gentleman from north carolina, subcommittee on government operations. the gentleman from north carolina, mr. meadows, for five minutes. >> thank you mr. chairman. thank you each of you for being incredibly flexible today. really, i guess the underlying concern that i have is as we are celebrating the 25th anniversary is we got to figure out a way to get off the high risk list. it's not a very high benchmark. really, if you look at the components of that, it is just making a real concerted effort. so i'm looking forward to each one of you putting together a plan to make sure that we can do that. doctor, let me come to you.

i sent you a text and i want to compliment you -- actually, sent you ton ean e-mail. i want to compliment you that on a weekend you responded via e-mail, which was shockingly surprising, and i just want to say thank you. do you have the automatic reenrollment numbers that i've been requesting from cms? have they given those to you? >> mr. meadows thanks for the question, and happy to be accessible whenever you need. the answer is i think we're still working on it. that is part of the agency, obviously, that i don't have direct oversight over. my understanding is you've had numerous conversations with the ceo of the marketplace, kevin kuninen, and they are working on assembling those numbers. our focus is getting the numbers out to you and the public, but making sure they're accurate when we do. >> so what you're saying is you have not seen the numbers for the automatic reenrollment.

you've never seen any totals? >> i have not, no. >> it's my understanding that we've had those numbers and we've been trying for 60 days to get it. any reason why it would take that long to verify numbers? >> i think it's just confirming that the numbers are numbers we can stand behind, making sure they are good numbers that ought to be released. again, i believe staff at cms are in touch with your staff and obviously you've been in touch -- >> we've been in touch. they have not really been in touch from a follow-up. it's been amazing to me that we can have the response time for those that get recorded messages or wait times for spanish-speaking operators, and we know that down to the second, or actually tenth of a second, and yet we can't get automatic reenrollment numbers from cms. when can we expect those? >> i don't have a particular timeline. >> let me go on further because i've got limited time. let's look at medicare.

you're going from 14,000 lines of code to 68,000 codes in terms of medicare reimbursement; is that correct? >> are you talking about icd? >> yeah. icd 9 and icd 10. >> sure. >> so we're going to different codes. >> yes. >> so doctors and hospitals putting in the wrong code will come out as an improper payment or fraud; is that correct? >> not necessarily. >> or improper payment. >> it may. obviously, the importance -- >> why would we go from 14,000 codes to 68000 codes? how could that make it more efficient? >> first let me say the agency is adopting these codes that are actually established outside of agency processes and with the input of the provider community. in fact, it was really the provider community searching for specificity and the ability to really define exactly what they were seeing --

>> so they could get payments they wanted. >> so they could get properly reimbursed. >> i went through and looked at your codes. we've got codes now that one in particular says, if you unexpectedly are missing your big toe. unexpectedly missing a big toe gets a code. there are six different codes for squirrels. so if a squirrel bites you, if it's a first time or second time, if it scratches you. do you not see that we've got unbelievable lines of code, that more codes will not make it more efficient? there is one code in here for spending too much time in a freezer. i mean, it's incredibly ridiculous, and let me tell you, the physicians that i talk to and the hospitals i talk to are spending millions of dollars in compliance trying to figure out your codes and yet we're going to increase those by fourfold? why would you do that?

>> again, i would just be careful. let me just say i believe there is a code for an orca attack as well numerous different kinds of codes. i don't imagine in my own practice to be using that one or many others. >> is a mouse a rodent? >> pardon me? >> is a mouse a rodent? >> i assume it is. >> but you've got a different code for a rodent than a mouse. what i'm saying is you make it so complicated that nobody can comply. >> to be clear, though, the agencies are a recipient of idc 10 just as we are. >> but you're in control of that implementing that, your program integrity? >> there are numerous parts of the agency. we are required to implement icd 10. i realize congress has delayed implementation of that requirement, but at some point we are required to implement icd 10 and that's meant to -- the code design itself is not something that cms has engaged

in. it is really designed to improve both epidemiologic understanding of administrative data to make sure administrative data really reflects what's going on in the real world clinically and providers have had extensive input into these code sets. i don't necessarily disagree with your point, but i think we are as much of a recipient of icd 10 as other agencies implementing it across the world. >> my time has expired. i'll yield back. >> thank you, we'll recognize the ranking member. [ inaudible ] >> cms has undertaken a number of initiatives to reduce fraud and improper payments in the medical program. i'm just concerned about how they work and how effective they are and what you see for the future. i'd like to ask you about these today. the aca requires to increase scrutiny and provide to suppliers a higher risk of fraud and abuse.

