so i think we're faced with a situation where we have very unre unrealistic projections about how much we're going to have to spend on both the defense and the nondefense side of the budget. and as anne points out, i think it's the entitlement programs in both defense and non-defense that are driving the increases. so we have to raise the taxes to pay for those or we have to find some way of cutting them back. i don't think they're going to get cut back too much on either the nondefense or the defense side. it means at some point, we'll have to face the taxes. okay. as you point out, there's the general sense that ultimately, a

lot of this, in the shorm term, 1 going to come out of readiness. id know as a reporter, i find it a little bit difficult to attract readiness across the floor so large that does so many different things. >> what does that really mean. if they're going to have to face cut ins readiness, how does that translate into the real world and what should we be looking for in terms of maybe a red flag over the next few years. what should we be looking for. >> readiness is a tough thing to understand. we know what it means when the

force is not ready and not able to do the job that it needs to do. i always thought of the operations account when i worked on the appropriations committee. it was kind of like a black hole. you put money in, but you're not quite sure what comes out on the other end. i think it was gordon england who described it as this great river of money that flous through the pentagon that they don't know what it's for. as far as readiness, how you track it, it's a very tough thing to do. if we find ourself in a situation that we now face which is we have the budget act that's in place. it reduces the budget spending over the next nine years or so it was initiated. the pentagon is no longer going to have a large increase in funds. the question, though, is as sequestration goes on top of that and we don't find some way

to get rid of this burden, that's when you're going to start to see problems come to the defense department. the 31% figure for military personnel is not that alarming to me, having watched this over the years. but there is an important factor that's hidden in the 31%. and that is it's 31% in a period of relative growth. and now we're going to reach a period of stagnation or even decline. and, at that point, then you start wondering what happens to personnel costs. they're going to probably go up. when you have shrinking budgets, the first thing that goes are the investment accounts. the second thing that goes are the readiness acounts because there's not much you can do about personnel costs. and basically, the chickens have come home to roost on this issue of all volunteer force now in place for 40 years, as you mentioned. that means you have two cadres

of individuals that are retired. that means people that scored lower were categorized as cat 4 in the broadcast. all of that means you are going to have to pay a price for it. i saw a study that indicate that had a high school graduate who joined a military would make more money than 90% of the jobs they were eligible for. that means we have a large amount of resource in the military costs. is it the right amount? it's hard to say. you have very high-tech no

logical issue that is need to be maintained. they certainly like a higher capability force. we have a very, if not the most, effective fighting force in the world. you see that some of the issues that have taken place over the years, i think, also, the deferred compensation. both state, local and federal, we have a tendency to look at kicking the can into the future. all of the things lead to this issue where, maybe in fact if we don't solve sequestration

readiness, then it's starting to be ineffective. the bottom line to me is we have a very small segment of the p population that's willing to serve. they are willing to sacrifice their lives. they're willing to endure long periods of family and separation. they adhere to a strict society. they deserve to be compensated fairly. we need to make sure that we're taking care of the men and women who are, in fact, willing to protect the rest of us. >> charlie makes a lot of really interesting points there. one thing i'd like to highlight a little bit, which i, personally, having poured over these numbers for a long time,

i, personally, on page 11, where you start to see most of this talks about the defense budget and how things are changing inside the defense departments. but as far as taxpayers are concerned and the long term federal budget, there's a lot of costs outside the department that arue over time. linda, you've done a lot of research in this area. from a taxpayer's perspective, what should we be looking at that's outside the defense budget proposal. >> thank you for inviting me today. i also want to shout out to a few of my students. robert, stand up.

you can be on c-span. i believe, robert is the only person in uniform here in the room today. robert is 19 years into the navy. he's the kind of person we're talking about, theoretically. i also want to say to all of you young people in the audience how wonderful the kennedy school is. for all of you not-so young people, how wonderful the kennedy school is if you're thinking about hiring young people. i want to make a couple of points.

>> we've increased at a time when recruiting was a big issue we've paid some of the highest profits in the war to the companies that manage tricare. to my own analysis, where did the money go? if you actually look at who earned the highest profits, it was not the haliburtons that roll off the tongue but it was the tricare companies. we've also had a huge surge in the numbers of claims. who are having medical visits in

children military personnel who are seeking mental health care counseling. huge inc. crease in the number of claims related to the war. however, it's important to note that some of these are due to kpojness figures. for example, the cost of health department insurance in the private sector for a family of four has doubled from about 2,000 dwla$2,000 a year to $4,0. so the change in that differential has not surprisingly driven a very high

increase into tricare for those who are eligible. so over the period, the percentage has gone up from 29% to 52%. so the percentage of people with pry vault health insurance has decreased from 44% to 19 pnts. so we're seeing all of these trends which are putting an enormous amount of pressure. so it's as if we've had a giant credit card and all of the sudden, we've maxed out. we've reached our limit. it's enabled us to pass through and fudge having a lot of money

and watch through the pentagon. sequestration can be considered on top of that as if we now have a payment plan. so we now have a cap in order to -- because of all of the debts that we've racked up. so i think it's important to think about it in that way. secondly, and to your question, i think we need to consider the increases in military persz nel, particularly tricare costs, together with the increases in the department of veterans affairs and social security and elsewhere. that is an enormous increase. some of the proposals on the hill right now would add up to $150 billion a year. yesterday or two days ago, the

new secretary was requesting another 17 billion tlars for next year. we've already had tens of billions of systems between the alta and vista. which is still not worked. and so i can talk about this more -- i can talk about this all day and night. but it's posht to see these together. in the portion of social security disability bumt, it's also related to these wars. the number of veterans from iraq and afghanistan is over $30,000. those who are 70, 80 and 90% are probably eligible for that, as well.

it's a binary system related to whether or not you can work. it's all part of the massive cost. it leads me to my third point, which is in many ways, the most important and the most boring chrks is the acounting system. now, as charlie mentioned, we have a way of kicking these long term costs down the cam. all of these benefits would be written up as deferred compensation.

most of these that are accrued promtss in the military and the va don't appear anywhere in the financial statements of the united states. the actuarial capacity to even estimate some of these things is pretty weak. when you compare the amount of time and attention and knowledge to social security to the medicare systems to what we know about the accrued liabilities and particularly in the pent gob, it's extraordinary how weakly we really understand the liabilities. i've argued for years you begin to come up with a sensible way of financing them.

i know how we should go about being fixed and solving these problems. >> okay. sounds good. we'll start a q&a here. before that, i want to talk about things on the hill. obviously, a lot of this comes down to what congress is going to do and, you know, what sort of authorities they're going to grant the pentagon for dealing with this. a lot of these decisions on military compensation are really not for the secretary of defense to make, which is really the important point that they're not always aware of. let's talk about the murray ryan deal from late last year, early this year. as part of this broad sweeping deal that affected every also peblgt of the federal government. there was a clause in there that said and, oh, by the way, we're going to talk all current military, even guys that left in

the late '80s, and we're going to scale back their retirement increases. the cost of living adjustment, minus one percent. i, personally, we at our newspaper thought this was a huge deal. we're going to talk about this things, but we're going to grandfather everyone. all of the sudden, not everyone was in today's force not grandfathered, but there was this change that was going to affect people 10 and 20 years ago. obviously, that was a political disaster. congress promptly repealed it. what lessons did we learn about this from the real world in my experience. i'll open it up to the panel members. i think that's a prime example of what i was talking about earlier. that you cannot approach major changes in the military retirement system unless you look across the board at domestic entitlements.

