>> i hope so. let me go back to the numbers. earlier you said you had 2,000 hard drive crashes this year. >> yes. >> is that correct? 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 which year, but let's take that. that is a 2.2% failure rate. >> correct. >> in the people that truly are involved in this, in that sphere of 80 people, if, indeed, 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? >> first of all, i have no information as to whether that's the actual number.

>> let's take the number that you know, seven, that you testified. 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, the failure rate goes to 10% to 15%. >> lois lerner's laptop was a new laptop. it was not an old one. and actually, the probability of her hard drive failing at that time was at the lowest, according to industry standards, was at the lowest possible time. 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 will regularly fail. >> so out of this circle. 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 don't know whether --

>> well, i'm giving you the numbers. >> if you stipulate you have ten times as many as 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 in your testimony today was something to the effect, mr. santos, 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 on 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?

>> no. >> 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 >> in may when i was advised we had this problem and were proceeding to find how many lois lerner e-mails we could have, i

asked, a, what are the industry standards for hard drive crashes and i was told somewhere between 2% to 3%, 5% within the warranty period. if you have older computers, it goes as high as 10% to 15%. i then asked that we do a review to determine what, if any of them, had hard drive crashes and if they had them, whether it caused any loss of e-mails. we have over 2,000 crashes already this year, but all of those didn't result in loss of e-mails. you could lose e-mails without your hard drive crashing. so at the time, we were starting down that road to complete our review of exactly what were the situations with regard to the production of documents. that has stopped from coming to closure because the ig himself is looking at all of that. >> thank you. and mr. koskinen, on june 20th you testified before the ways and means committee that even after discovering miss lerner's

2011 hard drive crash you said, the irs took multiple steps over the past months to assess the situation and produce as much e-mail as possible for which ms. lerner was an author or recipient. during this time and into may, we were also identifying and reviewing lerner e-mails to and from 82 other custodians. by mid-may as a result of these efforts, the irs had identified the 24,000 lerner e-mails between january 1 and april 2011. commissioner koskinen, why did the irs take these steps to recover ms. lerner's e-mails? >> it was an attempt on our part to produce as many lois lerner e-mails either from her accounts or other accounts as possible in response to the request of this committee and the ways and means committee to produce all of lois lerner's e-mails. we were trying to make sure there were no e-mails anywhere

in the system to or from lois lerner that we had not located and not provided. >> all right. now, so despite the hard drive crash, the irs still produced 24,000-plus additional e-mails, is that right? >> that's correct. >> witnesses have told this committee that in february of 2014, irs employees discovered that there were fewer of lois lerner's e-mails from january 2009 to april 2011 than there were for other periods. upon this discovery, irs officials immediately took steps to determine the reasons for this discrepancy and whether they could locate additional e-mails from ms. lerner during that time period. the question is, why didn't you inform us about the discrepancy in ms. lerner's e-mails when you testified before this committee in march? >> because in march i did not know and we didn't know whether we had lost e-mails or not.

one of the first things that was investigated in february and into march was to review all of our production processes to see if anything in the way we had reached into the system to produce the e-mails, put them into our search method had caused us to misplace those e-mails because it wasn't clear initially whether the problems with her computer resulted in any loss of e-mails. so the first process while we were producing the other documents regarding the determination process was to make sure we hadn't ourselves done anything in the process that caused e-mails in that period to be lost. we determined ultimately into april and may that nothing that we had done in the search process had caused the e-mails to be not producible. >> thank you, i yield back. >> i thank the gentleman. now recognize the gentleman from pennsylvania, mr. meehan. >> commissioner, thank you for taking the time to come up and be with us again today.

i know you came here before and i know we're going through a lot of detailed testimony, but the baseline is accurate that to the best of your knowledge when you testified before that the e-mails were not available from ms. lerner during the period that they had been to the best of your knowledge that they had been destroyed because they were recycled on the tape. and i'm not questioning that testimony at this particular moment. but i think what has people interested is mr. kane came up here not so long ago, and he's a very sophisticated guy. his job is to produce documents for investigations and litigation and other kinds of things. therefore, he not only has a very detailed understanding of the process, but a deep appreciation of the implications to do or failure to do including

exposure for failure to do things. he also has a very sophisticated understanding of how to answer questions with respect to this. appreciating that when he's under oath, anything he says will put him in a particular position, which if it is known to be wrong, could expose him to further scrutiny. so i'm curious as to why he would come and testify that -- i don't know, and this is his words, i don't know if there's a backup tape with information on there or there isn't. that he was now unsure about whether there were some backup tapes from the period of time that may not have been erased. i'm using his direct testimony. there is an issue as to whether or not there is a -- that all of the backup recovery tapes were destroyed on the six-month retention schedule. i don't know whether they are or aren't, but it's an issue that's

being looked at it. what do we know about this issue, and why would he have made that statement? >> what i know about that issue is i was advised by the inspector general that they were -- they had taken tapes they found, and they were reviewing those tapes to see if they had been totally recycled or whether they were not recycled and usable. i was advised about that because the inspector general, again, wanted us not to do any -- because he knew however they had found them, somebody knew ig had them. he didn't want us to do anything to investigate further what those tapes were, what they did with them, where they were found. i said that was fine. at this point, i haven't talked to mr. kane about this, but what he has said is what he knows is because as you said he's been involved in it, is that the inspector general is looking at some tapes -- i don't know

how many and which ones -- to see whether or not any of them turned out to be recyclable or information that's recoverable. at this time as mr. kane's testimony states, it's not clear whether they do or don't. >> whether substantially there's information when he gave you that identification that there was, as you said, it was believed that they had all been produced but now maybe some of them have been found. weren't you concerned about what procedure they used to potentially come up with new tapes? >> when the inspector general advised me of that, i was interested as to why they were looking at tapes that we were advised had been recycled. but i didn't cross-examine the inspector general about it. i agreed with him that they would do the investigation. we wouldn't do anything to interfere with that. i wouldn't and none of our people would talk to anybody about it. i can't tell you how they found them, what they are, and as mr. kane said, whether there's anything on them or not. at this point, we're supporting the inspector general --

>> did you have any idea about what the issue is that he referred to because that was the very specific thing. there is an issue as to whether all of the backup tapes had actually been recycled. >> yes, and the issue as i just said, is that he obviously is aware of what the inspector general advised me, which is the inspector general has taken some tapes -- i don't know which ones -- and is reviewing those to see if they have been recycled, if there's information on them that can be found or used. that's all i know and i assume that's all he knows. beyond that, i haven't talked to anybody about this because, again, our position with the inspector general is -- >> just one follow-up question. why are these not available from a third party vendor who, in the event of a cyberattack would protect us against destruction

of all records which would put our government in a remarkably perilous position so we take steps to assure that essential documents are preserved to have them in third party data storage situations. why were the documents that are relevant to this particular period of time, why were they not backed up and available today? >> that's an important question. as i have testified earlier, there's been no loss of any information and no action taken since this investigation started with regard to any information and production of documents. we have frozen and saved and backed up all e-mails from six months before the start of the investigation forward. what we're talking about is what happened three years ago. and three years ago the process was to use backup tapes for basically disaster recovery purposes and recycle them every six months. that was the protocol and process that had gone on for some years. it used to be they only kept

them for one month. it was increased to six months. that was the process three years ago. whatever e-mails were lost three years ago were not lost, they were lost then. nothing has been lost as far as i know since this investigation started. we have gone out of our way to protect all of the data and all of the documents. >> thank you. i have further questions but my time is expired. thank you. >> you're an attorney and you talked about these documents having been missed, but at the period of june 29th, 2011, lois lerner is informed that some of the activities she's been associated with may have been involved with discriminatory practices. you're a yale lawyer. and you understand the situation in which there is a potential for litigation. and the requirements that when

there's potential for litigation that there is a requirement with the recordkeeping responsibilities to retain the documents relevant to that. all of this occurred before the period we are looking at some years down the road. if you were informed that somebody is holding your agency or you in particular as having potentially engaged in discriminatory practices, would you preserve the documents from that era? >> we have -- any time there's an investigation, any time there's an inquiry, we have litigation document hold policies and procedures. we have done our best to protect every document for the last year and a half, almost two years now, and any time anyone raises a serious question about production of evidence, we go out of our way to protect it. i don't know what the circumstances were three years ago.