this higher screening process applies to providers and suppliers who are attempting to either unduly enroll in the medical program or revalidate a patient. can you describe the different risk-based screening level designations and the various requirements that providers and suppliers in each category are subject to? >> sure. so provider categories by provider type essentially are subdivided among three risk categories, limited, medium and high. and as you go up the chain of risk, more screening strategies and approaches are implemented to screen those types of providers. again, whether they're newly enrolling or revalidating. at the highest level of risk, say a home company or health agency they are screened to

make sure there are no criminal records that would keep a provider out of the program. but in addition the higher risk providers face site visits, they face fingerprint-based background checks, so a multitude of different screening approaches for the higher risk providers, and that also includes providers who are attempting to reenroll after having a program integrity action taken against them in the past. the result of all this work, and to date we have revalidated a million of the providers and suppliers in medicare, and the task of this work of reenrolling and revalidating is we have removed the building privileges of over 450,000 enrollments in medicare. i can tell that you these new enrollment requirements are also allowing us to deny more applications at the front end so providers actually never make it into the program because they do not qualify. >> that's what i was about to ask you. so as opposed to chasing money, you do some preventive things;

is that right? >> i think a lot of our provider enrollment work solidly lands in the preventive category because it really is designed to keep folks out of the program that don't belong. so if we conduct a site visit and determine that you are a non-operational provider then you never make it into the program. or if we check your criminal background record or check your license license and see that you are not able to be enrolled, we deny your enrollment. >> how does the power of mobility devices compliment ems' programs? >> one of the central challe election -- challenges in the enrollment is

it indicates what happened during that medical interaction and the claim that comes to cms, essentially the bill for that interaction. what prior medication does is require that documentation requirements are being met on the front end before the service is even offered to the beneficiaryry. beneficiary. we take a very risk-based approach. the demonstration was implemented around power mobility prices first. we put out a proposed rule that would look to expand that to other high cost supplies, and there were elements in the budget that look to expand it to things like hyperbaric oxygen and scheduled ambulance transportations, but all of it is the same principle which the private sector uses every day of valuableidateing the service before it's even provided and the benefit service gets paid.

>> is the beneficiary adversely affected? >> i think that's an important aspect of this. by checking on the front end, before the service is even provided documentation is provided, it prevents the beneficiary from being potentially on the hook for a denied claim. the service was never provided, right? that way neither the provider is on the hook for a service they were provided but are not getting paid for and the beneficiary is not on the hook for having received a service that the provider is not going to get paid for. >> thank you. the gentleman yields back. we now recognize the gentleman from tennessee mr. duncan. >> thank you, mr. chairman. mr. he is at theteat the -- estevez, the paper says, congress should seriously look at addressing wasteful spending in the pentagon.

of major federal agencies, the pentagon is one to rarely submit, let alone pass, a full audit. another article says pentagon leaders have stepped up production of f-35 the beleagured jet fighter that has proven to be a massive drain on resources with no end in sight, 75 billion was sunk into the f-35 with massive cost overruns and egregious acquisition failures. over the years i've read so many articles about waste at the pentagon, and i sometimes wonder if there are any fiscal conservatives at the pentagon. what do you say? do you have any estimate as to how much we've spent on the f-35 so far? are you concerned about this article that's in the hill today that talks about wasteful spending by the pentagon? >> thank you for the question congressman. first, we're always concerned

about any wasteful spending at the pentagon and we have a number of processes in place to address spending in general, including looking at our overhead and functions and looking at our acquisition processes. let me address the f-35. i don't have the total number spent to date. f-35 costs per plane have gone down below our estimations since it was rebaselined in 2010. it's actually producing a pretty good airplane. the f-35 is stuck on old news. >> you're the principal deputy for acquisition, and do you have any rough guess as to how much we spent on the f-35 thus far? a wild rough guess? >> i would be happy to get you that for the record. it goes back to 2004 congressman. >> right. dr. agaral i met last week with

hospitals from east tennessee, and they told me that many hospitals in tennessee are either going to have to close or about to go under or will probably end up being sold to some big out-of-state corporations because of the unfairness in their medicare wage index. and they said that the system that cms has now rewards very expensive, inefficient hospitals and penalizes hospitals that have held their costs down or that have continually lowered their costs. have you looked into this? i mean, it's the difference between what hospitals are being paid, say in san francisco in comparison to tennessee or mississippi or places like that it's just almost unbelievable. these hospitals are being paid twice as much for mostly the same type of work.

what can you tell me about that? is cms looking into this or concerned about these huge discrepancies at all? >> yeah i appreciate the question. we do have processes for hospitals and other providers to engage us in terms of wage discrepancies like that. i can tell you we have a very proactive approach to, say, the misvalued codes that we know exist and re-evaluating those codes and sharing our coding approach and reimbursement approach is really paying for valuable services that taxpayers expect that we all want the program to provide. the core message is there is a process for doing that and we're happy to engage with hospitals on the providers on these kinds of questions. >> i'll tell you this. i don't have much time left, but years ago, a hospital administrator in a small town in tennessee, he said, if you don't have hospitals, you don't get doctors, and if you don't get doctors, you don't get people. and there are many rural