i think the inequity was a major flaw in that approach. and we'll say, as a private citizen not speaking of any former affiliation, i thought it was a step in the right direction to get people talking about the i shall shoes. unfortunately, in the final process on that bill it was again. limited to the military and did not open up the other entitlements. i think just as scott was mentioning, for structure reductions and things like that, those were just as politically charged as a brac round, for example. so, again, i will go back to my comment that, while i think the ryan murray deal got us through a very difficult spot and laid out a framework from which -- a framework from working together from which broader reforms could take place we have a lot of work

to do because the 30% today are only going to continue to increase without structural reforms just like social security, medicare and medicaid. >> yeah, please. and they, politically, it was a miscalculation for them to come up with that recommendation. i mean, we've seen this in the past. it was 1985 or so we passed military retirement form and we gave ourselves 15 years to grandfather in everyone. and then we got to the point where it's time to implement it and the congress repealed it under leadership from the military. it's very difficult to go in and change compensation. it's easier to put a pay freeze on and say we're going to nickel

and dime these things that people think they have already earned. so whatever approach people take in the future, i don't think it's going to be successful until we reach the point where your organization say it's the right thing that needs to be done. until that happens, i don't think there's going to be a lot of success in terms of getting the next generation of a riot agreement. i have a funny feeling that senator murray and mr. ryan will not be coming forward with this proposal again. >> i think that's a safe bet. >> yeah, i think it's completely true that you cannot understand

this problem outside the contexts of the entire budget. we have a friendly process and the budget control act is a perfect example of all of that. it's declined by 3% over the next ten years. in a world where our trade with the rest of the world doubled in the last ten years is probably going to more than double. the world population is going to grow by a very substantial amount in the next year. and we'll somehow unburden

ourselves is totally unrealistic. all of the growth in the federal budget over the last 25 years, has been in that program. social security,medicare and medicaid. and that's basically our retirement system. the defense and nondefense discretionary programs have basically stayed the same. and, yet, we look at a future in which we're expecting all of those things to decline in real per capita terms. and our spending, even under

that decline, is going to rise to 23% of gdp with revenues of only 19%. so it's that 4% gap. >> if i could just add one quick comment. i must distance myself from any conversation about increasing taxes except as a result of economic growth where revenue increases by virtue of better employment and businesses making additional profit. in arms control world, we have something called comfor ee ee e

confidence-building measures. >> in the long run, debt goes up to 10 of% of gdp. that's just public debt. that's not the off-the-books debt. ie, the money we borrowed from social security. so when gdp is x and that is more than x, we're essentially bankrupt. and that is the projection if we don't do anything. comforts hch building measures can be a structure of looking at entitlements which we have not touched and i think all indications are, at least that i have read and people have talked

to, is that that would help as far as confidence would in our economy. i was talking to somebody the other day who was talking about what the crystal ball may have shown. he said none of this would be address addressed until the other things were addressed.

cutting the quantity of people or stuff or both. and that's where all of the conversation has been. where i see the solution, or at least the may jor gain that is have been made that could not be tackled is the 30%, and this is by gates' estimate, of overheads in the pentagon. if this were a private company,

we would be looking at the overheads which are -- 30%, according to gaets, i think are even higher. which really have not been scrutinized and particularly, have not been scrutinized in the huge era of growth over the past decade. just to give you a little anecdo anecdote, i worked with ben cowen, who is ben from ben&jerry's ice cream. he says we squeeze every little penny around refrigeration and sales and marketing and finance, but we flefr cut a flavor. we would never cut a flavor. and it seems to me, in the military, we're talking about cutting the flavors. cutting end strengts. cutting weapon systems. we sort of are going there, first.

>> it means, looking in terms of activities. the saine savings are not the contracts, per se. the savings are the whole process. the planning the rfp, the awarding the rfp, the bidding process, the monitoring process, the evaluation process, the legal costs. all of those indirect costs for every single rfp. so it's sort of cutting a couple

of people in procurement staff that's not hitting it. that's easy. but that's the flavor. restructuring the budget is a four or five year thing. everyone who's there inclueing gates and rumsfeld and others feel this is really important. it hasn't been tackled because it hasn't had the sustained leadership. together, with that, there needs to be sustained leadership around the financial acounting.

although the financial accounting is not the be all and end all, it still contributes. so i feel, and you all are the political experts, that a way to approach it that really has not been tried is to really seriously try and prune back on the overhead costs. >> it's a really interesting point about reminding the d.o.d. is the only agency that really doesn i don't even think they

can be on it. >> would anyone like to post questions of the panelists? >> it's very interesting to me that there hasn't been any mention other than the first product. i'm not naive enough to think that everything they've proffered will be imp lefted. >> it was really striking to me. >> the question was asked about congress commenting 18 months ago, they have a remarkable staff of 60 some people, study this for a year or so and come

back with a very detailed site of recommendations. but you're right. we haven't talked about that much. can anybody offer any thoughts why on there is low expectations for that? >> i have looked at the interim report, which is a compendium of data. it's a good survey of what the issues are. >> i've seen a lot of commissions in my time.

and, actually, i've seen a lot of very good reports from commissions that don't go anywhere. roles and closure commissions and things of that sort. so i would love to see that commission come forward with some great, strong, bold and brave recommendations. but even if they do, it's not terribly likely that there will be a lot that gets done, unless it gets done in the early part of 2015. so it's a good point that we need to see some thoughtful, independent, bipartisan recommendations from these folks.

by to my earlier point point, there's really no commission coming forward. >> the people that work on this know those numbers. and they have vetted those numbers. i would agree with anne, this congress or anything that's likely to be seated in january in either house is very unlikely to support in either house. >> i've looked at the interim

report and i can say that i've read it word-for-word and they do a nice job of laying out -- in a sense, they lay out the problem. they talk about all of the different aspects. but i didn't see a lot of it there, even the cursory reason that i would point to. i did not think that they came up with something that this was the model of the situation used today. maybe the commission will come up with something. we've had a lot of commissions over the years.

other than a brac commission, not a lot is going to come out of this. >> if i could adjust one more point on this. i agree with what everyone has said. military compensation applies to those who have stayed in for 20 years. so we have a student, 19 years in, staying in for his 20th year. but 87% of the afghanistan veterans will not stay in for 20 years. so, for the young person who comes back after two or three grueling tours of duty, where do they go? they don't have military compensation. they end up, in my opinion, going into the va system, claiming for everything they possibly can claim for.

they end up in the medicare system. my criticism is that we have a systemic issue here and it's very difficult to just fix one piece of it without looking at the other aspects. >> that's a really interesting point. i think the number is 83 pnt of service members leave the service before 20 years and end up with no retirement. so the system is -- the problems are so deep, you arguably have people leaving the service without the benefits.

>> if i could ask the former to comment on why we have three military departments and why we have people checking to be sure con trakts aren't improperly use ed is there a pot of gold there. >> i'm wondering if the former staffers could comment on whether they think that's a really viable place to fiechbd some big savings. >> i would just offer that there have been some, although not perhaps as well-informed as there should be if there were a manager ill-accounting system in place.

i think the government claims 150 or $200 billion that they've saved. they are still very, very hard decision that is have to be made, no matter how much data you have and how much clarity you have on exactly where those costs are. you still have to make the hard decisions. are you going to cut people or consolidate activities? short answer, no. it's not a pot of gold. it's an area that needs to be looked at, but it's not going to solve the problem. >> i think the area, if not broke chb, it's pretty badly messed up.

i'm all ears in how somebody is going to fix that. in my mind, it's a pretty fundamental issue. i think we lack the talent both in the uniform and in the civilian side of the pentagon to know what we want and to buy it at a reasonable price. one reason is making huge amounts of money in the private sector. and we're trying to hire them on the cheap. and it's ending up with fairly low-skill relative to the top.

we try to hire that and we try to build a personnel capability who are government employees and whose entire loyalty is to the government and the taxpayer inside the pent gone in order to really change that decision. and no management is going to no management system is going to change the expertise of the people that we feel if we don't do something about the compensation that allows us to hire those people. >> there's been a lot of force and a lot of debate about personnel costs about that and, again, other commission called forward to examine that issue. but i'd just like to get your take on that reaction.

