Transcripts For CSPAN3 Key Capitol Hill Hearings 20140625

501c4s do not get 100 deduction. Youre not tax. Not at all . Not a penny. They are tax exempt in the money they receive from taxpayers who have paid their taxes and give them after tax income, they dont count it as profit. They simply spend it on their baffle but they are not tax deductible the way a charity is. Its a very significant difference. It is one of the reasons they can do up to half of their activities in these. These are social welfare groups, not charities. But theyre social welfare groups and they dont get a Tax Deduction. Of . When you give to a 501c4, you do so without a Tax Deduction. It is taxable. You give your after tax. Its the same kind of deduction you get when you receive a political campaign. Your donors pay their taxes and give you after tax income. It is not a charity. Not at all. Well, i stand corrected. I thought 501c4s had a tax treatment that was favorable to them. And i was saying why not just have a rule that no one gets a Tax Deduction that gets involved in political activities. But i think getting back to the emails, when 22 million emails from the Bush White House went missing in wa 2003 and 2005, which was only discovered under the Valerie Plame affair, our colleagues across the aisle had a different take on how things should happen. And were there any provisions put in place after this loss of emails between 2003 and 2005 that made it less likely that emails could go missing again . I ask anyone who would like to answer that. What there was a terrible debacle in 2003 and 2005. What changes were put in place to prevent this from happening again . So i would suggest that thats an example of some of the challenges that all federal agencies across the government have as it relates to managing email. And the instance were talking about today with the irs is also another where agencies need to be able to understand how their email systems work, how theyre work in connection with the federal records act and how theyre ensuring that preservation is occurring according to disposition schedules. Thats been a wakeup call for the entire federal government. He would also say that ha a wakeup call is that you need your infrastructure to be hitech in place. And mr. Pharoah, as you may be aware, the irs has a 1 billion i. T. Infrastructure but the federal times recently reported that sequestration and other cuts have imposed terrible restrictions on the irs including a reduction in the agency supplies and tiers in budgets. Can you so if you basically have andty equated i. T. System in addition to not putting reforms in place. Can you discuss how maintaining and tick equated i. T. System might impact an agencys records retention capability . What does this mean, these budget cuts and not having an updated i. T. System . It certainly plays a role in this particular case in terms of the capacity of their hard drives to retain information. The number of emails theyre actually able to capture at one time. The upside of the directive that were that were in the process of implementing is that it gives us the authority to work with the strit, the electronic Mail Industry the hitech industry to create solutions that will work for the federal government. Efficient, effective and cost of benefit solutions to this problem. So im optimistic about the future. Well, has funding been a significant challenge to some of these agencies and modernizing their i. T. Records and retention infrastructure. Certainly have. The commissioner testified and i read his testimony they have proposed 400 million to 500 million to modernization and improvement activities but this hasnt become a reality in the budget. Others have complained the Department Still has not completed the switch from Microsoft Windows xp to windows 7. What kind of problem is that . Can you elaborate a little further . This is a problem across the government in terms of the investment in technology. Would my colleague yield . Absolutely. At last nights hearing it was established that the irs has had over 800 million cuts in its budget slated for an additional 350 million this year. You cant have it both ways. You cant be cutting the irs that kind of amount and then decry the fact that theyve got antiquated i. T. Systems. I thank my colleague for yielding. My time has expired. I thank the gentle lady and the gentleman for pointing out the 10,000 less workers but not a smaller i. T. Budget. I know the chairman shares my concern about the i. T. Investment. I really do. I wish you had stayed longer last night to hear the accolades from both sides of the dais for the i. G. And his independence, his nonpartisan, the tigdas efforts and how much hes relied on as a nonpartisan. I think it would have been very, very insightful. I appreciate that. My wife is ill. And i have had to go home at night to you have our sympathies. I know that he would appreciate that. The gentleman from ohio, mr. Jordan recognized. Miss oconnor, in the six months you were at the Internal Revenue service, who was the person in charge of getting the documents congress wanted to this committee and to the ways and Means Committee . I guess i would say that thats mr. Werfel because he directed the agency at the time and told us what his directives were. But the people working on document production, who was in charge . So i served as i think i was describing as the liaison between him and the team of people. Was it you . Were you the person in charge. I wasnt working on it fulltime. I had a number of other responsibilities. When we interviewed mr. Wilkins, he said it was you. He said employees who have been responsible for collecting and producing documents, we asked him who was responsible for that process. He said it is tom kean and jennifer. Then he said miss oconnor and he said yes. He identified you as the chief person. In the six months youre there, this is a huge story. You got the key player in this who took the fifth. Its in the news every day. At that time, youre delling us you didnt have any inclination that a bunch of lois lerners emails were lost . I did not know they were missing and uncoverable and a laptop crash had caused that. When you did learn, what was the date that the White House Counsels Office learned . Mr. Koskinen told us he felt he had no duty to disclose. He knew in march there were lost emails. He didnt tell us at the end of march. Someone at the white house learned in april. We didnt learn till june when they sent us a letter a week and a half ago. When did the White House Counsels Office learn that there were lost emails . So i just got there. I understand. Im asking when the counsel. How theres only like 25 lawyers. I wasnt there in april. I have seen the same letter youve seen. Do you know the date . I dont. Is it fair to say april . Thats what your boss said. He said it was sometime in april when they learned from the treasury. Is that accurate . I have no reason to doubt its true. I wasnt there. Do you know who from treasury told the White House Counsels Office that emails were lost . Do you know who that person was . I dont know. You dont know who was in that meeting or if it was a meeting or how it was communicated . Id love to be helpful. I wasnt there yet. And do you know if anyone in the white House Counsel once they got the information, did they tell anybody else . Did did your boss tell the chief of staff at the white house . Did they tell the president . Who was that communicated to . Again, im sorry. I dont mean to be a broken record. I wasnt there. We asked to you come to this hearing a week ago. In the week, you didnt ask like what happened here . We learned in april the congress didnt learn till zwrun. You didnt ask any of your colleagues . How many lawyers are in the White House Counsels Office . Approximately 25 . Im efficiently knew i have not done a headcount. I understand its around 25. You would think you would talk to those folks and get the details what youll have to answer questions about. You didnt do that . So the letter i received from chairman issa said that the reason that you wanted to talk to me was to understand what i learned at my time at the irs. I did not have much time to prepare. You didnt think the to ask about the fact that the white house knew in april and the peoples house doesnt know until june . You didnt think there was a duty to figure out who gave you the information, who you may have shared that information with . Seems like everyone knows this stuff still its up to congress. We dont get it till months later. Id like to be as helpful as i can with what i knew. It would have been helpful if you had the answers to those questions. Do you know if the White House Councils office that lois lerners emails were lost, do you know if the White House Councils office told the fbi and told the Justice Department . So what i can tell you is what i knew when i was at the irs. I wasnt at the white house. You work at the White House Counsels Office. They knew this information in april. We didnt know it till june. Theres a twomonth time difference there. In that type, did the White House Counsels Office tell the fbi . Remember what the president said, hes angry about this. People have to pay. Theres no place for this, all the things he said when the scandal broke. If you get Important Information like lerners emails are lost, did share that with the agency doing the criminal investigation . Did you say this is serious. Wed better get this information to the fbi and the Justice Department . Did you do that . Im happy to answer questions about my time at the irs. Im asking did your boss, the folks you worked for at the White House Counsels Office, when they got the critical information, did they share it with the Justice Department . Mr. Eggalston started the same day i did. Our tenures are the same. He wrote the letter to dave camp saying they learned of it in april. When he got that Important Information, did he get it to the folks running the criminal investigation . Thats important. Or do you think theres no duty for the white house when they got critical information, theres no duty, no obligation to share that with the Justice Department who is running a criminal investigation . You dont think they have to do that . They can sit on the information. The gentlemans time has expired. May i answer the question . Im happy to work with you and with your staff to try to get you information as we can. To answer your questions about my time. That wasnt the question. The question was, do you think the White House Counsels Office has a duty to share critical information about lost emails with the Justice Department when you knew that two months ago . Ing. Okay. I think the question is now understood. Can you answer that question, please. And my answer. Could she not be interrupted. My answer would be that im here as a witness about the facts that i learned at the irs. To the extent you have questions about activity at the white house, im happy to see what we can do to get you answers. Thats not what im prepared to talk about today. From the chair i need to advise when a question is asked and youre an attorney and hes asking if you have an opinion as to whether or not knowledge of a crime should be referred or the knowledge of something you think is a crime should be referred, it really is a yes or no or i do not feel. Im happy to answer that. I think knowledge of a crime should be referred to the fbi, yes. Thank you very much. I thank you. The next is the patient gentle lady from illinois, miss duckworth. Thank you, mr. Chairman. Miss oconnor, has it been determined that the crashed hard drive was a crime . Not as far as i know. Thank