House report: IRS spent $50M on conferences

AP

WASHINGTON (AP) — A government watchdog has found that the Internal Revenue Service spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012, a House committee said Sunday.

The chairman of that committee, Rep. Darrell Issa, R-Calif., also released excerpts of congressional investigators' interviews with employees of the IRS office in Cincinnati. Issa said the interviews indicated the employees were directed by Washington to subject tea party and other conservative groups seeking tax-exempt status to tough scrutiny.

The excerpts provided no direct evidence that Washington had ordered that screening. The top Democrat on that panel, Rep. Elijah Cummings of Maryland, said none of the employees interviewed have so far identified any IRS officials in Washington as ordering that targeting.

The conference spending included $4 million for an August 2010 gathering in Anaheim, Calif., for which the agency did not negotiate lower room rates, even though that is standard government practice, according to a statement by the House Oversight and Government Reform Committee.

Instead, some of the 2,600 attendees received benefits, including baseball tickets and stays in presidential suites that normally cost $1,500 to $3,500 per night. In addition, 15 outside speakers were paid a total of $135,000 in fees, with one paid $17,000 to talk about "leadership through art," the House committee said.

The report by the Treasury Department's inspector general, set to be released Tuesday, comes as the IRS already is facing bipartisan criticism after agency officials disclosed they had targeted tea party and other conservative groups.

Agency officials and the Obama administration have said that treatment was inappropriate, but the political tempest is showing no signs of ebbing and has put the White House on the defensive.

Three congressional committees are investigating, a Justice Department criminal investigation is under way, President Barack Obama has replaced the IRS' acting commissioner and two other top officials have stepped aside.

The Treasury Department released a statement Sunday saying the administration "has already taken aggressive and dramatic action to reduce conference spending."

IRS spokeswoman Michelle Eldridge said Sunday that spending on large agency conferences with 50 or more participants fell from $37.6 million in the 2010 budget year to $4.9 million in 2012. The government's fiscal year begins Oct. 1 the previous calendar year.

On Friday, the new acting commissioner, Danny Werfel, released a statement on the forthcoming report criticizing the Anaheim meeting.

"This conference is an unfortunate vestige from a prior era," Werfel said. "While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred."

Issa's committee also released excerpts from interviews congressional investigators conducted last week with two IRS employees from the agency's Cincinnati office. The excerpts omitted the names of those interviewed and provided no specifics about individuals in Washington who may have been involved.

One of the IRS employees said in an excerpt that they were told by a supervisor that the need to collect the reports came from Washington, and said that in early 2010 the Cincinnati office had sent copies of seven of the cases to Washington.

The other said "all my direction" came from an official the transcript said was in Washington.

One of the workers also expressed skepticism that the Cincinnati office originated the screening without direction from Washington, according to the excerpts.

Appearing Sunday on CNN's "State of the Union," Issa said this conflicted with White House comments that have referred to misconduct by IRS workers in Cincinnati. Without naming White House spokesman Jay Carney, Issa said the administration's "paid liar, their spokesperson" is "still making up things about what happens in calling this local rogue."

He added, "This is a problem that was coordinated in all likelihood right out of Washington headquarters and we're getting to proving it."

In briefings with reporters, Carney has not referred to the Cincinnati IRS office as "rogue."

"He's good at throwing out outlandish charges but it's unclear what he's saying he lied about," White House spokesman Eric Schultz said of Issa's remark.

Cummings said Issa's comments conflicted with a Treasury inspector general's report that provided no evidence that the Cincinnati office received orders on targeting from anyone else.

"Rather than lobbing unsubstantiated conclusions on national television for political reasons, we need to work in a bipartisan way to follow the facts where they lead," Cummings said.

The interviews with IRS employees were conducted by Republican and Democratic aides on Issa's committee and also involved aides from both parties from the House Ways and Means Committee.

One of the employees was a lower-level worker while the other was higher-ranked, said one congressional aide, but the committee did not release their names or titles.

The IRS Cincinnati office handles applications from around the country for tax-exempt status. A Treasury inspector general's report in May said employees there began searching for applications from tea party and conservative groups in their hunt for organizations that primarily do work related to election campaigns.

That May report blamed "ineffective management" for letting that screening occur for more than 18 months between 2010 and 2012. But that report — and three hearings by congressional committees — have produced no specific evidence that the Cincinnati workers were ordered by anyone in Washington to target conservatives.

The latest report on IRS conferences will be the subject of a hearing Thursday by the House Oversight and Government Reform Committee.

Werfel is scheduled to make his first congressional appearance as acting commissioner Monday when he appears before a subcommittee of the House Appropriations Committee.

According to congressional aides briefed by the inspector general's office, the IRS did not formally seek competitive bids for the city where the agency's 2010 conference was held, for the event planner who assisted the agency, or for the speakers.

The aides, who spoke on condition of anonymity to describe a confidential congressional briefing, said other benefits given to some attendees at the Anaheim IRS conference included vouchers for free drinks and some tickets to attend Angels baseball games.

Two videos produced by the IRS were shown at the Anaheim conference. In one, agency employees did a parody of "Star Trek" while dressed like the TV show's characters; the second shows more than a dozen IRS workers dancing on a stage. The two videos cost the agency more than $50,000 to make, aides said.

The lecturer who spoke about leadership through art produced six paintings of subjects that included Abraham Lincoln, Michael Jordan, the rock singer Bono and the Statue of Liberty, the aides said.