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. i cannot control their behavior.

secondly, this was a requestsponse to a request. this was a transmitted letter and i haven't seen it. it was from our counsel to the committee. i would request the opportunity to review this and to respond precisely, but thirdly -- >> you've heard of oliver holmes, haven't you? >> i went to law school, yes. >> you agree with the truth, don't you? >> yes. >> when you keep changing your story the way your office has, you lose your credibility and people stop believing they're telling the truth. >> congressman -- >> i yield back, mr. chairman. recognize the gentleman from michigan, mr. wahlberg, for five minutes. >> thanks to the panelists for the work you've done. it's been intimidating, it's been held up, frustrated all across the many, many months we've been dealing with it. i would also start with a quote from a famous chief justice of

the supreme court. as well as one of the most famous trial lawyers and former members of congress, daniel webster and justice marshall, who both said the power to tax is the power to destroy. i'm not sure they were talking about degaussing, but they were certainly talking about the power of a taxing entity to impact the lives of people. that's something we've had here. i also want to remind our whole committee again, as we talk about numbers and we talk about degaussing and we talk about tapes and we talk about hard drives remember the fact of the matter that lois lerner sat at that very table and pled the fifth. what does the fifth amendment refer to? the right to not self-incriminate. that says to me lois lerner was worried about the fact that what she had done could be construed at ill-- as illegal at the least.

she didn't kick the football. she walked off the field. we're left with trying to deal with tapes that have been degaussed -- sorry. i understand it. my people understand it. they've been destroyed. when congress began its investigation in may 2013, the irs issued a preservation notice to ensure the documents relevant to the investigation were not destroyed. is that not correct? >> that is our understanding. >> we want to rehearse this again. cut through the clutter to get back to what the situation is. who sent out this preservation notice? >> that was the chief technology officer. >> so based on your investigation, what efforts did the irs or anyone else make to ensure the ctos e-mail notice to cease routine destruction of electronic records was followed by low-level employees?

>> very -- there was very much confusion, and i'm not sure there was appropriate management oversight of the director. >> who was responsible for the preservation of the e-mails? >> every irs manager in my view. >> every irs manager. >> yes. >> every irs. plenty of them could have followed this out. has anyone been reprimanded for e-mails being destroyed, despite the preservation notice? >> in as much as we're finishing our investigation, we have not provided the irs with the results of what we found during our thorough investigation of the matter. >> they know the laurelw relative to the preservation notice. they should know it. >> i believe they do and they'll get our report. >> we don't know of reprimand they've taken. if these instructions would have been taken would more lerner e-mails be available for the investigation? >> i believe there would be. >> that's a fact of the matter. how many potential sources for recovering the e-mails existed for the irs?

>> we believe, six. >> namely? >> the hard drive would have been a source. blackberry, source. backup tapes, a source. server drives, a source. the backup tapes for the server drives. finally, the loaner laptops. >> how many of these six did the irs search? >> we're not aware that they searched any one in particular. they did -- it appears they looked into initially whether or not the hard drive had been destroyed. but they didn't go much further than that. >> they found out it had been destroyed. but the other six, we don't know that they even attempted a search on it. did the irs personnel ever state a reason why they did not attempt these alternative methods of retrieving lerner's missing e-mails. >> they believed at a high level that attempting to get e-mails off the backup tapes was a futle

attempt. they would have yielded the very e-mails everybody has been interested in. >> they wouldn't do this with a common citizen taxpayer, would they? i'm not asking you to answer that one. i'm suggesting that they would not have followed their pattern of course with lois lerner's tapes and e-mail records with any of us in the room. given the irs's failure to attempt the methods to recover the e-mails would you characterize the irs efforts as extraordinary? >> i would not. >> the power to tax is the power to destroy. i yield back. >> thank the gentleman. the gentleman from virginia. >> i would remind my friend another quote from a distinguish ed holmes, tax is a price we pay for civilization. they're not always bad things.

>> would my friend yield back? >> briefly. i agree with you. we're not talking about that. we're talking about destroying people's lives. >> well, i don't know that any lives have been destroyed. we can assert it but it doesn't make it true. mr. camus, we submitted questions to you on march 4th after the last hearing. the committee informed you and mr. george those answers were due march 18th. we were -- i find it interesting that we're complaining about responsiveness. let's start with the ig's office. if you're not pure in this you have no credibility or business testifying about somebody at irs. you need to be pungctual. your questions, mr. camus we were informed were ready on

march 27th. nine days late but ready, is that correct? >> i dilligently worked on the questions and submitted them for review. >> why was there a three-month delay between the completion of the questions and delivery to the committee two days ago. >> i don't know. >> would you call that responsive? >> i don't know the circumstance for the non-delivery. >> i do. i can give you -- >> i'll get to you in a second mr. george. i promise. don't worry. i don't leave you out. i found it interesting. i would think that would be a declarative answer one way or the other, responsive or not. i'll ask you this in any way, shape or form, were your answers with that delay changed or suggestions made to be changed in order to conform to somebody else's answers. >> no, sir. >> so to your knowledge they

remain unchanged but just delayed. >> that's correct. >> mr. george, why did you delay this process? because we only got your answers two days ago and i just heard you assure the chairman and this committee your commitment to making sure congress and everything it wanted, except from you. why did we have to wait three months for your answer and why did you delay mr. camus' answers. >> the request came to both of us in a single document, so we wanted to respond in a single document, one. two, as -- >> excuse me even if it delayed, by three months? >> i have to beg your indulgence and express this with chairman chaffetz. my mother had a severe stroke and is in an intensive care unit now for two and a half months nearing death. yes, i've had to put aside some of my professional responsibilities while attending to her, my elderly mother, who

is states away. i have that primary responsible, sir. >> i'm very sympathetic. i have elderly parents too, who suffer health issues. >> that is the explanation. my apology to the committee for the delay. >> could that not have been communicated? we had nothing but silence. >> there are certain parts of my life i don't want communicated. >> you could have said because of personal concerns. i can't do my job for three months. with respect to responding -- >> but there were reviews to make sure that prooifivacy act and 6301 was addressed. the primary responsibility was my personal family situation. >> again i'm always sympathetic to someone's personal circumstances. >> i appreciate that. >> but there is a concern, frankly, as you know and mr. cartwright and i filed a complaint about you, with respect to your behavior throughout this entire thing.

and the latest delineation of e-mail numbers that mr. cummings provided -- cumis provided is troubling. you met with members of the staff without democrats present. you talked to the chairman and took direction without consulting with the democrats, even though standards of conduct for igs specifically say you should always have not only the appearance but the reality of non-partisanship non-partisanship, so your credibility is adhered to. from our point of view there are real questions about whether you actually lived up to that standard. you've indicated that your own answer to the investigation common exonerated you but you refused to provide that answer to the committee. another evasion. we're having a hearing,

ironically ironically, about whether irs was transparent whether there was any attention or attempt to prevent information to the committee, and you're guilty of the same thing. you have not been transparent. you've refused to provide information. you've been unresponsive, for whatever reason. you held up mr. camus' answers in the process, which could have partially satisfied the committee demand. i renew my request to you. you claim it's a violation of the privacy, your rights under the privacy act. if, indeed, your answer exonerated you, why would you want to keep it secret? >> the gentleman's time has expired. i want the gentleman to know that mr. george had informed the committee, had informed me, that he was dealing with a personal situation. it's hard to communicate that with everyone in mass, but i was aware of that.

>> i want the gentleman to know, too, that he did inform me. on more than one occasion that he was going through this. certainly, mr. george we all wish your mother well. but you definitely kept this side informed also. thank you. >> sorry you are going through that. as chairman, i'd like to inform you there is a vote on the floor. i'll recognize mr. desjarlais. then we'll have a recess. we won't reconvene before 10:45, sometime after that. a few minutes after the last vote, we will resume. we'll have to adjourn briefly. for now, let's recognize the gentleman from tennessee for five yearminutes. >> thank you. mr. george, how long has this investigation been ongoing?