hospitals that are really struggling in this country today because of these discrepancies between what they're getting in comparison to some of the very wasteful very inefficient big city hospitals. and i think that's something that you really need to take a look at, because it's very unfair, and i can give you all kinds of statistics about that that i won't bother you with today, but it's getting to be a very serious problem in my state. >> thank you very much mr. chairman. >> we're recognizing numbers based on seniority when we gavelled in, so the gentleman up next is actually from south carolina, mr. mulvaney. the gentleman is recognized for five minutes. >> thanks, mr. chairman. mr. koskinen, when i sat down to do the report i got sidetracked. one of the things i found when doing the research for the report that just came out today, or just being reported today, that your agency is reporting that the tax refund fraud will

be $21 billion this year. that's about 300% from just a couple years ago. that number stunned me. just out of curiosity, i think it's more than we spend on the entire department of agriculture. you could run the treasury, the judiciary, the sec, the spa and the irs with that money and still have a couple billion dollars left over. mr. estevez, just out of curiosity, it could buy you 140 f-35s. on just what we're going to lose this year in tax refund fraud, you could run my state of south carolina for three years with that money. that's not all the fraud occurring in the irs, it's just the tax refund fraud. that research led to the research i wanted to ask you about, which was your testimony last week before the senate, where mr. grassley, senator grassley, asked you some questions about the impact within the internal revenue code and within your department of what the president has done on executive amnesty. you went back and forth with

senator grassley, and he asked you about people who are benefiting from the amnesty claiming the earned income tax credit in arrears up to three years. do you remember that testimony with senator grassley? >> i do. >> and i don't know if we established what that would cost. have you had a chance to figure out what the total cost of that program would be? >> i have not. but before i get there i don't know where the 31 billion in refund fraud came from -- >> 21 billion. >> -- 21 billion came from. we stopped at about 61 billion in refund fraud and had about 75% is what came through. we're worried about it, but it's not 21 billion going out the door. in regard to the question you asked earlier in order to be eligible for the earned income tax credit you have to work. to be able to apply for it, you have to have a social security number. >> okay. >> and so if -- we have about

700,000 i-10s out there by illegal immigrants who are paying taxes, but they're not eligible to apply because they don't have a social security number. >> but several million of them will get social security numbers under the new program right? >> under the new program, if you get a social security number and you work you'll be eligible to apply for the earned income tax credit. you will get an amount depending on your situation. if you're an individual working and applying for the individual tax rev, it will be in the range of 5 or $600. >> let's drill this down, because there was an apparent lack of clarity in the interpretation of what you said in the senate. i want to clear this up. is the earned income tax credit only going to be available to illegal immigrants who filed taxes previously, or is it going to be available to all of them who receive social security numbers under the new program? >> it turns out there was a lack of clarity about that.

if you get a social security number, you can then file for this year if you're working and if you earned income in the three years before that and filed, you'll be eligible. if you did not file, you'll have to file a return and you'll have to file and demonstrate with the same information that anyone else would that you actually earned income and are eligible. there is an assumption that you would get the earned income tax credit automatically whether you were working or not. >> so it will be available to everyone who was working even if they didn't file in the previous three years. >> that is my understanding, yes. >> and you have no idea how much this is going to cost. >> i don't know how many people are going to get social security numbers, how many will be -- >> did the white house not ask you to estimate that? >> i haven't talked to the white house about this at all. >> did anyone at the white house ever consult with your office before they issued the executive orders that gave rise to the executive amnesty? >> they didn't consult with me, and to my knowledge they didn't consult with anyone else. i'm not aware of any

consultation. >> are you aware that if we were to do what the president did by legislation that he did by executive order that we would have to go get an estimate of exactly what you and i are talking about here today? >> from the joint committee on taxation? >> or cbo. >> yes, sir. >> so if we did the same thing the president did by law we would have to know the answer to that question but the president didn't have to know the answer to that question before he did what he did. >> the president may know the answer. he wouldn't come to us to get it, he would go to mb. >> did he ask you about any increase in the risk of fraud? >> we had no conversations with the white house that i'm aware of. i've never talked to the white house about any of this. >> thank you, mr. koskinen. i appreciate that. >> we now recognize the gentleman from ohio, mr. jordan. >> i thank you mr. chairman and i want to talk about the irs targeted conservative groups and frankly the pattern of deception and delay we've seen from this administration. i would just remind you if you

don't take my word for it just yesterday in the hill, front page, feds won't release irs targeting documents. don't take my word take bob kusak, editor of the hill, respected journalist talking about deception in the hillirs. last year they told this staff that there would be no deception. it turned out to be a lie. we were also given other assurances there would be no targeting. may 2013 that day that lois lerner went from the bar association here in d.c. with a planted question, again, unprecedented to get in front of the story before the inspector general released a report and talked about the targeting by the irs of conservative groups. and i quote from -- remember she talked to treasury and the white house about this from mr..

