[House Report 113-415]
[From the U.S. Government Publishing Office]


 
113th Congress 2d SessioHOUSE OF REPRESENTATIVES        Report
                                                       113-415
_______________________________________________________________________

                                     

                                                 House Calendar No. 100

RESOLUTION RECOMMENDING THAT THE HOUSE OF REPRESENTATIVES FIND LOIS G. 
    LERNER, FORMER DIRECTOR, EXEMPT ORGANIZATIONS, INTERNAL REVENUE 
SERVICE, IN CONTEMPT OF CONGRESS FOR REFUSAL TO COMPLY WITH A SUBPOENA 
    DULY ISSUED BY THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                               ----------                              

                                 REPORT

                                 of the

              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                             together with

                     ADDITIONAL AND MINORITY VIEWS






   April 14, 2014.--Referred to the House Calendar and ordered to be 
                                printed
RESOLUTION RECOMMENDING THAT THE HOUSE OF REPRESENTATIVES FIND LOIS G. 
    LERNER, FORMER DIRECTOR, EXEMPT ORGANIZATIONS, INTERNAL REVENUE 
SERVICE, IN CONTEMPT OF CONGRESS FOR REFUSAL TO COMPLY WITH A SUBPOENA 
    DULY ISSUED BY THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
113th Congress 
 2d Session             HOUSE OF REPRESENTATIVES                 Report
                                                                113-415
_______________________________________________________________________

                                     

                                                 House Calendar No. 100

RESOLUTION RECOMMENDING THAT THE HOUSE OF REPRESENTATIVES FIND LOIS G. 
    LERNER, FORMER DIRECTOR, EXEMPT ORGANIZATIONS, INTERNAL REVENUE 
SERVICE, IN CONTEMPT OF CONGRESS FOR REFUSAL TO COMPLY WITH A SUBPOENA 
    DULY ISSUED BY THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                               __________

                                 REPORT

                                 of the

              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                             together with

                     ADDITIONAL AND MINORITY VIEWS






   April 14, 2014.--Referred to the House Calendar and ordered to be 
                                printed
                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. EXECUTIVE SUMMARY................................................2
 II. AUTHORITY AND PURPOSE............................................2
III. BACKGROUND ON THE COMMITTEE'S INVESTIGATION......................3
        A. IRS Targeting of Tea Party Tax-Exempt Applications....     4
        B. Lois Lerner's Testimony Is Critical to the Committee's 
            Investigation........................................     6
 IV. LOIS LERNER'S REFUSAL TO COMPLY WITH THE COMMITTEE'S SUBPOENA FOR 
     TESTIMONY AT THE MAY 22, 2013 HEARING............................7
        A. Correspondence Leading Up to the Hearing..............     8
        B. Lois Lerner's Opening Statement.......................     9
        C. The Committee Resolved That Lois Lerner Waived Her 
            Fifth Amendment Privilege............................    11
        D. Lois Lerner Continued to Defy the Committee's Subpoena    12
        E. Legal Precedent Strongly Supports the Committee's 
            Position to Proceed with Holding Lois Lerner in 
            Contempt.............................................    15
            1. Ms. Lerner knew that the Committee had rejected 
                her privilege objection and that, consequently, 
                she risked contempt should she persist in 
                refusing to answer the Committee's questions.....    16
            2. The Law Does Not Require Magic Words..............    17
  V. CONCLUSION......................................................18
 VI. RULES REQUIREMENTS..............................................19
VII. ADDITIONAL VIEWS................................................21
VIII.MINORITY VIEWS.................................................337

                                                 House Calendar No. 100
113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     113-415

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


RESOLUTION RECOMMENDING THAT THE HOUSE OF REPRESENTATIVES FIND LOIS G. 
    LERNER, FORMER DIRECTOR, EXEMPT ORGANIZATIONS, INTERNAL REVENUE 
SERVICE, IN CONTEMPT OF CONGRESS FOR REFUSAL TO COMPLY WITH A SUBPOENA 
    DULY ISSUED BY THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                                _______
                                

   April 14, 2014.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Issa, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                     ADDITIONAL AND MINORITY VIEWS

    The Committee on Oversight and Government Reform, having 
considered this Report, report favorably thereon and recommend 
that the Report be approved.
    The form of the resolution that the Committee on Oversight 
and Government Reform would recommend to the House of 
Representatives for citing Lois G. Lerner, former Director, 
Exempt Organizations, Internal Revenue Service, for contempt of 
Congress pursuant to this report is as follows:
    Resolved, That because Lois G. Lerner, former Director, 
Exempt Organizations, Internal Revenue Service, offered a 
voluntary statement in testimony before the Committee, was 
found by the Committee to have waived her Fifth Amendment 
Privilege, was informed of the Committee's decision of waiver, 
and continued to refuse to testify before the Committee, Ms. 
Lerner shall be found to be in contempt of Congress for failure 
to comply with a congressional subpoena.
    Resolved, That pursuant to 2 U.S.C. Sec. Sec. 192 and 194, 
the Speaker of the House of Representatives shall certify the 
report of the Committee on Oversight and Government Reform, 
detailing the refusal of Ms. Lerner to testify before the 
Committee on Oversight and Government Reform as directed by 
subpoena, to the United States Attorney for the District of 
Columbia, to the end that Ms. Lerner be proceeded against in 
the manner and form provided by law.
    Resolved, That the Speaker of the House shall otherwise 
take all appropriate action to enforce the subpoena.

                          I. EXECUTIVE SUMMARY

    Lois G. Lerner has refused to comply with a congressional 
subpoena for testimony before the Committee on Oversight and 
Government Reform relating to her role in the Internal Revenue 
Service's treatment of certain applicants for tax-exempt 
status. Her testimony is vital to the Committee's investigation 
into this matter.
    Ms. Lerner offered a voluntary statement in her appearance 
before the Committee. The Committee subsequently determined 
that she waived her Fifth Amendment privilege in making this 
statement, and it informed Ms. Lerner of its decision. Still, 
Ms. Lerner continued to refuse to testify before the Committee.
    Accordingly, the Chairman of the Oversight and Government 
Reform Committee recommends that the House find Ms. Lerner in 
contempt for her failure to comply with the subpoena issued to 
her.

                       II. AUTHORITY AND PURPOSE

    An important corollary to the powers expressly granted to 
Congress by the Constitution is the responsibility to perform 
rigorous oversight of the Executive Branch. The U.S. Supreme 
Court has recognized this Congressional power and 
responsibility on numerous occasions. For example, in McGrain 
v. Daugherty, the Court held:

          [T]he power of inquiry--with process to enforce it--
        is an essential and appropriate auxiliary to the 
        legislative function. . . . A legislative body cannot 
        legislate wisely or effectively in the absence of 
        information respecting the conditions which the 
        legislation is intended to affect or change, and where 
        the legislative body does not itself possess the 
        requisite information--which not infrequently is true--
        recourse must be had to others who do possess it.''\1\
---------------------------------------------------------------------------
    \1\McGrain v. Daugherty, 273 U.S. 135, 174 (1927).

