501c4s do not get 100 deduction. Youre not tax. Not at all . Not a penny. They are tax exempt in the money they receive from taxpayers who have paid their taxes and give them after tax income, they dont count it as profit. They simply spend it on their baffle but they are not tax deductible the way a charity is. Its a very significant difference. It is one of the reasons they can do up to half of their activities in these. These are social welfare groups, not charities. But theyre social welfare groups and they dont get a Tax Deduction. Of . When you give to a 501c4, you do so without a Tax Deduction. It is taxable. You give your after tax. Its the same kind of deduction you get when you receive a political campaign. Your donors pay their taxes and give you after tax income. It is not a charity. Not at all. Well, i stand corrected. I thought 501c4s had a tax treatment that was favorable to them. And i was saying why not just have a rule that no one gets a Tax Deduction that gets involved in political activities. But i think getting back to the emails, when 22 million emails from the Bush White House went missing in wa 2003 and 2005, which was only discovered under the Valerie Plame affair, our colleagues across the aisle had a different take on how things should happen. And were there any provisions put in place after this loss of emails between 2003 and 2005 that made it less likely that emails could go missing again . I ask anyone who would like to answer that. What there was a terrible debacle in 2003 and 2005. What changes were put in place to prevent this from happening again . So i would suggest that thats an example of some of the challenges that all federal agencies across the government have as it relates to managing email. And the instance were talking about today with the irs is also another where agencies need to be able to understand how their email systems work, how theyre work in connection with the federal records act and how theyre ensuring that preservation is occurring according to disposition schedules. Thats been a wakeup call for the entire federal government. He would also say that ha a wakeup call is that you need your infrastructure to be hitech in place. And mr. Pharoah, as you may be aware, the irs has a 1 billion i. T. Infrastructure but the federal times recently reported that sequestration and other cuts have imposed terrible restrictions on the irs including a reduction in the agency supplies and tiers in budgets. Can you so if you basically have andty equated i. T. System in addition to not putting reforms in place. Can you discuss how maintaining and tick equated i. T. System might impact an agencys records retention capability . What does this mean, these budget cuts and not having an updated i. T. System . It certainly plays a role in this particular case in terms of the capacity of their hard drives to retain information. The number of emails theyre actually able to capture at one time. The upside of the directive that were that were in the process of implementing is that it gives us the authority to work with the strit, the electronic Mail Industry the hitech industry to create solutions that will work for the federal government. Efficient, effective and cost of benefit solutions to this problem. So im optimistic about the future. Well, has funding been a significant challenge to some of these agencies and modernizing their i. T. Records and retention infrastructure. Certainly have. The commissioner testified and i read his testimony they have proposed 400 million to 500 million to modernization and improvement activities but this hasnt become a reality in the budget. Others have complained the Department Still has not completed the switch from Microsoft Windows xp to windows 7. What kind of problem is that . Can you elaborate a little further . This is a problem across the government in terms of the investment in technology. Would my colleague yield . Absolutely. At last nights hearing it was established that the irs has had over 800 million cuts in its budget slated for an additional 350 million this year. You cant have it both ways. You cant be cutting the irs that kind of amount and then decry the fact that theyve got antiquated i. T. Systems. I thank my colleague for yielding. My time has expired. I thank the gentle lady and the gentleman for pointing out the 10,000 less workers but not a smaller i. T. Budget. I know the chairman shares my concern about the i. T. Investment. I really do. I wish you had stayed longer last night to hear the accolades from both sides of the dais for the i. G. And his independence, his nonpartisan, the tigdas efforts and how much hes relied on as a nonpartisan. I think it would have been very, very insightful. I appreciate that. My wife is ill. And i have had to go home at night to you have our sympathies. I know that he would appreciate that. The gentleman from ohio, mr. Jordan recognized. Miss oconnor, in the six months you were at the Internal Revenue service, who was the person in charge of getting the documents congress wanted to this committee and to the ways and Means Committee . I guess i would say that thats mr. Werfel because he directed the agency at the time and told us what his directives were. But the people working on document production, who was in charge . So i served as i think i was describing as the liaison between him and the team of people. Was it you . Were you the person in charge. I wasnt working on it fulltime. I had a number of other responsibilities. When we interviewed mr. Wilkins, he said it was you. He said employees who have been responsible for collecting and producing documents, we asked him who was responsible for that process. He said it is tom kean and jennifer. Then he said miss oconnor and he said yes. He identified you as the