from mr. kusak's article yesterday, and i quote the treasury informed the white house about the plan to disclose the targeting quote so the white house wouldn't be surprised by the news. think about this. planted question before the inspector general's report comes out, she discloses that and the white house and the treasury already knew it was going on. then of course we have ms. lerner talking about cincinnati was the problem and not the white house. that was false then it was a phony scandal which brings me to mr. koskinen. february 14 of last year we subpoenaed you for all of lois lerner's e-mails. put up slide number 1. just a few weeks later march 26 in this committee room, the chairman of the committee, mr. chapitz, asked you a question are you going to provide all of lois lerner's e-mails, and your sfons response was, yes, we will do that. do you remember that conversation? >> i remember that conversation.

you remind med ofed me of it a few times. >> yes and i will continue because america is mad for the vai lalgs of this rights. remember a letter you wrote saying the e-mails were destroyed. do you remember that? >> i remember that. >> i asked you specifically what date did you learn you couldn't get all her e-mails? do you remember that conversation, mr. koskinen? >> i remember that conversation. >> and your response was, i learned in april. so my question to you is today, will you admit that you misled this committee, the u.s. congress, and more importantly the american people just like ms. lerner was doing, just like mr. shiler was doing, will you admit you were misleading congress and the american people? >> absolutely not. >> you don't think you misled them? >> no. >> you told mr. chaffetz, yes

we'll give all her e-mails. that was march. in april you learn you can't and you wait two months to tell us, and you don't think that's misleading the american people? >> i do not. we waited six weeks to tell you, and we waited those times to find as many of the e-mails as we could and as we reported -- >> have you sent the chairman a letter saying what you told him on march 26, yes, we will get you all of lois lerner's e-mails, have you sent chairman chaffetz an e-mail saying, what i told you on march 26 isn't true? >> i still tell you, we said we would give you all of lois lerner e-mails, we gave all we had. what i told you before we couldn't make up lois lerner e-mails. we gave you all we had. >> you said ilgive them will give them all to you and then you said you lost them, you destroyed them. have you done anything to correct the record? >> we didn't lose them. they were lost in the period of

time of 2012 and when we testified in june i testified that we waited the six weeks while we tried to provide you as much e-mails as we could and there were 24,000. >> put up slide 4. put up slide 4. this is the letter you sent. and you said, you can confirm that no backup tapes existed. so you confirmed that you couldn't get us all her e-mails and you've done nothing to correct the record when you told mr. chaffetz that you were going to give them all to us. and you waited two months to tell us you lost them. >> we waited six weeks so we could provide all the e-mails we could find. we provided you 24,000 e-mails from the time of her hard drive crash, and we didn't have tapes because they had been rerecorded over. >> one more question, mr. chairman, in the last 10 seconds if i could. have you withdrawn the letter understanding that now tigna has told us her e-mails are

recoverable on the backup tapes, have you withdrawn the letter that you sent to senate finance where you confirm that those tapes weren't there? and i bring this up mr. chairman, because this committee has some experience with letters being withdrawn. in 2011 the justice department after making inaccurate statements regarding fast and furious sent a letter to chairman issa and they said this. facts have come to light during the course of this investigation that indicate the february 4 letter contains inaccuracies. because of this, the department now formally withdraws the february 4 letter. so what i want to know, mr. koskinen, when are you going to be square with the american people and withdraw false and misleading statements you sent this committee and more importantly the letter you sent to senate finance. are you going to withdraw that letter? >> absolutely not. we can have this argument for a long time. tigna, by the way has spent six months trying to extract those e-mails from the backup tapes.

>> you said you could confirm they didn't even exist. >> the backup tapes, though, if you go through my records you'll find i said the backup tapes -- >> will you withdraw the letter about the falsehood. that's my question. >> there is no falsehood. i stand by that letter. >> your time has expired. i recognize the gentleman from michigan, mr. walberg, for five minutes. >> thank you mr. chairman. mr. koskinen monday and tuesday of this week i did two live town halls in my district, and at two of those events, the issue that was brought up, the same story that came out in the "washington post" with the headlines "irs rehires hundreds of ex-employees to troubled records" came up. and it basically came up from my constituents saying, why can we not get away with the same things recorded there? the article indicated that between 2010 january and

september 2013, the irs rehired 7,000 employees. a great jobs program, and we're always delighted when people are employed, but the question comes from my people as to why over 800 of those 7,000 rehired irs employees were rehired with prior substantial employment issues, including 11 individuals who engaged in unauthorized access to taxpayer information. and that really discourages and frustrates my citizens. that these people, 11 of them, who engaged in unauthorized access to taxpayer information, which is a crime as we understand it were rehired. why? >> the bulk of those employees are temporaries or seasonals who were hired for four to six,

eight months a year depending on the time. they should not be rehired. >> even though they committed a crime. why were they rehired? >> because the process at that point in time in 2009, to 2011 into 2012 followed, as the ig said, the open rules and regulations which would, in fact, havale allowed those people to reapply. we consolidated in 2012 all those hiring issues into our security division, and i made sure if you violated section 12-0rks-12- 12-0-3b, you will not be rehired. >> according to tigna, it still remains a concern because the irs rehired individuals with conduct and performance issues. this was subsequent to that. >> the ig again, in that report said that was all pursuant, and we followed the opm rules.

