IRS Hearing: Issa Scolds Treasury IG, Shulman Takes Beating For Misleading Congress

Rep. Darrell Issa, R-Calif., scolded the Treasury inspector general in an IRS hearing Wednesday for failing to inform his committee in a timely manner, ahead of a report released last week, about an investigation into the scrutiny of conservative groups.

Issa is chairman of the House Committee on Oversight and Government Reform. He told J. Russell George, Treasury inspector general for tax administration, that Congress has the right to “continuous information.”

“The statute as written does not give you the ability to -- or any IG -- to use us as a whipping boy when you want to and in fact keep us in the dark until an investigation is completed,” Issa told George.

George explained to Issa that there are established procedures when carrying out an audit. He also said the revenue agency needed to be given the chance to respond to his findings. To ignore the procedures would be counterproductive, George said.

“I think it would behoove all of us to make sure that accurate information is given to Congress so that we don’t act precipitously,” he said.

But George wasn’t the only one being admonished in Wednesday’s hearing. A clearly frustrated Issa also butted heads with former IRS Commissioner Douglas Shulman for not being able to provide Congress with what lawmakers deemed sufficient answers to pressing questions.

Shulman was commissioner between March 2008 and November 2012. It was on his watch that nearly 300 groups, including conservative organizations applying for tax-exempt status, were singled out by IRS employees and targeted based on their names. Employees were on the lookout for nonprofits with names that included words like “tea party” and “patriots.” Organizations with a mission to educate about the Constitution and the Bill of Rights were also on the radar. So, too, were those whose mission would deal with limiting or expanding government.

Issa found it incredible that Shulman did not know “something was rotten in your shop.”

“It was your job to make sure people weren’t abused,” Issa told Shulman. “It was your job to stop abuse.”

Shulman maintained that he had no idea of the “scope and severity” of the issue at the time.

That was not enough for Rep. Elijah Cummings, D-Md., the committee's ranking Democrat, and others who grilled Shulman over why he didn’t return to Congress after testifying last March about the agency’s subjecting tea party groups to special scrutiny. Shulman told the House Ways and Means Committee last year that the agency didn’t take part in such action.

Shulman acknowledged before lawmakers Wednesday that he recognizes the findings in the inspector general’s report are a very serious matter. But he said that as a political appointee, he wanted to have the responsible officials at the agency handle the issues.

“I have no memory of having knowledge of what was on the list and how it was being used,” Shulman told lawmakers. The former commissioner added that he was informed at the time the list was no longer in use and that the inspector general was looking into the matter.

“Once the IG has this, my practice was to support, not to interfere,” Shulman said.

Cummings reminded Shulman that it was not a matter of interference on his part. Rather, it is the fact that he never returned to Congress to “set the record straight.”

“I told you before,” Shulman said, “I think I took the proper course.”

That was enough to set off Rep. Stephen Lynch, D-Mass., who later accused Shulman of allowing Congress to proceed under false impression.

“Sir, you misled Congress,” Lynch told Shulman. “Make no mistake about it. … You never came back to Congress to straighten out that impression. That’s inexcusable. It really is.”