you. So when the white house lets go back. Last night, commissioner cos ca ca nen testified that he found out about the crashed hard drive in april of this year. Were you working at the white house at that time . I was not. When did you start at the white house . Just about a month ago. About a month ago. Middle of may. Yes. So you would would you have any information in the prior to the middle of may or in would the wous have called you and told you did it receive information or did not receive information from the irs before you started working there . Nobody called me from the white house to tell me they had received information from the irs. So you would not have known. The current commissioner testified that he only learned in april that the crash had happened and that in many that will process, they were still trying to recover some of the lost emails. In fact, they have managed to recover some of the emails that were lost because even though they were crashed and lost from the from account, miss lerners account, they were actually found not to accounts of the 82 custodial accounts confident people that received the emails and they were sort of going lieu that process. Its by no means complete but they were going through the process. This happened in april. Would you have had any knowledge of of that . I didnt have any knowledge of that in april. I do think that the measures that they described that they went through the sound exhaustive and appropriate. Lets go back to the five months worked at the irs. My colleague indicated that there had been previous testimony, you were identified as the person in charge of the employees whose job it was to produce the documents that had been requested by the various committees. Did you write the evaluations for all of those employees . None of them directly reported to me. My rowe was as an advisor. I did my best to advise them and help them and work with them and work with the committees and essentially make sure that the team that was working day to day all day long you know to do this all night long, i mean they worked very, very long hours knew what the priorities were for which employees material was going to be produced, what the search terms were supposed to be. Many of the investigating committees including this one had specific requests, please get me the bolo spreadsheets or the training materials or what not. I tried to facilitate that and help the team figure out how to prioritize what reviewerers were looking at what materials it could move quickly. So i played a role but i didnt write any performance evaluations because none of them directly reported to me. You played an advisory role but had no direct responsibilities in terms of evaluation them, directing them how they should go about doing the data gathering. You simply advised them as they were going through the process and then your job was to report back to mr. Werfel how on the progress of the effort. Is that correct . I dont want to leave the impression i didnt work closely with him. Dy. I was not their direct supervisor. Thank you. Mr. Pharoah, i would like to get a little bit more im interested in the cap stone process. I want to make sure we give that enough of a attention. One of the things that really as towned me last night was when i learned that only records that irs employees determine relevant would ob printed out and then those would be archived. But it was up to the individual employees to decide what would be and what would not be. Im looking at the National Archives and Record Administration pull bulletin 201302, titled guidance on a new approach to managing email records, which talks about cap stone and mr. Chairman, id like to have this entered into the record. Without objection, so ordered. Thank you. Point eight it actually says talks about preaccession and policy that talks about how preaccessionening if that were to be conducted would mean that you would actually he assume physical custody copy of all the records usually well before it is time to assume legal custody. Can you describe that process and how that would interact with the individual employees or whether that takes them out of the picture . I will take that. Im sorry, thank you. With the preaccessioning policy, we want to offer agencies the opportunity to transfer physical custody of email records to us so that we can ensure their preservation at the National Archives so that they are not you know, in any kind of danger or anything in an agency. So this is a way to ensure adequate preservation of archival records 2 to 3 of records that agencies create that have permanent value that would come to the National Archives, wed bring them in through that policy and maintain them physically and then at the time of transfer which may be in 15 or 20 or 30 years after that date, of irtheir creation, then make them available through the National Archives access programs. So once you have it, then those irs employees, for example or whatever agency it is couldnt delete the copy that you have, correct . They would be entrusted to the National Archives itself in our physical custody even though they would still be in the legal custody of the irs. My times up mr. Chairman. I yield back. Id ask unanimous consent that the press release from the treasury Inspector General for Tax Administration tigda dated november 21st, 2013, be placed in the record without objection, so ordered. Its entitled increased oversight is needed of the Internal Revenue Services Information Technology Hardware maintenance contract, and it goes into the tens it of millions of dollars that were spent in 2012 fiscal year on maintenance that was neither needed nor was it performed. We now go to the gentleman from michigan, mr. Wahlberg. Thank you, mr. Chairman. Mr. Furio, just just to review a bit in your testimony, you state that when agencies become aware of unauthorized destruction of federal records that they are required to report the incidents to the archives. At any time. 2011, through last monday, did the irs report any loss of records related to lois lerner . No. Is it fair to say that the irs broke the federal records act . Theyre required, any agency is required to notify us when they realize they have a problem that will could be destruction or disposal unauthorized disposal. But they didnt do that. Thats right. Did they break the law . Im not a lawyer. Well, you adminster the federal records act. I do. If they didnt follow it. Can we safely assume they broke the law . They did not follow the law. Mr. Walberg, i think youve got a witness who is smart enough to know that he knows he would have liked those records. Hed like to have gotten those records. He was entitled to those records but hell let the lawyers argue out. Let the lawyers argue out. General American Public who wouldnt get away with that if they were before irs themselves and said they didnt report a specific page or a specific document. I mean, thats the frustration. I hope those that are watching understand were dealing with a law here that was broken. That was broken by an agencying that has the power to tax which is also the power to destroy. Mr. Ferriero, in general, i guess could you briefly describe for us the print and phi recordkeeping process and how it works . I would like to take that quell for you. First of all, i need to apologize about intimating that the federal records act itself says print and file. So the federal records act is the archivist just said does not stipulate that you have to print and file but it is a practical activity that most agencies have adopted as part of their policy so as to ensure that federal records as defined in the federal records act are identified and put into official recordkeeping systems within agencies. The connection to the federal records act is that it is based on an analog and paper model for managing records and as a practical matter, most agencies if not all agencies across the government have had print and phi policies where individual employees are required to identify what the federal records are and put them into the recordkeeping copy within their agency for retention according to records control schedules that the United States approves. What were trying to do with the cap stone policy and the activities with the directive on managing government records is to automate this process so that we can eliminate the human intervention and the likelihood or the possibility of humans making errors and us and agencies losing control of records. So print and file has a long history of human intervention whether its printing it on paper and putting it into a file folder or clicking and dragging electronic file into an electronic file folder. The irs has that policy . Their official policy as we understand it is the print and file. In general, do you think it would be sufficient for the federal records act for employees to save emails that are federal records to a local folder on their computers hard drive instead of printing those emails out . Its inconsistent with the guidance that the irs has given to their employees and their official guidance is to print and file email records in this case to paper and put them in the official recordkeeping system. If an employee were to deliberately not comply with the fra by not printing out their emails would they be subject to any sanctions under the fra . If so, what sanctions . I am also not a lawyer but its not an enforcement statute. What we do with agencies when these sorts of issues arise is have them report to us what has occurred in the instance where emails or other kinds of records have been alienated or destroyed and then what are their plans for reconstructing those records or putting plans in place to make sure this sort of activity does not happen again in the future. Let me just complete account questioning here. If a federal employees hard drive crashes with no warning and no backup of the email exists, do you believe its proper for an agency to assume that no records were lost . No. Thats the question. 