Transcripts For CSPAN3 Politics Public Policy Today 20140725

That information was provided to the ways and Means Committee. We have not been able to pursue whether there are 6, 12 or 15 because once the ig started, we agreed we would not pursue those issues until they completed their investigation. Now, just a last question. When the doj was here the other day, and this was you were asked about this a bit earlier. They talked about the fact that they had not gotten information about the crash back in april. So they got it in june, i think, like everybody else. Why is that . When we in april, determined that in fact there had been a hard drive crash and some emails may have been lost, our next step was to in fact investigate how many emails did we actually have and could we find, and our plan and proposal was we would pull all of that information together, including information about custodians and make a public presentation to the committees including a description of why it takes us so long in our archaic system to actually respond to requests for documents. We provided that information in the june 13 report, as i testified earlier. We did that before the complete production of lois lerner emails which is when we originally intended because the Senate Finance committee asked us for an update on both the determination process documents as well as the other investigations, other searches we were doing. We gave them that. We noted that we had had found nothing beyond what we had noted in our march letter with regard to the determination process, which was the subject of the investigations when they started. But we had not completed at that time a review of the custodians, nor had we completed until the end of june the production of tax writers of all of lois lerners emails. We were working on producing the redacted version to this committee. So our plan was when we pulled it all together, we would be able to explain what our process was, the difficulties, what we had learned about lois lerners emails, what we had learned about others and what we were able to determine. As i noted, we were able to recover 24,000 lois lerner emails. We thought all of that was Important Information for people to have rather than simply saying if theres a problem with her computer and now were investigating how many emails there were, which would have triggered a hearing six weeks earlier. But we would not have known nearly as much as we know now. We dont know everything we would like to know because we stopped asking people while the ig is doing their investigation, which we fully support. I have confidence that the ig is independent of us. He was appointed by a different administration. Hes got 15 people working on it, according to the filings they made last friday. And we have told him personally whatever he needs, other documents, whatever people he wants to find, he can have access to, and well stay out of the way. We have gone out of our way not to talk to anyone who potentially he might want to sprue about what happened three years ago when the hard drive crashed. Russell george told you he did not want this committee in congress interviewing the same witnesses he was interviewing . No, he told me that he did not want us interviewing any witnesses thats fine, thats not the same as congress. Why did you make it so difficult why did we have to subpoena mr. Kane . Because ig in our discussions said he did not want us to do anything to cause any of our employees to be interviewed before he had a chance just for the record. So the Inspector General did not tell you that it would be it would hinder his investigation if congress interviewed the same people he was . If we provided names, let alone witnesses it would interfere with their investigation. I testified two week ago saying we were trying to cooperate with the ig and chairman issa said he understood that which is why you dont release full transcripts. You have conveyed to this committee that the Inspector General department want this committee interviewing and he did not say to you. Thats all i need. The gentleman from North Carolina is recognized. Thank you, mr. Chairman. Commissioner, i want to go back to one thing that the gentleman from maryland just asked you and make sure i heard you correctly. So if you know the testimony that you have given to congress is not correct, youre not going to correct that until we get a final report from the ig . Did i hear that correct . I thought thats what you said. What i said the testimony that i have given in the past was accurate. As of the time of what i knew. I testified as to what i knew. Right now the question is do i know any more about tapes, and i dont know anymore other than the ig is investigating whether there are backup tapes and whether they are recoverable. If you find during the course of your normal business that what you told congress is incorrect, you will come immediately to us and let us know . Im happy to correct in fact, the chairman with regard to so within 24 hours of you finding that youve given us incorrect testimony youll come and let us know . Yes, sir. If the committee has any questions, the chairman issa said when lerners lawyer talked about the records, he said heres what you said, heres what she said and correct it. I appreciated that. We appreciate the fact that youll come back to us because i thought you were saying im going to wait until the ig i wouldnt know until the ig investigation is complete what the answer is in terms of how many custodians you wont know what they found but youll are you saying youre not talking to mr. Kane or anybody . You arent talking to anybody in the irs about any of this . I am not talking to any potential witnesses or the Inspector General about what happened three years ago. So when you read the reports about mr. Kane, did you talk to hum and say, hey, this doesnt jive with what i know . No, because mr. Kane is someone i assume the ig will be talking to. Did you talk to someone who talked to him . No, i read the release this committee put out. All right. So did you read the release of the ways and means press release that talked about a scratched hard drive . I saw that this morning. It was put out last night i understand. Does that concern you that it was scratched and not crashed . It concerns me. Does it concern you . If thats accurate . If its accurate i dont know the gentleman. I dont know what he said. If its accurate, would that concern you . Let me tell you why it concerns me. And this is an hp laptop. To get to the hard drive, it is no easy task. Youve got multiple screws that have to be taken to get to it. Then once you get to that, you actually have a hard drive inside that has seven more screws that have to be taken off to get to the hard drive in order for it to be scratched. Would that concern you if it were indeed scratched that there may be some other motive . It would be a piece of information that would it concern you, yes or no . I wouldnt know whether to be concerned or not. I dont know anything about, as i understand from the press release it concerns me and im going to ask my staff to see how long it would take to get to that hard drive to make if it indeed were scratched. I assume theres a lot of ways the hard drives can get scratched. Im sure the ig will look into that and im sure hes already talked to that witness or would liked to have talked to him. I hope so. Let me go back to the numbers. Earlier you said you had 2,000 hard drive crashes this year. Yes. So let me ask you about numbers. You know im a numbers guy because i just did the numbers real quickly. If you look at your entire body of some 84,000 to 90,000 irs employees, depending on which year, but lets take that. That is a 2. 2 failure rate. In the people that truly are involved in this, in that sphere of 80 people, if, indeed, we had 16 to 18 hard drive crashes, why would the hard drive crash of that group of people be ten times greater than what you have throughout the agency . Can you explain . What would be the probability of that happening . First of all, i have no information as to whether thats the accurate information. Lets take the number that you know, seven, that you testified. That still would be four times greater than your overall average. Can you explain that . I dont know what the details were. I do know when i asked for the industry statistics, once you get beyond the warranty period, the failure rate goes to 10 to 15 . Lois lerners laptop was a new laptop. It was not an old one. And actually, the probability of her hard drive failing at that time was at the lowest, according to industry standards, was at the lowest possible time. Does that surprise you . No. But it does surprise you that her hard drive failed . No, my understanding about it is from the industry is its 2 to 5 depending on computers will regularly fail. If you have ten times that amount, would you say thats an anomaly. If you had ten times an amount, that would be an anomaly. I dont know whether well, im giving you the numbers. If you stipulate you have ten times more than the industry average, that would be an anomaly. Thank you, i yield back. Gentleman from pennsylvania. Thank you, mr. Chairman. Mr. Koskinen, the very first question you got in your testimony today was something to the effect, mr. Santos, my colleague, put the question to you whether you were aware you were under investigation by the department of justice and this is a very public hearing. This is a very, very public. We invite members of the press to come to these hearings and these hearings are televised and i think its important we dont lead the public down the wrong path on what the truth is here. Mr. Koskinen, have you ever received a target letter from the department of justice to say youre under investigation . No. Has anyone, anyone told you verbally that youre under investigation by the department of justice . No. Has anyone, anyone said to you verbally anything that would hint to you that youre under investigation by the department of justice . No. Has anyone, anyone said anything to you to hint to you that you might be the target of a Justice Department investigation some time in the future . No. Thank you for that. Another thing that youve been trying to get out and you were continually interrupted in your answers were comments about industry statistics about computer failures. I want to give you a chance now to make full sentences. In may when i was advised we had this problem and were proceeding to find how many lois lerner emails we could have, i asked, a, what are the industry standards for hard drive crashes and i was told somewhere between 2 to 3 , 5 within the warranty period. If you have Older Computers it goes as high as 10 to 15 . I then asked that we do a review to determine what, if any of them, had hard drive crashes and if they had them, whether it caused any loss of emails. We have over 2,000 crashes already this year, but all of those didnt result in loss of emails. You could lose emails without your hard drive crashing. So at the time, we were starting down that road to complete our review of exactly what were the situations with regard to the production of documents. That has stopped from coming to closure because the ig himself is looking at all of that. Thank you. And mr. Koskinen, on june 20th you testified before the ways and Means Committee that even after sdog discovering miss lerners 2011 hard drive crash you said, the irs took multiple steps over the past months to assess the situation and produce as much email as possible for which lerner was an author or recipient. During this time and into may, we were also identifying and reviewing lerner emails to and from 82 other custodians. By midmay as a result of these efforts, the irs had identified the 24,000 lerner emails between january 1 and april 2011. Commissioner koskinen, why did the irs take these steps to recover ms. Lerners emails . It was an attempt on our part to produce as many lois lerner emails from her accounts or other accounts as possible in response to the request of this committee and the ways and Means Committee to produce all of lois lerners emails. We were trying to make sure there were no emails anywhere in the system to or from lois lerner that we had not located and not provided. All right. Now, so despite the hard drive crash, the irs still produced 24,000plus additional emails, is that right . Thats