-- they use i would have to check. >> i would like to hear back from the department on that because it makes me concerned that those who have an interest at the end of the day are given the information to make a determination, it raises the question of the fox guarding the chicken coop. if we are going to have transparency and greater confidence in our financial institutions, we want to have that across the spectrum. >> we do our own economic assumption and compare them to the blue chips, the cbo economic assumption. the general practice is we do our own economic projections and see where they hit on the spectrum of others. if there is an outlier estimates >> our dislike to call your attention to two things.

senator boxer and my responsible homeowner refinancing act, we think it will help millions of families and we hope this will be an advocacy point because the bill is only open for so long as interest rates remain historically low. as well, the whole question of our efforts, which i have mentioned to you before, on making sure that we unlock the potential that the administration has also acknowledged. those are things that will not cost the federal government money at the end of the day, and have a good -- the potential to help boost the economy. >> i have to strongly agree that opening opportunity refinancing to more homeowners who are creditworthy is an urgent matter. the window will not remain open forever. we don't know exactly when interest rates will go up but

you know that over time, interest rates will go up. if middle-class working americans are either under water or have lost some of the value in their home because of the financial crisis, while they are still creditworthy, they are not able to refinance at lower interest rates. it would be hugely important to the economy in terms of promoting economic growth. it is something we believe legislation like yours would help fix and we would very much like to work with you to get that done. >> thank you for being here today. i may surprise you but i will mostly stick to the subject at hand. i want to say on the irish

the -- the irs issue, my understanding when the fbi comes to a company accused of corrupt practices, a lot of times they will go to the top, even though they may not have known specifically the activities. in essence, engaged them because of the culture they have created there, and therefore hold him culpable for some of the levels levels. i want to say the indignation that you showed on the front end, to a degree, is kind of laughable, in that when you have the president of the united states and the vice-president and other leading folks in our administration using the type of language to describe the folks that were targeted -- demonizing, vulcanizing, i think you would expect that bureaucrats at lower levels are going to act in the way that they acted. it is reprehensible what happened, but it will be interesting to see as this goes

about where this culture really came from. i know you have not been there long, but i do think that that demonizing and the type of language that was used probably calls these bureaucrats to feel empowered to go and do the things they did, which offends all our sensibility, including yours, as you stated on the front end. >> i have to say the president's reaction to this was exactly the same as mine. he was outraged. he had taken no steps ever to condone this kind of thing. the issue we are dealing with is whether or not the irs engaged in an unacceptable behavior in screening applications. we are not discussing the merits of the organization. that is a separate issue. it is irrelevant.

>> i could not agree more, but i think when people, just like in a corporation, when they hear the ceo saying things that affect people on down lower levels, that is typically what happens in the case against the company. i am not trying to implicate. i am just saying people should not be surprised that bureaucrats at lower levels took it upon themselves to do what they did when at the highest level, people were being demonized and novelized in the way they work. i wrote a letter on march 12 and ask about section 121. i have not received a response. the question is, do you believe it has the ability to break a

company that is help the but one that they believe could pause systemic risk because of the kind of activities or the size that they are? have not received a response and i am wondering if you might do so. >> i have not seen the letter, i apologize. the authorities are to coordinate the activities of the different agencies that make up the membership of the council. there are some limited areas where they are starting to take action. i am happy to look at your letter. >> one of the thing is title 2 and dodd-frank talked about was i think most of us thought that when a company fails they were going to be liquidated. i have had a lot of conversations about this. the fdic realizes these

organizations are so complex they really cannot orderly liquidation. they have decided you cannot orderly liquidate them. they have come up with a single point of entry. basically you attack that shareholders and creditors rightfully. one of the things we have been pursuing is making sure that there's enough long-term credit held at a holding company. we have not received a response, but i think -- i would love to hear your thoughts on that. obviously with people going to do is not at the holding company level. i just wonder if you address that issue. >> the owner of the liquidation authority that the single point of entry proves our ability to manage any future crises are problems that develop. i totally agree that there has to be adequate capital available in order for that to work. in general, raising capital

standards has been a big part of the activity in a last couple of years. it is a combination of things, if you combine looking at capital, what the content of investment activities are, how much leverage there is. but the creation of a single poing of entry will only work if there is the ability to attack the assets that are in the equity and credit. >> i know that right now this is not your most expert area, if you will, but you would agree, generally speaking, that we need to have a certain amount of capital at the holding company level. otherwise the single point of entry will not be useful. >> there needs to be sufficient capital at the point when there is a liquidation in order for the process to work. how it gets there and how it is maintained is something they are working through right now.

