along. so this is a flash audit. you haven't had time to talk about it. you haven't had time to go through it. and yet you can award a multimillion dollar contract in less than 48 hours. that's what we don't understand. we're going to go through that in a minute. we're almost done with this hearing. this isn't just one audit. this isn't just one observation. the good people in the inspector general's office have been warning about this since the '90s. and it was never taken care of. >> thank you for pointing that out. and i appreciate it. and acknowledge that. i've been here 18 months and i took seriously the audits that came before me and that is why i have done and taken the steps. >> we don't believe you. i think you're part of the problem. i think if we want different results, we're going to have to have different people. and if you want to refresh the deck and we want to put mr. osmond or somebody else like that in charge let's do it. because you know what? we have a crisis. that hurricane has come and blown this building down.

i don't want to hear about putting boards up on windows and it's going to take years to get there. that's why i think it's time for you to go. ms. seymour, i'm sorry, but i think you're in over your head. and i think the seriousness of this requires new leadership and a new fresh set of eyes to do that. i wish you the best in life. i'm not out to get you. but you know what? this is as big as it gets. and there are going to have to be a new team brought in. that's where i'm at on this. yield back to the gentleman. >> gentleman back. >> i recognize myself. we have to talk about some things. mr. hess, have you come up with a decision about the timing of when you will provide this information i asked for previously? >> you want it by next week. >> fair enough. next week, if we can get that information, we would certainly appreciate it. and we will follow up. i will follow up. i got mr. cummings' back on this one, and i will support him in this. he's asking reasonable questions and i appreciate the cooperation.

thank you. i now -- i'm going to yield to the gentleman from alabama, who's brought up a great issue and a great point. i want to go through this contract timeline here. again, we're getting close to wrapping up. on thursday, may 28th of this year, just not too long ago, at 11:33 a.m. opm posted a 29-page request for quotes to provide notification, credit access, credit monitoring, identity theft insurance and recovery service and project management services. on may 28th at 2015 at 1:46 p.m. opm posted amendment one, a pricing sheet. on may 29th, at 1:32 p.m. op m changed the deadline from may 20th to may 30th. on may 29th at 2:45 p.m., opm posted another change. modified info to be submitted and deleted some clauses. and on tuesday, june 2nd, a contract was awarded to the winvale group. i don't know the winvale group. could be nice people. i don't know. but they immediately turned

around and subcontracted this to a group i don't know a whole lot about. i would like to have mr. palmer ask you some questions about this. >> thank you, mr. chairman. this question is to you, ms. seymour. do you know any of the management of csid. >> not that i'm aware of. >> do you have any knowledge about the management of csid? >> no, sir, not that i'm aware of. i got key personnel resumes in the proposal. >> did anyone discuss with you any knowledge about the ceo, scott cruickshank. chairman of the board. >> no, sir. >> how about hasam ben-gasim? >> no. >> how about mr. fore? >> no. only four directors. the last one is owen lee.

i asked you about him earlier. >> no, sir, i have no recollection of him. >> you know, you've let a contract in a very sensitive area. i mean, this literally impacts millions of people. it impacts their -- potentially impacts their financial well-being, their careers, yet it appears you didn't do the most basic research into the company that you've contracted this with. if you had, i think you might have discovered that mr. lee is under investigation by the department of justice and the securities and exchange council -- commission, i mean. they're looking into his management of a group called karnisi, which in nine months he lost 99.7% of the money invested in that hedge fund. mr. mcfarland, let me ask you this, if you had known this, would this have raised a red flag with inspector general's office? >> absolutely.

>> i've listened to mr. cummings, i've listened to the chairman. and the more i listen to these guys and members of this entire committee ask these questions, the more concerned, the more frightened i've become about how opm has handled this. and then to find this, to find the most basic analysis is not being done just adds to that. one other question i want to ask you. mr. osmond, who testified last week, made this comment -- i want to ask you, are you aware of any outside contractors who are foreign nationals? have you contracted any work with them? ms. seymour? >> i'm sorry, i didn't realize that was my question. i apologize. am i aware of any -- >> have you contracted any of this work to foreign nationals?

>> not that i'm aware of, sir. >> how about you, ms. archuleta? >> no. >> let me -- may i read this or do you to want read it? >> go ahead. >> this is in "the wall street journal." this is mr. osmond. he said some contractors that have helped opm managing internal data have had security issues of their own, including potentially giving foreign governments direct access to data long before the recent reported breaches. a consultant who did some work with a company contracted by opm to manage personnel records for a number of agencies told ars that he found the unix system administrator for the project was in argentina and his co-worker was physically located in the people's republic of china. both had complete access to every row of data and database they were route. another team that worked with these databases had two team members with people's china passports. people's republic of china passports.

i know that personally because i worked with them and revoked their privileges. you're not aware of that? >> sir, i'm aware of two of our -- two federal employees who have ties to foreign countries. they are u.s. citizens and they work on our programs. >> how are they -- does it not raise -- here's what osmond said. he said from his perspective opm compromises information more than three years ago. his take on the current breach is, so what's new? i yield the balance of my time. >> gentlemen where is the -- i would like to ask unanimous consent to enter into the record this article written by juliet laroche, head fund manager who said sorry for losing 99.7% of his clients' money is now being investigated by the s.e.c. and the department of justice. ms. seymour, were you aware that the contract that you let for

winvale was going to be sublet? or going to be a subcontractor? without objection, by the way, i'll enter this article into the record. did you know there was going to be a subcontract? >> winvale's proposal included the fact that it had work -- that it was subcontracting or partnering with csid on. >> when you did your due diligence and looked into some resumes of the people that would be involved and engaged in this, did that include the employees and the board at this subcontractor? >> it did -- it did not include the board. we used past performance and their other systems of the contracting officer uses to research a firm to make sure they're qualified to do work with the federal government. >> at either winvale or the subcontractor, if there's more than one subcontractor, do you personally know anybody who's in any way, shape or form involved in any of those companies?

>> not to my knowledge, sir. >> there's nobody from the former department of defense or from the office of personnel management? you know none of those people? >> i don't -- i do not believe i know anyone in -- that's working for those firms. >> ms. archuleta, do you know anybody that works for either of those two firms? >> not to my knowledge. >> here we have somebody who lost millions of dollar, under investigation by the department of justice. we got to figure out how in the world these people get the contract. because we're saying, federal employees, millions of you affected, go give them your information. that's the kind of person we're dealing with. i'm not saying he's guilty. but he's under investigation. why should we take the chance? why didn't you get to the gsa list? there's a list of approved vendors out there. why not use one of them? >> we did consult with gsa and the gsa schedule on this. one of the -- there were some requirements that we want to include in our contract that

were not available on the gsa schedule. and it -- >> like what? >> d-duplication of services is one of them. we knew -- what we were trying to do at opm was to set up a contract vehicle that we could use in the future for any additional breaches, whether it's one or twosies or anything else. we wanted to set up a vehicle that would not cause us to pay or to offer the same services to affected individuals at the same time. that is not something na the gsa schedule afforded us the opportunity to do even after we talked with the schedule holder at gsa. >> i'm just telling you this reeks. for any contract to go out that fast, i understand the gravity of the situation. you're going to deviate from that and immediately go out to a subcontract, i would encourage you to as swiftly as possible get back to senator warner and mr. palmer as well as this committee. i do need to ask about

credentials. ms. archuleta, is there anybody in the opm system whether they be an employee or a contractor, who is a foreign national? >> sir, i want to be sure of that answer. i'd have to come back to you to be sure that i -- >> ms. seymour, is there anybody who's a foreign national who is involved as either a contractor or directly as an employee at opm? >> i will get back to you on that, sir. >> the fact that you guys -- that you two don't know, that's -- that's what scares me. that's what really scares me is that you don't know. >> i know about my staff, sir. >> how many people on your staff? >> about 280. >> how many people have credentials to become a network administrator or have access to the network? how many? >> i believe it's about 50. >> so those 50 people. how often do you routinely audit that? >> we review them very

frequently. >> like what? >> probably monthly. we have processes for when they come -- when people come on board and when they leave that we remove their access privileges. >> do you review the traffic that's going through there? >> yes, sir. >> because that's part of what happened is somebody gained network administrator access and -- >> so that's how we were able to track through and find out our background investigation -- >> after they had been there for more than a year, right? >> yes, sir. >> so how often do you track that and monitor that? >> we had put the tools on our network just over the last six months or so to be able to see this type of activity in our network. again, sir, when i came on board, i recognized that these systems were in need of some modernization. we put in place a plan and began to execute that immediately, to put the security tools in place so we had visibility in our network. that's what led us to understand this latent activity that went back to even prior to my arrival

at opm. >> i've got a series of other questions. but let's recognize the gentleman from georgia, mr. carter. >> thank you, mr. chairman. thank you all for being here. ms. seymour, i would like to start with you. it's my understanding that opm's legacy system, that you're currently using cobalt, a system that was developed originally in 1959. is that correct? >> i don't know when it was invented sir, but yes we are using cobalt in some of our systems at opm. >> according to my research and my staff's research, it was originally developed in 1959. and that's the system we're using. >> yes, sir. ms. ar chew late -- archuleta, opm since 2008 has spent $577 million on i.d., is that

correct? >> i don't know exactly that number, but i'll accept it. >> you think it's pretty close? >> i would have to trust your judgment. i don't know the number on that but i could get back to you. yes, if you want -- >> would you say that's in the ballpark, $577 million? i mean, give or take a couple hundred million. what are we talking about? >> i can tell you what we've spent on it, but, yes, i'll -- >> $577 million since 2008, yet we're still using a legacy system that was developed in 1959? >> i agree with you totally, sir. we are using a legacy system that was designed in 1959, and that is what we're working to change. >> it's my understanding that approximately 80% of our i.t. budget is being spent on legacy systems, is that correct? >> right now the legacy -- we're working off of our legacy system. that's why we're making the investments into a new system. >> i'm sorry.