correct. Witnesses have told this committee that in february of 2014, irs employees discovered that there were fewer of lois lerners emails from january 2009 to april 2011 than there were for other periods. Upon this discovery, irs officials immediately took steps to determine the reasons for this discrepancy and whether they could locate additional emails from ms. Lerner during that time period. The question is, why didnt you inform us about the discrepancy in ms. Lerners emails when you testified before this committee in march . Because in march i did not know and we didnt know whether we had lost emails or not. One of the first things that was investigated in february and into march was to review all of our production processes to see if anything in the way we had reached into the system to produce the emails, put them into our search method had caused us to misplace those email because it wasnt clear initially whether the problems with her computer resulted in any loss of emails. So the first process while we were producing the other documents regarding the determination process was to make sure we hadnt ourselves done anything in the process that caused emails in that period to be lost. We determined ultimately into april and may that nothing that we had done in the search process had caused the emails to not be producible. Thank you, i yield back. I thank the gentleman. Now recognize the gentleman from pennsylvania, mr. Meehan. Commissioner, thank you for taking the time to come up and be with us again today. I know you came here before and i know were going through a lot of detailed testimony, but the baseline is accurate that to the best of your knowledge when you testified before that the emails were not available from ms. Lerner during the period that they had been to the best of your knowledge that they had been destroyed because they were recycled on the tape. And im not questioning that testimony at this particular moment. But i think what has people interested is mr. Kane came up here not so long ago, and hes a very sophisticated guy. His job is to produce documents for investigations and litigation and other kinds of things. Therefore, he not only has a very detailed understanding of the process, but a deep appreciation of the implications to do or failure to do including exposure for failure to do things. He also has a very sophisticated understanding of how to answer questions with respect to this. Appreciating that when hes under oath, anything he says will put him in a particular position, which if it is known to be wrong, could expose him to further scrutiny. So im curious as to why he would come and testify that i dont know, and this is his words, i dont know if theres a backup tape with information on there or there isnt. That he was now unsure about whether there were some backup tapes from the period of time that may not have been erased. Im using his direct testimony. There is an issue as to whether or not there is that all of the backup recovery tapes were destroyed on the sixmonth retention schedule. I dont know whether they are or arent, but its an issue thats being looked at it. What do we know about this issue, and why would he have made that statement . What i know about that issue is i was advised by the Inspector General that they were they had taken tapes they found, and they were reviewing those tapes to see if they had been totally recycled or whether they were not recycled and usable. I was advised about that because the Inspector General, again, wanted us not to do any because he knew however they had found them, somebody knew ig had them. He didnt want us to do anything to investigate further what those tapes were, what they did with them. I said that was fine. At this point, i havent talked to mr. Kane about this, but what he has said is what he knows is because as you said hes been involved in it, is that the Inspector General is looking at some tapes i dont know which ones to see whether or not any of them turned out to be recyclable or information thats recoverable. At this time as mr. Kanes testimony states, its not clear whether they do or dont. Whether substantially theres information when he gave you that identification that there was, as you said, it was believed that they had all been produced but now maybe some of them have been found. Werent you concerned about what procedure they used to potentially come up with new tapes . When the Inspector General advised me of that, i was interested as to why they were looking at tapes that we were advised had been recycled. I agreed with him that they would do the investigation. We wouldnt do anything to interfere with that. I wouldnt and none of our people would talk to anybody about it. I cant tell you how they found them, what they are, and as mr. Kane said, whether theres anything on them or not. At this point, were supporting the Inspector General did you have any idea about what the issue is that he referred to because that was the very specific thing. There is an issue as to whether all of the backup tapes had actually been recycled. Yes, and the issue as i just said, is that he obviously is aware of what the Inspector General advised me, which is the Inspector General has taken some tapes i dont know which ones and is reviewing those to see if they have been recycled, if theres information on them that can be found or used. Thats all i know and i assume thats all he knows. Beyond that, i havent talked to anybody about this because, again, our position with the Inspector General is just one followup question. Why are these not available from a Third Party Vendor who, in the event of a cyberattack would protect us against destruction of all records which would put our government in a remarkably perilous position so we take steps to assure that essential documents are preserved to have them in Third Party Data storage situations. Why were the documents that are relevant to this particular period of time, why were they not backed up and available today . Thats an important question. As i have testified earlier, theres been no loss of any information and no action taken since this investigation started with regard to any information and production of documents. We have frozen and saved and backed up all emails from six months before the start of the investigation forward. What were talking about is what happened three years ago. And three years ago the process was to use backup tapes for basically Disaster Recovery purposes and recycle them every six months. That was the protocol and process that had gone on for some years. It used to be they only kept them for one month. It was increased to six months. That was the process three years ago. Whatever emails were lost three years ago were not lost, they were lost then. Nothing has been lost as far as i know since this investigation started. We have gone out of our way to protection all of the data and all of the documents. Thank you. I have further questions but my time is expired. Thank you. Youre an attorney and you talked about these documents having been missed, but at the period of june 29th, 2011, lois lerner is informed that some of the activities shes been associated with may have been involved with discriminatory practices. Youre a yale lawyer. And you understand the situation in which there is a potential for litigation. And the requirements that when theres potential for litigation that there is requirement with the recordkeeping responsibilities to retain the documents relevant to that. This occurred before the period we are looking at. If you were informed that somebody is holding your agency or you in particular as having potentially engaged in discriminatory practices, would you preserve the documents from that era . We have any time theres an investigation, any time theres an inquiry, we have litigation document hold policies and procedures. We have done our best to protect every document for the last year and a half, almost two years now, and any time anyone raises a serious question about production of evidence, we go out of our way to protect it. I dont know what the circumstances were three years ago. This was knowledge that it was discriminatory practices and she was informed that she was central to the potential that there were complaints about discriminatory practices on the part of the irs. Would that the kind of document you would preserve . In anticipation of potential litigation . Again, our protocol is if theres going to be an investigation, if theres a serious issue raised, we protect and preserve documents. As ive testified one of the things i asked earlier in this investigation is we need to have an email system of record so that it would be easier to protect official records, preserve them and be much easier to search them. We should not have to spend 18 million answering straight forward questions for documents, but thats the system we have. The constraints on the budget has been significant over the past few years. Were looking at is there a way to get out of late 20th century and into the early 21st century. We should have an email system thats more searchable and a system of record. Thank you. I think his question cuts right to the chase. She was unnoticed there was a problem and suddenly her computer crashes, but its worse than that. The irs identified 82 custodians of information relevant to the investigation. Now we know from mr. Kanes testimony up to 20 may have had computer hard drive crashes. So this is way beyond the 3 to 5 that the commissioner keeps citing. This is approaching 25 of the relevant people that they have identified have had computer problems and may not be able to get the documents we need. I appreciate the gentlemans questioning. Ill recognize the gentle lady from illinois. Thank you, mr. Chair. Good morning, commissioner. On july 7th, 2014, you testified that since you were confirmed in december of 2013, the irs has quote, probably provided 300 to 400,000 documents to congress. To date, how many pages of documents has the irs produced to congress in furtherance of the Ongoing Investigation about the irs review of taxexempt applications . As i testified earlier, we produced 960,000 pages of tax writing committees redacted documents we produced 700,000 pages to this committee. I would imagine amassing a document production of this magnitude takes an extraordinary amount of time and money, as you talked about the money. Yes, its been a significant distraction. We spent, at last count, 18 million responding. We continue to produce documents. We hope shortly to be able to complete the production of redacted lois lerner emails to this committee, but in an area of declining resources, most of it is done in our office of chief counsel. There are 500 fewer people than there were four years ago. So thats been a significant strain on our chief counsels office. And how many employees have been involved in this process, and how many hours have been logged in to comply with all of these requests . We have had over 250 employees at various times involved. Over 120,000 hours devoted to it and we continue to work on the production of those documents. I understand that Current Agency staff, many of whom have other job responsibilities, have been tasked with complying with congressional document requests. Is that correct . Thats correct. Our i. T. Department has been asked for information. We have witnesses that are being interviewed as we go. As i have noted, the entire issue about the c4 investigation and operations involves about 800 employees in the entire exempt organization. Only a portion of them working on this. We have 89,000 other hard working, dedicated employees working on matters of importance to the government and to taxpayers. The individuals working on this, they have had to put their current workload aside . Yes. Particularly the lawyers, its a problem for us because they have obligations to represent the agency in tax cases. They have an obligation to continue to work with treasury to develop rules and regulations and procedures, so it is a constraint. Thomas kane, the irs deputy associate counsel was interviewed by Committee Staff on july 17th, 2014. He said that the irs currently exists, quote, with an increased workload and reduced staff from where we were several years ago. We have taken these people from their day jobs. They have no replacements for them because there are no