>> at least since -- well, it depends on how you -- the investigation of the missing e-mails as opposed to the tax exemption organization? >> both. >> two years? >> tax exempt was may 2013. investigation was 2014. >> since may of 2013, the exempt organizations, and roughly june 2014, the exempt missing e-mails. >> and apparently, according to the ranking member, we've had 22 hearings and spent $20 million. sometimes it's hard to remember what the focus is of why we're here because it's drug on so long. it's drug on because the irs has not been cooperating with us. also, i have to wonder as investigators like yourself how hard it is to conduct an investigation when the president informed you there's not a bit of corruption. does it make it difficult to conduct an interview when the leader of this country the leader that was benefitted by the fact that the irs admittedly

targeted conservative groups that were going to work against his presidency says there is not a smidgen of corruption. is that a concern? >> there's a drip, drip, drip here. with every new uncovery of information, whether it's testimony, interviews, finding of backup tape, this extends the course of the investigation. that is why this has been -- is stillon stillongoing. water watergate had 250 hours of testimony. we have not approached that. watergate cost more than this. we have an incident that's every bit if not more serious than watergate. it disheartens me we have opposition to these hearings. eventually democracy affects all of us regardless of party.

maybe at some point we'll get to the bottom of something that'll matter to people on the other side of the aisle. there's been a lot of comments today about the numbers of e-mails you're throwing out there. 10,000, 30,000. you're being criticized for that. as investigators, how many e-mails does it take to incriminate somebody of wrong doing? >> one. >> yeah, one e-mail. what does it matter how many numbers are being thrown out there? we're trying to get to the truth. i commend you guys for working hard and doing that. who at the irs was overseeing the destruction of the backup tapes, or who was in charge of that? >> there was a group of individuals. the first-line manager was a manager out of west virginia named charles stanton. >> what was kate duvall's role? >> she was in charge of the e-mail production to the congress. >> okay. did you interview ms. duvall?

>> we did. >> was she aware there was a problem with the collections of the e-mails? >> yes, she was. >> and what was her response? >> well they realized because he was running the effort at that time to gather the e-mails and produce them, when they realized there was a hole in the production, she's the one that informed the treasury that they were having difficulty with the e-mails. she is also the one that informed the commissioner that they were having trouble gathering the e-mails. >> was she held accountable for the fact that these have been destroyed? >> ms. duvall, i understand, is no longer at the internal revenue service. i believe they'll take appropriate action based on what we found in the report concerning individuals. >> do you feel that in your investigation to this point, knowing the irs has admittingly targeted conservative groups

they admitted wrong doing. lois lerner took the fifth, didn't want to incriminate herself. do you agree with the president's statement that there is not a smidgen of corruption in the irs? >> it's difficult to agree with a broad statement at any time. our job is to root out corruption at the irs. whether it's this matter or any other matter, we take great pride in conducting thorough investigations. if there is corruption, we're determined to find it and root it out. >> i certainly appreciate the work you're doing, and i know the american people appreciate the work you're doing. this was an assault on democracy, the democratic process and the way elections are conducted. i commend you two gentleman and yield back. >> i thank the gentleman. we'll recess and reconvene no sooner than 10:45. honestly, probably going to be a little longer. we stand in recess.

oversight and government reform committee will come back to order. we're in the midst of the hearing regarding the irs and appreciate the inspector generals being with us. there was a point of clarification. i believe mr. camus wanted to make it. i'll recognize him to clarify a previous statement. >> thank you, mr. chairman. when i was asked the name of the manager at the irs at the time the tapes were erased or destroyed, i said charles stanton. he wasn't actually the manager at that time. we're working on getting that name. we'll provide it for the record. stanton has been very cooperative. >> thank you.

appreciate the clarification. we'll recognize the gentleman from south carolina for five minutes. >> thank you, mr. chairman. mr. george i'll start by encouraging you to take heart. when the other side makes ss attacks, it's because they don't have the facts, law or, frankly logic. i know it is difficult for you to sit there and absorb those attacks, but the reality is, that is kind of the last of what folks have left to argue. i'll ask questions, and either one of you can answer them. i'm a simple man, so i'm going to start kind of simply. with respect to the irs investigation/targeted investigations, were there at some point subpoenas in place? >> there were. >> okay. were there requests to preserve evidence in place?

>> yes. >> were there ongoing congressional investigations? >> there were sir. >> were there ongoing ig investigations? >> definitely. >> and purportedly, there was an ongoing doj investigation, although we've seen scant evidence of that at least that's the allegation, right? >> yes. and i'll ask mr. camus to further respond. >> that's correct. >> okay. so you have subpoenas in place, you have requests to preserve evidence in place you have ongoing congressional investigations, you have ongoing ig investigations, and you may very well have an ongoing doj investigation, all of which leads me to ask, what does it mean, do not destroy/wipe/reuse any of the existing backup tapes for e-mail? what does that mean? >> that means, do not destroy, rewipe or do anything to that

material, as it could be evidence or of import. >> so it means exactly what it says? >> yes, sir. >> there is no hidden meaning? >> no, sir. >> even i can understand that sentence. don't do it right? you can call -- you can use fancy words like degauss if you want to but don't destroy, wipe reuse any of the existing backup tapes. now, was that done? >> yes, sir. >> was it done after any of the following were in place subpoenas, requests to preserve ongoing congressional investigations, ongoing ig investigations, or purported doj investigation? >> yes, sir. it was done on or about march 4th 2014, well after the commencement of all those activities. >> wow. now, i want to ask you about an individual in a minute, but i want to ask you this: sometimes

things can be done accidentally. let's go ahead and rule that out. are we talking about a misstroke on a keyboard? is that what causes these things to disappear and be wiped? you're typing in a word and hit the wrong key. does that do it? >> no. the destruction we're talking about required the employees involved to actually pick out tapes and place them into a machine, turn the machine on so it magnetically destroyed and obliterated the data. >> sounds like it'd be hard to accidentally do that. >> that's correct. >> we can rule out accident. that leaves negligence or in intentional intentional. do you know whether it was sheer negligence, incompetence, or was it a higher level? >> our investigation has shown the two employees who physically put those tapes into the machine

are lower graded employees at the mar tinstinsburg west virginia facility. they didn't conclude erasing these until june 2014. when interviewed, they said, our job is to put these pieces of plastic into that machine and magnetically obliterate them. we had no idea that there was any type of preservation from the chief technology officer. >> was mr. costkin in charge of the irs at that time? >> yes, sir. >> have you heard the name kate duvall? >> yes. >> who is that because i think i've laerd thatheard that name, too. >> the chief counselor concerning the production to congress. she was the lawyer making sure

that counsel made production to congress. >> she's in charge of making sure that e-mails and other matter is produced? >> yes. >> is she still with the irs? >> she is no longer. >> do you know where she's at now? >> i can get that information for you. >> no. i know where she is now. she's at the department of state, in charge of their e-mail productions. wow. i yield back. >> i thank the gentleman. recognize the gentleman from kentucky, mr. massie for five minutes. >> thank you, mr. chairman. i ask about the date that lois learn lerner's hard drive failed. >> we believe it failed on june 11th a saturday between 5:00 and 7:00 p.m. >> this hard drive failed conveniently. do you know where it was when it failed?

>> we believe, based on log activity, that the laptop was in her office at the time that the hard drive failed. >> so on a saturday it was just sitting there and it just sort of failed on its own, on a saturday. on june 11th. can you tell if there was any computer activity at the time that it failed, from log activity? >> there was. we were unable to determine if a program was in place that would remove another program from the computer. it was a silent deployment, if you will. that deployment was scheduled to occur between two dates, but we weren't able to definitivety say tyly say there was computer activity on june 11th when it was deployed. >> on june 3rd the chairman ways and means sent a letter to the commissioner of the irs at the time.

you're familiar with that letter? >> i'm not. >> june 3rd briefly says, as chairman of the committee of ways and means -- this was sent by mr. camp, the chairman at the time -- he was concerned that the irs appears to have selectively targeted certain taxpayers who engaged in political speech. not only does this threaten political speech and cast doubt on the irs credibility. he sent that on june 3rd which is a friday. so it's likely they didn't receive it at the irs until monday. which would have been june, what'd that make it, 6th? here, june 6th they probably received this letter and her hard drive magically fails on its own in her office on a saturday, five days later. now, before we thought there was a ten-day difference. now, we realize there is a five-day difference. this is just an amazing coincidence, to me. i think it's more than a

coincidence. i want to put up on the screen a directive that was sent out by the chief technology officer of the irs if we can get that on the screen. this is the directive that went out to managers is that correct, telling them not to erase the data? >> correct. >> this went out on may 22nd 2013. when were the tapes erased at the irs? >> on or about march 4th 2014. >> so about eight months later. and is this -- if we look at the highlighted part on here, it says, do not destroy wipe, reuse any of the existing backup tapes for e-mail or archiving or other information from irs personal computers. did that go to managers that were at the facility where the tapes were erased? >> it did.

