June 21 (Bloomberg) -- A special prosecutor should probe the loss of Internal Revenue Service e-mails that may contain facts about its scrutiny of Tea Party groups seeking tax-exempt status, the House Ways and Means Committee chairman said.
“We are missing a huge piece of the puzzle,” committee Chairman Dave Camp said at a hearing yesterday in Washington. The two years of missing e-mails cover the “very peak” of the IRS scrutiny, the Michigan Republican said. “How convenient for the IRS and the administration.”
The IRS said last week that a computer crash, combined with routine recycling of backup tapes, meant it couldn’t recover many e-mails written from 2009 to 2011 by Lois Lerner, the IRS director of exempt organizations at the time.
IRS Commissioner John Koskinen told the committee that a computer hard drive was destroyed and recycled in line with normal procedures, prompting audible groans from Republicans on the panel.
Republicans have said the IRS gave extra scrutiny to some Tea Party-related groups applying for tax-exempt status. At yesterday’s hearing, Representative Paul Ryan challenged the commissioner’s credibility about the missing e-mails.
“I am sitting here listening to this testimony and, I just, I don’t believe it,” said Ryan, a Wisconsin Republican. “That’s your problem, nobody believes you.”
Ryan went on. The IRS hasn’t been forthcoming, he said, and has a track record that makes people doubt it can be impartial. “I don’t believe you,” he said, “this is incredible.”
“I have a long career; that’s the first time anybody has said they do not believe me,” Koskinen responded.
“I don’t believe you,” Ryan said.
The Obama administration released a letter that said Lerner didn’t exchange any e-mails with White House officials during that period.
Reviewers “were unable to identify any communications between Lois Lerner and persons within” the president’s executive office, W. Neil Eggleston, a White House counsel, said in a June 18 letter to Camp and Senate Finance Committee Chairman Ron Wyden.
White House spokesman Josh Earnest told reporters that the Obama administration opposes appointing a special prosecutor.
“I’m not sure there’s a whole lot left to discover here,” Earnest said yesterday, adding there have been “a long list of claims and conspiracy theories by Republicans that just haven’t panned out.”
IRS documents said after Lerner’s computer hard drive crashed in 2011, experts at the IRS Criminal Investigations forensic lab unsuccessfully attempted to recover its contents. In a July 19, 2011, e-mail, Lerner told the technicians there were “irreplaceable” documents that she wanted to retrieve.
Koskinen read a statement describing the computer crash and IRS response. Camp responded that the statement didn’t include an apology.
“I don’t think an apology is owed,” Koskinen responded.
Minutes later, Georgia Democrat John Lewis apologized -- to Koskinen -- for the way the hearing was being conducted. Democrats called it an inquisition.
That set off Ryan. “The apology that ought to be given is to the American taxpayer, not a government agency that’s abusing power,” he said.
The controversy centers on so-called social welfare groups, which under tax law don’t have to disclose their donors. That has made them an attractive vehicle for anonymous involvement in politics.
Groups organized under section 501(c)(4) of the U.S. tax code must be organized “exclusively” to promote social welfare. The IRS has interpreted that to mean such groups can’t have politics as their primary purpose, a decision that has led to disputes over the meaning of “politics” and “primary.”
Lerner oversaw the IRS employees who determined whether groups seeking nonprofit status were too political. After an inspector general’s report highlighted management failures in Lerner’s division, she was put on paid leave in May 2013 and retired in September 2013. She hasn’t been charged with a crime.
Lerner has refused to answer lawmakers’ questions after telling the House Oversight and Government Reform Committee in May 2013 that she had done nothing wrong. The House voted May 7 to hold her in contempt, contending she had waived her right to avoid testimony.
Republicans on the panel said the IRS wouldn’t accept the same excuses from taxpayers.
Texas Republican Steve Stockman separately introduced a non-binding resolution that would, if adopted, put the House on record supporting tax dodges. “Taxpayers should be allowed to offer the same flimsy, obviously made-up excuses the Obama administration uses,” he said.
Among the circumstances Stockman’s resolution covers for not finding documents: “The dog ate my tax receipts” and “Was short on toilet paper while camping.”
Democrats called the hearing an exercise in letting Republicans air conspiracy theories.
“There is absolutely no evidence to show that Ms. Lerner’s computer crash was anything more than equipment failure,” said the panel’s top Democrat, Sander Levin of Michigan.
“Was her computer crash a conspiracy? No,” Levin said. “Was the Internal Revenue Service’s system for backing up its e-mail system entirely underfunded and wholly deficient? Yes.”
Texas Democrat Lloyd Doggett went a step further and, with Koskinen under oath, decided to bring up a few other matters.
In response to Doggett’s questions, Koskinen said he hasn’t been to Benghazi, Libya, where an attack killed four Americans; hasn’t been involved in any cover-up of space alien landings; and has never had custody of President Barack Obama’s birth certificate. Some Obama opponents contend he was born in Kenya and isn’t a U.S. citizen.
Doggett said he thought Koskinen’s mistake “is that you did assume this was a serious inquiry.”
Illinois Republican Peter Roskam said Koskinen may decide it was a mistake to accept the IRS commissioner job, musing that he may leave in six months or a year.
Koskinen said he is “firmly committed” to serving his full term, which expires in November 2017.
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