100 million billion dollar question that mr. Chairman, we hope we ultimately can get an answer to. I yield back. I thank the gentleman. The chair would now recognize the gentleman from the in, mr. Horseford. Thank you, olympic chairman. Last night, the actual chairman, chairman issa took an extreme action by issuing a unilateral subpoena to the white house. He demanded that miss oconnor show up here today within 24 hours and under threat of contempt. There was no vote on this subpoena. The committee did not debate it. Members did not have the opportunity to weigh the gravity of what the chairman did in the committees name. Now, we find out how misguided that subpoena really was. Miss oconnor, let me just confirm what weve heard here this morning. You were not at the irs when employees were using inappropriate search terms. Is that correct . I was not at the irs during the period covered by the Inspector Generals report. You joined the irs after the Inspector General issued his report. Is that correct . Yes, i joined on may 30th, 2013. And you left the irs in 2013 which was long before the irs made these recent discoveries this spring about miss lerners email. Is that correct . Thats correct, yes. And you joined the white house less than a month ago . About a month ago. And according to a letter we received from the white house, that was after the Treasury Department informed the white house in april about potential problems with miss lerners email. Is that right . Right, ive seen that letter and it refers to in april, an april referral or inforing in april. Yes. Thank you. Thank you. I quite honestly do not understand how chairman issa was able to be rush to issue this subpoena to force you, miss oconnor to be here today within 24hour notice. Your connection to this topic of todays hearing is at best a stretch. And all of these questions could have been answered by simply picking up the telephone and asking. Its just a continuation of the same charade that unfortunately this chairman continues to use this committee to perpetuate. And whats further insulting about this is that the chairman promised to use the authority of this committee responsibly. Let me read what the chairman said backing in 2011 and i quote, im going to take the thoughts on why you on the seriously to be honest, i will ask other members of my committee am i doing the right thing . I will also undoubtedly talk to other members on your side and say am i nuts . Am i wrong . Is this somehow a subpoena that is outside the mainstream . So i dont intend on simply writing subpoenas enendlessly. But thats exactly what chairman issa has done. Since he became chairman four years ago, he has issued more than 50 unilateral subpoenas. He has never once allowed a debate and he has never allowed a vote. Not only do these actions contradict the promises that he made four years ago as the chairman, but they result in unwarranted and abusive subpoenas like the one he issued last night. Now, many constituents do care about the issue of the wrongdoing that occurred at the irs. And there are members on the other side of the aisle who i have listened to to try to understand the concerns about the lack of accountability of those individuals who should be held responsible. But unfortunately, that is not what the chairman has allowed us to focus on. Any of the hearings that weve had dealing with this matter. In fact, hes used this process to politicize the process and to not focus on the proper oversight or government reform function of the committee. But perhaps this should not be a surprise. Because during an interview on august 19, 2010 before chairman issa became committee, he was asked what he planned to do with the ability to issue subpoenas and his response was, and i quote, cabinet officers, assistant secretaries, directors, i will be able to take on everybody that the president hires and relies upon. Well, he has certainly made good on that promise. I yield back my time. I thank the gentleman from nevada. The chair would now recognize the gentleman from the arizona, ggozar. Thank you, mr. Chairman. The Ranking Member brings up new legislation about electronic preservation. Mr. Ferriero, thats pretty much immaterial if you dont uphold the rule of and advance anarchy. Following the rule of law is very important, would you agree . Absolutely. Mr. Fer arrow, you found out about the potential loss of documentation by the irs or through a letter to senators widen and hatch. Through the letter in june. You are aware that federal regulations 36 cfr point 147b states the agencies must report promptly any unlawful or accidental removal destruction of records in the custody of that agency. True . True. Thats what i thought. So once again, weve got a problem. Last night i cited the articles of impeachment for president richard nixon, cited the inference about the irs. People are scared of the irs because the power to tax is the power to destroy, wouldnt you agree, mr. Fer repair role. I know that people are afraid of the irs, yes. Yeah. Missing documents kind of similar to missing tape minutes, wouldnt you agree, mr. Ferriero . Im not sure they equate. Whoa, whoa, whoa. Missing material, missing material, missing records, missing records. The same . Agreed . Missing material. Yeah. And then we havent followed the rule of law. So everybody is scared to death theres one application to bureaucrats and theres another application to the regular lay people on street. You know, it defies me. Miss oconnor, i mean youve been in the Clinton White house. You used to help with the Clinton Administration with the Teamster Union strike. In fact, youve been quoted as being a veteran of washington battles. Would you agree with that . Ive been here a long time. So you know the process, right . Im not sure which process youre referring to. The bureaucratic inside the beltway politics process you know about these recordkeeping and aspect of that, as well . Im not a recordkeeping expert. Certainly. But youre an attorney. You have to know when theres a problem or theres a problem with records, know to report it, right . I know that if you discover that records have been lost and theyre not recoverable, it needs to be reported, yes. Lets go back through this again. The accidental removal defacing alteration or destruction of records in the custody. So its not just laws. Its potential problems with it. So in your tenure over at the irs, there was nos inferences, miss oconnor, that there was some sequencing problems or some problems with the emails out of miss lerners office . None . Nobody raised to me what i understand to be the issue that arose here which is an identification that some of the emails were. There were some problems with the email because even the commissioner said that there was known there was problems with that with her records. I dont recall knowing that there were problems. So no one reported to you that there was any problems . I dont recall anybody telling me that there were problems. Could you consider the conduct of miss lerner normal . Which conduct. The conduct in front of this committee and her conduct in front of you know, supplying a question to the audience creeding a question to the audience. I mean as an employee and somebody supervising records and looking, are would you say the conduct of miss lerner is being normal . Just to break it out, the question at the conference doesnt wouldnt be something i would advise in terms of the laptop situation, my understanding from the material thats become public in the last week or so is that she took quite a number of efforts to have the laptop reconstructed. That seems to be appropriate. You could also look at it from the standpoint of america looking at it as covering up for a krip, too. I have no evidence that thats what. From the inside out, its pretty interesting that you could actually try to cover that up in regards to the way that you look like youre coming off on disclosure. Let me ask you one last question. So the way she took the fifth, is that normal, miss oconnooc . I dont have point of reference for that. Youve seen plenty of taking the fifth, have you not . I have not. I yield back. The chair would now recognize the gentle lady from illinois, miss kelly. Thank you, mr. Chair. Mr. Ferriero, the National Archives and Records Administration is required by law to ensure the investigation of all allegations of unauthorized disposal of federal records. Is that correct . We dont actually do investigations but we are charged with ensuring that we follow up on any reports that we have and urge the agencying to conduct such an investigation. Yes. So you just said you dont investigate the allegations yourself. You but you do instruct the entity to conduct on their own and report back. Okay. During the Bush Administration from 2001 to 2008, the National Archives reported that they opened 92 cases into whether agencies improperly disposed federal records. Does that sound correct . I believe it. It does. If you do the math, that was a little more than 11 years ago or almost one per month. Is it fair to say that such allegations are relatively common . You have the data. Yeah, the allegations are common. I would suggest that its not unique to administrations but its reflective of the challenges that all federal agencies have with this issue. Okay. On june 17th, the National Archives and Record Administration sent a letter to the irs chief in the office of records an Information Management indicating that the loss of some of miss lerners emails may constitute an unauthorized disposal of federal records. Is that correct . That is correct. Do you think that records retention is a problem exclusive to the irs . No. A 2008 Government Accountability Office Investigation found evidence that several federal agencies including the department of Homeland Security and the department of housing and urban development admitted at least one requirement of National Archive regulations related to proper management of electronic records. It certainly appears that federal agencies across administrations having struggled with the records retention. What is the nra role in developing a longterm solution to this problem that will endure even after this administration is over . Let me start with just describing the state as has been selfidentified over the past five years, four years, vee have been working with each of the agencies to develop a selfassessment of where they stand in terms of their control over especially electronic records and the data shows that a High Percentage of the agencies selfreport that they are at high risk. So thats why we have created the directive and are moving ahead to create the solutions to those problems. And what can agencies do to mitigate this longstanding problem . What ideas . There are a number of idea most of which are captured within the managing government records directive as weve talked about earlier, agencies feed to identify ways to automate these processes to take the human intervention out of the activity because that is where the highest risk for error to occur or other things to occur that do not ensure good recordkeeping. So to the extent that were able to have Industry Days and identify private sector developed doors and get their ideas about how this auto categorization and automation can take place with email and other electronic records and identify what the minimum electronic records keeping are that the National Archives needs to promulgate to the community and to federal agencies so they can better manage this electronic content. So were able to meet the deadlines within the directive. Because it would seem as though our technologies continue to improve, the amount of information that agencies must manage and appropriately store increases. So how important is it for agencies to make improvements to Information Systems to ensure full compatibility with new technologies . Its very important. They need to think about this in several kind of sectors. One is the policy piece which the National Archives is most responsible for and getting that piece organized so theyre thinking more creatively and differently about how to manage records in automated sorts of ways with our support and thinking about the Technology Issues working with the Vendor Community and the private sector to understand how automation can be added and cost eb ways to make this happen. Then identify ways that agencies can in a fiscally responsible kind of way add this technology and implement these policy changes so that agencies are managing their records to meet their Business Needs, protect the rights and interests of the government and then for the National Archives perspective, make sure theyre able to get the records in the National Archives so he we can make them available to be future generations. There are a couple aspects of this directive that are very important. The directive calls for the identification of a Senior Agency official, not the records official but Senior Agency official who takes responsibilities for Records Management within that agency, raises the profile of Records Management in the agency. At the same time, were working with the office of Personnel Management to create for the first time in our government the job family records manager. Theres no such thing right now in the Records Management