replacements. So we have pulled together people from all parts of the organization to contribute to the project on a fulltime basis. But there is no one to backfill the work that continues to exist and pile up. Thats particularly critical when youre dealing with people in the field that are trying cases that have deadlines. That type of staffing commitment and resource commitment has been a drain on the entire office of the chief counsel. Commissioner, would you agree with mr. Kanes assessment of the investigations impact on your agencys workload . I would. Also, he was asked about the impact that chairman issas subpoena for his testimony had on the morale of his team. He said that his employees have been working tirelessly to help the irs comply with congress who were, quote, visibly impacted in a very negative way. Commissioner, i would like to give you an opportunity to address any concerns you may have about the impact the various congressional investigations are having on your agencys morale and ability to perform its core functions. As mr. Kane apparently noted, we have a large number of people who have day jobs who have been in part or totally devoted to this who have been trying to be responsi responsive. When they then are subject to depositions and recorded interviews it sends these are all career people it has an effect on morale because they thought they were doing what they were asked to do. They were trying to provide information. Most of them had never had a deposition of theirs taken. They havent spent six, eight hours under crossexamination. So for everybody else who is working on this project, they are all looking over their shoulder wondering, am i going to get called up next and all theyve been doing is producing documents. Thank you. Sitting here listening to some questions that the chairman asked you, and im convinced that youre damned if you do and youre damned if you dont. This is what im talking about. The ig, appointed by a republican, asked you not to engage in i dont want to take words out of your mouth, but what did the ig ask you not to do . Not to do any further investigations or interviews or discussions with witness with employees about anything having to do with hard drive crash, any other hard drive crashes while they did their investigation. And then the chairman went on to say that he didnt tell you that this committee was under the same restrictions. Thats accurate, right . He didnt tell you the ig didnt say to you, the committee what im telling you about your restrictions does not have anything to do with the committee. Do you understand my question . Yes. Im going back to what the chairman said because im trying to figure out, how do you obey the law and obey the wishes of the ig . The question was, and i answered it was that the ig didnt tell me that he was telling the committee giving any instruction to the committee. The only discussion i had with the committee was when he told me about the existence of the backup tapes and asked us not to do any more questioning about that. He provided that to the Investigative Committee and asked them to treat it confidentially while his investigation was going on. So if something came up now where we contacted you and said we want to meet with experts in the irs because we think that this committee thinks that someone has something relevant to our investigation. Is there any way that you would treat that differently now than you would have if youd never had conversation with the ig . Do you know what im saying . Actually, we have tried to be responsive as best we can to the wide range of requests we have. We have six investigations and a number of requests coming in and requests for interviews. We have tried with more success in some areas than others to figure out what the priorities are so we can do it in the right order. At my hearing in march we agreed the next priority after we completed the determination issue was to provide all the lois lerner emails we had. We had a long discussion back and forth, that would be our next priority. Were getting close to completing that. I guess what im getting at is i assume you wouldnt have the discussion based on what the ig told you, you wouldnt have a discussion with an employee of the irs now because the ig told you not to. Thats correct. So when we had witnesses coming to testify and give depositions here and ways and means, we have not talked to them beforehand. Theyve simply come up. We dont feel that we want to do anything that would interfere with the igs investigation or this committees invest gauigat. So people come up and have done that without any conversations we have made. The gentle lady asked about morale at the irs. The irs is kind of a tough position because nobody seems to like the irs. On the other hand if you dont get revenue, you have a problem. We have a problem as a nation. When you think about the reduction in employees, and based upon what mr. Kane said that the gentle lady just read, it seems like something has to give. Im just curious as to whats giving. You follow what im saying . If you have based upon what mr. Kane said, you are pulling people from different areas to do certain things. You said some of them have to have court responsibilities and deadlines. The point is something has got to give. Something. Right. And can you tell us what were losing . Well obviously we have 10,000 fewer employees than we had four years ago. 500 fewer in the office of chief counsel. So what happens is people either have to spend a lot longer working. At some point you run out of things you can do. We have done our best and taking people around chief counsel and put them on the production effort. To do that means that work they would have otherwise done doesnt get done because we have no capacity to add more people or hire more people. Were only replacing 1 in every 5 people who leave the agency. We continue to shrink rather than expand. So we havent complained about it. We simply produced documents as fast as we can. Weve explained our biggest problem and obstacle is we have this archaic way to search each hard drive to pull out data to get it into a search machine, which wed like to change going forward. It does mean in the office of chief counsel you put them under more stress. It makes it more difficult for the other ongoing day jobs they have. My concern more importantly is over the course of certainly the three and a half years i have left, we have other issues. And as we ask people to do productions and just respond to congressional inquiries if they become subjects of depositions and crossexaminations, its going to be harder to get people to decide they want to leave their day job and help us respond to congress. Thats our only broader concern but we think its appropriate and were happy to cooperate with the committee. Ill just make one point. The witness testified that they dont talk about this issue and prepare and discuss and prep for it. We interviewed mr. Orsler yesterday. When steve came and briefed the ways and Means Committee, there was preparations done for him to get ready to come in front of congress. To portray it like you arent talking about this as you bring people before congress is not accurate. Regarding the morale issue, if the irs would have been willing to let tom kane come and be interviewed, we wouldnt have had to issue the subpoena. One thing that impacts morale is when you get a subpoena. But thats your cause. You caused the subpoena. We didnt. We tried for weeks to get mr. Kane to come and be interviewed. You guys said no, cant do it. We had to issue the subpoena and got all kinds of information that contradicts testimony youve given in front of congress. Thats the issue. You could have helped morale of the very employees you represent if youd have let him be interviewed by us. When they come for an interview, its still under oath and its still a transcribed interview and looks just like a deposition and for people who have never done it before, of concern. They get nervous. And my point is by you making it so we had to subpoena that that only adds to the anxiety of the employee. So thats your creation an your employees, not ours. Thats why were delighted to work out with you a schedule where there wont be subpoenas but people we appreciate that. But it took a subpoena to get that rolling. The gentleman from South Carolina is recognized. Ime sorry. I just asked you for we have a tendency to ask questions and not let him answer. I just want to understand this. I think its to the benefit of the entire committee. Why did mr. Kane have to be subpoenaed . Why is that . Because we tried i didnt ask you. I didnt know who you were asking. Im asking him. Thats fine. Thank you. We were in the process of discussing the production of witnesses because we are concerned about interfering with the igs investigation. And while we were doing that, as the chairman said, then mr. Kane got a subpoena which didnt, a, allow him to appear without any further adieu and didnt allow us to basically have a conversation about setting up a production schedule of witnesses. So the chairman is right. We were in the process of trying to do this, but i would say we take some responsibility for the fact you had to do a subpoena. You take all of it. Mr. Kane told during his deposition, because he had to be subpoenaed, he told Committee Staff that he wasnt even notified by you that we had requested an interview. He didnt even know that. All he knew is he got the subpoena. You didnt even tell him we were trying to interview him. Thats what he told us in the deposition last thursday. So its all on you. Youre the reason we had to subpoena the individual to get his testimony. He eventually came voluntarily, is that right . Yeah. After he hired private counsel after we sent the subpoena. The gentleman from South Carolina is recognized. Thank you, mr. Chairman. Its good to see you again, commissioner. I want to read a quote to you of june of 2014. I want you to tell me if you know who said it. We confirm the backup tapes from 2011 no longer existed because they have been recycled because of the irs normal policy. Do you know who said that . Sounds like me. It is you. Can you tell us who we is in that quote . The we is the irs. I tend to take responsibility for the agency and talk about it. I was advised that people had talked to everyone in the agency to ensure that during the course of several months of looking for so we is the royal we, speaking on behalf of the entire irs. How about the word confirmed . What does the word confirmed mean to you . That you confirmed the backup tapes no longer exist . When i read that, i asked the question and was told by whom . I dont remember. We had four or five people who were working an the report. And was told in that date mr. Kane said in his testimony that that was accurate as of june 13th. What does confirmed mean to you. That somebody went back and looked and made sure that in fact, all any backup tapes that had existed had been recycled. Are you still confirmed . At this point i have no basis for not being confirmed. I understand the ig advised me they were looking at tapes. I have not been advised as to whether any of those tapes confirmed is a pretty strong word, commissioner. Your still confirmed that no backup tapes exist . I know the ig is looking and he hasnt found anything. Im glad you mentioned the ig. I find this confounding, i find this vexing that once the ig is involved, nobody else can do anything. That is not supported by the law. Can there be a criminal investigation while theres an ig investigation . There can be all sorts of investigations. Then there can be a congressional investigation while theres an on going ig investigation. If there were Sexual Harassment in the workplace, are you telling this committee you would wait until the ig investigated it before youd stop some insidious practice . We could take whatever action is necessary. Precisely. You would not wait until an ig concluded his or her investigation. Can i answer that question . Sure. Our policy, and i have been my understanding when i chaired the counsel of Inspector General across the government if the ig starts an investigation, the agency will not themselves run a competing investigation to try to get there first. The ig advises us what the investigations are. When they advise us about those investigations, we allow them to proceed. Let me give