Carney: Obama out of IRS loop

Senior White House officials were briefed about a federal audit of the IRS’s improper focus on conservatives, but they decided not to tell President Obama about it, press secretary Jay Carney claimed Monday.

White House counsel Kathryn Ruemmler learned about the report in April and made the decision not to tell the president, even as other senior staffers got wind of the audit by Treasury’s inspector general for tax administration, Carney said.

Denis McDonough, White House chief of staff, was among those told about the nature of the report, which found that Tea Party and other small-government advocates seeking tax-exempt status were tagged for special screening because of their names.

Carney defended the decision to keep the president out of the loop, saying conclusions often change in the final stages of inspector general reports. It also would’ve been inappropriate, Carney added, for the White House to involve itself in an ongoing investigation.

Still, Carney’s comments underscored how the administration has shifted its explanation about what senior White House staffers knew of the situation and when they knew it. 

Republicans pointed to the changes in the White House story as proof that comprehensive investigations are necessary. 

“It’s not so much that Carney was off by about three weeks,” a GOP leadership aide said. “It’s just that every time we get a story, it’s different. That’s why, instead of relying on a spokesman with an agenda, we agree with the president that there needs to be an investigation. And Congress is investigating.”

Carney said Ruemmler and McDonough had only “top line” knowledge of the report’s findings. He argued that some in Congress, including House Oversight Committee Chairman Darrell Issa (R-Calif.), had been similarly briefed on the upcoming report but chose to sit on the information so as not to interfere.

“To be clear, we knew the subject of the investigation, and we knew the nature of some of the potential findings,” Carney told reporters. “But we did not have a copy of the draft report, we did not know the details, the scope or the motivation surrounding the misconduct, and we did not know who was responsible.

“The cardinal rule is to not intervene in an independent investigation or take any steps that could be seen as intervening,” the press secretary said. “That’s what we abided by, and that’s what any White House should do.”

Leaders of the Senate Finance Committee on Monday expanded their investigation into the IRS’s actions. The panel is scheduled to hold its first hearing on the IRS controversy Tuesday. 

Sen. Rob Portman (R-Ohio) and Rep. Danny Davis (D-Ill.), both tax-writers, are among the lawmakers who have sounded open to a special counsel, even as others on Capitol Hill have said it’s too soon to make that determination. 

Attorney General Eric Holder could appoint a special prosecutor if he believes that sort of criminal investigation is needed, which would in essence lead to the Obama administration investigating itself. 

Holder has already jump-started a criminal probe into the IRS’s actions. Under the law, the attorney general is charged with setting the jurisdiction for a special counsel’s investigation. 

A special counsel is different from an independent counsel, the spot from which Kenneth Starr investigated Bill Clinton’s administration. Congress allowed the authorization for independent counsels — which were appointed by a panel of appeals court judges and could have broader jurisdictions, according to one Washington lawyer — to expire in 1999.

The Senate Finance Committee hearing on Tuesday will be the second congressional inquiry into the IRS’s targeting of Tea Party groups and the first to feature Doug Shulman, the commissioner in charge of the agency for most of the period detailed in the inspector general’s report.

Steven Miller, the acting IRS commissioner pushed out by Obama last week, and Russell George, Treasury’s inspector general for tax administration, are also scheduled to testify. 

Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Orrin Hatch (Utah), the panel’s ranking Republican, pressed Miller on Monday for a wide range of new information, asking the IRS for answers to more than three dozen questions. 

The top tax-writers are seeking answers about how and why conservative groups received extra scrutiny. They are asking, for instance, for all the extra questions that the agency asked organizations seeking tax-exempt status since February 2010.

Baucus and Hatch are also seeking added information on any conversations, electronic or otherwise, between IRS and White House officials “regarding the targeting.”

That suggests the Finance Committee’s inquiry will have a bipartisan tenor to it, but other Democrats remain unconvinced about what their GOP colleagues are up to.

At last week’s Ways and Means panel hearing, several Democrats noted that President George W. Bush nominated Shulman. 

Democrats have also said that the agency’s actions are as much an indictment of the campaign finance system as anything else. 

“Republicans so badly want a smoking gun, yet all this shows is that the White House avoided getting involved in an ongoing audit,” one Democratic aide said Monday. “If the opposite had been true, you can only imagine the Republican uproar that would ensue.”