>> tom asked about the active reserve force mix, which is a question that comes up a fair amount as the budget pressures mount. some people say that the reserve components are cheaper. they come with reduced readiness, obviously. what do you think? do you think that question might emerge to the top of the list of things to address? or maybe not. >> every time you do have a constrained resource, there is a view that we should shift more cost or shift more of our fore structure to the general component.

politically, it becomes difficult. i think it's kind of a question that you always have when you come to this period of constrained resources. i don't think there's a long term solution for it. you can have too much of your force or else you're going to lose readiness in the force. >> okay. i think that question gets to an issue that we're talking about. on the domestic side, i think you can say the pace of government activity, the amount of government that we need, is driven by the growth of

inflation. the growth of the economy. it's somewhere between real per capita growth and gdp growth. to if you wanted to have relatively the same amount of government across the board, bureau prisons, whatever. you're going to be in between that. what's the pace of operations for the military? we worry about iraq and afgh afghanistan. particularly, afghanistan was just a squandering of resource that is we've got little or nothing out of in my view. before that, we had bosnia. we almost went to war with essential ya. we were just that close.

i think the fact that now we're out of iraq and afghanistan the world is going to be a better place is already falling apart. i think it's somewhere between the growth of global trade in which our interests have become more complicated. and the growth of the world possession of a weaponulation. the idea that we're going to have a static military is just very poor budgeting. >> we need to think about it. it's a deliberate decision we can make rather than sort of an

arbitrary thing that we're going to have 3% reduction in real expenditures and a great reduction of military expendages relative to the size of the world we live in. >> okay. i think we're running out of time. but maybe one more question. >> hi, i used to work in the pentagon. one of the things and concerns that there is is that uf service members performed out by service initiatives and you also have other folks being offered more money to go back and see other things like that. and some of the things, some of the policies that have come out of that have brn been a little

conflicting. kbh what do you think would be the right bansed approach? >> i think if we're going to continue, we have to recognize the fact that we have a contract. this is a contractual relationship with individuals in which we prochls them certain things.

somehow, the whole mentality doesn't grasp what it is. i see it from that perspective. you know, my sense is that t the -- this goes to a lot of things that have been said today if i'm answering your question right. there are a series of con traktss we make that have got to be reevaluated and rethought. people need to be able to rely on them. it's a very volatile picture for the pentagon.

the peek years in iraq, you have to pay people, instead of one weekend a month, you're paying them full time plus a full range of expert pay and a whole range of benefit which is kind of was one of the things that led to this sort of culture of endless money. so from an outside perspective, you see a group of many things. and the frustration of those sitting outside is when you see a lot of agreement on the important issues and the key things to address, and, yet, somehow, congress doesn't seem sort of able to churn out legislation which captures a lot of these areas of greechlt. >> i hate to be the one to cut

the panel short, but i wanted to take a brief moment and thank all of you for coming. particularly this panel led by andrew. such a great group to get together with some of your counter parts in the audience here. i want to thank the staff of aei and bipartisan policy center who did all the hard work and all of you really for these incredible insight. i wish we had another hour, but c-span does not, so thank you very much for coming, and we'll stick around for questions. president obama signed an executive order this week protecting lgtb rights in the federal work place. from the east room of the white house, the ceremony is ten minutes.

>> ladies and gentlemen, the president of the united states. [ applause ] >> all right, everybody, thank you. thank you. thank you. thank you, everybody. thank you. thank you, everybody. thank you. thank you. all right, everybody, have a seat. have a seat. welcome to the white house,

everybody. i know i'm a little late. but that's okay because we got some big business to do here. many of you have worked for a long time to see this day coming. you organized, you spoke up, you signed petitions. you sent letters. i know because i got a lot of them. and now thanks to your passionate advocacy and the irrevutable rightness of your cause, our government, government of the people, by the people, and for the people, will become just a little bit fairer. it is -- [ applause ] it doesn't make much sense, but today in america, millions of our fellow citizens wake up and go to work with the awareness

that they could lose their job. not because of anything they do or fail to do, but because of who they are. lesbian, gay, bisexual, transgender. and that's wrong. we're here to do what we can to make it right. bend that arc of justice just a little bit in a better direction. and in a few moments, i will sign an executive order that does two things. first, the federal government already prohibits employment discrimination on the basis of sexual orientation. once i sign this order, the same will be explicitly true for gender identity. [ applause ]

and -- and second, we're going to prohibit all companies who receive a contract from the federal government from discriminating against their lgtb employees. america's federal contracts should not subsidize discrimination against the american people. this executive order is part of a long bipartisan tradition. president roosevelt signed an order prohibiting racial discrimination in the industry. president eisenhower strength strengthened it. president johnson expanded it. today, i'm going to expand it again. currently, 18 states have already banned workplace discremination based on sexual orientation and jengender ident and 200 cities have done that

too. terry mcauliffe was there. his first act was to work against discrimination against employees of the community. he's right back here. i have appointed a record number of lesbian, gay, bisexual, and transgender public servants across my administration and they're ambassadors, federal judges, assistants, senior advisers from the pentagon to the labor department. every day, their talent is put to work on behalf of the american people. quality in the workplace is not only the right thing to do. it turns out to be good business. that's why a majority of fortune 500 companies already have nondiscrimination policies in place. it's not just about doing the right thing. it's also about attracting and retaining the best talent.

and there are several business leaders who are here today who will attest to that. and yet, despite all that, in too many states and in too many workplaces simply being gay, lesbian, bisexual, or transgender can be a fireable offense. people here today have lost their jobs for that reason. this is not speculative. this is not a matter of political correctness. people lose their job as a consequence of this. their livelihoods are threatened. their families are threatened. in fact, more states now allow same-sex marriage than prohibit discrimination against lgtb workers. so i firmly believe that it's time to address this injustice for every american. now, congress has spent 40 years, four decades, considering legislation that would help solve the problem. that's a long time. and yet, they still haven't gotten it done. senators terry baldwin and jeff merkley are here. they have been champions of this

issue for a long, long time. we are very proud of them. i know they will not stop fighting until fair treatment for all workers is the federal law of the land. everyone thank them for that. [ applause ] but i'm going to do what i can with the authority i have to act. the rest of you, of course, need to keep putting pressure on congress to pass federal legislation that solved this problem once and for all. amen. amen! got the amen corner here. well -- you don't want to get me preaching now. for more than two centuries, we have strived, often at great cost, to form a more perfect place.

make sure we the people applies to all the people. many of us are only here because others fought to secure rights and opportunities for us. we have a responsibility to do the same for future generations. we've got an obligation to make sure the country we love remains a place where no matter who you are or what you look from or where you come from or how you started out or what your last name is or who you love, no matter what, you can make it in this country. that's the story of america. that's the story of this movement. i want to thank all of you for doing your part. we've got a long way to go, but i hope as everybody looks around this room, you are reminded of the extraordinary progress that we have made. not just in our lifetime but in the last five years. in the last two years, in the last one year. we're on the right side of history. >> i'm going to sign this executive order. thank you, everybody.

so many pens. >> we're all good. we made it. thank you. [ applause ]

up next on c-span3, the head of the irs testifies at a house oversight subcommittee hearing. then congressman talks about some of the challenges facing the veterans affairs department. later, the senate finance committee looks at possible changes to the u.s. tax code. >> 40 years ago, the watergate scandal led to the only resignation of an american president. american history tv revisits 1974 and the final weeks of the nixon administration this weekend, the house judiciary committee as it considered impeachment of the president and the charge of abuse of power.