>> but just one more question. i know that some other people have gone over slightly. i was a little disappointed by the meeting about trying to make our financial regulations work a little better. the community banks around our country are dealing with basel 3. it is very complex. there has been some discussion about a minimum capital ratio for our community banks. i know it is a big issue to them and could make them far more secure if we just had a simpler capital ratio. i think many of us would like to see them raised even at other levels. is that something you would consider doing? allowing them to have a simplified capital ratio that would be better for them to operate under and generally better for our country. >> i have met with representatives of the small and medium-sized banks. i have looked into their

concerns as many members of the committee have, and i share the concerns of the regulators to have the direct responsibility to take action in that area. they are looking for ways to make appropriate distinctions and i have small institutions that are not averse to risk be treated as we did the same as large institutions? history did not begin in 2008. we had a financial crisis in the 1980's which was the savings and loans. all the regulators have to make sure they are looking ahead and taking provincial steps to address all the potential sources of systemic risk. there is not a one-size-fits-all approach. there are many provisions that reflect the differences between large and small institutions. i have shared my concern with

the regulators. i have heard that they share those concerns and i think we have to leave them alone of time to complete the process. >> i want to make a couple of comments on the remarks just a second ago from center court. our legislation addresses a lot of that. it's set capital standards that 15%. it told us out of basel 3, so it deals with a lot of those issues. the report cites what we recall the too big to fail banks. it cites risk-taking as a threat to the economy. some institutions receive special treatment by virtue of

their size. you acknowledge after confirmation hearing that this perception gives the medivacs of funding in dance at the capital markets. that is pretty clear. and reinforce that that our legislation will in fact eliminate the to be to fail funding advantage they get. dodd-frank requires fsoc to make recommendations to promote market discipline. my question is, why has fsoc failed to meet this requirement? >> i think that a number of the issues that are raised in your

legislation are issues that the regulators are working on right now. the capital standards have not been finally set. basel 3 is a floor, not a ceiling. there are number of regulatory approaches that would considerably raise the cost of being a large bank. i think we have to see where that process ens in order to be able to answer the question whether we have fully solve the problem. it is certainly the objective to be able to say at the end that we have ended to be to fail and that we have eliminated any -- the fact that the market applies a subsidy, we have said that to be to fail is not our policy is a bit of a challenge.

we demonstrated with the rules would put in place that make it costly to be a large bank in terms of the requirements that are put in place. the one issue out like to take issue with is replacing basel 3. for a lot of the world, it becomes an aspirational goal. we are trying to encourage the world to race to the top, not the bottom. basel 3 is working in a lot of other countries. when we look at the sources of financial risk, one of the things we worry about is the risk that is presented to the united states from undercapitalized institutions around the world. we have to get a balance in the approach, and we look forward to working together. >> you are a sophisticated guy to make that statement that if we back out, 15% four large

banks, when britain is doing what it is doing. you said something else, that the market implies that to be to fail may still be around. it is what the markets think that matters. the markets continue to say that too big to fail is alive and well. a recent report said the u.s. treasury has avoided publicly weighing in on this debate. this is more of a summary statement than a question. the perception is still there. you are a sophisticated guy. you've seen what happens when one of the leading bank

lobbyists, after the legislation was signed, said this is halftime, and then put an even larger, more powerful legion of lobbyists on ways that we could could -- ways to weaken these standards and at the same time, basel 3 may be better than now but what is it done with risk assessment of all, you know it is not going to be very strong capital standards. it is minimal compared to what the market that we should do. and this hope he takes his legal responsibility to promote market discipline. >> i want to emphasize the things we are agreeing on. if you look at the statements made by many of the regulators, what i am saying is consistent with statements made by the fed governor tarrullo, for example. as the final rules are put in place, we need to set adequate capital standards and put other