environment. So we have a variety of credentials that are in operation across the federal government. Thank you. My times up. I yield back. Thank the gentle lady from illinois. Dr. Desjarlais. Thank you, mr. Chairman. Miss oconnor, i just wanted to ask you a few questions. What was the reason you were hired in may of 2013 to join the irs . So mr. Werfel called me the day after he started and said that he had undertaken this significant challenge and was trying to add a few extra people to help him a chief of staff, a risk officer and a counselor. And our project was to help him as needed in var ways to run the irs which at that point was facing new leadership and had the problems that i know your committee knows about. Your chief counsel lane wilkins testified before this committee that you were a key supervisor of the irss document review and production process. Would you think mr. Wilkins was correct . I dont quibble with what he said. As i was trying to explainyer, i wasnt working on that fulltime. There was a large number of people working very hard fulltime. I worked with them. At your time from may 2013 to november, did you coordinate the irss response to congressional requests for pore documents . I worked with the staff of the committees to make sure i understood what they needed. I was certainly a part of the process of making sure what they were asking for was delivered to them. Did you review emails related to irs targeting . So the review process involved an enormous number of people who were in sort of tiers. Did you review emails . I wasnt in the, you know, set of employees who were doing the first level review or the second level review, that sort of thing. Did you redact emails related to the targeting . No. None at all . No. Did you determine the schedule of making document production to the committee . The schedule is basically as quickly as we can. And. So you did do that. It was determined by the calendar. So you did make the schedule . It was determined by the calendar basically. We looked at how quickly we could amass. Who decided when the irs would make a document production . Who specifically . It really was the calendar. The effort was to do it as quickly as could be when there was enough to produce. Did you interact with the Treasure Department while at the irs . Yes. How . How . Telephone call in person. What did you discuss with the Treasury Department. It was a variety of things. The irs is obviously part of the Treasury Departments. Mr. Werfel reported to secretary lew. There were a variety of Different Things at any meeting did you update them about the sons to the congressional investigation targeting . I did provide updates when we were going to produce documents that we would be doing it and things like how many documents were in it and that kind of thing. Did you interact with the white house while at the irs . As i explained earlier i had the one interaction where i went with mr. Werfel as he presented his 30day report to the president. So just one time. I didnt have communications with the white house about my irs work when i was at the irs. Who was your point of contact at the white house. For what . When you were interacting with them . You said you interacted once. I didnt have one. When you joined the irs, were you given training on preserving federal documents . Or federal records . There was an enormous amount of training right in the on boarding. I think it did include Records Management. Theres so much, its hard to remember now. It included preserving emails . I think so. Who provided the training for you . I think it was computer based. Did you back up your official records while at the irs . I think that my computer because i was in the counsels office was being backed up. And when i left my records were all copied by the i. T. Staff in the counsels office. Were you ever aware of an attempt not to preserve irs records by any irs employee while you were there . No, im not aware of that. Do you know, did you store your emails on your hard drive . I dont know. Do you know what the size of your email box was . I dont know. Thats fair enough. I have no further questions. Thanks. Thank you. I would just like to point out that the speaker of this house today admonished all of us that we need to show respect to all the witnesses who come before us. In fact, he said we invite people to come and provide testimony and frankly, they should be treated with respect. And i believe respect includes asking a question and then allowing a witness to fully answer the question and not cutting them off. So im hopeful that as this hearing and other hearings move forward, we will continue to show respect as the speaker of the house has recommended to us. Let me ask miss oconnor a question or two. Chairman issa issue aid report entitled how politics led the irs to target conservative tax exempt applicants for their political beliefs. The report alleged that the president s political rhetoric, quote unquote, is what quote led the Internal Revenue services targeting of tax exempt applicants. Miss oconnor, did you see any evidence that irs employees were motivated by politics or political bias in screening publics for tax exempt stat us . So as i said earlier, i joined the effort after it started at the end of may and i left mid stream. At the end of november. But and so i didnt see all the documents that were produced even while i was there. And more continued to be produced after i left. I didnt talk to witnesses. All that said, i didnt see any evidence of that, no. Are you part of a government wide conspiracy to target president obamas political enemies . Absolutely not. Are you here voluntarily and not a hostile witness . Im not his to. I did receive a subpoena. Would you have come had you not received a subpoena last night . Well, the initial response that we gave pointed out that i didnt have a lot of relevant information because i had only been at the irs for six months after miss lerners material was collected and it was before the discovery of the that she had emails that were not recoveriable connected to a computer failure. I think the initial reaction was that there would be many better witnesses to assist the committee. Now, mr. Ferriero, for a long period of time, the irs did not back up their records. And in fact, it was incumbent on each of the employees to print a copy of any email that they thought was relevant for Historical Perspective which is alarming in and of itself. Its also pretty alarming that they are still using windows xp which was first used in 2001 and microsoft does not even support that anymore. So i think for every american who pays taxes, theres a great sense of insecurity in not knowing that any communication they have with the irs may in fact be lost. And if there is one agency that we want to have the comprehensive backup, it would be the irs. Is that correct . I agree, but i also can testify that this issue about updated technology exists in many agencies across the government. So this is a problem we should be looking maybe this committee could undertake something that was constructive in nature and look at all of these agencies and whether or not there is sufficient backup of documentation. As i understand it, when mrmr. Mr. Werfel came to the agency in may of 2013, he made a decision implemented would require that there would be a daily backup of the email servers. Is that correct . I dont know that. Do you know that . He did. So now we can have confidence in knowing that at the end of every day there is a backup all emails that transpired during the day are backed up within the irs, is that correct . That was my understanding when i was there. All right. So my only question is, on one hand last night the commissioner said we have had all these cutbacks and we need more money to be spent to be able to have the kinds of servers necessary to retain all this information. He did take steps to back up everything. Are we at a point where everything is backed up or do we still need more technology and maybe you can answer that. Actually, what id like to the point id like to make about that is having a backup system in place is not Record Keeping system. And thats part of the discussion about what kinds of technologies do agencies need to have to have effective electronic Record Keeping . The action thats have been described that the irs have taken meet the needs of being able to produce emails and other electronic records or inquiries for committees like this one. It does not deal with the electricity Record Keeping issues that they deal with around this position and preservation and access for Business Needs with the agencies necessarily. All right. Mr. Chairman, i know my time has expired, i just wanted to point out on behalf of our colleague that her point was that 501 c 3s and 4 4s are tax exempt. Well, you know, i appreciate you pointing that out. I think the point and i received a text from the ways and means who thanked us for helping point that out because its a point of their frustration with that committee. The fact is that corporations in america, if they take in lets just say that theyre providing a computer service, if they take in 1 million and spend 1 million doing support and they have nothing left, they also pay no taxes. So a 501 c4 who takes in money from people who want to do service and pays no taxes, so the difference is a 501 c 3, people may give a Million Dollars and avoid a Million Dollars in personal taxes. So the difference in scrutiny is activity, not being political because political contributions are not tachlt deductible. The they follow the same rules as your pack. Except that my pack has to disclose, who makes donations to me. And that does that. I truly appreciate that. They have not legislated that disclosure. We did not put it under the federal Election Commission where lois learner worked for many years. We did not empower that. So the president s ofa does not have to disclose, thats just simply the law as it is. I just want to make sure and i think you were very surprised that people do not get a tax writeoff for giving to 501c4s. Therefore, the word tax exempt doesnt have the meaning that most people think it has when they lump together charities. It is extremely important. The american heart association, the American Cancer Association cannot engage in 49 of its activities in favor of promoting candidates because it takes charity. There say huge difference. Its a difference the ways and means is sensitive to because legislating changes is serious business. 