>> what you have here are questions about what the framers had in mind, questions about whether the activities that had been found out by the committee and by the senate, watergate committee, were indeed imbea imbeachable, and certainly can we prove that richard nixon knew about them and even authorized them? >> watergate 40 years later, sunday night at 8:00 eastern on american history tv on c-span3. next, irs commissioner john koskinen is asked by members of an oversight panel about the missing e-mails of former irs employee lois lerner. she's the subject of several ongoing investigations looking into whether the irs targeted certain political groups. congressman jim jordan of ohio chairs this subcommittee hearing.

>> committee will come to order. i want to thank our witness for being here again. and we'll start with some opening statements. i'll start first by recognizing the chairman of the full committee, the gentleman from california, mr. issa. >> thank you. that's very kind. commissioner, i know that this is unprecedented to have a commissioner of the irs in front of this committee so often. and i appreciate the fact that you have been willing to be brief and participate even beyond our requests at times. as we continue to explore a number of questions, the timeline of the crash, the

inconsistency of the probability of lost e-mails by multiple people within government, we appreciate that you were not in government. you were not doing this at the time. but as you can imagine, not just the internet, not just fox, but america is beginning to question how convenient so many e-mails of so many people at the heart of targeting conservative groups for their views, for their politics and for the fact that citizens united was objected to by the president, how many of them had loss of data and how much is not available to the american people. a cover-up is normally described as something that happens during an investigation around here, things go missing during the investigation. but when it comes to the loss of data, it's clear that data began

disappearing and not being able to be yet found at a time when congress was just beginning to look at wrongdoing that is now confirmed, that began with the president objecting to citizens united, that began with democratic members of the house and senate writing letters asking for investigation of people that were politically the opposite of their party. not asking for investigations about all people who may be involved in political activities in addition to their nonprofit work. it is clear they were driven within the irs and perhaps other areas by political bias and a belief that the president wanted a fix and that the fix had to occur. again, commissioner, you weren't in government at that time, but government is today. it is their time, it is their watch. it is their responsibility.

whether it's the s.e.c., the irs, the department of justice, or any and all of government activities that led to the unfair treatment on the eve of campaign elections of conservative groups. it is clear that there was a convenient loss of far more data by far more people than is explained by the normal arrhythmatic probability. today, we'll explore not only the timeline but when this committee received that timeline. it was your watch to give us accurately and keep us up to date on developments related to lois lerner and other parts of our investigation. it is my view that you could have done better. you will and have paid a price in public opinion for not being as forward leaning and proactive as you could have been. but that was yesterday. today, what we're asking you to

do is continue working with your ig and if we're fortunate enough to get a special prosecutor, work with him or her, and of course work with the groups that now have federal judges ordering the irs to show particular information and bringing it all together back to this committee. because this committee has an intent to make to the greatest extent possible public what we can find is being done on behalf of the american people to bring back the confidence in the irs. so again, i appreciate your willingness to be here. these are not easy hearings, and each time you come, you leave with more questions from us than you come with answers to us. and that is the nature of an investigation that continues to evolve. so mr. chairman, i want to thank you for recognizing me early. commissioner, again, you need to be part of the solution. i believe you have to a certain extent, and i believe you're

committed to do more. and for that, i thank you, and i yield back. >> recognize the member from maryland, the ranking member of the committee. >> thank you very much, mr. chairman. commissioner koskinen, i want to thank you for testifying before this committee yet again. this is the third time in the past month you have appeared before us and that does not count a fourth appearance you made before the ways and means committee last month on the same topic. unfortunately, it appears that you and other irs employees are now becoming collateral damage in a fight for the spotlight among a few republican committee chairmen, issa and representative camp. this is unseemly, embarrassing, it is not a proper way to run an

investigation or to spend millions of dollars in taxpayer funds. as the commissioner knows very well, when chairman camp was informed about the crash of lois lern lerner's hard drive, he said he would be holding the first public meeting before the ways and means committee ten minutes later. congressman issa had a subpoena calling the commissioner to testify first before our committee. he did not contact the commissioner before issuing the subpoena and didn't hold a debate or vote. in response, the chairman moved this hearing up several days so he was the first one in front of the cameras. it did not seem to matter to either chairman that the irs provided numerous extemporaneous documents showing the computer crash was a technological

problem that multiple i.t. officials attempted to remedy. those facts apparently were irreleva irrelevant. the goal is so public. camp has acted as general to conduct an investigation into ms. lerner's harddrive crash, which has agreed to do. commissioner koskinen testified last time that he was here, that the inspector general asked him to make his investigation a top priority, which meant not subjecting irs employees to any other interviews by the inspector general's interviews were going on. that was the ig's request. rather than waiting a few weeks, chairman issa disregarded the ig's request and demanded that the irs make the employees available to him now. commissioner koskinen explained that the inspector general did not want irs employees subjected

to multiple interviews, but chairman issa just began issuing more unilateral subpoenas. he forced the irs employees to appear before the oversight committee and he excluded chairman camp's staff from participating when the commissioner testified before. republicans accused him of obstruction, claiming he was hiding witnesses from the committee. when he again explained that the inspector general asked him not to subject irs employees to multiple interviews, chairman issa said he was going to follow up with the inspector general directly. well, that apparently didn't happen. yesterday, i asked my staff to contact the inspector general's office to find out exactly what was going on. they have spoken to the deputy inspector general of investigations and i can report what he told us. the deputy ig for investigation confirmed that his office is now conducting the investigation that chairman camp requested.

he confirmed exactly what commissioner koskinen told us, which is the inspector general preferred that irs employees nots be subjected to multiple interviews in order to avoid tainting their testimony. without directly criticizing the chairman's actions, the deputy ig for investigations stated that his investigators working for the inspector general, they want everyone to allow them to complete their interviews first, quote, without distraction, end quote. as he stated then, there's no confusion of witness testimony and integrity of the investigation is not impaired. contrary to these requests, chairman issa has been forcing irs employees to come before our committee to transcribe interviews excluding chairman camp's staff, irs employees also being forced to appear before ways and means. invariably, after each of these interviews, chairman issa and

chairman camp issued dueling press releases with tidbits of information and very big transcript excerpt s in their effort to compete. no matter how unsubstantiated their claims are, they also told us something else. over the past year and a half, they have obtained no new evidence that would change the conclusions in the audit from 2013. as i close, there is simply no evidence whatsoever of any white house involvement in the exempt abications. the irs has already spent $18 million responding to these dupelicative investigations and commissioner koskinen is now testifying before congress for his fourth time in just over a month. yet, chairman issa informed committee members yesterday that he will be holding yet another hearing on the topic next wednesday. we have the notice here. and with that, i'll yield back. >> i thank the gentleman.