requirements in place that meet our standards, so that we can fulfill the obligation of ending too big to fail. i totally agree with that. the market is assuming partly a political judgment that the government would jump in again if there's a problem. our job is to make sure there is that the enough layer of capital and there is no need to even get to that point. we are committed to making that happen. >> but the market understands what basel 3 is about. the market assumes it will go into effect, likely. the market still possess -- bloomberg says $83 billion. lots of other analysts have said 70, 80, 90 basis points advantage. we are seeing an incredible concentration, $2 trillion among

the largest banks increase in assets. it does not matter what we think, it matters what the market see. their worst nightmares may be realized if we do not act on this. >> the only thing i would respond by saying is that we are not yet completed in the process. we should make more progress this year. we need to make substantially more progress is year. when all the rules are completed, can i sit here and say we have made progress? >> the market has seen how long has taken to implement these rules. >> thank you for being here. could you repeat the time line that you explained to mr. shelby about when you had knowledge of the irs issues? >> i have one conversation with

the inspector general on march 15. it was a session that was one of many meetings i had to meet with senior officials at the department soon after becoming secretary. i then saw the results of the report when they became public. >> were you curious enough to ask when you talk to the inspector general about what the impact may have been? >> what i said to the inspector general was to have my full support. i am going to take action to fix any problems you may find. >> what was it specifically that caught your attention? >> it was a very brief conversation in this matter. noting there was an audit underway, suggesting there might be trouble in finding, and that was it. the i.g. process is one where the head of an agency ought not to be getting in between inspector generals and their work.

>> i disagree -- i have been through a number of audits in my political career with government agencies. you always have preliminary findings. you sit down and talk to them before they issue that final report. i am just surprised that you had no additional questions that they were troubled by. >> i think there is a well established practice at the treasury department of not bringing audit findings to the secretary until they are final. audit findings change frequently and direction and degree. they are not actionable. i have said to every auditor i have ever worked with, you need to complete your work. if there is a problem, you have my commitment of support, and we will fix anything you find. the individual you are describing is not working in the

area that is at issue. chronology matters, and at the time she was assigned to work on the implementation of the affordable care act. she was actually not working on this, to the best of my knowledge. any individual who is responsible will be held accountable when she testified in 2011 that she was the commissioner of the tax-exempt all this was going on. she has testified over the last couple of years that she was the commissioner of this. name some employees. will she be held accountable? >> what i have said is our policy, anyone whose actions are

such they should be held accountable will be held accountable. there will be a new acting commissioner as of tomorrow. his first order of business is to make factual determination of who should be held accountable. >> this is all about financial security. they have probably spent more time around a kitchen table discussing their finances than any single issue. you can imagine the kitchen table talks going on. there is not an agency in the united states that has more control or more input on your ability to win or lose. i just did a town hall meeting recently, last week. we asked a question about hiring 16,000 new irs agents.

the adjectives in this town hall meeting were that the irs is biased, corrupt, politicized and eager to attack white house adversaries. when you ask them question, should we hire 16,000 new irs agents, 61% said absolutely not. if you cannot trust them with your own taxes, if every business man comes up to me that is audited and wonders if the irs is doing it for political reasons, that is a difficult question for me to answer. >> i have said and the president has said that the actions here were unacceptable. there's nothing in the inspector general's report that suggested anyway there's any political

pressure brought to bear. these actions were unacceptable and have to be corrected. they cannot be allowed to happen. we have to restore confidence in the irs. there are a lot of investigations going on right now. there are many committees, the justice department is looking at it and we have a new acting commissioner who will come in and do a top to bottom review, beginning tomorrow. >> thank you, mr. chairman. >> with the question was asked about the irs, you replied more or less. i believe in this and all matters that no one is above the law. as you said that, i was thinking

about the situation with hsbc where for ten years they laundered money repeatedly, they were devised to stop doing it. it was related to countries where we have basically embargoes because of their policies to acquire nuclear weapons. these were terrorist organizations which put at risk our men and women around the world and companies around world. these were drug organizations in northern mexico and thousands have died from most drug operations. this money laundering took place continuously after multiple efforts to stop it. when you think about your statement that no one should be above the law and you look at what hsbc did, are you deeply disturbed that this prosecution free zone has been created?

