questions i would like to ask. and nuclear security enterprise under the construct it is currently taxable or do we need to move in a totally new direction? if it is fixable, where would you start? if not, what would you do? >> under the current structure, it is clear it does not work. it is very difficult to fix. is somethingpoint the committee is very much involved in and trying to decide . the list of options is not great. again i think organizational changes are needed. it is the lesser fix in the sense of the cultural reform is

a far greater priority. even with the organizational boxes come if you do not fix the cultural problem, those organizational shifts will be meaningless. you have to really address some of these cultural issues. that is the secretaries challenge. >> that made you have to incentivize and have people have a positive solution oriented to start over. that is a very daunting prospect and that is when it comes to. couple ofn to a specific questions. president obama made clear in his speech and identify that priority of strengthening

operation and making progress on nuclear arms control and sustaining a strong deterrent. is a load the president above the nsa level. mind, part of the government appointed at, there is that capability. the capability will need strong backing. there is always resistance to change. think there are some cases that would question whether we have got people on the job that are up to it. there are a lot of people who are very good. this is a case-by-case issue. that you cannot really separate the nonproliferation mission entirely from the nuclear

weapons stockpile surveillance and maintenance. the two are inextricably linked. in the weapons program is what contributes to the understanding that what other countries are doing and how they are developing and all of that lays into our nonproliferation initiative. aree issued -- they inextricably tied together and are critical. >> thank you. disastrous security incident, it has been stated ,hat nsa had an eyes on hands-off approach to oversight. it appears they did not have are used authority to second-guess the practices on security. has this been addressed within nsa?

havegenerally, does nsa the necessary expertise to valuate the performance and oppose those from the country there's? -- contractors? >> the answer is no, the capability does not exist today. one of the things that has happened is that that responsibility for the mission on nsa has the separated from you important supported functions. the person in charge of producing a weapon should also have part of the doctor produced the weapon and do it environmentally safely. taken over the latter issues. that should be embraced. a separation of

responsibilities. that leads to great bureaucracy, delay. add thatd only although we haven't seen wayificant changes in the oversight is done and it is still pretty much a transactional compliance based, there is a major initiative the number ofduce performance element factors that an focusare awarded on on mission elements rather than non-mission related elements. i think it is too early to say how successful that initiative will be. clearly there is a lunar suit to truth the standards. -- clearly there is a change to the standards. >> thank you.

i appreciate work and look forward to continue to work with you. thank you, mr. chairman. thank you for having this hearing and your commitment to our country. i look forward to reading this report. that we are dealing with even going back 14 years ago, there was a report by this oversight panel in regard through dependent of reorganization -- department of reorganization. this report, it is essential that the administration and nsa correct the confused lines of authority and responsibility within the complex that contributed to the mismanagement security problem's and to provide a clear focus and

accountability for the personnel involved in the nuclear weapons programs. it also said there was intended effect is to provide independence, but not total independence. we have touched on this. that would be one issue. the other, do you think your recommendations would resolve the confused lines of authority? y-12parate from the incident, the fact they have a semi autonomous nsa has created the growth of a number of redundant organizations within havend nsa, which duplantis functions. hence, there are conflicting lines of authority.

in many ways the creation of as semi-autonomous organization might have worsened the problem and not help the. -- not helped it. we consider it a failed experiment. add theld semi-autonomous approach has clearly not work. -- worked. the management has been vulcanized such as responsibility for many important functions such as environmentalty, responsibility, and so on is separate. it has major power in the organization such that the lower level management decisions take time to get to the top.

someone has to be put in charge. that this goes back to what we said earlier about basic successful management organizations to clearly define roles, responsibility, authority, and accountability. in many cases that is lacking. at decision-making is not embedded in line management who should be the best decision to make a risk informed decision to accomplish the mission safely secured and environmentally safe. >> we appreciate your insight.

this is in accordance with the nuclear nonproliferation agreement we have the while russian -- with the russian federation to process high level weapons of the ternium converted -- plutonium to be converted in nuclear reactors. the cost growth has been gruesome. it is 61% completed. as you were talking about capable and dedicated personnel, they were right there. they were making every effort to complete this facility. it has been put on standby. it concerns me having weapons and plutonium in our state. tothere any alternative this? >> i think there is no

alternative to producing a facility that could do what we committed to do. i'm not in a position to say. >> thank you very much. thank you to both of you. >> thank you to the gentleman. earlier you made a reference to or you took 17 small organizations and had to put it together. one of the reasons you were successful is because you are intolerant of folks who were not on the team. obviously the private sector, you have the ability to help find something to do it they do not want to be on the team. he could help them find something us to do. i'm not sure the secretary has

that. if -- could we go back to the common about whether we could legislate? what i think that could help would be to give authority at least within nsa. maybe not the department of energy, but at least within nsa so if he does have people in his organizational effort or the new administrator that needs to get on the team and move on, do you think that would be a significant piece of legislative authority that we could implement or what it really not be recalled -- critical? >> i had a terrific leadership team. that is essential. i think what you suggested would be a useful step. to give be useful

greater authority in terms of hiring. it would be useful to give him the opportunity to have people who could stay for number of years to the people the job long enough to be responsible. at theber testifying defense department about this very topic. people come and go so fast that no one is accountable. i think these would be useful steps. it would be very difficult steps. >> we have had a series of acting administrators. in general has been waiting for months now for action by the senate. how important in your review so far is it that we get somebody confirmed by the senate in the position as a permanent administrator? >> it is very important. >> minus. one of the concerns we have seen is a lack of leadership ability

and continuity at the senior -- mineip levels within as well. one of the concerns we have seen it the lack of leadership ability and continuity at the senior leadership levels within nsa. you cannot legislate cultural reform. i think that is the biggest issue. if you're going to legislate initiatives, i would encourage you to work closely with the secretary to ensure there is close alignment there. are lookingssues we at and we have not reached any conclusion on is that issue of exempted service positions value nsa whether my the and that are not. we have not come to any conclusion. how do you develop that --hnical competence

confidence, people with qualifications, and certifications to really affect me manage the enterprise? >> to that point, we have been meeting and asking what we could do to be helpful. lastly, y'all made various top provoking comments. how a man was the right man for right now. what do we do? is a good guy and has a red background -- has the right background. what would y'all recommend? what do you recommend congress do to make sure we at least urge for certain type of person to be viewed for that position? >> we are acutely aware of that

issue. really have a recommendation. we have a few thoughts. confirmg congress does and the congress does have a great deal of authority and can publications individual has, this is a difficult job. there's a nuclear deterrent on the other. -- one of thele most important things congress could do is ensure that successive leaders or whatever organization are qualified to deal with this issue. >> thank you. any comments? >> thank you to the witnesses for an excellent hearing.