Further, in Watkins v. United States, Chief Justice Earl Warren 
wrote for the majority: ``The power of Congress to conduct 
investigations is inherent in the legislative process. That 
power is broad.''\2\
---------------------------------------------------------------------------
    \2\Watkins v. United States, 354 U.S. 178, 1887 (1957).
---------------------------------------------------------------------------
    Further, both the Legislative Reorganization Act of 1946 
(P.L. 79-601), which directed House and Senate Committees to 
``exercise continuous watchfulness'' over Executive Branch 
programs under their jurisdiction, and the Legislative 
Reorganization Act of 1970 (P.L. 91-510), which authorized 
committees to ``review and study, on a continuing basis, the 
application, administration, and execution'' of laws, codify 
the powers of Congress.
    The Committee on Oversight and Government Reform is a 
standing committee of the House of Representatives, duly 
established pursuant to the rules of the House of 
Representatives, which are adopted pursuant to the Rulemaking 
Clause of the U.S. Constitution.\3\ House Rule X grants to the 
Committee broad jurisdiction over federal ``[g]overnment 
management'' and reform, including the ``[o]verall economy, 
efficiency, and management of government operations and 
activities,'' the ``[f]ederal civil service,'' and 
``[r]eorganizations in the executive branch of the 
Government.''\4\ House Rule X further grants the Committee 
particularly broad oversight jurisdiction, including authority 
to ``conduct investigations of any matter without regard to 
clause 1, 2, 3, or this clause [of House Rule X] conferring 
jurisdiction over the matter to another standing 
committee.''\5\ The rules direct the Committee to make 
available ``the findings and recommendations of the committee . 
. . to any other standing committee having jurisdiction over 
the matter involved.''\6\
---------------------------------------------------------------------------
    \3\U.S. CONST., art I. Sec. 5, clause 2.
    \4\House Rule X, clause (1)(n).
    \5\House Rule X, clause (4)(c)(2).
    \6\Id.
---------------------------------------------------------------------------
    House Rule XI specifically authorizes the Committee to 
``require, by subpoena or otherwise, the attendance and 
testimony of such witnesses and the production of books, 
records, correspondence, memoranda, papers, and documents as it 
considers necessary.''\7\ The rule further provides that the 
``power to authorize and issue subpoenas'' may be delegated to 
the Committee chairman.\8\ The subpoena discussed in this 
report was issued pursuant to this authority.
---------------------------------------------------------------------------
    \7\House Rule XI, clause (2)(m)(1)(B).
    \8\House Rule XI, clause 2(m)(3)(A)(1).
---------------------------------------------------------------------------
    The Committee has undertaken its investigation into the 
IRS's inappropriate treatment of conservative tax-exempt 
organizations pursuant to the authority delegated to it under 
the House Rules, including as described above.
    The oversight and legislative purposes of the investigation 
at issue here, described more fully immediately below, include 
(1) to evaluate decisions made by the Internal Revenue Service 
regarding the inappropriate treatment of conservative 
applicants for tax-exempt status; and (2) to assess, based on 
the findings of the investigation, whether the conduct 
uncovered may warrant additions or modifications to federal 
law, including, but not limited to, a possible restructuring of 
the Internal Revenue Service and the IRS Oversight Board.

            III. BACKGROUND ON THE COMMITTEE'S INVESTIGATION

    In February 2012, the Committee received reports that the 
Internal Revenue Service inappropriately scrutinized certain 
applicants for 501(c)(4) tax-exempt status. Since that time, 
the Committee has reviewed nearly 500,000 pages of documents 
obtained from (i) the Department of the Treasury, including 
particular component entities, the IRS, the Treasury Inspector 
General for Tax Administration (TIGTA), and the IRS Oversight 
Board, (ii) former and current IRS employees, and (iii) other 
sources. In addition, the Committee has conducted 33 
transcribed interviews of current and former IRS officials, 
ranging from front-line employees in the IRS's Cincinnati 
office to the former Commissioner of the IRS.
    Documents and testimony reveal that the IRS targeted 
conservative-aligned applicants for tax-exempt status by 
scrutinizing them in a manner distinct--and more intrusive--
than other applicants. Critical questions remain regarding the 
extent of this targeting, and how and why the IRS acted--and 
persisted in acting--in this manner.

