Politics & Policy

An Audit, Not an Investigation

The Treasury inspector general admits his report was far from exhaustive.

It seems that the more we learn about the Treasury Department inspector general’s audit of the IRS, which found evidence that the agency had been inappropriately targeting conservative groups, the less we actually know.

J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA), has testified before three congressional committees since publishing his report on May 14, and answered questions about its findings. But because lawmakers seemed far more interested in grilling the current and former IRS commissioners Steven Miller and Douglas Shulman, George had not faced particularly rigorous questioning until Wednesday, before the House Oversight Committee.

George has repeatedly emphasized that he conducted an audit, not a full investigation. “Suffice it to say this matter is not over as far as we are concerned,” he told members of the Senate Finance Committee on Tuesday. “Subsequent action will be taken.” The auditing process was hardly exhaustive, and its findings are not exactly conclusive, George admitted. Many aspects of the scandal are “still to be determined,” he said, such as whether the targeting process was limited to the IRS field office in Cincinnati or extended to superiors in Washington, D.C. (It appears to have been the latter.) George also said he received “conflicting information” from IRS employees over the course of the audit.

That hasn’t stopped Miller, Schulman, and White House press secretary Jay Carney from invoking it in their defense, especially the part where the IG found no evidence that the IRS targeting was “politically motivated.” Whether that’s actually true remains to be seen.

As it turns out, those findings were based on interviews with the employees believed to have been responsible for the targeting. Employees were not interviewed under oath, and were questioned in the presence of Holly Paz, the IRS director of rulings and agreements. Paz is an Obama donor, and was recently interviewed by the oversight committee regarding her knowledge of the agency’s targeting of conservative groups, which appears to be quite extensive. She may have even played a role in the targeting, according to committee chairman Darrell Issa (R., Calif.). Issa told George that it was “inappropriate for any inspector looking for wrongdoing to include individuals in the agency who could [have] and we now believe [have] participated in this activity.”

Paz had previously taken part in an internal IRS investigation that concluded in May 2012, around the same time George informed Treasury Department officials he was conducting an audit. The internal investigation concluded that the agency had wrongfully targeted conservatives, yet IRS officials declined to disclose these results to Congress. Issa said the request to have Paz “sit in” on employee interviews with the inspector general came from either Paz herself, or from Lois Lerner, the IRS director of the exempt-organizations office who refused to testify on Wednesday.

Asked if such an arrangement was “routine,” George again emphasized that he merely conducted an audit, not a full-scale investigation, but suggested that having a second person in the room during the interviews could be beneficial, and help “click the memory” of the subject being questioned. In any event, “hindsight is 20/20,” George conceded.

The oversight committee released a series of e-mails Wednesday that raise further questions about the IG audit. The correspondence between committee staff and TIGTA staff suggests that the findings of the audit were initially scheduled to be available to the committee by September 2012, before the upcoming election. However, TIGTA staff kept pushing that date back, until the report was ultimately published on May 14, some nine months later. TIGTA’s explanation for the delay — that the inspector general is “leaving no stone unturned,” as written in a February 22, 2013, e-mail — seems at odds with George’s own admissions that his “audit not investigation” was not entirely thorough.

As with the two previous congressional hearings into the IRS scandal, more questions were raised than were answered on Wednesday. Lerner’s decision to plead the Fifth certainly did not help on this front. Chairman Issa said in his opening statement that the committee “will not stop this investigation until the IRS is fixed.” That could take a long time.

— Andrew Stiles is a political reporter for National Review Online.

Andrew Stiles — Andrew Stiles is a political reporter for National Review Online. He previously worked at the Washington Free Beacon, and was an intern at The Hill newspaper. Stiles is a 2009 ...

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