anybody in congress should hesitate about giving anyone else management advice. we know this institution is not run properly. it worries me that two things have come out of the steering. one, the tendency of anyone in congress to blame the administration. congress has been limited administration ever since george washington was president. the last i checked, you do not have a magic wand or halo anytime you're elected to the office. realize thatnt to i think you have in your testimony that there is something remarkable going on even within the nsa. there are several remarkable things. one of those is then he will reactors program. it is largely exempt rom scrutiny. they do a darn good job. you do not do blend administration for that. somehow-ommon

they have been able to do that. the ability to have contracting officers who know what they are talking about. imagine that? other scrutiny of expenditures over $10 million as opposed to the usual hundred million dollars threshold. they know what is going on. wouldn't that be nice? when we are looking for bright spots and we need to find some time extending that culture would be a very valuable thing. the of it is avoiding political back and forth so they can do their jobs. i worry that this institution has the tendency to do that usual thing with publicity and express outrage.

we have got to do better than that. as you look at new models, there is a pretty good one right there your fingertips. thank you for your service. we look for to this report and to progress. havewould comment that we formed a benchmarking team to go out and look at what we thought were very successful examples. the nr was clearly one of those. >> i appreciate you align me to sit in. for have had their --

allowing me to sit in. they have at their own problems which eating in their school. a somewhat similar to what we see at ibm force. maybe it is an isolated incident . maybe it is not a bigger problem. we worry that the problems we have been talking about here are extending. for the naval reactors, in a way to twoport boat -- both institutions. it is a unique institution that was started by an admiral who had a very strong culture that has been able to be continued over the years and has been able to maintain large largely that culture over time. i'm not sure what that tells us. generalxactly how the -- look at the naval reactors and why they are successful and what we can duplicate. i still think there are more lessons. i agree. my other thought as you were

duplicateout organizations within doe and nsa , partly that is by design. --t happened before was everyone in daily wanted -- everyone in doe wanted a piece of nsa. i cannot remember what percentage of their budget is in nsa. about 40%? >> 40% is about right. >> about 40% of the budget. that means everyone at doe wants a piece of it. that goes back to what you were talking about. the idea was you do separate and insulate nsa from all those people except the secretary. he can do whatever he wants to

do. answersecretary is that and setting aside the increased authority that the chairman was talking about, but if he is the answer, why hasn't he been doing it? i had the same exact high hopes says everybody else has. now he is waiting for his country i realize -- conferee i realize. we have got to remember the problems that this was intended to create. it is a fix. i agree it has not fixed anything. i do no one go backwards to those days either. it was a dysfunctional rocker see incapable of reforming itself. i'm not sure it's much better. any comments i welcome. >> thank you. i'll be brief.

the future secretaries of energy or whomever this organization reports to has got to be qualified at the subject at hand . have got to be strongly committed. without that, i do not think anything we propose will matter. beyond the duplicate functions, i do think that semi-autonomy has created bureaucratic scene between nsa and other elements of the department of energy, particularly the office of andnce and other doe science labs. when you look at those laboratories, there is a need for collaboration between the nsa labs and the office of science labs. many of them work on proliferation issues. they have nuclear expertise and forensics in other areas. best, to some degree

semi-autonomy has created an impediment to hinder closer collaborations. it just isn't a duplicate function. is the issue associated with collaboration. i would only add that we have had several meetings with the secretary. he has moved out and is making of organizational changes to adjust what i perceive i cultural issues. you.ank did you have anything you wanted asked before we closed it up? >> first of all, my apologies. we have a coast guard ranking member. i was tied up. you for everyone's work. i will catch most of the testimony from the staff.

i understood there was one issue that wasn't covered. perhaps this is correct in my 32nd briefing. a facility.sue of the commission look at this issue at all? what could you determine? looked at it in great detail. it clearly falls in the same example as the ups facility in tennessee and the plutonium this 70 in new mexico. -- facility in new mexico. they suffered from three elements that i talked earlier about. a lack of robust strong program management. a lack of rigorous analysis of alternatives front before deciding to embark on a path.

robust capability and howstand how much much resources would be required to complete some of these major projects. i think those elements have contributed to the situation we find ourselves. apologize to the committee and the witnesses for not being here. those issues are of great interest to me. i want to get into it, but it is not really appropriate now. i will circle back to it. you.ank thank you to the witnesses very much. either you're cognizant of it -- there are changes

at the margins. i know you realize that. be bold. we appreciate you and looking forward to the report. we hope you come back this fall with some final thoughts. with that, we are agger and. djourned. agge [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] >> on the next "washington of the housember and energy commerce committee on his support for building the keystone xl pipeline.

the the lead democrat on house armed services committee will discuss national defense policy. "washington journal" begins at 7 a.m. eastern on c-span. of 1954.s a report this is a gigantic land maneuver under the coordination of the u.s. seventh army. it has many purposes, but an additional purpose could be due display enables mike before the communists. this exercise is divided into two opposing forces called black and green. in this exercise, both sides cannon.e american atomic the atomic cannon has never been fired in europe. what you'll see here is a simulated atomic explosion. the atomic cannon can be fired

in europe. the guns are ready. the men already. should any of the 14 nato nations be attacked, tommy guns will fire. >> from the big which are series, nato maneuvers of deterring soviet aggression and your this weekend on american america" on c-span three. >> they will look to this day and the day the president signs this bill as independence day for those who have been disabled , but who have a willingness and a desire and you are qualified and have an ability to dissipate in america and the promise of

america and the pursuit of happiness. mr. speaker, there were some concerns raised about this bill. there are those who will present a motion to recommit this bill and they are very open. they want to discriminate against individuals. they want to discriminate against individuals who have a disease. this bill does not allow that. this bill does however say that you can do that if it poses a risk to the public. that is our responsibility and this bill does exactly that. the united states senate andgnizes that concern adopted an amendment offered by senator dole and senator hatch. that amendment was adopted 99-1.