>> there were civil penalties that the treasury department was responsible for. >> these were criminal activities. >> it is not my responsibility as treasury secretary to make decisions on criminal matters. i can tell you my view is that no one is above the law. where there is criminal wrongdoing, investigations are appropriate and prosecutions are corporate. i cannot speak to the prosecutorial decisions that were made. i was not in the treasury at the time. it is also not in my area of responsibility. >> is it your sense that when a major organization is engaged in long standing money laundering, which they have admitted to, and they are given a free pass on criminal persecution, that draws into question whether or not there are organizations that are above the law.

what does that convey to ordinary americans? >> i have testified on a number of occasions. my point of view is, no one is above the law. >> i would encourage you to weigh in, because your world is a world involving large financial institutions, so there is an overlap between your role in this regard. i want to turn to the ig report. senator menendez noted that we have this unusual situation for the statute of the law says that donations will be used exclusively for charitable activities. but the irs regulation says, and this is the most bizarre thing i have encountered in public life,

that the word exclusively means primarily. how is it acceptable that an irs regulation completely ignores and overturns the 100% standard set in the law? >> as i responded to senator menendez, this is one of the issues coming out of this matter that is going to have to be reviewed. it is something we would look forward to working with congress on as we look at it. this is a very controversial area. >> let me be clear, congress has already written law and essays exclusively it is the irs regulation. >> i understand. i am saying that the process of reviewing the policy will begin immediately, and we will consult

as we go. >> it has been noted by many that we have a political organization under the law called 527. we have another charitable organization, but in that case the irs regulation has created enormous confusion about what can be done. half your activity can be non charitable activity, contrary to the clear language of the law. that confusion has become an enormous problem. is it not important to end the confusion and make the regulation consistent with the law, for the benefit of all concerned? >> there is no doubt there is confusion in this area, and something we are now beginning to look at. i will be in a position to respond after there is a review. >> senator cook.

>> my staff has put together a chart showing the effect of the kirk-menendez amendment. i don't think i have ever seen action by the u.s. senate that has been so effective against a rogue nation. this shows the value of the iranian currency, which is called the rial, against the dollar. a 74% drop since december 1, 2011. i would like to add on that we have a next step review to follow an initiative to restrict access to iranian euro

denominated accounts, which would cost the iranians about $30 billion. i would hope you could help the senate move on to it that next step which is to adopt the legislation. we already have 21 senators and several members of this committee on this legislation. if you look at what has happened to the rial, you will see that iran has lost 50% of their oil purchasing power. we have significantly impacted the purchasing power parity in iran. >> we have discussed this on a number of occasions and i agree with you that our sanctions policy and the implementation on a unilateral and multilateral basis has had an enormous impact on the economy of iran and is making life very hard in iran. >> i was going to say that i

haven't raised the issue of access to bureau denominated accounts with me of my counterparts and finance ministers in europe. after you and i talked about this and i brought that to their attention, it actually heightened level of awareness of the issue. the law is a strong law, and i think we have asked them to get that into place where it is working better. >> very much we back our dutch allies on this eu initiative. >> i am not familiar with the dutch initiative you are describing but i will look into it. >> it is a pleasure to have you here. i want to ask a question on the housing finance system.

in your testimony, you made reference to the housing finance system. much attention has been paid in recent months to the question of how to return to private capital to lead the market. i hear that all the time. and how to resolve the conservatorship of fannie mae and freddie mac. just last week, two senators held a hearing on this topic. can you talk about the recommendation for how to phase in to return to private capital to the housing market? >> this is obviously an area where there is considerable need for action. we have identified it as an area that requires attention. it is obviously not a place where they can put a specific plan out there. the administration has laid out the broad principles in this area and we look forward to working on a bipartisan basis as we go forward with that.

i think the issue of winding down the conservatorship is going to take a while. we are making progress and are determined that we will get taxpayers much of their money back as we possibly can for having bailed out fannie and freddie. it will take a while but we are making considerable progress there. we are looking at a housing finance sector which is dominated by government issued or guaranteed mortgages. we need to give private capital back into the market. we need to finalize the rules in the qualified mortgage area. i have heard from a number of bankers that we want to be in the space. we are willing to do our part, but we have to know how much is going to cost us, what the risk and capital requirements will be. going forward we do need to move ahead on the next debt.