>> mr. chairman -- >> chairman is recognized. >> point of privilege. there are a number of words in the gentleman's statement that disparage me and i object to his words and debate and i ask that he withdraw them and ask unanimous consent that among the terms that be withdrawn would not only be the unseemly statement but in fact when the chairman -- when the ranking member disparaged me for a number of areas, including my intent and essentially said that the items i said were not true. additionally, the ranking member, while objecting to multi multiple -- while objecting to multiple claims of cherry picking releases or interfering with the ig, failed to mention that in june of 2013, he released the entire john schaefer transcript, which has

compromised this investigation by statements made in future transcribed interviews saying they have reviewed these in preparation for those. so i certainly would say while questioning the intent and some argument about the republicans not getting along, the ranking member managed to go beyond the ordinary opening statement and claiming the intent, in fact the ranking member in june of 2013 went on national television claiming the investigation was over. this investigation is not over. i would ask that such items including unseemly be taken down. >> objection? >> i object. >> the gentleman objects. i understand. but i would reiterate that the decorum of this committee should not lead to personal attacks as to the intent of individuals on

either side. the fact is this committee is conducting vigorous oversight. we do so as a matter of our obligation as a committee, and i would make one last request. i ask unanimous consent that the staff be able to place the timeline into the record so that the ranking member's clearly erroneous claims that our request for this hearing -- our first hearing, came after the event when in fact the timeline will show that the subpoena had been served prior to the announcement from ways and means, and as the ranking member would know if he had ever chaired this committee, the fact is it takes a long period of time to prepare a subpoena, to write a subpoena, to go to the clerk and get it approved and then to serve it. so i would hope that the ranking member once he sees that in the record, would recognize that in fact he has been clearly erroneous in his claims and i

yield back. >> i thank the gentleman for yielding. if we can, without object, let's allow the timeline in and let's move to the next opening statement. would that be satisfactory? >> it is satisfactory. >> i thank the gentleman. >> i just wonder, though, is the brief response to the distinguished chairman? >> do you really have to? >> no, i don't really have to, other than to say to you, mr. chairman, i certainly associate myself and i know my colleagues do on this side of the aisle as well, withat we should always speak with respect about each other, we should never question each other's intention. that has not been the practice as often as i would like on this committee. i certainly hope this would reflect a new day dawning in the committee and that we can proceed civilly. i thank the chair. >> i thank the gentleman for his comments. our subcommittee meets today to

continue its oversight of the irs and the targeting of conservative tax exempt applicants. we welcome back our witness, irs commissioner john koskinen. all kinds of questions need to be answered, and that's why for the third time in a month we're -- we have mr. koskinen here to answer and address what many of those unanswered questions. first, we were promised the irs would produce all of lois lerner's e-mails. then we learned some had been destroyed and there was absolutely no way he could produce all of ms. lerner's e-mails to congress. second, we were told the irs had confirmed that all back updates with lois lerner's e-mails had been destroyed. then we learned last week from irs attorney thomas kane that a backup tape may exist. third, we were told there was one harddrive crash, lois lerners and then the ways and means committee told us there were seven or eight total

crashes and now we learn that there may be as many as 20. think about this. the irs has identified 83 custodians of documents and information. the irs has identified these people, associated with this targeting of conservative groups, and now almost a fourth of them may have had harddrive crashes. unbelievable. first, we were told that irs found utin april of 2014 that ms. lerner's e-mails were lost, but then we learned they knew on february 4th, 2013, about the hard drive crash and it found out just days later that the harddrive had been recycled and its contents were unrecoverable. that's why we continue to have hearings. that's why we have mr. koskinen back for the third time in a month. we would like to get some straight answers. we have convened this hearing because today, over a month after the first irs told congress it lost ms. lerner's e-mails, there are still many unanswered questions. there are still unanswered questions about why the irs

delays notifying us about the problems with ms. lerner's e-mail. the deputy attorney general cole told us last week that the justice department learned of the missing e-mails from press accounts in the media. i mean, imagine that. one of the highest profile investigations in years, and the justice department has to learn about critical evidence by the central player in this investigation, they learn about that in news accounts, not directly from the internal revenue service. that's why last week sitting at this very table where mr. koskinen sits today, depitary attorney general cole said he would have liked to have known about the e-mails earlier and he announced the justice department was investigating why commissioner koskinen failed to disclose the e-mails in a timely manner. let me reiterate that. james cole, deputy attorney general, the united states department of justice, said last week in that same chair to this same committee that they're investigating why the internal revenue service delayed months

in telling the congress, the american people, and most importantly, the fbi and the justice department, about the loss of lois lerner's e-mails. rather than the irs coming to congress and informing us what it knew when it knew it, they waited four months. they only came forward to acknowledge the missing emaims when it had no choice, and it disclosed the news the only way it knows how, by bearing it in a friday afternoon letter to the senate. information obtained by the committee in the last few days provides more questions than answers about the missing e-mails, but remember, this isn't information the irs is offering up willingly. it has taken almost a month for the irs to finally come clean and subpoenas to get people to talk. we tried a week to get mr. kane to talk, and we had to subpoena him to get him to come for the deposition last thursday. the american people have this information only because the committee has been asking questions and that's why

commissioner koskinen is here today. he's the individual, hand picked by the president to clean up this agency, and that's why he's here today, to answer our questions. until we know all the facts, until we clear about the confusion and misstatements about ms. lerner's e-mails, the committee will continue to press for the truth. that's the mission of the subcommittee and that's wi we meet today. the gentleman from pennsylvania is recognized. >> thank you, mr. chairman. first off, thank you, mr. koskinen, for coming today. we schedule these things on these doohickeys and it asks you, do you want to make this a recurring entry? and when i see koskinen, i want to say yes at this point. >> so do i. >> at this point, i am concerned that committee republicans are no longer using these hearings for the purpose of investigating what happened to the groups that were the subject of the inspector general's may 2013

report. this seems to be something different. and i want to say, we all ought to agree that the point of this committee, the oversight and government reform committee, is not publicly to harass federal agency heads, mr. koskinen. it is to conduct responsible oversight of the legitimate critical issues within our jurisdiction. i believe that these repeated hearings that we're seeing today are both an abuse of authority and a dereliction of this committee's duties. i think it's abundant lly clear that chairman issa and chairman camp are in a taxpayer funded footrace about who can make headlines about lois lerner's lost e-mails and we heard about a request for a timeline, and we ought to look at the timeline because it was on june 16th, shortly after chairman camp of ways and means announced he

would be holding a hearing with you, commissioner koskinen, on june 24th, that chairman issa of this committee issued a unilateral subpoena compelling the commissioner to testify before this committee on june 23rd. in response, chairman camp moved his hearing up to june 20th. so it's something like a children's fairy tale that we're looking at here. in addition, chairman issa is no longer allowing staff from the ways and means committee to participate in the oversight committee interviews. chairman issa's refusal to hold joint interviews is resulting in wasted taxpayer money as irs employees like you, mr mr. koskinen, are now being subjected to multiple duplicative interviews. i also want to address republican claims that the targeting of conservative groups is this government wide conspiracy initiated after the citizens united decision involving the president, the

irs, a conspiracy including the department of justice and other federal agencies. this committee has obtained no evidence linking these accusations to what we all know now were inappropriate criteria used by irs employees in cincinnati. some of my colleagues on the other side of the dies have chosen to overlook the funneling of dark money into the political system of the united states, republicans have demanded accountability from the irs but have not demanded the same from corporations who influence our national elections. in january 2010, the u.s. supreme court in a 5-4 decision on citizens united allow ed for profit corporations, unions and nonprofit groups to raise unlimited funds and register for tax exempt status under the 501(c)(4) designation and the irs then became flooded with

applications for this status. a 501(c)(4) designation is exclusively meant for organizations whose primary activity is social welfare defined in the tax code as making charitable, educational, and recreactional contributions to a community. while 501(c)(4)s are not barred from participating in political campaigns, it is stated plainly and clearly that political participation must be an insubstantial amount of the group's overall activity, accounting for less than 50% of expenditures. the irs's job was to make sure the groups were following the rules so they weren't taking tax breaks meant only for groups contributing to the community, not hiding the influence of the select few individuals have on our nation's electoral politics. as i have said before in previous hearings, this is about groups doing everything they can do to hide where they get their money. obscure the true intentions, and have undue influence on the political system tax free.

