House Oversight and Government Reform Committee Chairman Darrell Issa said he is “deeply disappointed” that a key Internal Revenue Service official refused to answer his panel’s questions on Wednesday about her involvement in the agency’s targeting scandal, and warned that the official may be held in contempt of Congress.
“She can be held in contempt,” Issa said on Fox’s “Hannity.” “Ultimately we are very fortunate that most people come voluntarily before our committee.”
Lois Lerner, a mid-level official at the center of the controversy over IRS treatment of small-government groups, invoked her constitutional right not to testify in a prepared statement that may have gone too far in proclaiming her innocence.
Issa said Lerner might be recalled to testify since she appeared to waive her constitutional right against self-incrimination in her opening statement in which she disavowed any wrongdoing, criminal or otherwise.
"I am very proud of the work that I have done in government," Lerner said, reading from the statement at the hearing. "I have not done anything wrong. I have not broken any laws. I have not violated any IRS rules or regulations and I have not provided false information to this or any other congressional committee. And while I would very much like to answer the committee’s questions today, I’ve been advised by my counsel to assert my constitutional right not to testify or answer questions related to the subject matter of this hearing.”
The U.S. Constitution’s Fifth Amendment allows people to stay silent to avoid incriminating themselves, but constitutional law experts, including famed attorney and Newsmax contributor Alan Dershowitz, insist that Lerner may have inadvertently waived that right by declaring her innocence of any wrongdoing.
Issa noted that Rep. Trey Gowdy of South Carolina raised the issue as a point of order and the committee is now awaiting a legal ruling from counsel.
“It does appear as though clearly under precedent, her making these statements — these denials on the subject for which she was subpoenaed, in addition to some other documents she authenticated afterwards — crosses the line by quite a bit,” said Issa.
He said that since the hearing was recessed rather than adjourned, the committee reserves the right to recall Lerner. But even that’s not the full extent of her potential exposure.
“There’s one thing that’s a bigger problem though is if she waived her rights — as we believe she did — and Trey Gowdy made a motion that she did, the same thing will hound her in criminal investigations — the Department of Justice — anywhere else she goes,” Issa told host Sean Hannity. “If she’s committed some sort of a crime, she’s waived her rights relative to criminal prosecution which is different than us but same problem.
Rep. Elijah Cummings of Maryland, the panel's top Democrat, said he didn't think Lerner waived her rights. "We should give her the benefit of the doubt," he told reporters.
The actions of employees who worked for Lerner erupted into a scandal at the tax agency that has cost two people their jobs and prompted four congressional inquiries and a criminal probe. Small-government groups seeking tax-exempt status, particularly those with "tea party" or "patriot" in their names, were subjected to extra scrutiny, and IRS officials were unable to stop the selective screening for 18 months.
Issa and other lawmakers have accused Lerner of making false statements to Congress, which is a crime. She said she had done no such thing.
Issa also said today that the inspector general who examined the matter "failed" to inform Congress after learning what had happened.
Issa, as he opened the third congressional hearing on the IRS, criticized the agency for not informing lawmakers what it knew after senior officials learned about its actions in May 2012.
"Congress was misled," Issa said. "The American people were misled."
The Treasury inspector general for tax administration, Russell George, released a May 14 report showing that the IRS had more closely examined tax-exempt groups whose names included words such as "tea party" and "patriot."
George said he hasn’t been able to determine who came up with those criteria.
"We have had some difficulty in terms of getting clarity from some of the employees we've interviewed," he said, adding that further inquiries could make those employees more forthcoming.
George said on Wednesday that he waited to ensure the report would be fair and that the IRS could respond to allegations.
"It would be impractical for us to give you partial information which may not be accurate," he said.
Issa requested the report last year after tea party groups complained about the questionnaires they were receiving from the IRS. He said inspectors general are required to inform lawmakers of significant issues and that he had specifically asked for such an update in August 2012.
Douglas Shulman, who was commissioner of the IRS until November, had told lawmakers in March 2012 that there was "absolutely" no targeting.
Testifying today, Shulman said he stands by his decision not to tell Congress what he knew, partly because the activity had been stopped by then and he knew that the inspector general was investigating.
"I didn’t have anything concrete," he said. "I didn’t have a full set of facts to come back to Congress or the committee with."
At yesterday’s hearing, Shulman refused to apologize. Today, he said, "I’m very sorry that this happened while I was at the Internal Revenue Service."
Cummings criticized "gross incompetence and mismanagement" at the IRS for failing to have clear rules for how to review applications for tax-exempt status.
Organizations seeking tax-exempt status under section 501(c)(4) of the U.S. tax code don’t have to disclose their donors. Under Treasury rules, such groups can’t have politics as their primary purpose.
Oversight committee staff members on Tuesday interviewed Holly Paz, a mid-level IRS official.
The committee also released transcripts of written answers that two IRS officials — Lerner and Joseph Grant — provided to the inspector general.
The answers are consistent with the findings in the inspector general’s report. Parts of the responses, including Lerner’s explanation of the origins of the tougher scrutiny, are redacted.
Separately, the IRS disclosures triggered allegations that anti-abortion groups were subjected to discrimination by the agency. The Coalition for Life of Iowa said on its website that after it sought 501(c)(3) tax-exempt status in 2008, the IRS offered tax-exempt status only if the group pledged not to picket Planned Parenthood Federation of America, which provides abortion services.
Iowa Republican Sen. Charles Grassley, in an interview on Wednesday called the IRS request "a violation of free speech" amounting to intimidation.
Protests outside the Planned Parenthood clinic in Cedar Rapids are an essential part of the group’s mission, Susan Martinek, its president, said in a telephone interview. After getting legal help, the group obtained tax-exempt status in 2009 without the no-protest requirement, she said.
At a House hearing last week, Illinois Republican Representative Aaron Schock asked acting IRS Commissioner Steven Miller why the agency asked a Texas anti-abortion group in 2011 if its educational materials presented "both sides of the issues." Miller, who was forced out as IRS chief on May 15, told lawmakers "it would surprise me" if "that question was asked."
An IRS spokesman didn’t immediately respond to a request for comment.
Bloomberg News contributed to this report.
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