IRS Computer Failure Reignites Partisan U.S. House Fight

U.S. lawmakers argued late into the night and again today over a computer drive that crashed in 2011, taking the controversy surrounding the Internal Revenue Service to a new level of acrimony.

Republicans said the broken device that belonged to former IRS official Lois Lerner is crucial evidence in their investigation of the agency and said the IRS was covering up its misdeeds. Lerner headed the IRS office that gave extra scrutiny to small-government groups seeking tax-exempt status and has refused to answer lawmakers’ questions.

“I’m sick and tired of your game-playing in response to congressional oversight,” Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, said to IRS Commissioner John Koskinen at a hearing last night in Washington.

The hard-drive controversy is the latest in a 14-month partisan battle over the IRS, now deep in arguments about document-production techniques.

The IRS says a catastrophic failure -- the crash of Lerner’s computer hard drive, followed by the routine recycling of backup tapes -- means that more than two years’ worth of her e-mails were wiped out.

Republicans don’t buy it. They argue that in an age where it seems like every keystroke lives forever, it’s too much to believe that these particular e-mails, from this particular person, simply vanished.

‘Haven’t Cooperated’

House Speaker John Boehner, an Ohio Republican, told reporters today that Obama administration officials “not only haven’t cooperated, they frankly haven’t done a damn thing” to find out the truth about the loss of the e-mails.

David Ferriero, the national archivist, told committee members today that the IRS “did not follow the law” that requires the agency to inform the National Archives of records losses.

Republicans criticized Koskinen for saying in March that the agency would produce all of Lerner’s e-mails and waiting until this month to disclose that the communications weren’t retrievable.

Koskinen testified yesterday that he knew in March that there was a problem with Lerner’s e-mails. He said he didn’t know until April that some couldn’t be retrieved.

“If you have a magical way for me to do that, I’d be happy to know about it,” he said.

‘Aged Equipment’

Koskinen blamed the “aged equipment” that the IRS uses because of budget constraints. He said he was unaware of any attempts to retrieve Lerner’s documents from the backup tapes before they were recycled.

The tax agency said last week that the computer failure meant it couldn’t recover many of Lerner’s e-mails from 2009 to 2011, though it is providing lawmakers with 67,000 of them. Lerner, who retired last year, oversaw employees who determined whether groups seeking nonprofit status were too political.

After her hard drive crashed, Lerner tried to retrieve data that she said was irreplaceable, according to e-mails released by the IRS and highlighted by Democrats.

“This was not intentional,” said Representative Elijah Cummings, a Maryland Democrat. “This was not nefarious. This was not a conspiracy.”

Koskinen told lawmakers that the hard drive crash occurred before any investigations started and that the agency’s inspector general is examining the matter.

Tea Party

Starting in 2010, the IRS gave Tea Party groups seeking tax-exempt status extra scrutiny based solely on their names, causing the groups to experience delays.

Agency officials have acknowledged those actions while insisting the IRS didn’t do so for political reasons.

Groups organized under section 501(c)(4) of the tax code, which are allowed to keep their donors secret, are required to operate “exclusively” for the promotion of social welfare. The IRS has interpreted that to mean they can’t have politics as their primary purpose, a rule that has led to disputes about the meaning of “politics” and “primary.”

The investigations have found little, if any, direct evidence of political motivation or involvement from officials outside the IRS.

Instead, documents released so far show that lower-level workers were confused about what criteria they should use to sort and assess applications. They show that IRS executives tried to respond to concerns from Democratic lawmakers, among others, that groups were using 501(c)(4) status to circumvent campaign-finance disclosure laws.

Issa’s committee is continuing its hearing today. Among the witnesses is Jennifer O’Connor, who worked as an IRS lawyer last year managing the agency’s response to the controversy and congressional document requests.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net Laurie Asseo, Michael Shepard

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