anonymous money in politics is something we don't need in this country. something that disrupts the democratic process, and something that has to be changed. i commend the chairman leahy and senator ahaul of the committee for advancing sj-res 19 proposing an amendment to the u.s. constitution which would negate these damaging effects of citizens united. i have co-sponsored the house companion to that bill presented by ted deutch, and with that, i'll conclude my comments and yield back to you. >> i thank the gentleman. members have seven days to submit seven written statements to the committee. mr. koskinen, you know how this works. please stand, raise your right hand, do you solemnly swear and

affirm the testimony you're about to give is the truth, the whole truth, and nothing but the truth so help you god. you're now recognized for your opening statement. your statement, and then we'll ask questions. >> chairman jordan, ranking member cartwright, members of the subcommittee, thank you for the opportunity to appear before you today. with your permission, i'll provide a brief introductory statement and submit a complete copy of my testimony for the record. before beginning my statement, i want to thank the subcommittee for its willingness to work around my travel schedule. in attempting to set the original date, my understanding was you were interested in an overview. that's covered in more detail in my statement. in general, the irs regularly and routinelynicate acts with the department in tax matters and financial fraud. our criminal investigation committee recommends them to the tax division for prosecution.

these cases represent a variety of tax issues including refund fraud, abusive tax shelters, repairer fraud, and noncompliance. the international area office offers a good illustration of what our coordinated efforts can accomplish. recent efforts include the guilty plea by bmp, two major financial institutions found to be in violation of u.s. law. routine interactions between the irs and doj also involve the irs office of chief council, which reviews all criminal tax cases developed by our criminal investigation division before those cases are recommended for prosecution. in addition, when the department of justice' tax division litigates a civil matter, chief counsel attorneys are involved, elaborating on the arguments and positions taken. i may now turn to an update of the effort the irs has made to cooperation with the investigators into the use of inappropriate criteria to evaluate applications for tax exempt status under 501(c)(4),

the revenue code. these include four investigations by congress, one by the department of justice and one by the inspector general. added to that has been the recent new investigation by the inspector general of circumstances surrounding the crash of lois lerner's harddrive three years ago. to date, we have now produced more than 960,000 pages of unredacted documents to the tax writing committees and more than 700 thousands pages of redacted documents to the house oversight and committee, in addition, the irs has been working on the identification and production of lois lerner e-mail. as part of the document production, the tax writing committees have received 67,000 e-mails that we found involving ms. lerner. we're continuing to provide redacted versions to the oversight committee, which to date has received more than 54,000 e-mails from lois lerner. we are working to provide these documents as quickly as we can. in the course of collecting and

producing ms. lerner's e-mails, the irs daempted that her harddrive crashed in 2011. at that time, ms. lerner had asked i.t. professionals at the irs to restore her harddrive, but their were unable to do so. nonetheless, the irs will prusz 24,000 e-mails from the period 2009 and 2011, largely from the files of other individuals. the irs provided information about the hard drive crash to all six investigating entities in a public report to be released in june. i would note that our june report to the extent that it focused on ms. lerner's hard drive crash was based in part on e-mails we had already provided to the congressional committees, the inspector general, and the department of justice. some of those e-mails were produced as long ago as last fall. those e-mails were provided in the normal course of production related to the search terms agreed upon previously. those all six investigators have had initial information about the hard drive crash since last

fall. also, additional e-mails about ms. lerner's hard drive crash were produced this spring to investigators prior to the release of our june report. i also want to point out that consistent with a bipartisan congressional request, the inspector general as noted, is proceeding with its own investigation regarding the crash of ms. lerner's hard drive. the ig, as noted earlier, has asked the irs not to do anything to interfere with its investigation and we're honoring that request to the extent possible. in addition, on july 18, we responded to a court inquiry with detailed information regarding the crash of ms. lerner's hard drive. this information is consistent with what was previously provided in the six investigations and we have provided the oversight committee and the other investigating committees with a copy of that information. i understand in last week's hearing with doj, there was a question as to what information the irs gave to the department ability the hard drive crash. we provided all investigating entities with the same information in our june report

which we released to the public. doj did not receive any additional information. since releasing our june report, we have continued to cooperate with the investigation. since mid-june, we have produced to the over sight committee more than 100,000 pages of documents and made witnesses available for interviews with congressional staff. five of those interviews have already occurred. our deputy chief information officer has given three briefings for congressional staff, including one for the oversight committee, and as noted, i have testified at four hearings, including the one today. this concludes my statement and i would be happy to take your questions. >> thank the jenltalman. i'll turn to the vice chair of the committee. >> thank you, mr. chairman. good morning, commissioner. mr. koskinen, are you aware that you currently are under investigation by the justice department regarding your role in determining when to produce lois lerner's e-mails? >> i'm not aware of an investigation. i did see the deputy attorney

general's statement last week before this committee that he was interested in -- would be interested in why we had not provided him information in april as opposed to june, but i have not received any notice of an investigation. >> well, he told us that it was something that the justice department would look into, and he said it was information that they did wish they had at the time that you discovered it. let me ask you this. the committee interviews irs deputy associate chief kourn thomas kean and he testified that senior irs officials, including the counsel to the commissioner, realized lois lerner's e-mails were missing, that there was a hard drive crash, on february 4th, 2014. and that by mid-february, they realized that the e-mails would not be recoverable off that hard drive. yet, you testified in front of this committee on march 26th, 2014, and after being asked numerous times whether you would produce all of lois lerner's

e-mails consistent with the subpoena, you said you would. so if a senior irs official knew in mid-february that the e-mails could not be recovered off the hard drive, why did you tell this committee that you would produce them? >> because i testified before, when i testified at previous hearings, when i testified in march, i said we would provide all lois lerner e-mails. as i have always testified since then, i did not mean to testify that if they didn't exist we would present them. i did present you with all of the e-mails we had. in regard to when the irs new the impact of the hard drive crash, as i have testified several times in the 11 hours of hearings since june 13th, what i was advised and knew in february when you took the e-mails that had been provided to this committee and other investigators and instead of looking at them by search terms and instead looked at them by date, it was clear there were fewer e-mails in the period up through 2011 than subquently,

and there was also, i was told, had been a problem with ms. lerner's computer. it was not described to me in any greater detail than that. i was advised near the end of february we were now reviewing all of our production capacity to make sure nothing had been done in the production capacity that would have explained or would have caused the loss of any e-mail. that process went forward, but at the same time, i would remind everybody, we were focused primarily on the request from this committee and finance committee and ways and means committee to provide complete production of all the documents we had related to the determination process. and we did that, and in mid-march, provided to the tax writing committees a letter saying we had now produced all the documents we had regarding the determination process. >> okay, i appreciate that. we even asked mr. cole, if someone responds to a discovery request and say they will produce all of them, they can't just do that, represent that, and then know, gee, we're not going to be able to produce all of them.

