[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
IMPEACHMENT ARTICLES REFERRED ON
JOHN KOSKINEN (PART III)
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 21, 2016
__________
Serial No. 114-89
__________
Printed for the use of the Committee on the Judiciary
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COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
LAMAR S. SMITH, Texas ZOE LOFGREN, California
STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas JUDY CHU, California
JIM JORDAN, Ohio TED DEUTCH, Florida
TED POE, Texas LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
C O N T E N T S
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SEPTEMBER 21, 2016
Page
OPENING STATEMENTS
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 1
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 2
WITNESS
The Honorable John Koskinen, Commissioner, Internal Revenue
Service
Oral Testimony................................................. 5
Prepared Statement............................................. 7
APPENDIX
Material Submitted for the Hearing Record
Material submitted by the Honorable John Conyers, Jr., a
Representative in Congress from the State of Michigan, and
Ranking Member, Committee on the Judiciary..................... 78
Material submitted by the Honorable Sheila Jackson Lee, a
Representative in Congress from the State of Texas, and Member,
Committee on the Judiciary..................................... 83
IMPEACHMENT ARTICLES REFERRED ON JOHN KOSKINEN (PART III)
----------
WEDNESDAY, SEPTEMBER 21, 2016
House of Representatives
Committee on the Judiciary
Washington, DC.
The Committee met, pursuant to call, at 10:07 a.m., in room
2237, Rayburn House Office Building, the Honorable Bob
Goodlatte (Chairman of the Committee) presiding.
Present: Representatives Goodlatte, Sensenbrenner, Smith,
Chabot, Issa, Forbes, King, Franks, Gohmert, Jordan, Poe,
Chaffetz, Marino, Gowdy, Labrador, Farenthold, Collins,
DeSantis, Walters, Buck, Ratcliffe, Trott, Bishop, Conyers,
Nadler, Lofgren, Jackson Lee, Cohen, Johnson, Chu, Deutch,
Gutierrez, Bass, Richmond, DelBene, Jeffries, Cicilline, and
Peters.
Staff Present: (Majority) Shelley Husband, Chief of Staff &
General Counsel; Branden Ritchie, Deputy Chief of Staff & Chief
Counsel; Zach Somers, Parliamentarian & General Counsel; Paul
Taylor, Chief Counsel, Subcommittee on the Constitution and
Civil Justice; (Minority) Perry Apelbaum, Staff Director &
Chief Counsel; Danielle Brown, Parliamentarian & Chief
Legislative Counsel; Aaron Hiller, Chief Oversight Counsel;
David Greengrass, Counsel; and Veronica Eligan, Professional
Staff Member.
Mr. Goodlatte. Good morning. The Judiciary Committee will
come to order. Without objection, the Chair is authorized to
declare a recess of the Committee at any time.
We welcome everyone to this morning's hearing on the
``Impeachment Articles Referred on John Koskinen (Part III),''
and I will begin by recognizing myself for an opening
statement.
The Constitution sets forth a system of checks and balances
which grants each branch of government tools to help ensure
that no one branch of government attains too much power. The
legislative branch's tools include the power to write the laws,
the power of the purse, the impeachment power, the power to
censure, among others. These tools empower Congress to exert
oversight over the executive and judicial branches, including
rooting out corruption, fraud, and abuse by government
officials, and taking further disciplinary action on behalf of
the American people when warranted.
The duty to serve as a check on the other branches,
including against corruption and abuse, is a solemn one, and
Congress does not and must not take this responsibility
lightly. That is why this Committee has scheduled this hearing
today.
In 2013, the American people first learned that their own
government had been singling out conservative groups for
heightened review by the IRS as they applied for tax-exempt
status. This IRS targeting scandal was nothing short of
shocking. It was a political plan to silence the voices of
groups representing millions of Americans. Conservative groups
across the Nation were impacted by this targeting, resulting in
lengthy paperwork requirements, overly burdensome information
requests, and long, unwarranted delays in their applications.
In the wake of this scandal, then-IRS official Lois Lerner
stepped down from her position, but questions remain about the
scope of the abuses by the IRS.
The allegations of misconduct against Mr. Koskinen are
serious and include the following. On his watch, volumes of
information crucial to the investigation into the IRS targeting
scandal were destroyed. Before the tapes were destroyed,
congressional demands, including subpoenas for information
about the IRS targeting scandal, went unanswered and were not
complied with. Mr. Koskinen provided misleading testimony
before the House Oversight and Government Reform Committee
concerning IRS efforts to provide information to Congress.
These are very serious allegations of misconduct, and this
Committee has taken these allegations seriously. Over the past
several months, this Committee has meticulously pored through
thousands of pages of information produced by the investigation
into this matter. On May 24, this Committee held a hearing at
which the House Oversight and Government Reform Committee
formally presented its findings and evidence to the Members of
this Committee. Then, on June 22, this Committee held a second
hearing to allow outside experts to assess and comment on the
evidence presented to the Committee at its May 24, 2016,
hearing and the options for a congressional response.
Today we hold a third hearing and hear from Mr. Koskinen
himself. I look forward to hearing from Mr. Koskinen today.
It is now my pleasure to recognize the Ranking Member of
the Committee, the gentleman from Michigan, Mr. Conyers, for
his opening statement.
Mr. Conyers. Thank you, Chairman Goodlatte, Members.
And I want to thank first Commissioner Koskinen for joining
us today on short notice and under these unusual circumstances.
Last week, a handful of my colleagues attempted to force a
vote on your impeachment, and when it appeared that they would
fall short of the necessary votes, that effort was abandoned
and this hearing was scheduled instead.
I hope that my colleagues now see what I see when I look
back at the history of impeachment in the House of
Representatives, which we all have an obligation to do. No
matter how you feel about a particular official, no matter what
we think of his or her agency, successful impeachments are
bipartisan efforts, and partisan attacks cloaked in the
impeachment process are doomed from the start.
Mr. Chairman, the effort to impeach Commissioner Koskinen
is destined to fail on both the merits and as a matter of
process, and if they somehow force this measure to the floor
again, I fear it will set a terrible precedent.
On the merits, the commissioner's critics simply have not
proved their case. In fact, every other investigation to have
examined these facts has refuted the charges against
Commissioner Koskinen. The Senate Finance Committee, in a
report that serves as the only bipartisan account of the
matter, found no evidence that the commissioner had intent to
mislead Congress at any time.
The Department of Justice ``found no evidence that any IRS
official acted based on political, discriminatory, corrupt, or
other inappropriate motives'' and, ``no evidence that any
official attempted to obstruct justice.''
The Treasury Inspector General for Tax Administration,
again, found no evidence to show that IRS employees had been
directed to destroy or hide information from Congress.
Despite these findings, some Members continue to insist
that the commissioner ``ordered 24,000 emails erased before
Congress could review them.'' Citing zero evidence to back the
claim, independent fact checkers rated this statement as
categorically false.
There is simply no evidence that the commissioner has acted
with intentional bad faith in his leadership of the Internal
Revenue Service. But even if there were some evidence of
wrongdoing, the push to impeach the commissioner on the House
floor without even basic due process in the Committee is wildly
misguided.
According to parliamentarians of the House past and
present, the impeachment process does not begin until the House
actually votes to authorize this Committee to investigate the
charges. In other words, this is not an impeachment hearing.
Merely including the word ``impeachment'' in the title doesn't
do the job at all. And at an actual impeachment hearing, the
commissioner would be represented by counsel and he would have
the right to present evidence, the right to question the
evidence presented against him.
In this case, by contrast, the commissioner has been denied
access to the transcripts of interviews conducted by the House
Oversight Committee, even though we are told that those
transcripts were key in forming the charges against him.
Many Members of this Committee are in the same position, I
might add. I am not alone in being skeptical of short process
or noting the importance of a full and independent
investigation by this Committee.
In 2006, Mr. Sensenbrenner, the gentleman from Wisconsin,
argued, ``Only after the House Judiciary Committee has
conducted a fair, thorough, and detailed investigation will
Committee Members be able to consider whether Articles of
Impeachment might be warranted.''
In 2010, Mr. Chairman, you expressed confidence in our
impeachment task force, because it had conducted an exhaustive
investigation. That investigation included, in your words,
``reviewing the records of past proceedings, rooting out new
evidence that was never considered in previous investigations,
conducting numerous interviews and depositions with firsthand
witnesses, and conducting hearings to take the testimony of
firsthand witnesses and scholars.''
All of that process is missing here. Yes, we have it within
our power to skip these steps, but what kind of precedence does
that set? Never in the history of this body have we impeached a
government official without first proving that he has acted in
deliberate bad faith. Never in modern practice have we declined
to provide the accused with the most basic due process, the
right to counsel, the right to present evidence, and the right
to question the evidence against him.
If the commissioner's critics have their way, I fear we
will have a new rule going forward. The House may impeach any
government official for any reason without supplying evidence
of deliberate wrongdoing, without an independent investigation,
and without regard to basic fairness toward the accused.
Forcing a vote in this manner will certainly not result in
the removal of the commissioner. Even if his critics succeed
here, senators of both parties have already stated their intent
to bury the matter. And in the process, I fear we will have
stripped our responsibilities of their weight and dignity and
turned impeachment from a constitutional check of last resort
into a tool of political convenience, and I cannot accept that,
and none of us should.
Commissioner Koskinen, thank you again for your willingness
to be here today. Stick to the law and the facts, and you will
be fine.
I yield back, Mr. Chairman, and I thank you.
Mr. Goodlatte. The Chair thanks the gentleman.
Without objection, all other Members' opening statements
will be made a part of the record.
We welcome our distinguished witness.
And, Commissioner, if you would please rise, I will begin
by swearing you in.
Do you swear that the testimony that you are about to give
shall be the truth, the whole truth, and nothing but the truth,
so help you God?
Thank you. Let the record show that the witness answered in
the affirmative.
Commissioner John Koskinen was sworn in as the 48th IRS
commissioner on December 23, 2013. Prior to his appointment,
Mr. Koskinen served as the nonexecutive chairman of Freddie Mac
from 2008 to 2012 and as acting chief executive officer in
2009. Previously, Mr. Koskinen served as president of the U.S.
Soccer Foundation, deputy mayor and city administrator of
Washington, D.C., assistant to the President, and chair of the
President's Council on Year 2000 Conversion, and deputy
director at the Office of Management and Budget. He holds a law
degree from Yale University of Law and a bachelor's degree from
Duke University.
Mr. Koskinen, you are welcome. Your entire testimony will
be made a part of the record, and we ask that you summarize
your testimony in 5 minutes. Your written statement, as I said,
will be made a part of the record. And you see a timing light
on the table. Please help us. We have a lot of Members with a
lot of questions to ask.
TESTIMONY OF THE HONORABLE JOHN KOSKINEN, COMMISSIONER,
INTERNAL REVENUE SERVICE
Mr. Koskinen. Thank you. Good morning, Chairman Goodlatte,
Ranking Member Conyers, Members of the Committee. Thank you for
the opportunity to answer questions here today.
I understand the extraordinary responsibilities entrusted
to this Committee. I appreciate both your willingness to hear
from me and the serious and fair-minded approach you have taken
on this charge of----
[Audio malfunction in hearing room.]
Mr. Koskinen. All right. Does that count against my time?
All right. Thanks. I will do my best today to answer your
questions, and I am committed to full cooperation. I recognize
the obligation all public servants share to be responsive to
Congress to the best of our abilities. That means listening and
responding to feedback and criticism, acknowledging mistakes,
and working diligently to improve.
Let me note at the outset how much I deeply regret our
inability to bring the (c)(4) issue to a close in a way that
satisfies all Americans and Members of Congress. I understand
the level of suspicion and distrust caused by the IRS' failure
to properly handle applications for social welfare status based
solely on the names of the organizations.
I took this job in large part to help restore confidence in
the IRS and to ensure that the agency never returned to the
unacceptable practices that had occurred before I arrived. I
believe we have made real progress during my tenure in ending
the practices that gave rise to the concerns, addressing
operational weaknesses, creating a culture of risk management,
and working to reassure taxpayers that our tax system treats
taxpayers fairly.
The tax system only works if taxpayers are confident that
the IRS will treat them fairly and that it doesn't make any
difference who they are, what organization or political party
they belong to, or whom they voted for in the last election.
This is an important principle to us at the IRS.
And no one, in addition, should have to wait years for an
answer to a question or a request for a determination of any
kind.
Congress also has a right to expect that reforms to restore
the public's trust in a nonpartisan and effective IRS will be
implemented fully. I have devoted my energies as commissioner
to that goal, and the inspector general has acknowledged that
real progress has been made in implementing all of his
recommendations. For instance, the IRS eliminated long ago the
use of the ``Be on the Lookout,'' or BOLO lists, as they are
known, that had resulted in the improper scrutiny of a number
of applicants as described in TIGTA's May 2013 report.
Mr. Goodlatte. Mr. Commissioner, I recommend you suspend
for the moment while we try to cure this problem.
Mr. Koskinen. All right.
[Audio malfunction in hearing room.]
Mr. Koskinen. Well, let's see how we do.
Mr. Goodlatte. Let's go ahead.
Mr. Koskinen. All right. As I noted, we have eliminated the
BOLO lists. The IRS has also offered an expedited approval
process for organizations that experience delays in the
processing of their applications for 501(c)(4) status.
Continuing our efforts to restore public confidence in the
IRS will remain my top priority every day that I am fortunate
enough to continue to serve.
I also understand there are significant remaining questions
on the minds of some Members about the IRS response to
congressional inquiries on my watch. I stand ready to answer
these questions today.
I responded honestly and in good faith as events unfolded,
particularly in response to the discovery that Lois Lerner's
hard drive had crashed in 2011. From the start, I directed IRS
staff to cooperate fully with Congress and to recover lost
information wherever possible, and I testified to the best of
my knowledge.
But the truth is, we did not succeed in preserving all of
the information requested and some of my testimony later proved
mistaken. I regret both of those failings.
I can also tell you that, with the benefit of hindsight,
even closer communication with Congress would have been
advisable. But my commitment is and always has been to tell you
and all Committees of the Congress the truth and to address
issues head on.
I accept that it is up to you to judge my overall record,
but I believe that impeachment would be improper, it would
create disincentives for many good people to serve, and it
would slow the pace of reform and progress at the IRS.
Again, I appreciate the opportunity to be here and look
forward to answering your questions.
[The prepared statement of Mr. Koskinen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
__________
Mr. Goodlatte. Thank you, Commissioner.
We will now proceed under the 5-minute rule with questions,
and I will begin by recognizing myself.
The report of investigation by the Treasury Inspector
General for Tax Administration, or TIGTA, concludes in its 2015
report regarding congressional requests for emails that, ``The
investigation revealed that the IRS did not put forth an effort
to uncover additional responsive emails. None of the IRS
employees involved had been asked prior to the June 30, 2014,
request from TIGTA to find any backup tapes or the server hard
drives associated with the NCFB Exchange 2003 server, which
would have contained responsive Lerner emails. The
investigation determined that if the IRS would have conducted a
search for the existence of backup tapes, they would have found
the necessary backup tapes that contained Lerner's missing
emails prior to when those tapes were degaussed in March
2014.''
Mr. Koskinen, is there anything inaccurate in that finding
of the Treasury Inspector General for Tax Administration, and
if so, what is inaccurate about it?
Mr. Koskinen. No, nothing inaccurate in that. I would be
happy to explain to you my understanding of how that happened,
but the report is accurate.
Mr. Goodlatte. Do you believe that it was the duty of the
IRS commissioner to, as the Treasury Inspector General for Tax
Administration stated, put forth an effort to uncover
additional responsive emails to Congress' inquiries, yes or no?
Mr. Koskinen. Yes.
Mr. Goodlatte. The report of investigation by the Treasury
Inspector General for Tax Administration also concluded in its
2015 report as follows: ``The investigation revealed that the
backup tapes were destroyed as a result of IRS management
failing to ensure that a May 22, 2013, email directive from IRS
chief technology officer concerning the preservation of
electronic email media was fully understood and followed by all
of the IRS employees responsible for handling and disposing of
email backup media.''
Is there anything inaccurate in that finding of the
Treasury Inspector General for Tax Administration?
Mr. Koskinen. No.
Mr. Goodlatte. Do you believe that it was the duty of the
IRS commissioner to, as the Treasury Inspector General for Tax
Administration stated, to ensure that a May 22, 2013, email
directive from IRS technology officer concerning the
preservation of electronic email media was fully understood and
followed by all of the IRS employees responsible for handling
and disposing of email backup media? And I would appreciate a
yes-or-no response to that.
Mr. Koskinen. Yes, to the extent the IRS commissioner has
control over that.
Mr. Goodlatte. The official IRS Web site in its section
describing you, Commissioner John Koskinen, states, ``Mr.
Koskinen manages an agency of about 90,000 employees and a
budget of approximately $10.9 billion.'' You are the top
manager at the IRS, so when the Treasury Inspector General for
Tax Administration concluded that the IRS did not put forth an
effort to uncover additional responsive emails and that the
backup tapes were destroyed as a result of IRS management
failing, the inspector general was referring to you, the
manager of the IRS. Is that correct?
Mr. Koskinen. As the leader of the organization, I am
responsible for the management of it. There are a lot of
managers there, but ultimately any CEO, any director of the
organization is responsible for its operations.
Mr. Goodlatte. So after you received the congressional
subpoena which affirmatively required that you protect all
emails related to this subject, what affirmative steps did you
take personally to ensure all responsive documents were
preserved?
Mr. Koskinen. I met with senior executives and was assured
that an appropriate document retention order had been put out
the prior year. The woman acting as my counsel at the time sent
a follow-up memo in February to the IT department to remind
them that they ensure that all of the available information be
preserved, and I was assured that that was being done.
Mr. Goodlatte. Did you send anyone to different locations
where emails are degaussed or destroyed, if you will, and
instruct them not to destroy any emails without first going
through the persons responsible for your responsibility to
respond to the subpoena and say, make sure that no emails are
destroyed without first verifying that they are not related to
this congressional subpoena?
Mr. Koskinen. I did not personally do that. I was assured
that managers understood the impact of the document retention
request or order in 2013 before I arrived, and the follow-up in
February 2014, I was assured, would make it clear to employees
and managers everywhere to preserve documents. We were at that
point 8 months into a massive document search, it seemed to me
everybody would understand the goal. And the instruction to
people was to produce all of the information as quickly as we
could wherever it was.
Mr. Goodlatte. But apparently that message didn't get to
the people who actually do the work of destroying emails.
Mr. Koskinen. It apparently got to everyone but two
employees on the midnight shift in Martinsburg. And at the time
that was revealed, which was a year after the hearings in 2014,
I said that that was a mistake, it shouldn't have happened, and
I took responsibility for it.
Mr. Goodlatte. My time has expired. Thank you.
The Chair recognizes the gentleman from Michigan for his
questions.
Mr. Conyers. Thank you, Chairman Goodlatte.
And welcome again to the Committee, sir.
Yesterday, the Chairman and I received a letter from our
colleagues and some 32 signatures.
And I ask, Mr. Chairman, that this letter be made a part of
the record.
Mr. Goodlatte. Without objection, it will be made a part of
the record.
Mr. Conyers. Commissioner Koskinen, this letter cites the
example of one of our colleagues who claims, ``The head of the
IRS ordered 24,000 emails erased before Congress could review
them.'' Commissioner, did you order the destruction of 24,000
emails in an attempt to obstruct congressional investigators?
Mr. Koskinen. I did not.
Mr. Conyers. Of course you didn't. According to PolitiFact,
there is no, zero evidence to support this claim.
The letter also cites to an exchange of letters which J.
Russell George, the Treasury Inspector General for Tax
Administration.
Mr. Chairman, I ask that this letter be made a part of the
record as well.
Mr. Goodlatte. Without objection, it will be made a part of
the record.
Mr. Conyers. Thank you.
In 2015, the inspector general released a report that
concluded no evidence was uncovered that any IRS employees had
been directed to destroy or hide information from the Congress.
This same conclusion was independently reached by the Senate
Finance Committee and the Department of Justice. Last week, my
colleagues wrote to the inspector general to ask him if he had
obtained any evidence whatsoever over the past year to cause
his office to change its conclusion. He responded within a day,
and the answer was no.
Commissioner Koskinen, to your knowledge, have any of the
underlying facts changed since the Senate Finance Committee,
the Department of Justice, and the Treasury inspector general
concluded that there is no evidence of your intent to mislead
Congress or obstruct the investigation?
Mr. Koskinen. No.
Mr. Conyers. I spoke earlier about the precedent of the
House, which has always provided some basic due process to an
accused official. For example, in 2010, we allowed Judge
Porteous to submit evidence, call witnesses, and cross-examine
others. In 1996, we allowed counsel for President Clinton to do
the same. In 1874, this Committee allowed Secretary of War
William Belknap the opportunity to explain, present witnesses,
and cross-examine witnesses.
But here in 2016, I understand that you have not been
allowed to review the evidence against you. The Oversight
Committee conducted over 50 transcribed interviews and claims
that those interviews were key to forming the charges against
you.
Mr. Commissioner, have you asked to review these
transcripts?
Mr. Koskinen. We have.
Mr. Conyers. Have you been given an opportunity to review
them?
Mr. Koskinen. No.
Mr. Conyers. Do you believe they might include evidence
that clears you of any of these charges?
Mr. Koskinen. I do. If there were any evidence there that I
had actually indicated or told anyone to impede the operations
of the Congress, destroy, or mislead the Congress, I assume
someone would have already quoted it. So I assume that those 50
depositions would support the fact that I did nothing to impede
the operation of the Congress, I gave no instructions to anyone
to do anything other than fully cooperate with the requests of
the Congress.
Mr. Conyers. I thank you, sir, for your testimony.
And, Mr. Chairman, I yield back.
Mr. Goodlatte. The Chair thanks the gentleman and
recognizes the gentleman from Texas, Mr. Smith, for 5 minutes.
Mr. Smith. Mr. Chairman, this Administration seems to have
set a record for the number of agency heads who have wrongly
deleted work-related emails, the number of Federal employees
who have pled the Fifth Amendment to avoid incriminating
themselves, and the number of officials who have failed to
respond to lawfully served subpoenas.
Even in this deplorable company, one agency stands out. The
Internal Revenue Service targeted organizations solely on the
basis of their conservative views. We expect this kind of
behavior from dictatorships and totalitarian governments, not
from the United States of America's Government. It represents a
direct attack on freedom of religion, it represents a direct
attack on freedom of speech, and thus an attack on our
Constitution and our democracy.