>> this was knowledge that it was discriminatory practices and she was informed that she was central to the potential that there were complaints about discriminatory practices on the part of the irs. would that be the kind of a document that you would preserve in anticipation of potential litigation? >> again, our protocol is if there's going to be an investigation, if there's a serious issue raised, we protect and preserve documents. as i've testified, one of the things i asked earlier in this investigation is we need to have an e-mail system of record so that it would be easier to protect official records, preserve them and be much easier to search them. we should not have to spend $18 million answering straightforward questions for documents, but that's the system we have. the constraints on the budget has been significant over the past few years. going forward, we're looking at is there a way to get out of

late 20th century and into the early 21st century. we should have an e-mail system that's more searchable and a system of record. >> thank you. >> i think his question cuts right to the chase. she was on notice there was a problem and suddenly her computer crashes, but it's worse than that. the irs identified 82 custodians of information relevant to the investigation. now we know from mr. kane's testimony last week, up to 20 may have had computer hard drive crashes. so this is way beyond the 3% to 5% that the commissioner keeps citing. this is approaching 25% of the relevant people that they have identified have had computer problems and may not be able to give us the documents they need. i appreciate the gentleman's questioning. i'll recognize the gentle lady from illinois. >> thank you, mr. chair. good morning, commissioner. on july 7th, 2014, you testified that since you were confirmed in december of 2013, the irs has

quote, probably provided 300 to 400,000 documents to congress. to date, how many pages of documents has the irs produced to congress in furtherance of the ongoing investigation about the irs' review of tax-exempt applications? >> as i testified earlier, we produced 960,000 pages of tax writing committees redacted documents we produced 700,000 pages to this committee. >> i would imagine amassing a document production of this magnitude takes an extraordinary amount of time and money, as you talked about the money. >> yes, it's been a significant distraction. we spent, at last count, $18 million responding. we continue to produce documents. we hope shortly to be able to complete the production of this committee, but in an area of declining resources, most of it is done in our office of chief counsel. there are 500 fewer people than

there were four years ago. so that's been a significant strain on our chief counsel's office. >> and how many employees have been involved in this process, and how many hours have been logged in to comply with all of these requests? >> we have had over 250 employees at various times involved. over 120,000 hours devoted to it and we continue to work on the production of those documents. >> i understand that current agency staff, many of whom have other job responsibilities, have been tasked with complying with congressional document requests. is that correct? >> that's correct. our i.t. department has been asked for information. we have witnesses that are being interviewed as we go. as i have noted, the entire issue about the c-4 investigation and operations involves about 800 employees in the entire exempt organization.

only a portion of them work on this. we have 89,000 other hard working, dedicated irs employees working on matters of importance to the government and to taxpayers. >> the individuals working on this, they have had to put their current workload aside? >> yes. particularly the lawyers, it's a problem for us because they have obligations to represent the agency in tax cases. they have an obligation to continue to work with treasury on the development of rules and regulations and procedures, so it is a constraint. >> thomas kane, the irs deputy associate chief counsel was interviewed by committee staff on july 17th, 2014. he said that the irs currently exists, quote, with an increased workload and reduced staff from where we were several years ago. we have taken these people from their day jobs. they have no replacements for them because there are no replacements. so we have pulled together people from all parts of the

organization to contribute to the project on a full-time basis. but there is no one to backfill the work that continues to exist and pile up. that's particularly critical when you're dealing with people in the field that are trying cases that have deadlines. that type of staffing commitment and resource commitment has been a drain on the entire office of the chief counsel. commissioner, would you agree with mr. kane's assessment of investigation's impact on your agency's workload? >> i would. >> also, mr. kane was asked about the impact that chairman issa's subpoena had on the morale of his team. he said that his employees have been working tirelessly to help the irs comply with congress who were, quote, visibly impacted in a very negative way. commissioner, i would like to give you an opportunity to address any concerns you may have about the impact the various congressional investigations are having on

your agency's morale and ability to perform its core functions. >> as mr. kane apparently noted, we have a large number of people who have day jobs who have been in part or totally devoted to this who have been trying to be responsive. when they then are subject to depositions and recorded interviews it sends -- these are all career people -- it has an effect on morale because they thought they were doing what they were asked to do. they were trying to provide information. most of them had never had a deposition of theirs taken. they haven't spent six, eight hours under cross-examination. so for everybody else who is working on this project, they are now looking over their shoulder wondering, am i going to get called up next and all they've been doing is producing documents. >> thank you. thank you for your time. >> sitting here listening to some questions that the chairman

asked you, and i'm convinced that you're damned if you do and you're damned if you don't. this is what i'm talking about. the ig, appointed by a republican, asked you not to engage in -- i don't want to take words out of your mouth, but what did the ig ask you not to do? >> not to do any further investigations or interviews or discussions with witness -- with employees about anything having to do with hard drive crash, any other hard drive crashes while they did their investigation. >> and then the chairman went on to say that he didn't tell you that this committee was under the same restrictions.

that's accurate, right? he didn't tell you -- the ig didn't say to you, the committee -- what i'm telling you about your restrictions does not have anything to do with the committee. do you understand my question? >> yes. >> i'm going back to what the chairman said because i'm trying to figure out, how do you obey the law and obey the wishes of the ig? >> the question was, and i answered it was that the ig didn't tell me that he was telling the committee -- giving any instruction to the committee. the only discussion i had with the committee was when he told me about the existence of the backup tapes and asked us not to do any further questioning about that. he said he provided that information to the investigative committee and asked them to treat it confidentially while his investigation was going on. >> so if something came up now where we contacted you and said

we want to meet with experts in the irs because we think that this committee thinks that person has something relevant to our investigation, is there any way that you would treat that differently now than you would have if you'd never had conversation with the ig? do you know what i'm saying? >> actually, we have tried to be responsive as best we can to the wide range of requests we have. we have six investigations and a number of requests coming in and requests for interviews. we have tried with more success in some areas than others to figure out what the priorities are so we can do it in the right order. at my hearing in march we agreed the next priority after we completed the determination issue was to provide all the lois lerner e-mails we had. we had a long discussion back

and forth. that would be our next priority. we're getting close to completing that. >> i guess what i'm getting at is i assume you wouldn't have the discussion based on what the ig told you, you wouldn't have a discussion with an employee of the irs now because the ig told you not to. >> that's correct. so when we had witnesses coming to testify and give depositions here and ways and means, we have not talked to them beforehand. they've simply come up. we don't feel that we want to do anything that would interfere with the ig's investigation or this committee's investigation. so people have come up and to the extent they've been interviewed, they have done that without any conversations we have made. >> the gentle lady asked about morale at the irs. the irs is kind of a tough position because nobody seems to like the irs. on the other hand, if you don't get revenue, you have a problem.

we have a problem as a nation. when you think about the reduction in employees, and based upon what mr. kane said that the gentle lady just read, it seems like something has to give. i'm just curious as to what's giving. you follow what i'm saying? if you have -- based upon what mr. kane said, you are pulling people from different areas to do certain things. you said some of them have to -- have court responsibilities and deadlines. the point is something has got to give. something. >> right. >> and can you tell us what we're losing? >> well, obviously, we have 10,000 fewer employees than we had four years ago. 500 fewer in the office of chief counsel. so what happens is people either have to spend a lot longer working. at some point you run out of things you can do.

we have done our best and taking people around chief counsel and put them on the production effort. to do that means that work they would have otherwise done doesn't get done because we have no capacity to add more people or hire more people. we're only replacing 1 in every 5 people who leave the agency. we continue to shrink rather than expand. so we haven't complained about it. we simply produced documents as fast as we can. we've explained our biggest problem and obstacle is we have this archaic way to search each hard drive to pull out data to get it into a search machine, which we'd like to change going forward. it does mean in the office of chief counsel, you put them under more stress. it makes it more difficult for the other ongoing day jobs they have. my concern more importantly is over the course of certainly the three and a half years i have left, we have other issues. and as we ask people to do

productions and just respond to congressional inquiries, if they become subjects of depositions and cross-examinations, it's going to be harder to get people to decide they want to leave their day job and help us respond to congress. that's our only broader concern but we think it's appropriate and we're happy to cooperate with the committee. >> i'll just make one point. the witness testified that they don't talk about this issue and prepare and discuss and prep for it. that's just not accurate. we interviewed mr. orsler yesterday. he told us specifically when steve came and briefed the ways and means committee, there was preparations done for him to get ready to come in front of congress. to portray it like you aren't talking about this as you bring people before congress is not accurate. regarding the morale issue, if the irs would have been willing to let tom kane come and be interviewed, we wouldn't have had to issue the subpoena. one thing that impacts morale is when you get a subpoena.