you possibly an alternative view, commissioner, which is that people cite ongoing ig investigations when it suits them to not cooperate, and they dont cite ongoing ig investigations when it doesnt suit them. Thats not my policy. You can certainly understand how a cynic might view it that way, right . Because theres nothing about an ongoing ig investigation to keep you from doing your job. Just like theres nothing about an ongoing ig investigation that keeps the department of justice from a criminal investigation. Or a committee of congress from a criminal investigation. Theres nothing talismanic about an ig investigation. This particular case as a general matter, my policy has been if the ig is doing an investigation, we wont interfere with that investigation. Words have consequences. Nobody is asking you to interfere. You can have a dual investigation without interfering, cant you . I think its very difficult. So you are saying if there was an allegation of Sexual Harassment or Racial Discrimination within the irs, you would not look into that until the ig had completed his or her investigation . Is that what you are telling me . I am not telling you that. Im telling you as a general matter, thats not what the ig would be investigating. Those claims would come to personnel and be investigated by our legal department. The ig doesnt have jurisdiction over appropriations. All three of those are importantuaries. So those should be ongoing even while an ig is doing the investigation. The ig does do criminal investigations. No, sir, they refer to an entut that actually has the power to indict, which does not include the ig. They actually my understanding, like our criminal it might be the same people who gave you the understanding that you were confirmed that the tapes dont exist. So my advice is to be very careful who you take your advice from. Im going to say this in conclusion, mr. Koskinen, i really could not believe the colloquy you had with one of our colleagues about the morale at the irs. It takes a lot to stun me but that stunned me. Heres a piece of advice i will give. If the folks like lois lerner and others would have spent more time working on the backlog, more time working on their case load and less time targeting groups and less time trying to overturn Supreme Court decisions they didnt agree with, maybe morale would be better. And maybe their backlogs would be lessened. Would the gentleman yield . Id be thrilled to. Commissioner, i want to maybe summarize what the gentleman was asking you with a question. Do you have full faith and trust that your ig is doing a thorough investigation at the same level as would be done if you were doing it as the commissioner . I do. I said earlier, i have a lot of confidence in the Inspector General. They have far more capacity in some of these areas. They have 15 people working on this. Im very comfortable and confident that they are doing a thorough job, and i have told them well do whatever so at least as to your own investigation, you consider the igs investigation to be your investigation . I do not. We do not control the ig. Hes very independent. Hes doing an independent investigation of all of this. I am satisfied that when he gets done, we will have an independent review and investigation of what went on. Thank you. Gentleman from virginia. Will the gentleman from virginia yield for one followup question . Its his call. But if you yield, ill allow some generous time. Ive been very generous. I thank the chair. I want to follow up on the gentleman from South Carolinas point. What youre just saying is that your belief is that it is wrong for you to do an investigation at the same time as an ig is doing an investigation. Is that correct . If we were doing an investigation, it would interfere so youre saying your predecessors who did exactly that in 2012 were wrong . Because when the ig started it, they did their own under sworn testimony, they did their own investigation. So what they did was not right. Everybody has their own policy. I dont know what they did or didnt know. In your opinion, that would not be right . I just want to show the hypocritical point there that its not consistent with what irs has already done. My point only was its consistent with how i have behaved in the past and how i will behave in the future. My view is ig is an important independent source of investigations. Whenever the ig is doing an investigation, i think its important to cooperate with it and not interfere with it. I thank the gentleman from virginia for yielding. I ask unanimous consent that all his time be restored. I thank my friend from North Carolina and the chairman. Welcome back, mr. Koskinen. Always a pleasure to be here. I can tell. Must be a thrill and the highlight of your week. I guess were going to do this as long as were in session. By the way, just sort of a side bar, i wish my friend from South Carolina was still here because his concern for morale at the irs is really touching. Morale at the irs is really touching, and gosh, if we were really that serious about it, maybe we wouldnt have slashed 800 something Million Dollars from your budget and represented another 350 million this year. At this point, were 1. 350 billion under water. Im glad were talking about the i. G. Im amazed that j. Russell george would have thought it wise or prudent to completely yoe mitt from the may 14th final audit report any mention of a critical, and i think aston earning analysis that was conducted by their own investigations. Id like to enter into the record, the conclusion of ticktas email, it was sent to michael phillips, Michael Mckin at this, chief counsel and two ticktas employees whose names have been redacted. This is stunning that after obtaining and reviewing 5500 irs emails from Staff Members in cincinnati that in addition to there being no email directing staff to target tea party or other political organizations and no conspiracy or effort to hide emails, and i quote, review of these emails revealed that there was a lot of discussion between the employees on how to pro set tea party and other political applications, there was on a be on the lookout list specifically naming those groups. However, the emails indicate the organizations needed to be pulled because the irs employees were not sure how to process them. Not because they wanted to stall or hinder the applications. There was no indication, im still quoting, that pulling these applications was politically motivated. The email traffic indicated there were unclear directions and the group wanted to make sure they had guidance in processing the applications so they pulled them. This is, he says, a very important nuance, unquote. Would you agree with that finding, mr. Koskinen . Sounds right to me. Have you any idea why the Inspector General would not include such a critical finding, after all of this, and the press compliantly giving my friends on the other side of the aisle the headlines, tea party target. Heres a critical piece of information, maybe a smoking gun, if were looking for exoneration, in ticktas own office. Why would that the not be included in the report . I have no idea. Is it worthy of your time to ask that question . Respecting the independence of the two offices. I would not ask the i. G. That question. Hes done his report, hes done his investigation. When they do investigations, they have any number of them going on. When they do the reports, we agree with them most of the time, sometimes disagree, sometimes disagree with process, but we do that in the orderly process of responding to their report. But mr. Koskinen, here you are for the third time before this committee but probably not the last. And your reputation and that of your organization, you know, has been called into question. With a charge that has unfortunately not been critically examined as much as id like by the media despite our efforts on this side of the aisle. Here is the head of investigations on your organization on ticktathat says otherwise, that directly challenges the pro pounded thought that only tea party and conservative groups were targeted. He says otherwise, and the ticktadoesnt put it in his time report. By the way, an Inspector General who has been questioned by a number of us up here, and we have formally requested an investigation of his conduct before the counsel of ifrmts grnlts. Ive heard mr. Jordan question other employees of the irs because of their political giving. Well, mr. George was a republican staff member of this committee. Hes given political contributions to republican candidates. Hes a bush appointee and met solely with the republican side of the aisle in getting ready for his audit. That raises serious questions. If its sauce for the goose, its sauce for the ganlder about his independence. But this is a critical piece of information it seems to me, and i cannot imagine you would be co copacetic. Its an interesting piece of information that obviously is useful for people to review. As ive said, i do have confidence in mr. George that hes independent. He actually is the Treasury Department inspector for irs. And weve supported him the past, i think he will, is doing an independent review of all of this, and i look forward to his response and findings about what happened with regard to the hard drive crash. Well, how about, and as a response to why he didnt include this important missive from his head of investigations in the final audit report of may 14. Thats a question that im probably not going to ask him. I yield back, mr. Chairman. I would just ask the gentleman, which way do we want it . Criticize the work he did before where he identified the targeting of kftive groups. You cant have it both ways. From chairman, there are an um in of us who have raised and been quite consistent in raising questions about the objectivity of mr. George. Mr. Cartwright and i have both filed a formal complaint. And id be glad to share it with the chairman. With all due respect then you should be advocating that we get access to the witnesses. Maybe a new Inspector General is the answer. Relative to this was somehow miss management. 80 of the applicants in backlog were conservative. The irs did not approve a single taxexempt application by a tea party groom from may 2010 to 2012. During the same time they approved dozens of liberal and progressive groups. If it was miss management, it was mismanagement in a targeted way. Mr. Chairman, i have a memo from Gregory Kurtz saying targeted is actually not accurate. I also have materials that were presented to irs for training that have elephants and donkeys, tea party, patriots. They have progressive. 