House GOP aims at IRS headquarters
By: John Bresnahan and Lauren French
June 3, 2013 11:24 PM EDT
House Republicans are seeking to shift the focus of their wide-ranging investigation into the Internal Revenue Service from “rogue agents” in Cincinnati to IRS headquarters in Washington, and ultimately, the Obama administration.
Investigators from the House Ways and Means Committee are now eyeing Joseph Grant — a top IRS official who officially retired on Monday — and his role, if any, in efforts to target conservative nonprofits. House Oversight and Government Reform Committee Chairman Darrell Issa has claimed that the IRS agents’ actions “were directly being ordered from Washington.”
Grant could prove a key steppingstone in the GOP drive to link the IRS controversy to officials inside the Obama administration. Based in D.C., Grant was the head of the Tax Exempt and Government Entities Division until he announced his decision to leave the IRS last month.
By linking the scandal to Washington-based officials, Issa and other House Republicans hope to prove that the targeting of conservative groups was politically motivated and not just the result of bureaucratic bumbling by Cincinnati officials operating without proper supervision.
Grant and former acting IRS Commissioner Steven Miller are the only top agency officials to step down since the scandal broke.
“He is definitely someone we’ve been interested in,” a Ways and Means Committee staffer involved in the IRS probe said of Grant, speaking on condition of anonymity. “Our investigation has been looking at all of the players and Joseph Grant was in charge of the exempt organization division, above [Director of Exempt Organizations Lois] Lerner. Clearly, his knowledge or however he was involved, whether it was telling people to cut it out … that is something we’re looking at … He is definitely involved in the same way Miller and Lerner are involved, but we don’t have a good grasp on the role.”
Grant could not be reached for comment for this story.
The IRS office in Cincinnati — which fell under Grant’s authority — processed applications from nonprofit groups for tax-exempt status. From 2010 to 2012, IRS employees in Cincinnati focused on conservative groups with words like “tea party” and “patriot” in their names and sent them questionnaires seeking additional information, or allegedly “slow-walked” formal approval of the groups’ applications.
Grant was above Lerner in the IRS hierarchy. Lerner, a key player in the scandal, declined to testify during a House Oversight hearing into the scandal on May 23, invoking her Fifth Amendment-right not to incriminate herself. The Justice Department is conducting a criminal investigation into the IRS’s treatment of conservative nonprofit groups, although that is still in its initial stages.
During a Monday hearing with Danny Werfel, the new acting IRS commissioner, House Appropriations Committee Chairman Hal Rogers (R-Ky.) singled out both Grant and Lerner as part of a group of top IRS officials who received tens of thousands of dollars in performance bonuses even as the targeting effort was under way in Cincinnati. Grant got nearly $84,000, while Lerner was awarded $42,000, Rogers said.
“Key figures of the current scandal got bonuses,” Rogers complained.
Grant, who joined the agency in 2005, told the IRS inspector general that he found out about the targeting of conservative groups on April 26, 2012. But he did not inform Congress of those improper actions in four letters sent to lawmakers during 2011 and 2012. That includes a letter on May 23, 2012, weeks after Grant learned what was going on in the Cincinnati office.
Grant also acknowledged in his response to questions from the inspector general’s office that the growing scrutiny of nonprofit groups came because of the increased spending on elections, not because of a dramatic increase in the number of organizations applying for nonprofit status, which is what other IRS officials have claimed.
“In February 2010, activity in the area of significant spending by 501(c)(4) organizations seeking to influence elections began to increase,” Grant told the inspector general’s office in November 2012. IRS agents in Cincinnati then created a “BOLO list,” meaning “be on the lookout” for applications that included terms such as “tea party.”
Grant is a former House Ways and Means Committee staffer having served on the Oversight and Social Security subcommittees. He also did a stint as chief operating officer and a deputy executive director of the Pension Benefit Guaranty Corp.
“I think this is one of those situations where it’s now coming out that Washington was more involved than we were initially told,” said a lobbyist familiar with the IRS probe. “This stuff comes from the top down on everything, that’s just how they [the IRS] work. Some guy in Cincinnati is not going to benefit from this. This has to come from somewhere else.”
The National Review reported on Monday that congressional investigators are also closely scrutinizing William Wilkins, the IRS chief counsel, and his deputies, as part of their probe. Wilkins’s office was made of aware of the targeting of conservative groups in August 2011, but it’s not clear — and Obama administration officials have denied — that Wilkins was personally told of the effort at that time.
The Ways and Means Committee will hold a hearing on Tuesday with six conservative groups that were targeted by the IRS.
Issa, who has ignited a war of words with Obama allies after calling White House spokesman Jay Carney a “paid liar” over his comments on the scandal, has a Thursday hearing regarding $50 million spent by the IRS to pay for employee conferences.
Issa’s comments on Carney — as well as his decision to release partial transcripts from his panel’s interviews with IRS employees — has quickly become the center of attention in the media during the scandal, as is so often the case with the California Republican.
Maryland Rep. Elijah Cummings, the top Democrat on the Oversight Committee, slammed Issa for releasing only partial transcripts prior to his appearance on a Sunday talk show.
“Chairman Issa’s reckless statements today are inconsistent with the findings of the inspector general, who spent more than a year conducting his investigation,” Cummings said in a statement. “Rather than lobbing unsubstantiated conclusions on national television for political reasons, we need to work in a bipartisan way to follow the facts where they lead and ensure that the IG’s recommendations are fully implemented.”
Former White House aides quickly came to Carney’s defense. David Plouffe, a former senior Obama staffer, called Issa “ethically loose” in a Sunday Twitter post.
“Strong words from Mr Grand Theft Auto and suspected arsonist/insurance swindler. And loose ethically today,” Plouffe tweeted. Issa and his brother were charged with stealing a car in the 1970s, but prosecutors later dropped charges. Issa later made a fortune as a car-alarm manufacturer.
Former White House spokesman Robert Gibbs blasted Issa as well, accusing the chairman of “doing nothing more than politicizing this event.”
Carney himself would not respond directly to Issa’s comment. “I’m not going to get into a back-and-forth with Chairman Issa,” Carney said.