i'm just flabbergasted by this. it's just mind boggling that we could spend -- first of all, we could spend $577 million. secondly, that we're spending 80% of what we have budgeted on legacy systems. i mean, it's just amazing to me that we're doing that. nevertheless, ms. seymour, let me ask you, the i.g.'s flash audit indicated that the estimated cost for two fadzphases, only two phases of your infrastructure improvement project is going to be $93 million. is that correct? >> yes, sir. we put together the plan with a very robust inter-agency team and had that reviewed by a number of experts. >> $93 million? >> yes, sir. >> i'm sorry. i don't mean to be dramatic but $93 million? >> that covers both securing our legacy architecture, the one we have today, putting as many -- >> the one that was originally

developed in 1959? >> our net -- not all of it was developed that long ago. >> if any of it was developed -- >> so our network was designed, you know, about a decade ago. so we are trying to shore that up, provide as much security around that network as we can, that's part of what the money is going to. the other part of the money is going towards building a more modern and more securable network that we will transition to. >> okay. it's my understanding that despite the decades we've been spending all this money, these millions of dollars, that we are still using paper forms in some cases, is that true? >> a number of our business offices still use paper forms. >> we've spent $577 million on i.t. since 2008 and we're still using paper forms? of course, hey, paper forms may be better in this case. at least we've still got control of those.

>> i can't speak to what's happened before me, sir. i can tell you that when i came in and saw the state of our i.t. systems, i worked with director archuleta to put in place a plan, an aggressive plan, for migrating to more modern, more secure network and systems. >> does it include paper forms? does it include paper forms? will we still have paper forms after you make these adjustments? >> we want to remove as much paper as we can from our environment, sir. that's one of our goals. >> well, i can't help but wonder if that's not a move in the wrong direction. i mean, at least we can have some control over these paper forms. we obviously don't have control over the computers and the information that we have on the internet. >> i would offer, sir, there are security concerns with paper just as well. we have, you know, violations or issues with paper as well, as you leave paper around. the other issue we have with paper, sir -- >> so, we leave paper around? >> sir, when you leave it in your office or when you're

working with it. i would also offer that when we have paper, we don't have backup systems. that's a concern as well. as we move forward with -- >> ms. seymour, i agree with every point you're making here. my point is we spent $577 million since 2008 and we're still using paper. >> sir, i've also said, i can't tell you what's going on before -- what's gone on before me. what i can tell you is the plan we are putting in place, we're planning to put in place an intercase management system. we're working towards that, that will eliminate a lot of our paper. we'll modernize our systems and provide better protections around our data and our systems. >> what we do includes that $577 million that we've already spent? >> i'm sorry, sir? >> this is going to be more problem we throw at this problem, right? >> sir, i cannot account for what happens happened before me. >> thank the gentleman. we have a vote on the floor. we'll recognize mr. cummings for one more question. >> i'll be very brief. thank you very much. i want to go back to this you contract.

winvale got this contract, is that right, ms. seymour? >> yes, sir, that's correct. >> what was the process? it doesn't smell right. something doesn't smell right about this contract. winvale gets it and then they turn around and csid -- >> no, sir. the proposal that we got was from winvale partnered with csid. we knew up front that they were -- they had support from csid. it was part of their proposal package to the government. >> you didn't know about mr. lee? >> no, sir, i did not. >> you didn't know his apology for losing 97.7% -- 99.7% of $60 million went viral? >> no, sir, i did not. >> in march? >> no, sir, i did not. >> so the question becomes -- i mean, do you think you should have done some better due diligence? >> so we did due diligence on

the company. there are several ways the contracting officer validates that the company is able to do business with the government. >> mr. mcfarland, this concerns you, i take it? >> yes, of course. >> and why is that, sir? >> just because of the reasons you espoused. it was very fast. as a matter of fact, a few days ago we were talking about that in the office and we are going to be looking into it. >> i'd appreciate that. i just have one statement real quick, mr. chairman. i want to conclude by thanking you again to invite the contractors here today. we've obtained some significant information, but there are also many, many unanswered questions. we asked users of information they have refused to give us for more than a year. mr. giannetti promised to help us get those answers, but i'm concerned he may not be there in a couple weeks. so we may need to follow up with

usis parent company. we also asked keypoint for documents we originally requested months ago and you pressed him to provide those documents. i think you understand how frustrating it has been for me over the past year. i thank you for your help for agreeing to invite them, for helping us get the information we need. we will prepare questions for the record for today. i hope we will be able to get all of these answers. i really hope it won't require a subpoena. with that, i thank you and i yield back. >> thank the gentleman. we're now at the halfway point. i'm just teasing. we're wrapping up here. you've all been sitting here for a long time. a couple more questions. we do have a vote on the floor. director archuleta, i need to go back to some of your previous comments. this has to do with what you said in july of 2014 regarding the opm data breach that became public in march of that year. at the time, you said they did

not have a breach in security. ms. seymour, i think, was -- ms. seymour was very candid in saying she did think it was a breach in security. so, which -- is she wrong? >> as i explained earlier, sir, in the question that was asked to me, the conversation was around pii, and i answered it in that context. >> but you don't believe that there was any access to see that information? >> i don't believe that there was -- that data was breached and that there was no data exfiltrated. >> exfill traited. but do you believe that they had at least access to it, to look at it? >> that's why we understand that there was, in fact, a breach. i'm not the forensics. i don't know what they did with it. what i was assured of, sir, and how i responded in that -- in that interview was that i -- there was no pii extricated from the system. >> so you did know that the opm

network, the network platform that the blueprint essentially the keys to the kingdom was exfill traitex exfiltrated, correct? >> the question was around the pii and i answered it. >> i'm asking you now. i'm asking you now. do you believe -- did you know -- somehow you had to know, i hope. >> mrs. seymour informed me that other data had been taken from -- but it was not -- it was in different context to that question. >> but that was essentially a blueprint of how the system worked, correct? >> she informed me some manuals had also been exposed and potentially exfiltrated, yes, i knew that. again, the question was around pii. >> again, you did know there was a security breach, correct? >> correct. >> and you did know that there were things other than the pii that were potentially exfiltrated? >> i did. >> you did know that.

what do you think's a bigger success for hackers, you know, stealing the files for tens of thousands of employees or the files for 32 million -- up to 32 million employees? >> i believe that all of that is very important, sir. i can't distinguish between both of them. they're both equally as important. >> when did the hackers first gain access to opm's network, the one we just learned about? when did they first? maybe ms. seymour is in a better position to answer that. either one of you. if you know what the timeline is on that. >> i have the timeline. >> yes. adversary access was first noted around november 2013. >> the one that we just learned about? >> i'm sorry that was from the 2014 intrusion that you were referencing based on the manuals. >> sorry, that happened in what

timeframe? >> we were able to confirm based on the on-site assessment that they had confirmed access in november of 2013. >> okay. ms. seymour, i think you were going to say something. >> i was just going to try to clarify for you, sir this most recent incident dates back to june of 2014 the access that the adversary had dates back to june of 2014, i believe. >> is it possible that when they took this blueprint, i call it the keys to the kingdom, that that would have potentially aided the hackers in coming back into the system and stealing these millions of records? >> these are available manuals typically for commercial i.t. equipment. so yes it would, an adversariy in understanding our platform. they did not get, you know, specific configuration diagrams

of our entire environment, but these are commercially available. a lot of these are commercially available documents about platforms, computing platforms. >> miss barron dicamillo, did they include any proprietary information? anything that was -- >> based on what we saw as a potential, it did not include proprietary information or information around the architecture of the opm environment. it was manuels associated with certain types of platforms but that information is available, i think ibm is one of the sites. >> did the hackers have access to be able to see the information regarding personal employees? >> so in 2014 is that the incident you're referring to? >> yes. >> based on the on-site assessment, we did not -- we weren't able to confirm that they were able to access any of the pii information. so not only -- so your question about seeing it, they did not -- there's a certain portions of the network that they were

specifically focused on. and they were not able to infiltrate into those portions of the network. >> ms. seymour -- let me ask ms. archuleta. if ms. seymour was responsible for safeguarding the pii, as we call it, information, in 2014, who do you hold responsible for its loss today? >> i hold all of us responsible. that's our job at the opm. we work very hard to do this. and we work with our partners across government. i know you're perhaps tired of hearing this from me, but we're facing a very aggressive attacker. we protect against 10 million attempts each month. so we're working very hard to do that. we're working extremely hard to prevent the types of things that we're seeing here today. >> i want to make sure you're

going to get us some documents, right? we've been requesting documents for a long time. i want to make sure what documents you're going to provide us. are those the ones we've been asking for? i can't hear you. >> i'm sorry. we're going to be addressing that letter and each of the requests that you've made to the extent that we're able to. >> okay. all right. thank you. >> it's been a long morning and into the afternoon. i thank you all. you all represent a number of people that have big -- a lot of staff so people who work hard, they patriarch, they care about this country. to that extent please let them know how much we appreciate them and all that you're doing. but we'll have somebody help you know where the restroom is. it's been a while. again, thank you for your participation today. we stand adjourned.

