the chairman of ways and means sends a letter to the commissioner of the irs, doug shullman. are you familiar with that letter? june 3rd briefly says as chairman of the committee of ways and means sent by mr. camp, the chairman at the time he was concerned that the irs appears to have selectively targeted certain taxpayers who engage in political speech. this threatens political speech and cast doubt on the irs credibility. he sent that on june 3rd which i looked it up on a calendar, a friday. so it is likely they didn't receive it at the irs until monday. which would have been june -- what would that make it -- 6th? so june 6th they received this letter and her hard drive magically fails on its own in her office alone five days later. before we thought there was a ten day difference but now there

is a five day difference. this is amazing coincidence to me. i think it is more than a coincidence. i want to put up on a screen a directive sent out by the chief technology officer of the irs. if we could get that on the screen. and this is the directive that went out to managers, is that correct, telling them not to reace the -- erase the data. >> correct. >> this went out on may 22nd, 2013. when were the taped 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 said do not destroy, wipe, reuse any of the existing back-up tapes for e-mail or archiving or other information for irs personal computers. did that go to managers that

were at the facility where the tapes were erased? >> it did. and there was a lot of discussion that we captured in our investigation by capturing the manager's e-mails over what mullholland meant by this directive. >> so what did they say they thought it meant when you talked to them? >> they believed that it 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 is what they told you. but doesn't it clearly say do not destroy, wipe, reuse any of the existing back-up tapes. >> it does. >> so if they didn't do this willingly or knowingly or purposely, this is basically incompetence isn't it? >> one could come to that conclusion, yes, sir. >> either that or they can't

read. >> one would come to that conclusion. like i said, you'll see in our report to the investigation we captured the e-mail traffic back and forth between employees as they were discussing the impact that this has an their operations out there and destroying things. >> do these people still work for the irs? >> yes. >> why is that? if they are this incompetent? >> the internal revenue service will get a copy of the report of the investigation when we're through and i imagine they will look at it and take appropriate action. >> i thank you and i yield back mr. chairman. >> thank the gentleman, now recognize the gentleman from florida, mr. desantis for five minutes. >> thank the chairman. and i would say to my friend from kentucky, it may be imcompetence or a willful disregard of the preservation order and a willful disregard of the subpoena this committee issued in august of 2013. and so those are two very very

important actions and yet, mr. camus, in early 2014, your report demonstrates 422 back-up 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. and so you have an agency here that is operating under a different standard than they impose on american taxpayer and that is unreceive accept -- unacceptable. june 14th, john koskinen, in front of his letter to the senate and this committee later confirmed that the back-up tapes

with lois lerner's e-mails no longer existed and yet your report shows that by doing basic due diligence you found 13 back-up tapes that had her e-mails on them after he made that statement, correct? >> that's correct. >> and not only did you find the back-up tapes you found approximately a thousand at this point unique e-mails from or two lois lerner that the committee never produced to this committee, is that accurate. >> yes, sir, that is accurate. >> and koskinen -- i remember sitting here when the chairman was a regular member he pressed koskinen, are you going to give us all of lerner's remails and you said yes he would give all of the e-mails. and they went to great lengths to recover her e-mails. when mr. koskinen said the back-up tapes no longer existed

to confirm the. >> g., what did you do? you went out to facility and asked for the tapes? is that correct. >> that is due diligence. >> i would say that is the bear minimum of due diligence. so you go above and beyond the call of duty and you don't even look to find where the back-up tapes are found and that doesn't sit right. and the problem and we've seen this with commissioner koskinen's attitude that he's had a contempt for this entire investigation and doesn't think the irs should be bothered of it and dismissive of the conduct that has occurred by targeting americans based on their view points and not done anything to meet the standards he's laid out here by getting us everything that we've asked for an of course the proof is in the putting because -- pudding because this has dragged on and on and on. and so i think the american people are left with a sense of

major frustration. i think they don't like to have a situation where there are all of these rules and regulations they have to follow but then somehow when things are subpoenaed by a government agency, government people can go ahead and destroy the documents destroy the tapes destroy the e-mails. and this is not the only context the irs throughout our whole government that happens. there are other things that were subpoenaed that we know were destroyed. this is just unacceptable and i think there needs to be accountability for it. if you were destroying back-up tapes under subpoena and your own agency said needed to be preserved, that is a willful disregard of what was required or a level of in competence so stunning that you clearly are not fit to serve. and so i think either way, those individuals need to be held accountable accountable. and i don't think you can have an irs commissioner come in front of congress and testify

under oath that he's confirmed that all of the back-up tapes have been destroyed and the e-mails are unrecoverable when he didn't do the basic due diligence that the. >> g. did by going out to the facility in west virginia where the back-up tapes are and getting those back-up tapes an looking. and the thing is there are 13 back-up tapes with e-mails and you found over 7 hub at the time -- 700 at the time you didn't know what was on them haund to check and there was no way to know there was only 13 so there were more back-up tapes that were there that were going to cover the time period and could have been relevant before you did it. so mr. chairman thank you for holding this update and i know this is just the beginning of our efforts to hold this agency accountable on behalf of the american people and i yield back. >> thank the gentleman. now recognize the gentleman from alabama, mr. palmer, for five minutes. >> thank you, mr. chairman. mr. george, much has 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 contain evidence of wrongdoing do you need to recover in order to pursue justice? is it 10,000? is it a thousand? a hundred? would one be enough? >> one would be enough sir. >> so whether you find a thousand e-mails or 100 e-mails or ten it is really -- the only relevant point here is that you and your office are doing your best you're exercising due diligence to pursue justice and if there is one mail or one

document that proves wrongdoing it would justify the effort, would you agree with that. >> i would agree 100%. and i would beg your indulgence here congressman because 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 the potential one e-mail or if there were more or if there aren't any, to make a final conclusion as it relates to this. >> and 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 your office does and the other i.g.'s 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 the 47

inspector generals who signed a letter to this committee raising concerns about federal agencies lack of -- i would say forthcoming with evidence and other documents. is that correct? >> i was a signature to that. >> and we held a hearing on that. and one of the points that 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, have 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 all candor under the current commissioner. he has been extraordinarily cooperative. but i have to point out and again in all candor the timing is blurred given everything that

occurred it wasn't until once appearing before this very committee that the irs turned over a training chart and i'm relate -- i'm not relating to the e-mail investigation, the over all exempt organizations investigation. and at that time a reveal -- an audit. it was not an investigation and so they with were not -- were not compelled to provide us that information and they neglected to. and so we may not consider something we weren't aware of. they were not required to provide that information to us. so that is a long-winded way of saying in that instance they didn't share information with us that they knew existed and so that is one of the reasons why put my name to that letter. >> well, thank you for elaborating on that. but my concern about this is

that whether they didn't provide 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 neglect or incompetence is irrelevant because at the end of the day the objective is to get to the truth. it is nonpartisan in that respect. it is incumbent upon us, in this committee and your office, to pursue the truth. i think that is the key point here. is doesn't matter how many e-mails you've gone through, what is reported in the media, the media -- that is irrelevant. what is relevant is whether or not any wrongdoing has occurred and that you be able to do your job as inspector general and get

to the truth. thank you, mr. chairman, i yield the balance of my time. >> i recognize the gentleman from georgia, mr. heist for five minutes. >> thank you mr. chairman. the directive goes out to stop destroying the tapes or erasing the tapes in may of 2013. yet we know that they are still being erased in 2014. and 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 of 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 it pertained to hard drives whether it just -- >> let's go on from here. i get your point. were there ever any orders to reinstate the destruction of tapes? >> no sir. >> so there was a clear directive to stop destroying the tapes and 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 and the challenge in any criminal investigation is the willfulness. you need to gaerng the -- gather the evidence that shows when these two lower graded employees

introduced the 424 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 the orders down. so have you determined from that there could potentially be any criminal activity in the managers or anyone above the lower grade. >> there is not any evidence that they willfully improperly executed their duties. >> mr. camus you, yourself before the break, set this is an unbelievable set of circumstances that led to the destruction of the tapes and i have to agree with you. it is unbelievable. the truth is not being told here. the directive could not be more clear than what it was. and yet tapes were still

nonetheless destroyed. so the truth is not being told. why is there not some sort of criminal investigation underway? >> the investigation at hand was a criminal investigation conducted by criminal investigators who have the authority to place people under oath and bring charges to the department of justice. my agents, during the interview of all of the folks and again with support of the contemporaneous e-mail traffic between them came to the:collusion there was no willfulness by the employees or the managers. >> just based upon what they said. so what they said under oath awe didn't mean to do this but all of the circumstances even in your own words tuesdayen believe -- words, it is unbelievable and it is unbelievable to us and the truth is not being told and in your own words what you were told is unbelievable. if it is not believable, that means it is not the truth.