once they figure that out, they have to come immediately and tell the opposing party, in this case, a congressional investigation, so it's not the same. yet you guys sat on the information for several months and that caused this investigation from our end to be obstructed. let me ask you this about the back-up tapes. the irs has told congress that back-up tapes from 2011 no longer exist, yet mr. kane testified in terms of the interview of this committee that back-up tapes may in fact exist. can you now under oath definitively state that the relevant back-up tapes that this committee has sought do not in fact exist? >> excuse me. as i understand from your press release, what mr. kane said was the information we provided in june was accurate to the best of everyone's knowledge at that time. what he said since then is that the inspector general -- >> what you said, too, with all due respect, you said on june 20th, 2014, to the ways and means committee, that we,

meaning the irs, confirmed that back-up tapes from 2011 no longer existed because they had been recycled pursuant to the irs's normal policy. that was a definitive statement on your part. now we're getting information from mr. kane, well, the irs isn't exactly sure that that is in fact true. >> what mr. kane reported was information that the inspector general has started to review tapes to see if there's additional information on them. mr. kane said therefore there may be back-up tapes that were recycled but may be recoverable. we have no information -- i have no information about what the inspector general is doing with those tapes. in fact, the inspector general advised us that he was reviewing those tapes and asked us not to do any further investigation, not to have any further conversations, and i understand he asked this committee as well not to make the existence of their review of those tapes public, but at this point, i have no information as to whether there's anything usable

on those tapes. >> can you confirm to the committee today -- we have been told, obviously, about lerner's hard drive failure, then ways and means have identified as many as seven or eight additional individuals who are relevant to the investigation whose hard drives also crashed during this period. now based on testimony from mr. kane, it could be as many as 18 or 19 different hard drives that have crashed, that would be relevant. so can you definitively state to this committee the number of hard drives from relevant individuals that crashed during the period in question? >> i can tell you what i know at this time, which is in the first six months of 2011, over 300 hard drive crashes occurred, and there were over 5,000 reports of hardware problem. the first six months of this year, for example, over 2,000 hard drives have crashed. >> i understand, but that's your whole agency. we're talking about people who happen to be relevant in a relatively small universe of

people and the number of hard drive crashes seem to be getting higher the more we investigate. >> right, and in may, i asked our people once we knew that there was an issue on ms. lerner's crash, i asked for what the industry standards were for hard drive crashes, was advised 3% to 5% of hard drives crash. i asked them for a review of the question you're asked of custodians, how many of those 83 had hard drive crashes. we reported on the monday, june 16th, to the ways and means committee in a staff interview that we knew there were probably at least six or seven. the next morning, promptly on the receipt of that information, the ways and means committee issued what turned out to be an erroneous press release saying all those e-mails had been lost including the e-mails of nicole flax. it turned out in a further investigation it appears no e-mails from ms. flax were lost because the hard drav that crashed was not her office computer. i'm sorry, can i answer the

question? >> the question was the number of hard drives crashes. i understand you mentioned the ways and means investigations, but the numbers. where do we stand on the number of hard drive crashes? >> where we stand is thereafter, the ig was requested by congress to do an investigation, and the ig asked us not to do any further interviews or investigations so we have not pursued further what the additional implications are, how many hard drives crashes of custodians or what the implications are because the inspector general is investigating that very issue. i cannot give you a definitive answer at this point as to either how many custodians had crashes or if they did, how many lost e-mails because i would emphasize not every crash loses -- >> he put the upper limit at 20. there seems to be a contradiction there. my time is up. mr. chairman, thank you for indulging me. i yield back. >> thank the gentleman. >> i want to thank you for testifying before the committee

today and for the third time of the month. when you testified on june 23rd, 2014 and july 9th, 2014, you told us that the ig was investigating circumstances of ms. lerner's computer crash. on june 11th, 2014, you wrote to this committee reiterating that the ig is conducting an investigation into the loss of ms. lerner's e-mails and that as you previously testified, you would honor the inspector general george's request to prioritize his investigation. has the inspector general expressed concern to you about the release of non-public information about an ongoing ig investigation? >> when the inspector general first talked to me and asked us to give a priority to his investigation and not to do any further investigation or witness interviews ourselves, he explained to me that they were

concerned that they did not want to muddy the waters. they wanted to have their ability to talk to witnesses and then go back and talk to them again without anyone having conversations in between time. so they were very concerned that witnesses that they were interviewing in the investigation be allowed to proceed with the inspector general only. >> do you know when that was that you had that conversation with the inspector general? >> the conversation was shortly after they were asked by the finance committee and congress to make the investigation -- i can't remember which date was in mid-june. >> the ig has expressed similar concerns to our committee. for example, on july 2nd, 2014, committee staff held a conference call with the inspector general in which the ig described the investigation of lois lerner's hard drive as, quote, very active, open, and ongoing. end of quote. and asked our committee to

refrain from publicly disclosing the non-public information regarding this ongoing investigation. is the ig's investigation into this manner still active and ongoing to your knowledge? >> to my knowledge, it's still active and ongoing. >> would the ranking member yield for just a question. were majority staff members present at that briefing where the inspector general conveyed that information? >> yes. >> our staff says that they weren't, and if i -- you'll get your time plus extra if you would like, inspector general called our counsel yesterday. he happened to be in my office with mr. meadows, and said that they had talked to you but did not express any of the comments you made in your opening statement or frankly any of the comments that you're making now. >> why don't we have a meeting next week since we are having all of these irs hearings.

>> i'm open to that. >> because we can go back and forth on this. i want to be very clear as to what was said. so you know, when you're talking about he say, she say, it's better than we have them here, and we'll do that if you so choose, but i would be happy to. the ig has expressed similar concerns again to the committee. it's your understanding that the ig investigation is still ongoing? >> it is. as far as i know. >> so in spite of the inspector general's request on july 21st, chairman issa issued a press release based on the interview of irs deputy associate koernl, quote, new kwemedevelopments, e quote, have regarded uncertainty regarding the existence of back-up tapes. commissioner koskinen, is it your practice to release nonpublic information about an

ongoing ig investigation? >> no. >> why not? >> because we made a commitment to the ig that we would give -- honor his priority, that we would not do anything that would interfere with his investigation, he would talk to anybody he wanted, they could look at any evidence they wanted, and we would not have an ongoing discussion with any of the witnesses because we did not want to interfere. >> mr. issa's pres release and statements from mr. kane and other witnesses undermined the partisan narrative. mr. kane told the committee that he was aware of a, quote, potential issue, end of quote, regarding the backup tapes. but he did not know any additional detail. when asked whether he had seen, quote, any evidence that any irs employee intentionally destroyed documents or e-mails to avoid their disclosure, end of quote, commissioner kane said, and i quote, i have not seen anything

to that effect, end of quote. have you seen any evidence of obstruction by irs employees? >> i have not. >> yesterday, the committee staff interviewed irs national director for legislative affairs leonard alsor. he told the committee staff that based on the information available at the time, your june 13th, 2014, letter to the senate finance committee stating that backup tapes from 2011 had been recycled was accurate. is that right? >> i don't know what he said, but i understand from the press release about mr. kane that he said the information we had and provided on june 13th was accurate and that's what everybody knew at the time. >> now, we were also told that earlier this month, he was made aware of an issue with a backup tape, but that he did not know

if the backup tape from 2011 was from 2011 or whether it was mislabeled. he said that even if the unrecycled backup tapes exist from 2011, the irs does not know whether they contain e-mails from ms. lerner, not previously produced to the committee. sitting here today, do you know any additional details regarding the backup tape issue that the ig is currently looking at? >> no, all i know is actually what mr. kane said, that at this point, nobody had any information as to what was on those tapes or whether they were relevant. >> and until the ig determines the facts regarding this backup tape issue, are you in a position to direct your earlier statement? >> no, my point has been that we're going to honor the ig's

investigation. i look forward, as everybody does, to his completion, and we'll see what his facts are and what he determines happened three years ago, and we'll respond accordingly. >> and you were asked earlier about computer crashes and you said that you were not aware of the folks who may have relevance to this investigation with regard -- concerning their crashes. would you normally have that kind of information? >> normally, if things had proceeded as might do, when i asked in may for the answers to this question, that is how many custodians had hard drive crashes in light of the fact the industry says they crash regularly, i had asked for a review of how many crashed and what the implications were. we had not completed that review when we provided our june report. and basically, we had that morning the following monday our i.t. people had been advised, i had not been advised, that you