That this corruption of power continued unrestrained for
several years can only lead to one conclusion: Such conduct is
an abuse of office that was condoned by the Administration and
warrants stiff penalties.
Mr. Chairman, I will yield the balance of my time to the
gentleman from Ohio, Jim Jordan.
Mr. Jordan. I thank the gentleman for yielding.
Mr. Koskinen, I am going to read from the articles of
impeachment. On page 2, it says, ``On March 4, 2014, the
Internal Revenue Service magnetically erased 422 backup
tapes.'' Is that statement true?
Mr. Koskinen. Yes.
Mr. Jordan. Were you commissioner at the time that these
tapes were erased?
Mr. Koskinen. Yes.
Mr. Jordan. Was there a subpoena in place for the very
information that was erased?
Mr. Koskinen. Yes.
Mr. Jordan. More than one subpoena, right? There were two
subpoenas.
Mr. Koskinen. Well, the subpoenas asked for specific
information. The assumption is that some of that information
was on those tapes.
Mr. Jordan. It is not the assumption. It was on those
tapes, because it was from the critical time period when Ms.
Lerner's hard drive had crashed.
Mr. Koskinen, who is Kate Duvall?
Mr. Koskinen. Pardon?
Mr. Jordan. Who is Kate Duvall.
Mr. Koskinen. Kate Duvall was serving as counselor of the
commissioner.
Mr. Jordan. When we got her bio, it said, counselor to the
commissioner, said she advised on high-profile investigations,
and she was a member of your senior management team. Is that
accurate?
Mr. Koskinen. Yes.
Mr. Jordan. In her deposition in front of the Oversight
Committee, Ms. Duvall said she learned on February 2, 2014,
about Lois Lerner's computer crash and missing emails. So on
February 2, the counselor to the commissioner, in senior
management, working on high-profile investigations, learns
evidence is missing, and 1 month later, March 4, the backup
tapes that contain this evidence are destroyed.
What a coincidence, Mr. Koskinen. One month after your top
counselor learns Ms. Lerner's hard drive has crashed and there
are missing emails, the backup tapes, the secondary source; the
primary source is gone, a month later the backup tapes are
destroyed.
Now, here is what is also interesting. Those backup tapes
were supposed to have been destroyed months and months
beforehand, weren't they, Mr. Koskinen?
Mr. Koskinen. Yes. And a large number of them had been
destroyed in 2012 and 2013.
Mr. Jordan. In fact, you testified to this. You said this.
``Ms. Lerner''--this is testimony in front of the Oversight
Committee--you said, ``Ms. Lerner's hard drive had crashed in
June 2011. As a result, certain emails could not be retrieved.
Recovery tapes containing data for that period no longer
existed.'' False statement, they did, but they were supposed to
have been erased. This data was retained on tapes for only 6
months.
So they were supposed to have been erased actually 2 years
prior to the date that they were, but they somehow survived.
They somehow survived. And then, exactly 1 month, 30 days,
after your top counselor, Kate Duvall, in senior management,
learns that the primary source, the emails, are missing, these
backup tapes that have survived for 2 years suddenly get
destroyed. And we are supposed to believe that is just a
coincidence, that just happened by chance?
Mr. Koskinen. The inspector general spent a year looking
into exactly that subject and came up with the conclusion,
after interviewing over 50 witnesses, that that was totally a
mistake by two employees on the midnight shift in Martinsburg--
--
Mr. Jordan. The old----
Mr. Koskinen [continuing]. That no one had----
Mr. Jordan. The old----
Mr. Koskinen [continuing]. No one--I am sorry.
Mr. Jordan. The old midnight shift guys in Martinsburg
excuse. Okay.
Mr. Koskinen. Well, that is the IG's report after a year.
Mr. Jordan. Okay. Well, let me read one other statement to
you, again from the articles of impeachment. This is only page
3, article III. On June 20, 2014, Commissioner Koskinen
testified, ``Since the start of this investigation, every email
has been preserved, nothing has been lost, nothing has been
destroyed.''
Is that statement true, Mr. Koskinen?
Mr. Koskinen. At the time, that was what I had been
informed and what I believed. A year later, or 9 months----
Mr. Jordan. Whoa----
Mr. Koskinen. That was----
Mr. Jordan. It could have been----
Mr. Koskinen. It was----
Mr. Jordan. It could not have been true at the time,
because that says--the date is June 20, 2014.
Mr. Koskinen. That is correct.
Mr. Jordan. And you just told me on March 4, the first
question I asked you, on March 4, 3 months before that, March
4, 2014, that the IRS had destroyed 422 backup tapes.
Mr. Koskinen. That is correct.
Mr. Jordan. So how is this statement true that you made
under oath to a congressional Committee?
Mr. Koskinen. The statement was not correct in light of
that evidence, which I did not know.
Mr. Jordan. So the statement wasn't true?
Mr. Koskinen. The statement I thought was true. It was not
true on the basis of the evidence that we discovered later.
Mr. Jordan. Mr. Chairman, this is the problem. You think
about any of the folks we represent, any of the constituents I
represent in the Fourth District of Ohio has this same fact
pattern, where they lose documents and then a month later--they
are being audited by the IRS, they lose documents, a month
later they destroy the backup disk, and it is fine, they can
get away with that?
This is what so many Americans are frustrated about, this
double standard. Mr. Koskinen can lose documents--excuse me--
the IRS can lose documents, then destroy the backup source, the
backup tapes, and nothing happens. Any American, that happens
to them, they are in big trouble, and everybody knows it.
All we are asking is this guy no longer hold this office.
That is all we are asking. And in light of this fact pattern, I
think that is the least we can do.
I yield back.
Mr. Goodlatte. The time of the gentleman from Texas has
expired.
The gentleman from New York is recognized for 5 minutes.
Mr. Nadler. Thank you, Mr. Chairman.
In your opening statement, you mentioned reviewing
thousands of pages of documents related to these charges. Does
the Committee majority have access to the unedited transcripts
of interviews conducted by the Oversight Committee?
Mr. Goodlatte. You should direct your questions to the
witness.
Mr. Nadler. I am directing my question to the Chairman.
Parliamentary inquiry. And please stop the clock. It is a
parliamentary inquiry.
Mr. Goodlatte. We do not think so, but----
Mr. Nadler. You do not think that the majority has access.
Mr. Goodlatte. No.
Mr. Nadler. Well, I would request that the minority at
least, if the majority wishes, that is your prerogative--that I
request the minority have access to these documents.
Mr. Goodlatte. The Chair will take your request under
advisement as we ascertain whether or not your question is
answered in the affirmative. If so, then we obviously think it
should be.
Mr. Nadler. We are going forward with impeachment hearings
that are the purview of this Committee. I think this Committee
ought to see all of the relevant evidence. But that is self-
evident.
Let me just say before I ask Mr. Koskinen some questions
that Mr. Jordan's questions--wasn't this true then, yes; did
you know it was true then, no; did you tell the truth then as
you knew it, yes--that fact pattern shows nothing about
impeachment, obviously. All it shows is that he didn't know at
the time he was asked the question. He told the truth as he
then knew it.
Mr. Koskinen, Commissioner, thank you for being here.
The Senate Finance Committee, the Department of Justice,
and the Treasury Inspector General for Tax Administration have
all looked into the accusations against you and each of them
has independently concluded there is no evidence to support
these charges. Your critics have not made their case, nor do
they have the votes to force impeachment on the House floor,
and these proceedings are an obvious sham.
But because you are an expert on tax policy, I do think it
serves some purpose to shed some light and have you as the IRS
commissioner understand some of the work of the IRS.
Is there anything that would prohibit someone from
releasing their tax returns if they want to because they are
under audit?
Mr. Koskinen. No.
Mr. Nadler. Thank you. Now, President Nixon disclosed his
tax returns while under IRS audit. Have the rules changed since
then?
Mr. Koskinen. No.
Mr. Nadler. Can an individual use other people's money, run
through a charitable foundation, to enrich himself or satisfy
his personal debts or obligations?
Mr. Koskinen. The rules are that would be personal
inurement. No tax-exempt organization can benefit, use its
funds to benefit any, in effect, insider.
Mr. Nadler. Would the following factors affect the tax
exemption of a foundation: If an individual used funds from his
charitable foundation to purchase a $12,000 football helmet for
himself signed by Tim Tebow, if an individual used $20,000 from
the foundation to pay for a 6-foot-tall portrait of himself, if
an individual used $100,000 of the foundation's money to cover
part of a legal settlement after a dispute with a municipal
government, or if he used $158,000 to settlement a dispute with
a disgruntled participant at a celebrity golf tournament. Were
any of those actions using tax-exempt foundation moneys
improper, and if so, would they jeopardize the tax exemption of
the foundation?
Mr. Koskinen. I can't comment on individual----
Mr. Issa. Mr. Chairman.
Mr. Nadler. I would like him to answer the question, sir.
Mr. Issa. Mr. Chairman, I object to the questioning, in
that it is outside the scope of this hearing. Additionally, it
is outside the scope and expertise of the witness.
Mr. Nadler. That is not a proper parliamentary inquiry.
Mr. Goodlatte. The rules of the Committee would permit the
gentleman to ask the question, and the commissioner is
requested to answer.
Mr. Koskinen. Clearly, the general rules are understood
that a 501(c)'s assets should not be used to benefit either a
major contributor or anyone operating the entity. The
particular facts and circumstances of any case would need to be
reviewed carefully and----
Mr. Nadler. Obviously. But if those were the facts that I
just said, would they be improper?
Mr. Koskinen. All I can tell you is that the rules are
clear, and it would be up to a set of people who do this
regularly at the IRS to investigate and make a determination as
to whether, in fact, the tax exemption of that organization was
still viable.
Mr. Nadler. Thank you.
Commissioner, in your opinion, if a fact pattern like this
one were brought to the attention of the IRS and the IRS failed
to investigate it, would that be a dereliction of duty or even
an impeachable offense?
Mr. Koskinen. The commissioner does not make a
determination as to--about any audit or investigation. We get
referrals, suggestions, sometimes might review urgings to look
into a wide range of activities of not only tax-exempt
organizations, but others. Those are referred to a detailed
process internally----
Mr. Nadler. Okay. Thank you.
Mr. Koskinen [continuing]. And it is not my role to make
that determination.
Mr. Nadler. Thank you.
I have one last question, and that is, at the time you were
appointed by the President, why did he ask you to take--to come
out of retirement and appoint you to the head of the IRS? What
mission--what did he state--what mission did he give you?
Mr. Koskinen. Actually, I did not talk to the President
personally. I talked to Secretary Lew, who I knew from years
ago, and White House personnel. And the reason I was asked was
obvious: The IRS had made a terrible management mistake. I have
spent 45 years of my career managing organizations under
stress, including in the private sector and the public sector.
And it was obvious to me just reading the paper that there was
a problem that needed to be fixed, and I was honored to be
asked and pleased to undertake the responsibility.
Mr. Nadler. Thank you very much. My time has expired.
Mr. Goodlatte. The gentleman from Ohio, Mr. Chabot, is
recognized for 5 minutes.
Mr. Chabot. Thank you, Mr. Chairman.
You know, everybody is afraid the IRS, and no wonder. They
can make your life a living hell if they want to. That is why
it is so important that they play it straight, that they don't
play favorites, that they don't play politics.
Well, back in the years leading up to Barack Obama's
reelection in 2012, the IRS did play politics. It intensely
scrutinized conservative organizations, especially if they had
the words ``tea'' and ``party'' in their title, and all but
refused to grant them tax-exempt status. At the same time, the
IRS freely granted such status to liberal organizations.
Why would they do this? To give Barack Obama and his
liberal allies the advantage in the upcoming election. And who
ordered it? Well, Lois Lerner was the head of the exempt
organizations unit of the IRS. She ordered it. But who above
her told her to do it, and did it go all the way to the White
House? We will never know, because she destroyed the evidence,
then took the Fifth, and then the Obama Justice Department
refused to prosecute her and find out the answers to these
important questions.
In many ways, this is a lot like what Hillary Clinton did.
She destroyed the evidence. Evidence of her emails was sought
by the FBI and by congressional Committees. Rather than comply,
she had her emails destroyed and she lied about it. She even
had the devices that stored the emails, multiple BlackBerrys
and iPads, destroyed, some with a hammer. Yet the Obama
administration Justice Department refused to prosecute her too.
So, Mr. Commissioner, where do you come in? Well, when the
selective targeting of conservative groups by the IRS story
broke, President Obama feigned outrage, said the targeting was
inexcusable, and declared that we needed ``new leadership that
can help restore confidence going forward.'' So President Obama
brought you in to head the IRS, supposedly to clean up the
mess.
Arguably, Commissioner Koskinen, you have made matters
worse. How? Well, you testified before congressional Committees
on multiple occasions, you made a number of important
statements before Congress which turned out to be completely
false, even though you were under oath. For example, in
referring to Lois Lerner's emails, you stated, ``Since the
start of this investigation, every email has been preserved,
nothing has been lost, nothing has been destroyed.''
This turned out to be completely untrue, of course. Lerner
had tens of thousands of emails destroyed. And when you learned
of this, rather than inform Congress, you failed to notify
Congress for 4 months.
Why in the world did you wait 4 months?
Mr. Koskinen. Actually, I waited 2 months. I was advised of
this situation in April. And the reason I waited, because I
instructed people we needed to find as many of the emails from
that period of the hard drive crash as we could. We found and
produced 24,000 Lois Lerner emails from the period of her hard
drive crash.
She did not destroy the information. Thereafter, we
produced another 50,000 emails. So the investigators, all six
of them, had 78,000 Lois Lerner emails from the period of 2009
to 2013.
Mr. Chabot. Well, I would submit that you had a duty to
inform Congress immediately when you learned that. But let me
move on, because I have only have a minute.
Mr. Koskinen. No, no. And I would agree. I have said that
in retrospect, if I had it to do over again, in April, I would
have contacted and advised Congress immediately. The delay
didn't change any investigation, but I can understand the
aggravation it caused in some areas. And if I had to do it
again, I would actually advise the Congress that the hard
drive--I knew the hard drive had crashed and had been advised
of that. We were now going to try, as we did, to produce all of
the emails we could from that period, and we actually produced
24,000.
Mr. Chabot. Thank you. Let me move on.
Similarly, after you learned of the destruction of Lois
Lerner's emails, you testified that the IRS went to great
lengths to try to resurrect her emails by other means. This too
turned out to be false. You and the IRS did very little to
recover those destroyed emails.
In fact, experts testified that there were six ways the IRS
could have tried to reacquire the emails. You failed to even
try five of the six techniques. You failed to look at the IRS'
own backup tapes, you failed to look at the server, you failed
to look at the backup server, you failed to look at the Lerner
laptop, and you even failed to look at Lois Lerner's
BlackBerry. So you really did very little to comply with that.
My time is running out so let me just say this. What really
makes me mad about this whole sorry episode is that the IRS
subpoenas information from taxpayers all the time, and if the
average taxpayer exercised the same lack of cooperation that
the IRS displayed in this matter, that taxpayer would be in a
world of trouble. That taxpayer would undoubtedly have been
prosecuted, likely convicted, and likely would have spent time
behind bars.
But in this case, it was the Obama administration's
powerful IRS that got caught with its hand in the cookie jar.
And you circled the wagons and clammed up and you took the
Fifth and you destroyed evidence and betrayed the country, and
most sadly, got away with it.
And my time has expired, so I yield back.
Mr. Goodlatte. The Chair thanks the gentleman, recognizes
the gentlewoman from California, Ms. Lofgren, for 5 minutes.
Ms. Lofgren. Thank you, Mr. Chairman.
I am really astonished by some of the reckless statements
that have been made this morning. But let me just go to the
commissioner.
You are under oath right now, right? You have to tell us
the truth.
Mr. Koskinen. Yes.
Ms. Lofgren. And we have had an IG report basically
pointing out that when you testified before to a congressional
Committee you told the truth as you knew it at the time, and
later there was information that you didn't know that came out
that you sent to us. Is that correct?
Mr. Koskinen. Correct.
Ms. Lofgren. So I guess my question is, if you take a look
at the Constitution, Article II, Section 4, it says,
``The President, Vice President and all civil Officers of
the United States, shall be removed from Office on Impeachment
for, and Conviction of, Treason, Bribery, or other High Crimes
and Misdemeanors.''
Now, I realize you are not here as an expert on
constitutional law, but you are a lawyer and you went to a very
fine law school. Can you tell me which element of that,
treason, bribery, or other high crimes and misdemeanors, that
you have committed?
Mr. Koskinen. My position and that of my lawyers is I have
not committed any of those crimes. But, again, I recognize this
Committee has already heard from constitutional experts, and it
is this Committee's decision.
Ms. Lofgren. No, I understand that. But I just think this
is a trumped-up type of thing. Having worked on many
impeachments in the past, this doesn't even pass the smell
test. This is absurd.
I would like to also ask, since you are here, and we are
not on the Financial Services Committee, is it within the
authority of the commissioner to suspend an audit of a taxpayer
during the course of a Presidential campaign so that that
taxpayer who felt that they were constrained in the release of
their audit would then feel okay to release it?
Mr. Koskinen. The IRS commissioner----
Ms. Lofgren. Could you?
Mr. Koskinen [continuing]. IRS commissioner has no
authority over any individual audit or even the determination
of whether an audit should begin, and I think that is
appropriate.
Ms. Lofgren. Let me ask you whether or not--I know that
everything that the IRS does is private and that the staff
takes that very seriously, and I think we all appreciate that.
But let me ask you this. if an audit had been terminated, would
that--would the commissioner or the agency be allowed to say
publicly that there was, in fact, no audit going on of a
taxpayer?
Mr. Koskinen. We never would--do comment about any taxpayer
situation, the status of whether they are under audit, whether
the audit is continuing, or whether it is concluded. That is
all taxpayer information that is protected.
Ms. Lofgren. So even if there was nothing going on and
somebody was lying about that, they would just get away with a
lie?
Mr. Koskinen. We would never comment on any taxpayer's
situation with regard to audits or filings or what was in that
information.
Ms. Lofgren. I would like to talk about whether or not, if
someone took money from a foreign government, say, Russia, and
then decided as a candidate or an elected official to go easy
on our opponent, would that, if they were elected, an elected
official, would that fall into the realm in the Constitution of
bribery or treason?
Mr. Koskinen. I am not in a position to make a comment on
that.
Ms. Lofgren. Well, I just think that, you know, one of the
things that should concern this Committee is the fact that one
of our candidates for President has failed to provide
transparency on his financial situation by releasing his tax
returns, as every other candidate has this time and has for
many, many decades. It leads to questions on the role that
Russia is playing in his business, what that may lead him to do
in terms of his extraordinary comments of praise for the
Russian leader, who is a virtual dictator and certainly an
adversary of the United States.
And I would hope that this Committee might use some time to
explore that possibility and to see if we couldn't get that
candidate to do the right thing and let the American people
know that he has been compromised financially with Russia, the
foreign power who is causing so much problems in the world, in
the Balkans, in Syria, and certainly elsewhere around the
world.
And with that, Mr. Chairman, I see my time has expired.
Mr. Goodlatte. The time of the gentlewoman has expired.
The Chair recognizes the gentleman from California, Mr.
Issa, for 5 minutes.
Mr. Issa. Thank you, Mr. Chairman. And I will refrain from
asking about large nonprofits that might have taken and been
influenced by foreign government contributions. That would be
too sensitive to Mrs. Clinton.
Commissioner, our Founding Fathers did consider
maladministration for impeachment and they decided that that
was too low. Do you know of that from your readings?
Mr. Koskinen. That is my understanding.
Mr. Issa. And so I want to ask, very much along that,
misdemeanors are in, maladministration is out.
Now, I represent Camp Pendleton and 47,000 marines.
Maladministration is what you get fired for if you are a
colonel, a captain, a sergeant, or even a general, and that
includes loss of confidence in being able to do the job,
failure to essentially get your subordinates to follow your
orders, failure to show the kind of zealous obedience for
compliance with rules, regulations, and laws.
These are two different standards, the standard between
impeachment and the standard for relieving a senior officer or
even a sergeant in the military. So I want to go through this,
because I think, at a minimum, we should have a discussion
about what actually occurred.
You were under a subpoena, you were aware that we were
looking for documents, you assured the Oversight Committee that
you were using absolutely every possible tool to recover them.
And so now the question. In retrospect, did you fail to use
every tool, did you fail to ask the kinds of questions of
enough people, enough experts to know that the BlackBerry that
still existed at the time of the investigation would have had
many of these lost emails, that the servers, the tapes, and
other documents could have been recovered, as you eventually
discovered? Would you say that that is a failure of yours that
you will have to live with?
Mr. Koskinen. No, we clearly failed. The BlackBerry was
actually in the control of the IG from 2013 on. But as I have
stated, we clearly failed in areas of preservation of
documents, and I have said that was a mistake, and it was
driven by the fact that we were spending, and I was told the
group were looking every place they thought they would find the
emails, and we found 1,300,000 pages of documents that were
produced. It took us a year to do that. And that was where
people thought the most likely place it was to come.
The IG in his review of everything else found another
thousand emails, a number of which were in the early 2000's,
long before this held, but those thousand emails, if we would
have had the technique and the time, would have been important
to produce.
But I would remind you that we did produce a phenomenal
volume of stuff, with 250 people working every day. And from my
standpoint, my commitment and order and instruction to people
was to do everything possible to produce information for the
Committee as fast as we could and as thoroughly as we could.
Mr. Issa. Thank you.
I would ask unanimous consent that the 226-page report
chronicling the actions be placed in the record from the
Oversight Committee.need report deg.
Mr. Goodlatte. Without objection, they will be made a part
of the record.*
---------------------------------------------------------------------------
*Note: The submitted material is not printed in this hearing record
but is on file with the Committee, and can also be accessed at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=105349
Mr. Issa. Thank you.
Commissioner, you know, obviously if we had to do this over
again, we would all ask that it be done differently. But I am
going to use the remainder of my time to ask you a more serious
question.