and at some point we have to got to the bottom of this because the truth is not being told and we and the american people are tired of being snookered and taken by our government and i think it is time your investigation steps it up. did you interview kate beautiful. >> 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 already departed the internal revenue service when 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. >> but she knew the e-mails of interest were there? >> she could have known and she certainly should have looked. >> you just said she did know. was she reprimanded in any way. >> i'm not aware if she was reprimanded, sir. >> do you know if -- you said a moment ago she is no longer with

the irs. do you have any idea if she stepped down from her position willfully or pressured in any way or potentially running from criminal charges herself? >> i don't have that information other than she left the internal revenue service. >> on her own? >> on her own. >> thank you mr. chairman. >> now recognize the gentleman from north carolina, mr. walker, for five minutes. >> thank you mr. chairman. appreciate your patience in coming from a markup. this is a huge issue not because it is cut along the press, but this comes down to integrity as well as credibility. and i appreciate what has been shared and what i've heard so far today. a couple of things that i'd like to address and just to make sure that 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 held by this committee and others where they testified about their efforts to produce e-mails so we're well aware of the fact that there have been promised made there have been -- obligations to provide the material. is that responsive? >> i think it does. let me delve a little deeper if i could. is there concern that the inspector general for trax administration did not learn directly from the irs that the lerner e-mails were supposedly lost? >> that is correct. we did not learn of that until june 13th, 2014, at the same time everybody else did. >> with you expand on why? why the delay? >> they shared with us the same information they did with everybody else why they delayed it, when they knew in february of 2014, they were missing e-mails and the explanation was they went the time between

february and when they made notification in june allegedly looking for e-mails. >> all of the time under the guise as far as trying to deliver what they did find. so we don't really know how much of that was posture, how much of it was discovered, let's sit down and figure out the best tactic or it was late in the game and boom a week later is there any way to support when the evidence was found? >> the only evidence that was found is when we initiated our investigation and recovered the first set of tapes and then learning after having them examined there were e-mails on them. >> let's look at precedence. it is customary for the inspector general of tax administration to hear about significant issues like the missing e-mails from a letter sent by the irs to the senate. talk about protocol about your experience. >> a case this significant this interest to all parties i would

have expected it would have been reported to us when they determined that there was a loss of e-mails because if it is pertinent to so many ongoing investigations. >> and that enters my next question, i don't want to put words in your mouth, but there would be concern if you didn't learn sooner of the problems given that the irs learned the e-mails were unrecoverable as early as february of 2014. is that fair. >> that would be fair. >> and finally have you brought any of the concerns to the attention 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 will be briefed about the management failures and the observations that we had and our concern about not being properly notified in a timely manner. >> so we don't know whether he's aware of what you are finding as this go-along progress as you

are discovering so there is no official release of information back to mr. koskinen, is that yes or no. >> occasionally we would give him an update like we did the committee in as much as we were talking to his senior managers and staff and let him know in our efforts to recover e-mails how we were coming along. so other than the general occasional status like we did with the committees we weren't providing him a blow by blow. >> did you have something to add to that? >> he is aware again of the general findings but no conclusions yet. and that will be forthcoming. >> well can i get the word on it today that we will make sure that you guys will inform congress as soon as you encounter difficulties in obtaining information directly from the irs, will you let us know promptly with that? >> yes, sir. >> as long as the secretary permits it yes we will. >> with that, i yield back. >> now recognize the gentleman

from oklahoma, mr. russell, for five minutes. >> thank you, mr. chairman. >> we've established from your investigations that tapes were not sent to the labs, laptops were not examined, blackberries were not examined. in june of 2014, the irs in testimony and letters stated that it let, 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. >> not true. in july of 2014, irs officials testified it was possible that lois lerner's e-mails were recoverable on discovered back-up data tapes and other things that you've explained here today. were the tapes being erased after july 2014? >> we're not aware that --

>> degauzed. >> our understanding is that the tapes in question that would contain 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 the same month, july of 2014 irs testified to the committees here that it, quote confirmed the e-mails were unrecoverable, end quote. given then that these tapes had -- the degauzing or whatever had been stopped given that recoverable data still existed on the tapes, was that statement true? >> it would not appear to be true. >> it would not appear to be true. february 2015, commissioner koskinen declared that he had

and i quote, confirmed the e-mails were unrecoverable end quote. and that there were, in his words, and i 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 incidences where the irs did not tell the truth. worse, the first amendment protections on targeted groups were violated, even stated by lois lerner in a public forum. there is 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 good job of safeguarding data and e-mails from our government and allow our enemies to breach them with skill and this is a 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 and saying well i -- i thought that was the case but maybe it wasn't and 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 your investigativive capacity -- investigativive capacity that you have that responsibility that 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. chairman, i yield back. >> the gentleman yields, just for one question. mr. cam us i want to make sure i'm clear because you just accused the commissioner of a crime. >> that was not my intention sir. >> no. >> 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. >> well you need to clear that up. one way or another. i just want to it be clear. because you've now put him in a very interesting situation. we just are searching for the truth. go ahead. >> no, 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 i'm not alleging that the commissioner willfully gave any information that he knew at the time he gave it not to be true. if that helps clarify. >> that clarifies. >> and i apologize. >> 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 showed 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 candor. >> i think what he said -- willfully, we don't know whether it was a willful statement on the part in effect that commissioner koskinen knew exactly what they had or had not done. we don't know that, unless you have contrary information. >> and if 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 routinely. we had to bring -- issue a subpoena to have one other person come testify before the committee in the irs. we'll have the debate. you're here to present the facts. i know you are presenting those facts. i know you are not

trying to come to a conclusion, that is for us to debate. >> and one more thing. >> sure. >> is there any 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 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. >> i assume mr. russell yields back. his time is well expired. but thank you. 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 investigat 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 or as far as you know, can you give us any status as to when this will 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 it appears to be thorough and like everybody else they are waiting for the conclusion of this case or finding new 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 application process broke the president an the attorney general at the time departmented 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 it may and the truth fall where it may. so as long as that is our effort and i'm briefed by my agents and they are convinced through their

efforts that has occurred, then i'll take their answer. >> and we have received no indication, sir, that anything to the contrary. >> okay. i appreciate your professionalism. i will say this whole irs thing in targeting people, i think it is having a chilling effect on america. i'm sure i'm not alone. when you call people for the other thing politicians do this is something that is brought up. people believe if they take a politically unpopular stand and it is not just the irs, the epa and what have you that if you say something that is politically incorrect or take a politically incorrect position the full force of the government is going to come down on you. and that is not the way this 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 and i yield the remainder of my time. >> now recognizing mr. med yos from north carolina for five minutes. >> thank 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. cameus, i want to come back to you because i want to 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 vf 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 and it says we've confirmed the back-up tapes no longer exist, we've confirmed that lois 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 have indicated, you found them in six different sources is that correct? >> that's correct mr. meadows. >> so how could if we have