there are some big policy issues we will have to grapple with and we will continue to work on that going forward. >> on the bailout, do you have a figure as to how much the public has spent? >> i can get back to you with the exact number. >> and then on the rulemaking, it still needs to be completed. what sort of rule making -- what else needs to be done to start the process, and do you have any sort timeframe? this has been going on for quite awhile. >> obviously i have been secretary for just under three months.

i've made it a matter of enormous priority for me personally, driving this process. we also have to look to what was going on the first two years of dodd-frank. there was an enormous effort to repeal dodd-frank. there was an effort to put every delay in the way of implementing the rules that you could imagine. since november, that has changed. what i am hearing now is the desire to settle down. there is acceptancy that dodd- frank is a lot of land and is not going anywhere. i have gone to all the regulators and said this is more than just a question of implementing dodd-frank. it is a question of respect in the government's ability to implement the policy it said it was going to implement. i want to keep this at the top of all the agencies. i don't have the ability to direct specific actions in every case. i will use every tool that i have to get decisions made in

these areas. >> thank you, mr. chairman. >> thank you for coming in to the job have been put into at a most appropriate time. a lot of the questions have been asked but i want to talk about the whole premise of what is going on with the american people. the government should be your ally, your partner. the government has become the adversary relationship and is basically not your friend anymore. the irs has always been the elephant in the room, if you will. i have individuals who believe they have been targeted. that thought it was just a pervasive attitude that the

institution has gotten so large. i guess in saying that, and i am not talking about just the irs, but government in general. anybody in any agency that would use for their own personal agenda or a political agenda against a class of people or an individual, should not be -- they should be losing their jobs, losing the benefits they accrue, and may be facing jail time. >> i have tried to stake in the clearest terms of possibly can tell unacceptable is for this behavior to have happened. i have spent most of my career in public service. i hold myself and everyone i work with to a very high standard. there's no place for bias in the implementation of our tax laws or our other laws.

we have to be implemented fairly and equally. i would be reluctant to go beyond the facts in front of us now and assume any broader issue. i think it is a bad enough set of facts that we are looking at that we need to understand them, take the actions to fix them. look at the irs and make sure that if there are problems, we fix them. i would be reluctant to accept the notion that this is a pervasive problem, unless presented with fax to that effect. we have to be vigilant and make sure we are a government of laws, observing standards of neutrality in the way we implement the laws, and fairness. that is what i believe and have always tried to do. >> with your leadership, i know the citizens of west virginia

would be very appreciative of that. in the late 1980's and early 1990's, we investigated indeed the savings-and-loan crisis may not have been as big as the one in 2008, but across the federal government millions of dollars. we investigated u.s. senators. as people are looking back now they're looking at why it has gotten so big. are they getting so large that they are a protected class or species? >> i have indicated today and on a previous occasion that i do not believe anyone is above the law. there should not be an acceptance of that principle.

>> if a bank gets that big, should it not be the ultimate recommendation that we should not let them to decide peer in that position? >> i think there's a question of how we make sure we have ended too big to fail. one is to say there's a certain limit or divide up what can take place. you use the tools we have in dodd-frank to make it more expensive to be big and it becomes a market determination. >> and working with a the capital requirements would be something -- >> i think we ought to see where the rules end up when it is fully implemented to see if it solves the problem. >> you can understand the citizens' concerns to get capital back on the street.

they're the people who benefited the most from the turn of the economy. >> in the aftermath of the crisis, they took a bold action in passing powerful tools and we are now determined -- >> i appreciate your explanation, but i'm wondering why it's taking so long to get this implemented. this toxic atmosphere we live in every day as part of that reason and i hope it stops. >> senator. >> mr. chairman and ranking member crapo, thank you. i'd just want to add that i will hold them all in my prayers in oklahoma.