         A. IRS Targeting of Tea Party Tax-Exempt Applications

    In late February 2010, a screener in the IRS's Cincinnati 
office identified a 501(c)(4) application connected with the 
Tea Party. Due to ``media attention'' surrounding the Tea 
Party, the application was elevated to the Exempt Organizations 
Technical Unit in Washington, D.C.\9\ When officials in the 
Cincinnati office discovered several similar applications in 
March 2010, the Washington, D.C. office asked for two ``test'' 
applications, and ordered the Cincinnati employees to ``hold'' 
the remainder of the applications.\10\ A manager in the 
Cincinnati office asked his screeners to develop criteria for 
identifying other Tea Party applications so that the 
applications would not ``go into the general inventory.''\11\ 
By early April 2010, Cincinnati screeners began to identify and 
hold any applications meeting certain criteria. Applications 
that met the criteria were removed from the general inventory 
and assigned to a special group.
---------------------------------------------------------------------------
    \9\E-mail from Cindy Thomas, Manager, Exempt Organizations 
Determinations, IRS, to Holly Paz, Manager, Exempt Organizations 
Technical Unit, IRS (Feb. 25, 2010) [IRSR 428451].
    \10\Transcribed Interview of Elizabeth Hofacre, Revenue Agent, 
Exempt Orgs. Determinations Unit, IRS (May 31, 2013).
    \11\Transcribed Interview of John Shafer, Group Manager, Exempt 
Orgs. Determinations Unit, IRS (June 6, 2013).
---------------------------------------------------------------------------
    In late spring 2010, an individual recognized as an expert 
in 501(c)(4) applications in the Washington office was assigned 
to work on the test applications. The expert issued letters to 
the test applicants asking for additional information or 
clarification about information provided in their 
applications.\12\ Meanwhile, through the summer and into fall 
2010, applications from other conservative-aligned groups 
idled. As the Cincinnati office awaited guidance from 
Washington regarding those applications, a backlog developed. 
By fall 2010, the backlog of applications that had stalled in 
the Cincinnati office had grown to 60.
---------------------------------------------------------------------------
    \12\IRS, Timeline for the 3 exemption applications that were 
referred to EOT from EOD. [IRSR 58346-49]
---------------------------------------------------------------------------
    On February 1, 2011, Lois G. Lerner, who served as Director 
of Exempt Organizations (EO) at IRS from 2006 to 2013,\13\ 
wrote an e-mail to Michael Seto, the manager of the Technical 
Office within the Exempt Organizations business division. The 
EO Technical Office was staffed by approximately 40 IRS lawyers 
who offered advice to IRS agents across the country. Ms. Lerner 
wrote, ``Tea Party Matter very dangerous'' and ordered the 
Office of Chief Counsel to get involved.\14\ Ms. Lerner 
advocated for pulling the cases out of the Cincinnati office 
entirely. She advised Seto that ``Cincy should probably NOT 
have these cases.''\15\ Seto testified to the Committee that 
Ms. Lerner ordered a ``multi-tier'' review for the test 
applications, a process that involved her senior technical 
advisor and the Office of Chief Counsel.\16\
---------------------------------------------------------------------------
    \13\See The IRS: Targeting Americans for Their Political Beliefs: 
Hearing before the H. Comm. on Oversight & Gov't Reform, 113th Cong. 22 
(May 22, 2013) (H. Rpt. 113-33) (statement of Lois Lerner, Director, 
Exempt Orgs., IRS) (emphasis added).
    \14\E-mail from Lois Lerner, Director, Exempt Orgs., IRS to Michael 
Seto, Manager, Exempt Orgs. Technical Unit, IRS (Feb. 1, 2011) [IRSR 
161810].
    \15\Id.
    \16\Transcribed Interview of Michael Seto, Manager, Exempt Orgs. 
Technical Unit, IRS (July 11, 2013) [hereinafter Seto Interview].
---------------------------------------------------------------------------
    On July 5, 2011, Ms. Lerner became aware that the backlog 
of Tea Party applications pending in Cincinnati had swelled to 
``over 100.''\17\ Ms. Lerner also learned of the specific 
criteria that were used to screen the cases that were caught in 
the backlog.\18\ She believed that the term ``Tea Party''--
which was a term that triggered additional scrutiny under the 
criteria developed by IRS personnel--was ``pejorative.''\19\ 
Ms. Lerner ordered her staff to adjust the criteria.\20\ She 
also directed the Technical Unit to conduct a ``triage'' of the 
backlogged applications and to develop a guide sheet to assist 
agents in Cincinnati with processing the cases.\21\
---------------------------------------------------------------------------
    \17\Transcribed Interview of Justin Lowe, Technical Advisor to the 
Commissioner, Tax Exempt and Gov't Entities Division, IRS (July 23, 
2013).
    \18\Id.
    \19\Transcribed Interview of Holly Paz, Director, Exempt Orgs., 
Rulings and Agreements, IRS (May 21, 2013).
    \20\Id.
    \21\Seto Interview, supra note 6.
---------------------------------------------------------------------------
    In November 2011, the draft guide sheet for processing the 
backlogged applications was complete.\22\ By this point, there 
were 160-170 pending applications in the backlog.\23\ After the 
Cincinnati office received the guide sheet from Washington, 
officials there began to process the applications in January 
2012. IRS employees drafted questions for the applicant 
organizations designed to solicit information mandated by the 
guide sheet. The questions asked for information about the 
applicant organizations' donors, among other things.\24\
---------------------------------------------------------------------------
    \22\E-mail from Michael Seto, Manager, Exempt Orgs. Technical Unit, 
IRS, to Cindy Thomas, Manager, Exempt Orgs. Determinations Unit, IRS 
(Nov. 6, 2011) [IRSR 69902].
    \23\Transcribed Interview of Stephen Daejin Seok, Group Manager, 
Exempt Orgs. Determinations Unit, IRS (June 19, 2013).
    \24\Id.
---------------------------------------------------------------------------
    By early 2012, questions about the IRS's treatment of these 
backlogged applications had attracted public attention. Staff 
from the Committee on Oversight and Government Reform met with 
Ms. Lerner in February 2012 regarding the IRS's process for 
evaluating tax-exempt applications.\25\ Committee staff then 
met with TIGTA representatives on March 8, 2012.\26\ Shortly 
thereafter, TIGTA began an audit of the IRS's process for 
evaluating tax-exempt applications.
---------------------------------------------------------------------------
    \25\Briefing by Lois Lerner, Director, Exempt Orgs., IRS, to H. 
Comm. on Oversight & Gov't Reform Staff (Feb. 24, 2012).
    \26\Treasury Inspector Gen. for Tax Admin., What is the timeline 
for TIGTA's involvement with this tax-exempt issue? (provided to the 
Committee May 2013).
---------------------------------------------------------------------------
    In late February 2012, after Ms. Lerner briefed Committee 
staff, Steven Miller, then the IRS Deputy Commissioner, 
requested a meeting with her to discuss these applications. She 
informed him of the backlog of applications and that the IRS 
had asked applicant organizations about donor information.\27\ 
Miller relayed this information to IRS Commissioner Douglas 
Schulman.\28\ On March 23, 2012, Miller convened a meeting of 
his senior staff to discuss these applications. Miller launched 
an internal review of potential inappropriate treatment of Tea 
Party 501(c)(4) applications ``to find out why the cases were 
there and what was going on.''\29\
---------------------------------------------------------------------------
    \27\Transcribed Interview of Steven Miller, Deputy Commissioner, 
IRS (Nov. 13, 2013) [hereinafter Miller Interview].
    \28\Id.
    \29\Id.
---------------------------------------------------------------------------
    The internal IRS review took place in April 2012. Miller 
realized there was a problem and that the application backlog 
needed to be addressed.\30\ IRS officials designed a new system 
to process the backlog, and Miller received weekly updates on 
the progress of the backlog throughout the summer 2012.\31\
---------------------------------------------------------------------------
    \30\Id.
    \31\Id.
---------------------------------------------------------------------------
    In May 2013, in advance of the release of TIGTA's audit 
report on the IRS's process for evaluating applications for 
tax-exempt status, the IRS sought to acknowledge publicly that 
certain tax-exempt applications had been inappropriately 
targeted.\32\ On May 10, 2013, at an event sponsored by the 
American Bar Association, Ms. Lerner responded to a question 
she had planted with a member of the audience prior to the 
event. A veteran tax lawyer asked, ``Lois, a few months ago 
there were some concerns about the IRS's review of 501(c)(4) 
organizations, of applications from tea party organizations. I 
was just wondering if you could provide an update.''\33\ In 
response, Ms. Lerner stated:
---------------------------------------------------------------------------
    \32\E-mail from Nicole Flax, Chief of Staff to the Deputy 
Commissioner, IRS, to Lois Lerner, Director, Exempt Orgs., IRS (Apr. 
23, 2013) [IRSR 189013]; Miller Interview, supra note 16; Transcribed 
Interview of Sharon Light, Senior Technical Advisor to the Director, 
Exempt Orgs., IRS (Sept. 5, 2013); E-mail from Nicole Flax, Chief of 
Staff to the Deputy Commissioner, IRS, to Adewale Adeyemo, Dept. of the 
Treasury (Apr. 22, 2013) [IRSR 466707].
    \33\Eric Lach, IRS Official's Admission Baffled Audience at Tax 
Panel, Talking Points Memo, May 14, 2013.

          So our line people in Cincinnati who handled the 
        applications did what we call centralization of these 
        cases. They centralized work on these in one particular 
        group. . . . However, in these cases, the way they did 
        the centralization was not so fine. Instead of 
        referring to the cases as advocacy cases, they actually 
        used case names on this list. They used names like Tea 
        Party or Patriots and they selected cases simply 
        because the applications had those names in the title. 
        That was wrong, that was absolutely incorrect, 
        insensitive, and inappropriate--that's not how we go 
        about selecting cases for further review. We don't 
        select for review because they have a particular 
        name.\34\
---------------------------------------------------------------------------
    \34\Rick Hasen, Transcript of Lois Lerner's Remarks at Tax Meeting 
Sparking IRS Controversy, Election Law Blog (May 11, 2013, 7:37 a.m.), 
http://electionlawblog.org/?p=50160.

    Ms. Lerner's statement during the ABA panel, entitled 
``News from the IRS and Treasury,'' was the first public 
acknowledgement that the IRS had inappropriately scrutinized 
the applications of conservative-aligned groups. Within days, 
the President and the Attorney General expressed serious 
concerns about the IRS's actions. The Attorney General 
announced a Justice Department investigation.\35\
---------------------------------------------------------------------------
    \35\Holder launches probe into IRS targeting of Tea Party groups, 
FoxNews.com, May 14, 2013.
---------------------------------------------------------------------------

B. Lois Lerner's Testimony Is Critical to the Committee's Investigation

    Lois Lerner's testimony is critical to the Committee's 
investigation. Without her testimony, the full extent of the 
IRS's targeting of Tea Party applications cannot be known, and 
the Committee will be unable to fully complete its work.
    Ms. Lerner was, during the relevant time period, the 
Director of the Exempt Organizations business division of the 
IRS, where the targeting of these applications occurred. The 
Exempt Organizations business division contains the two IRS 
units that were responsible for executing the targeting 
program: the Exempt Organizations Determinations Unit in 
Cincinnati, and the Exempt Organizations Technical Unit in 
Washington, D.C.
    Ms. Lerner has not provided the Committee with any 
testimony since the release of the TIGTA audit in May 2013. 
Although the Committee staff has conducted transcribed 
interviews of dozens of IRS officials in Cincinnati and 
Washington, D.C., the Committee will never be able to 
understand the IRS's actions fully without her testimony. She 
has unique, first-hand knowledge of how, and why, the IRS 
scrutinized applications for tax-exempt status from certain 
conservative-aligned groups.
    The IRS sent letters to 501(c)(4) application 
organizations, signed by Ms. Lerner, that included questions 
about the organizations' donors. These letters went to 
applicant organizations that had met certain criteria. As 
noted, Ms. Lerner later described the selection of these 
applicant organizations as ``wrong, [] absolutely incorrect, 
insensitive, and inappropriate.''\36\
---------------------------------------------------------------------------
    \36\Rick Hasen, Transcript of Lois Lerner's Remarks at Tax Meeting 
Sparking IRS Controversy, Election Law Blog (May 11, 2013, 7:37 AM), 
http://electionlawblog.org/?p=50160.
---------------------------------------------------------------------------
    Documents and testimony from other witnesses show Ms. 
Lerner's testimony is critical to the Committee's 
investigation. She was at the epicenter of the targeting 
program. As the Director of the Exempt Organizations business 
division, she interacted with a wide array of IRS personnel, 
from low-level managers all the way up to the Deputy 
Commissioner. Only Ms. Lerner can resolve conflicting testimony 
about why the IRS delayed 501(c)(4) applications, and why the 
agency asked the applicant organizations inappropriate and 
invasive questions. Only she can answer important outstanding 
questions that are key to the Committee's investigation.