there's a lot of discussion that we captured in our investigation by capturing the manager's e-mails, over what was meant by this directive. there was some back and forth. >> what did they say they thought it meant, when you talked to them? >> they believed that it pertain pertained to hard drives and personal computers. they overinterpreted the directive, which was basically, preserve all electronic media. >> so they thought it just applied to hard drives and personal computers, and that's what they told you. doesn't it clearly say, do not destroy, wipe reuse any of the existing backup tapes? >> it does. >> so if they didn't do this willingly or knowingly or purposefully, this is basically incompetence isn't it? >> one could come to that conclusion. yes, sir. >> either that or they can't read? >> one could come to that conclusion. like i said, you'll see in our report of investigation, we

captured a lot of the e-mail traffic back and forth between employees as they were discussing the impact that this has on their operations out there and destroying things. >> do these people still work for the irs? >> yes. >> why is that? if they're this incompetent. >> the internal revenue service is going to get a copy of our report when we're through and i imagine they'll look at it and take appropriate action. >> i thank you and i yield back, mr. chairman. >> thank the gentleman. recognize the gentleman from florida for five minutes. >> thank the chairman. say to my friend from kentucky it may be incompetence, or it may just be a willful disregard of the preservation order and a willful disregard of the subpoena that this committee issued in august of 2013. those are two very, very important actions. yet, mr. camus, in early 2014

your report demonstrates 422 backup tapes were destroyed by the irs, correct? >> that's correct. >> so we have clear guidance mandatory guidance, and yet, they destroyed the tapes. so if a taxpayer had been asked by the irs in an audit to produce certain documents to justify their tax returns and they just decided that some of the things they didn't want to produce or claim they were destroyed or destroy them, something tells me that would not fly. so you have an ayengency here operating under a different standard than they impose on the american taxpayer and that's unacceptable. june 14th, 2014 john in front of his letter to the senate and this committee later confirmed that the backup tapes with lois lerner's e-mail no longer existed. yet, your report shows that by doing basic due diligence you

found 13 backup tapes that had lois lerner's e-mails on them after he made that statement, correct? >> that's correct. >> and not only did you find the backup tapes, you found approximately 1,000, at this point, unique e-mails from or to lois lerner that the irs never produced to this committee, is that accurate? >> yes, sir, that's accurate. >> i remember sitting here. our current chairman when he was one of the regular members he pressed the commissioner, will you give us all of lerner's e-mails? the commissioner said, yes, we will. claimed the irs went to, quote, great lengths and made extraordinary efforts to recover the e-mails. when the commissioner said the backup tapes no longer existed, that they confirmed the ig what did you do to verify that? you drove out to the facility in west virginia and asked for the

tapes, correct? >> that's correct. >> now, do you consider that to be an extraordinary effort? >> that's due diligence. >> i'd say the bare minimum of due diligence. for the commissioner you go to great lengths above and beyond the call of duty, and you don't look where the backup tapes are found. that doesn't sit right. i think the problem is and i think we've seen this with the commissioner's attitude, that he's had a contempt for this entire investigation. he doesn't think the irs should be bothered by it. he's dismissive of the conduct, and he's not done anything to really meet the standards he's laid out here by getting us everything we've asked for and of course, the proof is in the pudding. this has dragged on and on and on. i think the american people are left with a sense of major frusation.frus frustration frustration. i think they don't like to have

a situation where there are all these rules and regulations they have to follow but then somehow, when things are subpoenaed by a government ayen agency agency government people can destroy the evidence. this is not the only context, the irs, throughout our whole government, where that happens. there are other things that have been subpoenaed, as we know, that have been destroyed. this is just simply unacceptable. i think that there needs to be accountability for it. if you're destroying backup tapes that were under subpoena and your own agency said needed to be preserved, that is either a willful regard of what was required or a level of incompetence that is so stunning that you clearly are not fit to serve. i think either way, those individuals need to hold account. i don't think you can have an irs commissioner come in front of the congress, testify under oath that he has confirmed that all of the backup tapes have been destroyed, the e-mails are unrecoverable, when he did not

even do the basic due diligence that the ig did by going out to the facility in west virginia where all the backup tapes are, and getting those backup tapes and looking. the thing is there are 13 backup tapes with lois lerner's e-mails. you also found over 700 at the time you didn't know what was on them. there would be no way to know there was only 13. there were more packupbackup tapes that could have been relevant before you did it. mr. chairman, thank you for holding this update. i know this is just the beginning of our efforts to hold this agency accountable on behalf of the american people. i yield back. >> now recognize the gentleman from alabama mr. palmer for five minutes. >> thank you, mr. chairman. mr. george much have been made about the number of e-mails that have been recovered.

i would agree with some of the members who have emphatically asserted that numbers matter. my question to you is, how many e-mails that contain evidence of wrong doing do you need to recover in order to pursue justice? is it 10,000? is it 1,000? 100? would one be enough? >> one would be enough, sir. >> so whether you find 1,000 e-mails or 100 e-mails or 10, it's really -- the only relevant point here is that you and your office are doing your best you're exercising due diligence to pursue justice. if there's one e-mail or one document that proves wrong

doing, it would justify the effort. would you agree with that? >> i agree 100%. i would beg your indulgence, congressman. the staff of the office of investigations is doing just tremendous work almost around the clock, over weekends and over holidays in order to address this matter and to locate that potential one e-mail or if there were more or if there aren't any, to find a conclusion as it relates to in. >> i think i can speak for the staff -- for this committee. i don't think i'm out of line in saying this, that we are very, very grateful for the work that your office does and the other igs, and how you pursue it with excellence and professionalism on behalf of the american people. >> thank you. >> mr. george, i don't remember, i think you were one of 47 inspector generals who signed a letter to this committee, raising concerns about federal

agencies' lack of i'd say, forthcoming with evidence and other documents. is that correct? did you sign that? >> i submitted a signature on that. >> we held a hearing on that. one of the points i think we brought out here is that how the lack of cooperation by these federal agencies and in this case, i would say the irs, has impeded investigations. made it very, very difficult to get to the truth, to get to the bottom of these issues. have you found that to be the case? >> very rarely, especially in our candor under the current commissioner, he's been extraordinarily cooperative. but i have to point out and, again, in all candor the timing is blurred with everything that occurred, it wasn't until once

appearing before this very committee that the irs turned over a training chart. not relating to the e-mail investigation. it's the overall exempt organizations investigation. at that time, revealed, ordered. it was not an investigation so they were not compelled to provide us that information. but they neglected to. so it showed us it showed that we may not have considered something that we were unaware of. they were not required to provide that information to us. it's a long winded way of saying, in that instance, they didn't share information with us that they knew existed. so that is one of the reasons why i agreed to put my name to that letter. >> thank you for elaborating on that. my concern about this is whether

they didn't pr liveovide it because they weren't asked i find it inconceivable that they would be unaware of the investigation, and of the need to turn over every document that might have some relevance to this. and whether they intended to obstruct or impede or whether it was by benign meneglect or incompetence is relevant. at the end of the day, the objective is to get to the truth. it is non-partisan in that respect. it is incumbent to pursue the truth. doesn't matter how many e-mails you've gone through, what's been reported in the media that's irrelevant. what's relevant is whether or not wrong doing has occurred, and you be able to do your job as inspector general and get to the truth.

thank you, mr. chairman. i yield. >> recognize the gentleman, mr. hice, for five minutes. >> thank you, mr. chairman. the directive goes out to stop destroying the tapes or erasing the tapes in may of 2013. we know that they are still being erased in 2014. yet, what i'm trying to wrap my mind around is the fact that you've said you found no reason to believe that there was any intentional criminal or obstructive behavior. so why in the world were the orders from may 2013 not followed? >> through our interviews of the irs employees involved under oath, and the review of their e-mail, concurrent e-mail with the issue, it appears that they had a manifest misunderstanding of the directive.

there was a misunderstanding at the management level, because they didn't know whether or not this pertained to just hard drives. they didn't know whether it just contained -- >> let's go on from here. i get your point. were there ever any orders to re-instate the destruction of tapes? >> no, sir. >> all right. so there was a clear directive to stop destroying the tapes. there was never orders to begin destroying tapes again. how in the world can your investigation determine that there was no criminal activity? >> one of the elements of most criminal statutes is a willfulness prong. the challenge is the willfulness. you need to gather the evidence that shows when these two lower graded employees introduced the 422 tapes -- >> let's go beyond the lower grade employees.

if there was no willful intent with them, that would have to mean they were not fully aware of what the orders were. you stated earlier that the managers of the irs clearly were responsible. they were responsible to know the orders. they were responsible to pass those orders down. so have you determined from that that there could potentially be any criminal activity among the managers or anyone above the lower grade? >> there doesn't appear to be evidence that they willfully, improperly executed their duties. >> mr. camus you yourself before the break said that this is an unbelievable set of circumstances that led to the destruction of these tapes. and i have to agree with you. it's unbelievable. the truth is not being told here. do the directive could not be more clear than what it was. tapes were nonetheless, still destroyed. so the truth is not being told.