these statements how do you reconcile those statements with you going out and finding them? how do you -- how do you take someone who says 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. 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 again at contemporary e-mail traffic between the various parties when they sevened the -- received the directive from mullholland they were confused as to what it encampused. >> that is hard. because if i give this to a fifth grader -- 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 i guess is what i'm saying. >> i couldn't agree with you

more, mr. meadows. >> so if that is the case who is going to be held accountable? who 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 we've searched and we can't find and yet you found them. so who is going to be held accountable? who in your opinion should be held accountable? >> well it is just an opinion. there are many many people in the situation who should be held accountable. >> will that be in your report or can you get that to the committee on who should be held accountable? >> our general process -- >> we need you to name names, mr. camus. >> 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're proud of our mission which is to restore and keep the american people's confidence in the internal revenue service. we take our job seriously and i have an outstanding staff of men and women who do that work every day. >> indeed you do. i yield back. thank you. >> i thank the gentleman and i'll recognize myself. so let's go back to 2011. it is june 3rd, 2011. dave camp chairman of ways and means committee sends a letter to the irs inquirying about what is going on with the targeting. we think that letter arrives on june 6th. we're just getting. and then mysteriously lois

lerner's computer, it crashes on june 11th. what a coincidence. unbelievable, right? 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, where that is. i would guess there is presumably some sort of card reader that would tell who was on the floor, who was in that area? did you look at that? >> yes, sir, we did. unfortunately the vender, who had the security contract for that building, routinely destroys their provm cards 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 we were very hopeful we could get those records. >> because it is a saturday. there aren't going to be many people there i'm guessing. and it just begs the question, why? why is this the policy. the reason to do the card readers, to permit access and to 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 right on the verge of this. do you have a specific date as to when this will be issued? we made a commitment to the senate 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 interview -- and that is part of

the problem, mr. chairman. there are subsequent interviews that will have to occur and additional work and review of again e-mails. so as i indicated if my opening statement today as did mr. camus, we might have to issue a supplemental report depending on what additional information comes out. but again, the results of the investigation -- or report of the investigation we made a commitm to issue by the end of this -- so yes, next week. >> would you yield to the gentleman from ohio mr. jordan. >> i thank the chairman. mr. camus, i'm going back to where mr. meadows was. how many places physical locations were the tapes erased? how many are there. you said a handful, what does that mean? one, two three spots? >> i believe there are four or five locations where the e-mails are centralized. >> okay. four or five places. so say there are four places, physical locations where they

take the 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 -- >> how many who work in those erased the tape. the picture in my mind is -- maybe you have it wrong is joe and fred in the basement putting them into a machine and erasing them. how many people we do that? we know it is four locations. how many people do the erasing? >> in this location there were two employees involved in the erasure on a midnight shift so i imagine they are running three shifts per location. >> so six people times four, 24. >> 24-30 people. >> so 24 and if it is five locations, we are talking 30 people, right. so some of the 30 people they are the ones responsible. they got the directive. they knew there was a subpoena. they probably read the

newspaper, they knew this was an issue. back to the question by mr. meadows, are they going to be punished? >> we are continuing an investigation on act of this which is a discrepancy over the way the material is counted. >> because you say they got the directive, those 30 people at the five locations where they got the directive where they weren't supposed to destroy it correct. >> the locations for sure got the directive through the management chain but for me to surmise whether or not each of the locations the people for responsible for erasing tapes i couldn't testify to that. >> in your investigation -- two final questions mr. chairman. in your investigation did anyone from the top levels of the irs mr. koskinen kate duval, did any one of the top levels of the irs talk to those 30 people? >> specifically, not to my knowledge. especially at martin. >> so the 30 people responsible for erasingmmunicated to by the head of the irs. >> yes, that is correct.

>> yes they never talked to the key people not to destroy evidence who destroyed evidence mr. koskinen never talked to them? >> that is correct. >> 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 his senior managers. >> the same people who didn't talk to the 30 key people. and all i'm saying is what mr. koskinen told this committee and the american people, was it a true statement that he made under oath sitting in that chair right there. >> i don't know what he did. >> no we told you what he did. he said i can assure you i'm going to get you all of the information. >> and i believe he went back to

his senior staff and told them to do so. >> and i'm not asking why he said it but i'm asking was what he said truthful? >> i -- i know he didn't talk to the people who destroyed the tapes. i do understand that he told the senior staff to comply with the investigation. >> thank you mr. chairman. >> now recognize the gentleman from maryland. >> thank you very much mr. chairman. we have spent a phenomenal amount of time talking about conservative groups and i'm concerned about them and i'm also concerned about all americans. back on may 23rd, mr. george, 2013, you appeared before the committee and we asked about progressive groups. you said that were going to be reviewing some 600 miles and i'm wondering what have you forbid out about the -- 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 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 -- is being stymied or stalled until the review of the missing e-mails is done because there is a number of overlap in terms of individuals and in addition a lot of the key players involved in that process have since retired or left the irs in the wake up the initial report and review. so we are still committed to doing that. we have started preliminary work on it. >> will that be a part of your report? >> it will be a separate

report -- we're not sure whether it will be an addendum or a stand alone report. because of the missing people under the yellow book standards we might or might not be able to issue a -- an actual audit that would be accepted by the general auditing community so it might have to been an evaluation or an inspection but the bottom line is we are going to look at that issue and determine how the irs treated progressive groups an the like and i'm using that term at large. >> so it has been a year now, over a year, and you say people have left and more people will probably leave. so it doesn't make it any better does it? i mean of the 600 cases you mean you don't have any conclusions for any of those. you said you had 600 files you are looking over? >> yeah. but, 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, unfortunately. >> i want to make sure -- we have spent a phenomenal amount of time talking about conservative groups and i'm concerned, like i said. but what about these other groups? seems like they're getting second-rate review. i'm not knocking you i understand their problems but it seems like it would have been some conclusion about some of them. >> well, keep in mind, too, that our initial review was how political advocacy groups were being treated. >> right. and the vast majority of groups that had inappropriately -- had inappropriate questions and the like delivered to them were found to be groups that were --

leaning not to the left. i'm trying to be very diplomatic how i word this for fear of -- i don't want to use the word targeting in this context. >> i understand. >> it's too early to know what was dope. but the vast majority of the cases in the political advocacy area, the irs was slowing down their application processes asking what we believe were inappropriate question and the like were groups not deemed at least on their face progressive. >> you testified in february that the computer crashed on june 13, 2011 and the next day she sent a contemporaneous e-mail to colleagues confirming that fact. do you recall that? >> i know the current testimony. >> is that right? you further testified that more that two weeks later a briefing

was received on june 29 2011, informing that irs employees in cincinnati were screening applications using the terms such as "tea party" and "9/12" is that right? >> that's my understanding. >> according to your may 20, 2013, when miss learner became aware of these inappropriate search terms she immediately directed the criteria be changed. did anything in your investigation call that conclusion into question, mr. george? >> not to my knowledge, no. keep in mind that practice resumed. but her instructions were not followed. >> so you confirmed that miss learner's computer crashed before your office started any investigations "at the time of miss leonard's computer crash

had taken the applications and protections and status your response was no no it hasn't been begun. do you recall that. >> vaguely. >> and you testified that the office did not begin reviewing the circumstance ss surrounding the lost e-mails until june 15, 2014. do you recall that testimony? >> yes, i do. >> now that the investigation is complete does the time line we discussed hold through? >> as far as our investigation goes it would still hold true. >> mr. camus, did the investigation review any evidence that miss learner saw three years into the future and knew that you would one day investigate the loss of her e-mails. >> the investigation did not show that. >> i yield back.