In light of the fact that agency heads generally make the
decisions about subpoenas coming from Congress, and they lack,
as you lack, in spite of all your experience, the expertise to
know where to go, how to preserve documents, where the, if you
will, all the places to make sure, the six different areas that
could have been looked at and, according to the IG, were not
looked at, five of them, do you think that Congress should
insist on having a contact and responsible person in each
agency that in fact could be held accountable because they had
the expertise and could be reasonably expected to have the
authority to enforce and deliver documents on behalf of
lawfully submitted subpoenas?
Mr. Koskinen. That is an interesting suggestion that I
don't have the authority to respond to, but it would be helpful
to reaffirm the commitment that we had at the IRS, which is if
Congress asks, not whether, subpoena or not, if Congress asks
for information, we have an obligation to provide it as quickly
as we can as thoroughly as we can. And that is an obligation,
as I say, it doesn't take a subpoena, that is an obligation we
have to the Congress any time you ask us for a question.
Mr. Issa. In my last few seconds, Lois Lerner was referred
for a criminal indictment by the Ways and Means Committee under
a statute that said that the U.S. attorney for the District of
Columbia shall present to a grand jury, and the Administration
failed to do that.
In retrospect, when the American people expect somebody to
be held accountable for the wrongful targeting of conservative
groups, wouldn't it have gone a long way if the Justice
Department had simply complied with the law rather than chose
not to comply with the law?
Mr. Koskinen. I can't speak for the Justice Department, but
I can, as you know, remind you that from the commissioner on
down, the acting commissioner on down, all five levels of
people responsible in this area are no longer with the
government, they are no longer with the IRS. They, in fact, no
longer have their jobs.
Mr. Issa. Thank you, Mr. Chairman. I yield back.
Mr. Goodlatte. The Chair thanks the gentleman, and
recognizes the gentlewoman from Texas, Ms. Jackson Lee, for 5
minutes.
Ms. Jackson Lee. Let me thank you very much, Commissioner,
and let me apologize for your presence here today. I realize
that you have made a commitment as a public servant, but I
think it is appropriate to apologize to you for what I believe
is a nonserious effort as relates to the Constitution and the
impeachment criteria.
Saying that, let me take note of your language in your
statement, which says, ``I will do my best today to answer your
questions and I am committed to full cooperation...That means
listening and responding to feedback and criticism,
acknowledging mistakes, and working diligently to improve.'' Do
you still adhere to that statement in your testimony?
Mr. Koskinen. I do.
Ms. Jackson Lee. So you are committed as a public servant
to ensure that we get all the information that we need to have.
Is that not correct?
Mr. Koskinen. That is correct. I spent 4 years on the
Senate side as the chief of staff to a senator who ultimately
chaired the Oversight Committee in the Senate, and I fully
understand and appreciate and think it is appropriate for
agencies to respond as quickly as they can with all of the
information requested.
Ms. Jackson Lee. Thank you, Commissioner, very much.
Let me put into the record a statement. The Senate Finance
Committee, Department of Justice, and the Treasury Inspector
General for Tax Administration found three points related to
you, Commissioner, and that is that you had not misled
Congress, you had not allowed evidence to be destroyed, at
least it was not attributable to you, and you were not
considered to have obstructed oversight of the IRS.
Do you still believe that those were true about your
actions as a commissioner?
Mr. Koskinen. I do.
Ms. Jackson Lee. Let me also put into the record a letter
dated September 14 where a direct question was asked to the
Treasury inspector general, no evidence was uncovered that any
IRS employees have been directed to destroy or hide information
from Congress, the DOJ, or the TIGTA. That letter was written
by two Members of Congress on September 14, 2016. A letter came
back from Mr. J. Russell George, inspector general, and it
says, ``I received your letter and its conclusion that no
evidence was uncovered that any IRS employees have been
directed to destroy or hide information from Congress, the DOJ,
or TIGTA. In your letter, you specifically asked: Since issuing
this report, has your office changed its previous conclusion on
this matter? At this time, no additional information has been
uncovered that changes our conclusion in this report.''
I ask unanimous consent to put this in the record.
Commissioner, do you adhere to that letter from the
inspector general?
Mr. Goodlatte. Without objection, the document will be made
a part of the record.
Ms. Jackson Lee. You have seen such reports from the
inspector general, have you not?
Mr. Koskinen. Yes.
Ms. Jackson Lee. And do you adhere or at least understand
that that is being said about IRS employees, which would
include yourself?
Mr. Koskinen. Yes.
Ms. Jackson Lee. Right. Do you--was Ms. Lerner at the IRS
when you arrived?
Mr. Koskinen. She was gone. I have never actually met her
or talked to her.
Ms. Jackson Lee. Are you still engaging in ``Be On The
Lookout'' activities?
Mr. Koskinen. We have not used ``Be On The Lookout''
activity numbers for 3 years or longer.
Ms. Jackson Lee. I think it is also important to note,
again, that this is not an impeachment hearing. And even though
many of our Members are inquiring in that manner, it is not.
And it is also important to note that experts have said we
have not given you due process. I hope as we proceed to
eliminate this proceeding, meaning to cease and desist, that if
we do not, that you will have due process.
Let me proceed with some questions regarding the time that
you have come after February 2014. What efforts have you made
to be constructive and to provide information to Members of
Congress?
Mr. Koskinen. Across the board, I have made a commitment
that we will respond to every request. I will personally
respond to every letter within 30 days, if at all possible, and
I will explain if it is not. As a general matter, over 90
percent of inquiries get a response from me within 90 days. We
have not refused to provide any information. We are anxious
across the board. The IRS affects every taxpayer in the
country, and it is important for us to be transparent.
Ms. Jackson Lee. Thank you.
And in this proceeding, dealing with impeachment, if it is
not high crimes or misdemeanor, there are elements that our
friends believe that would suggest that you would be subjected
to impeachment proceedings. And so is there anything that you
have done that can show deliberate bad faith? You are a lawyer.
You are allowed to say that you think this action or that
action--is there any action that may have done so?
Mr. Koskinen. As I have said, we have--it was not a perfect
process. There are things that, again, in retrospect----
Ms. Jackson Lee. When you made mistakes, you owned up to
it. Is that correct?
Mr. Koskinen. Yeah. And basically there is no evidence that
I have actually acted in bad faith, given anybody instruction
not to comply.
Ms. Jackson Lee. And you offered information when you found
the information after the fact?
Mr. Koskinen. And when we found the information. In fact,
we spent a lot of time--again, I should have told Congress
earlier, but we spent time finding the 24,000 emails.
Ms. Jackson Lee. Let me ask you, this, Commissioner--I am
sorry for talking over you. I am just trying to get in.
Is it appropriate for a foundation to give political
donations out of the foundation, a 501(c)(3) foundation?
Mr. Koskinen. 501(c)(3) organizations, foundations,
otherwise are not allowed to participate in politics.
Ms. Jackson Lee. I thank you very much, Commissioner. And I
believe an apology is owed to you. And I believe that there are
no grounds, if we were to move in that direction, for any form
of impeachment. We need to thank you for your service. Continue
to do the good work that you are doing, working on behalf of
the American people and answering questions from Congress in
the normal oversight responsibilities.
Thank you. And I yield back.
Mr. Goodlatte. The time of the gentlewoman has expired.
The Chair recognizes the gentleman from Virginia, Mr.
Forbes, for 5 minutes.
Mr. Forbes. Mr. Chairman, thank you.
And, Mr. Commissioner, thank you for being here.
As we sit here today, just bringing a little commonsense to
this, a vast majority of Americans believe today that our
country is headed in the wrong direction, and they want us, the
people elected by them, just to fix it. And I want to go on
record as saying I don't apologize for trying to fix it.
And when I look here and I recognize that a vast majority
of Americans no longer trust their government, that creates a
crisis of confidence in our government. And they have a good
reason to believe that. And I don't apologize for asking how we
fix that, when I see gag orders issued by the Pentagon where
they don't even allow individuals over there to testify or meet
with Members of Congress, we see evidence that is being
destroyed, we see misrepresentation of facts to Congress. That
is something we should come together and try to fix.
And so everybody has asked you what is appropriate,
testimony from the other side. So I want to ask you this: What
do you feel is appropriate as the IRS commissioner? Should you
be held to a lower standard than the taxpayers subject to your
jurisdiction, a higher standard, or the same standard? What do
you think is appropriate for us to hold you to?
Mr. Koskinen. I think I, like any public servant, should be
held to the highest standards of probity. We should cooperate
with----
Mr. Forbes. Should you be held to at least an equal
standard to taxpayers that are subject to your jurisdiction?
Mr. Koskinen. Yes, I think we should be held to that
standard or even higher.
Mr. Forbes. And if that is the case, wouldn't you agree
that if a taxpayer were sitting where you were sitting with the
same responses that you are giving, that that taxpayer would be
in a lot of trouble before the Internal Revenue Service?
And let me just throw this out to you: If the facts show
that you lied to Congress and I am not saying they did; if they
show that you lied to Congress or that you mismanaged your
office, what do you believe is appropriate for Congress to do
to try to fix it? You have already said you don't think that
impeachment is the right thing. What do you think is
appropriate? Should we just do nothing and let that continue,
or should we just keep coming back in here and saying, oh, we
are not going to do it again?
Mr. Koskinen. No. I have never objected to any of the
hearings. I have had close to 40 hearings.
Mr. Forbes. I am not talking about the hearings. I am
talking about the conclusions from the hearings.
Mr. Koskinen. Conclusions.
Mr. Forbes. You said that you didn't think impeachment was
appropriate. Mr. Jordan said he didn't think you should
continue to hold that office. If a taxpayer were here, you said
you should be held to the same standards as that taxpayer.
Mr. Koskinen. Right. And if a taxpayer----
Mr. Forbes. That taxpayer would have had to pay the IRS.
Mr. Koskinen. If the taxpayer provided us information
truthfully, did the best they could to produce information, and
found that information was missing, the first thing we would do
with that taxpayer is try to help them reconstruct those
records.
Mr. Forbes. Wait a minute. Wait a minute. You are not going
to tell me that if a taxpayer comes to you and has filed a
faulty tax return and then just says, oh, I am sorry, I didn't
know that was the case, that you are going to let him off the
hook?
Mr. Koskinen. No. He has got to pay the taxes he owes. The
question is whether----
Mr. Forbes. What do you owe for misrepresenting something
to Congress?
And let me just say this to you, Mr. Commissioner: What
incentive is it when you come here to testify before us if you
can consistently just say, I don't know? Isn't it a great
incentive for you not to do due diligence, to find out? You
could have told the Committee I don't know, but when you make
an affirmative statement, doesn't that put you under some
responsibility to have made sure you have ascertained that?
And the second thing, my friends on the other side of the
aisle consistently love to say they didn't find any affirmative
action that you did to order that information would be impeded
from going to Congress. Don't you have an affirmative duty to
do everything you can to make sure that doesn't take place?
Mr. Koskinen. And duty to make sure the agency functions
well, that that doesn't take place to the extent I can control
it.
Mr. Forbes. In hindsight, did you do everything you could
do to find out if you were making accurate statements before
Congress? And did you do everything you could do to make sure
that evidence getting to Congress wasn't being impeded?
Mr. Koskinen. I do in retrospect. The erasure of those
tapes was not known until well after my hearings and it is----
Mr. Forbes. That is not my question. My question is----
Mr. Koskinen. Well, the answer is, I couldn't tell the
Committee things I didn't know. All I could tell the Committee
in honesty and good faith was what I knew. And what I knew is
what I told the Committee. When later information--a year later
in terms of the tapes came out--I said that was a mistake and
we should be----
Mr. Forbes. Did you do everything within your power to find
that information? You said you were given assurances. Is that
what you just relied on, that one person told you that?
Mr. Koskinen. I know I have--we have a large number of
executives that I have great confidence in, and when they tell
me that, in fact, they are doing their best to produce all of
their relevant evidence----
Mr. Forbes. So you just can rely on those experts to tell
you that, and that is enough for you?
I just close by saying, Mr. Chairman, the commissioner says
he should be the same standard of the taxpayer. If a taxpayer
was sitting there, Mr. Commissioner, I think you know, he would
be in a world of hurt.
And with that, I yield back, Mr. Chair.
Mr. Goodlatte. The Chair thanks the gentleman. Recognizes
the gentleman from Tennessee, Mr. Cohen, for 5 minutes.
Mr. Cohen. Thank you, Mr. Chair.
And firstly, I welcome you. I know you would rather be
other places, and I probably wish you were other places too.
But you are here. And this has all the trappings of
impeachment, and that is kind of a sexy thing, so to speak, in
political parlance.
But the constitutional standard for impeachment that this
Committee considers is high crimes or misdemeanors. And I know
that has been discussed today. The question is not whether you,
Commissioner, have been a perfect administrator--and I am not
saying you haven't--that is a question for the Ways and Means
Committee to decide--they oversee the IRS--and for the
President who appointed you, not for this Committee.
The question we are called upon in this context is to
decide whether it have been high crimes or misdemeanors that
warrant the extraordinary constitutional remedy of impeachment.
And that would be high crimes or misdemeanors that you have
committed, not that maybe people think your office or your
predecessors committed.
We heard in our last hearing that although high crimes and
misdemeanors need not be limited to criminal acts, the
commissioner's critics still need to show that he acted with
the some deliberate bad faith. They have not done so, and every
other investigator who has looked at these facts--the Treasury
inspector general, the Department of Justice, the Senate
Finance Committee--have reached the same conclusion.
So it is regretful that you are here. But since you are
here, I want to ask you this: Has the Internal Revenue Service
been funded adequately to perform its job of catching tax
cheats, and by catching tax cheats and/or the threat thereof
gotten the revenues that are necessary to provide the services
that government should be rendering?
Mr. Koskinen. No.
Mr. Cohen. How much has the IRS budget been cut recently?
Mr. Koskinen. The IRS budget since 2010 has been cut $900
million, even as we have 10 million more taxpayers and a wide
range of statutory mandates to implement.
Mr. Cohen. Has been cut $900 million, is that what you
said?
Mr. Koskinen. Yes, our budget today is $900 million less
than it was 6 years ago.
Mr. Cohen. Has anybody taken that figure and said that when
you cut the IRS $900 million how much revenue is lost because
of the lack of ability to audit----
Mr. Koskinen. We estimate and have provided that
information to Congress that we are leaving $5 billion a year
on the table, and it is not a guess as to--we might find
people. It is $5 billion in audits that we can't undertake when
we know there are difficulties.
Mr. Cohen. So we cut $900 million. We haven't saved $900
million. We have lost $4.1 billion?
Mr. Koskinen. Correct.
Mr. Cohen. Does that contribute to the deficit?
Mr. Koskinen. Yes.
Mr. Cohen. And if you cut IRS by that much money--and you
all are kind of the whipping boy of the--my friends on the
other side of the aisle, who don't like or think the government
services are so necessary--the government has to fund
entitlements, quote/unquote.
So if you don't have the money and we lose $4.1 billion, we
are hurting the person at the bottom, the people that need
government assistance. It is not an entitlement, whether it be
SNAP payments, or it is energy, LIHEAP, folks not getting
through the winters without freezing, they are not getting
enough food for their children, our public schools or maybe
even public health, the CDC and the NIH which is looking for
cures for cancer, and Alzheimer's, and diabetes, and heart
disease, and stroke, and all the other diseases that are coming
to get each and every one of us, one day.
Those folks are getting hurt. When they attack you, they
are attacking the NIH, they are attacking the CDC, they are
attacking people who need SNAP payments to ease hunger and
their children and WIC payments and public education and public
health. Is that not true?
Mr. Koskinen. Well, I am not an expert of where the money
would go, but clearly there is less money to be provided or
appropriated or to cut the deficit.
Mr. Cohen. Well, it is just incredulous to me. You have
done nothing to warrant this hearing, but your office is under
attack because government is under attack, and the government
that is under attack is the government that takes care of the
poorest and the least of these. Those that would be the most
precious in the eyes of people who look at humanity as--at a
sight of seeing how we treat others, and if we treat others as
we should treat ourselves and follow the Golden Rule. And that
is unfortunate.
And with that, I yield back.
Mr. Goodlatte. The Chair thanks the gentleman.
Recognizes the gentleman from Iowa, Mr. King, for 5
minutes.
Mr. King. Thank you, Mr. Chairman.
And, Commissioner, I thank you for coming here to testify.
I think this is important discussion this country is having
right now about our reliability within our government agencies.
And the first question from me would be, did Lois Lerner
have any kind of a software package or any kind of electronic
search that excluded or identified the conservative groups that
far outweighed the nonconservative groups that had asked for
the not-for-profit status?
Mr. Koskinen. Yes. Clearly, all of this started with the IG
report noting that--he called it improper criteria. They were
totally improper criteria were used to select organizations
applying for (c)4 designation for further review. Those
organizations predominantly were conservative organizations.
Mr. King. Was there an electronic system that sorted out
these applications?
Mr. Koskinen. No.
Mr. King. Was there any database, any matrix of any kind,
any paperwork of any kind other than a stack of applications?
Mr. Koskinen. No. My understanding is that there were
ultimately developed ``Be On The Lookout'' lists for
organizations with these names in their titles, and some of
those were progressive names but the bulk of the applications
were conservative. And it was that list, that ``Be On The
Lookout'' list of any organization with these names in their
title, had nothing to do with whatever their political
philosophies or views were. It was if their name was in the
title they should then be selected for review.
Mr. King. And who generated that?
Mr. Koskinen. Pardon?
Mr. King. Who generated that ``Be On The Lookout'' memo?
Mr. Koskinen. It actually was--I am not an expert in what
happened before I got there, but my understanding was it was a
back and forth by people at Lois Lerner's office as well as the
frontline trying to figure out how do we handle these. And that
list was developed and there was an attempt to stop using a
list and then the list got used again.
Mr. King. And we know that the IG confirmed the targeting
that had taken place as well. I would ask you, have there been
any firings, dismissals? Have you identified anyone within the
IRS that had violated law or policy or protocol in such a way
that it was worthy of termination?
Mr. Koskinen. As I noted, all of this happened well before
I got there. That is why I am here. But as I stated, starting
with the acting commissioner down, everyone in that chain of
command is gone.
Mr. King. Everybody in the chain of command is gone. Are
there any remaining culprits within the IRS today?
Mr. Koskinen. None that anybody has pointed out that had a
responsibility. The leadership and the responsibility are gone.
Mr. King. And if you identified them, that would be your
duty going forward as well?
Mr. Koskinen. Yes.
Mr. King. And then I would like to take you to Martinsburg.
I am having a little trouble understanding that. And that is,
there were 424 tapes that were discovered at storage in
Martinsburg in a shipping center that I view as a warehouse of
about 1,900 square feet. I know about how big that is. And so
that night shift, they decided they would scrub those tapes,
422 of the 424 successfully. And can you explain to this
Committee how long it would take to process 422 tapes?
Mr. Koskinen. I don't know, but I assume it is a relatively
prompt process. I would note, the tapes actually had been sent
to Martinsburg. They originally were in New Carrollton and they
were actually--a bulk of related tapes had been erased a couple
years before that. These were the remaining tapes. They were in
a closet. The IG said they were identified as junk and they
were sent----
Mr. King. Do they process them one tape at a time or
multiple tapes in batches?
Mr. Koskinen. That I don't understand--I don't know, but I
think they are one at a time but we will--we can find out.
Mr. King. Well, I think that is important. Because how long
would it take you to put a tape in, scrub it, even if it is a
couple minutes to do so and another and another, and to get 422
of them done in an 8-hour night shift. Do you know the names of
the individuals that processed those tapes?
Mr. Koskinen. I do.
Mr. King. And they are still working for the IRS?
Mr. Koskinen. I can't talk about personnel, but the IG
investigated them, clearly provided a report, and I can't say
anything more about that.
Mr. King. Yeah, but I am not asking you for their names. I
am just saying, are they still working for the IRS?
Mr. Koskinen. My understanding is at least one of them is.
But the IG noted it was an honest mistake, and we turned it
over to our people to review it and that personal review--
personnel review went on. But the IG said they had made an
honest mistake. It was not anything intentional on their party.
They certainly didn't mean to interfere with anything going on
with the Congress.
Mr. King. The IG, in their testimony before Congress,
seemed to be a bit incredulous that this string of coincidences
could be put together in that fashion and have the voids and
the vacancies in information that we have.
I just reflect on this, Commissioner, is that if I would
take the timeline of the IRS activities throughout this thing--
and there are many of them sitting around in this Committee
today--and I would overlay that over the timeline of the things
that went on with Watergate, I will ask you, which one do you
think would sound more improbable?
Mr. Koskinen. Again, that is a judgment, I guess, people
could make. I think when there is a 17-minute gap and no
intervening information provided, that is more significant than
when there are tapes erased and 24,000 emails are provided from
that same period. If we had some information about that
conversations on the 17-minute gap, they would be more
comparable. But there was no information there. It was all
lost. Here, the IG said 24,000 emails but only 10,000 of them
were from the gap period, and in that gap period we produced
24,000, twice as many emails from Lois Lerner.
Mr. King. I would submit the opposite conclusion myself,
but I thank you, Commissioner.
And I yield back, Mr. Chairman.
Mr. Goodlatte. The time of the gentleman has expired.
The Chair recognizes the gentleman from Georgia, Mr.
Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
This hearing has been noticed as a ``Hearing on Impeachment
Articles Referred on John Koskinen, Part III.'' There are no
impeachment articles, and this is not an impeachment hearing.
This hearing is therefore simply a total sham. The impeachment
process cannot begin until the 435 Members of the House of
Representatives adopt a resolution authorizing the House
Judiciary Committee to conduct an independent investigation.
Such a resolution has not been presented to or passed by the
House, rendering today's hearing a misnamed farce.
This Committee does a grave injustice to the Committee as a
hollowed institution by being complicit in the perpetuation of
this sham proceeding. There is a reason for a careful process
when it comes to the most drastic action of impeachment; it is
called due process. The effort to impeach IRS Commissioner John
Koskinen is without precedent in the history of the United
States.
The House has impeached Executive Branch officials only
three times, and it has never impeached a sub cabinet official.
The so-called impeachment resolutions contain clear errors of
fact, misleading statements, and baseless conclusions.
The commissioner has repeatedly asked for immediate access
to the transcripts of all interviews conduct by the House
Oversight and Government Reform Committee during its
investigation. They are necessary to answer basic questions
about the scope and depth of that Committee's investigation,
such as what witnesses were interviewed, what questions were
asked, what leads were followed, and whether all relevant
information was disclosed.