501c4s do not enjoy that. Just as your Homeowners Association doesnt. Except theyre supposed to be exclusively for social welfare purposes. I agree that. But the Court Standing is majority. I now recognize mr. Couplie cum. Thank you very much. I would like to admit into the record a letter dated june 23rd, 2014 from the white house. She was saying with regard to house and ways. Just explaining. Noncooperative witness, they refuse to provide her. Its been informative, i appreciate that. Its in the record. Thank you. The gentleman from texas is recognized. Would the gentleman yield me ten seconds . Certainly. I want to put it in perspective for mr. Webster. If you agree, can you answer on the gentlemans time, if we continue to collect data the way theyre describing, what youre doing is effectively taking all the data at the end of six months and throwing it in the trash heap and then the difference if you just collect a bunch of tapes is the equivalent of owning the yard that your trash is hauled to and saying its all there. If i understand correctly, what youre trying to achieve at capstone is in fact to have the meaningful data retained so that it is searchable and usable while recognizing that the vast majority of data is likely not to be of any value and certainly you would not want to search through it to find the important data that is effectively being thrown out today. Yes. Thank you. Thank you. I want to follow up on some questions. You mentioned you have gone through extensive training with the irs on the document retension records policy and you felt like your laptop was probably automatically backed up. But the actual document retension policy doesnt have to do with backup or saving files. It has to do with printing out things you believe follow under the record. How many in your tenure at the irs, you have an idea how many things you printed out to keep for the archives . I have no volume. Just to get back to it, i want to make sure it is clear. I dont think that much was on records retension. Did you print out i absolutely. And would it be more than one or two a day . I dont have a recollection. But what i explained is that what happened with my electronic material when i left is that the i. T. People in the chief Councils Office collected that and then copied it. They made a copy of it and the paper records were all transfer sod that they could continue to be used by my successor. And so when you printed them out, was there just like an in box type thing on your desk . You stuck them in . What did you do with them after you printed them out . I had files in my office. Was it one big file or broken up under files based on subject matter or do you recall . How that was done. It was in different categories, i cant remember. Thats what im getting at. Im trying to imagine the amount of work necessary to go in. And then the amount of work that eventually goes in when the documents get to the National Archives for sorting them out. I dont have a good reference. Lets talk about the record. I mean assuming you got your capstone project. Had you rather have more records or less records . I would rather have right records. And the identification, the work that goes on between the records and manager and the agency and my Records Management staff is creation of schedules. You dont always know what is going to be an important record at the time you get the email. I mean if there was an email about what parking place somebody is going to get assigned, that probably isnt an important record until maybe, you know, god forbid an employee comes in with a car bomb and parks in that parking place. All of a sudden, it becomes relevant. So trusting an individual at the time its happening to decide what is a federal record is probably not a very good way to do it. I agree. Thats why the capstone takes that part of the process completely out of it. It captures everything for the senior executives. The cost of implementing it, does it work just like something that plugs into the network and captures the email . I mean that is a broad general term. So in general when agencies look to deploy a capstone sort of solution and manage the email, theyre doing it in the context of upgrading their email system. The National Archives in the past couple years, we transitioned email systems and part of what weve done is rolled out this Capstone Technology along with the policy. So you got it. Its off the shelf. If somebody wants it, they can buy it for their agency. Its not quite that simple. But its products that then have to be integrated by the i. T. Shop. Again, i used to work in i. T. I mean is it as simple as plugging in a server and Loading Software and making sure you have enough storage price on it . Obviously configuration. I cant imagine that the irs testified like that last night. Is that accurate number . I dont know if its an accurate number or not. But what i would say is agencies are moving to the cloud and theyre trying to identify solutions that can make capstone work. Its not a free activity. There are costs associated with doing integration and other sorts of things. Certainly saving it digitally, its a lot cheaper than printing something out when industry standards say each page you print out costs between five and eight cents. It has to be a massive savings. There are massive savings moving to electronic Record Keeping and also much easier to provide access electronically than having to provide boxes on carts and Research Rooms as we do today. All right. I see my time has expired. I thank the gentleman. We now go to the gentleman from missouri. Mr. Clay . Im in shock, mr. Chairman. Thank you. Wait a second. I apologize. They said clay that you returned. Im thrilled to see the delegate from the district of columbia, miss norton. Thank you, mr. Chairman. I thought you were looking through me. You know, we have been asking about backups here and by the way the last the last member my friend from texas was indicated and i couldnt learn more about electronic backup as opposed to paper. Of course, it costs money to do hardware and to get those things. So when you already have the Old Fashioned stuff, you go with the more costly Old Fashioned stuff. That is the story of the irs and many of oufr federal agencies. It takes money to do things like that. It takes money to save money. Before i go any further, were talking about federal records of the time. Of Course Congress would subpoena those. The federal records theyre the most concerned about. Theyre the own taxpayer documents. Could i ask if there is backup with taxpayer documents . You know, when you filed your income taxes, for example . Mr. Webster . I do not know the answer to that. That is most appropriately brought up with the irs. Gri that thats an irs question. Id be pleased to yield. We earlier had an oversight of ibms role and the subcontracts. At that time i became aware that, yes, the electronic data for filing of taxpayer records which is the vast majority of filing today which is far greater, far more vast than the emails were discuss zg have the system and a backup. It is a big part, a significant part of the 1. 8 billion spent on i. T. Thats actually one of the interesting points of this is the small back end of the irs compared to the massive spending in that data base. Can i ask you, at the same time, did you discover at that time whether this backup for the Health Care Data coming into the irs since the witnesses dont have that . My confidence is high that it does exist in that data trove. But that was came in after our investigation. But it is a significant part, hundreds millions of dollars of the irss new budget go forward is the maintenance of the transactions. As the chairman says this is a back end. This doesnt come up veven. Its very important. And let me say because theres been a lot of back and forth and contentious not testimony, contention among members, so let me just say for the record whenever anybody loses emails, there is always going to be an issue. So i just want to say that for the record. My concern was that nothing that lois learner did, contemporaneous emails and if you do lose if you do crash, could i ask both of you, if you crash, if youre in the old irs because thats where these people are now, what should you do when you know that you may be called before a committee of congress . What should you do . What precautions should you take . Well, we counsel agencies to do is to make sure that i. T. , Legal Council and the Records Management Records Offices are all working together on the different aspects of the records act to make sure that records are identified and preserved and policies are being followed. If there were a crash of an individuals apparently there have been a great number of crashes. Yes. A crash in and of itself doesnt necessarily mean that thorough records have been lost. But does it indicate that there are issues that need to be addressed with the i. T. Organization, records organization. S im assuming the records have been lost. Obviously that, is catastrophic. Somebody is going to be accused as has occurred here because there is hardly any way to prove that negative. So i want to know what precautions should be taken. They tell you its a crash. What should be done . Because we may have this situation to gain. Now the suspicion will come up. I dont record the suspicion as unfounded. I just think that the suspicion needs to be shown. So i need to know what you should do since i dont see any way we can avoid this happening again until we get new software and new computers. The first step is to notify the National Archives that theres a problem so that we can start the process. Do you know whether this was done in this case . It was not done. So thats the first thing, notify the National Archives, even before you try to retrieve it . Just say, look, i lost something. I want you to know it. And we would, as we did in this case when we found out, write a letter to the reference manager there. Whether did you find out in this case . We found out when you did. That letter to senators biden and hatch. And we submitted our letter whats the point of notifying just for credibility sake . Well, no. Because its were demanding that they investigate and report back to us in 30 days what is the situation. Of course they are already doing that. It has to be more than that. They werent just sitting there. This is the first indication we had that there was a problem. So we snap into action when were notified. But you were convinced that they were already trying to do that . What was going on at the time, it was clear that activity was going on. What was not clear to me until that letter appeared is that there were emails potentially were not produced or lost. And thats the difference for us. There are activities that go on across the hard drives and other i. T. Issues. It becomes a serious concern of ours when it becomes increasingly clear that records may have been lost and thats when we do get into action. Yes, sir . Go ahead. When it become clears, it either is clear or not clear. It cant be increasingly clear. Someone has to look. And it may take some time. At the end of that search, then you can conclude its lost or not lost. Can you answer if you would. I want to make a couple points if its okay. When an individual in an agency should be working with the Records Office or making sure theyre managing the records, i am not familiar with too many official Record Keeping systems that entail saving records on a hard drive to maintain them. You do that for access purposes or reference purposes or things like that. Not an official Record Keeping system. What we counsel them to do is be in contact with the Records Officer. Be in contact with the i. T. Staff. Be in contact with your council so when these issues happen can you figure out what needs to be done from a federal records perspective. And pursuing capstone and other sorts of policy ideas that we have promulgated with a directive, we anticipate a day where well be able to remove human intervention from this sort of activity and then be able to manage these records. Would it be fair to say that when you should have been informed if lois learner knew there were federal records on the drive, it could be the point that she discovered her drive was broken and or they were at the point convinced they couldnt recover it, wouldnt it have come to the National Archives as now you get to try to recover them if they are known to be federal records . That would have been the time frame. It would have been preferred for us to know about it when there was an issue that would have indicated that email was lost. Right. Hundreds of other places where she could have helped you look for and find the records that would have existed in real time rather than years later. The reason i have