why is there not some sort of criminal investigation underway? >> the investigation was a criminal investigation conducted by investigators who had the authority to place people under oath and bring charges to the department of justice. my agents during the interviews of all these folks and with support of the contemporaneous e-mail traffic between them came to the conclusion there was no willfulness by the employees or managers. >> just based upon what they said? so what they said under oath was, we didn't mean to do this. but all the circumstances, even in your own words, it's unbelievable. >> it is. >> what they're saying is unbelievable. it's unbelievable to us. the truth is not being told and in your own words, what you have been told is unbelievable. if it's not believable, that means it's not the truth. at some point we've got to get to the bottom of this. the truth is not being told. we and the american people are

sick and tired of being taken by our government. i believe it's time that your investigation steps it up. did you interview kate duvall? >> yes, sir, we did. >> okay. when was she informed that the tapes had potential e-mails of interest from lois lerner? >> i believe she had departed the irs before we obtained the e-mails off the tape. >> did she take any action to stop the destruction of tapes? >> not to our knowledge, she did not. >> she knew the e-mails of interest were there? >> she could have known, and she certainly should have looked. >> you said could have, she did know. was she reprimanded? >> i'm not aware sir. >> do you know if, you said a moment ago that she's no longer with the irs. do you have any idea if she stepped down from her position willfully, or if she was

pressured or if she was potentially running from criminal charges herself? >> i don't have that information, other than she left the internal refvenue service. >> on her own? >> on her own. >> thank you. recognize the gentleman from north carolina, mr. walker, for five minutes. >> thank you mr. chairman. appreciate your patience. this is a huge issue, not just because it's in the press, but this issue comes down to integrity, as well as credibility. i appreciate what's been shared of what i've heard so far today. a couple things that i'd like to address, just to make sure i'm clear, in your investigation, did we examine the circumstances under which the irs informed congress about the missing e-mails? could you take a minute and address that? >> yes. we're privy to the production that irs has been through. we've observed the hearings, the various hearings that have been held by this committee and

others, where they testified about their efforts to produce e-mails. we're well aware of the fact that there have been promises made, there have been obligations to provide the material. is that responsive? >> i think it does. let me delve deeper, if i could. is there concern that the treasury inspector general for tax administration did not learn directly from the irs that the lerner e-mails were supposedly lost? >> that's correct. we did not learn of that until june 13th 2014, at the same time everybody else did. >> can you expand on why? why the delay? >> they shared with us the same information they shared with everybody else. why they delayed it when they knew in february 2014 there were missing e-mails. the explanation was they spent the time between february and when they made notification in june allegedly looking for e-mails. >> all the time though under

the guise of trying to deliver what they didn't find. we don't know how much was posture, how much was we found it, let's figure out the best tactic, or it was late in the game they found it. is there any evidence to support when the evidence was found? >> the only evidence i'm aware of that was found is when we initiated our investigation and recovered the first set of tapes. then learning after having them examined that there were e-mails on them. >> let's look at precedence for a moment. is it customary for the treasury to hear about significant issues like the missing lerner e-mails from a letter sent from the irs to the senate? talk to me about protocol with your experience. >> the significance of this issue to all parties, i would have expected it would be reported to us when they determined there was a loss of

the e-mails. it was pertinent to so many ongoing investigations. >> and which i guess answers my next question. i don't want to put words in the mouth, but there could be concern you did not learn sooner of the did you not learn sooner of the problems learning that the e-mails were unrecoverable of 2013 is that fair. >> that would be fair. >> and finally, have you brought any of the concerns to at tension of mr. koskinen and if not, why not? >> we haven't shared the results of our findings or our major concerns because we're not quite finished with the report of investigation. when we are finished with that document he will get a copy and he'll be briefed about the management failure and the orvess that we -- the observations that we had and not be notified in a properly manner. >> and so we're not aware of the go along process and there is no

official notification to mr. koskinen yes or no. >> in as much as we're talking to his senior managers and his staff and would let him know in our efforts to recover e-mails how we were coming along. so other than just the general occasional status like with the committees we weren't providing him a blow by blow. >> and mr. george, did you have something to add to that. >> he is aware of the general findings but again, no conclusions yet. and that will be forthcoming. >> can i get the word on it today that we will make sure that you inform congress as soon as you encounter difficulties with information from the irs will you let us know promptly. >> as long as 360 allows it we will. >> i will yield back. >> we'll recognize the gentleman from oeks mr. russell for five minutes. >> thank you mr. chairman.

>> we're established from your investigation tapes will were not sent to the laps, laptops were not examined black berrys were not examined. in june of 2014 the irs in testimony and in letters stated that it left, and i quote, no stone unturned end quote, to recover the e-mails. was that true? >> we went through a series of logical steps with due diligence and we were able to recover e-mails so it would appear that that statement is wrong. >> that statement was not true. in july of 2014, irs officials testified that it was possible that lois learner's ee-mails were discoverable on back-up data and other tapes that you've explains her today. were the tapes beingee erased after july 2014. >> we're not aware that -- our

understanding is that the tapes in question that would contained the relevant material were erased or degauzed on march of 2014, june of 2014 they reportedly stopped erasing all media and came into compliance with the chief technology officer's directive. >> in that same month july 2014, irs officials testified to the senate finance committee, the house ways and means committee and the over site and government reform committee here that it quote, confirmed the e-mails were unrecoverably, end quote. given then that these tapes had -- the degousing or whoever had been stopped and given that recoverable data was still recovery on the tapes was that statement true. >> it would not appear to be true. >> it would not appear to be true. february 2015, deputy koskinen and i quote, had confirmed that

the e-mails were unrecoverable, end quote and there were, in his words, quote no way, end quote, to recover them, was that true? >> that would not appear to be true. >> that would not appear to be true. we have established here today multiple incidents where the irs did not tell the truth. worse, the first amendment protections on targeted groups were violated, even stated by lois learner in a public for im. there has been no accountability of individuals misleading congress and making untrue statements which we've established here, in hearings this week we're seeing a trend whereby government agencies do a great job of safeguarding data and e-mails from our government but allow our enemies to breach them with skill. an this is a grotesque double standard on the rights of american citizens. if they use the same untrue

statements on records provided to an irs audit they would likely be brought up on charges if an american citizen used the same standard, making untrue statements, saying, well i thought that was the case, but maybe it wasn't but i don't have the records and i can't send them to you. there would be fines and prosecutions, more than likely. we urge you to use a similar standard in holding the irs accountable for those that have lied to congress and in your investigations, to resolve and restore confidence that our government can act with integrity and act constitutionally on behalf of the american people. you, in your auditing capacity and investigative capacity have that responsibility that i know you take seriously. but we need to restore that confidence to the american citizens of this country and i urge you to hold these people

that have lied to congress to account. i yield back. >> the gentleman yields. for one question. mr. cammous i want to make something clear, because you just accused the commissioner of a crime. >> that was not my intention, sir. >> no. i'm not -- i'm not -- i'm not arguing with you. i want to make sure the record is clear. you said that in answer to a question. you said that he lied to congress. is that what you told us? >> no i -- >> well you need to clear that up. one way or another -- whatever. i just want to be clear. because you've now put him in a very interesting situation. we are just searching for the truth. >> thank you mr. chairman for the opportunity to clarify. i was asked a series of questions that based on our investigation we found things that were said earlier were not there.

any time you make an allegation or if you prove to prove a false statement there is a willfulness prong in that. you have to understand that somebody willfully gave information they knew was not to be true. so time not alleging that the commissioner willfully gave any information that he knew at the time that he gave it not to be true. if that helps clarify. >> it clarifies. >> and i apologize. >> gentleman yield. >> but it wasn't true, was it? >> we found -- we found e-mails that they did not. >> they did not what? >> that they did not find and our investigation shows they did not look for them. but i'm not alleging that the commissioner made false statements at this point. i'm not. so thank you for the opportunity. >> we'll have to have that debate and that conclusion. but i think it is pretty crystal clear. and i appreciate the chance.

