The Internal Revenue Service spent $17,000 to hire a speaker who painted pictures of Michael Jordan and U2 singer Bono to motivate employees at a 2010 conference in California, the agency’s inspector general said.
The tax agency spent about $49 million on 225 conferences from fiscal 2010 to 2012, including $4.1 million on the Anaheim, California meeting, said the inspector general report released today. In Anaheim, some IRS employees stayed in rooms typically costing as much as $3,500 a night, and the agency paid $135,350 to speakers, including $17,000 for a lecture by Erik Wahl on “The Art of Vision,” the report said.
The IRS contract said Wahl was “uniquely qualified” because of his “artistic abilities and his presentation skills,” the report said. “In each presentation, he will create a unique painting that reinforces his message of unlearning the rules, breaking the boundaries, and freeing the thought process to find creative solutions to challenges.”
The amount the IRS spent on conferences is adding to criticism of the agency, which is being investigated after disclosing that it gave extra scrutiny to small-government groups that sought tax-exempt status. The agency is under investigation by six congressional committees and the Justice Department on its review of those groups.
The House Oversight and Government Reform Committee plans a June 6 hearing on the IRS spending.
The Anaheim meeting was the most expensive IRS conference held between fiscal 2010 and 2012, according to the inspector general’s report.
The IRS “specifically requested numerous upgraded rooms and other concessions” from the Anaheim hotels, the report said. The costs could have been reduced if the tax agency had instead negotiated for a lower room rate, it said.
IRS officials used money intended for hiring more enforcement personnel to cover some of the Anaheim conference’s costs, the review said.
“The wasteful Anaheim conference is one example of a culture of excess that plagues the IRS and many federal agencies,” Darrell Issa, a California Republican and chairman of the House Oversight panel, said in a press release. “Taxpayer money meant to pay for a core agency mission, the hiring of more enforcement personnel, was instead spent on a lavish party.”
An IRS fact sheet said the Anaheim meeting’s focus included safety and security training after a suicide attack on an IRS facility in Austin, Texas, earlier that year. The agency no longer hires paid outside speakers, it said.
The inspector general’s review found no fraud or misconduct, the agency said. “Receipt of room upgrades, and the welcome reception and breakfast provided by the hotel, were complimentary and did not entail the use of any additional government resources,” the IRS said.
The inspector general said the agency paid about $34,000 to house local employees at hotels during the conference and paid for two top officials to stay in presidential suites that typically cost between $1,499 and $3,500 a night.
The Anaheim gathering, for workers overseeing small businesses and self-employed taxpayers, featured an IRS-produced video parody of Star Trek. Faris Fink, now the commissioner for that division, played Spock in the spoof.
The IRS constructed a mock set at its television studio in New Carrollton, Maryland, at a cost of $2,400 to make the Star Trek video, the report said. Executives featured in the video bought their costumes with personal funds, it said.
Agency employees also participated in a “dance party” video that mentioned plans for the Anaheim conference.
Some employees received prizes, including 24 tickets to two Los Angeles Angels baseball games, which IRS management said were provided by the hotels. The agency spent more than $64,000 on gifts and trinkets for employees who attended the conference, according to the report.
IRS officials estimated the event for about 2,600 employees cost $4.1 million, according to the inspector general’s report. The agency’s auditors were unable to verify the cost figure, the report said.
“Procedures at the time of the conference did not require IRS management to track and report actual conference costs,” the review said. As a result, the inspector general “could not validate the conference cost.”
Danny Werfel, acting IRS commissioner, said in a statement last week that the event was “an unfortunate vestige from a prior era” and the agency has since cut training and travel expenses.
The General Services Administration and the Department of Veterans Affairs had similar audits last year of employee conference spending. General Services Administration expenditures included $823,000 for a Las Vegas event featuring a clown, a mind reader and a $75,000 bicycle building exercise. Martha Johnson, the GSA administrator, resigned.
Department of Veterans Affairs employees improperly accepted gifts such as massages and incurred $762,000 in unauthorized and wasteful expenses tied to two conferences in Florida, the agency’s inspector general reported last year. John Sepulveda, the VA’s assistant secretary for human resources, resigned the day before the report was released.
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