a difficulty answering that question is because its a operational issue. Reporting to you makes a difference. Yes. Because the proper reporting to us allows the agency itself to be on notice to itself with our information that they need to take action. Thank you. I ask unanimous consent to have the clock reset to five. Thank you. I thank the gentleman from utah. I thank you, miss oconnor, its good to have you back. Good to see you again. In your testimony you talked about when you got to the irs may of 2013 that all of lois learners emails were in this area to be redakted and work on. Is that correct . Thats what you still in the prosetsing part. They were being flattened but they had been gathered already. Was there not anybody who looked and saw this huge hole between 2009 and 2011 and says, man, this is really strange that the email activity during this period, a lot of it disappeared. Was there anybody that looked at it, like you would look like treasury would look at a counterfeit dollar and say, gosh, this is a fake. Was there not anybody that raised that concern . So it wasnt brought to my attention. And would you be mad about that since you were overseeing that . Would you be mad if somebody saw that and didnt bring it to your attention . If somebody had seen it, i would hope it was brought to my attention. So you think that somebody didnt see it . I have no reason to think that anybody saw it. Can i as the question please to speak into the microphone. Miss oconnor. Can you move it closer. Thank you. Sorry about that. So who is responsible for making sure that all the documents are submitted to this committee or any other committee, who is responsible to make sure that that body of work is complete . I think its probably the head of which ever agency was asked. You just trust them to make sure its complete. So there is no real oversight within the irs to make sure that we what we get is complete . I mean within the irs, we had a whole number of different layers of sort of quality checking to make sure that the materials that were being reviewed were appropriately redakted and were then produced. All those layers, there was really nobody there saying well we got everything we need. The thing that i think is challenging about the situation is that i believe that the people who collected all of miss learners material most likely believed they had it all because they got successfully was on the hard drive. I think the missing piece is not knowing there was a crash. So when they look at, they were going back to 2009, they didnt see there was a big hole of where all of a sudden the email volume picked up. In june of 2011, they wouldnt have seen just this unbelievable anomaly of additional emails . So nobody brought it to my attention. Let me go on further. Here is the bombshell in all of this. Every one of us had been counting on the particular port for a chronological of who knows what when. Over 6 a of what they reported were solely based on emails. So if we have a whole lot of emails that are listing missing, wouldnt that suggest that the whole time frame is at best incomplete . So one of the things i think is important in this is that my understanding is what the irs has done is provided all the emails thats after the report. During the report, what they reported because this is new since then, wouldnt you agree that at best it is incomplete . Yes or no . Youre a smart person. Ive dealt with you before. Yes or no, wouldnt you agree it would be incomplete . I cant answer. I can tell you why. The reason why is because my understanding of the report is that it was based on interviews, extensive interviews. It was, based on 30 interviews. 65 . I read the report its put me to sleep a number of times. So in that, most of it is based on emails, wouldnt you say that if you didnt have all the emails that the report might not be the full story . Its a real easy answer. If there were a if there were that might be true. Now we know there are thousands of emails that they never got to see from lois learner. And maybe several others. Im not sure that we know that. All right. So let me go on very quickly to my good friend there with the National Archives. I say that in a sincere fashion. Now that we found out its a number of people at the irs, do they call you on a regular basis to say, listen, we may have this problem . Have you gotten a number of notifications from those higher officials on that have had hard drive issues . Not to date. Neither of you . No. So we have a federal law being ignored about it irs. I yield back. Thank you to the gentleman. Thank you, mr. Chairman. And let me provide a recent History Lesson to my colleagues. During the administration of president bush, government officials lost millions of emails including significant numbers of white house emails in the midst of congressional and criminal investigations. In one instance, the Bush Administration lost near lly fi million emails related to various white house matters under investigation by congress. At the time, a white house spokesman stated, we screwed up and were trying to fix it. Your predecessor wrote to the White House Council at the time and said this, it is essential that the white house move with the most dispatch both in assessing any problems that may exist with preserving email and in taking whatever action may be necessary to restore any missing emails. Those documents were also pertinent to criminal and congressional investigation. In 06, special properor Patrick Fitzgerald hit a roadblock whether emails relating to the valerie plain leak investigation went missing. Fitzgerald explained, and i quote, not all email of the office of the Vice President and executive office of the president for certain time periods in 03 was preserved through the normal archiving process on the white house computer system. In 09, the department of justice investigated socalled torture memo. One key Bush Administration official relevant emails had been deleted and reportedly were not recoverable. I assume you agree that the irs is not the only agency to have lost emails related to congressional investigation. Is that correct . Thats correct. I assume you also agree that the federal government has had significant and long standing challenges when records, resengs especially that of emails. From the very beginning. From the very beginning of using emails. Zbh and using paper. This is not just an email problem. This is a Records Management problem. According to the General Council of the archive at the time, the archivists request to the Bush White House went largely ignored. How a few year changes things. You know, the general counsel reported that National Archives knew veirtually nothing about the status of the alleged missing white house emails. Can you discuss some of the policy changes president obama has made to improve records retension throughout the federal government . As i described earlier, hes issued a memorandum on Records Management the First Time Since the Truman Administration that the white house go involved, recognized an issue around Records Management and authorized the creation of a directive by the office of manage. And budget and myself outlining what we need to do to get our act together as well as a set of promises about how the archives are going to support that work involving industry partners. Creating the tools. Creating more visibility, credibility within all of the agencies around Records Management. Professionizing Records Management across the government. Doing a better job draining every member of the federal government in terms of their records responsibilities. Its been a huge focus on Records Management. So you have seen a change in how our Team Managers at the different agencies archive . Theres been a great deal of interest, support and collaboration for the first time that i can see between the records manager community and the Cio Community and the federal government. And do you believe that president obama has made retension of these records a priority of his administration . The administration certainly understands the problem and has authorized the direction for us to implement new ways of solving this problem. Thank you. Would my friend yield for a question . The gentlemans time has expired. I ask the chair for a little leeway given the fact that chair has many times been granted ive been patient. I simply have a question for my colleague if the chairman would allow it. Proceed. I thank the chairman. Is it not true, you brought up the Bush Administration experience. Is it not true that many of the five million emails lost that you described were in fact delated, it wasnt because of crashed computers. They were actually deleted. Sure, intentionally deleted in order to hide whatever it is they didnt want the pub tloik see. I thank my friend. Out of the Vice President s office of all places. I thank my friend and the chair. We now recognize the gentleman from mr. Pennsylvania. All right. I thank the chairman. I remind my colleagues that mr. Fitzgerald was a colleagues of mine. There were people investigated and convicted. I have Great Respect for your history as an attorney. And you yourself identified you manage complex litigation matters before you came hire. Im asking for your insight even though this may have been prior to your actual involvement. But in june early in june 2011, in fact, june 3rd, ways and means chairman sent a letter to doug shulman, commissioner in which he identified alleged discriminatory practices on the part of the irs. From your perspective, when somebody alleges discrimination, do you think there is ever a chance that matter goes to litigation . The allegations of discrimination sometimes do get to litigation, yes. They do sometimes get to litigation, dont they . Can i speak into the microphone. Im very sorry. Around 2011, in fact, very similar to the same time, there were a series there had only been 2,000 pages of responsive materials when these original requests had come in. Only 2,000 pages. But hundreds of those 2,000 pages that came from the irs were materials and emails that were purportedly showing that the efforts were being directed not just to conservative organizations but liberal organizations as well. So we have, in my mind, a very responsive body on the part parsing the materials that are being returned in response to ways and means subpoena. So knowing that there are discriminatory allegations and knowing that the irs and those who are advising the irs and vet limited return are using great discretion in the form of the materials they are returning, how do you come port with the responsibility under the law of what is emails which may be subject to electronic discovery . This is not ambiguous. They may be identified and preserved when litigation is anticipated. Why was there not an effort undertaken on the part of people to preserve the records as far back as 2011 . Which records in particular . The records of lois learner and she was advised in january of 2011 to communications were potentially the subject of discriminatory practices. So by your own admission, there say recognition that emails may be subject to litigation by the requirements in preparation for litigation. As an attorney, i used to receive those. Why werent those emails retained in 2011 when she had notice that she was potentially subject to discriminatory practic practic practices . I dont know the i wasnt at the agency then. I do have a question about that. That is one of the problems. It appears just the same time frame, just the same time frame within weeks in june 2011 that seven people from irs had their Computers Crash. Now in terms of response and response