 
IRS targeting.
    Ms. Lerner, do you believe that there is not a smidgeon of 
corruption in the IRS targeting of conservatives?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ms. Lerner, on Saturday, our committee's 
general counsel sent an email to your attorney saying, ``I 
understand that Ms. Lerner is willing to testify and she is 
requesting a 1 week delay. In talking''--``in talking to the 
chairman''--excuse me--``in talking to the chairman, wanted to 
make sure that was right.'' Your lawyer, in response to that 
question, gave a one word email response, ``yes.''
    Are you still seeking a 1 week delay in order to testify?
    Ms. Lerner. On the advice of my counsel, I respectfully 
exercise my Fifth Amendment right and decline to answer that 
question.
    Chairman Issa. Ladies and gentlemen, seeking the truth is 
the obligation of this committee. I can see no point in going 
further. I have no expectation that Ms. Lerner will cooperate 
with this committee, and therefore, we stand adjourned.
    [Whereupon, at 9:45 a.m., the committee was adjourned.]

                                 
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