>> yes fengentlemen, we want to thank you for the work of the inspector general's hospital. good people working hard looking at a lot of paperwork and we appreciate it. we look forward to seeing your final report but pass forward how much we rely on their work as a body as an institution and committee. with that, this committee will stand adjourned.

this weekend on the c-span networks, politics, books, and american history. a road to the white house coverage features nearly all of the presidential candidates and begins in iowa. at 8:00 eastern, we're live on c-span from cedar rapids, iowa for the democratic party hall of fame dinner. all day saturday starting at 11:00 a.m. eastern we're live at the family leadership summit in ames iowa. and sunday evening interviews with two republican presidential candidates, first, south carolina senator lindsey graham and then ohio governor john kasich. on c-span 2's book tv, saturday morning at 11:00 eastern, we're live from new york city for the 17th annual harlem book fair with author, talks and panels on economics, african-american identity and race and politics with historian mel irvin painter, journalist family newkirk and more.

and at 10:00, ann coulter says the greatest issue facing the u.s. is immigration. and saturday afternoon at 1:00 eastern we're live with the warren g. harding symposium from florence harding to michelle obama. speakers include historian ann dunlap and the executive director of the national first ladies' library. at 9:00, the national archives of kansas city shows how the u.s. government used propaganda during world war ii to persuade citizens to join the military buy war bonds and keep national secrets. get our complete schedule at cspan.org. lake secretary thomas perez is our guest on "news makers" this weekend. he'll answer questions about increasing the minimum wage overtime pay family leave and employment numbers. newsmakers is on c-span sunday at 10:00 a.m. and 6:00 p.m.

eastern. early next month, a forum with republican presidential candidates. c-span is partnering with the new hampshire union leader for the voters first forum on monday august 13. all 17 current and likely gop candidates have been invited to participate. the forum is live from st. anselm college in manchester on c-span, c-span radio and cspan.org on monday august 3 at 7:00 p.m. eastern. when congress is in session c-span 3 brings you more of the best access to congress with live coverage of hearings news conferences, and key public affairs events and every weekend it's american his history tv discussions with authors and historians and eyewitness accounts of events that define the nation. c-span 3, coverage of congress and american history tv.

at berkshire community college in lenox, massachusetts senator elizabeth warren delivered this year's commencement address. she told the class of 2015 to fight for what they believe in. [ applause ] thank you. that's so nice. thank you. thank you president kenned thank you trustees thank you faculty and administrators, thank you family and, most of all, thank you class of '15 for having me here. it is good to be here. it's a great honor to join you at tanglewood. i am deeply grateful to stand on the stage and share this very special day with you.

as i stand here, i can just hear the echoes of the boston symphony orchestra playing some of the world's greatest music. i can hear james taylor singing about friendship and love and berkshires. i can see the future, too. in a few weeks lady gaga will walk across this stage -- [ laughter ] -- just like i did. [ laughter ] okay, she will use more explosives and she will have a cooler outfit than i do but you know what i mean. today we celebrate the 55th commencement of the commonwealth's oldest first community college. [ cheers and applause ] this is it. this is where it started. so we start with the word of the day -- congratulations. and i want to offer my congratulations not just to this graduating class but also to your parents and to your kids,

to your families and your friends, to your teachers and advisors and for so many of you, to your employers and your co-workers because i know as well as you do you don't get through college all by yourself. making it to this stage requires the support and understanding and encouragement of people who love you. people who care about you and people who really want to see you succeed. so today we applaud your success and the success of everyone who helped get you here. that's what we do. [ applause ] now, i know that this moment is a time for celebration, a time to taste the success but i want to talk about what you had to master to get here. and no i am not talking about mastering elementary statistics -- although 77.42% of

you did that. i'm not talking about overcoming the long, long, long trek from campus to the fitness center. i'm not even talking about surviving the roughest winter on record. nope, i'm talking about mastering the hard art of making something happen. i'm talking about learning to fight for what you believe in. sometimes it means fighting for yourself and sometimes it means fighting for something bigger than yourself. either way figuring out what you want is the first step and fighting to make it happen is the nest second step. now, president lincoln said "determine the thing that can and shall be done and then we shall find the way." and today we celebrate a graduating class full of people who determined that something

can and shall be done -- your graduation. and then you found the way. you faced down some real challenges. even some tough ones. i have no doubt that along the way there were plenty of people who told you what you couldn't do. plenty of people who said how hard this part would be or how that part would stop you dead in your tracks. is money child care work, plenty of other things to do besides home work plenty of reasons not to enroll again next semester. but you hung in there and you made this day happen. one more time. [ applause ] one more time. you did it. so today you're going to walk across the stage we're going to celebrate reaching your goal. but i hope you'll celebrate even more. the hard work, the determination, the grit that got

you here because those are the ingredients that you'll need to reach the next goal and the one after that and the one after that. is now graduation speakers are supposed to inspire but i know my limits. i can't play music like the bso, i can't sing like james taylor, i cannot put on a fashion display likely a lady gaga. but i can set a goal. and make it happen just like you did. so i'm here to urge you to use the same skills and determination that got you to this day to help you get to a lot more days that are just as meaningful. i once had a day like this. graduation. for me it was a celebration of fighting for what i believed in. the president partly talked about this. i had grown up in a family that had a lot of ups and downs money wise and college wasn't in the cards for me.

nobody in my family made it through college, but i wanted to be a even theeer and i believed that i would be a good teacher and i thought that was a goal worth fighting for. the path was tough i borrowed money, i married young, i dropped out of school, i went back. and finally i got lucky. i got really lucky. we moved to a place that was about 30 miles away from a commuter college where the tuition was $50 a semester. i grabbed that chance and i held on for dear life and i pieced together enough classes, including correspondence courses and i graduated. best of all, i got that job teaching special needs kids in public school. i loved that job. i think i was good at it. but i had a baby on the way and back then there were rules about pregnant teachers so i had to

give it up. but i'd won a big battle. i graduated from college i got a job as a teacher and that made me bolder. each time i fought for something i believed in and won i believed i could do it again. the challenges got bigger, the results got better the twists and turns in my life became more and more unexpected. so i want to fast forward to a fight from a few years ago. by the time of this fight i was a professor just like your teachers and for about 20 years i'd been doing research on what was happening to america's working families. year after year i saw people getting slammed. cheated on credit cards fooled on mortgages, tricked on payday loans, and it got worse and worse. i watched as big banks raked in billions of dollars by trapping people in debt and i wanted as

millions of families lost their homes, lost their paychecks lost their hope. what really burned me deep was that there was plenty of law to stop those banks but the government agencies that were supposed to enforce those laws couldn't be bothered. i wanted to change that. and that's when i had an idea. what if we built a new agency? what if we gathered up all those laws about hort gajs and consumer loans and gave them to one agency and we gave that agency the tools to enforce the laws. a sort of financial cop on the beat for american families and then we held that agency accountable. a you have to cop that was willing to take on wall street and big banks? what would happen then? so i talked to everybody i could about this idea. i went down to washington i talked to folks in congress i talked to policy gurus, think

tanks, newspaper people, anybody i could. and pretty much all of them told me two things -- first one was "that's a good idea. that is actually an idea that could make a difference." and the second thing they told me was "don't do it." now think about that. they gave me a thousand reasons not to do it but the reasons all boiled down to one very painful point -- you can't win. don't do it because you can't win. don't even try because you can't win. you will never get this consumer agency passed into law. they pointed out the biggest banks in the country would hate this idea and they would spend hundreds of millions of dollars to stop it. and they said to me "you're just a teacher you've got nothing, you've got no money no organization, no political

juice. it won't happen so don't even try. now i i heard this but there was something deep inside me that just refused to believe them. they said don't try and what i heard was "try harder." and that's what i did. i jumped in and fought for that little agency because i truly believed it could make a difference. the way i figured it you don't win anything that you don't fight for, so i was ready to fight as hard as i could. the fight was just about what you would expect only worse. the banks hated the idea of a new consumer agency, d'uh. these guys had built whole business models around cheating people and they spent millions and millions of dollars to make sure there was no cop on the beat to stop them. they hired an army of lobbyists and i say that no joke.