298 cases in the irs backlog. Only three had the word progressive. None use the word occupy. No progressive word was denied c4 status. Hundreds of conservative, tea party groups, and some still waiting, just for the record. I guess you and i could argue that all day, mr. Chairman, and we need to get on with this hearing and allow mr. Koskinen to get back to his job. Mr. Koskinen, why june 13 . Why that date . Let me ask you this. Why not, why not february 2nd when you first learned there was a big gap in a bunch of email that looked like they were missing, why not february 4th when, as mr. Kane testified, and you know mr. Kane. Do you know tom kane . I do know mr. Kane. Is he a solid lawyer, good, professional employee at the Internal Revenue service . Certainly. Why not when they knew her hard drive had crashed, why not tell us look, we have a problem. Why not disclose that to someone on february 4th . Or how about this . How about mid february when mr. Kane said last thursday that we know, we knew then in mid february that the data on her computer was unrecoverable. Why didnt you tell us in mid february . Or how about the hearing weve talked a lot about, mr. Desantis raised in the opening questions. Why mott at march 26 . Why not disclose on march 26 when you were in front of this committee and everyone on both sides of the aisle asked you about lois lerners emails, and yet, you knew, good professional employee, lawyer at the irs, you knew that mid february her email were unrecoverable. You should be careful to note, thats what mr. Kane knew, thats not what i knew. Well, thats a problem too. Thats something you should have known. Mr. Kanes a highranking official. And you did not know . I did not know. Do you know kate duval . Pardon . Do you know a person named kate duval . Kate duval i do know. And what is her responsibility . Whats her title . Shes counselor to the commissioner. So shes counselor to you. Yes. She knew in mid february according to mr. Kanes testimony. She didnt tell you. Ive testified at some length, basically what ive told you is that in mid to late february i knew that we had taken the lois lerner emails that have been produced and instead of tom kane said they were unrecoverable. He said he told kate duval. Did she tell you they were unrecoverable . She did not tell me they were unrye coverable. Thats a problem. Why not tell us april 4 when ms. Duval briefs this committee, and the briefing was about how we would deal with, how the irs was going to deal with Committee Requests for concerns about the lost or, excuse me, producing lois lerners emails. Didnt know they were lost at that time. Why didnt you tell us april 4th . I testified at some length in the past and earlier today heres the key question, let me jump in here a second. Why not mid april when you knew. In fact, lets put you the slide. This is the question we had earlier in one of our hearings. Why not when you knew, what date did you learn you could, you could not get all of her email . I learned that in april. Why not april . As i testified then and i testified on numerous occasions, my judgment was, a, we needed to find out what emails we did have. We needed to put it together in a full report, which we did. Why not anytime in april. Someone at the irs who told someone at treasury who then told someone at the white house. So if it was good enough to pass on to the treasury and white house, why not tell us sometime in april . Because i thought at that point we did not have the full information as to what was involved. You learned in april they were unrecoverable. Your chief lawyer in charge of document production knew in mid february they were unrecoverable. Kate duval knew in mid february they were unrecoverable and you waited until june 13th. Why june 13th . All of those emails that determined whether she had a hard drive crash or not, what she tried to do are emails provided to this committee, and their tax writers new, the materials were produced. The materials were about the email chain, about her trying to restore her hard drive were produced to the tax writers in april and to this committee in may. So there was no secret that we were hiding. We were processing through. No, no, no. You were giving us emails. But you didnt tell us there were emails you couldnt give us. Why didnt you tell us that the irs had destroyed emails that belonged to lois lerner . Its not clear. First of all, emails from ms. Lerner were not destroyed they were recycled. So at some point theyre destroyed. Why didnt you tell us you could not produce those emails that they were lost in april . This hearing is noted to be an update on what were doing. I have given you at least two different occasions. Answer the question, why june 13 . Why not june 10, why not may 10 . If you couldnt do it in april, why did you have to wait two more months. Were going to be here a long time if you want to repeat all the answers you know what i think . Ive answered it before, and im happy to answer it before. But it is in the testimony that ive given before that you all have read very closely. We were producing lois lerner emails. I thought the most efficient way to proceed was complete the production so wed know how many lois lerner emails we had from her account, how many lois lerner emails that we were able to retrieve from our accounts. I had hoped wed find out how many other problems we would have with custodians, and we would use that as you a report to the committees and a public report that would explain what our email process is, why its so complicated, what we had determined about lois lerners emails and crashes and it would be a full report. June 13th was a friday. I should have known friday the 13th would be an interesting day. Wed been asked by the finance committee which was considering coming to closure on their report when we would give them an update on our march letter in which wed advised the tax writing committees that wed completed the production of the start of the investigation. Thats what the i. G. Was focused on. We said we would do that. They then called and we were going forward. They then called and said they would like that report no later than that friday because they were going to have a meeting the following week. So we pulled the document together at that point. We had not completed the custodians that were involved with hard drive crashes and what the impact, we had no idea if you lo the hard drive one of the custodians, one of the custodian hard drive crashes was in february of this year. Not very relevant. We produce thad document and shared it with everybody on friday, june 13th, and it was to meet a request. So your testimony is the Senate Finance committee drove the timing of when you disclosed that you had lost lois lerner email. Yes, because we were actually going to produce i think its something different. I do, and obviously youre going to disagree, but i think youre never going to tell us. You got to remember what happened here. Judicial watch does an foia request. And they learn that the irs and department of justice had been working on possible ways to bring false claims action against tea party groups. And there was an email from that foia and ms. Lerner had an exchange in 2013 after a senate hearing. We saw that email. We said you know what, were going to talk to mr. Pilger who was meeting with ms. Lerner just days before. So on may 6 we interview mr. Pilger, and we learn, in mr. Pilgers Opening Statement in that deposition we learn this. He said, im reading straight from mr. Pilgers statement. Turning to my contacts with ms. Lerner in the fall of 2010. Shocked us. We didnt know they were meeting clear back in 2010, that the Justice Department was meeting with the irs clear back in 2010. In the fall of 2010, at the direction of the chief of the Public Integrity section, jack smith, i contacted the Internal Revenue service. When i contacted them, they directed me to lois lerner. Who met once at the Public Integrity Section Office with some of her staff, my chief, jack smith, other personnel from my section and the fbi. So now we learn in 2010 the Justice Department, with the fbi is meeting with lois lerner. And so we said, you know what . We better subpoena documents from the Justice Department. And we said we want any communications with lois lerner that youve had. And we get this slide, we get this email. Put this up if 2003 can. We get this communication. From lois lerner and Richard Pilger. Now, mr. Koskinen, did you give us this, did you give us this email . Do you know . I dont know. I can tell you. You didnt. We got it from the Justice Department. And after we got this from the Justice Department, we contacted you all on june 9th, and we said hey, hows come we didnt get this email from you. Theres no 6103 issue with this email, so we were concerned. This is an email from clear back in 2010. So we contacted you, mr. Koskinen in the letter and said were wondering why the irs hasnt sent us this email from four years ago. And then suddenly, four days later, you tell the finance committee, the congress, more importantly, the American People, you know what . We lost lois lerner emails. Weve lost a bunch, from that time period. My theory is this, mr. Cass ca nen, you guys werent ever going to tell us until we caught you. We caught you because of the foia request. We took that email, interviewed mr. Pilger. He said he met with lois lerner. We contact you and say why didnt you give it to us, and then you knew you were caught. You didnt tell us this, but we knew, we didnt give it to you because we dont got it. Now we have to tell the whole world we lost them. And what better to do it than friday, june 13th, saying were complying with some senate concern, put it on page seven of the third addendum and say you know what . We may have a problem with lois lerner emails. Good. I think all kinds of people logically going through this would say thats what prompted these guys. You just say, well, we better come clean, plus, youve already told us you knew clear back in april that you lost them. So you wait two months, and then you say, well, we better do it june 13, just four days after they figured out justice and the irs were working together in 2010. And they got an email that indicates that, and we cant produce it. When you find any direct evidence to support that assertion, id be happy to see it. If you think that this organization in four days could produce that report, you dont understand how larger organizations function. You can ask anybody that worked on that report, theres a whole series of people. That report was under production for a long time. Im not saying it wasnt. Im saying, though, clugt statement we lost lois lerner email was in that report. And one thing ive learned in these investigations is look at the timeline. You knew in april. You didnt tell us until june 13th. What happened between april when you knew and june 13 . One key event was the foia request from judicial watch, finding this collaboration between the irs and the Justice Department, us getting that email because we subpoenaed the Justice Department. They give it to us, its in the relevant time frame when you say you lost lois lerner emails, and suddenly, you say they got us. We got to come clean. Mr. Chairman. Can i respond . Thats a fairly serious charge. There were a whole bunch of senior staff. And if you find any evidence to anybody that worked on that report in terms of the timing of it, the fact that we were otherwise not going to deliver it, i would be surprised and astounded because there is no such evidence. And ive been very patient about this. But before you make that charge and claim, you better have better evidence than a single email. We have other emails. If youll yield for one moment. I know the chairman. A lot has been said about what thomas kane has said. Well, last week, thomas kane told our staffs that the irs always intended to alert us about ms. Lerners lost emails, so, i know you have all these theories. Unfortunately, our committee has been one where we put out these headlines, and then we go chasing facts that in many instances never exexist. Include everything when you ask the questions. They get a letter from us on june 9 where they know we now have this email from the Justice Department that they cant produce. And four days later they tell the world weve lost lois lerner emails, when they knew that, according to mr. Koskinens testimony in questioning from me that he knew in april they couldnt get ms. Lerners emails. So they waited two months, and then when they decided to tell us was four days after, on a friday, four days after we knew there were emails we were getting from justice that we werent getting from the Internal Revenue service. All im saying is that timing is pretty suspect technically in light of the things weve heard, one computer crash, seven, eight, maybe up to 20. When you look at the timeline, it looks pretty suspect. All im saying is im not sure they were going to tell us. But chairman chairman, youve this is very interesting, because one i dont know his name, said to the man was under investigation and that, i heard that i was in the entire hearing, and he never said that. By the way, the Justice Department never said that. Then, you, mr. Chairman have made strong accusations. And when you make these kind of accusations, i would appreciate it if you would give the witness an opportunity to answer. Because these are the kind of allegations that tarnish ones reputation and you, you come up with this theory, and im not saying your theory is, you know, your theory is what it is. But he ought to be able to answer, please. Thats all im asking. Appreciate the Ranking Member. As i said, i havent seen mr. Kanes testimony, but it doesnt surprise me that he would say that we had been producing this report for some time and clearly planned on making it public. You can talk to people. Wed be happy to give you those contacts, the people we talked to at finance who did in fact have a meeting the following week, had asked us for an update that we did provide. They asked for it no later than that friday. I am confident and very confidence