But, again, I would tell you that this Committee has
conducted no such investigation, the House Judiciary Committee.
This is a drastic departure from our previous process, and it
is depriving Commissioner Koskinen of his due process rights.
You know, there are many basic reasons for there to be due
process applicable to this particular proceeding, with the
errors that are--and the misleading statements and baseless
conclusions that riddle the so-called charging document.
It is due process that requires Commissioner Koskinen to be
allowed to make objections to any evidence, to cross-examine
each witness that the resolution's proponents put forward, to
call his own witnesses, to expose what he believes to be
blatant factual errors in the resolution.
And then after due process allowed for the submission of
the evidence against him and his ability to confront that
evidence, present his own evidence, have that evidence subject
to confrontation by the accuser, it then would fall to the
reasoned and sober intellect of this Committee to determine
whether or not impeachment was, in fact, warranted, which is a
very drastic action, again, only taking place three times in
the history of this country.
So what we are doing today, ladies and gentlemen, you know,
I know, the American people know, it is just plain politics. We
have got other things that we should be dealing with: The Zika
virus, funding for it; funding for the Flint fiasco that has
been un-remediated for the last year. So many things for this
Congress to do: Passing a budget, keeping the government open.
We are approaching another deadline, September 30. No
continuing resolution, no omnibus, no appropriations bills
passed, nothing. And here we are 3 or 4 days before we adjourn
so that these Members, who talk so badly about the institution
of government can go home to get reelected so they can come
back next year and do nothing.
With that, I will yield back the balance of my time.
Mr. Goodlatte. The Chair recognizes the gentleman from
Arizona, Mr. Franks, for 5 minutes.
Mr. Franks. Well, thank you, Mr. Chairman.
Mr. Chairman, sometimes the track record of a particular
witness to obfuscate is so strong that it vitiates the purpose
of additional questions. And all that one can do is to state
the facts and hope that they will be enough to serve the cause
of justice.
Commissioner John Koskinen took over the Internal Revenue
Service in the wake of the IRS conservative group targeting
scandal, ostensibly, for the precise purpose of reforming that
agency internally. Instead, he pointedly continued his
predecessor's legacy of deliberately stonewalling justice.
After Lois Lerner, director of the IRS's tax-exempt
organizations unit invoked the Fifth Amendment when she
appeared before Congress, the Committee on Oversight and
Government Reform issued a subpoena for IRS documents,
including all of Lois Lerner's emails. The IRS's chief
technology officer specifically issued a preservation order
instructing employees not to destroy any emails, backup tapes,
or anything relevant to the investigation.
But, Mr. Chairman, despite a congressional subpoena and a
do-not-destroy order, the IRS inspector general found that the
agency erased 422 backup tapes containing as many as 24,000
emails. And I know that has been stated here. But all the
while, Commissioner Koskinen knowingly kept Congress in the
dark.
Commissioner Koskinen was clearly aware that the emails had
been lost, but he knowingly and deliberately withheld that
information from Congress for 4 months and stonewalled the
entire investigation. Mr. Koskinen testified under oath four
different times before Congress during that 4-month period
saying he would turn over all of Lerner's emails, making no
mention of the fact that the bulk of them had already been
``lost.''
Mr. Koskinen provided false testimony and swore under oath
that the information on the bulk of the backup tapes was
unrecoverable. The inspector general found that approximately
700 of those emails had not, in fact, been erased and were, in
fact, recoverable. Commissioner Koskinen then failed to protect
citizens against the same type of future discrimination.
A General Accounting Office report found no significant
measures had been implemented under Mr. Koskinen's watch to
ensure that civil servants at the IRS don't continue in the
future to unlawfully target Americans based on their political
or religious views. Mr. Chairman, this entire matter was
absolutely counter to everything a republic like ours was meant
to be. In a constitutional republic like the United States of
America, we are fundamentally predicated on the rule of law.
And there are very few things that more shamefully break
faith with America and the American people or that undermine
their trust in their government more than witnessing those
given the sacred responsibility to enforce taxation equally and
according to the law, using the Federal Government's power of
taxation and its attending power to unlawfully and economically
destroy.
For them to then deliberately oppress American citizens
based on their religious or political views with these powers
is an unconscionable act. And such a tyrannical abuse of power
and the betrayal of their sworn oath to the United States
constitution by Mr. Koskinen and Mr. Obama will be writ large
in their legacy because it is something that goes to the very
heart of the rule of law in this republic and that so many
lying out in Arlington National Cemetery died to preserve.
Mr. Koskinen would never have allowed an American taxpayer
to treat an IRS audit the way he and other IRS officials have
treated this congressional investigation. The Congress owes it
to the American people and future generations and to our sworn
oath to the Constitution to hold the perpetrators of this
tyrannical abuse of power accountable and to make sure it never
happens again.
Mr. Chairman, with that, I yield back.
Mr. Goodlatte. The Chair thanks the gentleman and
recognizes the gentleman from Florida, Mr. Deutch, for 5
minutes.
Mr. Deutch. Thank you, Mr. Chairman.
Commissioner Koskinen, since you are the commissioner of
the IRS, I have some tax questions for you. Since 1976,
Commissioner, every Democratic and Republican candidate for
president--every one--has released his personal tax returns.
And releasing tax returns provides voters with important
background information of the candidate's contributions to his
community, how he may operate his business.
And I just would like to confirm a few things that we might
know if we had access to the candidate's tax returns. Releasing
a tax return can demonstrate how much a person pays in taxes.
Is that correct?
Mr. Koskinen. You would know anytime anybody files what
they paid in taxes, yes.
Mr. Deutch. And would it also tell us how much a person
gives to charity?
Mr. Koskinen. To the extent they took the charitable
deduction, it would. For various reasons sometimes people
don't.
Mr. Deutch. Would it give us some indication into a
person's assets or investments?
Mr. Koskinen. All you report is income and expenses, so it
would not necessarily tell you a lot about assets other than
that they produced a lot of income.
Mr. Deutch. If they produced a lot of income, we could draw
some conclusions about the amount of the assets?
Mr. Koskinen. Right. But there would be no way to actually
know what the assets were.
Mr. Deutch. Yeah. And would it confirm how the person has
chosen to try to reduce his tax liability?
Mr. Koskinen. Yeah. You would be able to see in any
taxpayer's return what the deductions were, what benefits they
took advantage of.
Mr. Deutch. Right. If we had the tax return, would it
provide information on how a person receives his income? Right?
Mr. Koskinen. You would see the source of income, yes.
Mr. Deutch. Right. And we may, if we had the access to the
tax returns, have some indication how the person finances his
real estate transactions?
Mr. Koskinen. You would have some. You wouldn't have a full
picture, again, because you wouldn't have a picture of all the
assets.
Mr. Deutch. We would have some. Right, we would have some,
as opposed to none.
And is it correct that a lot of this information we would
be able to glean right from the first couple of pages a
person's 1040 and schedule A?
Mr. Koskinen. You would have some, but it would be a very
high level of abstraction because there would not be any of the
exhibits.
Mr. Deutch. Right. But if--well, let me just--let me go on.
As you are aware, the current Republican nominee for President,
Donald Trump, has repeatedly said that he is unable to release
his tax returns because he is under audit by the IRS. He said,
``When the audit is complete, I will release my returns. I
don't have a problem with it. It doesn't matter.''
So I just have a few questions about that. Under current
law, the IRS is prohibited from disclosing a person's tax
returns, right?
Mr. Koskinen. Correct.
Mr. Deutch. But current law doesn't prevent a person from
releasing his own tax returns?
Mr. Koskinen. That's correct.
Mr. Deutch. And how long can an audit go on?
Mr. Koskinen. Audits can go on, depending on the
complexity, for years.
Mr. Deutch. And a person's not prohibited from releasing
their tax returns while they are under audit, are they?
Mr. Koskinen. No. They may be advised not to, but they are
not prohibited.
Mr. Deutch. Advised by the IRS not to?
Mr. Koskinen. No. They may be advised by their advisors,
but not by the IRS.
Mr. Deutch. Okay. And, in fact, Richard Nixon released his
tax returns while he was being audited by the IRS. Is there
anything in the law that prohibits a person from releasing his
tax returns during an audit?
Mr. Koskinen. No.
Mr. Deutch. Does the IRS--well, let me ask another
question. Would releasing the person's tax return during the
audit in any way impact that pending audit of the return?
Mr. Koskinen. The release itself wouldn't. The concern
sometimes by taxpayers is that when the information is public,
there may be more information that will be discovered or
provided.
Mr. Deutch. Yes.
Mr. Koskinen. But to release itself does not----
Mr. Deutch. I understand. Right. That is the concern. I
understand. We understand that that is the concern.
Does the IRS send a letter to a person informing him that
he is being audited by the IRS?
Mr. Koskinen. Yes. In other words--in fact, as I tell
people with the phone scams, if you are surprised to be hearing
from us, you are not hearing from us. We send you a letter if
we are going to start an audit.
Mr. Deutch. Commissioner Koskinen, is there any law or
regulation that prevents a person from publicly disclosing the
letter from the IRS that tells them that they are being
audited?
Mr. Koskinen. There is no restriction by the IRS.
Mr. Deutch. Releasing tax returns, as we have just been
discussing, provides transparency. It is being reported also on
the front page of today's Washington Post that the Trump
Foundation spent more than a quarter of a million dollars to
settle lawsuits that were filed against his business. Just a
few remaining questions there.
Is it illegal for the head of a nonprofit to use money from
the charity to benefit himself or his business?
Mr. Koskinen. As a general matter, nonprofits are not
allowed to--it is called inurement--use benefits of the tax-
exempt organization for their own purposes.
Mr. Deutch. Okay. Is it also illegal for a nonprofit group
to make political gifts such as the Trump Foundation's $25,000
contribution to the Florida attorney general's reelection
campaign?
Mr. Koskinen. I can't talk about any individual taxpayer's
activities. The law is clear: 501(c)(3) organizations cannot be
involved in politics.
Mr. Deutch. Right.
Mr. Koskinen. But I, again, would stress, we never talk
about any individual's tax returns or their policies.
Mr. Deutch. Right. Commissioner Koskinen, we shouldn't have
to ask you to talk about Donald Trump's tax returns. We should
be free to talk about those tax returns, because as you have
told us, there is simply no reason that he has not shared them
with us; he has not been prohibited from sharing them with us;
and, in fact, there is no rule that says that he can't at least
provide the audit notice so that we can have some small piece
of information that might help us.
You are right. We can't learn everything there is to learn
about his finances from his tax return, but it sure would be an
important start for the American people. And I appreciate your
being here to help clear some of that up.
And I yield back the balance of my time.
Mr. Goodlatte. The Chair recognizes the gentleman from
Ohio, Mr. Jordan, for 5 minutes.
Mr. Jordan. Thank you, Mr. Chairman.
Mr. Koskinen, is the IRS still targeting conservative
groups?
Mr. Koskinen. Absolutely not.
Mr. Jordan. Mr. Koskinen, that is not what the United
States Court of Appeals for the District of Columbia said. They
just issued a decision on August 5, 2016, last month. And I
just want to read from that decision. They said, ``Cessation
has never occurred. The IRS has admitted to the inspector
general, to the district court, and to this court that
applications for exemption by some plaintiffs have never to
this day been processed.''
That sounds like it is still going on to me, Mr. Koskinen.
Mr. Koskinen. I----
Mr. Jordan. I mean, let's read further.
Mr. Koskinen. Okay.
Mr. Jordan. They say, It is absurd to suggest that the
effect of the IRS's unlawful conduct, which delayed the
processing of plaintiffs' applications, has been eradicated
when two of the plaintiffs' applications remain pending. Sounds
like targeting still going on to me.
Let me just paraphrase that. It is absurd to say targeting
has stopped when the unlawful conduct continues. Again, this is
not Jim Jordan saying this. This is not Donald Trump saying
this. This is not the Freedom Caucus saying this. This is the
United States Court of Appeals for the District of Columbia
decided just 6 weeks ago.
So you guys are still up to it, aren't you?
Mr. Koskinen. No. As I wrote in a letter to all of the
oversight Committees, including yours, there are three cases
out of the 145 that have not been processed because they are in
litigation. And our policy for years has been if you are in a
process and then you sue us, we stop the process.
Mr. Jordan. You know----
Mr. Koskinen. But those are three from 4 or 5 years ago.
They are not new cases. There is no new case in the last 3
years.
Mr. Jordan. Yeah. These guys have been waiting 4 or 5, some
cases 6 years. And, you know, I figured you would say that, and
so it doesn't carry much weight with me and it frankly didn't
carry any weight with the court. Because here is what the court
said to that very argument. They said, The IRS is telling
applicants in these cases, ``We have been violating your rights
and not properly processing your applications. You are entitled
to have your applications processed. But if you are ask for
that processing by way of a lawsuit, then you can't have it.''
So the court wasn't buying your argument. They don't care
what your internal policy is. They are more concerned about
people's fundamental liberties and you guys continue to violate
them.
They go on to say this: ``We would advise the IRS if you
haven't ceased to violate the rights of the taxpayers, then
there is no cessation.'' So if you are still doing it, if you
haven't stopped doing it, then you are still doing it is what
the court said. You can't sit there and say you are not still
targeting. So here is what we have got to keep in mind.
Mr. Koskinen. Targeting is a present-tense verb. Those
organizations were improperly selected 4 years ago.
Mr. Jordan. These organizations still don't have their tax-
exempt status.
Mr. Koskinen. And as I noted, once the court made that
issue, while we for 50 years have stopped processing, we are
processing those applications.
Mr. Jordan. Remember, Mr. Koskinen, this is not me making
the argument. This is not just all these--we have heard from
the other side, these conservatives who want to impeach the IRS
commissioner. This is the court saying you guys are still doing
it. Never forget the underlying offense.
The IRS targeted people for exercising their most
fundamental liberty, their right to speak against the policies
of their government, and they got harassed for doing that. We
have heard a lot about due process from the other side. I think
you should get every bit of due process you are entitled to.
But how about the due process that all these people who got
harassed for years and three groups are still getting harassed
today? Here is what happened. The IRS targeted folks. They got
caught. Ms. Lerner, at first, she lies about it. She says, oh,
it wasn't us. It was those folks in Cincinnati. Then she takes
the Fifth. That sort of puts a premium on all the documents and
communications, making sure we get those. That is why we had
two subpoenas and three preservation orders for that
information.
You come in to clean up the mess, and under your watch,
documents are destroyed, false statements are made, 422 backup
tapes are erased. And now the clincher. Now the clincher: It is
still going on. And so the other side can say that we shouldn't
be here today. You shouldn't have to sit through this. I am
saying, why didn't we do this a long time ago?
You should've been gone a long time ago, when this is the
record: Losing emails, backup tapes destroyed, targeting still
continues to this day, not Jim Jordan's words, not Freedom
Caucus words, words from the Court of Appeals. For goodness
sake, that is why this hearing is important, and that is why we
should move forward with the articles that Mr. Chaffetz
submitted 15 months ago and make sure that you no longer hold
office.
Mr. Chairman, I yield back.
Mr. Goodlatte. The Chair thanks the gentleman.
Recognizes the gentlewoman from California, Ms. Chu, for 5
minutes.
Ms. Chu. Thank you, Mr. Speaker, Mr. Chair.
Commissioner Koskinen, today, how many investigations have
you been involved with regarding the events referenced in this
impeachment resolution? Could you explain your personal
involvement in each of these investigations?
Mr. Koskinen. Again, all of this happened before me. When I
started, there were six investigations ongoing: The House
Oversight Committee, the Ways and Means Committee, the Senate
Finance Committee, the Senate Permanent Subcommittee on
Investigations, the Department of Justice, and the Inspector
General all had investigations going on.
Ms. Chu. What were the results of these investigations?
Mr. Koskinen. The IG noted in its investigation that no one
had done anything purposely to impede the congressional
investigations. Nobody had instructed anybody to do that. The
Justice Department said, while there--and I would totally
agree--mistakes made--it was not a perfect process by any
means--no one had done anything that, in fact, raised to a
level of any activity subject to, you know--they basically said
nobody did anything that impeded the investigation.
The bipartisan report from the Senate Finance Committee,
again, had all the information they needed, disagreed. There
was a majority report and a minority report about whether it
was political motivation or whether it, in fact, was just bad
management and a poor management judgment. The bipartisan
report had a series of recommendations. We accepted all of
those recommendations. We actually accepted all the
recommendations of the majority report and the minority report.
The Permanent Subcommittee on Investigations closed its
report. It was the first one. And it basically maintained that
there was nothing done that was intentional in terms of any
material presentation. Everybody has agreed that it was a
management mistake, a terrible mistake. It shouldn't happen
again. No one should be selected for any adverse activities,
either denial of an application or wait for time, simply
because of the name of the organization.
This was not political philosophy. This was, in fact,
selecting people only by the name of the organization. And
everybody has agreed--and I totally agreed when I started--in
fact, I apologize to anyone who was stuck in the process for
more than a year waiting for an answer.
The Ways and Means Committee has not issued a report.
The House Oversight Committee did not issue a Committee
report. There was a staff report issued at the end of 2014.
Ms. Chu. In fact, let's talk about the Treasury Inspector
General. Could you describe what the working relationship is
like between the staff at the IRS and the Treasury Inspector
General. Are the results of the investigation by them generally
considered nonbiased and reliable?
Mr. Koskinen. Yes. For 3 years, when I was in OMB, I
chaired the Intergovernmental Organization of Inspectors
General. I have always been a supporter of the IGs. In the
private sector, I was a supporter of internal auditors. I meet
with the senior staff of the IG every month.
As I tell our employees, the IGs and GAO don't create
problems; they raise issues before that we might not otherwise
know, and it is important to respond positively. And we have
responded to the IG's recommendation. The IG reviewed it and
said, we had actually basically implemented all of their
recommendations. They had some additional recommendations. We
have implemented those as well.
But, I think the IG has done a good job. I knew him when he
worked on the Hill for the Republicans, but I don't think he
has been political. I think he has done a straightforward job,
and we have a good relationship.
Ms. Chu. Uh-huh.
One major problem here stems from the decision of two IRS
employees in a West Virginia facility to erase the backup tapes
that contained some of the Lois Lerner emails. The inspector
general found in its June 2015 report that no evidence was
uncovered that any IRS employees had been directed to destroy
or hide information from Congress, the DOJ, or the Treasury
Inspector General.
Let me ask this: Did you make an affirmative order that
those tapes be preserved? And did you ever make efforts to keep
this information from Congress?
Mr. Koskinen. I know I never kept any information from the
Congress. My counsel, in February 2014, within a few weeks of
my arrival sent a reminder to the IT department making sure
that they understood that all of the media should be preserved.
And again, as I said, when I discovered in 2015 from the IG
that those tapes had been erased, I said that was a mistake. It
shouldn't have happened. And as has been noted, I run the
organization, and if an honest mistake is made on my watch, it
is my mistake. I tell employees that.
Ms. Chu. So you made several statements saying that those
tapes should be preserved then, your office did?
Mr. Koskinen. I did not make several. It had gone through
the system. There was a standing order in 2013. There was a
reminder that went out from my counsel to the IT department to
preserve those reports. We were making a massive effort of
production, so you would have thought everybody would have
known that we are producing documents as fast as we could, and
therefore, we should protect them.
Ms. Chu. Thank you. I yield back.
Mr. Goodlatte. The Chair thanks the gentlewoman.
Recognizes the gentleman from Georgia, Mr. Collins, for 5
minutes.
Mr. Collins. Thank you, Mr. Chairman.
Mr. Koskinen, thanks for being here. I think it is
interesting that we have the commissioner of the IRS here to
give tax advice. I am glad that you have worked with my office
to actually help my constituents actually be able to get tax
advice, where we had one person with 700-plus thousand people
having to take golden tickets at a front door at 3:30 in the
morning.
I know we have added another one. I would like to see
another added there. And we still have some ongoing
correspondence that I would like some break down on the letters
that I have shared with you.
Mr. Koskinen. And I am delighted to do that.
Mr. Collins. And we will continue.
However, let me go back to just a couple questions, because
you and I have had several conversations. This thing has round
over several years, and we have had conversations when I was a
Member of the Oversight Committee.
And do you believe that a subpoena is a valid form of
getting information from someone who is being asked for, like
if the Committee actually subpoenas the Treasury or the IRS to
produce documents, that is as a valid form of getting
documents?
Mr. Koskinen. It certainly is.
Mr. Collins. And it should be followed. Correct?
Mr. Koskinen. Yes.
Mr. Collins. Okay. In September 2014, I asked you, this
does not require a transcript. I am going to give you your
answer back. I asked if the IRS had produced all the emails
from Holly Paz as required by subpoena; this subpoena currently
right here at the Oversight Committee. I had asked you the same
question 56 days earlier, and the answer then was no. And then
when I asked you the question September of 2014, the answer
again was no.
My question to you today, have those documents been
produced to the Oversight Committee?
Mr. Koskinen. I don't know. We have been working from the
start with the Committee staff to prioritize. We had a long
hearing, as you will recall, in March of 2014, about the order
in which we would reply to the subpoena. I made it clear we
were prepared to respond to the entire subpoena. That is how we
ended up with the Committee saying their first priority would
be all of the remaining Lois Lerner emails, and I said we would
provide those.
Since then we have been working with the Committee and
working our way through the subpoena in terms of whatever
information they would want.
Mr. Collins. Okay. Well, in number two on this subpoena,
just as a schedule--which was supposed to have been produced on
August 16, 2013, a nice day. That was my birthday. It didn't
get the gift of being produced. But on Holly Paz was number two
on the list. And on the actual request.
My question is this: Holly Paz is not in a crash situation.
Her hard drive was never in doubt. Why the delay here? Are you
blaming the Committee?
Mr. Koskinen. No, no, no. The Committee has a vast subpoena
they are asking for, some information from 90,000 IRS
employees. And at that hearing in March of 2014, we agreed that
we would get Lois Lerner emails and then we would respond to
the Committee staff as we went forward.
Mr. Collins. But if----
Mr. Koskinen. And we have provided Holly Paz emails. I just
can't tell you whether all of the ones from Holly Paz that have
anything to do with this issue have been provided. The question
is, have we provided other emails that she may have sent, and I
don't know the answer to that.
Mr. Collins. Well, in just your opinion as commissioner, do
you think that you are in compliance with this subpoena?