>> i think what -- willfully is the issue. we don't know whether it was a willful statement on the part. that commissioner koskinen knew exactly what they had or had not done. we don't know that. unless you have contrary information. >> and i can continue on for a second. mr. koskinen is very aggressive in making sure that he is the only one that comes and testifies before this committee. he is the only one that comes and testifies before congress because he feels like he has the best grip on his organization and he doesn't want anybody else to come and testify. that is routine. we had to issue a subpoena to have one other person come testify before our committee on the irs. so again we'll have that debate. you're here to present us the facts. i think you presented the facts i know you are not trying to come to the conclusion. that is for us to debate. >> just one thing. >> sure. >> was there evidence it was

willful? any willful criminal act, lying to congress? >> we found no willfulness throughout our investigation. >> and just one last question. at the end of your -- your investigation, if you did find it, would that -- if you did find that, would that be a part of your report? >> yes, it would. >> very well. >> we look forward to your report. >> mr. russell yields back at this point. his time is well expired, but thank you. >> thank you very much. >> and now to the gentleman from wisconsin for five minutes. >> thanks much. i guess this question is for either one of you. you know, the department of justice announced they'd be conducting their own investigation. are you still participating with the d.o.j.'s investigation of the targeting of conservative nonprofit groups? >> i'm going to ask tim to

elaborate but their investigation is ongoing. >> yes, sir, we are still participating in that effort. >> okay. it was implied before that the investigation is nearing completion. i think by justice, is that true as far as you know or can you give us any status as to when you think this is going to wrap up? >> i don't know the status for the d.o.j. investigation. >> so you won't know if any criminal charges would be filed? >> i'm not aware. >> and they made no recommendations, as far as you know. >> as far as i know, they have not. >> are you satisfied with their investigation? >> well our agents have shared with me it appears to be thorough. like everybody else, they are waiting for the conclusion of this case or our finding now evidence or material relative to the investigation. >> okay. won't it in general be your responsibility to make recommendations on how to clean up the irs as opposed to the department of justice. >> in general it would. but in this particular case when

the whole exempt organization's application process broke, the president and the attorney general at the time determined that the department of justice would be the lead investigative agency for that particular matter. >> okay. that is a little bit unusual then. normally you would be the lead agency, right? >> that is correct. >> are you satisfied that the truth is going to come out with the justice leading -- being the leading agency rather than yourself? >> i believe that because we have been involved that the truth will prevail. our goal is, we are focused on the american people and congress to get the american people through the congress all of the information that we can and we let the facts fall where they may and truth fall where it may. so as far as that is our effort, i'm convinced if i'm briefed by my agents and they are convinced through their efforts that has occurred then i will take their answer. >> and we've received no

indication, sir, that anything to the contrary. >> okay. i appreciate your professionalism. i will say this whole irs thing and targeting people i think it is whiching a chilling effect on america. i'm sure you are not alone. when you call people for the other thing that politicians do this is what gets brought up. people believe if they take a politically unpopular stand and it is not just the irs other agencies as well, epa, what have you, that if you say something that is politically incorrect or take ape politically incorrect position, the full force of the government is going to come down on you. and that is not the way the country is supposed to be built so i appreciate your professionalism. and i hope you get to the bottom of what was really going on here so we can do -- so the people who -- the wrong doers can be prosecuted but thank you for coming over here today and i yield the remainder of my time. >> recognize the gentleman from

north carolina mr. meadows for five minutes. >> change you mr. chairman and thank you for putting a priority on informing the american people by holding this hearing. mr. george on a personal note the passion and compassion that you showed about caring for a loved one is not missed in the unbelievable difficulty of this hearing and i just want to say, you know if we could all have sons who are willing to do that kind of service to a family member, this world would be a better place so i just want to say thank you. thank you for your service. >> thank you very much, sir. >> mr. camus, i want to come back to you because i what follow up on what the chairman was talking about because as we started to look, this whole thing of willful is a very high

standard. you almost have to have the smoke coming out of the end of the gun, and yet in your investigation and actually i started reviewing mr. koskinen's statements before this committee, before the senate finance committee, before the ways and means committee and just to refresh your memory, it says we've confirmed the back-up tapes no longer exist. we've confirmed that lois lerner lerner's e-mails are unrecoverable. we had another statement that would indicate that they have worked diligently to find these missing e-mails, but as you've indicated, you found them in six different sources, is that correct? >> that is correct, mr. meadows. >> so how could, if we have these statements how do you reconcile those statements with

you going out and finding them? i mean how do you -- do you take someone who said there is absolutely no way that they exist, and then according to your testimony here today they didn't even look. so how could you say that that was anything other than willful? >> the issue that we have here is, as i shared earlier is a management failure. >> okay so -- and you did. and that is where i want to pick up. because if we have a management failure, one thing that hasn't been talked about yet is these back-up tapes are held in just a handful of locations, is that correct. >> yes, sir. >> so in a handful of locations a memo goes out, how in the world would those handful of locations not have gotten the memo that they needed to be preserved? >> our evidence shows they did in fact receive the directive

from mr. mullholland. >> so a handful of organizations, all of them, got the memo and then decided not to follow it? >> the evidence shows from interviews and looking in contemporaneous e-mail traffic from the various parties when they received the directive from mulholland they were confused as to what it actually encompassed. >> and i guess that is hard because if i give this to a fifth grader they -- and i know it is harder to be smarter than a fifth grader. but if i give it to a fifth grader, to not destroy back-up tapes, i don't know how much simpler it can be, do you mr. camus? do you see the ambiguity is what i'm saying. >> couldn't agree with you more, mr. meadows. >> so if that is the case, who

is going to be held accountable? would is going to lose their job? who is going to restore or start to restore the confidence in this agency by the american people? because we've been hearing hearing after hearing after hearing we've looked and we've searched and can't find and yet you found them. so who is going to be held accountable? who? your opinion should be held accountable, let me rephrase it. >> that is just an opinion. there are many, many people in this situation that should be held accountable. >> will that be in your report or can you get that to the committee who should be held accountable. >> our general process is. >> we need you to name names. >> there will be names in the report and documents of each of the interviews and i'm sure various people can come to various conclusions. >> so last question. how is it that the inspector

general can find things that the irs can't find, that d.o.j. can't find? should we put you in charge of d.o.j. and auditing? >> we just work very, very hard we are proud of our mission, which is to restore and keep the american people's confidence in the internal revenue service and we have an outstanding staff that do that every day. >> indeed you do. thank you very much. i yield back. >> i thank the chairman. i now recognize myself. so back to june 3rd, 2011. dave camp, kwharm of ways and means committee sends a letter to the irs inquiring about what is going on with the targeting. we think that letter arrives on june 6th we're just guessing and then mysteriously lois

lerner's computer crashes on june 11th. what a coincidence. unbelievable. days later it crashes. it is reported on june 13th. so it crashes on a saturday at the irs. you know precisely as best you can tell precisely where that is? >> i would guess there is presumably some sort of card reader who tell who was on the floor, who was in the area? did you look at that? >> yes, sir, we did. unfortunately, the vender who had the security contract for that building routinely destroys their proximate card logs after one year period of time. so unfortunately for this investigation, sometime in 2012 the proxy logs were overwritten. >> they were degauzed, is that

what happened. they degauzed the card readers? >> the records were not available to us. we looked and were hopeful to get those records. >> because it is a saturday. there rpt going to be many people there i'm guessing. and it just begs the question why? why is this the policy. the whole reason you do the card readers is for access and so you have a record and here we have a serious investigation and those records were degauzed. so it is just so frustrating that way. when will you issue this report? i know you are on the verge of this. do you have a specific date as to when this will be issued? >> we made a commitment to the finance committee to have it by the end of the month. >> so tuesday or so. >> that is our commitment. so unless there is a change because of additional interviews: and that is part of the problem mr. chairman there

are subsequent interviews that will have to occur and additional work and a review of again e-mails. so as i indicated in my opening statement today as did mr. camus, we might have to issue a supplemental report depending upon which additional information comes out. but again, the results of the investigation or the report of the investigation, we made a commitment to issue by the end of this -- so yes, next week. >> now i yield to the gentleman from ohio, mr. joerld. >> i thank you the gentleman. mr. camous, i'll go back to where mr. meadows was. how many physical places were the tapes were erased. you said a handful. what does that mean. one, two, three spots. >> there were four or five places where the e-mails are centralized. >> four our five places. four or five place where's they take the tapes and erase what is on them.

how many people work in those four locations. >> dozens in each location. i have a list here mr. jordan, but for me to sit here and count them, i don't want to waste your time. >> how many work there erase the tapes. in my mind i see joe and how many people do the actual erasing. >> in this particular case there were two employees involved in the erasure in the md shift and they are rubbing three shifts per location. >> so six people times four, so 24. >> 24 to 30 maybe. >> so we're talking 30 people right. so some of those 30 people, they are the ones responsible, they got the directive they knew there was a subpoena they probably read the newspaper, they know this is an issue, back to mr. meadows question, are any of them going to be punished?