to emails that have actually been sent to us here. Yeah, i need a document. The question is responding to all emails. There have been mum us are requests from this kpt and others for all of lois learners emails. And, yet in, a letter that just came only probably a week or two ago, we have the irs telling us that fulfilling the request would require that you go beyond the search terms that were originally loaded for review. So let me ask, why are there search terms . Or emails when every email is being requested. And this is only weeks ago that were finding this response. What is ambiguous about every learner email . I believe i dont know if its all. Many of the pieces of correspondence that accompanied the document thats were produced referred to the fact that they were produced according to the terms that we had talked with your staff and other staffs about the committee staff. There are four different committees doing investigations. We met with all four staff. We asked them to provide search terms. The staff of this committee provided. So their response is what is ambiguous . The gentlemens time has expired. You may complete your answer. The reason that in any large document production, search terms are applied is that it enables the people who are seeking the material to get what they want faster. Thats the reason for the search terms. The gentleman from virginia mr. Connolly is now recognized. I thank the chair. There are 90,000 employees in the irs. Is that correct . To your knowledge . To the best of my knowledge. How many of them have computers . I have no idea. Is there a guess . I do not have one either. Do you know how many computers we had testimony last night from the commissioner, so far this year and its only june, 3,000 irs computers have already crashed. Were you aware of that fact . From the testimony last night, yes. So thats a pretty High Percentage. Lets assume we have lets assume therefore if we stay in that trajectory, well have 12,000 Computers Crash on the irs alone, right . If you double the number. Excuse me, 6,000. Thats a pretty High Percentage every year if you assume 90,000 computers. The maximum number. Thats a lot. My friend from pennsylvania see sometimes conspiracy. Its just coincidental that right after her computer crashed lois learner, seven people in cincinnati go rogue on us and create b ocholos that seem to b nefarious. The fact is there is no evidence that because of one thing happening in cincinnati, it is related. I mean that is a logical fallacy that is taught in law schools. And, you know, logic courses. The two are not necessarily related. In fact, there is no evidence that the two are related. Unless they want to treat lois learners computer crashing a unique event from the irs which is not true. Would you agree with that . I agree with that. And this isnt unique to the irs, is it . Were dealing with an aging set of i. T. Investments in the federal government because we dont keep up with investment. We have introduced a bill for the federal Information Technology acquisition format. Otherwise known as isoa connolly. That is being marked up as we this week in the senate. We spend 82 billion a year in i. T. Investments. 20 billion is used for legacy systems. That has to be enormous concern. If Congress Wants to do something about it, wouldnt i be a wise thing to try to make some prudence and target investments so were not dealing with this kind of issue . It sure would. Youd have a lot of friends in the cio and Records Management community if this gets passed. Right. I heard you say earlier that the federal records act requires print and save. I misspoke. That language is actually not in the law but that is the guidance that many agencies are following. Based on that law, some guidance was issued that says for now, print and save. I assume the reason for that guidance is because with antiquated systems, we dont want to take the risk of backup that could crash . Actually, the guidance came before electronic mail was even so we havent even updated . Thats right. Thats right. The guidance issue is precedes the i. T. Problem. Lord almighty. Which is why it is very important. By the way, why not use the cloud . Why not move to the cloud . Do you have security concerns with respect to the cloud . Such that we shouldnt do that as an alternative to pay for backup . We are using the cloud in the National Archives. Okay. We heard from him last night that he was a little concerned about security. I understand that concern. But one could make the arguement after the lois learner computer crash that actually security may be better than frankly relying on these old, cranky obsolete hard to maintain systems for the federal government. I would say that the 6103 issues brought up last are very serious concerns that we have. We work with the irs to provide access to. The point is well taken that it is one of the items within the directive to move the federal government through the cloud and ensure that as the agency is moving the cloud that effective Records Management policies and practices are implemented. I just want to say mr. Chairman in closing, i understand some who want to pursue a Conspiracy Theory and try to use isolated well, not such an isolated event. The crash of a computer at irs and subscribe to all kinds of nefarious reasons. I prefer to say from an i. T. Perspective, frankly, unfort natalna unfortunately, this is par for the course. This is what happens when we allow the degradation of the federal government and i dont know how we can be surprised. The fact that there were 3,000 computer crashes already this year in one agency, the irs, i think makes the point that sadly what happened to lois learners computer is hardly unique. I thank the chair. I now recognize the gentleman from South Carolina. Thank you. I want to thank you again for coming to South Carolina. You were and remain a big hit with everyone who had a chance to hear you. I had a number of people does that you come back to South Carolina and that i not come back to South Carolina. So with respect to the retension of documents, can you give us not as an expert, just 35,000 foot level, why it is important that we as a republic retain documents . So the American People can hold their government accountable, so they can see how decisions are made, so that they can learn themselves from the original documents about our history. There is a constitutional component and also a legal component and you were gracious enough to brag about not being a lawyer earlier. We have an expert lawyer sitting beside you. So im going to ask miss oconnor what evidence is. I encountered that once. Somebody for who worked for one of the parties without realizing the material was supposed to have been kept, destroyed it, burned it is what happened. Then it wasnt available for the trial. Right. Theres a presumption whatever you destroyed would not have been good for you, right . So the judge had to go through an effort of evaluating whether or not there should be a negative inference from that. The jury can decide that. The judge determines whether or not to draw that inference. And its important for us to note that reason we have that evidence in the law is so that people dont destroy evidence that would not be favorable to them. So we have to have a presumption built in. And with respect to my colleague from pennsylvania, you talked about search terms. I have to be candid with you. Lois learner responds a democrat beat a republican the night before. Which search term you would recommend . I havent looked aem them in a while. Im sure democrat and republican are on the list. But what if democrat and republican werent in the email . What if they use the name of the democrat who beat the name of the republican and her response was yoohoo . Most of the terms came from the majority staff of this committee and included many politicians. But what is wrong whats wrong with the search terms being to and from . That would get you everything. Right. Thats my point. You want access to all of the information, you want access to all of the truth, why are you reducing the search terms . Why not just to lois learner and from lois learner . Right. As i explained earlier, i dont know if you were here. At the beginning of the project, we met with the staffs of the four communities. Good right. Its important to note that that was your request to meet with them. You thought the original request was too volumous. And my response is when any administration, republican, democrat dont care. But when you come to a committee of congress and try to negotiate a reduction in the search terms because of time constraints or resources and this happens, let me tell you the next subpoena youre going to get is simply to and from and can you save yourself a trip to come over and try to negotiate the terms. I was done to make life easier for you, not congress. It was done to get you the material you wanted faster. Well, it didnt wind up happening. Shamen us if we let it happen again. What negative inference would you draw in this particular case . Youre talking about the hard drive crash . What im talking about is the failure to retain whatever the mechanism of the failure, intentional or negligent, you said maybe the fec will save the day. You have someone that said we need a project but we need to make sure its not per se political. And then the emails. What negative inference would you draw if you were one of our fellow citizens . Watching this, you know there was a denial of targeting. You know she picked a very obscure conference to disclose that targeting had taken place. You know it was blamed on two rogue agents. In fact, jay carney perpetuated that myth. You know she took the fifth amendment. You know that president of the United States said there is not a smithon of corruption and now youre told the evidence doesnt exist, emails dont exist. What negative inference, if you were a regular citizen sitting at home watching this, and you got that litany of failed defenses, those all statements and now youre told that evidence doesnt exist, what negative inference would you draw . One of the things that i found constructive in the material that became public in the last week was that she sent her hard drive to the criminal Investigative Unit for them to attempt to recover it. And the inference that i would draw is that if she wanted intentionally to destroy the materials, she would not have sent it to the criminal investigation. Did she ever use her personal computer . I dont know. She did. The gentlemans time has expired. Thank you very much. Thank you, mr. Chairman. A couple things. I want to thank you all for being here. Subpoena or not. Appreciate the work that you do. Second, i want to say a couple things. One is i am a strong supporter of congressional oversight. I do believe that when congress provides information, it should be provided. But i have some significant concerns about the way we proceeded on this hearing. When you go back to the bags ikz here, there is very serious question about what happened to the emails. That is in my view is a worthy topic of investigation. No group should be targetted because of their political affiliation whether theyre conservative or liberal. I totally agree with that. But no one should be allowed to abuse the stat justice. That is worthy of investigation. Its not a tax exempt as mr. Isa mentioned. But its a way of funneling money under the cover of doing social welfare work which is really about political advocacy. And political advocacy is fine. Do it in the daylight, not in the dark. Dont undercut the merits and legitimacy of the social welfare organizations by turning them into