i get that. but that's your cause. you caused the subpoena. we didn't. we tried for weeks to get mr. kane to come and be interviewed. you guys said no, can't do it. we had to issue the subpoena and got all kinds of information that contradicts testimony you've given in front of congress. that's the issue. you could have helped morale of the very employees you represent if you'd have let him be interviewed by us. >> mr. chairman? >> subpoenas sound different but when they come for an interview, it's still under oath and it's still a transcribed interview and looks just like a deposition and for people who have never done it before, of concern. they get nervous. >> and my point is by you making it so we had to subpoena that that only adds to the anxiety of the employee. so that's your creation on your employees, not ours. >> that's why we're delighted to work out with you a schedule where there won't be subpoenas but people -- >> we appreciate that. but it took a subpoena to get that rolling. the gentleman from south carolina is recognized. i'm sorry. >> i just asked you for -- we

have a tendency to ask questions and not let him answer. i just want to understand this. i think it's to the benefit of the entire committee. why did mr. kane have to be subpoenaed? why is that? >> because we tried -- >> i didn't ask you. >> i didn't know who you were asking. >> i'm asking him. >> that's fine. >> thank you. >> we were in the process of discussing the production of witnesses because we are concerned about interfering with the ig's investigation. and while we were doing that, as the chairman said, then mr. kane got a subpoena which didn't, a, allow him to appear without any further adieu and didn't allow us to basically have a conversation about setting up a production schedule of witnesses. so the chairman is right. we were in the process of trying to do this, but i would say we take some responsibility for the fact you had to do a subpoena. >> you take all of it.

we asked -- mr. kane told during his deposition, because he had to be subpoenaed, he told committee staff that he wasn't even notified by you that we had requested an interview. he didn't even know that. all he knew is he got the subpoena. you didn't even tell him we were trying to interview him. that's what he told us in the deposition last thursday. so it's all on you. you're the reason we had to subpoena the individual to get his testimony. >> he eventually came voluntarily, is that right? >> yeah. after he hired private counsel after we sent the subpoena. the gentleman from south carolina is recognized. >> thank you, mr. chairman. it's good to see you again, commissioner. i want to read a quote to you of june of 2014. i want you to tell me if you know who said it. we confirm the backup tapes from 2011 no longer existed because they have been recycled pursuant to the irs normal

policy. do you know who said that? >> sounds like me. >> it is you. can you tell us who "we" is in that quote? >> the we is the irs. i tend to take responsibility for the agency and talk about it. i was advised when the draft report was submitted to me that people had talked to everyone in the agency to ensure that during the course of our several months of looking for -- >> so we is the royal we, speaking on behalf of the entire irs. how about the word confirmed? what does the word confirmed mean to you? that you confirmed the backup tapes no longer exist? >> when i read that, i asked the question and was told -- >> by whom? >> i don't remember. we had four or five people who were working on the report.luuç and was told in that data, mr. kane said in his testimony that that was accurate as of june 13th. >> what does confirmed mean to you? >> that somebody went back and looked and made sure that in fact, all -- any backup tapes

that had existed had been recycled. >> are you still confirmed? >> at this point, i have no basis for not being confirmed. i understand the ig advised me they were looking at tapes. i have not been advised as to whether any of those tapes -- >> confirmed is a pretty strong word, commissioner. are you still confirmed that no backup tapes exist? >> i know the ig is looking and he hasn't found anything. >> i'm glad you mentioned the ig. i find this confounding. i find this vexing that once the ig is involved, nobody else can do anything. that is not supported by the law. can there be a criminal investigation while there's an ig investigation? >> there can be all sorts of investigations. >> there can be a congressional investigation while there's an on going ig investigation. correct? >> of course. >> and there can be an ongoing ig investigation.

if there were sexual harassment in the workplace, are you telling this committee you would wait until the ig investigated it before you'd stop some insidious practice? >> we could take whatever action is necessary. >> precisely. you would not wait until an ig concluded his or her investigation. >> can i answer that question? >> sure. >> our policy, and i have been -- my understanding when i chaired the counsel of inspectors general across the government, if the ig starts an investigation, the agency will not themselves run a competing investigation to try to get there first. the ig advises us what the investigations are. when they advise us about those investigations, we allow them to proceed. >> let me give you possibly an alternative view, commissioner, which is that people cite ongoing ig investigations when it suits them to not cooperate, and they don't cite ongoing ig investigations when it doesn't suit them. >> that's not my policy. >> you can certainly understand how a cynic might view it that

way, right? because there's nothing about an ongoing ig investigation to keep you from doing your job. just like there's nothing about an ongoing ig investigation that keeps the department of justice from a criminal investigation. or a committee of congress from a criminal investigation. there's nothing talismanic about an ig investigation. >> this particular case, as a general matter, my policy has been if the ig is doing an investigation, wherever i am, we won't interfere with that investigation. >> words have consequences. nobody is asking you to interfere. you can have a dual investigation without interfering, can't you? >> i think it's very difficult. >> so you are saying if there was an allegation of sexual harassment or racial discrimination within the irs, you would not look into that until the ig had completed his or her investigation? is that what you are telling me? >> i am not telling you that. i'm telling you as a general matter, that's not what the ig would be investigating.

as a general matter, those claims would come to personnel and be investigated by our legal department. >> the ig doesn't have jurisdiction over legislative policy or appropriations. all three of those are important areas. so those should be ongoing even while an ig is doing the investigation. >> the ig does do criminal investigations. >> no, sir, they refer to an entity that actually has the power to indict, which does not include the ig. >> they actually -- my understanding, like our criminal -- >> you should go back -- it might be the same people that gave you the understanding that you were confirmed that the tapes don't exist. so my advice is to be very careful who you take your advice from. i'm going to say this in conclusion, mr. koskinen, i really could not believe the colloquy you had with one of our colleagues about the morale at the irs. it takes a lot to stun me, but that stunned me. here's a piece of advice i will give. if the folks like lois lerner

and others would have spent more time working on the backlog, more time working on their case load and less time targeting groups and less time trying to overturn supreme court decisions they didn't agree with, maybe morale would be better. and maybe their backlogs would be lessened. >> would the gentleman yield? >> i'd be thrilled to. >> commissioner, i want to maybe summarize what the gentleman was asking you with a question. do you have full faith and trust that your ig is doing a thorough investigation at the same level as would be done if you were doing it as the commissioner? >> i do. i said earlier, i have a lot of confidence in the inspector general. they have far more capacity in some of these areas. they have 15 people working on this. i'm very comfortable and confident that they are doing a thorough job, and i have told them we'll do whatever -- >> so at least as to your own investigation, you consider the ig's investigation to be your investigation?

>> i do not. we do not control the ig. he's very independent. he's doing an independent investigation of all of this. i am satisfied that when he gets done, we will have an independent review and investigation of what went on. >> thank you. >> gentleman from virginia. >> will the gentleman from virginia yield for one follow-up question? >> it's his call. but if you yield, i'll allow some generous time. i've been very generous. >> i thank the chair. i want to follow up on the gentleman from south carolina's point. what you're just saying is that your belief is that it is wrong for you to do an investigation at the same time as an ig is doing an investigation. is that correct? >> as a general matter if we were doing an investigation it would interfere with -- >> so you're saying your predecessors who did exactly that in 2012 were wrong?

because when the ig started it, they did their own -- under sworn testimony, they did their own investigation. so what they did was not right? >> everybody has their own policy. i don't know what they did or didn't know. >> in your opinion, that would not be right? i just want to show the hypocritical point there that it's not consistent with what irs has already done. >> my point only was it's consistent with how i have behaved in the past and how i will behave in the future. my view is ig is an important independent source of investigations. whenever the ig is doing an investigation, i think it's important to cooperate with it and not interfere with it. >> i thank the gentleman from virginia for yielding. i ask unanimous consent that all his time be restored. >> i thank my friend from north carolina and the chairman. welcome back, mr. koskinen. >> always a pleasure to be here. >> i can tell. must be a thrill and the

highlight of your week. i guess we're going to do this as long as we're in session. by the way, just sort of a side bar, i wish my friend from south carolina was still here because his concern for morale at the irs is really touching. and gosh, if we were really that serious about it maybe we wouldn't have slashed 800 something million dollars from your budget and represented another 350 million this year. >> at this point, we're $1.350 billion under water. >> but the morale, we'll keep on flogging people until morale is improved. that seems to be the philosophy of some of my friends on the other side of the aisle. all right. i'm glad we're talking about the ig. i'm amazed that j. russell george would have thought it

wise or prudent to completely omit from the may 14th final audit report any mention of a critical, and i think astonishing analysis that was conducted by their own head of investigations the weeks leading up to the release of the may 14th report. without objection, i'd like to enter into the record the conclusion of the tigta's e-mail which was sent in a may 3rd, 2013 e-mail to the acting principal deputy michael phillips, michael mckennny, chief counsel mike mccarthy, assistant ig for exempt organizations gregory kutz and two tigda employees whose names have been fully redacted. it's just a one-pager. after obtaining and reviewing 5500 irs e-mails from staff members of exempt organizations, division in cincinnati, that in addition to there being no