as the battle heated up when i went down to washington to fight for this little consumer agencies, those lobbyists thundered through the halls of congress in herds. people like me were pushed against the walls like we were invisible. the biggest most powerful lobbyists in washington thought they could each us for lunch and sometimes when i was pushed up against those walls i thought they might just do it. but i didn't back down and neither did anyone else. we looked for ways to make it happen, writing papers talking with people, organizing groups. this was david taking on goliath. and you know what eventually happened? we won. we actually won. [ applause ] i still can't half believe it when i say the consumer financial protection bureau is

now the law of the united states. that's pretty dam good. [ cheers and applause ] now, before you go home and you say to yourself when this is all over, you say "yikes, i just clapped for the creation of a government agency. i must be turning into a total nerd." let me just remind you about this little agency. it has been up and running for just about four years now and it's already forced the biggest financial institutions in this country to return more than $5 billion directly to people they cheeded. now that's government working for us. that's how it works. so look, i get it, i know that building an agency to keep people from getting cheated on credit cards and mortgages may not be on your bucket list.

it sure wasn't on mine. at least it wasn't on my bucket list until it was on my bucket list and that's really the point. i believe in the good that this little agency can do and so i fought for it even when people told me i couldn't wind. the truth i learned along the way was pretty basic. you can't win what you don't fight for. so i say to each of you, you want to change something? nobody will give it to you you have to fight for it. i wanted to be here today not just to be on the same stage where the boston symphony orchestra, james taylor and lady gaga do their stuff. i wanted to be here because i believe in what you can do. you can do what you fight for what you believe in no mat the odds, no matter who you're up against, if you fight, amazing

things can happen. amazing things will happen. after all, we're here to celebrate your amazing graduation and to think of many more amazing things to come. so thank you all and keep fighting. [ applause ] thank you. tonight on c-span, all five democratic presidential candidates former secretary of state hillary clinton hillary clinton, vermont senator bernie sanders, former maryland governor martin o'malley, former virginia senator jim web and former rhode island senator and governor lincoln chafee. they're at the iowa democratic party's hall of fame dinner cedar rapids. it starts at 8:00 p.m. eastern time live on our companion network c-span.

>> this weekend, the c-span cities tour travels across the country with time warner cable to learn more about the literary life and history of lexington, kentucky. edward prich chert was a state hero who had a tumultuous political career. >> in the mid-1940s, if you asked who is a bright shining star in american politics who's going to be president, people would have said ed pritchard of kentucky. he was one of the people who worked in the white house when he was in his early 20s, seemed destine for great things and came back to kentucky in the mid-1940s was indicted for stuffing a ballot box. so that incredible promise just flamed out.

>> we also visit ashland, the former home of speaker of the house, senator and secretary of state henry clay. >> the mansion at ashland is a unique situation. clay's original home had to be torn down and rebuilt. it fell into disrepair and his son found it could not be saved so he rebuilt on the original foundation. so what we have is a home that is essentially a five-part federal style home as henry clay had with italian details, architectural elements, et cetera, and an added layer of aesthetic details added by henry clay's granddaughter and great granddaughter and so on. >> see all of our programs from lexington, saturday evening at 6:30 eastern and sunday afternoon at 2:00 on american history tv on c-span 3. labor secretary thomas perez is our guest on "news makers" this weekend. he'll answer questions about

increasing the minimum wage, overtime pay family leave and employment numbers. news makers is on c-span sunday at 10:00 a.m. and 6:00 p.m. eastern. the department of veterans affairs says it's facing a $2.6 billion budget shortfall amid growing wait times for veterans to receive medical care. the department's deputy secretary and undersecretary for health testified about the issue before the house veterans affairs committee late last month. >> if i could get everybody to go ahead and take their seats. i want to begin the hearing. we're going to allow a little flexibility for arrival time for members because people are coming back from votes and i

certainly appreciate everybody getting back here as quickly as they can. looks like we may have another vote around 12:00 or shortly thereafter so ms. brown is on her way but we are going to go ahead and start this process. the committee will come to order. i want to thank everybody for coming today to talk about the state of v.a.'s fiscal year 2015 budget. members, i called this hearing two weeks ago following a series of concerning and inconsistent reports from veterans and department of veterans affairs employees around the country about the current state of v.a. funding. and i don't believe anybody was aware then of the troubling extent of v.a.'s current budget crisis except maybe those in the

central office. and unfortunately i suspect that had i not called this hearing we would still not be aware today of the $2.6 billion funding shortfall that the veterans health administration is currently estimating. largely as a result of increased veteran demand for non-v.a. care and rising costs of hepatitis-c treatments that v.a. did not properly plan for or manage. given the extensive pent up demand for care that was exposed on last year's hearings on wait time manipulation, v.a. had ample time to adjust its budgetary needs with the office of management and budget to prevent what we are now seeing today. february through april of this year, secretary mcdonald appeared in four separate budget hearings. since those have concluded the secretary and i have met and

spoken regularly on a number of important emerging issues. at no point in these discussions or hearings has the secretary expressed to me that the department had a budget shortfall of a magnitude of $2.6 billion. one that threatens v.a.'s ability to meet its obligations to the veterans of this country. nor did other v.a. leaders or officials communicate how much in the red v.a. was, either. even though thmittee was informed late last week that the department knew as early as march that there were giant disparities between the amount of money that v.a. was spending and the amount of money that had been budgeted. the only message that congress received in march regarding the state of v.a.'s budget was the quarterly financial report that v.a. submitted to the appropriations committee for the first quarter of fiscal year

2015 which showed that v.a. was actually under plan in terms of its spendout rate. meanwhile, just two weeks ago v.a. proposed a plan that congress authorized at the department's urging to transfer $150 million in fiscal year 2015 funding to support the continued construction of the replacement center in aurora, colorado. v.a. also proposed an across-the-board rescission of just under 1% in fiscal year 2016 funds to devote to the aurora project. a proposal, by the way that the veterans health administration's chief financial officer told committee staff last week that she did not even know about until after it had already been transmitted to congress. now, look i think these actions clearly show that v.a. leaders

believe that moving forward with the denver project, which is not scheduled to open to veteran patients until 2017 at the earliest, is a higher priority to the department than ensuring veterans who need care now are able to access the care. i've come to expect a startling lack of transparency and accountability from v.a. over the last years, but failing to inform congress of a multibillion dollar funding deficit until this late in the fiscal year while continuing to advance what i believe have lower priority needs that further deplete the department's coffers in support of a construction project that benefits no veteran for at least two more years is disturbing on an entirely different level. earlier this week, v.a. issued a fact sheet that claims that v.a. formally requested limited

budget flexibility in february. and in march and in may of this year. and that they plainly articulated v.a.'s need for additional resources. now, buried on page 167 of the second volume of v.a.'s budget submission is a single statement that reads and i quote "in the coming months the administration will submit legislation to reallocate a portion of choice program funding to support essential investments in v.a.'s system priorities." secretary mcdonald repeated this testimony without providing any additional supporting details or justification and to date there has been no legislative proposal that has been submitted by the administration to the congress. in may of 2012 the letter was