tonight at 8:00 we'll have president obama's reaction to the supreme court ruling on subsidies for health care exchanges. then other reaction from the court as well as the oral argument from king versus burrwell. we'll open our phone lines and take calls and looking for your reaction on twitter and facebook. all tonight at 8:00 p.m. eastern on c-span.

>> here are some of our featured programs this weekend on the c-span networks. on c-span, saturday night at 8:00 eastern on issue spotlight, we'll look at the government and culture of iran. sunday night at 6:35 profile interviews with two presidential candidates. first, kentucky republican senator rand paul, and then vermont independent senator bernie sanders. on book tv on c-span2 saturday night at 10:00 eastern on after words, author nelson den es on puerto rico and its relationship with the united states. sunday historian h.w. brands recounts the live and career of president ronald reagan. on american history tv on c-span3 saturday night, a little after 9:00, commemorating the 800th anniversary of the magna carta. brenda hail on how the document

influenced both countries from the life of rights and properties to limits on executive power. and the french sailing schiff hermione brought general de lafayette to america. and we were in virginia to cover the welcoming ceremony of the replica of that ship. get our complete schedule at c-span.org. i'm not one of those who believes in the psychiatric examination of people. i believe that most of these people recycled historians should be on the couch themselves rather than to psycho analyze people they've never met. on the other hand, when i meet people, i don't judge them in terms of whether they have a firm handshake or have eye contact. but i listen to what they say. you don't learn anything when you're talking.

you learn a great deal when they're talking. >> one of the many tragedies of richard nixon was that he although very self-conscious he was not very self-aware. nixon, endless ironies here. nixon did have a psychiatrist, dr. hutchnager. he later said he was careful not to let nixon think he was analyzing him. he went to him because he had psychosomatic illnesses in the '50s, his neck and head hurt and he couldn't sleep. even though he went to one, he hated psychiatrists and was always denouncing them. and he was afraid in a way of looking at himself in a realistic way. one of the reasons he used to say, i don't carry grudges. hello? richard nixon was one of the great grudge carriers of all type. he could be very unself-reflective, and this hurt him because his lashing out at enemies, of course is what destroyed him. >> evan thomas, author of "being

nixon: a man divided" talks about the inner turmoil of richard nixon focusing on the personal stories associated with our nation's 37th president. sunday night at 8:00 eastern and pacific on c-span's q&a. next a discussion with leaders from some of the largest corporations in the united states on the challenges their companies and the global economy face. in this portion the ceo of an employment agency talks about his transition to chief financial officer of his firm. the cfo series was hosted by "the wall street journal." >> so you guys have all spent about a day and a half hearing about the external forces in the world, the things that are shaping politics and trade deals and emerging markets. then we have some time, just a little bit, to talk about you

and your career. with me is gary burneson who was once among your number. you've been ceo of corn and ferry, but before that you were the firm's cfo for quite a while and holding the coo responsibilities for a while. what was that transition like and how did you lay the groundwork for the change? >> it was something that i never wanted -- i didn't have it as a goal to be a ceo, that's for sure. one day the ceo called and said i'm going to nom ittate you to be the next ceo of the company. they put thee through the whole kabuki thing and the white smoke went up and voila. and you know it was bizarre because i'll never forget giving this presentation and like you probably, you know using these power point slides. and i did it a couple times. and somebody asked me you know what's wrong? and it dawned on me that it

actually wasn't what i said, it was how i was saying it. what my mood was. and that was pretty eye opening. that at the end of the day, there's this pyramid you go up and you get there and nobody else is there and it's really isolating. and you stop becoming a person. you're actually a function. and so there's weird things that start to happen like people don't tell you the truth. and you can't have a gray day. and you know it was kind of one of those moments where i said, oh, boy, i've got to ditch the power point slides. >> so all of you out there who are currently cfos, enjoy the honesty and candor. tell us a little bit about your background and of all the things that you have done and who you are, what is the single-most important thing that helped vault you to the ceo job? >> raising candice partner at kpmg recovering investment

banker, pretty hard core finance person. and i think the thing i draw upon is part of life in kansas. that may sound strange here. but it's a way to relate to people. people are generally real there in the cultural mecca of the united states. and i draw upon that all the time in terms the of making a connection. that's what leadership is all about. >> so once -- so you don't sound -- you don't sell yourself like a typical cfo, right? i don't hear you bean counting here. i hear the midwest i hear a very different narrative. is that by design? have you always done your job like not defining yourself as the cfo, but defining yourself as a different kind of leader? >> yeah, i was never a very good cfo. that's for sure. >> career tip number one. >> i wouldn't -- listen, i couldn't hold a candle to the people in this room that's for sure.

but yeah it was those moments that i realized that hold it this gig is not about the left brain, it's about the right brain. >> so that's a good transition to everyone here. what is your advice, what is one skill that everyone here should master if they do aspire to be ceo some day? >> you know, can you get people to wake up at 4:30 without the alarm clock. it's not the left brain actually. and i don't know if you want to get into this yet or not. but we assess literally million of executives. every three minutes we put somebody in a new job. every month 50000 people go through our leadership development. and what we found actually ceos and cfos have the same kind of left brain profile. very very similar. in fact something that you would -- you always hear this thing, well, she's a visionary.

you know she can wear a black sweater and walk on a stage. actually cfos clinically when you look at the assessment data, they rank really close to ceos. the big gap is on the right brain stuff. that's where there's an enormous gap. >> and so what are some of those traits, what are the things that cfos can be practicing now if they do want to develop, if they do want to do brain building on the right side? >> listen, the people in this room are known within organizations as dr. no, right? people are intimidated to go to the cfo. they're expecting a certain thought, a linear thinker, and the answer is probably going to be no. and as ceo, you can't really say no. or you want to say nowhere the people are really thinking oh okay. it's not what they said or he

said, but it's what they talked about, what they made me think about. so it's really around the people side, the people skills. and that's tough coming from a chair which is the right chair, the right seat where generally people are looking to you as kind of the no, the very clinical thinker, very buttoned up, process oriented. it's very difficult to make that transition to the left seat from where you come from. >> mm-hmm. well, this is actually a great moment to see what kind of sample size we're working with. so everybody do pull out your ipad minis. hopefully haven't lost them over lunch. we'll go to survey question one where we are going to -- we're asking everybody to agree or disagree with this statement. i have what it takes to become

ceo some day, gary, what do you think these guys are going to say? >> that's the question? >> mm-hmm. >> you know, then put -- then i think you have to be very reflective. and one of the things we found is that ceos have a very, very high self-awareness. and so i think you have to just put yourself in different positions and do you really want to be there. i'll just be personal about me. it could be literally a proxy officer who passed away from leukemia. i walk in the church. the family asked i want two people to speak. a thousand people in the church. the pastor and myself. a thousand people. you know, be in a room that's 3 by 3 a big right light's on you, you're going nightly news and you're sitting on ice for 13 minutes with makeup on. is that what you want to do? do you want to be sued

personally? you know it's those actual questions where the responsibility really does stop with the ceo. you know, look, cfos report the numbers. very rarely will they get fired because of the numbers. and so i just think you have to check yourself against the glass and say, is that -- is that really what i'm -- really what i want to sign up to do. >> as the boss of cornferry, it looks like you have potential talent in the room. three-quarters of the room do believe they have what it takes to be the ceo. gary, you have conveniently -- we thank you for releasing a report about that transition from cfo to ceo. you just released it now and some of the numbers. can you go through very briefly some of the findings. what are the odds like that three-quarters of the people in this room will see you in a couple of years at ceo council? >> odds aren't good.

odds aren't good. one out of five. if you look at the fortune 2000 one out of five would have been a ceo in their past life. when we look at ceos, there's generally four or five traits that you have to have on the left brain. so you obviously have to have a high degree of financial acumen. you got to be able to set forth a strategy. the one thing you may not think about is you got to be able to handle a crisis when you're in the hot seat. that's one that you can't learn in business school. and the last that we think is the most important is this concept around learning agility. as it turns out, ceos and cfos have similar profiles when it comes to learning agility, but there's a huge gap in one aspect, people agility, which is the ability to get things done for others through motivating, inspiring, all that stuff. that's what the job of a ceo is

all about. at least i think it's all about. it's less about strategy and more about people. so that's what we see clinically in a sample like this would say there's a deficiency around people agility, people skills social leadership being able to look at somebody and connect with them and do they believe in where you're going. that's what it's all about. >> well, you bring up crisis management. this is as good a moment as any to ask about this. you are ceo. you lead a big company. things happen. right now you are targeted in a lawsuit by a former executive who said he was fired because out of retaliation for telling the board that you can be a very difficult manager and that things were sometimes tough for women at korn ferry. tell me about leading through crisis, gary burneson.