Mr. Koskinen. I think we are in compliance with that
subpoena in terms of our discussions with the staff. We have
not completed--as I say, one of those questions is emails from
90,000 employees outside, and I have explained in 2014 that
that would take a long time, and in our discussions with the
Committee staff we are not pursuing that.
Mr. Collins. And we have understood that, but some of these
were specifically named. The four people specifically named
were not these vast amounts out here.
Mr. Koskinen. Right.
Mr. Collins. Holly Paz has no constructive problem with a
computer. It was a hard drive.
Mr. Koskinen. Exactly.
Mr. Collins. You could get it off of it. I know--and it
sounds very upfront frankly, and I know this. You are a very
good witness in that you parse your words very well. That is a
compliment, but it's also the very frustrating part of this
whole thing. It sounds very much like you are blaming Committee
staff on their priorities here.
Mr. Koskinen. I----
Mr. Collins. I think at this point this is the frustration
that we all have with this.
Mr. Koskinen. I don't mean to do that, and I apologize if
there is any indication that I am trying to blame the staff.
All I am saying is we have been working with the staff in terms
of response to the subpoena. We provided all of the Holly Paz
and all of everybody's emails regarding the determination. That
is how the 2,300,000 pages came out. I have forgotten how many
hundreds, thousands of emails there are.
To the extent that the Committee at any time feels that
there is additional information that we haven't provided, we
have been providing information we completed. We sent a note to
everybody saying we are done with document production in
January of 2015. If we haven't provided all of the Holly Paz
other emails that have nothing to do really with this and the
Committee staff would like those, we will do that.
Mr. Collins. As I said before then, I say again now, this
is why the American people just do not understand the selective
ability to, you know, work with a subpoena or not.
And with that, Mr. Chairman, I yield back.
Mr. Goodlatte. The Chair thanks the gentleman, and
recognizes the gentleman from Illinois, Mr. Gutierrez, for 5
minutes.
Mr. Gutierrez. Thank you, Commissioner. I am sorry, I am
going to finish up this Skittle. I really love Skittles,
because, as you see, they come orange and yellow, red and
purple, all the different colors. And they come all together in
a bag together, right, all the different colors and kind of
like a rainbow. A lot of people on this side of the aisle, we
like that.
And every now and then--sorry--I will get a bad Skittle.
But I don't ban them all because I get one. Because most of the
Skittles are pretty delicious. I like them. They might not be
nutritious, but they are delicious. Just like we shouldn't ban
all the little girls fleeing murder and rape and human bondage
and torture. We shouldn't ban them all. Just like we wouldn't
ban all the Skittles because there might be one bad Skittle.
This is a Nation of freedom of religion, and yes, even freedom
to pay your taxes to the United States.
Commissioner, I have a few extra bags of Skittles, and I am
going to share them with you and your staff so that after this
reckless and bitter hearing, you can get a small amount of
sweet candy to improve the rest of your day.
Now, I have a question. Is it fair to say that you are an
expert on tax law at this point?
Mr. Koskinen. I know I have never claimed I was an expert
on tax law.
Mr. Gutierrez. Okay. I know you can't answer questions
about specific tax returns--you have made that abundantly clear
to my friend Mr. Deutch and others as we had the hearings. Even
if those tax returns everybody in America would love to see
them, you can't share them so we can't do a poll and send it to
you commissioner and you can abide by the poll. There are laws.
Or to answer specific questions about any individual's tax
activity.
So I want to offer a hypothetical and see if we can't get
your reaction. Let's say someone set up a charitable
foundation. Let's say someone solicits millions of dollars for
that foundation, and let's say that that individual who set up
the foundation used the money from that foundation, which is
tax exempt by you at the IRS. This is a tax-exempt tax
foundation.
And he uses it to pay off debts incurred by his for-profit
company. Tax-exempt charitable, use that money to pay off debts
incurred. In fact, not only does he do that, he used it to pay
off legal judgment against his for-profit company. That is the
company I am making money from, and I am hopefully paying you
taxes. And I am using the other money that I don't pay you
taxes because it is tax exempt.
So let's say for the sake of argument the individual says
he would pay someone $1 million if they hit a hole-in-one
during a tournament at his golf course, and after someone hit
the hole-in-one the individual refused to pay. Then after a
court rules that he has to pay--$100,000 would be paid,
mutually agreed by a charity, a part of that settlement, the
individual takes the $100,000 of other people's money--not his
money--the court said you have to pay the money, individual,
but he uses it from the foundation to pay that debt.
My question to you is, given that scenario, is that
strictly speaking--what is the term--legal to do something like
that? I just want to know, would that be legal for an
individual to use money from a tax-exempt account, foundation,
a charitable account, of other people's money to pay off legal
obligations incurred by his for-profit enterprises?
And before you answer, let me just follow up, again,
strictly hypothetical: Let's say there were a $10,000 portrait
of the individual and he used the foundation's money to buy it,
put it in one of his for-profit businesses, writing a check out
of the charity auction drawn and the charity using other
people's charitable tax-free donation but using the portrait in
his for-profit business.
So I get a bunch of money, I put it in my foundation, we
don't pay taxes on it. I go and bid on a portrait of me and
then I put it in my business. Would that, in your opinion, be
legal within the law and consistent with someone who declares
themself a law-and-order individual?
Mr. Koskinen. Congressman, I said at the start I came here
to answer questions truthfully and straightforward. But I
can't--we don't talk about individual cases, and if
hypotheticals begin to look like individual cases, I am not at
liberty to give opinion or judgments about them.
Mr. Gutierrez. But, Commissioner, Commissioner, you do know
whether something is legal or not. I mean, here is the
question: Can someone take money from a not-for-profit
foundation and pay off a legal settlement, court settlement to
pay that debt off?
Mr. Koskinen. What I can say is----
Mr. Gutierrez. Is it--can you use tax-exempt money to pay
for business purposes?
Mr. Koskinen. As I have said before, the law is clear: Any
tax-exempt organization cannot use its money to benefit anyone
as closely associated with that organization. But I can't give
you--every case is different. Every case has background and
information surrounding it and----
Mr. Gutierrez. Commissioner, you know who I am talking
about. Everybody in this room knows who I am talking about,
right. So all we want is a straight answer.
Mr. Koskinen. But I----
Mr. Gutierrez. Right? I mean, I know--can he get a haircut?
Mr. Goodlatte. The time of the gentleman has expired.
Mr. Gutierrez. Can he buy a new car? Can he buy new suits?
What can he use with that tax-exempt charitable money?
Mr. Goodlatte. The time of the gentleman has expired. The
commissioner will be allowed to answer the question if he
chooses.
Mr. Koskinen. As I would stress, and I think it is
important for all the taxpayers to understand, if you deal with
us, your information we go at great lengths to protect. Our
employees understand every taxpayer's information is
sacrosanct. We do not reveal it to anybody.
And it is important for them to understand that we do not
discuss anything about their tax situation with the public. And
so while I understand the interest in this issue, even in the
hypothetical sense, it would be inappropriate for the
commissioner or anybody else at the IRS to respond other than
to say the law is clear as to what 501(c)(3)s can do and cannot
do.
Mr. Goodlatte. The Chair recognizes the gentleman from
South Carolina, Mr. Gowdy, for 5 minutes.
Mr. Gowdy. Thank you, Mr. Chairman.
Commissioner, I want you and I to do something that those
of us who serve in government probably ought to do with a
little more regularity, which is put ourselves in the shoes of
the people that we purport to work for. I want you to imagine
waking up and you learn that agents of an agency that you
already fear, one of the most feared agencies in all of
government, with a lot of control and power, either real or
perceived, over your life, some agents of that agency are
targeting people based on their political ideology. And those
are folks in positions of leadership.
I don't know if you have read Lois Lerner's emails or not,
but there is a palpable animus, a hostility toward
conservatives that comes through in her work emails. These are
work emails. This is not her musing about an op-ed in the
Washington Post. These are work emails demonstrating a
tremendous enmity toward conservatives. And some of those
groups wanted to do nothing more than just educate their fellow
citizens about the Constitution.
And so I am sure you can appreciate the irony of Lois
Lerner punishing people who want to educate their fellow
citizens about the Constitution and then she comes and hides
behind it to avoid answering questions about her conduct. That
is why people are upset.
And then you add to that the President of the United
States, the person who campaigned as the great uniter, that the
same rules should apply to everyone, really didn't mean it
after all. And he prejudges an investigation while the
investigation is pending. So against this backdrop, Congress--I
am sure you will agree--has not only the right but, frankly, an
obligation to provide oversight over an agency where that is
the prima facie evidence at bar.
We have an obligation to do it. But the efficacy of our
investigations depends upon the fullness of the information we
are provided and the honesty of the witnesses that come before
us. We are of no use if we have incomplete information or those
that we seek information from are not truthful.
So there is a piece of your testimony that has troubled me,
and I want us to go through it. And this is what you said:
``Since the start of this investigation, every email has been
preserved. Nothing has been lost. Nothing has been destroyed.''
So I want us to go through it. What did you mean by since the
start of this investigation?
Mr. Koskinen. I meant since the response, as you note, the
appropriate congressional response to the IG report in May of
2013 when the six investigations started. The investigations
there, as I said, were four congressional, the IG and DOJ.
Mr. Gowdy. All right. So you and I are in agreement. You
meant from the very inception of the investigation?
Mr. Koskinen. Correct.
Mr. Gowdy. And then your next--this is under oath--I think
you will agree it is material. It is important. We are not
asking you about something unrelated to the investigation. It
is under oath. The next thing you say is, ``Every email has
been preserved.'' What did you mean by every email?
Mr. Koskinen. I meant by every email that the IRS had that
I knew of had been preserved. That is what I thought. That was
my honest belief.
Mr. Gowdy. Well, then why didn't you say that?
Mr. Koskinen. Pardon?
Mr. Gowdy. Why didn't you say that?
Mr. Koskinen. Well, if I knew then what I know now, I would
have testified differently. But at the time I testified
honestly on what I knew and what I had been told.
Mr. Gowdy. Well, then that gets us----
Mr. Koskinen. And nobody regrets more than I do that in
some ways this case has been the case that keeps on giving with
new information coming out. I wish the information had all been
out to begin with.
Mr. Gowdy. Well, Commissioner, it is always an option to
say, ``I don't know.'' Loretta Lynch has made a living
answering questions with, ``I don't know.'' It is always an
option to say, ``Based on what I was told.'' But you were
incredibly definitive. You said every email has been preserved.
And then for those of us who may not have been paying
attention, you said, nothing has been lost. What did you mean
by ``nothing''?
Mr. Koskinen. What I meant at that time was I had been
advised nothing. But you are exactly right, in retrospect I
would have been better advised to say, ``to the best of my
knowledge,'' or, ``on the basis of what I have been told,''
which was, in fact, the basis of my testimony.
Mr. Gowdy. Well, I am out of time, but this is what I would
like you to do, because this is an important matter. I was one
of the folks who wanted this hearing. I think this is really
important. And you should be able to provide us information,
but Congress should have all of that information.
Mr. Koskinen. Exactly.
Mr. Gowdy. So what I would like for you to do for me, is
you used the word ``mistake.'' That is the lowest level of
scienter. There is mistake, there is reckless disregard for the
truth, there is deliberate indifference, and then there is
intent. I would be curious what you think the proper punishment
is for each level of that scienter.
And the other thing I need you to do is, to the extent you
relied upon other people's counsel or what they told you, I
need to know who they were. I think you would want us to
interview every single witness that has access to information
that would be relevant.
Mr. Koskinen. I think you have interviewed all of them
already.
Mr. Gowdy. So you cannot think of a single person that this
Committee should interview that we have not already
interviewed?
Mr. Koskinen. To the best of my knowledge at this time, you
have interviewed the--I don't know the names of all the 50, but
the people who advised me throughout this case, you have
interviewed.
Mr. Gowdy. Would you do me the courtesy of making sure with
your lawyer that the record is complete, because whenever the
record is complete, that is when we have to make the decision.
And I am giving you the opportunity under the heading of due
process to make sure that every bit of information you think
should be considered is, in fact, in the hands of this
Committee.
Mr. Koskinen. Well, I would just note, and without going
into detail about it, there is a lot of information and
misinformation and misinterpretation of it that is in the hands
of the Committee, and if there were going to be a full hearing,
I would have the opportunity to explore that, we would be able
to cross-examine witnesses, we would be able to actually
provide you not just the allegations being made, but the facts
on both sides. Each side would have the opportunity.
But the impact of the facts. You should hear from the
inspector general directly, who did he talk to, is he still, as
he said in his letter, confident that it was an honest mistake
by two employees, it was not purposeful.
You should hear----
Mr. Gowdy. That is what I am asking.
Mr. Koskinen. Yeah.
Mr. Gowdy. Give me a witness list. Because you can't cross-
examine them until we have examined them.
Mr. Koskinen. That is correct. I would be happy to provide
you the witnesses and the information that this Committee would
need to be able to actually proceed accordingly. But, as noted,
that would be if the Committee decided it wanted to go to a
full-scale impeachment process, which I understand this is not.
Mr. Gowdy. Thank you, Mr. Chairman.
Mr. Goodlatte. The time of the gentleman has expired. I
allowed additional time because that is a good exchange of what
needs to happen.
The Chair recognizes the gentlewoman from California, Ms.
Bass, for 5 minutes.
Ms. Bass. Thank you, Mr. Chair.
Mr. Commissioner, let me begin by joining in with my
colleague on the other side of the aisle in thanking you and
your staff for being of great assistance to my constituents in
Los Angeles. I have had several members of the community that
have had some difficult situations, and your staff has been
very responsive.
Mr. Koskinen. Thank you.
Ms. Bass. I know when you took over the IRS, one of the
reasons why you were asked to fulfill this assignment is
because of your history of addressing organizations that were
having big challenges. And I wanted to know if you could
describe what specific challenges the IRS faced at the time you
took over the organization.
Mr. Koskinen. When I took over the organization, first, we
needed to make sure that the situation that led to the improper
selection of people just by their names never happened again.
And so we pursued, and as people have made recommendations over
which we have control, we have adopted those.
We had a substantial challenge when I started with the
underfunding of the agency, which still continues, in terms of
implementing not only the normal tax seasons, but we had the
Foreign Account Tax Compliance Act, we had the Affordable Care
Act. Since then, we have had the ABLE Act, we have had the
Health Coverage Tax Credit Act, we have had private debt
collection requirements, all of which have been basically
unfunded mandates that the IRS has had.
We are under constant attack by organized criminals around
the world trying to get access to our information, so our
cybersecurity issues and our antiquated IT systems are a major
concern and a major attack for us.
Ms. Bass. So----
Mr. Koskinen. They are all----
Ms. Bass. Go ahead.
Mr. Koskinen. And the last thing is, we provide tax credits
pursuant to statute, particularly with the earned income tax
credit. And I have been concerned from the start that we need
to do everything we can to get the level of improper payments
down, make sure everybody eligible participates, but make sure
that the right amounts go out, and it has been a very
complicated challenge.
Ms. Bass. So with all of those challenges, it is my
understanding that the IRS has spent about $20 million and
devoted over 160 hours--160,000 hours--to collect, review, and
produce over 1.3 million pages of documents to Congress. With
all of that effort, all of that time, and all of those pages,
were these primarily related to the 501(c)(3), (4) issue?
Mr. Koskinen. These were all related to the six
investigations.
Ms. Bass. And are those numbers accurate?
Mr. Koskinen. Pardon?
Ms. Bass. Are those numbers accurate in terms of the amount
of money, time, and pages?
Mr. Koskinen. Yes, those are the numbers. Basically it is
$20 million, we have had 250 people at various times working
either full-time or part-time, doing our best to respond as
quickly as we could to congressional requests.
Ms. Bass. So how did all of that time and money assist the
IRS in addressing the number of challenges that you laid out?
Mr. Koskinen. The best it was going to do, and I hoped it
would do in some ways better than it has, would be to try to
assure people that we understood the nature of the problem,
which the IG had reported on 6 months before I started, and
then we would have a basis for trying to solve that problem.
And I think we have done--taken all the recommendations anybody
has had, because I think it is critical, going back to the
issue about confidence in the IRS and in the government, for
people, as I said, to believe that they are going to get
treated fairly.
We don't care whether they belong to one party or another,
whether they go to church, they don't go to church, who they
voted for, what their political beliefs are, they should be
treated the same way as anyone else, and all of that background
is not relevant to us at all.
Ms. Bass. You know, when the whole controversy was taking
place, I found it interesting, the concern over conservative
organizations, because I am very familiar with a number of
liberal organizations that felt they received extra scrutiny
beyond what was appropriate by the IRS.
One of the root problems here in general is the time it
takes for the agency to process applications for tax-exempt
status. And I know in recent years, especially after Citizens
United, the agency was overwhelmed by applications for (c)(3)
and (c)(4) status.
I wanted to know how you have addressed this problem and is
there currently a backlog?
Mr. Koskinen. Presently, there is no backlog. For a (c)(4)
application, it now takes an average of 83 days to go through.
For (c)(3)s, where we had a backlog of 65,000 applications when
I started, we have streamlined the process for small charity
applications and allowed them to get through in a matter of
weeks rather than 9 to 12 months, and there is no backlog.
Our goal is for the complicated (c)(3)s, to get them out
within 270 days, and we meet that. For (c)(4)s, most of them
get handled very quickly under expedited processing, so there
are no backlogs.
Ms. Bass. And are you still getting a flood of
applications, and can you give an example of how things were
streamlined?
Mr. Koskinen. At this point, you know, we get--we have
about a million and a half Subchapter S--sorry, (c)
organizations, tax-exempt organizations. Seventy-five
percent of them are (c)(3), only about 5 percent are (c)(4)s,
and the majority of the (c)(4)s are garden clubs, Kiwanis
clubs, local groups. But every year we get a couple thousand
(c)(4) applications, and as I say, the average time for
processing now is 83 days.
Ms. Bass. Thank you. My time is up.
Mr. Goodlatte. The Chair thanks the gentlewoman and
recognizes the gentleman from Utah, Mr. Chaffetz, for 5
minutes.
Mr. Chaffetz. Thank you, Mr. Chairman.
Mr. Koskinen, in your opening statement you said that you
had instructed people in writing to preserve their records.
Could you please provide this Committee and the Oversight and
Government Reform Committee a copy of those emails?
Mr. Koskinen. A copy of the emails? Sure. We would be
delighted. I think my statement said that we instructed those.
I did not personally send an email.
Mr. Chaffetz. You didn't. Okay. We will go back and look at
the record. If there are any emails asking people to preserve
those documents, we would like see those, because we don't
think we have them.
Mr. Koskinen. We would be happy to provide those.
Mr. Chaffetz. Do you stand by all of your previous
congressional testimony?
Mr. Koskinen. Well, I have noted that if I knew then what I
know now, I would have testified in a different way.
Mr. Chaffetz. What in your previous congressional testimony
needs to be clarified or altered or updated?
Mr. Koskinen. Well, I tried to make that clear. Clearly, at
the time I testified, I was advised that, in fact, all the
evidence was being preserved pursuant to the orders that went
out. Since then, it is been clear that obviously some tapes
were erased, which was a mistake. I said that at the time. If I
were testifying again, I would say----
Mr. Chaffetz. Part of the problem that we have is that you
have never clarified your testimony. This is the first time we
have ever heard you say ``mistake.'' This is the first time
that you said that you provided essentially false testimony.
That is the way I read it.
When you said on June 20, 2014, ``Since the start of this
investigation, every email has been preserved, nothing has been
lost, nothing has been destroyed.'' Was that a mistake or was
it false?
Mr. Koskinen. That was an honest statement on the basis of
what I knew. As Congressman Gowdy said, I would have been
better advised if I had said, ``on the basis of what I have
been told and I understand.''
Mr. Chaffetz. But you told us in a hearing on July 23, you
told Mr. Jordan that you learned in April that these emails
were missing.
Mr. Koskinen. You have to understand there are two sets of
emails. The emails that I knew were missing in April of 2014
were from the Lois Lerner hard drive crash. No one knew until
2015 about the erasure of the tapes in Martinsburg. When I
testified in June, our whole focus, because none of us, the
Committee nor I, knew about the erasure----
Mr. Chaffetz. Why are you testifying that since the start
of the investigation, nothing has been lost, nothing has been
destroyed?
Mr. Koskinen. At the time I testified, that hearing was
about the Lois Lerner hard drive crash, so it was clear Lois
Lerner's hard drive had crashed.
Mr. Chaffetz. But you also testified a couple weeks later
that you knew in April there was a problem. In fact, Kate
Duvall, your senior person, knew in February. But you said you
personally knew in April, and yet you came before Congress and
you gave these definitive statements.
Mr. Koskinen. Well, if you look at the timing of it, you
had the report from us on the entire production system and the
Lois Lerner hard drive crash before I testified.
Mr. Chaffetz. But what you said was false. Was it true or
false, what you said?
Mr. Koskinen. It was true as far as I knew. And when I
testified----
Mr. Chaffetz. But in April, you said you knew in April that
there were missing emails.
Mr. Koskinen. Yes. And I filed a report with the Congress.
Mr. Chaffetz. How can you simultaneously say that you know
there are missing emails in April, and in June you say, since
the start of this investigation every email has been preserved?
Mr. Koskinen. Because Lois Lerner's emails were lost in
2011, long before the investigation started, and that hearing
was about the Lois Lerner hard drive crash.
Mr. Chaffetz. Let me ask you another quote. True or false.
``We confirmed that the backup tapes from 2011 no longer
existed, because they had been recycled pursuant to the IRS
normal policy.''
On July 23 you said, ``Confirmed means that somebody went
back and looked and made sure that, in fact, any backup tapes
that had been existed have been recycled.'' Is that true or
false?
Mr. Koskinen. That was true in my belief at the time.
Congressman Gowdy's exactly right----
Mr. Chaffetz. Who went back and looked?
Mr. Koskinen. I was told that the IT department----
Mr. Chaffetz. Told by who?
Mr. Koskinen. I was told by people, and you have
interviewed all of those people.
Mr. Chaffetz. Who are these people?
Mr. Koskinen. Who are those people?
Mr. Chaffetz. Yes.
Mr. Koskinen. It was the deputy chief information officer,
whom you have interviewed, who said to me that they had looked
and they were confident that, in fact--I asked, is there any
way to get tapes? And he said, they have all been recycled.
Mr. Chaffetz. But nobody went back and looked. In fact, Mr.