kn we knew there were six or seven custodians with hard drive crashes. that was provided to the way and means committee. we have not been able to pursue if there were 6, 12, or 15 because once the ig started, we agreed we would not pursue those issues until they completed their investigation. >> now, just a last question. when the doj was here the other day, and this was -- you were asked about this a bit earlier. they talked about the fact that they had not gotten information about the crash back in april. so they got it in june, i think, like everybody else. why is that? >> when we -- in april, determined that in fact there had been a hard drive crash and some e-mails may have been lost, our next step was to in fact investigate how many e-mails did we actually have and could we

find, and our plan and proposal was we would pull all of that information together, including information about custodians and make a public presentation to the committees including a description of why it why it takes us so long in our archaic system to respond to a request for documents. we provided that in the june 2013 report as i testified earlier. we did that before the complete production of the e-mails when we originally intended because the senate finance committee asked us for an update on both the determination of the documents as well as the other investigations and searches we were doing. e we gave them that. we noted that we had had found nothing beyond what we had noted in our march letter with regard to the determination process, which was the subject of the investigations when they started. but we had not completed at that time a review of the custodians, nor had we completed until the end of june the production of tax writers of lois lerner's

e-mails. so our plan was when we pulled it all together, we would be able to explain what our process was shs the difficulties, what we had learned about lois lerner's e-mails, what we had learned about others and what we were able to determine. we were able to recover 24,000 lois lerner e-mails. we thought all of that was important information for people to have rather than simply saying if there's a problem with her computer and now we're investigating how many e-mails there were, which would have triggered a hearing six weeks earli earlier. we don't know everything we would like to know because we stopped asking people while the i.g. is doing their investigation, which we fully support. i have confidence that the i.g. is independent of us. he's got 15 people working on it according to the filings they made last friday. and we have told him personally whatever he needs, other documents, whatever people he

wants to find, he can have access to and we'll stay out of the way. we have gone out of our way not to talk to anyone in the potential he might want to interview about what happened three years ago when the hard drive crashed. >> i understand. >> russell george told you he did not want this committee in congress interviewing the same witnesses he was interviewing? >> no, he told me that he did not want us interviewing any witnesses -- >> that's fine, that's not the same as congress. why did we have to subpoena mr. kain? >> because the i.g. in our discussions said he did not want us to do anything to cause any of our employees to be interviewed before he had a chance -- >> for the record. the inspector general did not tell you that it would behihind his investigation? >> the inspector general told us if we started providing names it would interfere with their investigation and that's why -- i testified two weeks ago and

said we were trying to cooperate with the i.g. and the chairman upd that which is why you don't release full transcripts. >> you have conveyed to this committee that the inspector general department want this committee interviewing and he did not say to you. that's all i need. the gentleman from north carolina is recognized. >> thank you, mr. chairman. commissioner, i want to go back to one thing that the gentleman from maryland just asked you and make sure i heard you correctly. so if you know the testimony that you have given in congress is not correct, you're not going to correct that until we get a final report from the i.g., did i hear that correct? i thought that's what you said. >> what i said the testimony that i have given in the past was accurate. as of the time of what i knew. right now the question is do i know any more about tapes, and i don't other than the i.g. is investigating whether there are

tapes and whether they are recoverable. >> if you find during the course of your normal business that what you told congress, you will come immediately to us and let us know? >> i'm happy to correct. the chairman with regard -- >> so within 24 hours of you finding that you have given us incorrect testimony, you will find us and let us know. >> if i know it's incorrect and if the committee has any chairm questions, when the lawyer talked about records, he isn't me a letter and here's what she said, here's what you said, take a look at it and correct it. and i appreciated that. >> we appreciate the fact that you'll come back us to. i thought you were saying you were going to wait. >> no, i wouldn't know until the i.g. investigation is complete. what the answer is in terms of how many custodians. >> you won't know what they found. are you saying you're not talking to mr. cane or anybody? you're not talking to anybody in the irs about any of this? >> i'm not talking to any

potential witnesses for the inspector general about what happened three years ago in the investigation. >> when you read the reports d you take to him and say, hey, this doesn't jive with what i know? >> no, because mr. cane is someone i assume they will be talking to. >> did you talk to someone who talked to him? >> no, i read the release that this committee put out. >> so did you read the release of the ways and means press release that talked about a scratched hard drive? >> i saw that this morning. it was put out last night i understand. >> does that concern you that it was scratched and not cracked? it concerns me. does it concern you? if that's accurate? >> i haven't talked, i don't know the gentleman. i don't know what e he said. >> if it's accurate, would that concern you? let me tell you why it concerns

me. and this is an hp laptop. to get to the hard drive, it is no easy task. you've got multiple screws that have to be taken to get to it. then once you get to that, you actually have a hard drive inside that have zech more screws that have to be taken off to get to the hard drive in order for it to be scratched. would that concern you if it were scratched that there may be some other motive? >> it would be a piece of information that -- >> would it concern you, yes or no? >> i wouldn't know whether to be concerned or not. i don't know anything about, as i understand from the press release -- >> it concerns me and i'm going to ask my staff to see how long it would take to get to that hard drive to make -- if it indeed were scratched. >> i'm sure the i.g. is going to

look into that and i'm sure he's talking to that witness. >> i hope so. let me go back to the numbers. . earlier you said you had 2,000 hard drive crash this is year. >> yes. >> so let me ask you about numbers. you know i'm a numbers guy because i just did the numbers real quickly. if you look at your entire body of some 84,000 to 90,000 irs employees depending on, let's take that, that's a 2.2% failure rate. in the people that truly are involved in this in that secure of 80 people, if we had 16 to 18 hard drive crashes, why would the hard drive crash of that group of people be ten times greater than what you have throughout the agency? can you explain? what would be the probability of that happening?

that still would be four times greater than your overall average. can you explain that? >> i don't know what the details were. i do know when i asked for the industry statistics, once you get beyond the warranty period, it goes to 10 to 15%. >> lois lerner's laptop was a new laptop pfs. it was not an old one. the probability of her hard drive failing was at the lowest. according to industry statistics. does that surprise you? >> no. >> but it does surprise you that her hard drive failed? >> no, my understanding about it is from the industry is it's 2 to 5% depending on computers are regularly fail. >> if you have ten times that amount, would you say that's an anomaly.

>> if you had ten times an amount, that would be an anomaly. >> i'm giving you the numbers. >> if you stipulate, you have ten times more than the industry average, that would be an anomaly. >> thank you, i yield back. >> gentleman from pennsylvania. >> thank you, mr. chairman. mr. koskinen, the very first question you got was something to the effect my colleague put the question to you whether you were aware you were under investigation by the department of justice and this is a very public hearing. this is a very, very public. we invite members of the press to come to these hearings and these hearings are televised and i think it's important we don't lead the public down the wrong path from what the truth is here. mr. koskinen, have you ever received a target letter from the department of justice to say

you're under investigation? has anyone, anyone told you verbally that you're under investigation by the department of justice? >> no. >> has anyone, anyone said to you verbally anything that would hint to you that you're under investigation by the department of justice? >> no. >> has anyone, anyone said anything to you to hint to you that you might be the target of a justice department investigation some time in the future? >> no. >> thank you for that. another thing that you've been trying to get out and you were continually interrupted in your answers were comments about industry statistics about computer failures. i want to give you a chance now to make full sentences. >> in may when we hadis