 IV. LOIS LERNER'S REFUSAL TO COMPLY WITH THE COMMITTEE'S SUBPOENA FOR 
                 TESTIMONY AT THE MAY 22, 2013 HEARING

    On May 14, 2013, Chairman Issa sent a letter to Ms. Lerner 
inviting her to testify at a hearing on May 22, 2013, about the 
IRS's handling of certain applications for tax-exempt 
status.\37\ The letter requested that she ``please contact the 
Committee by May 17, 2013,'' to confirm her attendance.\38\ Ms. 
Lerner, through her attorney, confirmed that she would appear 
at the hearing.\39\ Her attorney subsequently indicated that 
she would not answer questions during the hearing, and that she 
would invoke her Fifth Amendment rights.\40\
---------------------------------------------------------------------------
    \37\Letter from Hon. Darrell E. Issa, Chairman, H. Comm. on 
Oversight & Gov't Reform, to Lois Lerner, Director, Exempt Orgs., IRS 
(May 14, 2013) (letter inviting Lerner to testify at May 22, 2013 
hearing).
    \38\Id.
    \39\E-mail from William W. Taylor, III, Zuckerman Spaeder LLP, to 
H. Comm. on Oversight & Gov't Reform Majority Staff (May 17, 2013).
    \40\Letter from William W. Taylor, III, Zuckerman Spaeder LLP, to 
Hon. Darrell E. Issa, Chairman, H. Comm. on Oversight & Gov't Reform 
(May 20, 2013).
---------------------------------------------------------------------------
    Because Ms. Lerner would not testify voluntarily at the May 
22, 2013 hearing and because her testimony was critical to the 
Committee's investigation, Chairman Issa authorized a subpoena 
to compel the testimony. The subpoena was issued on May 20, 
2013, and served on her the same day. Ms. Lerner's attorney 
accepted service on her behalf.\41\
---------------------------------------------------------------------------
    \41\E-mail from William W. Taylor, III, Zuckerman Spaeder LLP, to 
H. Comm. on Oversight & Gov't Reform Majority Staff (May 20, 2013).
---------------------------------------------------------------------------

              A. Correspondence Leading Up to the Hearing

    On May 20, 2013, Ms. Lerner's attorney sent a letter to 
Chairman Issa stating that she would be invoking her Fifth 
Amendment right not to answer any questions at the hearing. The 
letter stated, in relevant part:

          You have requested that our client, Lois Lerner, 
        appear at a public hearing on May 22, 2013, to testify 
        regarding the Treasury Inspector General for Tax 
        Administration's (``TIGTA'') report on the Internal 
        Revenue Service's (``IRS'') processing of applications 
        for tax-exempt status. As you know, the Department of 
        Justice has launched a criminal investigation into the 
        matters addressed in the TIGTA report, and your letter 
        to Ms. Lerner dated May 14, 2013, alleges that she 
        `provided false or misleading information on four 
        separate occasions last year in response to' the 
        Committee's questions about the IRS's processing of 
        applications for tax-exempt status. Accordingly, we are 
        writing to inform you that, upon our advice, Ms. Lerner 
        will exercise her constitutional right not to answer 
        any questions related to the matters addressed in the 
        TIGTA report or to the written and oral exchanges that 
        she had with the Committee in 2012 regarding the IRS's 
        processing of applications for tax-exempt status.
          She has not committed any crimes or made any 
        misrepresentation but under the circumstances she has 
        no choice but to take this course. As the Supreme Court 
        has ``emphasized,'' one of the Fifth Amendment's 
        ``basic functions . . . is to protect innocent 
        [individuals].'' Ohio v. Reiner, 532 U.S. 17, 21 (2001) 
        (quoting Grunewald v. United States, 353 U.S. 391, 421 
        (1957)).
          Because Ms. Lerner is invoking her constitutional 
        privilege, we respectfully request that you excuse her 
        from appearing at the hearing. . . . Because Ms. Lerner 
        will exercise her right not to answer questions related 
        to the matters discussed in the TIGTA report or to her 
        prior exchanges with the Committee, requiring her to 
        appear at the hearing merely to assert her Fifth 
        Amendment privilege would have no purpose other than to 
        embarrass or burden her.\42\
---------------------------------------------------------------------------
    \42\Letter from William W. Taylor, III, Zuckerman Spaeder LLP, to 
Hon. Darrell E. Issa, Chairman, H. Comm. on Oversight & Gov't Reform 
(May 20, 2013).

    The following day, after issuing the subpoena to compel Ms. 
Lerner to appear before the Committee, Chairman Issa responded 
---------------------------------------------------------------------------
to her attorney. Chairman Issa stated, in relevant part:

          I write to advise you that the subpoena you accepted 
        on Ms. Lerner's behalf remains in effect. The subpoena 
        compels Ms. Lerner to appear before the Committee on 
        May 22, 2013, at 9:30 a.m.
          According to your May 20, 2013, letter, `requiring 
        [Ms. Lerner] to appear at the hearing merely to assert 
        her Fifth Amendment privilege would have no purpose 
        other than to embarrass or burden her.' That is not 
        correct. As Director, Exempt Organizations, Tax Exempt 
        and Government Entities Division, of the Internal 
        Revenue Service, Ms. Lerner is uniquely qualified to 
        answer questions about the issues raised in the 
        aforementioned TIGTA report. The Committee invited her 
        to appear with the expectation that her testimony will 
        advance the Committee's investigation, which seeks 
        information about the IRS's questionable practices in 
        processing and approving applications for 501(c)(4) tax 
        exempt status. The Committee requires Ms. Lerner's 
        appearance because of, among other reasons, the 
        possibility that she will waive or choose not to assert 
        the privilege as to at least certain questions of 
        interest to the Committee; the possibility that the 
        Committee will immunize her testimony pursuant to 8 
        U.S.C. Sec. 16005; and the possibility that the 
        Committee will agree to hear her testimony in executive 
        session.\43\
---------------------------------------------------------------------------
    \43\Letter from Hon. Darrell Issa, Chairman, H. Comm. on Oversight 
& Gov't Reform to William W. Taylor, III, Zuckerman Spaeder LLP (May 
21, 2013) (emphasis added).
---------------------------------------------------------------------------

                   B. Lois Lerner's Opening Statement

    Chairman Issa's letter to Ms. Lerner's attorney on May 22, 
2013 raised the possibility that she would waive or choose not 
to assert her privilege as to at least certain questions of 
interest to the Committee.\44\ In fact, that is exactly what 
happened. At the hearing, Ms. Lerner made a voluntary opening 
statement, of which she had provided the Committee no advance 
notice, notwithstanding Committee rules requiring that she do 
so.\45\ She stated, after swearing an oath to tell ``the truth, 
the whole truth, and nothing but the truth'':
---------------------------------------------------------------------------
    \44\Id.
    \45\Rule 9(f), Rules of the H. Comm. on Oversight & Gov't Reform, 
113th Cong., available at http://oversight.house.gov/wp-content/
uploads/2013/12/OGR-Committee-Rules-113th-Congress.pdf (last visited 
April 7, 2014).