Camus, who was the deputy there at the Treasury inspector
general, said, ``The best we can determine through this
investigation, they simply didn't look for those emails. So for
the 1,000, over 1,000 emails that we found on the backup tapes,
we found them because we looked for them.''
How is it that you spent $20 million, 250 full-time people,
and you never looked for them, according to the inspector
general? And you testify that you went back, in fact, and
confirmed. That is false.
Mr. Koskinen. That is what I was told at the time. That was
my understanding at the time. As I have said, if I knew then
what I know now----
Mr. Chaffetz. And when did you inform Congress that this is
your view now? When did you tell Congress that you were wrong
on this?
Mr. Koskinen. When the IG reported in 2015, I subsequently
had a hearing with the Senate Finance Committee about this, and
I publicly stated in response to the public issues that it was
a mistake for those tapes to be erased, and I testified with
the Finance Committee----
Mr. Chaffetz. You know it was a mistake, but they were
erased after a duly issued subpoena. That is where we have a
fundamental problem. You issue 66,000 summons and subpoenas
each year. You know how to dish it out, but you don't know how
to take it. And so we issue a subpoena, we expect you to comply
with it. And when you destroy documents that are under
subpoena, somebody has got to be held accountable for that.
Mr. Koskinen. The IG----
Mr. Chaffetz. And that starts with you. You provided false
testimony to this Committee, you have provided false testimony
to the Oversight and Government Reform Committee, and you
should be held accountable for that.
I have got about 30 minutes more of questions, Mr.
Chairman, but I will yield back.
Mr. Goodlatte. The Chair thanks the gentleman and
recognizes the gentleman from Louisiana, Mr. Richmond, for 5
minutes.
Mr. Richmond. I will just, Mr. Chairman, I will just kick
off where my good friend from Utah left off, and that is
conversations about being held accountable.
You don't know me, but I did criminal defense for a while,
and I was a State rep, and in Louisiana I watched many people
get indicted and go to jail for the misuse of nonprofit funds.
And in your testimony, you say that one of the important things
with the IRS is for people to feel that they will be treated
fairly and that it doesn't make any difference who they are,
what organizations or what political party they belong to.
Well, let me just tell you, there are a bunch of people,
including me, that think that the justice system is rigged for
those who are privileged and those who are rich. So for the
people that I have seen go to jail for misappropriating $2,000,
$3,000, $5,000, $8,000, and we have an indictment that is
pending right now, the question becomes, how can someone take
money that belongs to a nonprofit to satisfy a personal
judgment and that not be a misappropriation of the nonprofit's
funds?
Mr. Koskinen. I don't know the details. All I can say, as I
have said, the law is clear, a (c) organization cannot use its
assets to benefit anyone who is closely associated with the
organization.
Mr. Richmond. And to pay off a personal judgment would be a
benefit to a person, not an organization?
Mr. Koskinen. Whatever you use to not pursue charitable
purposes, but to benefit anyone associated with it, the law
says you should not--it is not allowed.
Mr. Richmond. Let me just say this, and I wasn't even going
to bring that up, because I think today is a very unfortunate
day, but it signals what this Congress has been about and why
our approval rating is so low and why our reputation is the do
nothing Congress. We do do something. We grandstand and
showboat on a regular basis.
This Judiciary Committee in this room weeks ago, after
Philando Castile and Alton Sterling were killed by law
enforcement, I begged for a public hearing on the issue,
because I really think that the public deserves it, and I think
if we don't do it, we are going to have blood on our hands.
Well, unfortunately, police officers were killed. This week
we have two more incidents where two people were killed in an
incident with law enforcement, or two people lost their lives
in an incident with law enforcement. But we are not talking
about it. We are talking about a fragile country, we are
talking about fragile people, and we are ignoring a humongous
issue, because we are talking about impeaching you.
In Louisiana, we just had 7 trillion gallons of water
dumped on Baton Rouge and the surrounding areas. Just in Baton
Rouge, we lost 60 sheriff deputy cars, we lost 50 police cars,
we have a law enforcement that is dismantled.
But we are not having a hearing here today to talk about
how we get them back up because there is a pending Alton
Sterling decision that has to come out and how do we protect
American citizens and how do we keep their communities safe
when that decision comes out, because we know it is coming, but
we are, again, talking about impeaching you with 50 something,
I don't know, 100 days left in our term.
We keep grandstanding while America is burning. There are
some who would rather talk about Colin Kaepernick not standing
for the national anthem than to talk about people losing their
lives by the hands of law enforcement.
This is the Judiciary Committee. We don't even
acknowledge--we are not even talking about the fact that we are
losing law enforcement officers. We don't even have enough
bulletproof vests for the sheriffs in the United States of
America. But we are talking about impeaching you. We just had
police officers and sheriffs gunned down in Dallas and in Baton
Rouge, but they don't have police vests, and we are talking
about impeaching you.
Somewhere, somehow you have to say, what are these guys
thinking, what are these guys and women doing? Do they not
realize that we have a crisis in America, and we are talking
about impeaching you, which, you know, is laughable at its best
if it wasn't so sad, that all of a sudden this becomes the
biggest priority that we have.
And, Mr. Chairman, I would just again urge, and I want to
be on the record every time we talk, that we need a public
hearing so that people understand how serious we are taking the
policing in America issue, because, again, if people don't
understand we are taking it serious, they will continue to take
it in their own hands, people that are mentally disturbed will
do unimaginable things, and it is all on us if we don't get
together and talk about it.
With that, I will yield back.
Mr. Goodlatte. The Chair thanks the gentleman, recognizes
the gentleman from Texas, Mr. Gohmert, for 5 minutes.
Oh, for what purpose does the gentleman from Utah seek
recognition?
Mr. Chaffetz. I would just ask unanimous consent to enter
into the record the GAO report from July 2015, ``Internal
Controls for Exempt Organization Selection Should Be
Strengthened.'' Critical that, as Mr. Jordan talked about, that
the IRS has not fixed the targeting problem.
Mr. Goodlatte. Without objection, it will be made a part of
the record.**
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**Note: The submitted material is not printed in this hearing
record but is on file with the Committee, and can also be accessed at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=105349
Mr. Goodlatte. And now Mr. Gohmert is recognized.
Mr. Gohmert. I appreciate my friend from Louisiana pointing
out the grandstanding. That is kind of what I felt about the
sit-in that occurred on the House floor and my friends across
the aisle refusing to recognize that radical Islam is at war
with us, and instead they talked about guns. I am looking
forward to the grandstanding about pressure cookers and the
need to make them illegal.
But this hearing is about whether or not, Mr. Koskinen, you
committed such acts as should cause you to be removed from
office. And it has already been mentioned that you had
testified that you were made aware of problems associated with
Ms. Lerner's emails the same month that Ms. Duvall discovered
the gap and that you had withheld that information, didn't
disclose it for 4 months, until June 13 of 2014, and that
during that time, you had testified before Congress four times.
So I want to ask you, during those four times you testified
after you learned about the problems with Ms. Lerner's emails,
did it cross your mind at all that perhaps you should disclose
that, that there were problems with Ms. Lerner's emails?
Mr. Koskinen. If I could correct the record. I have
testified, and honestly, I learned about the Lois Lerner email
crash in April. Between April and the time we provided the
report to the Congress, I did not have a hearing. The hearings
in June were about the Lois Lerner hard drive crash. But I have
also stated, and the reason I did not immediately report that
crash was because I instructed people to see how many emails
from the crash period we could recover, and we recovered
24,000.
But as I have said, in retrospect, because it did create a
certain amount of aggravation on the part that I understand of
at least some Congressmen, in April, when I was advised, if I
had to do it again, I would advise the Congress that we had a
hard drive crash and we were now----
Mr. Gohmert. So is it your opinion that once you have
testified before Congress, if you learn information that makes
your prior statements not completely true, that you have no
obligation to come forward, send a letter, send an email, send
a message that you have now learned things, or in your opinion,
should you just wait until you are asked, and if you are not
ever asked, you have no need to disclose? Which is your
opinion?
Mr. Koskinen. I didn't wait until I was asked. We actually
produced a full report to all of the investigative Committees
about the process. But as I have said, when I learned of it in
April, life would have been a lot easier if I had simply
advised the Congress.
Mr. Gohmert. Well, you----
Mr. Koskinen. But since that time, we have advised the
Congress----
Mr. Gohmert. When you found out there were problems--did
you know Lois Lerner used a BlackBerry, that she had a handheld
device?
Mr. Koskinen. I did not, but that BlackBerry was in the
hand of the IG from 2013.
Mr. Gohmert. Did it cross your mind that she may have had a
portable device that was used to send and receive email?
Mr. Koskinen. No. I was not analyzing Lois Lerner's
activities. I was working and instructing people----
Mr. Gohmert. You knew there were requests for Lois Lerner's
emails and it never crossed your mind she might have them on a
personal device that she carried? That never crossed your mind?
Did it cross your mind that there was this facility in
Martinsburg, West Virginia, where storage was kept? Did that
cross your mind?
Mr. Koskinen. No. I was focused, as the agency was, on
reviewing all the emails we could, get emails. We had to pull
each hard drive out of the computer and----
Mr. Gohmert. Mr. Koskinen, when you are asked under oath
about the existence of emails, there really is an obligation to
learn about the emails and where they are and where they exist.
Let me just read for you--I hope you are familiar with the
Internal Revenue Manual. You are, hopefully?
Mr. Koskinen. Yes.
Mr. Gohmert. Thank you. Well, this was added January 23,
2014, 25.1.1.2. ``Fraud is deception by misrepresentation of
material facts or silence when good faith requires
expression.''
And I would submit to you, Mr. Koskinen, you have had ample
opportunities over the last 2 years to disclose things or maybe
to make inquiry, but it certainly appears you have what might
be called willful ignorance so you don't have to come up here
and testify about what actually happened.
It is hard to believe that you never made any inquiry about
potential places that Ms. Lerner's controversial emails that
may have been lost, may not have been lost, where they might be
found. It shocks my conscience that the head of the IRS would
not think to ask any questions other than, can anybody find her
emails? You require so much more from taxpayers.
And then we give you 290 million more dollars, and what
happens? You start closing local tax assistance offices for
taxpayers, like in Longview, Texas, and the excuse is, well, we
got our budget cut. Yeah. This year you got $290 million more;
2 months later you are closing offices to hurt taxpayers. It
looks like there is a problem with the management at the IRS.
And I see my time has expired, so I yield back.
Mr. Goodlatte. The time of the gentleman has expired. The
Chair recognizes the gentleman from New York, Mr. Jeffries, for
5 minutes.
Mr. Jeffries. Mr. Commissioner, thank you for your presence
and for your service.
The chief sponsor of the impeachment resolution that
resulted in this hearing is Republican Representative John
Fleming from Louisiana. Is that correct?
Mr. Koskinen. It is my understanding he is one of the
proposers.
Mr. Jeffries. And Congressman Fleming is currently a
candidate for the United States Senate. Is that right?
Mr. Koskinen. My understanding. I am learning from
Congressman Gowdy.
Mr. Richmond. Yes, he is.
Mr. Jeffries. Are you aware that Congressman Fleming is
currently running television advertisements as part of this
campaign that claims that the head of the IRS--that would be
you--ordered 24,000 emails erased?
Mr. Koskinen. I am aware of that.
Mr. Jeffries. But the facts have already been established,
I think, that the emails were inadvertently wiped by two low-
level employees. Is that right?
Mr. Koskinen. That is correct.
Mr. Jeffries. And these employees work the midnight shift.
Is that correct?
Mr. Koskinen. Yes.
Mr. Jeffries. And they work the midnight shift at a
facility in the blooming metropolis known as Martinsburg, West
Virginia. Is that right?
Mr. Koskinen. That is correct.
Mr. Jeffries. Now, the Treasury inspector general is a
Republican. Is that right?
Mr. Koskinen. Yes.
Mr. Jeffries. And he issued a report on June 30, 2015,
which concluded ``that no evidence was uncovered that any IRS
employees had been directed to destroy or hide information.''
Is that correct?
Mr. Koskinen. That is correct.
Mr. Jeffries. The Republican-led Senate Finance Committee
has uncovered no such evidence, true?
Mr. Koskinen. That is correct.
Mr. Jeffries. The Department of Justice conducted an
independent investigation and also concluded that no IRS
employee, from top to bottom, had been directed to destroy or
hide information. Is that correct?
Mr. Koskinen. That is correct.
Mr. Jeffries. This is not a legitimate impeachment hearing.
This is a political charade, it is a sham, it is a Hollywood-
style production. The outcome has already been predetermined,
the script has already been written, the witness has already
been labeled a bad guy, because in any Hollywood-style
production, there must be a villain, and who better than the
commissioner of the IRS.
But here is the problem. The Founding Fathers of this
Nation gave to this House the power of impeachment as an
extraordinary remedy only to be used in serious circumstances.
It is not a high crime or misdemeanor to be the head of an
agency that some of my friends on the other side of the aisle
don't like as part of an Administration that some of my friends
on the other side of the aisle don't like.
But it has been clear to me, as my good friend from
Louisiana indicated, Rome is burning right now in the midst of
a police violence crisis, but we are on this reckless
legislative joyride to impeach the commissioner of the IRS.
Why is that? Well, perhaps there are some in this town who
have been determined to impeach a member of the Obama
administration from the day that the President of the United
States was sworn in, in January of 2009, but you couldn't
impeach Barack Obama, you couldn't impeach Eric Holder, you
couldn't impeach Hillary Clinton, and so some genius came up
with the brilliant idea that we are going to go after the IRS
commissioner.
It is a dereliction of duty, it is the only reason why we
are here today, and it is a waste of the time and the treasure
of the American people.
I yield back.
Mr. Goodlatte. The Chair recognizes the gentleman from
Idaho, Mr. Labrador, for 5 minutes.
Mr. Labrador. Thank you, Mr. Chairman.
Thank you, Mr. Koskinen, for being here.
Your testimony suggests and what was just indicated by my
friend suggests that impeachment is improper, and that you have
attached many exhibits to that effect. You further stated that
you are unaware of anyone on your level having been impeached
in the past.
In fact, you sent us a letter from a bunch of college
professors, law professors, that says, the reason for the
salutary exercise of self-restraint by the House, meaning that
we have never impeached anybody at your level, is that in our
constitutional system, primary responsibility for supervising
executive branch officials resides with the President, not with
the Congress.
But the question that we have to answer in this hearing is,
what happens when the President is not exercising that
supervision over somebody like you?
So maybe the question is not whether impeachment is proper,
but maybe the question is, why, after all of these disturbing
instances of lack of candor, lack of transparency, and lack of
fitness to serve, you still believe that you can competently
serve as the commissioner of this agency?
This country may not have a long history of impeachment at
your level, but certainly we have a long, long history of
officials at your level who have been subject to dismissal and
resignation for similar or even lesser offenses than what you
have perpetrated.
Are you familiar with Michael Brown, the former director of
FEMA?
Mr. Koskinen. I do not know him, but I know the position he
held.
Mr. Labrador. And do you know what happened to him
following his mismanagement of the Katrina efforts?
Mr. Koskinen. I do not recall specifically. I know
ultimately he left the government, but I don't know the
circumstances.
Mr. Labrador. Yeah, he resigned from office.
Are you familiar with former DEA Administrator Michelle
Leonhart? Do you know what happened to her following the
release of a watchdog report on agent misbehavior under her
watch?
Mr. Koskinen. I do not.
Mr. Labrador. She resigned from office.
Are you aware of what Katherine Archuleta, the former OPM
director, did following the 2015 OPM hacks by foreign
governments?
Mr. Koskinen. That, I do understand.
Mr. Labrador. And what did she do?
Mr. Koskinen. She resigned.
Mr. Labrador. She resigned. There are many examples of
this, including the resignation of Secret Service Director
Julia Pierson following security breaches and ATF head Kenneth
Melson over Fast and Furious.
While I could, I am not going to spend my entire 5 minutes
providing you with examples of agency heads at your level who
have resigned based on agency failures. But, however, I am
going to suggest to you why this is not a dereliction of duty.
Your boss has refused to actually hold you accountable for your
actions, so there is only one branch that can do that, and that
is our branch.
Instead, I want to ask you, do you dispute that over 24,000
emails responsive to a congressional subpoena and investigation
were destroyed during your tenure?
Mr. Koskinen. I do not.
Mr. Labrador. Do you dispute that you testified before the
Oversight and Government Reform Committee after that
destruction that it was your intention to comply with the
request for evidence and that you were planning on turning over
all relevant email communication?
Mr. Koskinen. That testimony was not after anyone knew
about that erasure.
Mr. Labrador. But you testified that after that happened.
Mr. Koskinen. No. I----
Mr. Labrador. Was anyone at----
Mr. Koskinen. Yeah. I am sorry. I did testify after it
happened, just nobody knew it had happened.
Mr. Labrador. Was anyone at the IRS, including the two low-
level employees that you keep blaming for this, was anybody
fired due to the destruction of evidence?
Mr. Koskinen. I would like the record clear, I don't blame
them. At the time, I didn't blame them. The IG did a year
investigation and found it was a mistake.
Mr. Labrador. Were they fired?
Mr. Koskinen. They were not----
Mr. Labrador. Was anybody fired for the destruction of
evidence?
Mr. Koskinen. Those two people were not fired. The IG
determined it was an honest mistake on their part.
Mr. Labrador. So no substantive corrective action has been
taken. So ultimately, sir, I will do what you asked us to do. I
will judge you on your overall record. Your inability to
successfully preserve the information requested and your so-
called mistaken testimony clearly demonstrates that your
overall record is one of gross incompetence and extreme
negligence, and that your department exhibited such, or worse
yet, there was some intentional deception.
We shouldn't need the articles of impeachment that we are
talking about today and we shouldn't need these hearings,
because you, Mr. Koskinen, should have resigned for your
failures to properly carry out your duties and for failure to
bring the transparency that you promised during your
confirmation hearings.
And with that, I yield back my time.
Mr. Goodlatte. The time of the gentleman has expired. The
witness will be permitted to respond if he chooses to.
Mr. Koskinen. Pardon?
Mr. Goodlatte. You can respond.
Mr. Koskinen. No, I think if--I have an overall record at
the IRS that I am proud. We have made significant progress
across the board. I have talked about----
Mr. Goodlatte. You have to respond to the specific----
Mr. Koskinen. But on the specific issue, I do not think
that the mistakes, honest mistakes made by two employees are
the grounds for either resignation or certainly not for
impeachment. If, in fact, every time an employee makes an
honest mistake in an agency, the expectation is that the head
of that agency should resign, we are not going to have many
agency heads around.
Mr. Goodlatte. The Chair recognizes the gentleman from
Rhode Island, Mr. Cicilline, for 5 minutes.
Mr. Cicilline. Thank you, Mr. Chairman.
Thank you, Commissioner, for being here today and for your
service.
There is clearly no evidence that the charges being leveled
at you today have any validity whatsoever. In fact, multiple
independent and bipartisan investigations have found that you
in no way purposely misled Congress in any of your statements.
The Treasury inspector general, the Senate Finance
Committee, and the Department of Justice have each conducted
their own investigations on the so-called IRS targeting
scandal, and while these investigations uncovered various
management problems at the IRS, there was no evidence to
support allegations of criminal activity or politically
motivated behavior. There was no evidence to support
allegations that you deliberately misled Congress or attempted
to obstruct a congressional investigation.
In fact, each of these investigations found no evidence
whatsoever that you acted in bad faith. Under your direction,
the IRS has spent $20 million and devoted more than 160,000
hours to collect, review, and produce 1.3 million pages of
documents to investigating Committees.
The entire record, built on multiple investigations, fails
to support the allegations leveled here today. And it is
regrettable that rather than dealing with the issues of
criminal justice reform, immigration reform, commonsense
proposals to reduce gun violence, that we are taking up time in
this Committee for this charade.
So I want to ask you, since you are here, about the
political contributions of charitable foundations. First, is it
legal or illegal for a charitable foundation to make a
political contribution?
Mr. Koskinen. The law is clear, any (c)(3) or--any (c)(3)
organization cannot make a political contribution. 527s can be
in business, have to be in business totally to make political
contributions. (C)(4)s, the rule is, as long as their primary
purpose is social welfare, they can make political
contributions.
Mr. Cicilline. So if a charitable foundation makes a
political contribution and the IRS becomes aware of it, you go
through a process in which you impose a penalty, correct?
Mr. Koskinen. We would go through a process of doing an
audit and an investigation to determine the details.
Mr. Cicilline. And if you determine that such a political
contribution was made in violation of law, you impose a
penalty?
Mr. Koskinen. There would be penalties if that was the
final determination.
Mr. Cicilline. And in deciding the level of punishment, the
kind of penalty that the IRS will impose, you look at whether,
for example, it is an honest mistake or whether someone did it
intentionally and then tried to cover it up. You would treat
those two categories differently.
Mr. Koskinen. We certainly would. We would always in any
audit hear from the taxpayer and make our responses
accordingly.
Mr. Cicilline. So in the case of a contribution made by the
Trump Foundation of $25,000 in which they made that
contribution to a political action committee for the benefit of
the attorney general candidate Pam Bondi, shortly before she
decided not to pursue a criminal charge or any other
investigation against the Trump Foundation, on the filing of
the foundation, they put as a place that they made a $25,000
contribution instead an organization called Justice for All,
which is a Wichita organization, which they never made a
contribution to, which sounds just like And Justice for All,
the only inference, I think, would be in an effort to cover up
an illegal political contribution.
In those circumstances, the IRS would impose a more severe
penalty, correct?
Mr. Koskinen. I don't mean to be unresponsive. As I say, my
goal here today is to answer questions. But as I say, when
hypotheticals start to get very specific, it is inappropriate
for the IRS or the commissioner to respond.
Mr. Cicilline. Well, Commissioner, you have been
undoubtedly following the extraordinary coverage of the
operation of the Trump Foundation as it relates to these
political contributions in the media, correct?
Mr. Koskinen. Well, I read newspapers every day.
Mr. Cicilline. Okay. Well, is someone at the IRS reviewing
this or will someone initiate some review of these illegal
political contributions by the Trump Foundation?
Mr. Koskinen. As I have tried to make clear, we never talk
about the status of any taxpayer. And we get referrals from the
public, from Members of Congress suggesting that we look into
particular activities of companies, charitable organizations,
and others. There is a process with appropriate reviews and
controls it goes through. But we never respond.