it is a terrible catastrophe. thank you for mentioning it publicly. thank you for being here, secretary lew. i want to talk about a different brown amendment. you may remember senator brown joined with senator kaufman during the dodd-frank debate to introduce an amendment that would have broken up the country's largest banks. the amendment had bipartisan support behind it, but it did not pass and we all know what has happened since then. the four biggest banks considered too big to fail before the crisis are now 30% larger than they were just five years ago. the libor scandal, the infamous london whale, the fourth quarter foreclosure fraud. attorney-general holder -- said

they could not do this without factoring in potential systemic fallout. there are parts of dodd-frank there to address the problem, even federal reserve chairman bernanke says it is not yet over. i know you're elsewhere during the dodd-frank debate, but i like to read you something from a "new yorker" article on what a senior treasury official said about the brown-kaufman and too big to fail amendment. "if we, the treasury department, would have been for it it would have happened. but we were not, so it didn't."

the opposition of the treasury is an important reason that my colleague, senator brown's amendment did not pass. are you still opposed to capping the size? >> i have tried to indicate that ending too big to fail is in our policy already today. >> at the question is specifically about capping the size of the largest financial institutions. it was the treasury opposition that killed off breaking up the big banks and i want to note the treasury has changed its position. >> as you noted, i was not in the treasury at the time.

we are in a path now which of the right path, to implement dodd-frank and take stock when we're done implementing. there are a lot of calls of legislation in this area and i have said things to people who won various kinds of changes. this is not the time to be enacting big changes to dodd- frank or to the regulatory system. >> the question is, secretary lew, we all set back in 2008- 2009, the problems that caused this was concentration in the banking industry and more concentration. we are seeing some roles in dodd-frank of was trying to

it. let me phrase this a different way. how big to the biggest banks have to get before reconsider breaking them up? they are 30% bigger than they were five years ago. do they need to double in size triple in size, quadruple in size? >> senator, many changes that have taken effect since the passage of of dodd-frank, we have better capitalized banks, better visibility, derivatives traded in a way where we can see what is going on, there were many things that contributed to the financial crisis and we're making good progress. have we taken the measures and to account for systemic risk to not be the issue that it was? is not the only factor. >> yes, but it's one that is

growing. >> of the look what happened from 2008 until now, there were other institutions who failed that needed to be reorganized and it wasn't unusual time when we were ironically seeing a shrinking in the number of players because of the failures of the institutions. i'm not trying to avoid addressing too big to fail. and trying to address that it is an unacceptable policy. we need to take a look at all the policies that lead up to systemic risk. >> secretary, i really think the evidence suggests that the

concentration as one of those factors. when we see the largest financial institutions getting bigger and bigger, it tells us that we are not clearly on the path. >> in fairness, we have not seen the capital surcharges that will be fully in effect. >> we have seen one scandal after another in these larger financial institutions. it is clear that have not changed their risk practices nor have they decided they will suddenly start changing the law. at best, we have evidence going both ways. i apologize, mr. chairman, for running over in this exchange. >> mr. secretary, the ranking member and i have a brief follow-up question.

the fsoc report highlights the growing securities threat to the financial sector including the recent attacks. what can fsoc do to make sure that they remain vigilant telling guarding against threats? >> cybersecurity is a major threat and it will be with us going forward. there are bad forces out there always tried to get a step ahead of any protections that are put into place. the first thing we have to do is to make sure we have the kind of coordination where the threats are well understood and communicated, where there is collaboration with the industry and with the regulators and the industry. my first weeks l.a. office, i wanted to make it clear that we needed them to step forward to be a part of that process.

the feeling that the executive orders that the president issued last year, he got about as far as we could go with administrative authority to put forward the tools to deal with this. it would be very helpful to get legislation to make it even more likely that firms would do the kind of cooperative work that is needed to be as vigilant as we can possibly be. one thing i'm particularly concerned about as large institutions have the capacity to do more on their own than smaller institutions do. i think we have to be very concerned that the risks are not just to the big money-center banks. they are much broader than that

and they're faced by institutions in the kind of collaboration and cooperation we're talking about how the full capacity to respond should there be a threat. we're going have to remain committed and vigilant using all the tools that we have both to detectives and to look at these issues and it will take real cooperation between financial- services and government officials. >> senator crapo. >> thank you, mr. chairman. mr. secretary, two questions to follow up on. one on the irs and one on fsoc. you indicated that the inspector general's finding indicated that there was not a political motivation to irs activity. >> no political pressure was brought to bear. >> i had to step out for a few moments to go down to the finance committee and i had an opportunity to ask some questions of the inspector general and a few very important things came out. he made it clear that the report does not make a finding that there was no political pressure or political motivation.