what the ig said is we should make sure that before we hire someone, we've actually reviewed all of this and as i said we now do that. we took the ig's recommendation and i've talked with our personnel people since the ig started raising this issue, which i think is an important issue in december, and to make sure that -- and this consolidation with our personal security people, if you have violated 12-0-3b, which is willfulness of taxpayer information, you won't be hired. >> let me proceed further then. and i hope this is a general trend. the audit identified 141 individuals that were rehired that had a prior tax issue, with five of them having been found by irs management to willfully not filed their taxes. how many of these employees still working? >> they're all seasonal employees, so i don't know. a lot of them don't come back the next year so i wouldn't know

how many of them there were. we take employees to be tax compliant very seriously. our compliance rate is over 99%. we hold people accountable even if their mistakes are inadvertent. even if they make modest mistakes, we count that as noncompliance. what we are concerned about are are the five employees who were found willfully to not pay their taxes and violate the tax laws, and those people are subject to termination. >> could you get information to this committee of people we're referring to here that are still employed? >> i will find the information. the 141, if you had a minor attempt -- minor mistake, you would get cited for that, but those aren't basis for termination. the five you mentioned that had a willful violation finding, i will find out the information and get it back to you. >> i appreciate that. what about those -- not the tax issue, but had substantial prior employment issues attendance

issues, misrepresentation of what they were doing if they were on the job? >> again, as i said, consolidation, we have a personal security department that reviews every offer before it is made to make sure we've gone over all of that. some personal activity are you didn't show up to work for two days. others are you had a significant problem, and we distinguish between those, and the opm rules are very clear about that that just because you had a performance issue in your file doesn't mean you can never work again for the irs. it depends on the nature and the duration of the affair. but it is important for people to be confident, even though as the tigna report said, 80% of these people are temporaries or seasonals that don't work for half the year it is very important that we have appropriate people working there. so i take the tigna report, i'm a big supporter of igs because they continue to review these

issues wechlt take issues. we take it seriously, we implement their recommendations, and before a request goes out, if there are other conduct issues not only are we going to follow the opm rules, we're going to follow those for appropriate work at the irs. in order for people to be comfortable, we do take it seriously, and people working for the irs ought to be tax compliant. we collect your taxes, we want them to pay ours. >> so i still want information about the 824. >> the 824 covers a lot. >> we now recognize the gentleman from alabama mr. palmer, for five minutes. >> thank you mr. chairman. i want to give mr. koskinen a break here a minute and talk with mr. lightfoot, if that's okay. >> i don't want you to think that's not appreciated. >> that doesn't mean it won't come back to you. mr. lightfoot, nasa has done a

good job in making progress on getting off the high-risk list but there is still some issues from alabama masses of major presence in our state, but there have been some issues with rebase planning costs and schedule on management and technical issues. can you address that on some of your projects? >> yes, sir. we have -- the process we go through where we review these projects on a routine basis, we have some that have done really well. we continue to make good progress on the eight of the last nine that have launched it and came in under the baseline. once we go through confirmation of a project which moves it from formulation to development, that's when we make a commitment for a certain cost and schedule that we're going to try to live to. the process we have where we review those monthly occasionally we have one that

pops up and it gives us an issue. we've had two of those. the space ground sustainment system that we have and the isat 2 project, which are two issues we have going where we are required to go back and baseline. when you re-baseline, you go through a process of analysis of alternatives, is there another way to get that mission accomplished can you descope the existing mission so you can still stay under the cap. that's the process we go through. each one of those has lessons. one thing we've been working on is the facts that go back in and improve on those projects. >> at a prior time in my life, i worked for a couple engineering companies, and one of the things that drives a client crazy, particularly the one paying the bill, is change orders. you've got some projects that i don't know if it's a result of design changes or poor design to begin with that are running some

substantial overruns on change orders rgs orders, but could you address that? >> i think the one you're talking about in particular is the ground systems project that we had. this was the first time we've actually applied the same project management methodology that we've had for the spacecraft we've been flying to a ground system. that's an upgrade to our ground networks that actually communicate with all the satellites we have on orbit. that system is basically becoming obsolete. what we did was we went out and we knew we had a pretty large job in front of us those program techniques we've been doing for spacecraft to a ground system. we've learned a few lessons in that process. the first one is that we have to be very clear on our requirements much to what you're talking about and make sure we understand the contractor that's doing that work understands those requirements as well. so we've gone back and forth with this in terms of trying to

define better the expectations we have per the contractor, and then managing that contractor. in this particular case, we've changed out the entire contract management team and the team we have in terms of our managing it, and since we've done that, we've managed to stay from an earned value perspective we stayed at the levels that we expected. >> would you say this is the result of a design of a project that the schedule dictated the design or is this something where you're entering a new area and you're designing as you go? >> i think this is a case where we underestimated the type of work we need to do to deal with the obsolescence issues we have in front of us in terms of designing a software system that we were putting in place with the new equipment. >> all right. i believe that's all i have. i yield the balance of my time. >> the gentleman yields wechlt