political operations. Frankly, id like to see our committee giving equal weight to that investigation. This dark money going into politics in my view is really pernicious for democracy. And its terrible if we have any Agency Government thats not providing requested information. There is always a fair question if theres been a computer crash, how did that happen . Was it intentional . But there is also this fundamental questions about the money and politics in the use of the 501c4 organizations by liberal or conservative groups to hide the money thats going into political advocacy. The second thing, mr. Chairman, is that, yes, we have to examine these questions but i do not think that jumping to conclusions and assuming the worst possible interpretation is a way to, a, give respect to folks who dedicate their lives to Public Service whether its in the irs or any other agency. B, any way to educate the American People about what the problems may be in an organization because the whole point of the cues first and examine facts second is to attack the very legitimacy of the organization thats being investigated. It does raise the question. I know our chairman during the Bush Administration had to explain that oftentimes that can happen with computers. Was it innocent . Was it deliberate . We dont know. Talking to mr. Lynch who may discuss this, why not have the aig take a look at this . Why not have the graup do it. We have a situation going on here that is getting in our way of getting to i think what is a shared goal of getting to the bottom of the would the gentleman yield . I will yield. This wont surprise you, the way this investigation started is i went to the ig because they had the ability to look at 6103 and we were interested. They began that investigation. One of the problems is the ig was never given that drive nor were they independent and outside the irs which is one of the reasons that as a i. T. Background guy, i have never seen a disk drive that had zero left on it. Thank you, i think that was a good move on your part. Were getting a little off the rails now. If ig looks at this, there is a motivation issue that both sides without the facts can come to their own conclusions and usually we all come to conclusions to suit our political bias. This function that we have in this committee, as you know, i appreciate your aggression. But there has to be, my view, a balance where, yes, we investigate real hard. It doesnt so overwhelm that this fundamental question about the 501 c 4 abuse in my view suddenly is not an issue. I was one of the people who was concerned and wrote a letter to the irs saying whats going on . Do your job. Investigate. There is no free ride around here. If youre a taxpayer and not paying your taxed, i think the irs should investigate you. Youre not doing social welfare works. You should lose your 501c4 investigation. Thank you for doing that with the ig initially. Maybe they can help us out with the specific question that were dealing with now. I yield back. Miss oconnor, the i. G. , Inspector General, issued their report on may 14th, 2013. You were appointed on may 30th. What do you . What is the first thing do you when you walk into this new role . I got a badge. I had some training. I think the but how did you organization . Who do you bring into the room at that point . Well, it wasnt like that. It really was the first and most important thing was the 6103 training. Okay. So after you got trained, then what did you do . I believe i met with mr. Warfu tlochlt see what is on the plate. Okay. After that . I cant remember the playbyplay. Who did you gather around you to get your job done . There was nobody. You did it all by yourself . No. My job as xplaexplained earlier to advise the commissioner on a variety of things. One of the things that i did was to work with the a team that was fairly small at that time but got very large later. Who is on that team . Its a whole number of irs people and it changed. I think you should ask the irs. Im asking you. You were the irs at that point. You were the person in the room they were reporting to. You come with great title. Tell me who you were interacting with. The team had some 6103 experts on it. It had some tax litigateors on it. Who . Who . Name a person. I want xa names. Honestly, i would like to be able to have accurate and complete testimony. Its going to be hard for me to recreate it. Can you name even one person that you interacted with . I interacted with mr. Warful a lot. We assume that. Those are the people you reported to. I want to talk about who reported to you. Name some people that reported to you. I think that best way to do it is i know. But youre here in front of congress. You knew this was going to happen. Name one person you interacted with. I interact with a lot of people. I know. Name somebody. Who i interacted with . Yes. The deputy chief Council Chris turner. Anybody in the i. T. Arena . I didnt actually interact directly with people in the i. T. Arena. There was somebody whose name was i cant even remember his last name. I think his first name may have been ben. A dude named ben. Who else . I dont recall. You were there six months. You have people around you that would jump at your very again i didnt interact with the it staff very much. You were their six months. You had some people reporting do you, did you not . I didnt have any direct reports, no. Did you have people responsive that you asked questions of. On a variety who did you ask questions of, i worked with a lot of people on the chief counsel mrs. Oconnor our a bright person. Why are you being so elusive. Who interacted with you . You havent named a single person. You named three people that you report to. I want to learn of people that you asked to. Name one person in that category. People that i asked questions that ran and got me that information. I dont think i can characterize anyone this way. Do you ever ask anyone in the irs to provide you information. Sure, yes. Give me one example. In the tax exempt organization, the person who replaced mrs. Learner theres one. How many people do you think you asked information of . Probably a lot of people. Can you name more than one . Ive named a couple now. Why are you being so elusive . Im not being elusive. How long would take you to get that information and provide it to you. The irs can provide that information. Why cant you provide that information. Because i wasnt there. Mr. Chairman. I think you may not unfair to that witness. The fact is that the commissioner could not narrow less than 60 days ago within 30 days when he was told. I think that in fact, the ability to remember at the irs is simply limited. Do you know thomas cane . Whos that . I do. I think his title was associate deputy, chief counsel. And you did interact with him . I did. My name has expired here. In deference to what this committee does. I cant believe youre not more candid with us. Its hard to believe it took to find out a dude name ben and one other person. I yield back. Well, i now recognize the gentleman from massachusetts, mr. Lynch. Five minutes. Thank you mr. Chairman. I think sometimes the search for conspiracy is interfering with the meaningful oversight that we should be doing. I think sometimes my colleagues are reaching for the most grandios Conspiracy Theory and we forget that we do have evidence of wrong doing that we should we going after. Despite all the conspear as yay legations there is some evidence before us. I have been hearing from some of my colleagues that theres no evidence of wrong doing. Im not here to make excuses nor the irs or protect the irs to downplay what theyve done. There was serious wrong doing on the part of the irs here. Theres evidence that they used improrp search terms. They use the quote unquote tea party search terms. Patriot search terms if you had a complaint in your file about Government Spending or statements criticized how the government was run, the irs targeted you. The ir ises withey asked for inappropriate information. They asked for the name of donors and what their position wer were on those issues. Them asked whether the applicant or officer intended to run for office. They asked the political affiliation for the 501 c 4. Ms. Oconnor. Are you aware. I know you werent at the analysis when this was going on. I think you might have been in on some interviewed that we had with the irs. Are you aware that irs emt ploy ees treated concern groups in an agreys riff matter. Certain groups, yes. We actually have a report here of the irs ep titled inappropriate criteria were used we also have a letter here from commission her acting commissioner last night that indicates the progressive groups that were also targeted. I ask unanimous consent that they be entered into the record. My information is for accurate and includes i would stand by the accuracy of this report as well. I am saying we will enter this into the record. Okay. Let them fight it out. Thank you. The irs subsequently released information that the irs targeted emerge america, acorn affiliated groups. Im not saying this to mitigate the wrong doing or the misconduct of the irs. It makes it worse. It makes it worse that the irs was actually violating the Constitutional Rights of progressive groups and conservative groups. This is wrong doing. It doesnt it doesnt help the conspiracy theorists but it certainly indicates wrong do serious misconduct on the part of the irs probably our nations most power of the agency. So they are violating the free speech of our does it zens and free associations of our citizens and violating constitutional right against search and seizure. This isnt evidence. The irs stipulated this in your report. So we have some serious wrong doing. Now in pursuing the evidence of that wrong doing we have 27 months of emails disappear. Im asking you how do we restore the trust in this . How do we pursue this sin a way im not going after the irs because of their misconduct. In going for this grand Conspiracy Theory youre overlooking the fact that the irs conducted misconduct. Can you suggest what we should we doing in terms of get egg to the irs misconduct. Witnesses if someone wants to respond if not well move to our next okay. Thats great. Thank you. I thank the gentleman. The gentleman from ohio is recognized. I appreciate mr. Lynchs statements that this was wrong during misconduct. The issue that we all have is what do you do to pursue that misconduct. Were still sitting here without the understanding of an investigation. We know the missing emails in part twart the failure. I want to put all of that aside for a second. Ms. Oconnor. Youre white House Counsel. Youre a lawyer, im a lawyer. I want to step away from the irs problem and investigation for a minute and have a compare tativ discussion. I think in the responses there may be some misunderstanding with respect to the treasury Inspector General for Tax Administration. Id like to talk to you a minute about their powers not with the irs but in general. Id like to compare the powers of t with the fbi the Inspector General is going to do an investigation. That is probably a good thing. There are many who dont believe its enough but you and i having a discussion on a comparative just of authority and powers perhaps can let other people decide whether or not thats sufficient investigation or whether Additional Investigation is going to be undertaken. Lets just talk about the inspector again and the fbi. The Inspector Generals Mission Statement is that they were established under the irs restructuring and reform act that promote the economy and effectiveness of the administration of the Internal Revenue laws committed to the