          Good morning, Mr. Chairman and members of the 
        Committee. My name is Lois Lerner, and I'm the Director 
        of Exempt Organizations at the Internal Revenue 
        Service.
          I have been a government employee for over 34 years. 
        I initially practiced law at the Department of Justice 
        and later at the Federal Election Commission. In 2001, 
        I became--I moved to the IRS to work in the Exempt 
        Organizations office, and in 2006, I was promoted to be 
        the Director of that office.
          Exempt Organizations oversees about 1.6 million tax-
        exempt organizations and processes over 60,000 
        applications for tax exemption every year. As Director 
        I'm responsible for about 900 employees nationwide, and 
        administer a budget of almost $100 million. My 
        professional career has been devoted to fulfilling 
        responsibilities of the agencies for which I have 
        worked, and I am very proud of the work that I have 
        done in government.
          On May 14th, the Treasury inspector general released 
        a report finding that the Exempt Organizations field 
        office in Cincinnati, Ohio, used inappropriate criteria 
        to identify for further review applications for 
        organizations that planned to engage in political 
        activity which may mean that they did not qualify for 
        tax exemption. On that same day, the Department of 
        Justice launched an investigation into the matters 
        described in the inspector general's report. In 
        addition, members of this committee have accused me of 
        providing false information when I responded to 
        questions about the IRS processing of applications for 
        tax exemption.
          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.
          And while I would very much like to answer the 
        Committee's questions today, I've been advised by my 
        counsel to assert my constitutional right not to 
        testify or answer questions related to the subject 
        matter of this hearing. After very careful 
        consideration, I have decided to follow my counsel's 
        advice and not testify or answer any of the questions 
        today.
          Because I'm asserting my right not to testify, I know 
        that some people will assume that I've done something 
        wrong. I have not. One of the basic functions of the 
        Fifth Amendment is to protect innocent individuals, and 
        that is the protection I'm invoking today. Thank 
        you.\46\
---------------------------------------------------------------------------
    \46\The IRS: Targeting Americans for Their Political Beliefs: 
Hearing before the H. Comm. on Oversight & Gov't Reform, 113th Cong. 22 
(May 22, 2013) (H. Rpt. 113-33) (statement of Lois Lerner, Director, 
Exempt Orgs., IRS) (emphasis added).

    After Ms. Lerner made this voluntary, self-selected opening 
statement--which included a proclamation that she had done 
nothing wrong and broken no laws, Chairman Issa explained that 
he believed she had waived her right to assert a Fifth 
Amendment privilege and asked her to reconsider her position on 
testifying.\47\ In response, she stated:
---------------------------------------------------------------------------
    \47\Id.

          I will not answer any questions or testify about the 
        subject matter of this Committee's meeting.\48\
---------------------------------------------------------------------------
    \48\Id.

    Upon Ms. Lerner's refusal to answer any questions, 
---------------------------------------------------------------------------
Congressman Trey Gowdy made a statement from the dais. He said:

          Mr. Issa, Mr. Cummings just said we should run this 
        like a courtroom, and I agree with him. She just 
        testified. She just waived her Fifth Amendment right to 
        privilege. You don't get to tell your side of the story 
        and then not be subjected to cross examination. That's 
        not the way it works. She waived her right of Fifth 
        Amendment privilege by issuing an opening statement. 
        She ought to stay in here and answer our questions.\49\
---------------------------------------------------------------------------
    \49\Id. (emphasis added).

    Shortly after Congressman Gowdy's statement, Chairman Issa 
excused Ms. Lerner from the panel and reserved the option to 
recall her as a witness at a later date. Specifically, Chairman 
Issa stated that she was excused ``subject to recall after we 
seek specific counsel on the questions of whether or not the 
constitutional right of the Fifth Amendment has been properly 
waived.''\50\
---------------------------------------------------------------------------
    \50\Id. at 24.
---------------------------------------------------------------------------
    Rather than adjourning the hearing on May 22, 2013, the 
Chairman recessed it, in order to reconvene at a later date 
after a thorough analysis of Ms. Lerner's actions. He did so to 
avoid ``mak[ing] a quick or uninformed decision'' regarding 
what had transpired.\51\
---------------------------------------------------------------------------
    \51\Business Meeting of the H. Comm. on Oversight & Gov't Reform, 
113th Cong. 4 (June 28, 2013).
---------------------------------------------------------------------------

 C. The Committee Resolved That Lois Lerner Waived Her Fifth Amendment 
                               Privilege

    On June 28, 2013, Chairman Issa convened a Committee 
business meeting to allow the Committee to determine whether 
Ms. Lerner had in fact waived her Fifth Amendment privilege. 
After reviewing during the intervening five weeks legal 
analysis provided by the Office of General Counsel, arguments 
presented by Ms. Lerner's counsel, and other relevant legal 
precedent, Chairman Issa concluded that Ms. Lerner waived her 
constitutional privilege when she made a voluntary opening 
statement that involved several specific denials of various 
allegations.\52\ Chairman Issa stated:
---------------------------------------------------------------------------
    \52\Id.

          Having now considered the facts and arguments, I 
        believe Lois Lerner waived her Fifth Amendment 
        privileges. She did so when she chose to make a 
        voluntary opening statement. Ms. Lerner's opening 
        statement referenced the Treasury IG report, and the 
        Department of Justice investigation. . . and the 
        assertions that she had previously provided false 
        information to the committee. She made four specific 
        denials. Those denials are at the core of the 
        committee's investigation in this matter. She stated 
        that she had not done anything wrong, not broken any 
        laws, not violated any IRS rules or regulations, and 
        not provided false information to this or any other 
        congressional committee regarding areas about which 
        committee members would have liked to ask her 
        questions. Indeed, committee members are still 
        interested in hearing from her. Her statement covers 
        almost the entire range of questions we wanted to ask 
        when the hearing began on May 22.\53\
---------------------------------------------------------------------------
    \53\Id.

    After a lengthy debate, the Committee approved a 
---------------------------------------------------------------------------
resolution, by a 22-17 vote, which stated as follows:

          [T]he Committee on Oversight and Government Reform 
        determines that the voluntary statement offered by Ms. 
        Lerner constituted a waiver of her Fifth Amendment 
        privilege against self-incrimination as to all 
        questions within the subject matter of the Committee 
        hearing that began on May 22, 2013, including questions 
        relating to (i) Ms. Lerner's knowledge of any targeting 
        by the Internal Revenue Service of particular groups 
        seeking tax exempt status, and (ii) questions relating 
        to any facts or information that would support or 
        refute her assertions that, in that regard, ``she has 
        not done anything wrong,'' ``not broken any laws,'' 
        ``not violated any IRS rules or regulations,'' and/or 
        ``not provided false information to this or any other 
        congressional committee.''\54\
---------------------------------------------------------------------------
    \54\Resolution of the H. Comm. on Oversight & Gov't Reform (June 
28, 2013), available at http://oversight.house.gov/wp-content/uploads/
2013/06/Resolution-of-the-Committee-on-Oversight-and-Government-Reform-
6-28-131.pdf.
---------------------------------------------------------------------------

       D. Lois Lerner Continued to Defy the Committee's Subpoena

    Following the Committee's resolution that Ms. Lerner waived 
her Fifth Amendment privilege, Chairman Issa recalled her to 
testify before the Committee. On February 25, 2014, Chairman 
Issa sent a letter to Ms. Lerner's attorney advising him that 
the May 22, 2013 hearing would reconvene on March 5, 2014.\55\ 
The letter also advised that the subpoena that compelled her to 
appear on May 22, 2013 remained in effect.\56\ The letter 
stated, in relevant part:
---------------------------------------------------------------------------
    \55\Letter from Hon. Darrell E. Issa, Chairman, H. Comm. on 
Oversight & Gov't Reform to William W. Taylor, III, Zuckerman Spaeder 
LLP (Feb. 25, 2014).
    \56\Id.