>> wow listen i'm not going to comment. i would only say in terms of the substance of that specific allegation, seven out of ten employees in the united states are female or diverse. but it is true that this ability to manage through a crisis -- you know i can think back to hey, when we saw half our business fall off in the span of literally 15 days, and we went in and did three acquisitions during the darkest, darkest days. so that happens. we were hacked by a foreign government five years ago before it became vogue. and we were one of 160 companies that were targeted. i had the fbi in my office. and you know, as a ceo, it's more important what you don't say. but i decided to step out a little bit. i said if they had just called me i would have sold it to them. and mr. burneson can you

clarify that. but you are constantly put in these situations. i can -- i'll remember being with ingenuity from pepsi, it's not a vertical growth when you become ceo, it's exponential. because you're put in situations that you probably never been in before. and what you got to be able to do is know what to do when you don't know what to do. and that's why this concept around learning agility we found that there's an extremely high correlation between the outliers of achievement in terms of executives, ceos marketing people, coos and people that are curious, that have the insatiable appetite to grow and learn. i mean, it is highly, highly correlated. >> and so i just want to ask you one more thing before we leave off this particular hook is this -- and this is actually a really good example of in the

cfo role although it is broadening and we'll talk about that, the ceo overcease every asees every aspect of the company. this lawsuit alleged that korn ferry can sometimes be a hard place for women to work. are you worried about retaining women and making the workplace welcoming to them and what do you do around that area? >> the number one request that we get today -- you know, we've got three businesses. our leadership development business is a third of our business, we've got an outsourcing business around knowledge workers and we've got what we're known for, the executive search business. in that business, the number one requirement today that we get from clients all over the world is diversity. it's real, it's not just people talking. people are actually acting on it. when i look at our company, can we do a better job? absolutely we can do a better job. particularly at the leadership level. you look at, say, in the united

states seven out of ten employees are female or diverse, that looks pretty good. but when you look at the very top 10 or 15 people, the picture doesn't quite look like that. so we have to change that. the same with our board membership. we have to look at that and ask yourself does it look like the world, does it look like america and you have to be honest. and as a cfo you know you can go through all of this, but at the end of the day you're not the -- you know, you're not ultimately responsible, right? so it's a huge difference. >> this is the stuff they don't teach you about in business school. so talking to a lot of the people here, we've heard from you about how in the last five years the job of the cfo has changed a lot. you've been ceo for seven years now, is that correct? >> eight years. >> since you've been in the seat, it's become a lot broader a lot more strategic. the cfo is pitching in on far

more than finance you can see heads nodding agreement in the audience. as that has changed how do you see that play out both in executive search and in the transition? does this look better for a lot of cfos who might want to ascend to the top job? >> there are a lot of companies that are really enlightened around taking the person that's in the right seat and getting them the right kinds of opportunities, right? because the stuff we're talking about, you can't necessarily read in a textbook. so there's companies that are doing a very good job of you know moving cfos around and giving them experience with customers, giving them experience running businesses. and that's one of the things you must do, you know, if you truly, you know want to move over to the left-hand side of the cockpit. >> and what is the attitude that you are seeing right now with your clients among boards?

how are they regarding when it's time to do succession planning when it's time to look for a new boss, how is the cfo regarded in their thinking the process? >> listen, boards are hyperactive today in the area of succession. so what you find is things tend to go from one side to the other. and over the last few years, you know, we've definitely taken a marked turn where there's much more emphasis today -- and i'm sure you can attest to this -- it's not just lip service. around talent, succession and all that. so you just read the news today. look at twitter. i mean, that's somebody who is seriously being considered. and so the real key is can you get those executives, that broadened experience in an organization to get those kind of, you know, those social leadership skills around you

know optimism and courage and making people feel better after they meet with you than before. >> so the message is that it's not enough to be a financial leader, even in this era of an shareholder. how much does the investor expertise at the cfo bring to bear in this the ceo selection process? >> i think over the last you know, two to three years it's been, you know, pretty big because there's been a lot of financial engineering because of low rates. look where -- look at the percentage of cash flow going back to stock buy backs. that is not the important constituency as a ceo, there are two constituencies that you have to focus on. and there's only two. and they will be the arbitrators of your performance. and that's your customers and your people and that's it. if you get those two right, everything else will sort itself including that investor constituency. >> and we're going to turn over to you for questions in just a minute.

i'm curious, what do you miss most about being a cfo or the coo? >> you know, vicinityi haven't looked back, to be honest. it's not something i ever dreamed i'd be doing. we're a billion eight mark map company. half our business -- i never thoud it be doing this. so i feel kind of blessed and very lucky. very, very lucky. i don't have the skills the education that you need today for sure. not even close. >> so that's good for corn ferry then. who is your cfo right now? what is their remitt right now? >> our cfo is fabulous. i mean he was price waterhouse partners, cfo of las vegas sands, did a stint at kodak and he's unbelievable. absolutely unbelievable. you know, so we're blessed to have him. >> we're getting right to the

point where we have questions -- where we can take questions from the audience if that's all right for you. >> let's go to the second polling question. we would like to hear your response to this. >> oh, yes. >> my board of directors looks to me for leadership on matters beyond finance. if you could answer that one for us very quickly. >> we're interesting to see how this matches up with your expectations or your observations. all right. so 90% say what is the prognosis for this group? what motivating details can you message can you leave these guys with? >> well, you know, listen i think that clinically when you look at the outliars afterof achievement, the left brain, strategic side all that spot on even innovation. the gap is on the social

leadership. so the ability to get things done through others. and i would just check. this is going to sound incredibly simplistic. but just for the next couple weeks, just check yourself and ask yourself this question. when you have any kind of meeting. no matter what the topic is. if you're laying somebody off or not, do they feel better after than before? just try that with every interaction you have with an employee. >> let's take a couple questions. any from the audience? i want to ask you one on talent retension which seems to be as difficult these days as talent recruitment. what is that discussion like now in your ceo role? you are finding that there are new ways to keep people at the company that you want to keep? are you finding that millennials

are behaving in a different way? or is it pretty consistent from group to group demographic to demographic the types of things that a company needs to do to hang on to its best people? >> look, i -- sure, there are differences with millennials absolutely. but i think that as a ceo for me it's not the what when, how, who. it's the why. and so why are you in business? it's not just to make money. i think you have to ground an organization in purpose. i think that's the most important thing. and the reality is people don't leave companies, they leave bosses. you know, that's -- i think there is a lot of truth to that. >> is that right? is that what you found? >> yeah. obviously there are going to be exceptions to. that and the career today is not linear. so it used to be if you had a 32-year-old and they had eight jobs, you think this person is in santa cruz surfing.

today at 32 you could have eight jobs and it's pretty typical. so we're seeing people are working longer, well past 65. i mean we did a survey recently that would say 76% of people will work past age 65. the funnel at the top is getting clogged. you have people graduating from college which is yesterday's high school. so you know so like my daughter is working two part time jobs as has to bring her own coffee in the k cup. actually can't even afford to park. and this lady work ford bloomberg, james carville, president of her sorority. so what you find for youth is that there's you know, this desire to have more skills in the workforce. so there is a bit of clogging at the top. so ceos today are all about precision, not scale. and so you know this.