sent to the chairman and ranking members of the house and senate veterans affairs committees and appropriation committees regarding the denver project and v.a. stated that the department "requests flexibility to make the choice program work better for veterans through limited authority to use funds from section 802 of the choice act to fund kaur in the community to the extent it exceeds our fy-2015 budget." again, no further information or supporting materials have been pro provided by. if these statements are what v.a. calls formally requesting budget flexibility and plainly articulating the department's needs than i understand why v.a. has, in fact found themselves suffering nothing but string after string of failures since last year once more it proves to

me once more again that v.a.'s current problems reflect a management issue far more than they represent a money issue. this committee cannot help v.a. solve its problems if v.a. refuses to be honest, to be up front and transparent with us and with the american people about the position it is in the struggles that it's facing and the help that it needs. congress has consistently provided by v.a. with the funding that the department has requested and as a result v.a. funding has risen 73% since 2009. while the numbers of veterans using v.a. for care has grown only by about 2%. this comes from v.a.'s own testimony. i know that i speak for every member of this committee when i say that we are committed to ensuring that v.a. has the funding it needs to deliver the world-class health care our

veterans deserve. but v.a. has got to do its part to confront and correct its poor budget planning and poor management issues to hold poor-performing executives accountable and employees accountable and perhaps most importantly to prioritize our veterans' needs over the wants of a bur crocksy. and if the current shortfall shows us anything it's that what our veterans need and what they want is to have a say in and where they get their health care. assuming v.a.'s numbers are true non-v.a. care appointments now make up 20% of all v.a. appointments with veterans receiving more than one million appointments from community providers each month. in the coming weeks i will work with my colleagues on the appropriations committee to try to give the v.a. the flexibility

it's seeking to use a limited amount of choice funds for non-v.a. care and ensure that no veteran suffers as a result of v.a.'s mismanagement of the generous budget the american taxpayers have provided by. however going forward there has to be a dedicated appropriation account to fund non-v.a. care under a single streamlined integrated authority with a dedicated funding stream contained within the v.a.-based budget. rather than the seven desperate ill-executed non-v.a. care programs that are outlined in the testimony. this morning i look forward to discussing the proposal with my friend, the deputy secretary sloan gibson and with the committee members that all share the same concerns and want the same outcomes. i want too thank you all for coming back so quickly, i appreciate the ranking member being here today and i will yield to miss brown for her

opening statement. >> thank you, mr. chairman. today's hearing is on the state of v.a.'s fiscal year 2015 budget. i can tell you all that the state of v.a.'s budget is not strong. the v.a. is facing a shortfall of $2.6 billion for veterans health care. this shortfall must be addressed immediately. we can not put the health and lives of our veterans at risk by spending our time and attention pointing fingers and assigning blame. v.a. will be facing an additional shortfall at the start of the next fiscal year in october. a shortfall that will be made worse by the cost-saving steps that v.a. is taking right now. we must address this upcoming

shortfall. i know that this committee as we have done so many times in the past will work together to solve this crisis and fix this mess and i know that we all recognize that sometimes it takes money to really fix a problem and not just slapping some tape on it and calling it a day. so in the words of deputy secretary gibson, we will get our checkbooks out, but i'm concerned that there may be nothing left in the account as long as we continue to pretend that we can fund the essential requirements of government without arbitrary budget caps. we seem to be hearing -- i'm sorry. we are heading towards a government shutdown. let me say that again. we are headed toward a government shutdown.

and i am concerned over the effects such a shutdown will have on veterans seeking health care. ten years ago we addressed another v.a. shortfall. that shortfall was due to lack of sufficient planning and years of not providing the v.a. the resources that it needed today's shortfall also seems to be caused by the lack of proper planning regarding the demands of veterans for v.a. health care. i am also concerned that inaccurate planning leads to insufficient resources requests. we need to begin to fix these problems. my bill, the department of veterans affairs budget plan and reform act of 2015 passed the house in march 420-0. it's a much-needed reform in how the v.a. plans and budgets for

the future. it is time that our colleagues in the senate pass the bill and send it to the president. if the v.a. is going to be there for our veterans, then we are going to have to fix the problems. this will call for more than us just opening our checkbooks or writing blank checks to the v.a. it will require thoughtful and major reform so that we can ensure that in the years ahead that the away is worthy of our veterans. but today right now we have veterans that need health care and checks we need to write to pay for them and we need to make sure that these checks are not returned because we don't have sufficient funds in the account. then and only then can we start the reform efforts so that v.a. is the model of how we care for

those who have sacrificed for us and honored us with their service. thank you and i yield back the balance of my time mr. chairman. >> i thank the ranking member for her comments and i associate myself with the vast majority of them especially the one where we call on the senate to please move and pass miss brown's budgeting bill. i think we all agree it's the appropriate thing to do. at the same time while i call on the senate to do that, i hope miss brown will join on me to pass the v.a. appropriations bill that is so critical to funding for our veterans so they, in fact, can get the health care they've earned and thank you for your comments, joining us on our first panel is the honorable sloan gibson deputy secretary of the department of veterans affairs, joining him is dr. james schmidt, the interprinciple deputy undersecretary for health, edward murray interim

chief financial officer and gregory giddens, the principal executive director of the office of acquisitions, logistics and construction. thank you for being here with us today. mr. gibson you are not recognized for your opening statement. >> one year ago today 290,000 veterans were waiting for than 30 days for care. that number represented veterans' needs we were unable to meet timely. for the past year improving access to care has been among v.a.'s to be priorities and we've made real progress. come completed seven million more appointments for care than in the previous 12 months doubled the additional capacity required to meet those veterans' needs of a year ago. average weight time for completed appointment, four days for primary care five days for specialty care three days for mental health. scheduled appointments inside

v.a. are up 12%. authorizations for v.a. care in the community up 44%. 97% of appointments inside v.a. are completed within 30 days of the clinically indicated date or the date the veteran requested. we know for many veterans 30 days is far too long to wait so we track shorter time frames. 93% completed within 14 days 88% completed within seven days and 22% of appointments completed on the same day. after hours and weekend appointments are up 12%. we've expanded the use of virtual care secure messaging up 36%, e-consults up 36%. the near list a new enrollee appointment request list down 93%, electronic wait list down 47%. all clear indications of improving access. to achieve this v.a. has been executed a strategy focused on

building capacity through staffing, space, productivity and v.a. community care. highlights. we've grown say are chay staffing by 12,000 since april last year, including a thousand physicians and 2,700 nurses. we activated 0880 new vha areas and 400,000 square feet in v.a.-owned properties. our relative value units, a standard measure of clinical output have increased 10% while our health care budget is up less than 33-%. and 1.5 million veterans have been authorized for care in the community. a 36% increase year over year. clearly we are improving access, providing more care to more veterans. what's the challenge? as we improve access even more veterans are coming to v.a. for their care. as a result, appointments

pending over 30 days are now up 50% from where they were a year ago. consider phoenix. after adding 337 staff, completing 100,000 more appointments and a 91% increase in care in the community, wait times are actually up. why? in the same period of time, the number of veterans in phoenix receiving primary care is up 11%. specialty care up 17% and mental health care up 16%. we also saw it in las vegas where we opened a new facility two years ago. since then the number of veterans receiving care there has jumped 18%. now, as we think about what's going on let's not lose sight of the broader context. we're dealing with an aging veteran population over half of those veterans receiving care at v.a. are over 65. more veterans are filing disability claims for more conditions. the average degree of disability

