[Congressional Record Volume 141, Number 170 (Tuesday, October 31, 1995)]
[House]
[Page H11563]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   INVESTIGATION INTO IRS INVOLVEMENT IN ``TRAVELGATE'' IS WARRANTED

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Indiana [Mr. Burton] is recognized for 5 minutes.
  Mr. BURTON of Indiana. Madam Speaker, about a week and a half ago the 
Committee on Government Reform and Oversight of the House held an 
investigative hearing into what is known as Travelgate and during that 
hearing, we went from the top to the bottom of the entire 
investigation. There were still some unanswered questions, so I would 
like to try to illuminate the issue for my colleagues and anybody else 
who may be paying attention.
  Madam Speaker, when this administration took office, some people in 
the administration, including the First Lady, felt like it was 
imperative that they do away with the people who were in the travel 
office that made travel arrangements for the press that followed the 
President around the country and put their people in.
  In other words, they wanted to get rid of the people from the 
previous administration in charge of the travel office and replace them 
with people from their administration. The problem was that the people 
in the press liked the people who were already there. So, even though 
the administration had the ability to make this change, they chose not 
to do it because they did not want to make the press corps angry. At 
least that was the gist of what we heard.
  So, Madam Speaker, they had some people start digging around to see 
if there were any improprieties in the travel office and so claim there 
was chicanery going on and then fire them. They even got the FBI to 
start investigating alleged violations or disappearances of small 
amounts of money in the travel office. Nevertheless, this started.
  Once it started, it started becoming a quagmire for them. They tried 
to get the FBI involved and other agencies involved in something that 
really need not have taken place.
  One of the things that happened was there was a contractor in 
Tennessee called Ultrair. Ultrair was a contractor for the White House 
and did some travel arrangements for press and other personnel that 
followed the President around the country when he went on his trips.
  Ultrair, in October 1992, because they handled transactions like 
this, contacted the IRS on their own. They contacted the IRS to find 
out if excise taxes should have been withheld or charged for these 
travel arrangements. They did this voluntarily. Then about 5 or 6 
months later, the day after the White House fired the travel office 
employees, it was reported in the newspapers, the Wall Street Journal 
and others, that there was some possible kickbacks involved and Ultrair 
was mentioned in a bad light, even though they had not done anything 
wrong. All they had asked for was a decision or review by the IRS on 
whether or not they should withhold excise taxes.
  The next day after it appeared in the paper, a horde of IRS agents 
descended on their office and took control of their books and had them 
for 2 years. Some people believe this may have been an obstruction of 
justice, because at a cocktail party later on there was a conversation 
which was recorded and given to us at the committee meeting by John 
Podesta, the White House staff secretary, the principal author of the 
White House travel office management review.
  At this cocktail party he put in his notes that, ``BK said that PR 
was on top of it.'' BK was Bill Kennedy, the assistant counsel to the 
President of the United States at the time, and PR was Peggy 
Richardson, who was the commissioner of the IRS.
  BK said PR was on top of it. She said at the party the IRS is on top 
of it, and some references that the IRS agents are aware of something 
like that which would indicate that the head of the IRS, the 
commissioner for the IRS was working with the White House to keep 
control of these documents, which we believe may be an obstruction of 
justice.
  When we had the hearing the other day, I asked the IRS people about 
this and they said they could not respond because of section 6103 of 
the Tax Code, which prohibits public disclosure of tax information 
about a specific taxpayer without the taxpayer's consent. The fact of 
the matter is we already had a release from the taxpayer for the IRS to 
give us that information and the IRS, nevertheless, would not give it 
to us. They said they would, if they saw the document and they would 
come and talk to our leadership at a closed meeting.
  Madam Speaker, this smacks of obstruction of justice. It is something 
that should be investigated. The IRS is suspect by a lot of people in 
this country and when the head of the IRS starts saying that she is 
putting a lid on something and using the power of the IRS to constrict 
information that is vital to an investigation like Travelgate, it 
smacks of an obstruction of justice.
  Madam Speaker, we need a full-fledged investigation of this. We need 
to have the IRS come before us in a closed hearing to explain why those 
documents were taken from Ultrair in Tennessee; why they were held for 
2 years; why the FBI couldn't have access to them for the 
investigation, and why the head of the IRS said at a cocktail party she 
was keeping a lid on it.

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