e-mail directing staff to target tea party or other political organizations, and no conspiracy or effort to hide e-mails about such a directive. and i quote, reviews of these e-mails reveal a lot of discussion about how to process the tea party and other political applications. there was a be on the lookout list specifically naming those groups. however, the e-mails indicated the organizations needed to be pulled because the irs employees were not sure how to process them. not because they wanted to stall or hinder the applications. there was no indication, i'm still quoting, that pulling these selected plxss was applications was politically motivated. the e-mail traffic indicated there were unclear directions and the group wanted to make sure they had guidance in processing the applications so they pulled them. this is, he says, a very

important nuance, unquote. would you agree with that finding, mr. koskinen? >> sounds right to me. >> have you any idea why the inspector general would not include such a critical finding, after all of this, and after the press compliantly giving my friends on the other side of the aisle every single time. here's a critical piece of information, maybe even a smoking gun, if we're looking for exoneration from the head of investigations in tigta's own office. why would that the not be included in the final audit report? >> i have no idea. >> is it worthy of your time to ask that question? respecting the independence of the two offices? >> i would not ask the ig that question. he's done his report. he's done his investigation. when they do investigations, they have any number of them going on. when they do the reports, we agree with them most of the time, sometimes disagree,

sometimes disagree with recommendations. sometimes disagree with process. but we do that in the orderly process of responding to their report. >> but mr. koskinen, here you are for the third time before this committee but probably not the last. and your reputation and that of your organization, you know, has been called into question. with a charge that has unfortunately not been critically examined as much as i'd like by the media despite our efforts on this side of the aisle. here is the head of investigations on your organization under tigta that says otherwise, that directly challenges the propounded thought that only tea party and conservative groups were challenged and it was deliberate and targeted. he says otherwise, and the tigta doesn't put it in his final audit report.

by the way, an inspector general who has been questioned by a number of us up here, and we have formally requested an investigation of his conduct before the counsel of ig. he's under a cloud himself. i've heard my friend, the chairman, mr. jordan, question other employees of the irs because of their political giving. well, mr. george was a republican staff member of this committee. he's given political contributions to republican candidates. he's a bush appointee and met solely with the republican side of the aisle in getting ready for his audit. that raises serious questions. if it's sauce for the goose, it's sauce for the gander about his independence. but this is a critical piece of information it seems to me, and i cannot imagine you would be copacetic.

with its elimination from an audit report that's critical for your organization and indeed for your leadership. >> it's an interesting piece of information that obviously is useful for people to review. as i've said, i do have confidence in mr. george that he's independent. he actually is the treasury department inspector for irs. and we've supported him in the past. i think he is doing an independent review of all of this, and i look forward to his response and findings about what happened with regard to the hard drive crash. >> well, how about, and as a response to why he didn't include this important missive from his head of investigations in the final audit report of may 14. >> that's a question that i'm probably not going to ask him. >> i yield back, mr. chairman. >> i would just ask the gentleman, which way do we want it? do we want to say this committee

can't get access to witnesses because there's an ongoing investigation or criticize the work he did before where he identified the targeting of conservative groups. you can't have it both ways. >> mr. chairman, there are a number of white house have raised and been quite consistent in raising questions about the objectivity of mr. george. mr. cartwright and i have both filed a formal complaint. and i'd be glad to share it with the chairman. >> with all due respect then you should be advocating that we get access to the witnesses. and not wait until the inspector general has them first. >> maybe a new inspector general is the answer. >> relative to this idea that it was just mismanagement, 80% of the applicants in the backlog were filed by conservative groups. n by liberal groups. the irs approved every group with the word in its name.

the irs did not approve a single tax-exempt application by a tea party groom from may 2010 to 2012. during the same time they approved dozens of liberal and progressive groups. if it was mismanagement, it was mismanagement in a targeted way. none of the treatment to conservative groups was given the same way to progressive groups. >> mr. chairman, i have a memo from gregory kurtz saying targeted is actually not accurate. i also have materials that were presented to irs for training that have elephants and donkeys, tea party, patriots. they have progressive. >> 298 cases in the irs backlog. only three had the word progressive. four used the word progress. none used the word occupy. no progressive word was denied c-4 status. hundreds of conservative, tea party groups, and some still waiting, just for the record. >> i guess you and i could argue that all day, mr. chairman, and we need to get on with this hearing and allow mr. koskinen

to get back to his job. >> mr. koskinen, why june 13? why that date? let me ask you this. why not, why not february 2nd c? why not february 2nd, when you knew there was a big gap and a bunch of e-mails? why not february 4th, when as mr. cain cain -- due mr. tom cain? >> do know him, is he a solid, laurel professional? >> certainly is. >> so why not february 4th when mr. kain, who testified just last thursday said they knew her hard drive had crashed? why not say we have we may have a problem. how about mid february when last

thursday he said we knew in mid february that the data on her computer was unrecoverable. why didn't you tell us in mid february? how about in opening questions, why not disclose on march 26th, when you were in front of the this committee and everyone asked you about the e-mails and you assured us you would produce all her e-mails, yet you knew, according to mr. cain's testimony, good professional employees at the i.r.s., you knew her e-mails were sun recoverable. >> you should be careful to know that that's what mr. cain knew, that's not what i knew. >> well, that's a problem too. that's something you should have known. his a high-ravening offici irand you did not know? >> do you know a person kate duval? >> i do know kate duval.

>> what's her tight at the internal revenue service? >> counselor to the commissioner. >> counselor to you? >> yes. >> i'm happy to stand by the testimony, if you want to go over it again. what i basically told you is in maid to late february, i knew we had taken the lois lerner e-mails that had been produced. instead of looking at them from search -- >> that's not the point. tom cain said they were unrecoverable. he said he told kate duval. did she tell you they were unrecoverable. >> she did not tell me. >> then that's a problem. why not tell us april 4th, when ms. duval briefs the committee, and the briefing was about how

the i.r.s. would deal with committee requests for concerns about the loss -- on you progress lois learners -- why didn't you tell us? >> ms. duval could have told the committee at that time. >> i testified at some length in the past and earlier today. >> here's the question. let me jump in. why nod in mid april when you knew? why not when you knew -- what date did you learn you could not get all of her e-mails? i learned that in april. why not april? >> as i testified then and on numerous occasions, my judgment was, a, we needed to find out what e-mails we did have. we needed to put it together in a full report, which we did -- >> why not anytime in april? one at the i.r.s. told someone at treasury, who then told someone at the white house, according to press reports.

offense good enough to pass on to the treasury and white house, why not tell us sometime in april? >> because i thought that at that point we did not have the full information as to what was involved, how many e-mails. >> you learned in april they were unrecoverable. and you wait until june 13th. why june 13th. >> first of all, i would note all of those e-mails that determined whether that she had a hard drive crash or not, were e-mails provided to this commute ellee. tax writers knew -- as early as the fall she had a hard drive crash. the materials about the e-mail chain about her trying to restore wsh produced in april, so there was no secret that we were hiding. we were processing through -- >> no, no, no, you were giving us e-mails, but you didn't tell us there were e-mails you couldn't give us. that's my question.

why didn't you tell us that the i.r.s. -- >> first of all they were not destroyed as a conscious effort by the i.r.s. >> the tapes were recycled, and when you back up tapes they're destroyed and recycledled. why didn't you tell us you could not produce -- this is -- >> those e-mails that they were lost in april. >> this hearing is noted to be an update on what we were doing. i have given you at least two different occasions. >> why june 13th? not june 10th? aye not may 10th? if you couldn't do it in april, why did you have to wait two more months? >> we'll be here a long time if you want to repeat the questions i've already answered. i've answered this question before and i'm happy to answer it again, but it is in the testimony that i've read before that you all have read very closely. we were producing lois lerner

e-mails. the thought the most efficient way to proceed is how many e-mails we had from her account, how many we had been able to retreat from other accounts, so you would have a full idea of the universe. i would hope to find out the other problems we had with

they then called and said think would like that report no later than that friday. at that point we had not completed with how much custodians better involved, and the impact. we had no idea -- in fact one of the custodian hard drive crashes was in february of this year, not very relevant. so the meet the friday deadline, we produced that document, shared it with everybody, and it was to meet a request from the finance committee, which was wanting to consider whether they had enough information to do a report. >> your testimony is the senate finance committee drove the timing of when you disclosed lois lerner e-mails? >> yes, because we were going to produce -- >> i think it's something different. i just do. obviously you're going to

disagree. i think you never was going to tell us. judicial watch does a foia request, and they learn on the 13th of this year that the i.r.s. and department of justice had been working on possible ways to bring false claims action against and there was an exchange after the senate hearing. we saw that e-mail and we said we'll talk to the lawyer at the justice department who was meeting with ms. lerner just days before the report went public in may of 2013. so may 6, we interview mr. pilger. we learn in his opening statement in that deposition, we learn this -- he said, turning -- i'm reading straight from the statement -- turning to

my contacts with ms. lerner in the fall of 2010 -- shocked this, we didn't know they were meeting clear back in 2010 that the justice diplomat -- in the fall of 2010 at the direction of the chief of the public integrity section, jack smith, i contacted the internal revenue service. when i contacted them, they directed me to lois lerner. who met one for about an hour. so now we learn in 2010 the justice department with the fbi it meeting with lois lerner. so we said we better subpoena documents, and we said to the justice department, we want any communications with lois lerner that you've had. we get this e-mail. let's put this up, if we can. we get this communication from

lois lerner and richard pilger. now, mr. did you give us this e-mail? >> i don't know. >> i can tell you you didn't. after we got this from the justice department, we called you all on june 9th and said how come we didn't get this e-mail with you. there's no -- this e-mail clear back in, and we contact you, and we wonder why is the irs hasn't sent you this e-mail from four years ago then four days ago later, you know what?