members concluded i would suggest that the public's health concern was protect it by the amendment which was adopted in this bill. there was another concern that was also taken care of. other than that, this bill represents the work of the house of representatives. it represents the bipartisan effort of that gentleman who has spoken on behalf of this conference report. i would ask the members of this house on this historic day to .ay now is the time now is the time to open the door of american life to all of the disabled in our country. today, tonight, do not delay this bill one minute more. let us act now. let us stand up and say to the disabled, you are fully part of

america. reject this amendment that is unnecessary, unwise, discriminatory, arbitrary, and capricious. it is nothing on medical evidence. let me enclosing say this, quoting the president of the united states, today i called the house of representatives to get on with the job of passing the law has embodied americans with his abilities act that prohibits his commemoration against people with hiv and aids . we will fight against this disease and not a fight against people. we must not in america tolerate discrimination. this motion to recommit tolerates discrimination. reject it. move on with this bill. say yes to the disabled. defeat the motion and pass the bill. >> the gentleman's time is

expired. all time is expired. >> more highlights of 35 years of health-care coverage on our facebook page. c-span created by the cable company 35 years ago and brought to you as a public service by your local cable or satellite provider. before this house oversight hearing got underway, irs commissioner is speaking to mr. issa. he has to answer questions on how they handle taxes and applications and is complying with the committee's investigation into potential irs abuses. oversight committee has subpoenaed e-mails of former irs taxes and organizations who has twice refused to testify before the committee. this part of the meeting is an hour and a half.

. the committee will come to order. please close the doors. >> the committee will come to order. please close the doors. the oversight committee exists to secure two fundamental principles. first, americans have a right to know the money washington takes from them is well spent. and second, america deserves an efficient, effective government

that works for them. our duty on the oversight and government reform committee is to protect these rights. our solemn responsibility is to be accountable to taxpayers because taxpayers have a right to know what they get from their government. it's our job to work tirelessly in partnership with citizens watchdogs to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. it's now my privilege to recognize the ranking member for the opening statement. >> thank you very much, mr. chairman. commissioner koskinen, i want to thank you for being here this morning and i want to thank you, mr. chairman, for calling this hearing. i think it's very important that we look at what the inspector general for the treasury recommended and take a look back at the research that he did. nearly one year ago the treasury inspector general for tax

administration, russell george, issued a report that included irs employees and i, quote, inappropriate criteria to identify tax exempt applications for review. i want to revisit the findings of his report. the ig found that there was ineffective management, and that's a quote, at the irs. the first line of the results section of the report said this began with employees in the determinations unit of the irs office in cincinnati. i didn't say that. the ig said that. the ig also went on to say that these employees, and i quote, developed and used inappropriate criteria to identify applications from organizations with the words tea party in their names. end of quote. the ig also said these employees, quote, developed and imme meanted inappropriate

criteria due to insufficient oversight provided by management, end of quote. the ig report that former irs official lewis learner did not disclose the use of these inappropriate criteria until 2011 a year after it began. i didn't say that the ig said that. although she immediately ordered the practice to stop, the ig stated that employees began, again, using different inappropriate criteria, quote, without management knowledge, end of quote. in contrast, the inspector general never found any evidence to support the central republican accusations in this investigation. it just was a political collusion erected on behalf of the white house. before our committee received a single document or interviewed one witness, chairman issa went on national television and said, and i quote, this was the targeting of the president's

political enemies. effectively lies about it during the election, end of quote. similarly, representative al rogers, the chairman of the committee on appropriations stated on national television and i quote, the enemies list of our -- out of the white house that the irs was engaged in shutting down or trying to shut down the conservative political viewpoint across the country and enemies list that rivals that of another president some time ago, end of quote. representative dave camp chairman of the ways and means committee said and i, quote, this appears to be just the latest example of a culture of cover-ups and political intimidation in this administration, end of quote. the inspector general identified no evidence to support these wild political accusations. the ig reported according to the interviews they conducted, the inappropriate criteria and i quote, were not influenced by

any individual organization outside the irs. the ig testified before this committee that his own chief investigator reviewed more than 5,500 e-mails and found no evidence of any political motivation and the actions of the irs employees. rather than continuing this partisan search for a nonexisting connections to the white house, i believe the committee should focus squarely on the recommendations made by the inspector general. the ig made nine recommendations in his report last may. as of february of this year the irs now reports that it has completed all nine. for example, the ig recommended that the irs change its screening and approval process for tax exempt applications. in response, the irs ended the end of so-called be on the lookout lists and developed a new guidance. the, ig recommended to the irs

ensure that applicants are, quote, approved or denied expeditiously. in response the irs made significant progress on its backlog over the past year, closing 87% of these cases. as i close, i want to thank the commissioner and his predecessor danny warfall for the extraordinary cooperation with congress. i disagree with the chairman's letter complaining about the agency's so-called failure to produce documents in noncompliance with committee request. nothing could be further than the truth. more than 250 irs employees have spent nearly 100,000 hours responding to congressional requests. they have delivered more than 420,000 pages of documents to this committee. and they have spent at least $14 million in doing so the chairman's statements simply disregard these facts and

they're also at odds with chairman cam of the ways and means committee who issued a press release just this month praising irs for its cooperation with document requests as a, and i quote, significant step forward. commissioner, i wanted to thank you for your efforts during things investigation and for your exceptional cooperation and i want to thank all of those irs employees who are working so hard and tirelessly to do their jobs and with that, mr. chairman, i thank you and i yield back. >> thank the gentleman. i am pleased to welcome our witness, mr. -- commissioner john koskinen. he was appointed by the president to report and restore trust and accountability to the irs. commissioner, you have a difficult task ahead of you. the american people do not have, in my opening statement says any faith, but they certainly don't have the faith they once had in the irs to be truly a

nonpartisan, nonpolitical tax collector. and rightfully so. does nonpartisan, nonpolitical agency target certain groups based on their names or political ideology? the irs did. does a nonpartisan or nonpolitical agency conspire to leak the findings of an independent inspector general report? the irs did. does a nonpartisan, nonpolitical agency withhold documents requested during a congressional investigation subject to a lawful subpoena? the irs does, did, and continues to. does a nonpartisan, nonpolitical agency reinterpret laws protecting taxpayer information when it appears their employees violated the law? the irs does. does a nonpartisan, nonpolitical agency blatantly ignore congressional subpoena?