that no one working on this report had any idea about it other than that we were going to produce it and provide all of the information to the public. I think any other assumption is not based are you willing to make those witnesses available . Or are you going to make us subpoena them so they can come here under oath and testify that yes, in fact, we, from mid april when the commissioner knew that lois lerner emails were lost, we planning on telling the congress as soon as we got all of the information. Theyll come and testify to that . Or will they come and testify, you know what, after the june 9th letter we decided we better put in the information that we lost lois lerner emails. I dont think youll find anyone who will make that latter. Are you willing to tell us who they are . Were happy to talk to you. You have others on your schedule. Gentleman from nevada is recognized. Thank you, mr. Chairman. You know, i do share concerns by some of my colleagues on the other side about why the irs delayed in providing congress with notification regarding the unrecoverable emails. Because it raises questions. I dont share in the chairman or other members conspiracy and rush to judgment about any motives as to why there was a delay. And i feel, again, as ive said in previous meetings, that we fail to get all the facts in order to then make a proper decision. Im not a defender of the irs or any other federal agency. Ive said from the beginning that i believe that there was wrongdoing. But the chairman and others want to conclude or make conclusions about that wrongdoing without justification or evidence to support their assertion. Now mr. Chairman, you just read into the record some comments by mr. Pilger that i had asked to be entered into the record, the full transcripts, so im going to ask, again for unanimous consent that the trandescribed statements of Richard Pilger and smith be allowed to be entered into the record, particularly since you just hand picked certain statements, and im requesting the full transcript be entered. Will the it chairman please provide that courtesy for this to be entered into the record under unanimous consent. If the gentleman will yield for just a second. I read from the Opening Statement that thats what this is. If youre just asking for the Opening Statement, not the full questions from democrat staff, republican staff, but just the Opening Statement from mr. Pilger and mr. Smith, wed be happy to do that. Thank you. All right. I also want to follow up to some of the claims that have been made by my republican colleaguing and give you an opportunity to respond. It has now been stated twice today that mr. Kane testified during his july 17th interview that in mid february 2014 the irs realized that lois lerners emails would not be recoverable. I want to clarify here, because i dont want mr. Kanes statements to be taken out of context. It is true that mr. Kane told us that he had discovered that ms. Lerners hard drive had crashed and that the contents of the hard drive were unrecoverable. However, that does not mean that mr. Kane said that he thought in february of 2014 that the irs would never be able to produce those emails to congress. In fact, mr. Kane was asked, quote, and as of march 2014, you were not aware that the irs would be unable to recover all of ms. Lerners documents. And he answered, quote, thats correct. He further explained, as you have, that the irs was engaged in an extensive process to find ms. Lerners emails from other sources at the irs. And in fact, those efforts were successful and yielded the production of an additional 24,000 lois lerner emails. Is that correct . Mr. Koskinen . That is correct. Mr. Kane also explained that the irs goal was to fully can comply with those requests as expeditiously as possible. He stated with respect to fulfilling that goal, and i quote, i have tried my best, and everyone that i work with have tried their best. Commissioner koskinen, do you share that belief that every effort was made to provide this committee and others with those emails that you were able to recover . I do. And beyond the issue of failing to notify us in a timely manner, then the question becomes what can be made of why that timeline was delayed. Right, and as ive said, first of all, all of the emails in question had been provided in the normal course to this committee and the other investigators. So there was no attempt to not produce information that showed that in fact there had been a problem with lois lerners hard drive. In fact none of us at the irs or investigators noted that in the fall productions there were emails from lois lerner saying she had problems with her hard drive and had lost emails. But everybody then appropriately were looking at subject matter. But its not as if these emails were withheld or not produced in a timely manner. We were trying to determine how many emails we had. We were producing emails as a regular matter. And the emails had all been provided previously to all of the investigators. Thank you. The gentlemans times expired. Commissioner, i really wish we had your irnlts t. Guys here instead, because it is inherently a little hard when were asking you so many questions that are not related directly to your past experience, but appreciate your continuing to volunteer to come up. Hopefully, as we interview some of your i. T. Professionals and some of the others involved it will make it easier to direct questions. But, you know, a lot has been done to talk about this. A drive this large that apparently went so bad that not a single piece of information could be saved. And youve asked us to believe that your very special experts couldnt save one piece of data from this drive. Or one just like it, correct . Thats what i was advised, yes. And thats what the email strategy that we produced and i testified about at previous hearings says. The American People dont believe that, you realize that the idea that we can recover the last 17 or 18 seconds from challenger exploding above our atmosphere, falling to the sea and being left under the sea for a year, that we can recover the voice from that makes people wonder why a product that simply came in and out of the office with lois lerner every day, suddenly not one piece of data could be recovered, doesnt surprise you the American People just have a hard time believing that, does it . Well, i dont know whether the American People do, but i do understand that when our criminal Investigation Division which are experts at extrabtsing information say they could not recover any emails, that seems appropriate. But on the other hand i can understand people saying if you kept trying. Do you think its reasonable for us to check with your criminal investigation people, interview people involved to see if that passes the reality check in spite of what the American People may think or the doubts they may have. Do you think its fair for us to check into that . Yes, and in fact those interviews are being scheduled. Some of them i gather from the press release i saw from ways and means that some of those i. T. People have already been interviewed. So its fair for us to do an interview and to investigate on our own in order to bring the credibility that we bring as if you will, a doubting thomas to the process. Youd agree with that . Ive never had any concern or objection to the oversight. As i said, spent four years in the senate, the Government Operations oversight. Im a big believer in congressional oversight. And i appreciate that you r one of the things that we discovered that was not made available was the existence of ocs, this chat capability that exists within the irs network, is that right . Thats correct. I spent some time testifying a couple weeks ago about that. And you wrote me back a letter when i asked about it. And in the letter it said, basically, that no records were kept, because it was the equivalent of visits or phone calls. Do you remember that in the letter . Yes. Now would it surprise you to know that we disagree with you . That in fact it is the opinion of this committee that the federal records act, unless you can train and guarantee that no policy decisions, none of the kinds of activities were discovering in email could be done on ocs that in fact you should turn on that switch and you should collect, and you should retain ocs chat unless you can assure us that its not doing the equivalent. And ill be brief but ill explain something to you. Years ago when i was a Sub Committee chairman, and president bush was in office, we investigated the Mineral Management service. And what we discovered there was that they had systematically signed leases that were simply wrong and cost the American People billions of dollars. And we could find not a shred of evidence in emails to show the absurdity of how this came to pass. So after we deposed peel repeop repeatedly they finally admitted that only the cover sheet was brought to them and they signed or initialed. But more importantly, as we went through the process, what we discovered was, at Mineral Management service, a now defung organization. Lawyers went out of their way to have no paper trail of things they did in their consultation. I will tell you today that has to end. That the American People exbent that the federal records act is not something to be avoided and you should not be trying or allowing the bypassing of future oversight that you said rightfully so with your experience you believe in. Maintaining data so that it can be analyzed by your Inspector General whos conducting your primary investigation, you have full confidence in. Activities going on in ways and means which are slightly different than ours. Our activities or anything in the senate are hampered by policies of any part of government that allow the use of something that clearly bypasses future oversight. So i hope today that in addition to your willingness to cooperate and help us in getting to the answers i mentioned on this that youll recognize that your letter is not acceptable. That email is a substitute, not just for the oldfashioned letter, but its a substitute for a visit. Its a substitute for a phone call, and that in fact the reason that those are important is that the phone call and the visit, in the old days, you would have done a memo for the record if in fact you wanted to do your job. That isnt being done. Emails and these chats are extremely important. And id like to have a second round at some time, but i would yield back at this time. Mr. Chairman, i have a point of information. Yesterday chairman issa informed Committee Members that hell be holding yet another hearing on this topic next wednesday. Could the chairman please inform us who will be testifying at that hearing on wednesday . Pursuant to the rules, well inform at the appropriate time, but at this time, they havent sent anything out, and i appreciate your inquiry. So you dont know . Or you wont tell us . I think regular order, please. Well do regular order. And the chair at this point will now recognize the gentleman from michigan for five minutes. Thank you very much, mr. Chairman. Mr. Commissioner, if any of my constituents were not as forthcoming as the irs, there would be a presumption of guilt. There would be fines . And or have their wages garnished am or liens laid on their home and or savings accounts seized. When i go back to the district, i had the opportunity to talk to many irs former employees at the irs, now retired. And i asked them what they thought about what was going on at the irs, and i heard despicable behavior every step of the way. The irs no longer credible. I think at this point, mr. Chairman that id like to yield back. Will the gentleman yield . Yield to the gentleman from california. I appreciate that. In regular order, this is helpful not to have a second round. Commissioner, theres been approximately a year of production of emails. In your earlier hearing i remember it might take two years. Sort of an estimate, but let me ask you a question. Have you reviewed the timeline when this committee issued lawful demands for lois lerners emails . Have you reviewed the tile line of who did what and when . No. Would you be prepared to deliver to us a timeline, meaning calendars, activities of individuals who were charged with going out and finding those emails, what they did and when they did it . As i say, weve had approximately 250 people doing