we've lost a bunch of lois lerner's e-mails. my theory is this. you guys weren't ever going to tell us. we called you, they found out there was a collaboration between the justice department and the i.r.s., we interviewed mr. pilger. we then subpoenaed justice, they if and you knew you were caught, and you said you didn't tell us this, but you knew we didn't give it to you, because we don't got it, now we have to tell the whole word we lost them. what better time to do it than friday, june 13th, saying we're complying with some senate concern, sending a her, put it on page 7 of the third addendum and say we may have a problem with lois lerner's e-mails. that's what i think. >> good. >> i think all kinds of people

logically would say that's what provened these guys, for you days after they got this her from this commit tee just four days after they figured out justice and the i.r.s. were working together in 2010. they have an e-mail that indicates that, and we could produce it. >> when you find any direct evidence to support that assertion, i would be happy to see it. if you think this organization in four days could produce that report, you don't understand how large organizations function. you can ask anybody who works on that report. that report was under production for a long time. >> i'm not saying it wasn't. i'm saying including the statement we lost e-mails. >> it was in that report and it was in that report.

>> one thing elf learned, it's always important to look at the timeline. >> look at the time did not line. >> you knew in april, you didn't tell us what june 13th. what happens between april when you knew and june 13th. one key event was is the foia request from judicial watch, finding this collaboration between the i.r.s. and justice department, us getting that e-mail because we subpoenaed the injures department, they give it to us. when you and suddenly you say, you moe what? they got us, we've got to come clean. >> mr. chairman -- >> and then you do the letter. >> can i respond in that's a serious charge. there were a whole set of senior staff people who will dispute your assertion. if you find any direct evidence of this to anybody who worked on that report, in terms of the timing of it, the fact we were otherwise not going to deliver it, i will nobility be surprised, but astounded. there is no such evidence. i've been vessel patient all of this, but before you make that kind of charge and claim, you

ought to have better evidence than a single e-mail dated june 9th. >> mr. chairman -- yield for one moment. >> be happy to yield. >> i know the chairman said about what thomas cain. last week he said the i.r.s. always intended to alert us about the lost e-mails. i know you have all these theories. unfortunately our committee has been one where we put out these headlines and then we go chasing facts, and in many instances never exist. >> all i'm saying -- >> i'm saying include everything when you're asking the point. >> great point. all i'm saying is this. they get a her from us on june 9th, where they know we have this e-mail that they could produce. and four days later, they tell the world we've lost lois lerner e-mails. when they knew that, according

to mr. koskinen's testimony, from questioning from me they knew in april. they waited two months. when they decided to tell us, four days after on a friday, four days after, we knew there were e-mails we were getting from justice that we went getting from the internal revenue service. all i'm saying that timing is pretty suspect particular any light of the affect from all the other things weed. one computer crashed, no it was seven, now eight, now maybe up to 20. in light of everything else, when you start looking at the timeline, it looks suspect. >> mr. chairman -- >> all i'm saying is they weren't -- >> woulded chairman yield? >> i would be happy to yield. >> mr. chairman -- this has been very interesting, because one member on your side, the gentleman -- i don't know his name, said to the man was under investigation, and i had heard -- i was in the entire hearing, and he never said that.

the justice department, by the way, never said that then you, mr. chairman, made some strong accusations, and when you make these kind of accusations, i would appreciate it if you would just give the witness an opportunity to answer, because these are the kind of allegations that tarnish one's representation, and you've come up with the theory. i'm not saying your dr your theory is what it is, but he's got to be able to answer, please. that's all i'm asking. >> appreciate the ranking member. >> as i said, i haven't seen mr. cain's testimony, but it doesn't price me he would say we had been producing this report for some time and clearly making it public. you can talk to people, we would

be happy to give you the contacts, the people at finance who in fact did have the meeting the follow week, had asked us for an update that we did provide. they asked for it no later than that friday. i am very confident that no one working on this report had any idea about it other than we were going to produce it and provide all of the information to the public. i think any other -- >> are you willing to make those witnesses available? or will you make us subpoena them so they can come here under oath and testify and say yes, in fact from mid april when the commissioner knew that the lois lerner e-mails were lost, we were planning on telling the congress as soon as we got all the information. or will they come and testify, you know after the june 9th letter, we decided we bert put in the e-mails -- >> i don't think you'll find anybody will make that latter testimony. >> my question is, are you willing to have the people come testify? >> we would be happy to talk

with you -- you've already talked to some of them and you have others on your schedule. >> all right. the gentle lady -- gentleman from nevada is recognized. >> thank you, mr. chairman. you know, i do share concerns by some of my colleagues on the other side about why the i.r.s. delayed in provides congress with notification regarding the unrecoverable e-mails, because it raises questions. i don't share in the chairman or other members conspiracy and rush to judgment about any motives as to why there was a delay.

we failed to get all the facts in order to make a proper decision. i've had said from the begins that there was wrongdoing. now, mr. chairman, you just read into the report some comments by mr. pilger that i had asked to be entered into the record, the full transcripts so so i'm going to that the transcribeded interviews.

particularly since you just hand-picked certainly statements, and i'm requested the full transcript be entered. will the chairman -- under unanimous consent. >> if the gentleman would yield -- i've read from the opening statement -- if you're just asking for opening statement, not the full questions, from democrat staff, republican staff, just the opening statement s. we would be happy to do that. >> thank you. >> all right. >> i want to follow up by some of the claims that have been made, and give you an opportunity to respond. it's now been stated twice today, that mr. cain testified during thinks july 17th

interview that in mid at the 2014, the i.r.s. realized that lois lerner's e-mails would not be recoverable. i want to clarify here, because i don't want mr. cain's statements to be taken out of context. it is true that mr. cain told us that he had discovered that ms. lerner's hard drive had crashed, and that the contents of the hard drive were unrecoverable. however, that does not mean that mr. cain said that he thought in february of 2014 that the i.r.s. would never be able to produce those e-mails to congress. in fact, mr. cain was asked, quote, and as of march 2014 you were not aware that the i.r.s. would be unable to recover all of mislerner's documents? he answered, quote -- that's correct. he furnished explained, as you have that the i.r.s. was enganged innage extensive

process to find miss lerner's e-mails from other sources at the i.r.s. in fact those efforts were successful, and yielded the production of an additional 24,000 lois lerner e-mails. is that correct, mr. koskinen. >> that's correct. >> mr. cain also explained the i.r.s.'s goals with respect to the document production of congress was to fully comply with those requests as expeditiously as possible. he stated with respect to fulfilling that goal, and i quote -- i have tried my best and everyone that i worked have have tried their best.

-- of what can be made of why that time line was delayed. >> right. as i've said, all of the e-mails had been provided, so there was no attempt to not produce information that showed that in fact there had been a problem with lois lerner's hard drive. in fact none of the i.r.s. or investigators noted there were -- saying she had had problems with her hard drive and had lost e-mails, but everyone them was looking at subject matter, but it's not as if they were withheld or produced in a regular manner. as we were working in april or may, trying to determine how many e-mails we actually had, we weren't producing e-mails as a regular matter and the e-mails the bade of the june 13th report had all been previously provided

to the investigators. >> thank you. the chair now recognizes the chairman of the committee, mr. eisen. a drive this large that apparently went so bad that not a single piece of information could be saved. you asked us to believe that the very special experts, becomes one piece of data from this drive or one just like it.