today is near 50 among veterans receiving disability, the average disability is 50% meaning many more veterans are eligible for health care in v.a. we also know many veterans prefer v.a. health care. the march survey of veterans reports 47% of veterans who were offered choice elected to wait to get their care inside v.a. 78% said they were satisfied with v.a. care experience and 82% would recommend v.a. to a fellow veteran. one more thing that's very important for all of us to keep in mind. most veterans already have a choice. 81% have either medicare medicaid, tricare or some form of private insurance many come to v.a. because of the disparate in out-of-pocket costs between their insurance and v.a. care. for example, the average medicare reimbursement for a

knee replacement is about $25,000. with a co-pay of 20%. choosing v.a. saves veterans $5,000. so as v.a. improves access which we are continuing to do, more veterans are going to come to v.a. because they either want to come or because they have a financial incentive to come. now, as we look inside v.a. what you're seeing is evidence of a sea change in the way we operate. historically and in the past we've managed to a budget number instead of managing to requirements based on veterans needs. as we improve access to see veterans within 30 days veteran response is placing extraordinary demands on resources. would we have managed this transition more effectively? i think we could have and should have. but remember we're running the largest health care organization in the country on a 20-year-old financial management system. we've had a hard time effectively factorying into our predictive analysis market

penetration, changing veteran reliance on v.a. and improving access and the impact that has on veterans' choices. we didn't fully appreciate the challenge associated with changing internal v.a. processes quickly you have no to accommodate the shift to choice. we underestimated the time required for third-party administrators to build provider networks and the resistance many providers would have to join those networks. notwithstanding our best efforts and much help from our vso partners, many veterans don't understand how choice works. the limitations particularly around geographic burden which congress has recently amended made it impossible to use choice in many instances and created additional demand for v.a.'s traditional community kaur programs. and lastly veterans are demonstrating very clearly that their decision cycle timeline for fair far outpaces the federal budget cycle timeline. like wide medical break

throughs don't follow the budget cycle timeline either. hepatitis-c treatment is an example of a new requirement impossible to forecast when our 2015 budget was first proposed. the first of the new generation of drugs to cure hepatitis-c was approved by the fda in fiscal year '14. over a year after we begin the fy-'14/'15 budgeting process. after adding the drugs to our farm lair in april 2014 we realized we would haven't enough money to pay for them in '15. in september we alerted congress to impending shortfall. since then, the fda has approved two more help cp-c drugs, all oral, no side effects, greater rate of cure but expensive. to cure veterans of hep-c in 2016, we moved $697 million from v.a. community care but it wasn't enough. veterans' desire for this

treatment has been extraordinarily strong and simultaneously we built capacity internally to meet veterans' needs quicker than we anticipated we would. in may, to keep hep-c veterans from needlessly waiting, we asked for budget flexibility to use a limited amount of choice program funding. secretary mcdonald raised the flexibility issue in february when he asked to use choice funding to meet the needs of veterans as they arose. the choice program is making a positive difference in the lives of veterans and in every instance if a veteran is eligible for choice we want to use choice rather than any other community care option. i would point out that in february, approximately 5% of choice eligible care in the community was being authorized through choice. by the time you get to the first week in may, that number was 10%. i receive daily updates on our choice penetration for choice eligible care. as of june 19 we were up to 33%

of the authorizations that were choice eligible and i expect that number if continue to climb. but we still need flexibility in the use of choice funds for the balance of '15 and for '16. further, we expect to need congress's help as we consolidate community care channels as the chairman alluded to including fewer program by program restrictions on those channels. existing choice funding can help meet the needs, needs more urgent now than when we first made the request in february. but our investments have paid off. we're providing more care to more veterans, to keep progressing providing veterans greater access to care today we need the flexibility to use as much as $2.5 billion of choice funds that were appropriated for veterans care to pay for veterans community care, exactly what choice is for. and we already anticipate we'll rely heavily on choice in fiscal year '16 to meet veterans' growing need in that fiscally

tight year. for our part, our strategy will remain the is same, productivity and v.a. community care to its maximum capacity. we're going to do the right thing for veterans and be good stewards of taxpayer resources and we'll work to make choice a success. but to succeed we need the flexibility to use funds to meet veterans as those needs arise. we look forward to working collaboratively with this committee and congress and we look forward to your questions. >> can you tell us when you first became aware of the major shortfall of what is now becoming a multibillion dollar shortfall? at what point was that evident to you or the secretary? >> i actually brought with me in

my foildlder from the cfo dated the 16th of march which indicated that based on our financial system we were still showing that we were underobligated. from that time forward, a process launch that covered several months during which millions of individual transactions in the fee-based care system were audited and reconciled in order to be able to determine the magnitude of the shortfall. it's only been within the last three or four weeks we've begun to get clarity around the magnitude of this disconnect. thee issues. one has to do with the push to accelerate access to care, the third is outdated systems and the third fundamental change is the requirement in the choice

act that we pull all of the budgeted funds for care in the community out ofedical centers and consolidate it in the chief business office. those three factors together created this disconnect and lack of clarity around what was going on in the fee-basis care area. >> i was looking at a document that i guess encapsulates the first quarter, which would have been the last quarter of last year that was provided to the appropriators in march i guess of this year and it's showing everything is on track at that point. >> we were still showing everything was underobligated through february. and the questions that i kept asking were how can we be under-obligated when we have a 40% increase in authorizations for care in the community? >> and what was the response? >> and that's what launched the review and reconcilement of the millions of transactions that were sitting out in the fee care

system to determine what had been obligated? >> so you can see why the questions that are going to come from this committee today are absolutely -- >> absolutely right. inexcusable. but find a health care company in the private sector of our order of magnitude operating under a 20-year-old financial management system. you're not going to find that. so part of what we have to do is we have to find work-arounds. we did what congress asked us to do pulled the budget money in. what had historically happened was that care in the community against the budgeted funds got managed in the medical centers while care in the community medical centers were still being made there but the budget dollars were sitting centrally. so you had a fundamental disconnect between these two elements. what we're going to have to do is build a work around. should we have built that will?

yes, should we have asked congress for relief? we should have. we see that clearly with the benefit of hindsight. >> have you requested any specific legislation or changes at this point? or is the central office still working on a detailed request? because, again as i stated in my opening statement, we've gotten very limited questions and statements that say we'd like to get more, is we'd like to reform the choice program but i haven't seen any requests from v.a. yet. >> we've done briefings with staff, we will deliver a very -- very promptly a written request asking for flexibility in the the utilization of choice funds to pay for care in the community for vet rants. >> because if we go down this path -- and it's not a path that i want to go down but it may be the only solution to a problem

that has been coming for a considerable amount of time, is reforms have got to be made and they have to be specific and we want to work with you as we go through that process. >> thank you and we appreciate that. >> thank you. i'm going to ask a question because i want something cleared up. explain the difference to us between the fee-based and the choice. >> the fee-basis care system is a system we use to track individual authorizations for care. that's where we ultimately wind up reconciling back to an invoice and ensuring we receive the clinical information from the individual veterans care. and unless i'm mistaken, i think fee basis care system offers choice. >> we need to be clear what's fee base? can i go to a doctor before we pass choice in the community?