that work. No, actually youve had people redabting and people legally reviewing. Im only talking about who went and got the information, the emails, who accumulated them, the gathering. Thats not just one or two people. Thats a set of people. But wed be happy to provide you the information in any form that would be usable. Heres the inquiry ill ask you today, and, again, you know, we appreciate you coming, but youre not the i. T. Guy. Youre not any of the 200 people per se. It is clear now from this side of the dais that we issued requests and subpoenas. Two things were to occur. One, that the moment we issued our first letter it required that you preserve information. Theres a question about whether that was preserved, because in order to preserve it, youd have to go look for it. So the tapes that now your own people have admitted, theyre not sure when they exist or not. They undercut your claim that youre very comfortable that theyre gone at the end of six months. That means that nobody went out to say what are the tapes, where are the tapes, are there any . Additionally, in order to not know that lois lerner had this gap, either you werent looking extensively all at once or, and this is one of my concerns, people just didnt want to admit that they werent going out and looking for emails by essentially what we expected, which was to do a keyword search on a server and deliver the data. Remember that for months, even before you came on board, we were being told, you know, well, heres some keywords, and we want a search or on these keywords. And the irs was adding keywords that allowed them to deliver the false narrative that progressives were being targeted. They were adding selfserving words and searching them. This committee had a reasonable expectation that you were searching the entire database. You were searching not six months worth of emails. Not 6,000 emails or less that were preserved, but you were searching the historic emails. Not until recently, the last since weeks, did we understand that if that was how you were getting all of your information, you were knowingly looking at a small fraction of the historic two or threeyear email selections. We now understand, no more than 6,000 emails. Only six months of record. So it is now appropriate for us to understand your search, your employees search techniques, what they did, because at some point, they must have started searching, okay, who has psts . Send us your psts. Or did they, and this is why we have to ask directly, did they send out one of these do you have any information relevant and please send it to us. Because the khai word search would imply that in fact they were accumulating these psts and tching them. If in fact that process didnt begin in earn nest the first week or month, if in fact your predecessor was delivering selected data from what was basically the last six months of things still preserved, we need to know that, because it does appear as though in this long investigation there has been either an absence of a willingness to disclose problems or an absence of real fact finding, getting these emails quickly, or deliberate obstruction. We dont know which, and we would like to know, as i said in the beginning of this, who went looking for what when. Not interested in who read them. Not interested in who edited them, who redacted them or who released them. And that information would be equally valuable whether it was p pu pursuant to the houses request, but giving us an idea of who was going and looking to tell us who knew that lois lerners email on her personal hard drive was of any relevance, because this committee didnt know that there was a lack of a central database for the first almost a year of this investigation. I thank the chairman and yield back. Gentleman yields back. The chair now recognizes the gentle lady from wyoming for five minutes. Thank you, mr. Chairman. I have no doubt, mr. Koskinen that morale at this irs isly. I want to tell you about morale in wyoming. The people of wyoming who i work for all feel targeted. They think the irs is out to get them. They are lower than a snakes belly about the irs. Because they know that lois lerner was brought into the irs from the federal Elections Commission where she had a history of political targeting. Political bias. They know that she was tapped to enforce the largest tax increase in history. Obamacare. After, after she targeted conservative groups while overseeing 501c4s. Taxexempt organizations. They saw her come to this committee and say ive broken no laws. And then take the fifth. They know that we subsequently did find out that she did break a law. That she provided confidential taxpayer information to another federal agency, which is against the law. And they know that so far shes gotten away with that. That the Justice Department isnt doing anything about it. That she got away scotfree. They know that when they get letters from the irs that theyre being targeted. I have a constituent who got a letter and an investigation from the irs that has cost her 50,000 just to close her estate. Because they keep asking her, what make and model is your bed . Your bed . They think her bed is some expensive antique. Incidentally, she is a very active member of the republican party. She feels targeted. Morale is low in wyoming because our government has turned against us. So this is a legitimate investigation. I hope it continues at length. I hope it goes on until we get to the truth. Because the people we work for feel like the government is getting away with their tax dollars, that they dont know, they feel like the government is denying them taxexempt status that they deserve. They feel like they cant trust the irs. Thats why this investigation. Thats why youre here and asked the same questions over and over. Im sure its frustrating. Were frustrated too. But its because our constituents are mortified. And scared, and are going to take matters into their own hands. Because they dont feel we have the ability to do it. Ourselves. So with no apologies for the morale at the irs and no apologies for how many times were asking you the sail questions over and over, mr. Chairman, while i thank you for your attendance, i do yield back the balance of my time. Would the gentlemen lady yield . I will. Some people just dont have enough questions for you, commissioner. The, i mentioned the timeline and my interest in that. Let me just ask you one other question, which is when you look at this investigation and you look at the fact that a federal judge is now ordering you to show certain things, you look at your i. G. s investigation. You look at our investigation. Are you aware, and do you recognize the three separate channels are perceived, and in reality are very different as to what your responsibilities are and how you approach them . My response to all of them is the same. If people have, from any branch, government questions, we have an obligation to respond to them in response to appreciate that, but the i. G. Does in fact work under you. He has limited authority. Absolutely not. I understand his independence, but in fact works for the Treasury Department. We have no control, influence over him. He does work in the irs. But in fact, he has testified that when he wants information he has to ask for it. And he may not always get it. That in fact, theres a process, and sometimes its very frustrating for him to get information, even though you say hes independent. He doesnt have the authority to demand things and automatically get them, isnt that true . Ive never had, in my time here or other places an experience with an i. G. Not able to get the information he needs, and i am committed as mr. George knows that whatever information he wants in any investigation, hes welcome to have. Well, well certainly hold you to that. Thank you. Im happy yield back. Thank the chairman. The other members who do want to do a second round, well do that. Ill kick it off and recognize myself. I just want to mention, people mentioned the morale, i do think its worth mentioning that there are a lot of taxpayers who have had their morale hit. When they see some of the conference spending thats gone on, 50,000 for a star trek parody video and other lavish expenses on their dime, and, again, that was before you were there. But that really irks a lot of folks and certainly our constituents. I think the same goes for the targeting, when people feel like they were being targeted or were targeted simply for exercising their constitutional rights, i think that hurts their morale too. I think its important that we mention that. Now a lot has been gone on about when you knew, why you delayed telling congress. And i think it is the case that the standard that would be applied to an official such as yourself is not simply what you actually knew, but what you should have known. In other words, you want bury your head in the sand and not be apprised of what people in your organization know. And so i think thats going to be a question is clearly there were people at the Senior Leadership level in the irs early february, mid february, who knew that the problems were more substantial than what you indicated to us that you personally knew. So the questions going to be, you know, why did you not know more. And i think that goes into what i and some other folks have raised, and i know my friend mr. Cartwright disputed the notion that this is being investigated by the Justice Department. And just so were clear, because i dont want to be lobbying charges that arent true. Heres transcript from last weeks hearing. Chairman jordan, the fact that the commissioner, meaning you, at the Internal Revenue Service Delayed telling congress the American People, the fbi and the Justice Department is a matter youre going to investigate. Mr. Cole replied, were going to look into what the circumstances were around that, yes. And so were concerned about it, and the d. O. J. Seems also to be concerned about it. Let me ask you this. You mentioned that you have seen the way the and means press release about their conducting interviews with different irs technical witnesses about what in fact happened to the hard drive. And so they told ways and means that the hard drive was scratched and that data was likely recoverable from it. And, of course, the irs just last week in federal court has filed a declaration saying, consistent with what i think youve testified to, that the hard drive was destroyed. And in fact, no data was recoverable for it. So my question is, what is, whats an american to think when they see some witnesses telling a congressional committee, scratched, maybe recoverable, but yet, the irs is representing in federal court that it was destroyed and completely unrecoverable . I havent talked to those people, and i dont know what that interview yesterday the technical people would be the ones that we would most want to talk to about that, correct . All i know is that the emails ive testified at a couple previous hearings about show that there were efforts made by ms. Lerner and the i. T. Department to restore the hard drive. It went to the criminal Investigation Division and their experts, and they said they were not able to retrieve information from that hard drive. Thats all i know. Thats what the emails contemporaneously showed. They had tried. They were unable to recover any information. Okay. So, and i read the pleadings, and i take that point, but we are getting conflicting information it seems in the congress at this point. So i think its important that that be resolved, because clearly you cant be telling the court one thing and then having people in the organization who are on the ground and maybe had imminent knowledge telling the other thing. Im almost out of time, but very quickly swifing gears a little bit. The dc circuit issue add opinion about the irs with respect to obamacare subsidy the and the states that have exchanges not run by the state but by the federal government. Given that theres a split where you have the Fourth Circuit saying it was a close call or scribners error. Or the other saying think didnt have the authority to issue that ruling, are you going to rescind that rule . Or whats the irss position . The rule about the granting of advanced premium tax credit is all run by hhs. We have our regulation said that in fact, it was appropriate and acceptable to go through the court, through