chief person. In the six months youre there, this is a huge story. You got the key player in this who took the fifth. Its in the news every day. At that time, youre delling us you didnt have any inclination that a bunch of lois lerners emails were lost . I did not know they were missing and uncoverable and a laptop crash had caused that. When you did learn, what was the date that the White House Counsels Office learned . Mr. Koskinen told us he felt he had no duty to disclose. He knew in march there were lost emails. He didnt tell us at the end of march. Someone at the white house learned in april. We didnt learn till june when they sent us a letter a week and a half ago. When did the White House Counsels Office learn that there were lost emails . So i just got there. I understand. Im asking when the counsel. How theres only like 25 lawyers. I wasnt there in april. I have seen the same letter youve seen. Do you know the date . I dont. Is it fair to say april . Thats what your boss said. He said it was sometime in april when they learned from the treasury. Is that accurate . I have no reason to doubt its true. I wasnt there. Do you know who from treasury told the White House Counsels Office that emails were lost . Do you know who that person was . I dont know. You dont know who was in that meeting or if it was a meeting or how it was communicated . Id love to be helpful. I wasnt there yet. And do you know if anyone in the white House Counsel once they got the information, did they tell anybody else . Did did your boss tell the chief of staff at the white house . Did they tell the president . Who was that communicated to . Again, im sorry. I dont mean to be a broken record. I wasnt there. We asked to you come to this hearing a week ago. In the week, you didnt ask like what happened here . We learned in april the congress didnt learn till zwrun. You didnt ask any of your colleagues . How many lawyers are in the White House Counsels Office . Approximately 25 . Im efficiently knew i have not done a headcount. I understand its around 25. You would think you would talk to those folks and get the details what youll have to answer questions about. You didnt do that . So the letter i received from chairman issa said that the reason that you wanted to talk to me was to understand what i learned at my time at the irs. I did not have much time to prepare. You didnt think the to ask about the fact that the white house knew in april and the peoples house doesnt know until june . You didnt think there was a duty to figure out who gave you the information, who you may have shared that information with . Seems like everyone knows this stuff still its up to congress. We dont get it till months later. Id like to be as helpful as i can with what i knew. It would have been helpful if you had the answers to those questions. Do you know if the White House Councils office that lois lerners emails were lost, do you know if the White House Councils office told the fbi and told the Justice Department . So what i can tell you is what i knew when i was at the irs. I wasnt at the white house. You work at the White House Counsels Office. They knew this information in april. We didnt know it till june. Theres a twomonth time difference there. In that type, did the White House Counsels Office tell the fbi . Remember what the president said, hes angry about this. People have to pay. Theres no place for this, all the things he said when the scandal broke. If you get Important Information like lerners emails are lost, did share that with the agency doing the criminal investigation . Did you say this is serious. Wed better get this information to the fbi and the Justice Department . Did you do that . Im happy to answer questions about my time at the irs. Im asking did your boss, the folks you worked for at the White House Counsels Office, when they got the critical information, did they share it with the Justice Department . Mr. Eggalston started the same day i did. Our tenures are the same. He wrote the letter to dave camp saying they learned of it in april. When he got that Important Information, did he get it to the folks running the criminal investigation . Thats important. Or do you think theres no duty for the white house when they got critical information, theres no duty, no obligation to share that with the Justice Department who is running a criminal investigation . You dont think they have to do that . They can sit on the information. The gentlemans time has expired. May i answer the question . Im happy to work with you and with your staff to try to get you information as we can. To answer your questions about my time. That wasnt the question. The question was, do you think the White House Counsels Office has a duty to share critical information about lost emails with the Justice Department when you knew that two months ago . Ing. Okay. I think the question is now understood. Can you answer that question, please. And my answer. Could she not be interrupted. My answer would be that im here as a witness about the facts that i learned at the irs. To the extent you have questions about activity at the white house, im happy to see what we can do to get you answers. Thats not what im prepared to talk about today. From the chair i need to advise when a question is asked and youre an attorney and hes asking if you have an opinion as to whether or not knowledge of a crime should be referred or the knowledge of something you think is a crime should be referred, it really is a yes or no or i do not feel. Im happy to answer that. I think knowledge of a crime should be referred to the fbi, yes. Thank you very much. I thank you. The next is the patient gentle lady from illinois, miss duckworth. Thank you, mr. Chairman. Miss oconnor, has it been determined that the crashed hard