>> at this time i don't know. we are continuing the investigation on an aspect of this which is a discrepancy over the way the material was counted -- >> because you said they got the directive, those five people, they got the directive they weren't supposed to destroy it. >> the locations got the directive through the management chain but for me to surmise whether the people got responsible for erasing the tapes, i couldn't testify to that. >> in your investigation -- two final questions. in your final investigation, did anyone from the top levels of the irs mr. koskinen, kate duvall, did anyone from the top levels of the irs talk to those 30 people? >> specifically not to my knowledge, specially at marten. >> so the 30 people responsible for erasing the evidence were not communicated to by the head of the irs? >> yes that is correct. >> yes that is correct? they never talked to the keep

people not to destroy evidence who destroyed evidence. mr. koskinen never talked to them? >> that is correct. >> and finally mr. chairman, and yet mr. koskinen sat where you sat and gave false information to this committee, correct? when he said i can give you assurances that we're going to give you all of the e-mails? >> he may have told you that under oath and made assurances to you. >> and that was a false statement, based on your investigation, mr. camus. >> our investigation showed he depended heavily on senior managers. >> the same people that didn't talk to the key 30 people. so what mr. koskinen told this committee and the american people, is it a true statement what he said under oath sitting in that chair right there. >> don't know what he did. >> we told you what he said. he said i'm going to assure you we're gel you all of the information. >> and i believe he went back to

his senior staff and told them to do so. >> but i'm asking, was he said truthful. >> i know he didn't talk to the people who destroyed the tapes. i do understand that he told his senior staff to comply with the investigation. >> all right, thank you mr. chairman. >> now recognize the gentleman from -- >> thank you very much, mr. chairman. we are spent time talking about conservative groups and i'm concerned about them and all americans. back on may 23rd mr. george 2013, you appeared before the committee and we asked about progressive groups. you said that you -- reviewing some 600 miles and i'm wondering what have you found out about the other american groups? the progressives? >> yes. we have a review underway looking at that very issue, sir

as to how other groups progressives and the like, were treated and in the handling of their applications for tax exempt status. unfortunately a lot of the information that would be needed to complete that review has to be -- is being stymied or stalled until the review of the missing e-mails is done because there is a number of overlaps in terms of individuals and in addition a lot of the key players involved in that process has since retired or left the irs in the wake the initial report and review. so we are still committed to doing that. we have started preliminary work on it. >> well that be a part of your report. >> it will be a separate report. we're not sure whether it will be an addendum to the original

audit or a stand-alone report. because of some of the missing people under the yellow book standards, we might or might not be able to issue an actual audit that would be accepted by the general auditing community so it might have to be an evaluation or inspeks but the bottom line is we'll look at that issue and look at how the irs treated progressive groups and the like and i'm using that term at large. >> and so it has been a year now or over a year and you say people have left and more people will probably leave and so it doesn't make it any better, does it. of the 600 cases, you don't have any conclusions to any of those? you said you had 600 files you are looking over? >> sir, i'm also being reminded that the d.o.j. investigation is hindering our ability to talk to

people. so our hands are tied unfortunately. >> i just want to make sure you know again we have spent a phenominal amount of time talking about conservative groups and i'm concerned, like i said. but what about all of the other groups. it seems like they're getting second-rate review here. and i'm not knocking you. i understand their problems. but it seems like there could be some conclusions -- out of the 600, some of them. >> well keep in mind, too, that our initial review was how political advocacy groups were being treated. and we have results from that and the vast majority of groups that were -- that were -- had inappropriately -- had inappropriate questions and the like delivered to them were found to be groups that were -- that are leaning not to the

left. i'm trying to be very diplomatic as to how i word this for fear of -- one i don't want to use the word targeting because it is too early to know exactly what was done but as we know the vast majority of the cases in the political add volk -- advocacy area, and slowing down the prose and asking what we believe inappropriate questions and the like were groups that were not deemed -- at least on their face progressive. they were more on the conservative -- >> and you testified that her computer crashed and the next day she sent a e-mail to colleagues confirming that fact. do you recall that testimony? >> i know that that is in the current testimony. >> is that right? >> yeah. >> and you further testified that more than two weeks later miss learner received a briefing

on june 29th informing her that employees were screening applications using the terms tea party and 9/11 is that right. >> yes. >> and when miss learner became aware of the terms she immediately directed that the criteria be changed. did anything in your investigation call that conclusion into question, mr. george? >> not to my knowledge no. but again, keep in mind, we did conclude shortly therefore that that -- thereafter that practice resumed. and she may have requested that it ceased but her instructions were not followed. >> and so you also confirmed that her computer crashed before your office started any investigations, particularly you were asked, quote, at the time of miss learner's computer crash, had tigga commenced an

audit for tax exempt status and your response was quote, no no it hadn't begun. do you recall that mr. george. >> vaguely. >> and mr. camus you testified that the i.g.'s office did not begin reviewing the circumstances surrounding miss learner's lost e-mails until june 16th, 2014. do you recall that testimony? >> yes, sir, i do. >> and now that the investigation is essentially complete, does the time line we just discussed still hold true? >> as far as our investigation goes it would still hold true. >> mr. camus did the investigation reveal any evidence that miss learner's saw three years into the future and knew you would one day investigate the loss of her e-mails. >> the investigation did not show that. >> all right. i yield back. >> gentlemen we want to thank you for your work and the work of the inspector general's

office. good people working hard and looking at an awful lot of paperwork and we look forward to your final report and do report back how we rely on this body as an institution and a committee and with that this committee will stand adjourned.

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through the c-span store. >> here are our featured programs. on saturday night at 8:00 p.m. eastern on issue special teams light, we look at iran and its relationship with the u.s. and the nuclear ambitions and on sunday night profiles with rand paul and bernie sanders. on book tv on c-span 2 saturday night at 10:00 p.m., author nelson dennis on the history of puerto rico and the tush lent relationship with the united states. on sunday night at 7:45, brand talks about ronald rairg. and on c-span 3, saturday night, a little after 9:00, commemorating the magna carta.

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welcome to the hearing. i'm going to go ahead and begin and i know senator carper is planning to be here and when he gets here we'll make time for him to make his opening statement but in the interest of the panelists and others, and other senators. >> i thought it would be bet to move on. i wouldn't to welcome every to the impacts of epa's proposed carbon regulations for costs for american businesses, rural communities and families and a legislative on my bill s 1324 better known as the arena act affordable reliable act. and i introduced it in may and am proud to have 30 supporters and fellow republicans. i introduced arena because of the devastating impact that the

epa proposed regulations will have on the businesses of my home state of west virginia and across the nation. i'm not exaggerating when i say almost every day back home in west virginia there are new stories detailing closed plants, job loss and price increases. i have a letter here today sent to me by m.r.s incorporated, a family owned company that operated 19 family mart stores in west virginia and virginia and eastern kentucky. customers are calling on epa to end the war on coal and impact on local economies. mars has been active in the region for 95 years and according to the letter the present crunch is the most difficult challenge this company has faced. quote, there was i time when the greatest obstacle was your competitor but if you worked hard and take care of your customers you could compete

successfully. unfortunately that is not the case now. the largest impediment is our own government. particularly the epa. the rulings issued by the epa have devastated our regional economy. coal provides 96% of the west virginia electricity and had among the lowest electricity prices in the nation. the average price was 27% below the national average but that will not survive this administration's policies. studies have projects that the electricity prices will rise from 12% to 16%. 450,000 virginans learned of an increase. compliance with epa regulations played a significant part. if we allow the plans to move forward, last week's rate increase will only be the tip of the iceberg. affordable energy matters. the 430,000 low and pidle income families in west virginia which is nearly 60% of our state's

household take home an average of less than $1,900 a month and spend 17% of the after tax income on energy. these familiys are vulnerable from the crisis of the clean power plan. but this isn't just impact on west virginia, this is about impacts across the country. it is important to note that all electricity has to come from somewhere. and in many states odds are it is being imported from a state that relies on coal but no one is talking about that. we'll learn in some of the panelist testimonies from reggie which is the regional greenhouse gas initiative, and one of the witnesses, mr. martens, is affiliated with reggie, that use market principals to reduce greenhouse gas emissions from the power sector. he may not mention that the five states consume five times more

energy than they produce and my little state of west virginia produces twice as much energy as all of the nine states in regi combined. there are energy producing and energy consuming states. only 13 states produce more energy than they consumer. and for the ten that export energy, coal is a net positive result. put simply there is no way that there epa driven reduction in coal-fired electricity generation is going to impact only coal states. it will impact the majority of states, the families an the businesses within them. the poorest and most vulnerable will bear the brunt. i look forward to hearing from the witnesses about the acts and the need for filter policies that don't over burden our states and cripple our economy. so with that we'll go ahead and begin our panelists. our first panelist is mr. eugene

trisko. and i welcome you mr. trisko. thank you for coming. >> thank you very much chair capito. chair inhofe and distinguished members. i'm eugene trisko. i'm an energy economist and attorney in private practice. i'm here today to summarize the findings of a study of energy costs on american families. i've conducted these household energy cost studies periodically since 2000 for the american coalition for clean coal electricity and the predecessor organizations. the study i will summarize today energy impockets on american family estimates consumer costs for households in the year 2016. the principal findings of the studies are, one, some 48% of american families have pretax annual incomes of $50,000 or less with an average after tax

income among these households of 22,732 dollars or a tax-home income of less than $1,900 per month. two, the 48% of households earning less than $50,000 devote estimated 17% of the after tax incomes to residential and transportation energy. energy costs for the 29% of households earning less than $30,000 before taxes represent 23% of the after tax family incomes before accounting for any energy assistance programs. now this 23% of income is more than three times higher than the 7% of gross income paid for energy by households earning more than $50,000 per year.

three, american consumers have benefited recently from lower gasoline prices, but higher oil prices are now reducing consumer savings at the gas pumps. meanwhile residential electricity prices are continuing to rise. residential electricity represents 69% of total household utility bills. a 2011 survey of low income households for the national energy assistance directors association reveals some of the adverse health and welfare impacts of high energy costs. low income households reported these responses to high energy bills. 24% went without food for at least one day. 37% went without medical or dental care. 34% did not fill a prescription or took less than the full dose.