the federal marketplace. We have no plans until the issue is resolved in court to rescind or change that rule or change our preparation for the next filing season. Is it your position at the irs that you construed that to be that there may have been a drafting error in the statute, but the intent of congress was that the subsidy should go and is that why the irs has taken the position that theyve taken . It was reported of the Justice Departments opinion which was upheld in the Fourth Circuit, i dont have a different view of the legality. I think the Justice Department puts it i have well that they think the statute is enforceable as, and the regulations are appropriate. Okay. I am out of time, and i will now yield back to the Ranking Member of the full committee, mr. Cummings. Thank you very much, gentlemen. On july 9 you appeared for hearing entitled solutions to closed the 106 million improper payments gap. Even though it was not clearly the stated purpose of the hearing, republican members of the hearing asked you a number of questions regarding the committees investigation into the irs treatment of applications for taxexempt status. At the hearing, chairman issa also released emails from lois lerner regarding the irs instant messaging system called ocs that he claims prove that ms. Lerner intentionally sought to hide information from congress, end of quote. Despite your testimony that you were unfamiliar with the system and would be happy to look into its use, republican members repeatedly questioned you about the specifics of ocs. Commissioner, now that you have learned of the system, can you describe what ocs is . Ocs, i actually provided a letter to the committee that chairman issa referenced earlier. Ocs is a system that exists in microsoft systems and allows people around the country to have a teleconference and you can put the same information on the screen and everybody looks at it at the same time and its a way to have a telecommunications gathering and a meeting. It allows you also to have instant messaging capacity. Not everybody uses it. I dont use it because i didnt know it existed. Much like your cell phone, somebody if they see youre online can send you a text message and its like calling you on the phone. Like all text messages, its a sometimes faster and more efficient way to communicate than picking up the phone and calling someone. Despite the fact that the email exchange occurred on april 9th, 2013, nearly two years after ms. Learners computer crashed, and more than one year after the Inspector Generals audit began, they said the emails was a, quote, smoking gun. From july 11th, the irs sent a letter to the committee explaining that ocs messages both the substitutes for telephone calls and inperson meetings, end quote. And, quote, the irs does not currently deserve communications to be received from ocs, end of quote. Is that accurate . That is accurate. The irs further explained that the federal records act and i quote, does not require recording or retention of telephone calls and meetings as a substitute for telephone calls and inperson meetings that would not normally be recorded. Communications sent through ocs are not considered records subject to federal records or other retention requirements, end of quote. Its unanimous consent that the letter be entered into the record. Without objection. Commissioner, does the federal records act require retention of the lcs messages . Its my understanding it does not and in fact, its my understanding that we reviewed our recordkeeping process and in 2011 we got a score of 93 and in 2012 got a score of 99. But we are meeting with nara and asked reached out to them to try to work with them to ensure, ashes, that were complying with the act and if there are ways we can improve our official Record Keeping were anxious to do that as i say, ultimately, we hope some day to be able to afford to have an effective email system thats a system of records. Are you aware of records that louis learner injuriesed the ocs system to intentionally hide information from congress or the Inspector General . Im not. As noted we produced 43,000 emails from her account so she obviously used email significantly. To the best of your knowledge, has any irs employee used ocss intentionally to hide communications from congress from the Inspector General . I have no knowledge of any such activity. Once again, your testimony corroborated by the results of the committees investigation. After receiving hundreds of thousands of pages of documents and interviewing dozens of irs employees they have not identified any evidence supporting chairmans allege that ms. Learner or any other irs employee used the ocs system to intentionally hide information from congress. I want to thank you for your testimony and 14 seconds left. Is there anything else you wanted to tell us . No, i would just add to the congresswoman from wyoming talking about she works for taxpayers. My view is we all work for the taxpayers. Im as the head of the agency basically, im employed by the American People. Were important responsible to be careful stewards of the money we spend. Its ultimately money that comes from the American People and we have an obligation to ensure that everyone is treated fairly and the same and to the extent their people have lost trust and confidence in the irs to do that one of our major charge so to restore that trust. Whenever were going to continue to contact and audit people as oouf said in the past. Some are democrats and some are republicans and some may not belong to a party. Some may have voted for one person or another and some may be active in politics and what they need to be confident of is when they hear from the irs its not because of any of that. Its all irrelevant. When they hear from us its because of some question in their tax return. If somebody else had that same question theyd be hearing from us as well. We have an obligation and a commitment to treat everybody fairly and evenly across the board. Ive met with over 11,000 irs employees across the country and ive never seen a more dedicated workforce dedicated to the mission of the list to providing Taxpayer Service to enforcing the Internal Revenue code and im delighted to be part of that workforce. Thank you. Before i recognize the chairman subcommittee i just with respect to louis learners emailsnd in terms of ocs, when she initially wrote the email to maria hook saying she had a question about ocs she said she was cautioning folks about email and that weve had several occasions where congress has asked for emails and there have been an electronic search for responsive emails so we need to be cautious about what we say in emails if someone asked if ocs conversations were also searchable. I didnt know but told them i would get back to them and so i think its important that context when she was asking about ocs was to fry to evade congressional oversight and with that ill recognize the chairman of the subcommittee, mr. Jordan. Back to the hallenbeck decision. Does the irs have an obligation to tell taxpayers that a tax credit may not in fact be available . We actually are i think we have an obligation to keep taxpayers informed about all aspects of tavld care act and all aspects of the Internal Revenue code. We have a program of Public Information to advice taxpayers now if theyre getting premium tax credits before these decisions if the information changes they should go back and make sure the credit is correct to the extent that we go forward. Are you going to educate taxpayers on the ramifications of the decision . We are actually well put out information regarding it. As i say, right now at this point, two courts have come to different conclusions so we dont intend to make any different changes and, therefore, i think our advice, although its not totally in my control, because its a policy issue of how to teel which the and were just tax administration. But my general assumption is that people will and should, continue to operate as they have thus far until we get to a final Court Decision and the courts have not underkated that anyone should do anything differently. Let me go to the ways and means statement yesterday. Their press statement. One of the things they say in the lead paragraph is it says inhouse professionals at the irs recommended the agency seek outside assistance in recovering the data. Are you going to do that . Or have you done that already outside professionals to recover data lost or that may be recoverable on the scratched hard drive or tape that now, in fact, may be available . Is that something the irs is going to do . As you know, my understanding is that that hard drive is if normal process once the criminal Investigation Division determines they could not restore any information from it, that hard drive was recycled and no longer exists. When that took place, when you were trying to get to the data, did you, in fact, go get outside assistance in trying to recover the data . I was not around at the time but im not aware of any attempt to go outside the irs. So even though inhouse professionals says, this might be a little bit above our pay scale we should go get the outside tech experts, the superwhiz kidsing that do this stuff we should bring them in. To your knowledge that was not done . To my knowledge, i dont know about that statement. I havent seen the transcript as to whether i was not aware that recommendation has been made but i have no information indicating that was done. Ie, outside experts were sought. All ive seen is the emails that i have testified about in which criminal Investigation Division reported that they could not restore the hard drive. But i have no information that we did the irs at that time did anything else. They did not . I want to be clear. Its your understanding that there was not outside professionals brought in to recover the data . Thats right. I have no indication that was done and its my assumption by the emails i saw when i testified that when the criminal investigation no outside experts were brought in even though inhouse experts recommended they be brought in. I have no information about the inhouse recommendation. You dont know what the ways and Means Committee is report something they said inhouse professionals said we should get outside experts. This is beyond our scope. We need someone else to get this because this is such Important Information . And youre saying you dont think that was done . Yoeng it was done but i havent seen the full context of what that gentleman said either. You dont think it was done and you dont know if it was asked for. Theyre reporting it was asked for and wasnt done. Right. Which is a problem. Which is a big problem when your tech experts say we need outside tech experts to get the data, no, no, no we dont want to do that, thats unrecoverable. Reported by what you said in testimony and hes been filed by the court that unrecoverable. This was three years ago and there were no investigations ongoing at the time and the irs had already taken extraordinary attempts even to go to the cid people. Thats the point. Thee years ago. Thats why they said they needed outside experts. Thats why they wanted the help and youre saying it didnt happen which is a concern. Right. One other question, if i could. According to your testimony, a month ago the ways and Means Committee said the irs in february identified documents that indicated ms. Learner had experienced computer failure no 2011 consistent with mr. Cain. February 4th, february 2nd, you knew there was a big problem and mid february you knew it was unrecoverable. Your testimony said in mid march of 2014 this review we learned that the data stored on her computer hard drive was determined to be unrecoverable. Mr. Cain says he knew in february, you knew in mid march. Thats right. But you were kept abreast. I new in mid april and thats a misstatement on my part. I had to read my testimony before this committee and the now, three hearings ive had. So youre saying this is your written testimony in ways and means. Its not accurate . This was your Opening Statement and what you said to the ways and Means Committee. The irs in february, identified documents indicating ms. Learner indicated computer failure in 2011 mid march review 2014 the day they stored on her computer hard drive was determined to be unrecoverable. Thats correct. That was what the irs kn