Mr. Cicilline. Okay.
Mr. Koskinen. If you write us a letter, we tell you thank
you for the letter; we don't tell you what the action is we are
going to take.
Mr. Cicilline. Thank you.
Mr. Koskinen. And so I can't tell you.
Mr. Cicilline. Thank you, Commissioner.
And so one final question. An issue which has been raised
by my constituents with some frequency are difficulties they
have when they call the IRS and they are put on hold for an
extended period of time, really unreasonable lengths of time as
they are waiting to speak to an IRS official.
Can you talk about what efforts are being made to reduce
that waiting time? And more generally, would you address the
impact of the deep budget cuts on your ability to deliver
services to my constituents and to constituents all across this
country?
Mr. Koskinen. Well, if I could respond, the question was
raised by the Congressman from Texas about what we do with the
$290 million. What we did with that was we hired, partially--we
hired a thousand people during tax filing season, and the level
of phone service went from 37 percent, a totally unacceptable
rate the year before, to 70 percent. But because the amount of
money provided was less than half of what we requested, I
advised the appropriators that after the end of the filing
season, the people we had hired, the money ran out, and the
people would go away.
So our level of taxpayer service right now is back to an
unacceptable level. It is a simple algorithm: If we have the
money, we hire the people, they answer the phone; if we don't
have the money, we don't have the people, then we don't have
enough people to answer the phone.
Mr. Cicilline. So the people who are being required to stay
on those phones and wait for an IRS, Commissioner, don't have
you to blame, they have Congress to blame for not appropriating
the resources necessary to serve our constituents properly?
Mr. Goodlatte. The time of the gentleman has expired. The
witness will be permitted to answer the question.
Mr. Koskinen. I have tried to make it clear to
appropriators in the Congress that it is--you know, we do the
best we can. We have an obligation to provide taxpayers the
best service we can. But it is a direct correlation between the
amount of funding and the amount of service we can provide.
The $900 million cuts over the last 6 years means that we
are significantly constrained. We did appreciate the $290
million from the Congress and we provided reports on how we
actually used all of those funds for protecting taxpayers,
cybersecurity, and taxpayer service.
Mr. Cicilline. Thank you, Commissioner.
I yield back, Mr. Chairman.
Mr. Goodlatte. The Chair recognizes the gentleman from
Texas, Mr. Farenthold, for 5 minutes.
Mr. Farenthold. Thank you, Chairman Goodlatte.
Commissioner Koskinen, you testified in response to a
couple of questions that as a result of the Lois Lerner
treatment of conservative organizations, several people are no
longer with the IRS. Were any of those people fired or did they
all resign?
Mr. Koskinen. I actually don't know. All of that happened
before I got there. All I know is the five people in the order
either resigned. There were reviews done on a personal basis,
and I don't know which of those people resigned and which of
them resigned in the face of, in some cases, knowledge they
were about to be fired. But I don't know that, and if I did
know, I wouldn't be able to tell you the details anyway.
Mr. Farenthold. And you talked about these two gentlemen
who degaussed the tapes and you have repeatedly said that it
was an honest mistake. Do you know if these gentlemen were
aware of the order to preserve data?
Mr. Koskinen. I have not done the investigation. The IG's
investigation reported that they were not aware, that they
actually thought--these were labeled as junk and they thought
it was junk. They had already degaussed some earlier, 2 years
ago. And their understanding, they were junk. They came with a
label saying for disposition, and they disposed of them.
Mr. Farenthold. And you testified that you got the word out
as a result of the subpoena not to destroy any evidence. How
did you get that information out?
Mr. Koskinen. The word was already out in the spring--in
the summer of 2013.
Mr. Farenthold. Right. But how did you communicate it to
the employees where, when someone who is in charge of
destroying a potential media that would contain these didn't
get a hold of it? Was there an email?
Mr. Koskinen. Yes. There were emails in 2013; there were
further emails in 2014. But as I have said, it shouldn't have
happened, and it clearly was not an appropriate level.
Mr. Farenthold. So what I am getting is the fact that this
email did not get to people who actually physically destroy
backup tapes seems to indicate a management failure. So I would
ask that you would get us copies of those emails and who they
were distributed to.
You know, I am a small-business man, I have never had more
than about 40 people working for me. But if we were to get an
order from Congress or a court or the IRS not to destroy
evidence, we would--I mean, we would probably pull the hard
drives out of all the computers so something isn't actually
erased accidentally.
As an attorney, I know that a claim of spoilation of
evidence really weighs against you. In Texas, you are entitled
to a jury instruction telling the jury that you can assume the
worst was in those emails.
Mr. Koskinen. I have been educated by Congressman Gowdy
about spoilation since I did not know it originally. It takes--
it has to be an intentional destruction for it to be assumed
that, in fact, you can assume the worst. There was thus far no
finding that it was intentional.
Mr. Farenthold. I am going to go a little bit and take a
step back, because, you know, we are talking about articles of
impeachment against you.
One of the things I hear consistently from my constituents
in Texas is, all you guys in Congress do is go yell and scream
and beat on your chest. In fact, I hear it from some of the
folks on the other side of the aisle.
When we find wrongdoing in government, Congress has a
limited number of remedies. We can write a law to change it,
try to fix things, but that has got to get passed by the Senate
and signed by the President. So if it is something the other
side doesn't like, right now this Congress is out of luck.
You know, people say, oh, you have got the power of the
purse, but the Senate won't take up our appropriations bills
and we are continued to forced to do continuing resolutions and
face claims of, oh, you are shutting down the government and
all of this nonsense. So the power of the purse is basically
gone.
We had Eric Holder held in contempt of Congress, we had a
Committee recommend criminal charges against Lois Lerner
herself, and last week Brian Pagliano refused simply to show
up, and the Justice Department isn't doing anything.
So our bag of tricks is getting kind of shallow, and
impeachment is in there. And I think one of the reasons we are
pulling it out is that the Justice Department and the Obama
administration are failing to cooperate with Congress. The
Justice Department, rather than being the people's lawyer, are
turning out to be the Administration lawyers, and you may be
the victim of this.
I mean, do you have any suggestions on how we should get
more cooperation from people before this Committee, the
Oversight Committee, and the rest of Congress?
Mr. Koskinen. Well, whatever the Oversight Committee is
doing, they take--they have noted on their Web site, or at
least it was until recently on their Web site, 20 executives in
the government that they thought should be removed or leave.
They have big pictures and they have big red X's through 18 of
them. So they have been successful 90 percent of the time. I am
one of the two that they have not thus far been able to get----
Mr. Farenthold. I guess the other weapon we have are these
hearings in getting the public behind us on that.
And I appreciate your courage coming here and testifying.
Mr. Koskinen. Thank you.
Mr. Farenthold. But I really am disappointed that these
things happened, and happened under your watch, and the buck
has got to stop somewhere.
And I see I am out of time.
Mr. Goodlatte. Would the gentleman--without objection, the
gentleman is granted an additional 30 seconds. Would the
gentleman yield?
Mr. Farenthold. Yeah, I will.
Mr. Goodlatte. Thank you. You asked a question that
Chairman Chaffetz and I would both like to pose to the
commissioner a slightly different way.
Can you please provide to this Committee and to the
Committee on Oversight and Government Reform any written
communication, not just emails, any written communication that
you or anyone else made instructing IRS employees to preserve
records responsive to congressional subpoenas?
Mr. Farenthold. And who it went to.
Mr. Goodlatte. And who they went to.
Mr. Koskinen. Yes. We will be happy to do that.
Mr. Goodlatte. Thank you.
The Chair now recognizes the gentleman from Michigan, Mr.
Bishop, for 5 minutes.
Mr. Bishop. Mr. Commissioner, thank you very much for being
here. Thank you for your time and your patience answering the
questions today, much of which has been asked and re-asked.
I apologize if I get into that area, but I represent
770,000 constituents, all of which have an opinion about
something, as well they should, but not many resonate, not many
issues resonate as they have on this issue in particular with
the IRS, because it impacts everyone.
And the question has to do with the way in which it is
hypocrisy that the IRS expects citizens to live up to a certain
standard but doesn't hold themself to that very standard. And
as a former businessman and person who complied as a citizen, I
am asked to comply with the IRS. If I were audited and the IRS
showed up at my doorstep and they said, ``Where is the
information?'' and I said, ``My server crashed, sorry,'' I
don't think the IRS would be as lenient with me as the
government has been with the IRS in such a circumstance.
So this is what angers people, this is why a hearing like
this happens. And I think this is regular order for a Committee
like this to bring this issue forward, because, as my colleague
said earlier, we have run out of options. Our job is to oversee
and make sure that government runs properly and according to
law.
And my frustration sitting on this Committee and being a
part of all this is that it doesn't operate that way, that we
very infrequently have real oversight, that those who come
before this Committee oftentimes just stare us down and go on
their merry way, they take a lashing and leave, as though they
have done their job.
But it is very frustrating for me. I have learned that--I
will not accept it. This all has to change.
But I want to ask you, the IRS has promised to deliver all
of Lois Lerner's emails relating to the targeting of various
conservative organizations, but was unable to because her hard
drive had failed and a substantial amount of backups--the
backups were destroyed as well. I wanted to ask you about the
backups.
Ordinarily there is a forensic research--if I am running
these operations, I go and make sure that every possible
remedy, every possible option was taken to ensure that we
checked everything, to find everything that was asked of us.
Can you tell us whether or not the IRS reviewed the backup
tapes or any information? For example, did they go back and
look at the hard drives that handled Lois Lerner's emails? Did
they look at the email server? Did they look at the BlackBerrys
that she had then or has now? All of these things. Laptops, did
she have more than one?
What was done to try and preserve this information, this
critical information for this Committee and the American
people?
Mr. Koskinen. As I noted, there were--well, all of this
started, the investigations started 6 months before I got
there. There were instructions issued to preserve all media,
and we will share those with the Committee.
The decision in 2013 trying to respond was the most likely
place to find these emails was in the hard drives in all of the
employees. Hard drives of 88 or 90 employees were pulled, they
were reviewed. We had an agreement with the Committees as to
what the searches would look like to make sure they were
getting everything responsive to the inquiries. And that is how
we ended up with 1,300,000 pages of documents.
With regard to Ms. Lerner, there were--78,000 of her emails
were provided, 24,000 from that gap period. When I was advised
of the gap period in April, I said we need to go and look at
everybody she communicated with, because if there was an email
in her box, it was on somebody else's as well, and we found
24,000.
Mr. Bishop. Can I ask you this? Did she ever, after all
this happened, did she ever come to your IT department and say,
``Someone help me find these emails''?
Mr. Koskinen. There are emails----
Mr. Bishop. Because if my computer crashed, I would say it
is critical, especially if I were the director of the IRS. I
would immediately go to the IT department and say, ``Please
help me. Something has gone wrong here. Find my emails.''
Mr. Koskinen. And there are emails in which she wrote to
the IT--sent to the IT department in 2011 saying, my hard drive
looks like it doesn't work. It has crashed. Could you fix it?
The hard drive was reviewed and worked on by IT, and they sent
her a note back saying, we can't find any of the emails. She
was, according to the emails, unhappy and upset that the emails
had been lost. And they said, the only way to conceive of it
would be to send it out somewhere with experts, and they didn't
do that.
But they did have--there are contemporaneous emails, which,
ironically, were provided to everybody in the end of 2013. So
it is not as if there was a conscious effort to hide the issue
that her hard drive had crashed. And she had, as you said, been
very concerned and asked for help to try to fix it.
Mr. Bishop. Mr. Chairman, my time has expired. I yield
back.
Mr. Goodlatte. The Chair recognizes the gentleman from
Michigan, Mr. Trott, for 5 minutes.
Mr. Trott. Thank you, Mr. Chairman.
And thank you, Commissioner, for being here.
You know, Commissioner, you have had an extraordinary
career. Head of the Soccer Foundation. Head of the Duke
University Board. Executive chairman at Freddie Mac. Deputy
mayor of D.C. Deputy director of OMB. Ran a large turnaround
company. Was in charge of Y2K for the entire country. Clerked
for the chief judge for the D.C. circuit. Worked at Gibson
Dunn. Duke. Yale. Cambridge. Just an extraordinary record.
You said earlier that you are proud of your record at the
IRS. I am not so sure I agree. You came in with two big tasks
in front of you, one, the Lois Lerner investigation, and two,
to restore the confidence in the American people that their
First Amendment rights weren't being compromised by the IRS.
And we have heard quite a bit today about our concern with
respect to both of those challenges.
But let me ask you a hypothetical. When you were the
executive chairman of the Freddie Mac board, if the president
and CEO of Freddie Mac lied under oath to Congress or
repeatedly misstated important facts or repeatedly was
uninformed of decisions being made by subordinates regarding
the mortgage crisis, what would you have done?
Mr. Koskinen. If he lied under oath to the Congress, we
would have considered appropriate disciplinary action, which
might have included termination.
Mr. Trott. If the president of Duke University, when they
were doing investigation into the scandal of the lacrosse team,
if he had lied or if he had misstated key facts or if he was
otherwise uninformed on what the subordinates were doing with
respect to that investigation, what would you have done when
you were the chair of the Duke Board?
Mr. Koskinen. Well, if he was performing in good faith--you
are talking about did he intentionally either mislead or
obstruct issues.
Mr. Trott. Well, just gross incompetence. Let's call it
that. Let's not say perjury. Let's just say gross incompetence,
unaware of the investigation, unaware of the facts, misstating
the facts consistently. What would you have done?
Mr. Koskinen. At that point, in fact, we would have a
discussion. But that doesn't sound like he intentionally--if he
was totally unaware, then you would have a serious question.
This is not a situation where the head of the organization
was totally aware by any stretch.
Mr. Trott. Let me--this is not a hypothetical--let me ask
you a more recent set of facts.
So yesterday, Senator Warren was screaming at the CEO of
Wells Fargo for what happened there to their customers. And I
think it is indefensible what happened there. And she called--I
think she screamed it several times--``He needs to resign.'' Do
you think the CEO of Wells Fargo should resign?
Mr. Koskinen. Not a decision for me to make, but the
distinction is people at Wells Fargo knew for the last couple
years about that problem. No one at the IRS knew about the
erasure of those tapes. This is not a situation where people
knew something and were covering it up. Every time--we spent a
significant amount of time trying to provide all the
information we had.
Mr. Trott. Well, so you think the CEO of Wells Fargo knew
about what has happening?
Mr. Koskinen. That is my--all I know is what I read in the
newspapers, and my understanding is that the question was that
people knew 2 or 3 years ago.
Mr. Trott. People or the CEO?
Mr. Koskinen. I haven't read the details, so I can't tell
you for sure. Again, to the best of my knowledge, it is--I
don't know the details.
Mr. Trott. We have heard a lot today from some of the
Democratic Members of the Committee that this whole hearing is
an embarrassment and we should apologize. And here are the
facts as I know them. People are afraid of the IRS. The IRS was
used as a political tool under the Nixon administration and now
the Obama administration. You were brought in to solve this
problem, and under your watch the problem got a lot worse,
either because you committed perjury or because you were
consistently misinformed regarding critical facts in the
investigation or you were unaware of what your subordinates
were doing.
Now, we both know--and I spent 30 years in the private
sector--we both know in the private sector, the head of the
organization, with those facts in front of you, they would have
been fired or they would have resigned.
And so when the Dems say this is a charade and a game--and
you could say the same about a lot of things here in
Washington--but my question to you is, what should I go home on
Friday and tell me constituents who are afraid of the IRS and
who are disgusted by Washington?
Because what happens when these facts are presented in
Washington is either people lie, they cover up, or we have to
say, well, you know, we have to expect some level of
incompetence from the Federal Government, that is why
Washington is a mess.
What should I tell my constituents about what is going on
at the IRS and how, under your tenure, this investigation
played out? Please give me an answer.
Mr. Koskinen. The answer to that is no one lied, no one
covered up. And, in fact, the base issue, the mismanagement
that led to the improper, totally improper, designation of
organizations by their names, has stopped, notwithstanding the
issue that there are three that have litigated and have not
been decided. We are actually resolving those.
So I think the answer is, no one lied, no one covered up,
and, in fact, we take very seriously the obligation to make
sure that every taxpayer, no matter their political party,
their beliefs, whether they go to church or not, whatever they
do, deserves to be treated and needs to be treated, and that is
our obligation to treat them fairly.
Mr. Trott. But, sir, you would have to agree with me. In
the private sector, the head of that organization probably
wouldn't have survived. Would you agree with that statement?
Mr. Koskinen. On these facts, the head of that organization
would survive.
Mr. Trott. All right. I respectfully disagree. Thank you,
again, for your time. And I have to say, I don't--I am
surprised that you haven't resigned. Because with your
extraordinary career, I think there is a part of you, if you
disagree with a lot of what we are doing here today would want
to say, gosh, I just don't need this, and you would move on and
do something else. But I appreciate you being here.
Mr. Koskinen. Well, I appreciate that. As I have said, if I
could, Mr. Chairman----
Mr. Goodlatte. You may answer.
Mr. Koskinen [continuing]. I have not resigned, A, because
I don't think anything has been done that would merit that; B,
after all of the, well, tugging and hauling and pushing over
the last year, year and a half, my concern is if I am, in fact,
forced out and I left, it will simply create a terrible
precedent trying to recruit people from the private sector, as
I came, on the ground that people can make allegations that are
not necessarily subject to a full investigation, can simply
make allegations charging you that there were threats of
impeachment or censure, and a lot of people are going to say,
why should I risk my career or my reputation to do public
service in that context.
So my sense is we need to get the closure on this. Because
I don't think impeachment is proper. And we need to demonstrate
to people you can come into public service and you have an
obligation to the taxpayers, you spend taxpayer money, you have
an obligation to do your best and perform well. And in some
cases, as we noted, on the Oversight Committee list, there are
18 out of 20 that they have so-called targeted that have left.
And if you can't meet the expectations, you don't make
progress, then you shouldn't be there.
But the total record here is not just (c)(4)s, where we
have solved that problem. The total record over the last 3
years is the IRS and its employees have made tremendous
progress dealing with a wide range of issues, and I am proud of
the record.
Mr. Goodlatte. The Chair recognizes the gentleman from
Wisconsin, Mr. Sensenbrenner, for 5 minutes.
Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
Mr. Koskinen, first of all, thank you for coming here. I
think that you have been able to present your side of the story
in a very articulate manner in response to both friendly and
hostile questions.
I want to make an observation before asking a couple of
questions. This Administration has made a career or maybe
history of basically ignoring whatever Congress wants to do in
furtherance of its constitutional oversight responsibility.
That includes blowing off subpoenas, delaying things, not
having full disclosures, covering things up. And in the case of
Lois Lerner, who was cited for contempt, the U.S. Attorney
announced that he would not present the contempt citation of a
separate court in a coequal branch of the government to the
U.S. District Court for the District of Columbia 30 minutes
before he left office following resignation.
That, in my opinion, is an impeachable offense. But since
he left office 30 minutes after he committed the offense, there
was nothing that Congress could do. You know, I think we have
to look at our ourselves. One of the things I think we should
do is to allow the counsel for the clerk of the House to be
able to go directly into U.S. District Court to enforce
congressional subpoenas and, you know, other types of process
to support our constitutional oversight responsibility.
And I think a lot of the problems that we have had not just
with you and with the IRS, but with a lot of the other
agencies, would be resolved if we could go directly into court
rather than having to go through the roadblock of the Justice
Department.
Now, that being said, I am very curious on how Lois Lerner,
who as a member of the senior executive service, and who
developed a reputation as a partisan when she was working for
the Federal Election Commission, ended up getting to the IRS
and being put in the position that she was in. I know this
happened before your time, and I know you probably don't know
why, but could you tell me, you know, what the process is of
transferring SCS personnel from one agency to another agency
and who initiates that and who signs off on that, you know,
aside from the member of the SCS who is proposed to be
transferred?
Mr. Koskinen. Right. You are right, I have no idea how that
happened when she arrived. As a general matter, at least at the
IRS I can tell you that, we will, if we have an opening, an SCS
opening, we will advertise it publicly and it will be open to
both government executives within the IRS and across the
government and private sector executives who will then have to
qualify, determine that they meet the SCS requirements.
When they apply, there are--there is a preliminary
screening of all the applications by a panel. There is a
separate group of senior executives that then interview the
finalists and make a recommendation then to the commissioner on
the basis of that review. That second panel is--these are all
career employees. The only political appointee at the agency is
the commissioner and the chief counsel.
That recommendation goes to--in our case right now--that
group are the two deputy commissioners and the chief of staff
to the commissioner. They interview then the three or four
final panelists and a recommendation comes----
Mr. Sensenbrenner. Let me see. I don't think it was a
coincidence that Lois Lerner left where she was from at the FEC
and ended up where she went to in the IRS. You know, there had
to be some kind of political design involved in that, and I
think Congress should look into whether there are political
transfers.
You know, the other thing, you know, I am proud of the fact
that I am conservative, and I know you are not. But I think
that one of the things that all of us who work for the
government are supposed to do is to engender and increase
public trust of government institutions, which isn't going very
well now.
Now, put yourself in my shoes, you know, somebody who
represents 715,000 people in Wisconsin. How do I tell my
conservative constituents that they should increase their trust
in the IRS and that what happened to a couple of my groups will
never, ever happen again? Thank you.
Mr. Koskinen. You could tell them there have been six
different investigations. The Internal Revenue Service has
taken every recommendation they have control over and
implemented it. The IG has reviewed the implementation of the
IG's recommendation and said we have done a substantial
progress, made additional recommendations for additional
training before elections, which we have taken; that we have
created a risk management operation and organization in the
agency, where I have now talked to 22,000 IRS employees in
person in townhalls and one of my pitches to them is everyone
has to be a risk manager. Everyone has to raise their hand if
they think anything is not going the way it should, if there is
a mistake or a problem, so that we can deal with it. And I
think you tell them we are committed, and I am personally
committed, that that situation was intolerable and should never
happen again.
As I said, you should be able to tell your constituents
with a straight face that we--still do, even with constrained
audits and resources, over 1 million audits this year. And I
think the system won't work if people, when they hear from us,
think that--wonder who I talked to the wrong way, did I go to
the wrong meeting, does anybody know that I belong to this
organization. People should be comfortable that the IRS process
does not care who they are in person, what their political
beliefs are, what organization they belong to, who they voted
for.
