IRS woes grow with report of conference spending

FILE � In this Nov. 9, 2011, file photo then-Controller Danny Werfel of OMB Office of Federal Financial Management watches as President Barack Obama (not shown) signs an Executive Order to cut waste and promote efficient spending across the federal government in the Oval Office at the White House in Washington. Friday May 31st, 2013, Werfel, the new acting Commissioner of the IRS, issued a statement commenting on a report by Treasury Department's Inspector General in which he criticized a $4 million IRS conference in August 2010 in Anaheim, Calif. The report will be released Tuesday. (AP Photo/Charles Dharapak, File)

FILE � In this Nov. 9, 2011, file photo then-Controller Danny Werfel of OMB Office of Federal Financial Management watches as President Barack Obama (not shown) signs an Executive Order to cut waste and promote efficient spending across the federal government in the Oval Office at the White House in Washington. Friday May 31st, 2013, Werfel, the new acting Commissioner of the IRS, issued a statement commenting on a report by Treasury Department's Inspector General in which he criticized a $4 million IRS conference in August 2010 in Anaheim, Calif. The report will be released Tuesday. (AP Photo/Charles Dharapak, File)

WASHINGTON (AP) — The Internal Revenue Service, already under fire after officials disclosed that the agency targeted conservative groups, faces increased scrutiny because of an inspector general's report that it spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012.

The report by the Treasury Department's inspector general about conference spending is set to be released Tuesday. The department issued a statement Sunday saying the administration "has already taken aggressive and dramatic action to reduce conference spending."

The White House and the agency were on the defensive before the report on conference spending. Agency officials and the Obama administration have said the targeting of conservative groups was inappropriate, but the political tempest is showing no signs of ebbing.

Three congressional committees are investigating, a Justice Department criminal investigation is under way, President Barack Obama has replaced the IRS' acting commissioner and two other top officials have stepped aside.

The chairman of one of those committees, Rep. Darrell Issa, R-Calif., also released excerpts of congressional investigators' interviews with employees of the IRS office in Cincinnati. Issa said the interviews indicated the employees were directed by Washington to subject tea party and other conservative groups seeking tax-exempt status to tough scrutiny.

The closest the excerpts came to direct evidence that Washington had ordered the screening was one employee saying that "all my direction" came from an official who the excerpt said was in Washington. The top Democrat on that panel, Rep. Elijah Cummings of Maryland, said none of the employees interviewed have so far identified any IRS officials in Washington as ordering that targeting.

The conference spending included $4 million for an August 2010 gathering in Anaheim, Calif., for which the agency did not negotiate lower room rates, even though that is standard government practice, according to a statement by the House Oversight and Government Reform Committee.

Instead, some of the 2,600 attendees received benefits, including baseball tickets and stays in presidential suites that normally cost $1,500 to $3,500 per night. In addition, 15 outside speakers were paid a total of $135,000 in fees, with one paid $17,000 to talk about "leadership through art," the House committee said.

IRS spokeswoman Michelle Eldridge said Sunday that spending on large agency conferences with 50 or more participants fell from $37.6 million in the 2010 budget year to $4.9 million in 2012. The government's fiscal year begins Oct. 1 the previous calendar year.

On Friday, the new acting commissioner, Danny Werfel, released a statement on the forthcoming report criticizing the Anaheim meeting.

"This conference is an unfortunate vestige from a prior era," Werfel said. "While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred."

On the topic of targeting conservative groups, Issa's committee also released excerpts from interviews congressional investigators conducted last week with two IRS employees from the agency's Cincinnati office. The excerpts omitted the names of those interviewed and provided no specifics about individuals in Washington who may have been involved.

One of the IRS employees said in an excerpt that they were told by a supervisor that the need to collect the reports came from Washington, and said that in early 2010 the Cincinnati office had sent copies of seven of the cases to Washington.

One of the workers also expressed skepticism that the Cincinnati office originated the screening without direction from Washington, according to the excerpts.

Appearing Sunday on CNN's "State of the Union," Issa said this conflicted with White House comments that have referred to misconduct by IRS workers in Cincinnati.

Issa said, "This is a problem that was coordinated in all likelihood right out of Washington headquarters and we're getting to proving it."

Cummings said Issa's comments conflicted with a Treasury inspector general's report that provided no evidence that the Cincinnati office received orders on targeting from anyone else.

The interviews with IRS employees were conducted by Republican and Democratic aides on Issa's committee and also involved aides from both parties with the House Ways and Means Committee. One of the employees was a lower-level worker while the other was higher-ranked, said one congressional aide, but the committee did not release their names or titles.

The IRS Cincinnati office handles applications from around the country for tax-exempt status. A Treasury inspector general's report in May said employees there began searching for applications from tea party and conservative groups in their hunt for organizations that primarily do work related to election campaigns.

That May report blamed "ineffective management" for letting that screening occur for more than 18 months between 2010 and 2012. But that report — and three hearings by congressional committees — have produced no specific evidence that the Cincinnati workers were ordered by anyone in Washington to target conservatives.

The latest report on IRS conferences will be the subject of a hearing Thursday by the House Oversight and Government Reform Committee.

Karen Kraushaar, spokeswoman for the inspector general's office, said public discussion of a report before it is released "serves no purpose and should generally be avoided."

Werfel is scheduled to make his first congressional appearance as acting commissioner Monday when he appears before a subcommittee of the House Appropriations Committee.

___

AP White House Correspondent Julie Pace contributed to this report.
Associated Press
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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