again, the irs continues to. the perform people believe the irs is now a politicized agency because the irs is a politicized agency. our constituents deserve better than this, commissioner. you are the president's man at the irs. you are one of only two political appointees, but it's clear that individuals acted on their politics and we now have some, but only some of the e-mails to prove it. you were brought in to do a very hard job and no doubt, you ask yourself every day, why did i get and ask for and accept up with of the hardest jobs anyone could ever have in washington and i appreciate that you are there and that you want to do that job. one of the ways you can do it is

by ordering your people to simply comply with outstanding subpoenas. the simple fact is your response to the irs targeting scandal has been bold by the ranking member standard and dismal by my standard. this committee doesn't count how many documents are produced but we do count when documents clearly responsive to a subpoena are clearly not delivered. the committee has made, excuse me, has made document requests almost 11 months ago that are still unfulfilled. i issued two subpoenas. the second to you personally. and they're still outstanding and this is unacceptable. unfortunately, you've been more concerned with managing the political fallout than cooperating with congress or at least this committee. i requested that you produce all

of lois learner's e-mails to this committee. she won't talk to us so these e-mails are the next best substitute and we need these e-mails and you know we are not only entitled to them, but by all that is holy, we deserve, the american people deserve access to know why somebody, who cites citizens united, cites political gains including the outcome of senate majority, who cites in a public speech statements about we feed to fix it because the fec can't do it, who cites they want us to do it and then takes the fifth when we ask who "they" are, those e-mails in their entirety, are clearly responsive. these are easy requests. and one that can -- that were made back in may but have not been honored and that request is one that you said you would work

to fully comply. i understand you reached an argument with the ways and means committee to produce a limited subset of miss learner's e-mails. let me make it very clear. your agreement with ways and means, without a subpoena, does not satisfy your obligation under a subpoena to produce all of her e-mails to this committee. commissioner, your objection or your refusal to cooperate with the committee delays bringing the truth, costs the american people the confidence they hoped to rebuild an clearly is running up the cost to the american taxpayer. i know you want to bring this investigation to a close as soon as possible and i do too. but the only way you can do that is to fully comply with our request. and i hope you will take that to heart today. and i yield back.

>> i now recognize the gentleman from ohio for his opening statement. >> thank you, mr. chairman. i would like to provide a little context for today's hearing. back to january of 2010, the president of the united states in the state of the union address called out the supreme court regarding the citizens united decision. that same year 2010 the president numerous times talked about tea party groups as shadowy groups who would hurt our democracy. that same year, senator schumer says we're going to get to the bottom of this encouraged the irs to investigate. senator baucus that same year asked the irs to investigate c 4 applications and c 4 groups. senator durbin asked the irs to investigate crossroads gps. and then in that same year, 2010, two weeks before the election, october 19th, at duke university, lois learner gives a speech and she says this. the supreme court dealt a huge blow on the citizens united decision and everyone is up in

arms because they don't like it. they want the irs to fix the problem. the irs laws are not set up to fix the problem. c4s can do straight political activity so everybody is screaming at us right now. who's everybody? everybody is not everybody. everybody is the president and democrat senators who asked her to do something. fix it now before the election. lois learner says, i can't do anything right now. she couldn't fix it before the 2010 midterm election but what she could do is start a project to deal with it in the future and that's what she did. that same fall she sent an e-mail just weeks before the midterm election, learner tells her colleagues let's do a c 4 project next year. she also says, we need to be cautious so it isn't a per se political project. in fact, the chairman put this e-mail up in our last hearing. per se political project, that's

code for it is a political project we have to make it look like it's not a political project. in early 2011 lois learner starts -- orders the multitiered review of c 4 applications. you know what that is? that's code for we're going to approve these people. make it difficult. that's part of the c 4 project. make no mistake she put washington in charge. this e-mail is one that the chairman put up at our last meeting. tea party matter very dangerous. cincy should probably not have these cases. so this narrative about cincinnati line agents and cincinnati doing this is false. she ordered them not to have these cases. and then what happened? lois lerner got caught with her hand in the cookie jar. tea party groups came to us and said we're being harassed. we asked the inspector general to do an investigation. he did the audit. and then before he can release the audit, unprecedented before he releases the audit lois lerner in a speech in front of

the bar association here in this town with a planted question from a friend reveals that yes, targeting was taking place. and what did she do? she throws the cincinnati people under the bus. the very people she said shouldn't have the cases, she throws them, good civil servants, she throws them under the bus. and here's the real kicker. lois lerner, who did this project from the pressure from the president and democrat senators, who did this project, she won't talk to us. she won't talk to us and our witness today won't give us her e-mails. even though we subpoenaed them over six months ago. that's what -- mr. chairman, lois lerner won't talk to us. she'll talk to the justice department because she knows that investigation. she'll talk to the people who can put her in jail and she won't talk to us and the guy who can give us the e-mails won't give us the e-mails. here's why today's hearing is so important. the c-4 rule that's being proposed that got 149,000 comments would codify what lois lerner put in to practice. would, in fact, accomplish the goal that she set out to do in 2010.