now. we now recognize the gentleman from -- >> based on previous testimony, you've made it clear that the ability of the irs to make progress in the areas that have been outlined by the jao have been largely hindered due to reductions and funding. this is kind of a personal question to me because of my involvement with non-profit organizations, and the irs has spent millions of dollars to basically rewrite the governing rules for 501-c4s or what have you, different nonprofit organizations, specifically potentially removing tax-exempt status if those organizations were involved in political

activity. my question is multiple. it's rather amazing personally that there would be an issue of trying to hinder speech of americans. can you tell me how much money the irs has spent on writing and the attempt to rewrite that specific section of the title 1-c-4 ruling? i know it was withdrawn, but my understanding is there is an attempt to rewrite that. i'm curious how much money has been spent. >> the only money that's being spent is the lawyers that have been working on the drafting of this and that's not them spending full-time, so it is not a large amount but i could try to get an estimate of how many people worked on it. the work on the first version was done before i got there but if you like, we can try to figure out a rough estimate in man hours. but the only time spent was a

relatively small number of lawyers who were working on it. but i would note that the goal here is not to hinder. as i said when i started and kind of inherited all of this the goal is in fact, to try to make clear what the rules are in a way that is fair to everybody all the organizations, it's clear and easy to administer. right now the rule that's been there a long time is you judge both the determination as to whether you're eligible to be a 501-c4 and whether you're performing under the statute by facts and circumstances. so that means that anybody running an organization is running the risk looking over their shoulder saying, is somebody going to have a different view of the facts and circumstances? my sense is that we ought not to be hindering political speech we ought not to be changing the way people act but what we ought to have -- and the ig in his recommendation said, the treasury department and the irs should clear up what the standard is for what amount -- how much, and what the definition is of the political activity you can engage in. my sense is that it ought to be

possible to have a rule that would be clearer easier for people in those organizations running them to understand and fair to everyone, and that would not be hindering political speech. it's not my intention, anyway, in looking at that to do that. my sense and concern is that the president system has, over the last several years by the ig's analysis, turned out to be unworkable. and i think it would be in everybody's interest if, again, it could be clear what the rules are without hindering people, and they would be able to run organizations confident that somebody isn't going to come in and second-guess them on the facts and circumstances that they've been operating under. >> i would agree with clarification on that but i would also strongly urge a very clear understanding of the freedoms of americans, that just because someone is part of a non-profit organization, they have not waived the first amendment rights, and that is a tremendous threat that the irs has, in my opinion, no business interfering with.

and that is a deep concern. >> i agree with you, and, in fact, my sense is that the rules, that they're fair and clear to everyone, will create less of a constraint on the people's right to free speech than the president's rules which are muddy and hard to interpret. >> one more question, and i will yield my time. again, going back to the issue that the main problem has been lack of funding, the issues from the goa have come up with the irs for some 25 years or close to it. it's been a long time that we've had issues. and yet a few years ago, in 2010, the irs had more funding than they've ever had and these issues still have not been addressed. >> that's not quite true, because we did have more money in 2010 by a long shot, and as i noted in my testimony in 2013 as a result of some of that spending on information technology, the information technology business system modernization problem for the irs was taken off the high-risk

list after having been there for 14 years. so it has been proven certainly in the i.t. area that if we had the funding, we can make significant progress. >> that's great for the i.t. area, but there are many other areas that need to be addressed and 25 years is far too long. it's time to put some teeth to it. thank you. >> i now recognize the gentleman from florida, mr. desantos, for five minutes. >> there was a time years ago when the ceo learned that ms. lerner's e-mail had crashed. you wrote a letter to finance in 2013 saying there was a problem with ms. lerner's e-mails and that the backup tapes had been destroyed. and then in february you testified before the ways and means committee and said that the irs made, quote, extraordinary efforts to recover lerner's e-mails. after the irs became aware that

lerner's hard drives had crashed, what specific steps did the irs take to loegt anycate any backup tapes or the disaster discovery tapes. >> the disaster discovery tapes at the irs are recorded over until they are no longer usable so there is no technique or capacity at the irs to retrieve e-mails off those tapes. what we did do was go to everybody in the custodial list at that point of about 80 different people that ms. lerner would have been communicating with, because we're looking for all e-mails. we already produced all e-mails that were relevant to the determination process. we looked at all those 82 and took every e-mail that was to or from lois lerner, compared them -- >> but that would have been from the hard drive. from the backup tapes you had made the judgment they simply were not going to be recoverable, or did you actually have somebody investigate whether you could have backup

tapes or you could find some backup tapes. >> our experts said we had no way, that they were not recoverable. it's taken the ig six months the last two or three months working around the clock and he still hasn't gotten them produced and we still don't know how many there are. but my position all along with the ig, because we helped thim try to recover them in that time, that if he could find more e-mails, that would be great, because it would lend even more light to the 24,000 we already produced as to what was in those e-mails in that time frame. >> why would the ig be able to find it if you guys couldn't find it? you said you went to extraordinary length. >> we discovered this in the spring and reported it in june six weeks later. within a couple weeks thereafter, the ig started his investigation, so we had no more time. i will tell you today, if we started today, it's taken the ig, and i don't know how much money they're spending, it's taken them over six months to, in fact, recover whatever they're going to recover.