>> that's what i was advised, yes, and that's what the e-mail strain that we produced and i testify about it in previous hearings says. >> the american people don't believe that. you realize that the idea that we can recover, from challenger exploding above our atmosphere, and falling to the sea and being left to the sea for a year, that we could recover the voice from that, makes people wonder why a product that's simply came in and out of the office with lois lerner every day suddenly not one piece of data could be recovered. it doesn't surprise you the american people just have a hard time believing that, does it? >> well, i don't know whether the american people believe that, but i understand when our criminal investigation division, which our experts at extracting information say they could not recover any e-mails, that seems probative on the one hand, but

on the other hand i could understand people saying if you kept trying -- >> do you think it's reasonable for us to check with your criminal investigation people, interview people involved to see if that passes the reality check in spite of what the american people may think or the doubts they may have? do you think it's fair for us to check into that? >> yes. in fact, those interviews are being scheduled, some of them i gather from the press release i saw from ways and means, that some of those i.t. people have already been interviewed. >> so it's fair for us to do an interview and to investigate on our own in order to bring the credibility that we bring as, if you will, a doubting thomas to the process. you would agree with that? >> yes, i've never had any concerned or objection to the oversight. as i want, spent four years in the senate. one of the things we discovered

that was not made available to us early on is the existence of o.c.s. the the chat capable within the network. >> that is correct. i spent some time testifying a couple weeks ago about that. in the letter, it says that no records were kept because it was the equivalent of visits or phone calls. do you remember that in the letter? >> yes. >> would it surprise you to know that we disagree with you, that the federal records act unless you can train none of the activities we're discovering in the e-mails could be done on ecs that in fact you should turn on that switch and you should collect and you should retain ocs chat unless you can assure us it's not doing the equivalent. i'll be brief but explain something to you. years ago when i was a

subcommittee chairman and president bush was in off, we investigated the mineral management service. what we discovered there was that they had systematically signed lesions that were simply wrong and cost the american people billion of dollars. we could find not a shred of evidence in e-mails to show the absurdity of how this came to pass. after we deposed people repeatedly, we finally discovered that all they admitted that only the cover sheet was brought to them, they signed their initials and never read the leases, so one mistake was passed through multiple signatures. what we discovered is at mineral management service. after the b.p. disaster, they had are a policy of what these called talking over the transom.

lawyers made no record, they went out of their way to have no paper trail of things they did in their consultation. i will tell you today that has to end, that the american people expect that the federal records act, the presidential reports act is not something to be avoided and you should not be allows the bypassing of future oversight that you said rightfully so with your experience that you believe in, maintaining data so that it can be analyzed by your inspector general, activities going on in ways and means, which are slightly different than ours, our activities, or anything in the senate are hampered. by policies of any part of government that allows something that clearly bypasses future oversight. i hope today that, in addition to your willingness to cooperate and help us in getting to the answers i mentioned on this,

that you'll recognize that your letter is not acceptable, that e-mail is a substitute, not just for the old-fashioned letter, but it's a substitute for a visit. it's a substitute for a phone call, and that in fact the reason that those are important is that that isn't being done, e-mails and this is chats are extremely important, and i'd like a second round at some sometime, but would yield back at this time. >> mr. chairman, i have a point of information. next wednesday another hearing. we have the notice. could the chairman please inform us who would be testifying at that hearing on wednesday?

>> pursuant to the rules, we will inform at the appropriate time, but at this time they haven't sent anything out and i appreciate your inquirinquiry. >> so you don't know, or you won't tell us? >> regular order, please. >> we'll do regular order. the chair at this point will recognize the gentleman from michigan. >> thank you very much. if any of the constituents were not as fort coming as the i.r.s., there would be a presumption of guilt. this would you say garnished and/or liens on their homes and/or savings accounts seized. i had the opportunity to speak to many former employees of the i.r.s., now retired. i asked them what they thought

of what was going on at the irs, i said despicable behavior every step of the way, the irs no longer credible. i think at this point, mr. chairman, i would like to yield back. emplgts would the gentleman yield? >> i think so. this is helpful. commission commissioner there's been -- in the it mike at a time two years, sort of an estimate. let me ask you a question. have you reviewed the time line when this committee issued lawful demands for lois lerner's e-mails? have you reviewed the time line of who did what and when? >> no. >> would you be prepared to deliver to us a time line -- meaning calendars, activities,

of individuals who were charged with going out and finding those e-mails, what they did and when they did it? >> we've had about 150 people -- >> no, you've had people redacting and legally reviewing. i'm only talking about who went and got the information, who accumulated them, the gathering? >> that's not just one or two people, that's a set of people. but we'd be happy -- >> here's the inquiry i'll ask you today. again we appreciate your coming, bur not the i.t. gale oar any of 200 people per se. it is clear from this side of the desk that we issued requests and subpoenas. two things were to occur, one that the moment we issued our first letter, it required that

you preserve information. there's a question about whether that was preserved, because in order to preserve it, you would have to go look for it. so the tapes that now your own people have admitted they're not sure whether they exist or not, they've undercut your claim that you're very -- that means that nobody went out to say where are the tapes? are there any? additional to not know that lois lerner had this gap either you weren't looking extensively once or -- and this is one of my concerns, that people just didn't want to admit that they weren't going out and looking for e-mails by what we expected, which was to do a keyword search on a server, and deliver the data. remember that for month even before you came on board, we were being told, you know, well, here's some keywords, we want a

search, and the irs was adding keywords. they were adding self-serving words and searching them. which commutees had an reasonable expectation that earp searching the entire database. you were searching the historic e-mails. not until recently, the last six weeks, did we understand that if that was how you were getting all of your information, you were knowingly looking at a small fraction of the historic two or three year e-mail selection. we now understand only six months of record, so it is now appropriate for us to understand your employees' search techniques, what they did,

because at some point they must have started search iing o. who has psts, send us your psts, or did this -- and this is why we have to ask directly -- do you have any information relevant and please sent it to us? because the keyword search would imply that in fact they were accumulating they downloaded local files, and then searching them. if in fact that process didn'tb gin in earnest in the first week or month, if in fact your predecessor was delivering basically the last six months of thing still preserved, we need it does appears as there's been an absence of willingness to disclose problems or absence of

real fact-finding, or deliberate we don't know, who went looking for what when? not interested in who read them, not interested in who edited them or redacted them or who released them. that information we're equally valuable, whether it was pursuant to the house or senate's request or to ways and mea means. so we know who knew that her e-mails were of any relevance, because they committee didn't know there was a lack of a central database for the first almost a year of this investigation. i thank the chairman and yield back.

>> thank you, mr. chairman. >> i want to tell you about more real in wyoming. the people of wyoming who i work for all feel targeted. they think the irs is out to get them. because they notice that lois lerner was brought into the i.r.s. from the federal elections commission, where she had a history of political targeting, political bias. they know she was tapped to enforce the largest tax increases in history obamacare, after -- after she targeted

conservative groups while oversees tax-exempt organizations. they saw her come to this committee, say i've broken for laws, and then take the fifth. they know subsequently we did find out that she did break the law that she provided information to another federal agency, which is against the law. and they know that so far she's gotten away with that, that the justice department isn't doing anything about it, and that she got away scot-free. they know that when they get letters from the irs that they're being targeted. i have a constituent who got a her and an investigation pending from the irs, that cost her $50,000 just to close her

estate, because they keep asking her what make and model is year bed? they think her bed is some expensive antique. incidentally she is a very active member of the republican party. she feels targeted. more real is low -- morale is low in wyoming because our government has turned against us. so this is a legitimate investigation. i hope it continues at length. i hope it goes on until we get to the truth, because the people we work for feel like the government is getting away with their tax dollars that they don't owe. they feel like the government is denies them tax-exempt status

that they deserve. they feel like they can't trust the irs. that's why you're here and asked the same questions over and over. i'm sure it's frustrating. we're frustrated too, but it's because or constituents are mortified and scared and are going to take matters into their own hands, because they don't feel we have the ability to do it. ourselves. so with no apologieses for the morale at the irs and for no apologies for how many times we're asking you the same questions over and over again, mr. chairman, while i thank you for your attendance, i do yield back the balance of my time. >> would the gentlelady yield?

>> i will. >> some people just don't have enough questions for you, commissioner. >> the -- i mentioned the time line. let me just ask you one other question, which is, when you will be at this investigation, and you look at the fact that a federal judge is now ordering you to show certain things, you look at your ig's investigation, you look at our investigation, are you aware, and do you recognize the three separate channels are perceived and in reality are very different as to what your responsibilities are and how you approach them? >> my response to all of them is the same. if people have from any branch government questions, we have an obligation to respond to them. >> i appreciate that, but the ig does in fact work under you. he has limited authority.