the c-4 rule, we had a hearing three weeks ago, mr. chairman. we had a hearing three weeks ago where we had aclu, tea party patriots, the motorcyclists association of america and the homeschool legal defense. all four of those groups came to that hearing and you know what they all said? this rule stinks, and should be thrown out. think about that. from the aclu, to the tea party, from homeschoolers to harley riders, everyone knows this rule stinks. everyone knows, except the irs. and now today, we get a chance, finally, to question the guy in charge of this rule, running this agency, here's the final thing, mr. chairman, i'll yield back. the same people who pressured lois lerner to fix the problem are the same people who picked john koskinen to finish the job. that's where we're at. and all we're asking is, give us

the e-mails. throw this rule in the trash because everyone knows it -- the only people who want this rule are this administration and the irs. everyone else knows this thing stinks. everyone else knows it. that's why today's hearing is so important, mr. chairman. with that i yield back. >> thank you. we now recognize the gentleman from virginia for an opening statement on behalf of mr. cartwright. >> thank you, mr. chairman. and mr. koskinen, welcome back. i remember working with you on y2k, and you did a great job then, and i certainly hope you'll do a great job now. i certainly think you're a great choice to be the new commissioner of the irs. in listening to statements from the other side of the aisle, one might think that the irs has just stonewalled the congress and has been completely uncooperative. and yet since the release of the audit report the irs has produced 420,000 pages of

documents to this committee, facilitated 32 interviews, of current and former irs employees, and testified at six separate hearings. that's not noncooperation. in addition, on march 7th, 2014, congressman dave camp, chairman of the ways and means committee, issued a press release, commending the irs on its cooperation with the committee, and in particular, its production of documents. he stated, and i quote, this is a significant step forward, and will help us complete the investigation. that cooperation included an agreement with the ways and means committee in terms of which e-mails, in fact, would be provided. the chairman says he shares your goal of your desire to want to end this investigation but he needs more cooperation. and i certainly take the chairman at his word.

but one has the suspicion that some of our friends on the other side of the aisle, the last thing in the world they'd do is end this ongoing if you can call it that, investigation. because it serves their political aims. mr. jordan just cited a panel we had. i was at that hearing. and one had the impression that this is all feeding the base. it's designed to get, you know, certain groups all riled up in time for midterm elections -- >> will the gentleman yield for a question? >> i'm going to finish my statement, mr. jordan, as you were allowed to finish yours. and that the serious purpose of investigation seems to be lost in the mire and the muck. this committee on a partisan vote decided that a citizen who happened to work for irs, not a heroic figure in this story, but a citizen, protected by constitutional rights, had, in

fact, waived her rights. a very dubious finding in light of the long case history in the courts, going back to the mccarthy era, when people needed that fifth amendment to make sure they weren't entrapped by their own words. by starr chambers or by people willing to play fast and loose with facts and with the truth to make some political point. and the fact that you might be an unwitting victim, you're a casualty of war. none of my colleagues on this committee, of course, would engage in that kind of thing. but to strip an american citizen or claim to strip an american citizen of her fifth amendment right, a right that was enshrined as sacred by the founders, who had been treated to the tender loving mercies of then-british colonial justice. it stung so much that they wanted to protect every american citizen from that kind of treatment. even if they might be hiding

something. even if they weren't heroic figures. precisely why the fifth amendment was there. so, mr. koskinen, there are some of us here who wish you well, and will certainly cooperate with you and try to make sure yours is a successful tenure. obviously to the extent that you can cooperate even more fully with this committee, that would be welcome. but, be aware, that unfortunately this committee has a habit sometimes of cherry-picking backs and of leaking, i heard the chairman complain about the irs actually leaking documents. my, my. that would be a terrible thing, if true. certainly not something we ever do in this committee. but just in case, be prepared. because that may happen to you, too. so thank you for your cooperation, but be on your guard because there's something else at work here. i yield back.

>> members may have seven days in which to submit opening statements for the record, including extraneous materials therein. the chair now welcomes the honorable john koskinen, who is the commissioner of the internal revenue service. welcome. pursuant to the rules, all witnesses are duly sworn. would you please rise, raise your right hand and take the oath. do you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth? >> i do. >> please be seated. let the record reflect the witness answered in the affirmative. you're a seasoned pro at this, but -- and i will remind everyone your entire statement is in the record, and it's been distributed in packets, and you may summarize as you see fit. recognized. >> thank you. good morning. chairman issa, ranking member

cummings, members of the committee. thank you for the opportunity to appear before you today to discuss irs activities in regard to the determinations process for tax exempt status. i'm honored to serve as the irs commissioner, and to have the opportunity to lead this agency, and its dedicated employees, because i believe that the success of the irs is vital for this country. one of my primary responsibilities as irs commissioner is to restore whatever public trust has been lost as a result of the management problems that came to light last year in regard to the application process for 501(c)(4) status. taxpayers need to be confident that the irs will treat them fairly, no matter what their backgrounds, their affiliations, who they voted for in the last election. i am committed to ensuring we restore and maintain that trust. i'm pleased to report to you that the irs has made significant progress in addressing the issues and concerns with the 501(c)(4)

determinations process. first of all, we've been resp d responding to the recommendations made by the treasury inspector general for tax administration. it was the inspector general's report in may of last year that found applications for 501(c)(4) status had been screened using inappropriate criteria. as of late january of this year, we completed action on all nine of the inspector general's recommendations. our actions have included reducing the inventory of 501(c)(4) applications, including the group of 145 cases in the so-called priority backlog, that is those that were pending for more than 120 days on may 2013. as of this month, 126 of those cases have been closed. including 98 that were approved. of those 98, 43 took advantage of a self-certification procedure we offered last year. also in response to the inspector general, the treasury and irs issued proposed

regulations in november that are intended to provide clarity in determining the extent to which 501(c)(4) organizations may engage in political activity without endangering their tax exempt status. as you know, we have received over 150,000 comments on that draft. although i do not control by myself the rulemaking process, the treasury and irs have a long-standing history of working cooperatively in this regard, and i will do my best to ensure that any final regulation is fair to everyone, clear, and easy to administer. along with the actions we've taken in response to the inspector general, we continue to make every effort to cooperate with the six ongoing investigations into the 501(c)(4) determinations process. including this committee's investigations. over the last 18 months, the irs has devoted significant resources to this committee's investigation and requests for information, as well as those of other congressional committees. more than 250 irs employees have

spent nearly 100,000 hours working directly on complying with the investigations at a direct cost of $8 million. we also had to add capacity to our computer systems to make sure we were protecting taxpayer information while processing these materials. we estimate that work costs another $6 million or more. to date we have produced more than 690,000 pages of unredacted documents to the house ways and means committee and the senate finance committees, which have sections 6103 authority which means they can see taxpayer information. we've already produced more than 420,000 pages of redacted documents to this committee, and the senate permanent committee on -- and subcommittee on investigations. last week we were pleased to announce that we believe we have completed our productions to the ways and means and finance committees of all documents we have identified related to the processing and review of applications for tax exempt status as described in the may