we don't have that capacity. >> did the irs ever collect any tapes or send any backup tapes to any forensic lab in your investigation, the people you detail to do this were any tapes recovered, any tapes sent to a lab by the irs? >> no. >> who told you that the backup tapes would not yield any e-mails from lois lerner's crashed hard drive? >> i was told that by our information technology department. >> and do you know the basis for that statement? did you inquire as to how they could be sure of that? >> basically, what they described to me was they have these disaster recovery tapes, they're actual tapes, and then when the six months -- they keep them for six months and when the six months are done they simply reuse them and record over them. if you ever had tapes, when you record over them in the normal process, the data underneath them is gone. in fact, i was told that we had no capacity and no way that you could actually recover those and in fact they were not sure

there was any way you could recover them. >> has the irs communicated with lois lerner or her attorneys about recovering the e-mails from any of her crashed hard drives? >> i've had no communication with lois lerner about this at all. i've never met her. >> let me ask you this. in the course of the irs' response to this committee's investigation, has the irs withheld any information or documents from congress on any other basis other than 6103? >> no. we've had some that we've asked the staff to review in camera because they are basically personal matters that have nothing to do with the investigation, but we have exercised no privilege. we aren't trying to keep anything from you. in fact, we've continued to respond to requests and continue to provide any information we can find. >> and you would say that your responses to the request from this committee have been above and beyond what is required in this situation? >> i don't care about above or

beyond. when you want information and ask for it we've done that. i don't think that's above and beyond. >> extraordinary efforts aren't above and beyond? >> when we discovered the crash it was my decision and i thought we needed to do whatever we could to fill in that gap, and we did find 24,000 e-mails we provided. my understanding from news reports, because the ig doesn't tell us a lot of stuff about this, is that the ig may be able to find another 9 or 10,000 of lois lerner's e-mails. >> so the final answer is you've made the effort you were not cavalier about this you made the effort to find what the committee wanted. is that your testimony? >> that's my testimony. >> thanks. i yield back. >> i now recognize the distinguished gentleman from south carolina, mr. gabby, pho five minutes. >> the book ofie ecclesiastes teaches us there is a time and place for everything, and mr.

koskinen was here for gao testimony and not irs, and i don't know whether he's prepared for the questions or not. we'll not find out because i believe you have agreed at some point he's going to come back before the committee. i was wondering me to make sure that my chronology is correct. i thought the last time the commissioner koskinen was in front of us, there was a robust discussion about the time period within which he was going to produce e-mails. and he had asked us to narrow the scope, so that he could prioritize and get us those e-mails that we had asked for. and of course, as the chairman will recall, we need those e-mails, because the e-mails we do have from lois lerner contain such jewels as lamenting gop, wins celebrating democrat wins. forecasting gloom and doom, if the gop god forbid ever

controlled the senate, saying that we needed a plan to overcome citizens united. those were just some of the e-mails that i recall, mr. chairman. and if my chronology holds, after commissioner koskinen had told us that he would prioritize the production of those e-mails of course, they magically disappeared. and then the irs, of course, mr. chairman, employed herculean efforts to recover those e-mails. they were not successful. but then talismanically after the election or just talismanically they did reappear after the election. and now we are reading that 500 of those e-mails will not be made available due to the invocation of a privilege. does the chairman know what privilege the white house is relying upon to not produce those documents to congress? >> i do not. >> do you think -- do you know whether the president has had an opportunity to review those 500

documents? >> good question. >> do you think there's a chance that his conclusion that not a smidgen of corruption exists in this investigation might be altered if he did have an opportunity to review what's in those documents? >> certainly. >> will you consider inviting mr. koskinen back to update us on this -- on this chronology? >> yes, indeed. >> all right. well mr. koskinen, commissioner, i'm not going to question you today. because i think the hearing title was something else. but i hope at some point we can go back to where we left off, which was an assurance from you that you were going to prioritize e-mail productions. and i hope at some point, mr. chairman, we can evaluate the refusal to turn over certain

documents to congress, the invocation of privilege. i hasten to add, as the chairman remembers, because of his service on judiciary and oversight, this administration has invoked executive privilege before, only for us to then learn that that privilege was invoked to protect an e-mail that the attorney general sent to his wife. under what theory of executive privilege is that e-mail protected? so i hope that i live long enough to see the production of those e-mails. and i certainly hope i live long enough to see the commissioner come back before us. with that -- >> the gentleman yields. >> yes. >> can i just make one clarification? during the course of all of the document production, treasury department turned over all of its lois lerner e-mails and the white house made a representation they had no lois lerner e-mails. in terms of that process, in fact this committee issued a report in december noting that in fact there was no evidence that anyone outside of the irs, whether the white house or