do more with less and all that stuff. those three things are clearly pretty big problems. >> so when you see this number of cfos who feel the board is engaged with them, do you see it reflected back in the recruiting when the board comes you to and says we're looking for a new ceo, do you find the board saying and we really want to try to hire from inside. we want to try to engage with our cfo? >> i do. i do. and not necessarily only the cfo. but i do. yeah. it will be very typical. we would put -- go through and assessment inside and then to the outside. >> any other questions? gary thank you very much. >> thank you very much. >> here's some of our featured programs this weekend on the c-span networks. on c-span saturday night at 8:00 eastern on issues spotlight, we'll look at the government and culture of iran, its relationship with the u.s. and nuclear ambitions. and sunday night at 6:35

profiling interviews with two presidential candidates, first kentucky republican senator rand paul and then vermont independent senator bernie sanders. on book tv on c-span2 saturday night at sock eastern on afterwards, author nelson dennis on the history of port reek yeent turbulent relationship with the united states. on sunday night at 7:45, historian h.w. brands recounts the life and political career of america's 40th president ronald reagan. and on american history tv on c-span3, saturday night a little after 9:00 commemorating the 800th anniversary of the mag in a magna carta and how it affected limits on executive power. sunday night at 6:00 on american artifacts, the french sailing ship brought the representative general marquee to america in 1780 and we were in yorktown virginia to cover the

reenactmeft. get our full schedule online. >> i'm not one that believes in the psychiatric examination of people. you know, i believe that most of these people should be on the couch themselves rather than the psycho analyzed people they never met. on the other hand when i meet people, i don't judge them in terms of whether they have a firm hand shake or whether they have eye contact but what i try to do when i meet people is to listen to what they say. you don't learn anything when you're talking. you learn a great deal when they're talking. >> many tragedies in richard nixon was that he although is self conscious, he is not self aware. nixon -- there are endless ironies. did he have a psychiatrist. he was an internist. he wasn't technically a psychiatrist. elater said he was careful not

to have nixon think he was analyzing him. but nixon went to him because he had psycho somatic illnesses. and he gave him some mild therapy. but nixon hates -- even though he went to one, he hated psychiatrists and denouncing them. and he was afraid in a way of looking at himself in a realistic way. one of the reasons he used to say i don't carry grudges. i don't carry grudges. hello? richard nixon one of great grudge carriers of all time. he could be very unself reflective. and this hurt him because his lashing out at enemies of course, is what destroyed him. >> evan thomas author of "mean mix on a man divided," talks about the victim riz and defeats of richard nixon focusing on the personal stories associated with our 37th president. that's on c-span's q&a. >> tonight on c-span3, a house

hearing on the missing e-mails of former irs employee lois learner followed by a senate hearing on epa regulations on power plant emissions. then the head of the gay rights advocacy organization glad & look at future projects of the smithsonian institution. as part of the investigation of ira targetion of conservative groups, the inspector general examined how the e-mails of former irs employee lois learners with lost. investigators testified at a house oversight hearing that backup tapes containing the e-mails were erased in march of 2014. congressman jason chafis chairs this 2 hour 20 minute hearing.

committee on oversight will come to order and without objection the chair authorized to declare recess at any time. today's hearing is about the irs and the targets that has happened there. we've had updates and we're here for another such update. we appreciate you for being here with us. and as we start this hearing, i'd like to walk through why we're here at this particular

time. it was -- there was targeting of people trying to use their first amendment rights. they did exceptional work unearthing this and talking to them the irs commissioner mr. shoalman about this. the inspector general provided a report in 2013. keep in mind when we had this information going on there is a preservation order that was put in place. asking and requiring the irs to preserve the documents. chairman isa, then the chairman of the oversight and government

reform committee in august 2013 issued a subpoena asking for the information and these documents. then he moved forward and this is where it just sort of starts to get unbelievable. stretches the imagination beyond comparison comparison. we're supposed to believe this wide away of facts just happened to come together and in such an odd and peculiar way. they said there is absolutely no targeted. when this came to the president, it was very good on this topic. he said he would work with congress and then somehow magically concluded even though the department of justice had not completed their investigation, the inspector general had not concluded their investigation, the united states congress had not concluded an investigation neither in the house or the senate but somehow magically the president came to the conclusion that there was not even a smithon of

corruption. now, interesting thing about that timing. that happened to be super bowl sunday. so super bowl sunday in 2014 the president makes this comment. we have heard from an irs official where she said that's the exact same day that i remember looking and realizing that there were some e-mails missing. this thing is going on for years, just coincidental. the president is on national television and she says and told us that oops. there is some e-mails missing. again, remember, for ten months there was a presentation order in place. there was a subpoena in place. we've been assured multiple times by the irs that they were doing everything bending over backwards, giving us all kinds

of stats and metrics about how many e-mails and how many people working hard on. this the one thing we wanted to have, evidence? so let the facts take us wherever they may be? that one thing just went missing. the exact same time, say just within hours of the president making that comment. but what we're going to hear today makes it even more stunning because what the inspector general has learned is that that evidence on that day that the president said that on the day that inspector general or the day that the irs person said they're missing e-mails, they weren't missing at that point. they weren't destroyed.

they get to where they were missing but they weren't missing, they got destroyed 30 days later. 22 days after that the irs commissioner on march 26th i remember because it was my birthday, irs commissioner comes here and testifies and tells us essentially that they have the e-mails, it's going to take years to provide them but they will get us those e-mails. in a direct question to the i had asked him. they destroyed them 22 days prior. they knew there was a problem back in february supposedly. and it wasn't until june that the irs then confirmed or buried in the back of a letter to the united states senate as senator orrin hatch's committee and senator widen's committee that oops, we think there is a

problem with the e-mails. then the inspector general, that catches their attention. what do they do? they put a team together and say let's see if we can find the e-mails. remember, at this point the irs had years to do it and they couldn't find them. they think there's a problem. the inspector general's office puts a team together and within two weeks they go and find him. they show up at this so-called cage and go ask and go look for the e-mails. nope, they've been sitting there the whole time. has anything ever happened? no, nobody ever asked us for them. that's the testimony we heard in a previous hearing. and we're supposed to believe this in the context of an fbi investigation investigation. a contempt from lois learner that house of representatives, doesn't happen very often around here hold lois learner in contempt. a statute that says they shall refer that to the grand jury.

they look there for ten months and two days or so roughly before they step away from that job and says you know what? we just think it's shouldn't be referred. that is a potential hearing and maybe something we'll look at later. what we're going to find today is there are 24,000 e-mails potentially that were destroyed. it's a instruction of evidence. we want to pursue the facts. there are democrats on the other side of the line other side of the aisle that say there is nothing here. let's move on. it noes big deal. let the evidence speak. but when there is a destruction of evidence that goes to a whole other level.

five of the six sources the irs didn't even look. and yet we've had multiple, multiple testimonies from the irs commissioner saying oh, we're working so hard. we eventual all the people we're spending millions of dollars. they're taking all the resources. they didn't look in the most obvious places like her phone. it defies any sense of logic which is just gets to the point where it truly gets to be unbelievable. imagine if this was reversed. right? imagine if you were on the receiving end of an inquiry from the irs and they ask you forgot the documents and they issued a subpoena and you destroyed the evidence. and you had that evidence. what would happen to you? you would be prosecuted to the fullest. you'd end up in jail.

you probably should. this should have been disposed of a long time ago. but we've been misled. there is evidence that has been destroyed. so we appreciate this today. the two men before us today that have done exceptional work. they're supported by a great number of people on the staff. we count on their opinions. let me be fair with this conclusion. part of what they're going to say today is they have found no evidence that this was done willfully, that this was some purposeful direction from any one person whether it's the white house or below. understood. they have the evidence. there was a preservation order in place. there was a subpoena in place.

and that evidence was destroyed. we're going o to hear this testimony. next week they're going to issue a lengthy report. we look forward to seeing that report. given that next week is the fourth of july recess we thought it appropriate to bring them before us to get their verbal comments and opportunity to question them. we look forward to hearing and reading the report in the totality. then we have to figure out a way moving forward. we are going to get to the truth. with that, i'm going to yield back and recognize our ranking member. >> thank you very much. and very glad you're having this hearing. i'm glad that at the very end of your statement you said that there would be testimony i take it from mr. george that these documents were not destroyed willfully. i'm glad you said that.

you said a number of things already. i think there many irs employees that are working very very hard short of staff giving the everything they got so they can do their jobs so that we can have the resources as a government to exist. i want to take a moment to thank all of those employees who are working so, so very hard. this oversight committee is now holding our 22nd irs hearing. 22. some people tuning in today may not realize this investigation is still going on. they also may not realize that the american taxpayers have spent more than 20 million dollars on this investigation.

$20 million. total does not include the millions of additional dollars spent by the inspector general was here to testify before us yet again. i want to thank you, mr. george for his hard work. this investigation has squandered tens of millions of taxpayer dollars and a failed xaf xaf xaf efrpger hunt against lois learner, the irs and the white house. 250 irs employees have spent 160,000 hours producing more than a million pages of documents to congress.

