June 6 (Bloomberg) -- The Internal Revenue Service executive who portrayed Spock in the agency’s Star Trek video parody apologized to lawmakers for inappropriate spending on a $4.1 million conference in 2010.
The videos “at the time they were made, were an attempt in a well-intentioned way to use humor,” Faris Fink said moments after the House Oversight and Government Reform Committee showed a Star Trek clip starring Fink and a separate line-dancing video. “It’s embarrassing and I apologize.”
The IRS is under investigation by Congress on multiple fronts -- today for the conference spending and more broadly for applying tougher scrutiny to small-government advocacy groups seeking tax-exempt status.
The conference spending was “at best, maliciously self-indulgent,” said Representative Darrell Issa, the committee chairman.
Issa, a California Republican, said he was less concerned about the total IRS spending on conferences -- $49 million from 2010 to 2012 -- than about perks such as discounted presidential suites and hotel rooms for local employees at the expense of other employees who could have gotten better training.
“This is an agency that is just out of control,” said Representative Jim Jordan, an Ohio Republican.
The Treasury Inspector General for Tax Administration released an audit June 4 on the conference spending, including parody videos made for the 2010 conference in Anaheim, California.
Fink is commissioner of the agency’s small business and self-employed division, which has 24,000 employees across the country and organized the conference. About 2,600 people attended the management conference, which included a $17,000 speaker who lectured on leadership through art.
Fink, deputy commissioner at the time, stayed in one of the presidential suites. The video costs included a $2,400 set for the videotaping, while employees bought their own costumes.
“Mr. Fink, the money that was spent on that, that’s my money,” said Representative Elijah Cummings of Maryland, the top Democrat on the committee. “That’s the lady who got the early bus this morning, that’s her money.”
Fink was promoted to commissioner in 2011, he said, and received a performance bonus during that time.
Cummings also read an e-mail between employees of Marriott International Inc. that suggested the decision to hold the meeting in Anaheim would cost an extra $1 million.
“The hotel employees were mocking you and maybe even taking advantage of the IRS,” Cummings said.
Fink said he wasn’t sure if the agency could have negotiated a discount on rooms or other items instead of accepting the suite upgrades. He said the decision to go to Anaheim was made using a travel estimator that also considered local costs.
“Suspicion is aroused whenever some sunny spot is picked,” said Eleanor Holmes Norton, a Democrat who is the non-voting delegate from Washington, D.C.
J. Russell George, the inspector general, said much of what was spent on the conference came from funds set aside for hiring enforcement employees. Some see federal rules as creating an incentive to spend money before it has to be returned to the Treasury, he said.
George said one of his employees spoke at the conference about security threats. His employee was upgraded to a suite because no regular rooms were available, George said.
Gregory Kutz, an assistant inspector general, said a revenue officer who did much of the Anaheim conference planning stayed for six nights in a presidential suite and received a $2,000 bonus for his work on the event.
The IRS and the Treasury Department have changed their rules and reduced spending on conferences. Those costs have declined to under $5 million in fiscal 2012 from about $37.6 million in 2010.
Daniel Werfel, the acting IRS commissioner, placed two employees on leave yesterday for accepting about $1,100 worth of free food and other items during a party in a private suite at the Anaheim conference. He said that using internal event planners could have cut the conference’s cost by about 10 percent.
“Such a conference would not take place today,” Werfel said.
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