>> absolutely not. he's the treasure department's ig. we have no control or influence over him. he doesn't work in the irs. >> but in fact he has testified when he wants information, he has to ask for it and may not always get it, in fact there's a process and sometimes it's very frustrating to get information, even though you say he's independent, he doesn't have the authority to demand things and automatically get them. isn't that true? >> i've never had in my time here or other places with an experience of an ig unable to get whatever he needs. i'm committed to know whatever information he wants in any investigation he's welcome to have. we'll certainly hold you to that, thank you. >> i'm happy to do that. >> i yield back. for members who want a second round, we will do that. i will kick it off and recognize myself. granted, a lot of the things

that happened were before you were there, but i do think it's worth mentioning, there are a lot of taxpayers who have had their morale hit. when they see some of the conference spending that's gone on, $50,000 for a trek parody -- again that was before you were there. that irks a lot of folks and certainly or constituents. i think the same goes for targeting, when the people feel like they were being targeted or in fact were targeted simply from exercising their constitutional rights, i think that hurts their morale too. so i think that's important we mention that. a lot has been going on about when you knew there was a problem, why you delayed telling congress, and i think it is the case that the standard that would be applied to an official such as yourself is not simply what you actually knew, but what you should have known. in other words, you can't bury your head in the sand and not be apprised of what people in your

organization know. so i think that would be a question is, clearly there were people at the senior leadership level in the irs early february, mid february, who knew that the problems were more substantial than what you indicated to us that you personally knew. so the question is going to be why did you not know more? i think that goes into what i and some other folks have raised, i notice mea friend mr. cartwright disputed the notion that this is being investigated by the justice department. just so we're clear, because i don't want to be lobbing charges that aren't true respect here's the transcript from last week's hear with doj deputy dje. he delayed telling congress the american people the fbi and justice department is a matter that you are going to investigate? mr. cole replied -- we are going to look into what the circumstances were around that, yes.

so we are concerned about it. the doj also seemed concerned about it. you have seen the ways and means press release about their conducting interviews with different irs technical witnesses about what in fact happened to the hard dlrive. they told ways and means the hard drive was scratched and data was likely recoverable from it, and of course the irs just last week in federal court has filed a declaration saying consistent with what i think you've testified to, that the hard drive was destroyed and in fact no data was recoverable for it. so my question is -- what's an american to think when they see some witnesses telling a congressional committee scratched, may be recoverable, but yet the irs is representing in federal court that it was destroyed and completely unrecoverable?

>> i wasn't there and i haven't talked to those people and that -- >> but the technical people would be the ones we would most want to talk to about that, correct? >> all i know is the e-mails i've testified about at a previous hearing show there were efforts maid be ms. lerner and the i.t. department to restory the hard drive. it went to the criminal investigation division and their experts and said they were not able to retrieve information from that hard drive. that's all i know. that's what the e-mails contemporaneously at the time showed and said, was that that the experts had tried and they were unable to recover any information. >> i read the pleadings, and i take that point, but we are getting conflicting information it seems, so i think it's important that that be resolved, because clearly you can't by telling the court one thing and have been people in the organization who are on the ground and maybe had intimate knowledge telling the congress the other thing. very quickly switching gears a

little bit, the d.c. circuit issued an espn about the irs's regulation about obamacare about mandates in the states that have exchanged run by the federal government. given that there's a circuit split, where you have the 4th circuit saying that basically it was either a close call or scrivener's error, the d.c. circuit saying that actually the irs didn't have the authority to issue that ruling, are you going to put -- rescind that rule until this can be resolved by the supreme court? what's the irs's positions in light of that case? itch . >> the rule about granting advance premium tax credit all run by hhs, we have our regulation said in fact it was appropriate and acceptable to go through the federal marketplace. we have no plans until the issue is resolved in court to rescind or change that rule or change

our preparation for the next filing season. >> is it your opinion as the irs that you construed that to believe there may have been a drafting issue, but the intend was the subsidy should go? >> it was reported of the justice department's opinion, which was upheld in the 4th circuit, not upheld in the d.c. circuit. i don't have a different view of the legality. i think the justice department puts it well that they think the statute is enforcible and the regulations are appropriate. >> okay. i am out of time and will now yield. to the ranking member of the full committee, mr. cummings. >> thank you, mr. chairman. on july 9th you appeared before the subcommittee for a hearing entitled solutions to close the improper payments gap.

republican members of the committee asked you a number of questions regarding the committee's investigation into the treatment of applications for tax-exempt status. also e-mails were released from lois lerner regarding the instant messaging system called ocs that he claims proves that ms. lerner intentionally sought to hide information from congress. despite your testimony that you were unfamiliar with the system, republican members repeatedly questioned you about the specifics of ocs. commissioner, now that you have learned of the system can you describe what ocs is? >> i provided a letter to the committee. what i've been advised is it's a system one microsoft systems and

basically allows people around the country, the prime use is to have a teleconference, and everybody looks at the information at the same time and it's a way to have a gathering at a meeting. it allows you also to in effect have an instant messaging capacity for those who use it. i don't use it, because i didn't know it existed, that much like your cell phone, somebody if they see you're online, can sent you a text message and it's like calling you on the phone. so like all text messages, it's a -- sometimes faster and more efficient way to communicate than picking up the phone and calling someone. >> all right. despite the fact that the e-mail exchange occurred on april 9th, 2013, near le two years after ms. lerner's computer crash and more than one year after the inspector general's audit began

on july 11th, a letter ways sent claiming that -- they posed as substitute for telephone calls and in-person meetings is that accurate? >> that is accurate. >> irs further explained that the federal records act does not require reporting or retention of telephone calls or meetings as a substitute for telephone calls and in-person meetings that the not normally be record ed requirements, i asked unanimous consent that the letter be entered into the report. >> without objection. >> doesed federal records act require retention.

it's my understanding it does not f. and it's my understanding they reviewed the process, and we got a score of 93, and in 2012 got a score of '99. we've reached out to them to try to work with them to ensure, a, that we are complying, and if there are ways that we can improve our official recordskeeping, we're very anxious to do that. >> are you aware of any evidence that lois lerner used the ocs system to intentionally hide information from congress or the inspector general? >> i'm not. as noted we produce 43,000 e-mails from her account, so he obviously used e-mail snickly. >> to the best of your knowledge has any used them intentionally hide communication from congress or the inspector general? >> i have no knowledge of any such activity.

>> once again your testimony is corroborated by the result of the committee's -- after receiving hundreds of thousands of pages of documents and, the committee has not identified any evidence or any other irs employee to use the ics system to intentionally hide information from congress. i want to thank you, mr. koskinen. i have 14 seconds. anything else? >> i just add to the congresswoman from womenling, my view is we all work for taxpayers. and we have to be important stewards of the money we spent, and we have an obligation to ensure that everyone is treated fairly and the same. to the extent that there are

people who have lost confidence in. irs, one of our major challenges is to restore that trust. whenever we continue to contact audited people, some will be democrats, some will be republicans, some may not belong to a party, some may have voted for one person or another, some may be active in politics. what they need to be confident of, when they hear from the irs it's not because of any of that, it's all irrelevant, but because there's a question in their tax return. if somebody else had the same question, they would be hearing from us as well. we have an obligation and a commitment to treat everybody fairly, and evenly across the board. i have met with over 11,000 irs employees across the country and have never seen a more dedicated workforce dedicated to the mission of the irs to provide taxpayer service to enforcing the internal revenue code. i'm delighted to be part of that workforce. >> thank you, mr. chairman.