          Ms. Lerner's testimony remains critical to the 
        Committee's investigation . . . . Because Ms. Lerner's 
        testimony will advance the Committee's investigation, 
        the Committee is recalling her to a continuation of the 
        May 22, 2013, hearing, on March 5, 2014, at 9:30 a.m. 
        in room 2154 of the Rayburn House Office Building in 
        Washington, D.C.
          The subpoena you accepted on Ms. Lerner's behalf 
        remains in effect. In light of this fact, and because 
        the Committee explicitly rejected her Fifth Amendment 
        privilege claim, I expect her to provide answers when 
        the hearing reconvenes on March 5.\57\
---------------------------------------------------------------------------
    \57\Id.

    The next day, Ms. Lerner's attorney responded to Chairman 
---------------------------------------------------------------------------
Issa. In a letter, he wrote:

          I write in response to your letter of yesterday. I 
        was surprised to receive it. I met with the majority 
        staff of the Committee on January 24, 2014, at their 
        request. At the meeting, I advised them that Ms. Lerner 
        would continue to assert her Constitutional rights not 
        to testify if she were recalled. . . . We understand 
        that the Committee voted that she had waived her 
        rights. . . . We therefore request that the Committee 
        not require Ms. Lerner to attend a hearing solely for 
        the purpose of once again invoking her rights.\58\
---------------------------------------------------------------------------
    \58\Letter from William W. Taylor, III, Zuckerman Spaeder LLP, to 
Hon. Darrell E. Issa, Chairman, H. Comm. on Oversight & Gov't Reform 
(Feb. 26, 2014).

    Because of the possibility that she would choose to answer 
some or all of the Committee's questions, Chairman Issa 
required Ms. Lerner to appear in person on March 5, 2014. When 
the May 22, 2013, hearing, entitled ``The IRS: Targeting 
Americans for Their Political Beliefs,'' was reconvened, 
Chairman Issa noted that the Committee might recommend that the 
House hold Ms. Lerner in contempt if she continued to refuse to 
answer questions, based on the fact that the Committee had 
resolved that she had waived her Fifth Amendment privilege. He 
---------------------------------------------------------------------------
stated:

          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 22, 2013, hearing.
          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 22, 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's under subpoena, the 
        Committee may proceed to consider whether she should be 
        held in contempt.\59\
---------------------------------------------------------------------------
    \59\The IRS: Targeting Americans for Their Political Beliefs: 
Hearing before the H. Comm. on Oversight & Gov't Reform, 113th Cong. 
(Mar. 5, 2014).

    Despite the fact that Ms. Lerner was compelled by a duly 
issued subpoena and Chairman Issa had warned her of the 
possibility of contempt proceedings, and despite the 
Committee's resolution that she waived her Fifth Amendment 
privilege, Ms. Lerner continued to assert her Fifth Amendment 
privilege, and refused to answer any questions posed by Members 
of the Committee.
    Specifically, Ms. Lerner asserted her Fifth Amendment 
privilege on eight separate occasions at the hearing. In 
response to questions from Chairman Issa, she stated:

          Q. 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?
          A. My counsel has advised me that I have not----
          Q. Would you please turn the mic on?
          A. 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.
          Q. So, you are not going to tell us who wanted to fix 
        the problem caused by Citizens United?
          A. On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q. 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'?
          A. On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        the question.
          Q. Ms. Lerner, why would you say Tea Party cases were 
        very dangerous?
          A. On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q. 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?
          A. On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q. 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?
          A. On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q. 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?
          A.  On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q.  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?
          A.  On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q. 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?
          A.  On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.
          Q. 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?
          A.  On the advice of my counsel, I respectfully 
        exercise my Fifth Amendment right and decline to answer 
        that question.\60\
---------------------------------------------------------------------------
    \60\Id.

    The hearing was subsequently adjourned and Ms. Lerner was 
excused from the hearing room.

   E. Legal Precedent Strongly Supports the Committee's Position To 
              Proceed With Holding Lois Lerner in Contempt

    After Ms. Lerner's appearance before the Committee on March 
5, 2014, her lawyer convened a press conference at which he 
apparently revealed that she had sat for an interview with 
Department of Justice prosecutors and TIGTA staff within the 
past six months.\61\ According to reports, Ms. Lerner's lawyer 
described that interview as not under oath\62\ and 
unconditional, i.e., provided under no grant of immunity.\63\ 
Revelation of this interview calls into question the basis of 
Ms. Lerner's assertion of the Fifth Amendment privilege in the 
first place, her waiver of any such privilege notwithstanding.
---------------------------------------------------------------------------
    \61\John D. McKinnon, Former IRS Official Lerner Gave Interview to 
DOJ, Wall St. J., Mar. 6, 2014, http://blogs.wsj.com/washwire/2014/03/
06/former-irs-official-lerner-gave-interview-to-doj/.
    \62\Patrick Howley, Oversight lawmaker: Holding Lois Lerner in 
Contempt Is `Where We're Moving,' Daily Caller, Mar. 6, 2014, http://
dailycaller.com/2014/03/06/oversight-lawmaker-holding-lois-lerner-in-
contempt-the-right-thing-to-do/.
    \63\McKinnon, supra note 61.
---------------------------------------------------------------------------
    Despite that fact, and the balance of the record, Ranking 
Member Elijah E. Cummings questioned the Committee's ability to 
proceed with a contempt citation for Ms. Lerner. On March 12, 
2014, he sent a letter to Speaker Boehner arguing that the 
House of Representatives is barred ``from successfully pursuing 
contempt proceedings against former IRS official Lois 
Lerner.''\64\ The Ranking Member's position was based on an 
allegedly ``independent legal analysis'' provided by his 
lawyer, Stanley M. Brand, and his ``Legislative Consultant,'' 
Morton Rosenberg.\65\
---------------------------------------------------------------------------
    \64\Letter from Hon. Elijah E. Cummings, Ranking Member, H. Comm. 
on Oversight & Gov't Reform, to Hon. John Boehner, Speaker, U.S. House 
of Representatives (Mar. 12, 2014), at 1[hereinafter Boehner Letter], 
attaching Memorandum from Morton Rosenberg, Legislative Consultant, to 
Hon. Elijah E. Cummings, Ranking Member, H. Comm. on Oversight & Gov't 
Reform (Mar. 12, 2014) [hereinafter Rosenberg Memo].
    \65\Boehner Letter at 1, Attachment at 1; Statement of Stanley M. 
Brand,  The Last Word with Lawrence O'Donnell, MSNBC, Mar. 12, 2014, 
available at http://www.msnbc.com/the-last-word/watch/the-fatal-error-
of-issas-irs-blowup-193652803735 (last visited Mar. 14, 2014).
---------------------------------------------------------------------------
    Brand and Rosenberg claimed that the prospect of judicial 
contempt proceedings against Ms. Lerner has been compromised 
because, according to them, ``at no stage in this proceeding 
did the witness receive the requisite clear rejections of her 
constitutional objections and direct demands for answers nor 
was it made unequivocally certain that her failure to respond 
would result in criminal contempt prosecution.''\66\ The 
Ranking Member subsequently issued a press release that 
described ``opinions from 25 legal experts across the country 
and the political spectrum''\67\ regarding the Committee's 
interactions with Ms. Lerner. The opinions released by Ranking 
Member Cummings largely relied on the same case law and 
analysis that Rosenberg and Brand provided, and are contrary to 
the opinion of the House Office of General Counsel.\68\ The 
Ranking Member and his lawyers and consultants are wrong on the 
facts and the law.
---------------------------------------------------------------------------
    \66\Rosenberg Memo at 3.
    \67\Press Release, Hon. Elijah E. Cummings, Ranking Member, H. 
Comm. on Oversight and Gov't Reform (Mar. 26, 2014), available at 
http://democrats.oversight.house.gov/press-releases/twenty-five-
independent-legal-experts-now-agree-that-issa-botched-contempt/ (last 
visited Mar. 27, 2014).
    \68\Memorandum, Lois Lerner and the Rosenberg Memorandum, Office of 
General Counsel, United States House of Representatives (Mar. 25, 
2014), available at http://oversight.house.gov/release/house-counsel-
oversight-committee-can-hold-lerner-contempt/ (last visited Apr. 4, 
2014).
---------------------------------------------------------------------------