19% had someone become sick because their home was too cold. the relatively low median imcome of minority and senior households detailed in the study attaches to my statement indicate these groups are most vulnerable to energy price increases. recent and perspective increases in residential energy costs should be assessed in the cob text of the long-term declining trend of real income among american families. the u.s. census bureau reports that the real pretax incomes of american households have declined across all five income quent ills since 2001 measured in constant 2013 prices. the largest percentage losses of income are in the two lowest income quent isles. in 2014 the average price was

32% above its level in 2005, compared with the 22% increase in the consumer price index. d.o.e. projects continued escalate of electricity prices due to the cost and compliance with environmental regulations and other factors. more over dough, epa,nerra and others project that electricity prices will increase even more because of epa's proposed clean power plan. lower income families are more vulnerable to energy costs increases than higher income families because energy represents a larger portion of their household budgets. energy costs reduce the amount of income that can be spent on food housing health care and other basic necessities. fixed income seniors are among the most vulnerable to energy cost increases due to the relatively low average incomes and high per capita energy use.

senior citizens and other low income groups will bear the burden of high energy costs imposed by the epa clean power plan but will be among the least likely to invest in or to benefit from the energy efficiency programs that the proposed rule envisions. thank you for the opportunity. >> thank you very much. our next witness is paul cicio who is president of the industrial energy consumers of america. welcome. >> thank you. chairman capito ranging member carper and members of the sub-committee. thank you for this opportunity. the industrial energy consumers of america is a trade association whose numbers are exclusively large companies who are energy intensive, trade exposed. these industries observe referred to as eite consume 73%

of the manufacturing sector use of electricity and 75% of the natural gas. as a result, small changes in energy prices can have relatively large impacts to our global competitiveness. we use as a manufacturing sector 40 quads of energy and this has basically not changed in 40 years. meanwhile, manufacturing output has increased 761%. this is a true success story. the industrial sector is the only sector of the economy whose grown house gas emissions are 22% below 1973 levels. these industries are very energy efficient. ieca is for reducing greenhouse gas emission so long as it does not interfere with our competitiveness. we must have a even playing field with our global competitiveness. and two competitors are china

and germany. they provide subsidies to give a competitive advantage. if we were military one would say we are engaged in hand to hand combat in competitiveness. all costs of unilateral action by the united states through the clean power plan will be passed on to us, the consumer. as proposed the clean power plan will dramatic increase the cost of power and natural gas and accomplish little to reduce the threat of global climate change and provide off shore competitors and creating industrial greenhouse gas leakage and harmle kmeskt to the middle class and the economy and the environment. the epa cannot look at the clean power plan in isolation from the significant cumulative cost that it will impose on the industrial sector either directly or indirectly through a number of recent rule makings.

since 2000 the manufacturing sector is still down 4.9 million jobs. since 2010 manufacturing employment has increased 525,000 jobs. we are still in the early stages of recovery and we do fear that the clean power plan and also the ozone rule is going to threaten this recovery. in contrast for example china, our primary competitor, has increased employment by 31% since 2000 and u.s. manufacturing trade deficit since 2002 has grown $524 billion, 70% of that is with one country china. china's industrial green has gas emissions have risen over 700% since 2008 alone. china produced 29% more manufactured gases than in the u.s. and emissioned 317% more co2, over three times the amount of the co2 than the u.s.

industrial sector. but despite our low greenhouse gas emission levels the epa will increase our costs and will make it easier for china's carbonin densive products to be imported which means the clean power plan will be responsible for increasing global emissions. there will be consequences on the industrial sector and it is called greenhouse gas leakage and the epa has failed to address this issue and thus the costs are underestimated. for example, when a state's electricity costs rise due to the clean power plan, companies with multiple manufacturing locations will shift their production to states with lower costs. along with the greenhouse gas emissions creating state winners and losers and when they do it will increase the price of electricity to the remaining state payers, including the

households. if the companies cannot be competitive, they move off shore and moving jobs and greenhouse gas emissions accomplishing nothing environmentally. one only needs to look at california. since ab-32, to our knowledge there is not a single energyinenceive trade skpoesed company that has built a new facility in california and the same goes for the au under the ets. california is importing their products and losing and for getting jobs. it is for this reason we would urge policymakers to hold off shore manufacturing competitors to the same content standard as we in the united states. thank you. >> thank you very much. our next witness is mr. harry alford who is president and ceo of the national black chamber of commerce. welcome. >> good afternoon, chair capito and ranging member carper and distinguish members of the sub-committee sub-committee. my name is harry alford and i'm

president and ceo of the black chamber of commerce. the ncc represents 2.1 million black owned businesses within the united states. i'm here today to testify about the environmental protection agency proposal to regulate greenhouse gas emissions from power plants and the potential impacts of the proposed regulations on energy costs for american businesses rural communities and families. and in particular i would like to focus on the potential adverse economic and employment impacts the clean power plan on low income groups and minorities, including individuals, families and minority businesses. while increase costs often come with increased regulation the clean power plan in particular it seems poised to escalate costs for blacks and hispanics in the united states. according to a recent study by the national black chamber of commerce, the plan would increase black poverty by 23% and the hispanic poverty by 26%.

result in cumulative job losses of 7 million for blacks and 12 million for hispanics in 2035. and decrease black and hispanic medium household income by 455 and $515 respectfully in 2035. for these minority and low income groups, increased energy costs have a greater impact on their lives and jobs and businesses because a larger percentage of their income and revenues are spent on energy costs. what may seem like a nominal increase in energy to some can have a much more harmful effect on minorities and low income groups. our members are concerned about the potentially devastating economic impacts of the clean power plan and we appreciate the opportunity to highlight them for our committee -- for the committee. in light of these concerns the national black chamber of commerce undertook the effort to

examine the minorities and low income groups on june 11th, 2015 the ncc released a study on the threat of the epa regulations to low income groups and minorities and the study fines that the clean power plan will reflect severe and disproportionate economic burdens on low income families and particularly minorities and impose harm on seven states with the highest concentrations on blacks and hispanics. the epa proposed regulation for greenhouse gas emissions from existing power plants is a slap in the face to poor and minority families. these communities already suffer from high unemployment and poverty rates compared to the rest of the country. yet the epa's regressive energy tax threatens to push minorities and low income americans even further into poverty. i want to highlight the key findings of the study. the epa rules increases black

poverty by 23% and the hispanic poverty by 26%. in 2035 job losses total 7 million for black and 12 million for hispanics. in 2035, black and hispanic medium house cold income will be 455 and $515 less respectively. compared to whites blacks and hispanics spend 20% and 19% moyer on food and 10% more on housing, 40% more on clothing and 15% more on utilities respectfully. the rule will harm residents of seven states with the highest concentration of blacks and hispanics arizona, california new york, illinois and texas. the study demonstrates that the epa clean power plan would harm minorities health by forcing tradeoffs between housing, food, energy and inability to pay energy bills is second only to the inability to pay rent as

leading cause of homelessness. business groups like the nbcc are not only -- not the only entities expressing concerns about the clean power plan. states which would be responsible for implementing the clean power plan have criticized the plan for numerous deficiencies. officials from 28 states said that the epa should withdraw the proposal citing concerns such as higher energy costs, threats to reliability and lost jobs. officials in 29 states have said that epa's proposed rule goes well beyond the agency's legal authority under the filter and 15 states have joined in a lawsuit. the nbcc totally supports the arena act s 1324 and we encourage all members of this committee to put the bill to vote and make it law. thank you so much. >> thank you very much. our next witness is joseph j.