>> i just will, with respect to lois lerner's e-mails, in terms of ocs, you know, when she initially wrote the e-mail to maria hook saying she had a question about ocs, she was cautioning folks about e-mails and had several indications when congress was asked for and there had been an electronic search for responsive e-mails, so we need to be cautious about what we say in e-mails. someone asked in ocs conversations were searchable. i didn't know, but told them i would get back to them. >> i think the context is try to evade congressional oversight. with that, i will recognize the chairman of the subcommittee, mr. jordan. >> let me go to the halifax decision. does the irs have an obligation to now tell taxpayers that tax credit may in fact not be available? >> we actually are -- i think we

have an obligation to keep taxpayers n about all aspects of the internal revenue code. we have a program of public information to advise taxpayers now if they're getting premium -- if their information changes, they should go back. >> to the extent that we go forward -- >> are you going to educate taxpayers on the potential ramifications of the halifax decision? >> we will put out information regarding it. as i say right now, two courts have come to different conclusions, so we don't intend to make any different changes, and therefore i think our advise, though it's not totally until my control, because it's a policy issue and we're just tax administration, but my general should continue to operate as they have thus far until we get to a final decision. >> let me go to the ways and means statement yesterday, their

press statement. one of the things they say in in-house professionals at the irs recommended the agency seem outside assistance in recovering the data. are you going to do that? or have you done that already, outside professionals to recover data lost or that may be recoverable on the scratched hard drive or the tape that now in fact may be available? is that something the irs is going to do? >> as you know, my understanding is that hard drive is a normal process once the criminal investigation division determined they could not restore any information from it, that hard drive was recycled and no longer exists. >> when that took place, when you were trying to get to the data, did you in fact get outside assistance in trying to recover the data? >> i'm not aware of any attempt to go outside the irs. >> so even though in-house

professional says, you know what, this might be above our pay scale, we should get the outside -- -- the super wiz kids who can do this stuff. to your knowledge that was not done? >> i don't even know about that statement. i haven't seen that transcript. i was not aware that recommendation has been made, but i have no indication indicating that it was done, i.e. that outside experts were sought. all i've seen is the e-mails i've testified about in which the criminal division reported they could not restore the hard drive. but i have no information that we did the irs at that time did anything else. >> they did not -- i just want to be clear. it's your understanding there was not outside professionals brought in to try to recover the data. >> that's right. i have no indication that was done. it's by my assumption by the e-mails that i saw when i testified that when the criminal investigation d. even though in-house experts recommended

that they be brought in? >> i had no information. >> they're reporting that they should go get some outsigh experts, this is beyond our scope. we need someone to get get this because this is such important information. and you're saying you don't think that was done? >> i don't think so but i haven't seen the full context of what that gentleman said either. >> you don't know and you don't know if it was asked for. they're reporting it was asked for and it wasn't done. >> right. >> which is a pro. when your tech experts say we need outside tech experts to get the data, no, no, it's unrecoverable. that's reported by what you said in testimony and what's been filed with the court that's unrecoverable. >> this was three years ago and there was no investigations ongoing at the time and in fact, the irs had taken extraordinary attempts even to go to the cid people. >> that's the point. that's why they wanted the help. you're saying it didn't happen? >> right. >> which is a concern. one other question.

according to your testimony, a month ago the ways and means committee you said the irs in february identified documents that indicated ms. learner had experience in 2011 consistent with mr. cain. you knew in february there was a problem. february 2nd, february 4th, you knew there was a big problem and in mid february you knew it was unrecoverable. in mid march of 2014, this review, we learned the data stored on her computer hard drive was determined to be unrecoverable. mr. cain said he knew in february. you knew in mid march. >> that's right. >> but you -- >> i knew in mid april and that's a misstatement on my part. i if you read my testimony before this committee and now the three hearings i've had into so this is your written testimony in ways and means? isn't that accurate? >> my written testimony? >> this was your opening statement and what you said to the ways and means committee? the irs in february identified documents that indicated ms. learner had computer failure in 2011. the data stored on her computer

hard droouf in mid march was determined to be unrecoverable. >> that's correct. >> that's what the irs knew. >> here's my question. mr. cain said on february 4th he knew. you indicate in your testimony in mid february we knew there were big problems and mid march we knew it was unrecoverable. you knew even though your key staff people knew in mid february. you testified on february 5th to the house ways and means committee, february 26th to the house appropriation subcommittee on financial services, march 26th, to this full committee and april 8th to the senate finance committee. in those hearings you were asked about ms. learner and e-mail and different things. you had four different opportunities in front of congress. so i'm wondering. in the back of your mind, were you wondering when you answered these questions that we're going to produce all of the louis learner e-mails, when we're going to comply in the back of your mind were you thinking, maybe i should let these guys in on the little kind of important fact that you know what? we've already determined that

her hard drive is unrecoverable. was that ever in the back of your mind when you answered questions from members of congress and four different committees over the time period when you already learned significant facts? even though in your mind as part of your testimony you didn't fully know we lost them for good? even though you sort of knew it was pretty darn likely you had lost they will all for good in the back of your mind did you think, you know what? maybe i should fully disclose what the real status is of ms. learner's e-mails? >> as i testified several times in the past -- >> that didn't enter your mind? >> i didn't know there were e-mails lost. i personally did know until the middle of april. when i testified and said this before in several hearings, when i said that on march 26th, i did not know that her e-mails were not recoverable. >> but this is your testimony, i'm reading, in mid march, 2014 timeframe we learned that the data stored on her computer hard drive was determined to be unrecoverable. so that's certainly before the

march 26th hearing and the april 8th hearing in front of the senate finance committee. >> so you had two opportunities where you already know it's unrecoverable. that means you're not going to get what's there? >> i'm sorry. as i say, i go to the point earlier. i take responsibility for the agency. when i said in that trying to report to people what we knew that's what the irs knew. you asked me specifically what did i know. i knew and didn't know until april, even though if you told me now that tom cain said he knew in february, i would hence forth say we, as the irs, knew in february. i, myself, personally did not know. when i testified tell you what i know. >> this goes right to the chairman's point. when your chief council knows in february, mid february, that it's unrecoverable, you can't come in front of congress and say, i didn't know that's why i didn't answer? is your chief council knows. you should have known. >> i should have known. >> and you should have disclosed that and you didn't. >> i didn't know and therefore, couldn't disclose.

and you're exactly right. i have not hidden behind the fact that somehow this is somebody else's responsibility. i am perfectly prepared to take full responsibility for exactly what we are did with the production of the information to the congress. >> you didn't tell us that in your testimony. you didn't tell us, you know what? on march 26th when you answered you didn't tell us it would have been nice if we had known at that point kate duval and tom cain knew it was unrecoverable and somehow they didn't tell you because you would have to disclose that when asked about it in congress? is that why they didn't tell you? >> i don't know. we were spending most of our time trying to produce these -- >> no one can figure in out. something this important, louis learner, the lady that stat in your chair and took the fifth, the central figure in this investigation, you lose her emails and if chief council knows in february, the lawyer in charge of document production knows in february, and they don't tell you and you can come up in front of congress four

times and not disclose that and then when you do learn in april you can wait until june 13th, that's what the american people no wonder there's some morale concern and no wonder there's trust problems. that's unbelievable. >> can i add one point? >> you talk to the chief council and she'll tell you what she did or didn't know. >> tom kab said she knew. >> he knew the hard drive had a significant problem. we did not know what e-mails we had. we, in fact, discovered and found 24,000 additional e-mails from louis learner to other people. and i -- >> all i'm saying is this, when tom cain, the lawyer in charge of document production, the professional you said does good unrecoverable and they knew that in mid february, and you come to congress three times after they knew that, both he and your chief counselor, and you don't disclose that, you should known

that and you should have told us. and when you find out you wait two more months? >> come on! come on, we're supposed to buy that? i yield back. >> i thank the chairman. and i would point out, before i recognize my friend from pennsylvania, here we are in, saying with february and march, saying you didn't know how many learner e-mails were out there and granted you were not commissioner during the whole time but we've been asking tore these things for over a year now. subpoena was sent in august. reissued under your watch and so, the irs dragged its feet on that and i realize a lot of that is not necessary loin your watch but don't tell me nine or ten months after we request this stuff and five or six months after the subpoenas are issued, somehow you don't know how many e-mails you have. that should have been something that should have been ascertainable. thank you for the indulgence and i will recognize mr. cart wright.

>> thank you mr. chair, protem. mr. coskin, i asked the chairman of the committee who were the witnesses supposed to be next wednesday from the irs. he declined to tell me. he declined to tell me whether he even knew who the witnesses next weekq%k[ will be. but i didn't ask you. and this is your department. do you know? >> until i came here i didn't know they would have a meeting next week. >> would you gae that those would be nice to know? >> it's always nice to know in advance when we're supposed to show up for a hearing. i don't know whether i'm expected to show up next wednesday. >> neither do i.

let's delve into the irs forensic lab together, shall we? there, commentsbility scratches on hard drives and that's not my area of expertise and i dare say that's not yours either but we had jon min s.e.c. k an list from the irs criminal investigation's unit meet with ways and means staff on monday. he told them he did not find anything suspicious about how a scratch got on ms. learner's hard drive. the analyst said that he dried to recover ms. learner's documents on several occasions. first with a normal tool set and then using more advanced tools he couldn't recover any data. mr. commissioner, contemporaneous e-mails confirmed that the irs, criminal investigation's unit, could not recover her documents. am i correct in that? >> that's correct. >> and the ci analyst told ways and means committee staff that he gave his colleague in the irs

i.t. shop, the name of a third party vendor that he used honorary occasions to recover information but irs i.t. staff has kultded with outside experts at hp. do you know if irs officials consulted with i.t. experts a second time in 2011 to recover ms. learner's e-mails? >> i do not know. >> okay and finally, i want to touch on something that the gentle lady from wyoming mentioned. she just said that her constituents are going to take matter into their own hand. and