it was that they were not able to find it. i asked what they looked into. they said they asked irs employees who they interrogated, were interviewed, whether they had a political motivation. none of them admitted to having such. i asked them if they were under oath. they had taken no informational testimony under oath and it was his opinion that he thought further investigation was necessary. it seems to me at this point, what we have is a coalition of targeting certain politically group to individuals or organizations. as i said earlier, we have an agency perceived by many in america to be the prosecutor, judge, jury, and executioner in major parts of their lives were setting up the criteria to look at those who are set up in the tea party, who use the words,

tea party, make america better, or criticize how the country runs and later expanding the search with a bolo list for those who want to educate our constitution and the bill of rights, those focused on addressing social economic reform in the united states. the question i have to you is are you, or is the irs, taking the position that somehow this coalition of audits that focus on people from these political perspectives just happened accidentally or statistically came about in a way that was not driven by a decision that was aimed at this particular political philosophy? >> i am aware of no evidence that suggests any political

interference in any way. there is a sharp wall between the treasury department and the irs it is a welcome a well-respected line and no evidence has been brought to bear. i read the report. it said there was no evidence of any political pressure. people can ask questions and i'm not discouraging asking those questions, but there is no evidence and we should be clear. >> the extent of the evidence is interviewing those who were implementing the lists and asking them if they were politically motivated? >> anyone accountable should be held accountable, but there has to be evidence to hold them accountable. >> you believe the lack of evidence means there is no political -- >> senator, i will not speculate on fact i cannot see. >> one quick question, secretary, on fsoc. you said you thought there was a lot a progress being made on

resolving cross border issues. in april, he received a letter from nine foreign ministers. >> i have spoken with many of them about it. i think the letter was ill informed and there were conversations going on between the sec and cftc making progress and i will might speculate whether reasons that other political officials write letters and i did say to them quite directly that it was not a helpful way to promote conversations to the independent regulatory agencies to write a letter like that that did not even reflect a state of affairs. i would not read too much into that letter. they are not finished yet, but have been working quite effectively to try to deal with this and i think the letter was something that did not reflect where the situation was out the time.

>> thank you, mr. chairman, for the extra time. >> secretary, thank you for your testimony today and your continued focus on matters important to the financial system. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> today, more about the

investigation into the iris targeting conservative groups. targeting' conservative groups. former irs commissioner. we will be live at nine: 30 a.m. eastern on c-span33. >> of all of your experience is that boston college, none is more meaningful than the education you have received here. ec, education is transracial. it literally changes lives. hardis why people work so to become educated. that is why education has always been a piece of the american dream. arbitrary divisions of race, class, culture, and it blocks every person's god-given potential.

as john f. kennedy said, not all the that equaled talent but we should all of the opportunity to develop our talent. >> commencement speeches from leaders of the politics, arts, education, and the sciences. in the next two weekends, you will hear stories and advice for a new graduating class, friday at 8:00 and saturday 8:30 p.m. eastern. >> up next on c-span, "washington journal" takes your calls, e-mails, tweets. at 10:00 eastern, the u.s. house starts today. in 45 minutes, the investigation into the iris targeting of conservative groups with representative mark meadows of north carolina. at 8:30 eastern, susan casey- lefkowitz of the natural resources defense council talks about the keystone oil pipeline.

and our spot line on magazines features nick summers of "bloomberg businessweek." >> for all of those who >> for all those who of been affected, we realize you have a long road ahead. enormous grief has to be absorbent, but you will not travel that passed alone. -- enormous grief has to be absorbed. host: president obama pledging support for oklahoma in the wake of the deadly tornado on monday. at least 24 people including nine children were killed. the medical examiner's office says the number was reduced from yesterday after officials said some of the dead were counted twice. clients