250 employees. who could be doing audits, making sure that people are paying their rightful share of taxes, making sure that the collection process is done properly. answering questions of our constituents as they try to make sure that they're doing the right thing. 250 folks 1is $60,000. yet the inspector general will testify today that his conclusions remain the same. the chairman said let the facts, let the evidence speak. i agree with that. there is still no evidence that the white house was involved that they ordered the targeting of conservative groups for

political reasons or that she intentionally crashed her computer to conceal her e-mails. today, the inspector general will testify about this investigation into the status of mr. learner's e-mails. unfortunately, the inspector general's office has repeatedly overstated the number of and i quote new e-mails they recovered from backup tapes and other sources.

only nine days ago and the inspector general will testify that total has plummeted to a little more than 1,000 e-mails that congress did not already have. that's a hell of a drop. from 80,000 to 1,000. they are not supposed to provide speculative and unconfirmed and inaccurate information to congress. i think mr. george would agree with. that they're not supposed to provide information they know is not credible. yet that is what happened in this case. based on this record, i do not know why anyone would have confidence in any of the numbers issued by the inspector general. you have to turn page six to the inspector general's written testimony for today's hearing.

it's very -- it's very gene but it says, and i quote, a review of these e-mails did not provide additional information for the purposes of our investigation and i hope that mr. george will explain that. so after all this work and after spending millions of dollars, republicans still have no new information to support their allegations. some people may be wondering if new e-mails do not advance the investigation in any way. then what are they? what are they? let me give you a few examples which the inspector general provided to us this week. i didn't do this. the inspector general gave it to us. on december 25th 2012, christmas day, mr. learner received an e-mail from ebay with an advertisement for holiday shopping meals. in another newly discovered

e-mail sent a few days earlier, on december 22nd mr. learner received an offer from the -- night quite the smoking gun that they alleged. the fact is that miss learner's computer crashed. and we need to keep this in mind. the fact is that miss learner's computer crash before she was informed that irs employees in cincinnati were using inappropriate criteria to screen tax exempt applicants. this is not my finding. it's not mine. that is defining of mr. george, our inspector general in advertise original report from may 2013. more than two years ago. today his hearing is our 22nd on

this issue. 22. and i can not imagine what possible reasons that tl might be to have a 23rd. so i hope we will finally be able to move forward and focus on bipartisan investigations that will help the american families in their daily lives. and, two, the irs employees i hope that all of the efforts don't have a chilling infect of you doing the job that american people have paid you to do. and expect you to do and who -- and the job you want to do. and with that, mr. chairman i yield back. >> i hold the record open for five legislative days for my member that would like to submit a written statement and recognize our panel of witnesses. pleased to welcome honorable jay russell george and mr. tim caymus for investigations at department of inspector general

for tax administration. we welcome you both. appreciate your work. pursuant to committee rules, all witnesses are to be sworn before they testify. if you please rise and raise your right hands do you solemnly swear or affirm the testimony you brought together will be the truth, whole truth and nothing but the truth? >> thank you. please be seated. let the record reflect the witnesses both answered in the affirmative. we would appreciate your verbal comments and any additional comments -- or written statements will be obviously made part of the complete record. do you have one statement or are you going to combine that into -- >> i have a very brief opening statement and then refer to you to provide more substance to the effects. >> very good. >> very good. >> thank you members of the committee. at your request we're here toup date you on the progress of our

efforts to recover former irs exempt organizations unit director lois learner's missing e-mails. with me again is tim caymus for investigations. tim led this investigation which was initiate the on june 16th 2014. this was shortly after the irs reported gaps and production of low he is learner's e-mails cite as the reason a crash of her computer's hard drive. one week later as was noted, the ranking member hatch of the senate finance committee requested that they investigate the matter including us to perform our own analysis of whether any data can be salvaged and produced. this morning's testimony will provide with you information about the extent of our investigative efforts as well as the evidence we have gathered to date. at the outset, it is important

to note that even as we believe we have reached certain conclusions in determination in our findings, this investigation is not yet concluded. should anything of note be discovered, we will review it for the impact on the investigation, produce a supplemental report and provide the new information including e-mails to all appropriate parties. overall, this investigation included interviewing over 118 witnesses, extensive document reviews and the processing and analysis of over 20 terabytes of dat yachlt we determined the following. they were successful in recovering over 1,000 e-mails that the irs did not produce to congress, the department of justice or to the office of investigations. we have also determined that prior to our investigation and efforts to recover miss learner's missing e-mails, the

irs did not search for review or examine the backup tapes, server hard drives or soss that ultimately produce new previously undisclosed e-mails. 422 tapes that likely contained miss learner's e-mails from the years 2010 and 2011 wereikely will never be recovered. the 422 tapes were erased around march 4, 2014. that this is one month after the irs realized they were missing e-mails from lois learner and eight months after this committee requested all documents and communications sent by, received by or copied to lois learner. as was noted, our investigation did not uncover any evidence that the ee rasher of the 22, 422 backup tapes was done to conceal information from congress or law enforcement.

in addition, it is important to note that it is remotely possible that our continuing review of data from the initial set of 735 backup tapes could result in discovery of additional e-mails not previously provided to congress by the irs. i will now turn to mr. camus who will provide a detailed investigation on the findings and our investigation and the search for the missing e-mails. >> thank you. i appreciate the opportunity to come here today to provide updated testimony on my agencies investigation of the internal revenue service's production of the e-mails of the former director of exempt organizations as well as our efforts thus far in recovering missing e-mails. throughout our investigation we have updated the tax writing and oversight committees of congress including this committee concerning our progress in recovering e-mails.

as the inspector general noted we're now in position to provide information about our investigation. my special agents determined that there were six possible sources of information in order to recover missing e-mails. those sources are mislearner's crashed hard drive the backup or disaster recovery tapes a decommissioned irs e-mail server, the backup tapes for the decommissioned e-mail server, miss learner's black berry and loner computers that may have been assigned to her while her laptop is being repaired. my testimony will provide an overview of some of the sources all of which are covered in the written testimony. with respect to miss learner's crash computer hard drive, we determined that on saturday june 11th 2011 between 5:00 p.m. and 7:00 p.m. miss learner's irs laptop was more than likely in her office and it stopped communicating with the irs server system.

the following monday june 13th 2011, miss learner reported that she found her computer inoperable and the malfunction was reported to the irs information technology staff. they dernld the hard drive had crashed and following standard protocol placed a new hard drive in miss learner's laptop. the hewlett-packard technician will go worked on the laptop for other repairs. when interviewed, both technicians reported they did not note visible damage to the laptop computer itself. because we were unable to locate and examine the hard drives, we do not definitively know why it crashed. on july 19th 2011 miss learner requested irsit to attempt to recover data from her crashed hard drive to rechief personal information. after receiving the hard drive from the irs technician an irs criminal investigation technician was unsuccessful in recovering data.

irs it manage. recovered data from miss learner's hard drive were not worth the expense. it is important to point out the irs does not track individual hard drives by the serial numbers. our investigation revealed that miss learner's hard drive was more than likely sent for destruction with a shipment of other media on april 30th of 2012. the shipment was chased to the recycling facility in florida. we determined that this shipment of hard drives was destroyed using a shredder that cut the inserted hard drives into quarter size pieces. according to the facility manager, those pieces are then sold for scrap. understanding the limitation on the investigation without having the hard drive, our investigation did not uncover any evidence of sabotage of miss learner's hard drive. our investigation included attempts to determine if anybody

entered her office prior to the date and time of her hard drive crash. unfortunately, those logs were erased after one year of retension. i will provide an overview of our efforts relating to the backup or disaster recovery tapdz. on june 30th 2014, demand the irs provide all backup tapes used for the irs people act, specifically during the period january 1st 2008 through december 31 rs 2011. on july 1st 2014, the irs identified 744 backup tapes and took possession of all of them. initially, it appeared as though nine tapes may have contained valuable data but they turned out to be blank. the irs executive in charge of the irs e-mail backup program and his staff identified the 13 specific backup tapes that would contain the earliest copies of lois learner's e-mail.

when we took the tapes to the recognized industry expert for electronic data recovery and extraction, they then provided us with exchange data base files from the tapes. at the conclusion of the process, they identified 79840 lois learner e-mails of which nearly 60% were in fact duplicateors cop yifz each other. leaving approximately 32,700 lois learner e-mails. as was pointed in and out our february testimony, they compared the 32,700 e-mails to what the irs produced to congress in an effort to identify unique e-mails that had not been produced to the congress. due to technological challenges the agents had to create a specialized program script that initially identified as many as 6,400 e-mails that appeared to have not been previously provided to congress. it is important to point out at each stage when we identify

e-mails we informed the recipients of that information that it was early in the investigation and additional technical work needed to be done. to further refine the population, we then manually compared the 6,400 e-mails that were previously produced to the e-mail that's were previously produced by the congress. to the congress by the irs. we removed the obvious spam e-mails and additional duplicates that we found during the manual process. if he conclusion of this review, we determined that over 1,000 e-mails that were recovered from backup tapes were not previously provided to congress. using the nalgs of e-mail transaction logs, we estimate that there may still be 23,000 to 24000 e-mails missing. another potential source of e-mail that's i will highlight is the decommission new carolton e-mail server.