2013 inspector general report. we are continuing to cooperate with this committee and i would stress that, we are continuing to cooperate with this committee, and others receiving redacted documents, and we will continue redacting and providing documents until that process is complete. as part of that process it's my understanding we will be delivering a substantial number of documents to this committee later today as part of the ongoing process. in light of those document productions, i hope that the investigations of the c-4 determinations process can be concluded in the very near future. in the event that this committee would decide to investigate other matters pertaining to the r-4 area such as the rulemaking process or the examinations process, the irs stands ready to cooperate with you. mr. chairman, that concludes my statement. i would be happy to take your questions. >> thank you. i'll recognize myself for a round of questioning. did you need to upgrade your computers in order to produce of lois lerner's e-mails?

>> i'm sorry -- >> did you need to upgrade your computers to produce all of lois lerner's e-mails? >> we have to upgrade our computers to produce all of the e-mails and documents. >> commissioner i appreciate that and my time is limited. i recently pulled all of my e-mails off of the house computers. it took one person at house call, a part of a very small part of a morning to gin it up and produce it. i understand it takes awhile to go through them. but if i'm correct, in a matter of hours, not after we subpoenaed, but after we showed interest, your agency had taken all of lois lerner's, all of holly, all of william wilkins, all of jonathan davis former chief of staff, all of the white -- or maybe or maybe not all of them pertaining to the white house but the first four, take a matter of minutes to do.

so my question is, our subpoena, which is not extensive for those four, particularly asked for information -- asked for all the e-mails that somebody who has in the e-mails we've seen, both government and nongovernment e-mails in some cases,abilitied overtly political in her speeches and her activities, including what mr. jordan quoted. we asked for all of her e-mails. do you have any privilege or any reason that you can't and shouldn't have delivered that months ago? >> you seem to have more information about this than i do. we have 90,000 employees and my understanding of the process is that to go through all of those e-mails, which are millions of e-mails to make sure we have not only the outgoing e-mails but the incoming e-mails is not a matter of a few minutes or a few hours. but in any event we have provided for all of those -- or in the process of providing all

of the information and all of the e-mails related to the determinations process, and we have -- >> commissioner that's not -- that is not the subpoena. and i want to be very clear. we issued you lawful subpoenas because you didn't cooperate based on letters. our subpoena says all of lois lerner's e-mails. is it your position today that you intend to give us those responsive to some key search word or you intend to give us all of lois lerner's e-mails? all of holly paz's e-mails, all of william wilkins' e-mails, all of jonathan davis' e-mails? >> we are working through the process. we have never said we would not provide those. we are anxious, as i have said -- >> will you provide all of the e-mails for those four individuals? >> we will provide you -- we are actually trying to in an orderly way conclude the investigation on the determination process which is what the i.g. report reported to. we've had over 250 people at various times working on this investigation. we are producing e-mails. you will get e-mail copies today, redacted, and you will

continue to get them. our hope is that you could concentrate on the determination process, gao is already at the congressional request doing a review studying a review on the examination process. as i've said in my letters to you -- >> commissioner, commissioner, you said something and i want to focus on that. you said your hope is that we would focus on the determination process. >> i can't tell you what to focus on -- >> thank you. we are focusing on those individuals. we have asked for all of their e-mails in a legal subpoena. my question to you, today, will you commit here today to provide all of the e-mails? not all the e-mails you believe are responsive, not all the e-mails you choose to give, not all the e-mails that are other than embarrassing, all of the e-mails? >> mr. chairman, i -- we are prepared to continue to work with your staff. as you can understand, when you say all of the e-mails, you're going to get hundreds of thousands of pages of irrelevant

documents -- >> no i'm sorry. lois lerner is an individual, we're asking for all of her e-mails. >> they're all -- >> she obviously had a limited amount of e-mails. quite frankly, we asked for all the e-mails. we believe that the e-mails, for example, where she talked about the outcome of the senate races, maintaining democratic control because of indiana and other states, the outcome of the maryland pro-gay initiative, all of those are responsive to who she was and why she did what she did. therefore, we have asked for, in the case of these individuals, all of their e-mails. holly paz, for example, said she didn't know what citizens united was. well, lois lerner made it clear that she was trying to find a way to enforce around citizens united at the irs. and we've already seen the documents for that.

will you today commit to deliver all of the e-mails, not all that you think are responsive, all that the four squares that any lawyer can read of the subpoena says we're asking for. which is all the e-mails for lois lerner, all the emmaims for holly paz, all the emails for william davis and all the e-mails -- wilkins i mean and jonathan davis. now these are all of the ins and outs from their mailboxes, it's not difficult, you already have pulled them, there's no question at all, it's a question of will you deliver them. >> mr. chairman, we're happy to continue to work with you, and we will advise you, i'm not aware that we have pulled them all. but to the extent we have, they all have to be redacted and we will work with you and advise you as to what the volume is. the reason the search terms were selected, they were selected by committee staff here and in the other investigation so that -- >> no, no, your people -- my time is expired. you previously selected search terms, asked to give priorities.