>> there's an authorization pro process veterans would pursue working through their medical center when they're asking to schedule an appointment and if we can't schedule it timely they get referred to the thursdayird-party facilitator or if they're 30 miles from their facility they would call the director directly. >> and choice? >> that is choice. and other -- there are six or seven, it's in the written testimony, six or seven different programs, the chairman alluded to this and i completely and totally agree. we have got to reconcile the six or seven different programs we utilize for choice in the community. it confuses veterans, it confuses our staff, it is confusing to providers. different payment reimbursement rates, different payment mechanisms. different requirements for

authorization, different processes. it's ees's thoroughly confusing. >> i understand that it is. but are the veterans getting the care in the community? >> we're estimating in fiscal year '14 we'll see somewhere in the neighborhood of between 21 million and 23 million appointments for care in the community. that's up from about 16.5 million in 2014 and as i mentioned, there are a report number of veterans who are receiving authorizations for care in the community. 1.5 million over the last 12 months, 36% increase over the prior period. >> is any of that in the mental health area? >> yes, ma'am, it is. >> what percentage? >> it is a -- mental health for us historically has been a relatively smaller percentage of care referred into the community because often times veterans experience issues that are --

that v.a. providers are potentially better positioned and more knowledgeable to be able to respond to. there are is mental health care out there but the vast majority of that care is delivered inside v.a. >> okay. i'm going to yield back my time and i hope we're going to have a second round. >> i think we'll have an opportunity to do that one question real quick, mr. secretary. over the past months we have examined improper procurement practices to pay providers in a timely fashion gross mismanagement of construction projects, we all know about roersz and i'll be yielding to the gentleman from colorado in a second and these are big news stories. this committee has heard many instances of smaller waste fraud and abuse by poor management bureaucrats that appears to be

become the culture within the system and i know you're trying to root it out but one in particular, this is in my state in particular we've discussedparticular in my state, in st. augustine, and how can v.a. continue to justify paying thousands and thousands of dollars in fines and penalties each month to retain a c bock in a facility they knew a long time ago they would have to relocate from that facility. how does that happen? >> it happens when we fail to forecast far enough in advance the need to relocate from an expiring leased facility. and what happens is we wind -- we wait too long and then we start working to define requirements and run through all of the process and we find -- for instance here, i think there were issues associated with site

selection that delayed it. and we wound up in the situation precisely you are describing. we've got i don't know how many hundreds of lease transactions in the pipeline right now that has become a major part of our business. we've under allocated resources to that part of our business and we have to better manage it and stream line the process and developing more standardization in lease design so we can work through the process and the design more expeditiously. >> this is your part of the state. >> it is my part of the state. and we had a briefing on that when you and i were in orlando. and it is not as simple and -- it is more complicated. >> it is complicated. >> the city and the county -- and this is something we need to address. if a city wants to give us some property to relocate we can't just take it. that is something that we today

to address. >> yes ma'am. >> not all apples are the same. >> but the chairman's point is an accurate point and st. augustine is one example. this happens all too often, where we have not made plans far enough in advance to be able to run through all of the process and it's a long process to get to the point where we've got -- we're ready to replace the facility before the lease actually expires. >> and it also happened in tallahassee. so we as a committee need to change the process. >> we're working on it and that is the guy right there principally responsible for fixing it. >> i saw him point you at mr. gidden giddens. >> sir yes, sir. >> i'm going to point at him again. we're going to talk about supply chain and i'll point at him again. >> it is important to change this culture that has been allowed to go on for too long.

mr. lamborn you are recognized. >> thank you and the ranking member for your leadership. secretary gibson i'm glad to see that the v.a. is committed to do what is right for the veterans in the colorado region and completing this major construction project without further delay, unquote, i'm still deeply disturbed by the additional time and money it will take. thanks to recent legislation and a reallocation of funds we are good through the end of the fiscal year but much more remains to be funded. this is a critical facility that our colorado veterans have earned and need and i remain committed along with my colleague representative kaufman and others to make sure we bring this project to completion. however as we are sitting here talking about budget shortfalls and mismanagement, i have to ask, where is the accountability? when we have poor management, whether it is forecasting the budget, or whether it is poor construction projects, where is the accountability?

we've given you additional legislative authorization, you and the secretary, and we really don't see that being used. where is the accountability, mr. gibson? >> if you look back, as i have, at the entire chain of command from the secretary down to the project engineer i believe there is only one person that was substantively involved in the project who still remains at v.a. and i think that is the project -- not project engineer, but project executive. there has been an aib in the process of wrapping up. i think we talked earlier in this committee about early evidence that was gathered by that aib which was being used to prepare charges against a senior executive who then retired in the face of that impending personnel action. a similar process happened recently with a senior attorney that was involved very heavily in denver and i expect the aib to wrap up very quickly and

we'll consider the evidence raised by the aib for any additional individuals that are in -- still on the payroll in the department. >> okay, thank you. and also secretary gibson you have asked for additional flexibility in allocating your funds but haven't provided what i believe is the supporting data needed for that. more importantly, i want to ensure there isn't the impression that the v.a. has decided to fund the denver hospital project ahead of hepatitis c treatment or any other veteran medical care. that won't be the case, will it and can you clarify? >> certainly there is not any intention to trade off hep c care for denver. we've gone through a series of proposals on denver starting with what i continue to believe was the best proposal for veterans and taxpayers which was to utilize nonrecurring maintenance and minor construction provided as part of

the $5 billion under choice. that got nowhere. there were other alternatives considered where we would reprogram dollars from major construction projects projects that aren't due to start construction for three years or four years, that got nowhere. we've looked at alternatives to reduce -- to move proposed funds into 2016 from nonrecurring maintenance and minor construction, that got nowhere. and so what we finally got to is the tactic of an across the board cut with an in tension that v.a. would have the time over the course of the year to be able to manage those reductions on a very micro level. so that we ensure that we are not adversely impacting veteran care. >> well i want to speak for myself and i'm sure every member of the committee would agree we can't do anything, any fix that

compromised veteran's healthcare. thank you for being here and chairman i yield back. >> mr. takata you are recognized. >> thank you secretary for your acknowledgment that things could have been better planned out and better management. when you talk about this financial management system, are you talking about the administration or outdated software, what are you referring to? >> we have like companies in the private sector we have a major technology system, i.t. software system that we use to account for all of the financial activity of the department. i recently interviewed a candidate to come in and head i.t. who was astounded to learn that we were still using it because he had -- helped develop it back when he was a beginning software engineer in -- 30 years ago. >> so we're talking about i.t. >> yes, we are. >> and i know there are problems

engaging nonv.a. providers and the v.a. has an obligation to manage accountability for the providers and there is a lack to use electronic medical records with this system is we definitely need to look at investing in upgrading that system. i understand a large part of the shortfall comes from increased payments for fee based care or contracts with nonv.a. providers and when you say community care in the community, you mean nonv.a. providers. >> that is exactly what i mean. >> do you have an estimate of how much of that care could have been provided through the choice program but wasn't. in other words how many could call for choice but received care by another means because of a slow rollout of the choice program. if you don't have that number you can get it to me later. >> let me take that for follow-up. but i will tell you, it is not 100%. because we can't use choice dollars for long-term care.

we can't effectively use it for dentistry because you can't find many medicare approved dentists out there. we can't use it for obstetrics because there aren't many obstetricians that are medicare providers but it is a very substantial amount that could have been channeled to choice. >> so a big chunk of this money we're talking about -- >> yes. >> -- could have been used for choice and could have qualified them. >> yes. >> and you are saying there are all sort of different reimbursement rates out there for the different kinds of nonv.a. care. my next question was of the remainder of the folks that would not have qualified, how much of that could you quantify in terms of how much of that was attributable to a lack of capacity at the v.a. that were not fully staffed up at the v.a.? if you are fully staffed up could we have taken care of more people who would not have qualified for the choice act?

>> i think the short answer is yes, if we were fully staffed up if we had all of the facilities we feed, yes, we could have. but there are instances for example, we've relied and come to rely heavy for example, on state nursing homes to care for veterans. and that winds up being -- i'm going to say a billion and a half round numbers ed. >> that is close. it is a billion and one. >> and that is a substantial amount we've come on to rely for outside providers for that. >> i want to turn to hepatitis c. i'm sorry to hear about the lack of funds to provide temperature for veterans with hepatitis c. more than 180,000 veterans are infected and these men and women served their country and should not be denied access to a cure and i commend the v.a. has done to treat