treasury, had any impact or influence over the -- as the ig said, improper use of the country tear yeah for the determination process for c-4. so i don't know what the documents over there are. there's been litigation around the inspector general investigating communications. but that's not a case between us and the irs. the irs is not a party to that. >> no it's not. which is in part why i directed my question to the chairman and not to you. but if you would like us to have this conversation, i will ask you, do you understand why congress wants those e-mails? can you understand as a trained attorney why we might want access to all the documents? >> i can understand that. my understanding was that the white house some time ago certified there were no lois lerner e-mails. and treasury gave you all of their lois lerner e-mails. >> well, then what are they claiming privilege -- >> we'll come back and we'll have more occasions, i think this is my sixth appearance before this committee. i look forward to the seventh.

we'll talk about it. i'll be delighted to give you an update, and i'll be delighted if the inspector general can ever complete his work, it's now going after six months, to produce those e-mails because then all of us will learn what was in them. i have been totally supportive of the i.g. my view really is, if there are e-mails that can be done, and the i.g. apparently in the public press it's been said has been able to find them, i think that will be a major step forward and i look forward to discussing that with you. >> well i know i'm out of time. you can appreciate our cynicism and skepticism. because it appears as if sometimes the strategy is just to delay and obfuscate and wait and wait and wait until either the public loses interest, or until there's a new administration. i know you can appreciate our desire to have those documents sooner rather than later. >> i can. and i thoroughly understand that. >> i thank the gentleman. >> thank you. >> gentleman's time has expired. i'll now recognize myself for five minutes. i haven't had a chance to ask questions.

and i'd like to remind my colleagues why we're here. the five of you are very presentable. you put a happy face on a difficult situation. but here's the reality. 25 years in a row, your agencies, these problems have come before congress. 25 years in a row. this is the all-star team of problems. that's the reality. you can try to put lipstick on this pig, but the reality is, it's ugly. to get on this list, you have been to be engaged in waste, fraud and abuse in excess of $1 billion a year. now, to get off the list, granted it's not easy, but here are the criteria for getting off the list. leadership commitment. agency capacity. you have to have an action plan. you've got to be monitoring efforts, and show progress. that seems like a reasonable five sets of criteria that you

can accomplish. the scorecard, according to gao, 25 years in a row you've failed to hit the criteria on those five. and consequently, that's why we're highlighting this. i think you're all well intentioned. i think you're all very talented individuals. but the mass of bureaucracy within the organizations that you represent here today, it's failing to meet these modest goals. and that's what's so frustrating. things are going to pop up. challenges are going to rise. but 25 years in a row, it's just not good enough. i heard that you were making measurable progress. sigma levels. good news to report. i'm sorry, you don't have good news to report. the bad news is, you're back again. we don't want to keep having these hearings. we want to show the progress.

and i really do appreciate the good men and women who spend untold number of hours and literally years going through the details of what's happening within these departments and agencies. as a follow-up, i don't expect you to do this off the top of your head, one of my concerns is, who's held accountable? like, who actually is held accountable? we asked, i think at the very beginning, one of our members asked a good question, has anybody ever been fired? i think it was mr. hurd who asked it. anybody been fired or dismissed or transferred by not meeting these goals? we have thousands of good quality people who work for the federal government. these are employees who wake up, they're patriotic, they work hard, trying to do their best, but somehow, some way, in these five areas, it's totally fallen down. we're not achieving the goals. again, the criteria put forward by the gao doesn't say that you have to solve this. it says you're on the trajectory

to actually getting it solved. so part of the follow-up that we would appreciate is, who's held accountable? what happens if you don't meet these goals? because some of these are astronomically large. i mean, we're talking hundreds of billions of dollars. if you just take -- you want to wipe out the federal deficit, you just look at the uncollected taxes, and the problems that we have in waste, fraud and abuse going out the door, through hhs. that more than wipes out all the deficit just right there, just those two things. it's not very easily done, but the waste, the fraud, the abuse, and you look at the people who work hard and pay their taxes and they're doing everything that they can, and then they hear hundreds of billions of dollars going out that's either not collected or going out erroneously, and the waste and fraud. they just throw up their hands, you know? their 2,500 bucks means

something in their lives. yet the numbers here are so big. i do not understand why the five that are highlighted here, there's six programs, two with the department of defense, why you can't hit those five goals. and according to the gao, like the medicare program, they've only met one of the five goals. four partially. on the two dod programs, met one of the five criteria. four are partially met. at the department of energy, one partially met, one fully met, three not met at all. so 25 years in a row. i don't want to come back and have this same hearing at the beginning of the next congress. i want you all to solve it. the committee would like to know, how are you going to do that? how are you going to do that?