that's all fine. the subpoena that was personally delivered to you, which we expect you to comply with, or potentially be held in contempt, those e-mails were very specific based on individuals who had become specific focus on which why they did what they did, and what they have said, whether it's true or not, is critical to this committee's discovery of intent. will you commit to deliver all of those e-mails, redacted only for 6103? >> yes, i'm -- as you say, we've never said we wouldn't produce those emmaims. the search terms just to clear the record were not collected by the irs, they were selected in cooperation with various congressional investigations on the house and senate side to try to limit the volume of material you're going to get. we will be happy to provide you volumes of material -- >> my time is expired. but let me make it clear in closing it does not take any

search terms to respond to all the e-mails of lois lerner. >> you're going to get a lot of e-mails, and as noted earlier, you may want to have this investigation go on forever. we have provided you all of the e-mails relevant to the i.g. report. we are providing you lois lerner's e-mails with regard to issues that you've raised about the examination process about the appeals process, and about the regulatory process. >> i appreciate that. gentleman from -- okay. >> i think the chairman has asked some very good questions and i want to give you an opportunity to respond. what is -- so when you all are going through these e-mails, you just -- the last part of what you said is very significant. you said that you are -- you said something about they have to be relevant? i mean where are you getting all of that from?

you said -- do you remember what you just said? the last part of that. sounded like there were certain things that were used, terms that were used, to decide what you are -- you think is responsive to the subpoena. now can you explain that to us? >> yes. >> in other words, if she had a personal e-mail, and she was talking about her shopping or something, i'm just, whatever, i mean are you all separating -- is that part of the process? i don't -- >> part of the process. >> you said something about relevance explain that. >> part of the relevance when this started because there are literally millions of e-mails, was to take a look at an agreement with the staffs of the investigating committees, take a look at 83 ultimate -- originally a smaller number, the irs added to the custodians as it were, the people sending and receiving e-mails, there are 83 of those that we agreed to look at. the terms, in terms of what would be relevant were determined by congressional committees, as well as the irs, to try to limit the volume.

limiting the volume you still have 700,000 pages of relevant documents. to the extent that somebody wants to look at hundreds of thousands more pages of what the search terms define by the congress would be determined irrelevant, at some point we're happy to provide those. we will provide those in the orderly course. but i will tell you, that our experience is it's going to be an overwhelming volume of materials that will take us some significant time to redact taxpayer information, a significant part of which will have nothing to do with this inve investigation. but if that's the way the committee wants to go, we will go that way. but the other committees, and staff of this committee in the earlier determinations, decided that that would be a fruitless task of overwhelming investigators, not us, nover whelming the investigators with thousands of pages of irrelevant documents. therefore they suggested with us, and selected with us search terms of what would be relevant. tea party, examinations, whatever else they picked, there are a whole series of those terms designed to limit the

volume of materials. we still have provided a lot of duplicative and probably irrelevant materials within those search terms but we have not determined anything within those search terms. we've said if those are the terms that will help you winnow it down we're happy to work with you. but if the committee wants to get simply large volumes of personal e-mails from a lot of different people, we will go through, again, making sure that we redact those appropriately, as i say we've provided unredacted copies of all of this in terms of the relevance determined by the committees to the other committees, and we provided all of the redacted information available now and we're continuing to redact it. it cannot be done overnight. >> thank you very much. i want to go to the recommendations of the inspector general. because this is oversight government reform. i think the committee ought to take some credit for what you have said that there were nine

recommendations and apparently you have all been able to address all nine of them. we don't hear that very often in this committee. so the inspector general's report was commissioned in may of last year. made nine recommendations i have a chart here that lists each one of these nine recommendations from the inspector general. the title of the chart is, exempt organizations, recommended actions, february 2014. mr. chairman i ask you this chart from the irs into the record? >> without objection so ordered. >> commissioner in addition to listing each of the nine recommendations this chart describes in detail the status of each recommendation it describes the work that has been taking place over the last ten months, as well as specific reforms that were implemented. is that correct? are you familiar with the chart? >> yes. >> if i'm reading this chart directly it appears all nine of

the inspector general's recommendations have been fulfilled. is that right? >> that's correct. >> let's look more closely at the status of these recommendations. the inspector general first several recommendations began on page 10 of his report. the proposed -- they proposed that the irs change its procedures for how screeners in cincinnati classify applications. all of these are now marked as completed. can you explain what new guidance theers has provided to screeners in cincinnati about how they should classify and process these applications in an appropriate way? >> the a tear yeah for exemption under c-4 are complicated because it's a quote facts and circumstance determination. the guidance in the new training is provided more guidance to those reviewing as to what's appropriate political advocacy, and what is direct political

campaign intervention. it's a campaign intervention that if you -- it becomes your primary activity you, in fact, are not eligible to be a 501(c)(4). there are obviously complicated terms. we've provided better guidance and improved and new supervags or any determination that is going to be delayed. we also have provided clear lines of authority so if anyone needs advice or additional assistance, they can get that automatically, and easily. >> often page 17 of the inspector general report you list another recommendation and i quote, provide oversight to ensure that potential political cases, some of which have been in process for three years, are approved or denied expeditiously. in response the irs chart says that this, and i quote, as of february 21st, 2014, 112 cases in the original backlog, 85%, have been closed. commissioner, this is good news. and i understand from your

testimony today that this number has gone even higher to 87%. can you please explain how this expedited review process works? i think i have one minute left. >> interim commissioner danny wuerffel established a process for expedited review and any applicant who would simply certify that they were not going to spend more than 40% of their time on political activity could be approved immediately. and that streamlined process continues for new apply can'ts. 45 of the pending applicants filed that paper and were immediately reviewed and approved. of those that are still pending, they have decided not to, in fact, sign the affidavit that they would not spend more than 40% of their time on political activity. >> my final question i understand the irs has now completed all of the inspector general's recommendations. going forward what additional plans do you have to ensure that

these management problems have been fully addressed? >> we have agreed with the inspector general that before any election we will conduct additional training sessions and try to sensitize all of the people reviewing applications, to make sure that we handle them appropriately no matter what the political background of any of the organizations, and this would apply to people at one end of the political spectrum or the other. that will be done before every election as we go forward. >> thank you before i call another member i want to make it clear staff has informed me for the record that early on with the irs, they did mutually agree to search terms. that was before the subpoenas were issued. there was never an assurance that those search terms were being used and to this day we don't know if those search terms were actually used, so one of the challenges is that that was abandoned in favor of subpoenas,