1. Ms. Lerner knew that the Committee had rejected her privilege 
        objection and that, consequently, she risked contempt should 
        she persist in refusing to answer the Committee's questions

    At the March 5, 2014 proceeding, Chairman Issa specifically 
made Ms. Lerner and her counsel aware of developments that had 
occurred since the Committee first convened the hearing (on May 
22, 2013): ``These [developments] are important for the record 
and for Ms. Lerner to know and understand.''\69\
---------------------------------------------------------------------------
    \69\The IRS: Targeting Americans for Their Political Beliefs: 
Hearing before the H. Comm. on Oversight and Gov't Reform, 113th Cong. 
(Mar. 5, 2014), Tr. at 3.
---------------------------------------------------------------------------
    Chairman Issa emphasized one particular development: ``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.''\70\ This, of course, was not 
news to Ms. Lerner or her counsel. The Committee had expressly 
notified her counsel of the Committee's rejection of her Fifth 
Amendment claim, both orally and in writing. For example, in a 
letter to Ms. Lerner's counsel on February 25, 2014, the 
Chairman wrote: ``[B]ecause the Committee explicitly rejected 
[Lerner's] Fifth Amendment privilege claim, I expect her to 
provide answers when the hearing reconvenes on March 5.''\71\ 
Moreover, the press widely reported the fact that the Committee 
had formally rejected Ms. Lerner's Fifth Amendment claim.\72\
---------------------------------------------------------------------------
    \70\Id. at 4 (emphasis added).
    \71\Letter from Hon. Darrell Issa, Chairman, H. Comm. on Oversight 
& Gov't Reform, to William W. Taylor, III, Esq., Zuckerman Spaeder LLP 
(Feb. 25, 2014), at 2 (emphasis added).
    \72\See, e.g., House panel finds IRS official waived Fifth 
Amendment right, can be forced to testify in targeting probe, 
FoxNews.com, June 28, 2013, available at http://www.foxnews.com/
politics/2013/06/28/republican-led-house-panel-challenges-irs-worker-
who-took-fifth-amendment/ (last visited Mar. 14, 2014).
---------------------------------------------------------------------------
    Accordingly, it is facially unreasonable for Ranking Member 
Cummings and his lawyers and consultants to subsequently claim 
that ``at no stage in this proceeding did the witness receive 
the requisite clear rejections of her constitutional 
objections.''\73\
---------------------------------------------------------------------------
    \73\Boehner Letter, at 1; Rosenberg Memo at 3.
---------------------------------------------------------------------------
    The Committee's rejection of Ms. Lerner's privilege 
objection was not the only point that Chairman Issa emphasized 
before and during the March 5, 2014 proceeding. At the hearing, 
after several additional references to the Committee's 
determination that she had waived her privilege objection, the 
Chairman expressly warned her that she remained under 
subpoena,\74\ and thus that, if she should persist in refusing 
to answer the Committee's questions, she risked contempt: ``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.''\75\
---------------------------------------------------------------------------
    \74\The subpoena to Lerner ``commanded'' her ``to be and appear'' 
before the Committee and ``to testify.'' Subpoena, Issued by Hon. 
Darrell Issa, Chairman, H. Comm. on Oversight & Gov't Reform, to Lois 
G. Lerner (May 17, 2013) (emphasis in original).
    \75\The IRS: Targeting Americans for Their Political Beliefs: 
Hearing before the H. Comm. on Oversight and Gov't Reform, 113th Cong. 
(Mar. 5, 2014), Tr. at 5.
---------------------------------------------------------------------------
    Ranking Member Cummings and his lawyers and consultants 
state, repeatedly, that the Committee did not provide 
``certainty for the witness and her counsel that a contempt 
prosecution was inevitable.''\76\ But, that is a certainty that 
no Member of the Committee can provide. From the Committee's 
perspective (and Ms. Lerner's), there is no guarantee that the 
Department of Justice will prosecute Ms. Lerner for her 
contumacious conduct, and there is no guarantee that the full 
House of Representatives will vote to hold her in contempt. In 
fact, there is no guarantee that the Committee will make such a 
recommendation. The collective votes of Members voting their 
consciences determine both a Committee recommendation and a 
full House vote on a contempt resolution. And, the Department 
of Justice, of course, is an agency of the Executive Branch of 
the federal government. All the Chairman can do is what he did: 
make abundantly clear to Ms. Lerner and her counsel that of 
which she already was aware, i.e., that if she chose not to 
answer the Committee's questions after the Committee's ruling 
that she had waived her privilege objection (exactly the choice 
that she ultimately made), she would risk contempt.
---------------------------------------------------------------------------
    \76\Id.; Rosenberg Memo at 3-4 (Committee did not make 
``unequivocally certain'' that Lerner's ``failure to respond would 
result in [a] criminal contempt prosecution''); id. at 2 (Chairman did 
not pronounce that ``refusal to respond would result'' in a criminal 
contempt prosecution'') (emphasis added).
---------------------------------------------------------------------------