If they hear from us, it is because of something in either
their application or their return. And if somebody else had
that same question, subject to resources, they would hear from
us as well. The system will not work unless we can get
taxpayers to understand that.
And I understand--the reason I took this job, was because I
understand that the mistakes that were made, the intolerable
operations, were corrosive to public confidence in the agency.
We touch virtually every American, 150 million individual
taxpayers file with us. They need to be confident that they are
going to be treated fairly no matter who they are. And I am
committed to that, and your constituents have to know we are
committed.
The proof ultimately will be in the pudding. People have to
see in our activities that we, in fact, treat everyone the same
way. They are all treated fairly. That is our obligation.
Mr. Sensenbrenner. Thank you.
Mr. Goodlatte. The Chair recognizes the gentleman from
Florida, Mr. DeSantis, for 5 minutes.
Mr. DeSantis. Commissioner, when does your term of office
expire?
Mr. Koskinen. My term expires, I think it is November,
either 9 or 12 next year.
Mr. DeSantis. Of 2017?
Mr. Koskinen. Yes, I have made it clear I serve--even with
a fixed term, I serve at the pleasure of the President. So
whoever the new President is can decide to make a change if
they would like.
Mr. DeSantis. So you will offer a resignation, whoever
comes in, and you will offer to step aside?
Mr. Koskinen. No, I have a fixed term. So unless I actually
don't want to fill out my term, I serve at the pleasure----
Mr. DeSantis. I understand that. But when you say you serve
at the pleasure, meaning that if the President came to you and
asked you to step aside, you would----
Mr. Koskinen. I would.
Mr. DeSantis [continuing]. If you got fired. But you are
not going to offer to step aside unilaterally. Correct?
Mr. Koskinen. That is correct.
Mr. DeSantis. Okay. Now, there has been talk about due
process. But I just want to, for the record, we did have a
hearing in this Committee, I think it was in July. And you were
invited to come to that first hearing, correct, and you chose
not to?
Mr. Koskinen. Sure. No. As I explained to the Chairman, I
had just come back from abroad. And I had a hearing the next
day. I explained to the Chairman I would be delighted to come
any time. And I have been delighted on relatively short notice
to be here today.
Mr. DeSantis. Okay. Now, I want to look at your testimony
today because there has been a lot of talk, I think
justifiable, about some of the things you have said over the
course of the investigation later turned out to be false. Now,
today you testified that the IRS ended the use of BOLO lists
more than 3 years ago. And that is your testimony. Correct?
Mr. Koskinen. That is my testimony.
Mr. DeSantis. Well, how does that square with the D.C.
Circuit opinion where the IRS made that exact same argument and
the court rejected that? They said, no, you have not ceased the
conduct. You have chosen to suspend the use of BOLO lists,
which means that you are free to attend, you are free to return
to the offending conduct. And that is what the court found.
So for you to say you ended the list, when, in fact, you
suspended them, that is not just me being, you know, nitpicky,
that is a distinction that the court seized upon and justified
in its ruling against the IRS. Shouldn't you have said that you
have suspended the use of BOLO lists?
Mr. Koskinen. No. The Justice Department has a litigation,
and that was what they provided. The IG reviewed this matter
over a year and a half ago and agreed that we had terminated. I
wrote a letter to all the oversight Committees saying it has
been clear--however you call it, terminated, suspended,
whatever----
Mr. DeSantis. Well, it matters legally because if you are
suspending it to try to get through a case and then you could
return to it, the court thought that that was important.
Mr. Koskinen. Yes. Our----
Mr. DeSantis. So there is no document, though, that says--
--
Mr. Koskinen. Document.
Mr. DeSantis [continuing]. You ended it or does it say you
suspended it?
Mr. Koskinen. No. It ends, and I will be happy to share
with the Committee the instructions given to all people in the
exempt organization decision with regard to this matter, and
those instructions went out 3 years ago, and we will share that
with you.
The other point----
Mr. DeSantis. The court rejected that. I mean, you agree
with that.
Mr. Koskinen. No, the court did not----
Mr. DeSantis. The court found that the IRS has simply
suspended the use of BOLO lists, but that there is--you guys
have not proven to the court--which that would have been the
time to do it--that you will not return to the offending ways
subsequent to the litigation.
Mr. Koskinen. Well, I can't speak for the Justice
Department and the litigation. All I can tell you is we have
provided all of the oversight Committees with the note that we
have committed and have terminated the use of BOLO lists. The
question about the three that were pending for 50 years, if you
are involved with us and then you suddenly go to court, we
don't continue to process the audit or the return.
Mr. DeSantis. But the court rejected that argument, as Mr.
Jordan said. To be fair, the court said that that puts people
in a catch-22 because you tell them, you know, you are going to
violate their rights, and then if they seek litigation to get
their rights, then you say, well, we are going to continue to
violate your rights until the case is over. And the court
thought that that was unacceptable, and I do too.
But let me move on. You have admitted that the subpoenas
that were issued for Lerner's emails, that the IRS did not
comply because there were tapes that were destroyed. Correct?
Mr. Koskinen. That is correct. I mean, if we did not--we
were supposed to produce evidence. We could only produce the
evidence we had.
Mr. DeSantis. And I think that you have acknowledged that
your June 20, 2014, testimony, you did testify falsely because
you said, ``Everything has been preserved. Nothing has been
destroyed.'' And of course, as we have established in March,
just a few months before that, there were tapes that were
destroyed containing pertinent emails.
You also testified that day that ``the IRS confirmed that
backup tapes no longer existed.'' I remember that exchange
because I was sitting there. They drilled down to you, what
does it mean by confirmed. And you said it meant somebody went
and checked. And of course that wasn't true. Because although
the IRS had destroyed 422 backup tapes, the IG did find backup
tapes that were still in existence at the time you made the
statement.
You also testified at your confirmation hearings that you
believed in transparency and report problems as soon as you
knew about them regarding the Lerner production. But you have
acknowledged today that you waited 2 months, and that that was
a mistake.
One of the other things you said was that the IRS went to
``great lengths in order to provide Congress with the material
that it requested.'' You remember making that statement?
Mr. Koskinen. I do.
Mr. DeSantis. Is that false? Did you go to great lengths to
provide it? And here is why I ask that. You never--nobody in
your organization ever went to the Martinsburg, West Virginia,
warehouse where they had the backup tapes. I put it on Google
maps today. It is about 76 miles from the District of Columbia.
You have complained about how costly it has been to provide
information to Congress in the past, but, in fact, that would
have taken probably a tank of gas to get there and back.
And yet, the inspector general, when they went there, even
though you said you went to great lengths, nobody from your
organization had ever gone to retrieve any backup tapes. Isn't
that true?
Mr. Koskinen. We went to great lengths to respond to the
congressional request. We provided----
Mr. DeSantis. But those great lengths did not involve
getting in a car, driving 76 miles, asking for the backup
tapes, and then bringing them to Congress. That was a bridge
too far for you.
So let me--I am almost out of time. Let me just end with
this.
Mr. Koskinen. Okay.
Mr. DeSantis. There has been disputes about did he order
the tapes destroyed or whatever. I don't think that that is
even the standard. Obviously if you did that, that is a no-
brainer. But I believe Justice Story was right when he talked
about impeachable offenses being political offenses that grow
out of personal misconduct or gross neglect. And he said they
must be examined upon very broad and comprehensive principles
of public policy and duty.
I think that the IRS had a duty to provide Congress the
information. The IRS breached the duty. I think you had a duty
to display candor in front of Congress. I think your false
statements--although you can say you didn't intend them--I
think had you investigated more, you would have known. So I
think it is really about breach of duty and about the gross
negligence that is at issue here.
I am out of time, and I yield back.
Mr. Goodlatte. The Chair recognizes the gentleman from
Texas, Mr. Ratcliffe, for 5 minutes.
Mr. Ratcliffe. Thank you, Mr. Chairman.
Commissioner Koskinen, I have listened to you today. I want
to make sure that I am summarizing the testimony that I have
heard from you and the things that I have heard you say today.
I think you've been candid in some of your testimony today, but
I want to make sure I am summarizing what has happened on your
watch as the commissioner of the IRS for the last 2 years and 9
months.
So I think you have acknowledged that there have been some
failures by the IRS under your watch with respect to the
retention and preservation of documents. Correct?
Mr. Koskinen. That is correct.
Mr. Ratcliffe. And I think you have acknowledged that there
have been failures by the IRS under your watch with respect to
the production of documents and other evidence. Correct?
Mr. Koskinen. No. We have produced all the documents. Our
failure was, in fact, with the documents that we did not have.
But we have produced, as I say, 1,300,000 documents.
Mr. Ratcliffe. Well, you have acknowledged failures by the
IRS to testify accurately under oath, specifically yourself on
a number of occasions. Correct?
Mr. Koskinen. That is correct. I did testify on the basis
of what I knew, but it was not--turned out not to be accurate.
Mr. Ratcliffe. There is a difference between testifying
truthfully and testifying to the best of your knowledge.
Correct?
Mr. Koskinen. No. Actually, truthfully is what you know.
Truth is, you know--if I had known it and I hadn't testified
about it, that would be a lie. That would be untruthful. At the
time, I testified--I have had over--close to 40 hearings. I
have never----
Mr. Ratcliffe. Let me reclaim my time here. You told the
OGR Committee that you would produce all of Lois Lerner's
subpoenaed emails. That wasn't true.
Mr. Koskinen. No, actually, we produced all the emails we
had. As I said at that----
Mr. Ratcliffe. That wasn't my question.
Mr. Koskinen. No. At the hearing----
Mr. Ratcliffe. You didn't produce all of her emails. Did
you?
Mr. Koskinen. No. At that hearing we had a discussion about
the fact that I can't produce emails that I don't have.
Mr. Ratcliffe. And on June 20, when you said the IRS had
preserved every email, that wasn't true?
Mr. Koskinen. That was actually--I did not know it, but
that was not accurate.
Mr. Ratcliffe. So it is not true. And of course, as
Congressman Gowdy asked you when you said nothing had been lost
or destroyed, that was not true.
Mr. Koskinen. That is right. I thought it was true at the
time.
Mr. Ratcliffe. So in light of all that----
Mr. Koskinen. Pardon?
Mr. Ratcliffe. In light of those failures, failures to
retain documents, preserve documents, testify accurately, I
would hope that you would appreciate why it is legitimate for
folks to wonder if they should take you at your word that
erasing--the erasing of the tapes and the destruction of
evidence was accidental, as you have characterized it.
Mr. Koskinen. You don't have to take my word. That was the
inspector general's results after a year of investigation.
Mr. Ratcliffe. Yeah. Let me stop you there. Because you
have talked about, about how the Department of Justice and how
the IG have investigated that and how they have backed you up
with respect to it being accidental. But the bad news for you,
commissioner, is that being cleared by the Department of
Justice in this Administration unfortunately doesn't carry much
weight with the American people anymore, not since the attorney
general started handing out get-out-of-jail free cards to Obama
administration officials like most of us hand out candy on
Halloween.
But while we are on the subject, let me ask you this
question: In the days before that investigation was closed by
the Department of Justice, you didn't happen to have a
clandestine but accidental meeting with the attorney general on
a plane or a tarmac somewhere, did you?
Mr. Koskinen. Never.
Mr. Ratcliffe. Okay. Well, I hope you can appreciate why I
would ask that. Because there is certainly a precedent for that
type of thing happening.
Regardless of whether this was accidental, let me concede
to you for purposes of your answer that this was accidental. It
seems to me, based on what I have heard from your testimony
today, that you don't think there should be consequences as a
result of that. You know, for ordinary Americans, even if it is
an accident, let's say someone gets in a car accident, if
someone dies because of it, there are consequences.
Now, someone might get charged with manslaughter, they
might get charged with vehicular homicide, they might get
charged or they might be sued civilly for gross negligence or
negligence. The consequences may be criminal. They may be
civil. But there will be consequences. And that is the way our
justice system is set up.
But for you and the folks in the IRS, it seems to me that
you want a different system and a different set of rules
where--one where you can say it was an accident, I am sorry,
just move on. And to that point, let me ask you, since you took
office to restore confidence and in your words provide
accountability and spent nearly $20 million to do just that,
who has been held accountable at the IRS?
Mr. Koskinen. As I noted, the basic issue has been the
management mistakes made in terms of identifying people for
review just on their names. And all of those people are gone.
With regard to----
Mr. Ratcliffe. Hold on. Hold on. We are talking about two
different things here.
Mr. Koskinen. No, no. Now we are talking about since I have
been there.
Mr. Ratcliffe. No, no. I want to talk about, yeah, on your
watch----
Mr. Koskinen. Can I explain that?
Mr. Ratcliffe [continuing]. Targeting officials----
Mr. Koskinen. Okay.
Mr. Ratcliffe. All right.
Mr. Koskinen. I will tell you, on my watch we have ended
the BOLO list. There is no evidence we are targeting any new
organizations. We do have three that we suspended we are now
going to process. Although, one has sued for an injunction to
keep us from processing. But I would note in terms of the
overall record, the IG spent a year, and looking at the tapes,
found 1,000 emails. We produced 1,300,000 pages. So that----
Mr. Ratcliffe. That is not my question. My question is who
has been held accountable. So you mentioned that you had 50
people advising you. Advising you on your watch, during your
watch, which you have acknowledged there were failures to
preserve, failures to retain, failures to testify truthfully.
Have any of those folks been terminated. Has anyone been
terminated on your watch for those transgressions?
Mr. Koskinen. No one has made a transgression that I think
is a fireable offense.
Mr. Ratcliffe. Has anyone been demoted?
Mr. Koskinen. No, I am not of--demoted.
Mr. Ratcliffe. I am not asking for their names. Has anyone
been demoted?
Mr. Koskinen. I know a few have left.
Mr. Ratcliffe. That is not my question.
Mr. Koskinen. No, nobody's been demoted.
Mr. Ratcliffe. Has anyone been held accountable? And the
answer is no.
Mr. Koskinen. I think that is probably right. Because we
don't think that anybody consciously or purposely did anything
to interfere with the investigation.
Mr. Ratcliffe. Well, we will just have to disagree on that.
My time has expired. I yield back.
Mr. Goodlatte. The Chair recognizes the gentleman, Mr.
Buck, for 5 minutes.
Mr. Buck. Thank you, Mr. Chairman.
Commissioner, welcome. You have been here for three and-a-
half hours now. The lights are hot and I notice that you have
gone through your water. Do you----
Mr. Koskinen. Well, I got another half a bottle left. So I
am all right.
Mr. Buck. Oh, okay. Okay. Good. Because I have heard about
dehydration affecting people's judgment. I want to make sure
you weren't dehydrated today.
Mr. Koskinen. Thank you.
Mr. Buck. Okay. And you don't have pneumonia?
Mr. Koskinen. No.
Mr. Buck. Okay. Good. I wanted to make sure. There is been
a lot of talk from the other side of the aisle about due
process. And I want to make sure that we have the same
understanding of due process. You went to a great law school.
You worked for a great law firm. You are well versed in the law
and understand due process. And I was a Federal prosecutor. I
worked with special agents from the IRS.
When they presented a case to me for charging, I didn't
have to talk to the defendant. I didn't have to re-interview
the witnesses. The level of due process in a charging decision
is simply the person charging making a best effort to determine
whether there is guilt or not. You understand that, do you not?
Mr. Koskinen. Yes. And that is why, again, I understand the
process is if the Committee wanted to charge me, they would go
to the House, get a resolution past authorizing the Committee
to proceed.
Mr. Buck. Right. And you would be charged. You would be
tried by the Senate with the chief justice sitting, and you
would receive due process on the Senate side. To say that there
is no due process----
Mr. Koskinen. My understanding is that that is not true. If
you look at how this Committee has conducted impeachment
proceedings historically, the Committee has held hearings.
There have been witnesses. There have been the right to cross-
examination.
Mr. Buck. I understand that. But in a charging decision--
the Committee's history is one thing. But in a charging
decision, the level of due process is based on the judgment of
the individual or group charging, not the trial. The trial has
a whole different level of due process than the charging
decision.
For somebody to say that you have received no due process
when you are testifying here, and you have testified in OGR, is
just not true.
Mr. Koskinen. Well, obviously, there are grand jury
proceedings where, in fact, the charge is presented to a grand
jury that decides whether there is evidence. My understanding
of the process----
Mr. Buck. And the defendant has a right in a grand jury
proceeding to be present?
Mr. Koskinen. My understanding of the process is
historically the way the House has dealt the impeachment, and
the way this Committee has dealt with impeachment, is the
Committee has done--has a set of preliminary hearings. The
Committee makes a resolution to the House that the House passes
authorizing the Committee to proceed with a full investigation
set of hearings and investigation. And then the Committee comes
back to the floor of the House with the recommendation which
would be the charge.
Mr. Buck. Okay. I appreciate----
Mr. Koskinen. The charge is not made directly to the House
floor. The charge comes in response to the Judiciary Committee
having been authorized to start an investigation, holding the
investigation, presenting witnesses----
Mr. Buck. I want to move on.
Mr. Koskinen [continuing]. And then going back to the
floor.
Mr. Buck. We disagree. I want to move on.
Mr. Koskinen. Well, that is fine. Okay.
Mr. Buck. You are familiar, I take it, with title 44,
United States Code section 3103 which deals with retention of
records. And the people that work for you are familiar with
this also, are you not?
Mr. Koskinen. I am not familiar with the statutory issue.
Mr. Buck. Well, let me read it to you. ``The head of each
Federal agency.'' Would you agree with me that you are the head
of a Federal agency?
Mr. Koskinen. I certainly am.
Mr. Buck. Okay. ``Shall make and preserve records
containing adequate and proper documentation.'' You have a duty
to preserve records that have documentation. Is that your
understanding according to the archives?
Mr. Koskinen. According to the archives.
Mr. Buck. Okay. And those records may contain essential
transactions of the agency. So that is the type of records that
you have to maintain are essential transactions----
Mr. Koskinen. Those are the official records, right.
Mr. Buck. And you understand that Lois Lerner's emails were
essential transactions of the agency.
Mr. Koskinen. Not all of her emails, but a chunk of them
were surely. Some emails back and forth are not official
records.
Mr. Buck. Okay. But her emails were important to Congress
to determine which were essential and which were not essential.
Nobody went through the emails before they were destroyed in
West Virginia to determine what was essential and what was not
essential.
Mr. Koskinen. Exactly. The erasure should not have
happened. It should----
Mr. Buck. So would you agree with me--that is the statute.
I have just read you the elements of the statute. Would you
agree with me that as the head of the Federal agency that you
violated that statute?
Mr. Koskinen. No. Actually, I think, as you know, to
violate a criminal statute you have to intend to violate that
statute. Nobody in the IRS intended to violate any of the
statutes. Nobody in the IRS intended to obstruct----
Mr. Buck. And this is not a criminal statute, sir. This is
not a criminal statute. There is no criminal penalty associated
with it. This is the statute that defines what records need to
be archived and the duties of the head of the agency. Would you
agree with me that you violated those three elements as I
described them to you?
Mr. Koskinen. No. Again, I think you violate it when you
consciously decide. Did we do it appropriately? Was it perfect?
The answer is no. We have had an ongoing process with the
National Archives about--we have an antiquated system--about
making sure that we are capturing official documents and
official records.
Mr. Buck. But you have now filibustered me out of time. I
can't ask you, but there are strict liability crimes. There are
other crimes where you don't need to have the intent.
I would yield to the Chairman.
Mr. Goodlatte. Without objection, the gentleman is
recognized for an additional minute if he would yield to the
gentleman from Ohio, Mr. Jordan.
Mr. Buck. Yes.
Mr. Jordan. I thank the gentleman for yielding.
Mr. Koskinen, these two guys down in Martinsburg, the
midnight shift guys, were they employees of the IRS or were
they contracted to work for the IRS, to do work for the IRS?
Mr. Koskinen. They are GS-4 employees of the IRS.
Mr. Jordan. They are employees of the IRS. About 90,000
people work for the IRS. Is that accurate?
Mr. Koskinen. There were 90,000. We are down to 80,000.
Mr. Jordan. Okay. 80,000 people. Of those 80,000, how many
other people in that 80,000 worked the midnight shift?
Mr. Koskinen. I have no idea.
Mr. Jordan. I mean, is that--I mean, when I think about
government employees, I don't really associate, you know, other
than our military working around the clock, I don't really
associate folks in government employment working the midnight
shift.
Mr. Koskinen. We have a lot of employees working the
midnight shifts. We have, during filing seasons, regular--our
systems have to be up and running 24 hours a day.
Mr. Jordan. Okay. All right. Mr. Chairman, I yield back.
Mr. Goodlatte. Would the gentleman yield to me?
Mr. Buck. Yes. I yield to the Chairman.
Mr. Goodlatte. I thank the gentleman for yielding. I want
to follow up on that.
You testified today that you wanted--you waited 2 months
after finding out that the backup media was recycled before you
informed Congress, before you informed----
Mr. Koskinen. That is not correct.
Mr. Goodlatte. What is correct?
Mr. Koskinen. What is correct is I waited 2 months after I
learned of Lois Lerner's hard drive crash. I didn't learn about
the erasure of the tapes until 2015, long after these hearings.
Mr. Goodlatte. Okay.
Mr. Koskinen. There are two sets of issues. One is Lois
Lerner's hard drive crash in 2011; the other is the erasure in
Martinsburg, which nobody knew until the IG reported it in
2015. So what I waited for was I had been advised there had
been a hard drive crash. What I did was I said we need to then
look at everybody who communicated with Ms. Lerner in that time
to see how many of those emails we can capture. And that is how
we captured 24,000 emails from that time period.
As I have said, in retrospect--there was no hearing in
between times, but as--in retrospect, I should have actually
advised the Congress while we were doing that search.
Mr. Goodlatte. All right. Thank you very much.
This concludes today's hearing. Commissioner, you have
given us a lot of your time. We thank you for attending. I want
to point out to you that without objection, all Members will
have 5 legislative days to submit additional written questions
to you or additional materials for the record. And we would ask
that you respond to those, and I think it will be in your
interest to respond to those written questions promptly.
Mr. Koskinen. I will get to them as quickly as we can.
Mr. Goodlatte. Thank you. And with that, the hearing is
adjourned.
[Whereupon, at 1:37 p.m., the Committee was adjourned.]
A P P E N D I X
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