marten martens, commissioner new york state, department of environmental conservation, welcome mr. commissioner. thank you. >> thank you chair capito, ranking member carper, members of the sub-committee, thank you for providing me with the opportunity to testify this afternoon. my name is joe martens and i'm the commissioner of drc and i'm the vice president of regi inc. which is a program of nine northeastern states that used market principals to reduce greenhouse gas commissions from the market sector. i thank you for reducing carbon emissions in new york while creating jobs and keeping energy bills in check. i've spoken with my colleagues across the country and i've heard many of them discuss their concerns about the rule. i recognize that each state faces different circumstances but i this in reg yifr we have a successful model to create

emissions. and other states can use similar emissions tailored to their own circumstances. regi was started in 2005 by a bipartisan group of northeastern and mid atlantic governors. in addition to the participation in regi the states have energy efficiency. and there is a single emission cap and ensures that the carbon reduction is realized and accounted for. in proceeds from regi helps fund many of the initiatives creating a cycle of consumer benefits for taxpayers and rate payers. our program has been a resounding success. the state great lie exceeded the 10% reduction target achieving a 40% reduction by 2012. to achieve even gretter reduction, the regi states acted

to further reduce the cap to 50% below 2050 levels in 2020. we achieved this reduction in an economy that grew 8% over the period from 2005-2013 adjusted for inflation. in new york we have realized economic benefits from regi and associated programs including creating jobs and reducing energy bills, for exam bell, governor cuomo's new york sun program has made it fourth in the nation for solar jobs. we've committed more than $550 million to provide energy bill savings of over $1 billion or benefits to over 130,000 households and 2500 businesses. ben fish years of programs funded by regi include low income families and businesses. for example, two energy efficiency programs are targeted income eligible families are

providing 100,000 low and moderate income families are providing families with savings and those who say electric rates for businesses to average to 13% below. we've enjoyed similar outcomes across the reggie region. an independent analysis undertaken by the highly respected analysis group concludes that the reinvestment of auction proceeds from the first three years of the program is reducing total energy bills in the reggie regions by 1.3 billion, adding 1.6 billion to the regional economy and creating an estimated 16,000 jobs. reducing emissions also provides substantial public health benefits, including saving lives, reducing illness, health care costs and lost workdays. our experience demonstrates a group of states can reduce emissions substantially and grow the economy at the same time. therefore, instead of asking whether we can afford to reduce

that pollution, a more pertinent question is whether we can afford not to act now to reduce the emissions that are causing our climate to change. in new york, we are already experiencing a destructive effects of climate-driven extreme weather. three years ago, hurricane sandy decimated many communities and tens of thousands of homes in new york and new jersey at a cost of $67 billion. over 70 lives were lost in the area struck by the storm. a year earlier, hurricanes irene and lee caused 66 deaths and 17 billion in damage. these storms disproportionately harmed low-income families and smaller businesses and communities located in low-lying areas, most vulnerable to flooding. our nation -- our choice as a nation is straightforward. we can invest in clean energy, creating jobs as a result at little or no net cost and reap the benefits of better health, lower health costs and reduced risks of climate change. or we can ignore the science and expect more frequent storm events causing tens of billions

of dollars in damages. to new york, the answer is clear. we have demonstrated that it's possible to use energy more efficiently, stimulate economic growth, provide healthier air and reduce the potential damage for climate change. that concludes my testimony. thank you. >> thank you. and our final witness is dr. mary b. rice, instructor in medicine, harvard medical school division of pulmonary critical care and sleep medicine. welcome. thank you. >> thank you. my name is dr. mary rice. i'm a pulmonary medical care physician. and i care for adults with lung disease. most of whom have asthma and emphysema. i also care for critically ill adults in the critical care unit. my message is simple, climate change is becoming the worst public health crisis of modern medicine. hundreds of research studies have demonstrated that greenhouse gas emissions have already changed our climate over the past several decades causing

heat waves that last longer and happen more frequently, dangerous spikes in ground level ozone, increased wildfire activity, and longer, more potent pollen seasons. and these effects hurt american families. my physician colleagues and i are already seeing these health effects among our patients. the american thoracic society recently conducted a survey of our u.s. members who are doctors from all around the country caring for children and adults. and we found that the vast majority of doctors said climate change is affecting their patients today. let me describe just a few of the health effects that my colleagues and i see. consider heat waves. several doctors commented that their patients with emphysema who are already struggling to breathe can't handle extreme heat. studies have found people with asthma and 'em if i ze ma visit their doctors more often and get hospitalized more often during heat waves. extreme heat also increases

ozone to levels that are harmful to the lungs of people. not only people with asthma and emphyzema but also the lungs of babies and young children. have been found to contribute to premature mortality. the hot conditions promoted by climate change favor forest fires and grassland fires which are at great cost to human health. during a heat wave in may of 2014, for example, multiple wildfires broke out simultaneously in san diego county. and that caused at least $60 million in damage. but this estimate doesn't capture the damage to the health of family who is are affected by those fires. wildfires can travel great distances and release a mixture of toxins that are especially irritating to the lung, making it harder for people to breathe. a colleague of mine in san diego told me that he advised all his patients to stay inside and keep the air-conditioning on. is this the future we want for

american families? one where it's not safe to go outside. there's no doubt that wildfires increase hospitalization for as ma in children and adults and for respiratory illness among the elderly. climate change is also bad for people with seasonal allergies. about 30% of all americans and roughly 10% of americans with asthma. warmer temperatures lengthen the pollen season because plants bloom earlier in the spring and also higher levels of carbon dioxide increase the amount of pollen produced. in the northern states of the u.s., pollen seasons have lengthened by more than two weeks today than they were in 1995. and they are also more powerful. studies have found that when pollen levels are higher, people use more medications and visit their doctors more for allergy. emergency room visits for asthma among children and adults go up. and one of my patients who is a single mother with a teenage son, both of whom have severe asthma, called me on a weekly

basis this spring because of trouble breathing. and between the missed days of school for her son and missed days of work for her, this allergy season was a disaster for her family. i'm a physician and a researcher, but my most important job is my role as a mother to three children under the age of 6. one of them, my 1-year-old son has had two emergency room visits and a hospitalization for respiratory illness. when my son develops a cough or wheeze, i'm terrified this could mean the next ambulance ride. and when he's sick, i can't go to the hospital and take care of my patients or my husband can't work. we're more fortunate than many americans, many of whom risk losing their job or struggle to pay for the next emergency room visit when they or a loved one suffers an acute respiratory illness. my son and every american deserves clean air. i've only described a few of the threats to the health of americans from climate change. experts predict that we can

avoid the most frightening scenarios if we reduce greenhouse gas emissions. and better yet, when we address climate change, we redeem immediate health benefits right here in the u.s. when we reduce greenhouse gas emissions, we also reduce air pollutants that trigger heart attacks, asthma and emphysema attacks, stroke and death. as a mom, a doctor, and a representative of the american thoracic society, i favor taking firm steps to address climate change because i support clean air and a healthy future for all americans. thank you. >> thank you, doctor. i want to thank all of you all, and we'll begin the questions, and i will begin. mr. trisko, you mentioned in your remarks about the impacts of the conservation. building block of the clean power plan and how elderly citizens and those on fixed incomes would probably be least likely to be the ones to be the

beneficiaries of that or to be able to afford to make those changes. it says that energy information administration projects that consumer energy prices will go up by 4% by 2020. which seems rather low since we just had a 16% rise in our prices in west virginia. how do you see these two converging? the rising price and the really the lack of the conservation and efficiency aspects of this clean power plan for the elderly citizen and those on fixed income. >> senator, excellent questions. let me first address the observation that i offered with respect to senior citizens being least likely to benefit from the energy efficiency aspects of a clean power plan. that observation derives from two facts. one, the payback period that is

required to support major investments such as replacement of windows, replacement of heating and ventilating systems, those paybacks, payback periods typically are too long to be economically feasible for lower income senior citizens. it's also true in general for the population that american houses tend to be owned for a period of about seven years on average. if you're a homeowner looking at a let's say $10,000 window replacement project, that's going to save a few hundred dollars a year on your energy bills, that payback period is not consistent with the period that typical homeowners expect to live in those dwellings. secondly, and i've heard this

from senior utility executives, as well, that one of the difficulties in securing energy efficiency gains from lower income consumers is the quality of the housing stock. that is, the relatively poor quality of the housing stock will not support investments in fairly high cost energy efficiency upgrades. such as windows and hvac systems. certainly, lower cost options, the simple things, such as better attic insulation, weather stripping and the like. those have short payback periods and they're feasible. but the magnitude of the energy efficiency investments that epa is projecting in the clean power plan, which nera estimates to cost some $500 billion for