our agents identified a8 new e-mails not previously produced to congress. the final source i will discuss is the backup tapes for the decommissioned e-mail server. as the ig stated during our investigation, we obtained the 424 backup tapes associated with the decommissioned new carolton e-mail server and it is important to note that server was in operation until approximately may 2011. we determined that 422 of the 424 tapes were degauzed or magnetically erased and, therefore had, no data on them. this was done by irs employees in mart inzburg, virginia, on or about march 4, 2014 one month after the irs realized it was missing e-mails. one of the 424 tapes contained backup files created in 2011 but they did not pertain to lois

learner. we were unable to read it. our investigation found no evidence to prove that the erasure of the 422 tapes was done in furtherance of an effort to purposely destroy evidence or to could be seal information from congress and law enforcement. sworn testimony and reviews of the involved irs employees e-mails indicate that the employee dz not know about, understand, or follow the chief technology officers may 2013 e-mail directive to halt the destruction of electronic media due to on going investigations. we also revealed they did not put forth an effort to locate and preserve the backup tapes. lastly, there is a remote possibility as the ig pointed out that further review of the information obtained from the backup tapes could result in the addition of e-mails that were

not previously produced. we're following up on the discrepancy in hard drives that we hope to have resolved prior to finalizing our reportive investigation. ranking member comings and members of the committee, thank you for the opportunity to discuss this matter and i look forward to answering your questions. >> thank you. i'll recognize myself for five minutes. the irs had these e-mails. you said they didn't purposely destroy them. what did they do with these e-mails? they simply didn't look for the e-mails. so for the 1,000 e-mails that we found on the backup tapes we found them because we looked for them. >> but there was a preservation order in place correct? >> that's what we understand, yes, sir. >> there was a subpoena in place, some seven months before correct?

>> correct. >> would you consider that these e-mails are evidence? it is what we're seeking. >> they would be -- we consider them responsive to the subpoena and the preservation order. >> is that fair to say that's snefdz. >> when we looked through our investigation, e-mail that's are responsive to a subpoena may or may not be evidence. it depends on the contentst e-mails. there were certainly responsive to your subpoena and preservation order. >> and what did they end up doing with those in march of 2014? >> there were 424 backup tapes. >> what did they do with them? >> they erased them. >> is that destroying them? >> they have an unusual terminology at the irs. when they magnetically erase them making them useless, they call that degauzing them. destroying them means they physically chunk them up into quarter size chunks. so on march 4th 2014, they

magnetically erased all the tapes but they had not destroyed them, therefore, my agents were able to obtain them and that allowed us to conduct the analysis of those tapes. >> so the new irs term is that they degauzed them. they degauzed them is what they did. >> right. >> they had them. they were under subpoena they were supposed to give them to us. but they degauzed them. so that we wouldn't be able to see this. this is magically happened 30 days we're supposed to believe this happened 30 days after the president makes his public comments that there's not even a smigeon of evidence? what a coincidence. let me ask you about the potential electronic media backup that they could have. what happened with the learner loaner back top -- laptop. she had a loaner laptop. did they search for e-mails on that? >> there were actually ten loaner laptops in service during

that period of time. one of which should have been assigned to her as a backup. we took possession of all ten of the laptops used for that purpose. we were unable to find one assigned to her. >> did the irs look and search there? >> i'm not aware they did, no, sir. >> did they look at her black berry, her phone? >> they did not. we took possession of her black berry shortly after she left the irs. >> so the irs commissioner who assured there is this dragnet out there looking for all this they're working hard. thousands of efforts and millions of dollars going out the door. but they didn't look at her black berry? >> actually, we had possession of the blackberry as of june 13th 2013. but they didn't look for it before then. so what about the irs server? did they look for it there? did they look for her backup there's? her tapes? >> they did not.

>> so you have a server. cheblg that out. they didn't look for it there. when you started to look for the e-mails, start to finish remember, they had years to get this done. start to finish how long did it take for you to find the tapes? when you started in june. i believe it was june of 2014. >> correct. >> we took possession of the 740 dsht initial set of backup tapes on july 1st. roughly 15 days after we started our investigation. so you guys -- paint the picture for me. it took you 15 days. that's it? >> that's it. >> and what happened when you went up there to go find the tapes? >> we were escorted to the the machine that makes the backups that uses the tapes and writes the e-mails to them. and when they open the machine that made the backups, they noted that nine of the tapes were in an unusual configuration which led the witnesses, irs employee witnesses to believe

that they may contain data that had never been overwritten. so we were initially very excited that those nine tapes would have everything the investigation needed. unfortunately, those tapes were defective and they ternld outturned out to be blank. then we had to figure of the 735 tapes which of those are the most likely to contain any lois learner e-mail? once we determined that, we identified 13 tapes. we sent those off to the industry expert and within a couple months we had our first glimpse of e-mails. >> and they did -- there were e-mail there's? >> yes, sir. >> how many of the cages and place that's they store these tapes are there throughout the country? how many of those are there? >> generally in one time there were located many, many locations. but the irs is trying to consolidate their e-mail processing to the primarily to the service centers. and mart inzburg, vf vf,west virginia is one of the service centers. >> so one place that they would put the tapes is one place that

irs didn't think to look and go ask. my time expired. i recognize the gentleman from rhode island. >> you talk about that. now was that -- did they just degauze learner tapes? >> no, sir. we found that they degauzed tapes before. they degauzed the learner 424 tapes. and they degauzed tapes afterwards. they were degauzing tapes up until about june of 2014. >> now you mentioned earlier there was a directive that they didn't know about? is that what you sned. >> yes, sir, i did. >> so you -- and so you -- you are saying this was not something to obstruct or investigation or block information intentionally from getting to us? is that -- >> the directive was issued about it irs chief technology officer. >> right. >> in his directive, he was

advising his management team to stop destroying -- in essence stop destroying backup evidence. he issued that directive in may of 2013. >> and you never answer mid question. zbh i'm sorry. >> people actually did the degauzing, you are saying that they did not -- they weren't intentionally trying to stop information from getting to us? >> as far as -- absolutely correct. the investigation did not show that any intent to do that. >> and you looked into that? >> yes, we did. >> and it would have been malpractice on your part if you didn't look into it, wouldn't it? >> that was a significant part of the investigation. >> mr. george, over the past year, i believe you and your staff have been highly irresponsible in speculating about the number of new e-mails you recovered from lois learner. i got to tell you, you heard my opening statement. it should concern all of us. we rely very heavily on the iag's information. you repeatedly put out numbers

prematurely without verification. time and time again your numbers were just wrong. they were wrong. in february of this year, your office briefed this committee and other committee in the senate and you reported recovering as many as 80,000 e-mails to and from miss learner. and in february 11 nch, the headline appeared in the press "senator ron johnson to irs. why did they find 80,000 lost e-mails"? you didn't find 80,000 e-mails, did you? >> mr. cummings, what we did is we attempted to keep members of congress with relevant jurisdiction over this matter informed at every stage. i can assure you that at every opportunity where i participated, i made a request. i admonished staff that this is preliminary information and we

requested that they not repeat this information publicly. and unfortunately that was done. so while we were in the process of refining, trying to keep congress informed because we've been criticized in the past for not keeping congress informed so we made an effort at my direction to do so. with every new discovery and every time my investigative staff was able to parse out, find duplicates, find things that were not necessarily responsive, the numbers changed. >> so you recovered these e-mails but you had no idea how many had already been turned over to congress. that's why you say it was on going? >> precisely. we made it quite clear that at the outset there was a good chance that many of the were duplicates and had been turned over to congress and would take a process by the irs to help

determine what had already been turned over glchlt so a few weeks later on february 26th you testified before this committee that you found 32,000 unique e-mails that were unique e-mails. and he added you were still in the proservice determining how many of these e-mails that had already been produced to congress s that right? >> that's correct. i think i also said if any if there were any of those that turn out to be new. we're still trying to determine that, yes, sir. >> so meanwhile the headlines continue. they continue. one of them reads, and i quote thousands of new e-mails found end of quote. then on june 16th about a week ago, chief council sent a letter to this committee with yet another new number and she wrote this, i quote, "the recovered e-mails that appear to not have

been previously provided to congress total approximately 6,400 but you didn't find 6,400 new e-mails. in your testimony today you talk about 1,000. is that right? over 1,000 from the backup tapes. so we've gone from 80,000 to 1,000? is that right? >> that is accurate. so you talked about 23,000 still being out there. is that right? >> that's correct. >> how do we know that number is accurate? that is pretty steep drop. wouldn't you agree? >> i would totally agree yes, sir. >> so i mean, where did that 23,000 come from? because i guarantee through is going to be a headline. we might as well try to get the facts to match up the headline.

that determined that government operation security center or government security operation center at the department of the treasury logs every single e-mail incident in or out of the irs.gov domain. we thought that was important to determine the total universe of e-mails. so we obtained that log and we compared it to what is already been produced to congress and that's how we came up with our estimate of the log activity, compared to what is already been produced and the estimate is between 23000 and 24,000 e-mails that we can't find. >> and last but not least mr. george, i think you already said it. but you -- the reason why you put these numbers out there is because you want to keep congress informed. but you see what -- you see what it does, right?