drive was a crime . Not as far as i know. Thank you. So when the white house lets go back. Last night, commissioner cos ca ca nen testified that he found out about the crashed hard drive in april of this year. Were you working at the white house at that time . I was not. When did you start at the white house . Just about a month ago. About a month ago. Middle of may. Yes. So you would would you have any information in the prior to the middle of may or in would the wous have called you and told you did it receive information or did not receive information from the irs before you started working there . Nobody called me from the white house to tell me they had received information from the irs. So you would not have known. The current commissioner testified that he only learned in april that the crash had happened and that in many that will process, they were still trying to recover some of the lost emails. In fact, they have managed to recover some of the emails that were lost because even though they were crashed and lost from the from account, miss lerners account, they were actually found not to accounts of the 82 custodial accounts confident people that received the emails and they were sort of going lieu that process. Its by no means complete but they were going through the process. This happened in april. Would you have had any knowledge of of that . I didnt have any knowledge of that in april. I do think that the measures that they described that they went through the sound exhaustive and appropriate. Lets go back to the five months worked at the irs. My colleague indicated that there had been previous testimony, you were identified as the person in charge of the employees whose job it was to produce the documents that had been requested by the various committees. Did you write the evaluations for all of those employees . None of them directly reported to me. My rowe was as an advisor. I did my best to advise them and help them and work with them and work with the committees and essentially make sure that the team that was working day to day all day long you know to do this all night long, i mean they worked very, very long hours knew what the priorities were for which employees material was going to be produced, what the search terms were supposed to be. Many of the investigating committees including this one had specific requests, please get me the bolo spreadsheets or the training materials or what not. I tried to facilitate that and help the team figure out how to prioritize what reviewerers were looking at what materials it could move quickly. So i played a role but i didnt write any performance evaluations because none of them directly reported to me. You played an advisory role but had no direct responsibilities in terms of evaluation them, directing them how they should go about doing the data gathering. You simply advised them as they were going through the process and then your job was to report back to mr. Werfel how on the progress of the effort. Is that correct . I dont want to leave the impression i didnt work closely with him. Dy. I was not their direct supervisor. Thank you. Mr. Pharoah, i would like to get a little bit more im interested in the cap stone process. I want to make sure we give that enough of a attention. One of the things that really as towned me last night was when i learned that only records that irs employees determine relevant would ob printed out and then those would be archived. But it was up to the individual employees to decide what would be and what would not be. Im looking at the National Archives and Record Administration pull bulletin 201302, titled guidance on a new approach to managing email records, which talks about cap stone and mr. Chairman, id like to have this entered into the record. Without objection, so ordered. Thank you. Point eight it actually says talks about preaccession and policy that talks about how preaccessionening if that were to be conducted would mean that you would actually he assume physical custody copy of all the records usually well before it is time to assume legal custody. Can you describe that process and how that would interact with the individual employees or whether that takes them out of the picture . I will take that. Im sorry, thank you. With the preaccessioning policy, we want to offer agencies the opportunity to transfer physical custody of email records to us so that we can ensure their preservation at the National Archives so that they are not you know, in any kind of danger or anything in an agency. So this is a way to ensure adequate preservation of archival records 2 to 3 of records that agencies create that have permanent value that would come to the National Archives, wed bring them in through that policy and maintain them physically and then at the time of transfer which may be in 15 or 20 or 30 years after that date, of irtheir creation, then make them available through the National Archives access programs. So once you have it, then those irs employees, for example or whatever agency it is couldnt delete the copy that you have, correct . They would be entrusted to the National Archives itself in our physical custody even though they would still be in the legal custody of the irs. My times up mr. Chairman. I yield back. Id ask unanimous consent that the press release from the treasury Inspector General for Tax Administration tigda dated november 21st, 2013, be placed in the record without objection, so ordered. Its entitled increased oversight is needed of the Internal RevenueServices InformationTechnology Hardware maintenance contract, and it goes into the tens it of millions of dollars that were spent in 2012 fiscal year on maintenance that was neither needed nor was it performed. We now go to the gentleman from michigan, mr. Wahlberg. Than