Werfel says that part of his job is 'to hold people accountable.' | John Shinkle/POLITICO Werfel's IRS discipline wins praise

Acting IRS Commissioner Daniel Werfel is placing two officials — including a top staffer implementing the health care law — on administrative leave for violating government ethics rules at a 2010 conference.

“When I came to IRS, part of my job was to hold people accountable,” Werfel said in a statement Wednesday. “There was clearly inappropriate behavior in this situation and immediate action is needed.”


Werfel didn’t specify which staff members he disciplined but congressional sources tell POLITICO one official is Fred Schindler, the director of implementation oversight at the IRS Affordable Care Act office. The other is Donald Toda, a California-based employee.

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The staffers received $1,100 in free food and other items at the conference, the sources said.

The disciplinary move comes ahead of a hearing House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) will hold Thursday on a report that the IRS spent about $49 million on conferences between 2010 and 2012. Werfel is slated to testify at that hearing.

Louisiana Rep. Charles Boustany, a senior Republican on the tax-writing Ways and Means Committee, said he saw the discipline as a sign that Werfel could shake up the IRS. He was pleased that the IRS alerted GOP members of the committee about the move late Tuesday.

“He’s promised us to be forthright and free-flowing with information and keeping us informed about what he’s doing at the IRS to clean that up,” Boustany said. “The fact that he provided the information to us last night is … a good sign.”

Maryland Rep. Elijah Cummings, the top Democrat on the Oversight committee, said Werfel is taking “aggressive action.”

“If you had some bad apples in the barrel, you have to remove them,” Cummings said.

President Barack Obama installed Werfel as the agency’s acting director last month after the administration asked his predecessor, Steven Miller, to step down.

Administrative leave can be the first step to firing a government worker, which is difficult due to federal employee protections. Suspended employees are often paid during suspension while supervisors decide how to proceed.

Fired employees can appeal their dismissal to the Merit Systems Protection Board, a process that can take longer than a year. During the appeals process, however, they are not on payroll.

The development adds to the scandal that has engulfed the IRS since the agency acknowledged last month that employees wrongly targeted tea party groups applying for a tax exemption. Those problems have only deepened in the wake of reports of big spending on IRS conferences.

Meanwhile, Ken Cuccinelli, Virginia’s attorney general and GOP candidate for governor, accused the agency on Wednesday of blocking $125 billion owed to the state stemming from a Medicaid fraud settlement, according to the Associated Press.

Schindler is a deputy to Sarah Hall Ingram, another staffer who has come under fire from Republican lawmakers for leading the IRS division that oversees nonprofits before moving into a different position to lead the agency’s implementation of the health care law. Treasury Secretary Jack Lew has said Ingram wasn’t involved in the targeting program.

A source close to the IRS told POLITICO Schindler is responsible for overseeing audits on the health care law conducted by the Government Accountability Office, among other tasks.

Previous roles for Schindler include stints in the agency’s collection policy division and work as a deputy assistant chief counsel.

Lois Lerner, a senior official in the division overseeing nonprofits, is the only staffer that has been placed on leave since the IRS scandal broke last week. Werfel put her on leave last month after she refused his request to resign.

The Obama administration asked Steven Miller, Werfel’s predecessor as acting commissioner, to step down last month.

The congressional probe of the IRS shows no sign of slowing soon. House Ways and Means Committee Chairman Dave Camp (R-Mich.) said the agency began responding to his panel’s requests for documents late Tuesday.

Camp said the agency has collected 64 million pages of documents in response to requests from lawmakers.

“The sheer volume of documents and the work that must be done to finish interviews and review the information provided by the IRS will require both time and patience,” Camp said in a statement.

Paige Winfield Cunningham contributed to this report.