White House, Treasury discussed how to handle disclosure of IRS story

The White House said Tuesday that senior officials took part in discussions over how the IRS would disclose its targeting of conservative groups, marking the latest shift in the White House’s official line on the matter.

Press secretary Jay Carney told reporters that Mark Childress, deputy chief of staff, spoke twice with Treasury Department officials about the IRS’s public relations strategy. 

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“This was just part of trying to find out when and under what circumstances this information would be released, made public and what those findings would be,” the press secretary said. 

Carney, however, made clear that White House officials were not involved in the discussions leading up to Lois Lerner’s disclosure at a May 10 conference of the American Bar Association that groups had been targeted, an apology the IRS now acknowledges came from a planted question. 

Lerner is the head of a section that oversees tax-exempt groups, and knew by June 2011 that conservative groups seeking tax-exempt status were under special scrutiny. 

“It’s a nice hypothetical, but that didn’t happen,” Carney said. 

Lerner, who remains at the center of the IRS probe but hasn’t spoken publicly in more than a week, told the House Oversight Committee that she would invoke her Fifth Amendment rights against self-incrimination, a day ahead of her first scheduled congressional testimony on the IRS’s targeting. 

A spokesman for House Oversight Committee Chairman Darrell Issa (R-Calif.) said the panel was hopeful Lerner would change her mind, and that she would still be forced to appear under a subpoena. 

The latest shift from the White House came the same day that Treasury Secretary Jack Lew criticized the IRS’s roll-out of the findings that the agency had given extra scrutiny to Tea Party organizations. 

Both Treasury and White House officials have said that the department basically acted as a conduit between the White House and the IRS as the agency was figuring out its public relations strategy. 

Carney said Tuesday that Childress and Treasury officials discussed Lerner disclosing the targeting in a speech, as well as Steven Miller, the acting commissioner that President Obama forced out last week, potentially apologizing during congressional testimony. 

A Treasury official said that the department had concerns about Lerner giving a speech and that the department knew in advance she would respond to the planted question this month. 

But the official also said the agency deferred each time to the IRS over how to disclose the looming inspector general’s report that detailed the agency’s treatment of conservative groups. 

Lew, in his first congressional testimony as Treasury secretary, told lawmakers on Tuesday that he could not stress “strongly enough how unacceptable this behavior was and how outraged I was when I read about it.”

 

He also said the inspector general who outlined the IRS targeting, Russell George, first told him there might be “troubling findings” in mid-March, and that he would have recommended that the agency find another way to reveal those findings. 

“I wasn’t asked about this,” Lew said before the Senate Banking Committee, when asked about the planted question. “I would have advised against doing that, but it was a decision for the IRS to make.” 

At a Senate Finance Committee hearing on Tuesday, lawmakers from both sides of the aisle said they were unsatisfied with the answers they were getting from Miller and the agency’s former commissioner, Doug Shulman. 

Shulman and Miller frustrated Republicans already irritated by Miller’s contentious appearance before the House Ways and Means Committee last Friday, and shed little additional light on when key figures in the White House and Treasury found out about the IRS targeting. 

Both Miller and Shulman found out about the targeting in May 2012, but did not alert lawmakers — a decision that ranking Republican Sen. Orrin Hatch (Utah) called a “lie by omission.” 

Finance Committee Chairman Max Baucus (D-Mont.) and other Democrats were also less than satisfied with the testimony, even as they also raised the broader question of whether the IRS was correctly enforcing whether political groups should obtain tax-exempt 501(c)(4) status, and whether the laws and regulations in that area are clear enough. 

Democrats noted that the statute on 501(c)(4) groups — which allows those organizations to keep their donors secret — said that those groups should “exclusively” be social welfare organizations. 

But the regulations on the matter now say that 501(c)(4)s must focus “primarily” on social welfare, which is interpreted to mean that less than half those groups’ work can be political. 

“Clearly, a Mack truck is being driven through the 501(c)(4) loophole,” Baucus said. 

George, who also testified Tuesday, told Senate Finance that his organization would be reviewing how the IRS deals with “campaign intervention” by 501(c)(4) groups.

 

Shulman, in his first testimony on the controversy, said the report left him “saddened” and “dismayed,” but he also noted that it didn’t find any political motivations by the employees. 

But the former IRS commissioner also said that the agency had a lot on its plate beyond dealing with tax-exempt groups — including some 140 million tax returns — and suggested it shouldn’t be surprising that an Ohio office had issues dealing with those groups’ potential political activities. 

“The confusion and breakdown that you saw happen in the Cincinnati office is inexcusable, but I would also posit — at least, this is my belief — that part of it was because of the very difficult task given to these people,” Shulman said. 

Republicans said they were hard-pressed to believe that there was no political motivation behind the targeting — especially after Shulman and Miller could not clearly state which staffers put the screening processes for Tea Party groups into place, and who decided to implement political screening terms a second time. 

“I don’t know how we can come to the conclusion that it’s not politically motivated. We don’t even know who made the decision,” said Sen. Pat Toomey (R-Pa.). “On the face of it, it certainly appears that it’s completely politically motivated.”
 


—Editor's note: This story has been changed to correct who Deputy White House Chief of Staff Mark Childress spoke with about the strategy for revealing the IRS's actions.

This story was first posted at 2:47 and last updated at 8:28 p.m.