i mean it really -- it really -- i mean i understand what you're saying. i know you've given the caveats in red and gold and, you know bold print. but you see how it ends up in print. hello? >> i do. >> so why give any number? >> you may recall, sir because you were ranking member when the previous chairman was here and -- >> i remember the previous chairman. >> and read me the riot act because he said i wasn't complying with the seven day letter rule pursuant to the ig act. and while we strongly disagree with his interpretation of that provision, it's -- this was a way to try to draw up some compromise because we know of the intense interest of congress in the subject both by committees with direct authorization over the irs as well as general oversight. >> in fairness to you, then can you -- is there a caveat that

goes with that 23,000 that you're talking about? >> most definitely. >> tell us so we'll know so that when the headline is written we got all of the caveat that goes it with. go ahead. >> sir, the 23 to 24,000 estimate involves just simply e-mail headers. that's what they can record. when you take that limited amount of information, they have the transaction log which is the header of the e-mail and the subject line and maybe one or two features underneath. it does limit your ability to compare. but i've been assured by my staff that we went through the process, we chebcked it twice and that is a fair at the same time of the e-mail activity that went through the domain. >> will the gentleman yield? >> of course. >> i'm sensitive to the idea that we want to have as accurate of information as we can possibly have. but let's remember why we're here. there was a preservation order in place. there was a spp in placeubpoena in

place. we hadsome from the irs commissioner we would get to find out they've been degauzing the tapes and they destroyed evidence. that's what they did. and that's why we continue to have this. we haven't even got into the content of the e-mails. we're just trying to get them. so we can actually read them and figure out what was going on. >> yeah. >> just one and i'm so glad you said that. one of the things that i've always done with the committee and 20 years since i've been on this committee is when we talk about employees and where there is an issue of their credibility, whether it's a possibility that they're being accused, i'm not saying this happened yet. i try to make sure that's clear. because it sends a -- because it has a tremendous impact on that individual and a chilling effect on the entire agency. and so one of the things i'm concerned about is that while

there have been degauzing the destruction in west virginia and whatever, there was nobody who did anything intentionally to hinder our investigation. i want to than what i just said. is that right? >> that would be accurate. our investigation found no purposeful destruction by the employees who put the tapes through the degaussing machine. >> thank you very much. i'll yield to you. >> we have thousands of irs employees in utah. they work hard. they're patriotic. most of the irs employees are. when the irs commissioner comes and says, there's no targeting, and the inspector general says there is when the irs commissioner says, we'll provide you all the tapes, and meanwhile, they're degaussing them, then you can understand, we're not trying to pick on the rank and file here. but when you lie to congress, you mislead us, we're going to hold you accountable. so, yeah our focus is on them

and it mystifies why with all these orders in place a subpoena in place these get destroyed. >> mr. chairman that's fair. my last comment, and i appreciate this dialogue, as you know, you and i have joined in on many instances where we felt that we were not getting the information that we were supposed to get. i backed you up, and you backed me up. as a matter of fact, yesterday you did that, and i appreciate that. i'm concerned, too, as to why things were not looked into. that really does concern me and i'm hoping we'll get some answers to that. >> would the ranking member yield one more time? >> we need to move on. thank you. recognize the gentleman from ohio for five minutes. >> thank you. i want to walk through the timeline real quick. may 10th 2013, lois lerner goes

to a bar association three days before you issue your report. they wanted to get ahead of it and get their spin on it. from the get go, the irs is not being transparent or helping the american people get to the truth because she lies. may 10th 2013. 12 days later, there is a preservation notice sent to people in the irs. wasn't followed. may 22nd 2013 notice that says, don't destroy any evidence, right? we want all the e-mails. we want all the documents preserved. is that right, mr. camus? >> yes, sir. >> okay. august 2nd 2013 there is a subpoena for the same documents that are supposed to preserve there is a subpoena to give them to congress, right, mr. camus? >> yes, sir. >> february 2nd 2014, the irs learns, not just anybody at the irs, the chief legal counsel

learns there is a problem with lois lerner's hard drive and e-mails are missing. one month later, despite the subpoena, one month after the chief counsel knows we're missing some e-mails, 422 tapes containing those e-mails are destroyed. right, mr. camus? >> that's right. >> and three weeks after that march 26th 2014, the head of the irs, commissioner sat where you are, mr. camus, and tells this committee, we're going to get you every single e-mail lois pamlico sound le lerner has sent. is that right? >> yes, sir. >> they destroy it. three weeks later the guy in charge tells us, we're going to get you everything and they've already been destroyed. here's the question. how in the world could that happen? this is the biggest story in the stinking country at that time. how in the world, with the

preservation order and a subpoena, do they destroy 422 tapes containing according to your investigation, potentially 24,000 e-mails? how does that happen, mr. camus? >> it's an unbelievable set of circumstances that would allow that to happen. it is going to be fully documented in our report and i'm not sure i can describe it to you in five minutes. >> the reason you can't describe it is because there is no explanation for that, other than they were trying to not help the american people get to the truth. they were trying to hide something. they were trying to hinder. i don't know any other explanation. unless it's the most -- i mean, it's unbelievable. when you have a subpoena preservation order and you destroy 24,000 e-mails? who is responsible ultimately? might it be the guy, mr. camus who sat where you're sitting, the commissioner of the irs, and assured this committee, and assured the american people, they'd get us all the evidence? might he be the guy responsible?

>> it's possible. the management team -- >> might it be the head of the irs who didn't look at the sources for potential lerner e-mails? is that correct, they didn't look at the sources? >> they did not. >> might it be this guy who said under oath in this committee, we will get you every single lois lernesr committee? doesn't the buck stop at the top? >> that could be said. >> i think it should. what's next, mr. camus? >> we're going to generate our report of investigation that will delineate step by step how this occurred, where the breakdowns here, and it will provide the evidence that i've been describing in both our written and oral testimony here today. >> you believe that -- do you believe there is criminal activity here, mr. camus, because it looks like it to the american people in our judgment. >> our investigation did not

uncover any. >> do you believe you might uncover that? >> there are always times at the conclusion of an investigation, especially when an investigation gets a public forum, that someone comes forward with new information. >> it might have helped if we had 24,000 e-mails to look at, might it? >> that would have been useful to have that material. >> i'd think so, too. with that i yield back. >> thank you. recognize mr. cartwright for five minutes. >> thank you, mr. chairman. mr. george, i want to ask you about your ever-changing estimates of the new e-mails that you recovered from mrs. lerner. your numbers started at 80,000 e-mails in february. then it dropped to 32,000 e-mails at the end of february. last week, it fell to 6,400. nine days later, now, it has sunk to about 1,000.

your new number today is 98% lower than the first number you gave us. you know there's -- this is a room where we like to hear the truth. there was a great justice of the supreme court of the united states oliver wendell holmes, and he talked about the truth. he said, the truth is tough. it's not like a bubble that you can prick and it'll explode. it's more like a rugged football that you can kick around all day, and it doesn't lose its shape and doesn't lose its form and it stays the same. the truth doesn't change. when you're talking about a story that's true, mr. george, it's the same the first time you tell it the second time you tell it the third time you tell it and the fourth time you tell it. the truth doesn't go 80,000 and then 32,000 and then 6,400 and now 1,000. in fact in the last nine days,

you dropped from 6,400 discovered e-mails to 1,000. i'm looking at the letter dated june 16 from your office. in the not from you. from hernan dezdez, your chief counsel. is she your chief counsel, mr. george? >> yes she is. hello. gladis. thanks for the letter. mr. chairman i ask for consent to enter this letter into the record. >> without objection, it's so ordered. >> i was reading the letter, mr. george, from attorney hernandez, that says 6,400. there's no caveat. there's nothing in there that says, oh, this could be fewer. could be fewer than 6,400. there's nothing in there. it doesn't say, there could be duplicates in here.

stand by for the next number. could be coming next week. we didn't hear that from you either. now, this is not new to you, mr. george. you were a republican staffer for this committee. you understand that headlines are generated out of this committee. you understand how irresponsible it can be to throw out numbers with little or no basis because you know they'll work their way into headlines. folks who like to make insinuations like the previous questioner, will throw that into headlines intentionally. there was also a question about the prior chairman pressuring your office, pressuring your office to come up with quick, fast turn around information. well news flash, the previous chairman is the previous chairman. he is no longer here. you are no longer under that kind of republican pressure to turn over headline information to this committee.

it certainly doesn't say anything about that in ms. hernandez's june 16th letter. the question is why, mr. george, would you send out letters and put out numbers that you hadn't fully checked, knowing full well as you do that these numbers will work their way into these fabulous headlines that we see every day? the breathless reporting of all of these huge numbers of e-mails that have been discovered. why, mr. george? why do you do that? >> first of all, i would like to point out that when i had the honor of serving here, it was with the late congressman horn from california who admonished us. we never leaked information prior to a hearing in the course of investigation. i made a request of staffers during the course of this investigation to act like wise. they did not do so.