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March 6, 2014
House Oversight Committee Considering Options After Lerner Maintains Silence
by Fred Stokeld

Full Text Published by Tax Analysts®

The chair of a House committee investigating the IRS's mishandling of exemption applications from conservative organizations said the committee will consider its options after a central figure in the controversy again refused to answer the panel's questions at a hearing March 5, prompting an abrupt hearing adjournment.

House Oversight and Government Reform Committee Chair Darrell E. Issa, R-Calif., spoke with reporters after Lois Lerner, exempt organizations director in the IRS Tax-Exempt and Government Entities Division at the time the agency was conducting its controversial exemption practices, refused to answer questions about the matter, pleading the Fifth Amendment. When asked whether Lerner could be held in contempt, Issa said, "If the committee rules on it, I'll go through [with] that." But, he added, "Ms. Lerner is not our primary concern today, nor is the contempt."

Referring to holding Lerner in contempt and other steps the Oversight Committee might take, Issa said, "We're going to have to consider all of those possibilities, whether or not there's any way to get testimony by a key character who very, very clearly had information but isn't willing to give it to us." He also said it's possible Lerner would testify if ordered to do so by a federal judge.

In his opening remarks at the hearing, Issa said that if Lerner would not answer questions, the committee might consider whether she should be held in contempt.

The hearing was a continuation of one that the committee convened May 22, 2013, 12 days after Lerner acknowledged the mishandled applications at a Washington conference. At the hearing in May, Lerner read an opening statement denying any wrongdoing but declined to take questions, invoking the Fifth Amendment. The committee later declared that she had waived her Fifth Amendment rights by making an opening statement and told her to return.

But on March 5, when Issa asked her about a comment she made in October 2010 about people wanting the IRS to "fix the problem" arising from the Supreme Court's decision in Citizens United v. FEC, 558 U.S. 310 (2010), Lerner declined to answer, saying her attorney had advised her that she had not waived her Fifth Amendment rights. She then refused to answer Issa's questions about e-mails she exchanged with her staff on Citizens United, e-mails on IRS review of Tea Party cases, a request to look at the exemption application of a particular organization, what she meant by the term "off plan" when discussing the development of guidance in the section 501(c)(4) area, whether she agreed with President Obama's recent contention that there is "not a smidgeon" of corruption at the IRS, and other issues.

After about six minutes of questioning, Issa gave up and adjourned the hearing. When committee ranking minority member Elijah E. Cummings, D-Md., tried to ask a procedural question and make a statement, Issa told him the hearing was over and shut off Cummings's microphone. That prompted an angry response from Cummings, who charged that the investigation has been one-sided, and shouted, "I am tired of this." He said the investigation has uncovered no evidence of White House involvement or political bias. He also said that Lerner had failed to tell Congress what she knew of the matter when she was at the IRS and that he wants her to answer questions about it now, but he disagreed that she had waived her Fifth Amendment protections in May.

Cummings also said the committee majority should have considered accepting a proffer from Lerner's attorney that would have enabled the committee to obtain information without requiring Lerner to waive her Fifth Amendment protections. "It seems to me that the committee loses nothing by accepting this proffer and in fact it may gain important information," he said.

The adjournment capped several days of confusion about whether Lerner would testify. During a March 2 appearance on Fox News Sunday, Issa said that Lerner's attorney had indicated that she would testify and that she had not been offered immunity. But according to subsequent media reports, Lerner's attorney, William W. Taylor III of Zuckerman Spaeder LLP, denied Issa's claim and said Lerner would continue to assert her Fifth Amendment rights. An Oversight Committee spokesperson told Tax Analysts March 3 that Taylor confirmed in writing that Lerner was willing to testify but had asked that the hearing be postponed one week, and a day before the hearing, the committee released e-mails between Taylor and committee staff on the subject.

According to USA Today, Taylor told reporters after the hearing March 5 that after watching Issa discuss Lerner's role in the applications matter during the chair's Fox News Sunday appearance, he concluded that Lerner would not be treated fairly at the hearing and advised her not to testify.

Issa told Fox News late March 5 that IRS e-mails appear to place Lerner at the center of a "hub of activity" in efforts to counter the effects of the Citizens United decision, adding, "We don't want the IRS to fix problems" as designated by the president. Asked whether he would hold IRS Commissioner John Koskinen in contempt if the agency fails to provide subpoenaed e-mails, Issa said, "If he fails to comply, we have no choice."

In a related development, Senate Finance Committee Chair Ron Wyden, D-Ore., said his committee plans to release a report on its investigation of the application controversy by April.

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