2. The Law does not require magic words

    The Ranking Member and his lawyers and consultants also 
misunderstand the law. Contrary to their insistence, the courts 
do not require the invocation by the Committee of certain magic 
words. Rather, and sensibly, the courts have required only that 
congressional committees provide witnesses with a ``fair 
appraisal of the committee's ruling on an objection,'' thereby 
leaving the witness with a choice: comply with the relevant 
committee's demand for testimony, or risk contempt.\77\
---------------------------------------------------------------------------
    \77\Quinn v. United States, 349 U.S. 155, 170 (1955).
---------------------------------------------------------------------------
    The Ranking Member and his lawyers and consultants refer 
specifically to Quinn v. United States in support of their 
arguments. In that case, however, the Supreme Court held only 
that, because ``[a]t no time did the committee [at issue there] 
specifically overrule [the witness's] objection based on the 
Fifth Amendment,'' the witness ``was left to guess whether or 
not the committee had accepted his objection.''\78\ Here, of 
course, the Committee expressly rejected Ms. Lerner's 
objection, and specifically notified Ms. Lerner and her counsel 
of the same. She was left to guess at nothing.
---------------------------------------------------------------------------
    \78\Id. at 166.
---------------------------------------------------------------------------
    The Ranking Member and his lawyers' and consultants' 
reliance on Quinn is odd for at least two additional reasons. 
First, in that case, the Supreme Court expressly noted that the 
congressional committee's failure to rule on the witness's 
objection mattered because it left the witness without ``a 
clear-cut choice . . . between answering the question and 
risking prosecution for contempt.''\79\ In other words, the 
Supreme Court expressly rejected the Ranking Member's view that 
the Chairman should do the impossible by pronouncing on whether 
prosecution is ``inevitable.''\80\ The Supreme Court required 
that the Committee do no more than what it did: advise Ms. 
Lerner that her objection had been overruled and thus that she 
risked contempt.
---------------------------------------------------------------------------
    \79\Id. (emphasis added).
    \80\Boehner Letter, Attachment at 4.
---------------------------------------------------------------------------
    Second, Quinn expressly rejects the Ranking Member's 
insistence on the talismanic incantation by the Committee of 
certain magic words. The Supreme Court wrote that ``the 
committee is not required to resort to any fixed verbal formula 
to indicate its disposition of the objection. So long as the 
witness is not forced to guess the committee's ruling, he has 
no cause to complain.''\81\
---------------------------------------------------------------------------
    \81\349 U.S. at 170 (emphasis added).
---------------------------------------------------------------------------
    The other cases that the Ranking Member and his lawyers and 
consultants cite state the same law, and thus serve to confirm 
the propriety of the Committee's actions. In Emspak v. United 
States, the Supreme Court--just as in Quinn, and unlike here--
noted that the congressional committee had failed to ``overrule 
petitioner's objection based on the Fifth Amendment'' and thus 
failed to provide the witness a fair opportunity to choose 
between answering the relevant question and ``risking 
prosecution for contempt.''\82\ And in Bart v. United States, 
the Supreme Court pointedly distinguished the circumstances 
there from those here. The Court wrote: ``Because of the 
consistent failure to advise the witness of the committee's 
position as to his objections, petitioner was left to speculate 
about the risk of possible prosecution for contempt; he was not 
given a clear choice between standing on his objection and 
compliance with a committee ruling.''\83\
---------------------------------------------------------------------------
    \82\349 U.S. at 190, 202 (1955).
    \83\349 U.S. at 219, 223 (1955); id. at 222 (stating issue 
presented as: ``whether petitioner was apprised of the committee's 
disposition of his objections'').
---------------------------------------------------------------------------

                             V. CONCLUSION

    For all these reasons, and others, Rosenberg's opinion that 
``the requisite legal foundation for a criminal contempt of 
Congress prosecution [against Ms. Lerner] . . . ha[ s] not been 
met and that such a proceeding against [her] under 2 U.S.C. 
[Sec. ] 19[2], if attempted, will be dismissed'' is wrong.\84\ 
There is no constitutional impediment to (i) the Committee 
approving a resolution recommending that the full House hold 
Ms. Lerner in contempt of Congress; (ii) the full House 
approving a resolution holding Ms. Lerner in contempt of 
Congress; (iii) if such resolutions are approved, the Speaker 
certifying the matter to the United States Attorney for the 
District of Columbia, pursuant to 2 U.S.C. Sec. 194; and (iv) a 
grand jury indicting, and the United States Attorney 
prosecuting, Ms. Lerner under 2 U.S.C. Sec. 192.
---------------------------------------------------------------------------
    \84\Rosenberg Memo at 4.
---------------------------------------------------------------------------
    At this point, it is clear Ms. Lerner will not comply with 
the Committee's subpoena for testimony. On May 20, 2013, 
Chairman Issa issued the subpoena to compel Ms. Lerner's 
testimony. On May 22, 2013, Ms. Lerner gave an opening 
statement and then refused to answer any of the Committee's 
questions and asserted her Fifth Amendment privilege. On June 
28, 2013, the Committee voted that Ms. Lerner waived her Fifth 
Amendment privilege. Chairman Issa subsequently recalled her to 
answer the Committee's questions. When the May 22, 2013 hearing 
reconvened nine months later, on March 5, 2014, she again 
refused to answer any of the Committee's questions and invoked 
the Fifth Amendment.
    In short, Ms. Lerner has refused to provide testimony in 
response to the Committee's duly issued subpoena.

                         VI. RULES REQUIREMENTS


                       Explanation of Amendments

    No amendments were offered.

                        Committee Consideration

    On April 10, 2014, the Committee on Oversight and 
Government Reform met in open session with a quorum present to 
consider a report of contempt against Lois G. Lerner, former 
Director, Exempt Organizations, Internal Revenue Service, for 
failure to comply with a Congressional subpoena. The Committee 
approved the Report by a roll call vote of 21-12 and ordered 
the Report reported favorably to the House.

                            Roll Call Votes

    The following recorded votes were taken during 
consideration of the contempt Report:
    The Report was favorably reported to the House, a quorum 
being present, by a vote of 23 Yeas to 17 Nays.
    Voting Yea: Issa, Mica, Turner, McHenry, Jordan, Chaffetz, 
Walberg, Lankford, Amash, Gosar, Meehan, DesJarlais, Gowdy, 
Farenthold, Hastings, Lummis, Massie, Collins, Meadows, 
Bentivolio, DeSantis.
    Voting Nay: Cummings, Maloney, Clay, Lynch, Cooper, 
Connolly, Speier, Cartwright, Duckworth, Welch, Horsford, Lujan 
Grisham.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. The 
Report recommends that the House of Representatives find Lois 
G. Lerner, former Director, Exempt Organizations, Internal 
Revenue Service, in contempt of Congress for refusal to comply 
with a subpoena duly issued by the Committee on Oversight and 
Government Reform. As such, the Report does not relate to 
employment or access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this Report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee states that 
pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Report will assist the House of 
Representatives in considering whether to cite Lois G. Lerner 
for contempt for failing to comply with a valid congressional 
subpoena.

                    Duplication of Federal Programs

    No provision of the Report establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Report does not direct the completion of any specific 
rule makings within the meaning of 5 U.S.C. 551.

                   Constitutional Authority Statement

    The Committee finds the authority for this Report in 
article 1, section 1 of the Constitution.

                     Federal Advisory Committee Act

    The Committee finds that the Report does not establish or 
authorize the establishment of an advisory committee within the 
definition of 5 U.S.C. App., Section 5(b).

                         Earmark Identification

    The Report does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

 Unfunded Mandate Statement, Committee Estimate, Budget Authority and 
               Congressional Budget Office Cost Estimate

    The Committee finds that clauses 3(c)(2), 3(c)(3), and 
3(d)(1) of rule XIII of the Rules of the House of 
Representatives, sections 308(a) and 402 of the Congressional 
Budget Act of 1974, and section 423 of the Congressional Budget 
and Impoundment Control Act (as amended by Section 101(a)(2) of 
the Unfunded Mandate Reform Act, P.L. 104-4) are inapplicable 
to this Report. Therefore, the Committee did not request or 
receive a cost estimate from the Congressional Budget Office 
and makes no findings as to the budgetary impacts of this 
Report or costs incurred to carry out the report.

          CHANGES IN EXISTING LAW MADE BY THE BILL AS REPORTED

    This Report makes no changes in any existing federal 
statute.

                         VII. ADDITIONAL VIEWS

                            C O N T E N T S

                               __________
                                                                   Page
1. Committee on Oversight and Government Reform Staff Report, 
  ``Lois Lerner's Involvement in the IRS Targeting of Tax-Exempt 
  Organizations,'' March 11, 2014................................    23
2. Committee on Oversight and Government Reform Staff Report, 
  ``Debunking the Myth that the IRS Targeted Progressives: How 
  the IRS and Congressional Democrats Misled America about 
  Disparate Treatment,'' April 7, 2014...........................   165
3. Memorandum to Chairman Darrell Issa from Office of General 
  Counsel, ``Lois Lerner and the Rosenberg Memorandum,'' March 
  25, 2014.......................................................   306
4. Letter from Chairman Darrell Issa, John Mica, Jim Jordan, 
  Jason Chaffetz, James Lankford and Blake Farenthold to Ranking 
  Member Elijah Cummings, April 9, 2014..........................   328