because of what they believed to be noncompliance a number of months in. but there was an initial attempt to work cooperatively, but as i said, there was a question of whether or not those search terms ever actually got used. >> so thank you. we now go to the gentleman from florida, mr. mica. >> well, thank you mr. chairman. we've had an opportunity to interact in the past, and always appreciate your candor. the very heart of this matter is a basic fact that irs appears to have been used prior to the election, the presidential election and a concerted effort to close down or keep at bay conservative organizations by

targeting. you're aware of that, sir? >> i'm aware of what's noted earlier that the inspector general found inappropriate criteria were used to select organizations for further review. >> well, he did not refer to it as targeting. >> but you heard -- one of the principle irs officials who was involved was lois lerner, who came to the chair where you're sitting now, and took the fifth amendment. she's at the heart of most of this activity. it was pointed out by mr. jordan that she concocted -- it was almost a hollywood production before the inspector general may 14th came out with his report to blame the people in cincinnati some rogue irs employees who gathered around the water cooler, and concocted a scheme to, again, target -- and i think

she laid that out. is that not correct? >> that's -- >> i mean historically you know that as a fact. she appeared before the american bar association, before the report came out, and made those statements. correct? >> she did make those statements -- >> okay. >> i wouldn't -- because she took the fifth, as i said in a letter to the chairman -- >> but, again, this committee, and this -- it's nice to be here for awhile, because you see how people try to -- to throw people under the bus. whether it's the chairman, you go back to mr. cummings said, here's the case is closed. we started our investigation and june 9th, in may, we started our investigation june 9th. mr. cummings, the ranking member, said here's the case is closed.

and then, june 9th -- well, he said, i've seen the case is solved, and so me i'd wrap this case up and move on and be frank. so he tries to throw the case under the bus. he tried to throw the chairman under the bus. he sent a letter just before that, your actions over the past three years do not reflect a responsible bipartisan approach to investigations. now, he has a constitutional and a house responsibility for investigations, and oversight, you have a responsibility to provide us with information. now we've asked you specifically for about a half a dozen individuals e-mails, including lois lerner, is that correct? >> yes. >> okay. and you said you just testified that probably most of the -- you said you gave 640,000 to the ways and means and 420 to our committee. but you also said here, and we can play the tape back, probably

most irrelevant material, right? >> most irrelevant -- >> probably mostly irrelevant material were your words. >> the material we provided -- >> at great expense. the irs and most bureaucracies have no problem spending lots of money doing things that we don't need. we asked you very specifically for the e-mails from six persons. six individuals, a half a dozen individuals and you have not complied, including lois lerner, is that correct? >> my point was is what you're going to get is mostly irrelevant -- >> and we're not interested. we're interested specifically in lois lerner and others to find out who did what. you're aware of cindy thomas' statements? she was the chief person out in cincinnati, and she said, may 10th, with a copy to lois lerner, we have a copy of that, to lois lerner, with a copy to holly paz, and she said, cincinnati wasn't publicly

thrown under the bus. instead it was hit by a convoy of mack trucks. are you aware of her statement as to what took place? >> i am. i'm aware of the fact that you already have a significant number of lois lerner e-mails, obviously, and we've been trying -- >> but we don't have what we want. and again it's a game of you providing us with probably huge amounts of irrelevant material -- >> that's what you're going to get. >> that i'm not interested in personally. you could give us a billion documents, that's not what we asked. we asked specifically -- >> right. and what you're going to get -- >> gentleman's time has expired but you can answer. >> can i answer a question? >> of course. that's what i said, the gentleman's time has expired but you may answer. >> first of all, your earlier comment about your staff being concerned about whether the search terms were being followed is the first time i have heard that. we have followed those search terms. no other committee, none of the other five investigations going on have raised any question about whether we've, in fact,

followed on those search terms. so if your staff has that concern, i would appreciate it if they would let us know, because none of the other five commission investigations, and none of the other five staffs have raised that issue. and as far as i know we have abided by those search terms and provided everything that the committee's requested pursuant to those search terms and with regard to the determination process. with regard to lois lerner as i said in my letter to you, because you have not been able to cross-examine her, because she is not an irs employee the first priority we have, we've already been providing you the e-mails, in fact her staff cited a number of them you had, her e-mails with regard to the determination process, you've been able to cross-examine over 30 witnesses about anything you wanted to talk to them about, but because you could not talk to lois we are providing you, and they have to be redacted, we are going to provide you lois lerner e-mails with regard to not only the ones you have about determinations, but lois lerner e-mails with regard to the examination process, the appeals process, and to the extent there are any with regard to the

development of the proposed regulations that were issued. those were the issues that have been raised. concerns about what her involvement was, we've committed that we will provide those to you. we've prioritized. we have not said we're not going to provide you the rest of them. we have prioritized trying to complete document redaction so that we would be able to get you the information that we thought would be appropriate for the determination process. as i said in my letter to you, if you now want to actually run an investigation of the other areas, with those employees or others, we're prepared to work with you, as you say, if you just want all the documents, once redacted no matter what they are we can give those to you but i guarantee you you're going to go under and it's not going to further the investigative process. but if that's the way you would like to do it that will be our next priority. >> mr. chairman a quick unanimous request, i'd like this e-mail from cindy thomas to appear in the record at this point, in the proceedings. and also a copy of "the washington post" june 9th cases

closed article to appear in the record. >> without objection so ordered. mr. chairman? >> yes. >> unanimous request. just one minute. you just said something mr. chairman that i want to make sure it's clear. it sounds like -- it sounds like mr. chairman the impression of what's being subpoenaed using certain lists, and we have an opinion, and they don't coincide is that accurate? >> i think what's happened is the subpoena that was delivered to me in february said it wanted all the e-mails for a set of people. what we have been trying to do is all of those people -- you have e-mails from those people with regard to the determination process pursuant to the search terms that we've been working with. this subpoena now says we'd like them all for anything. we have now finally completed, although we're still working on the redaction, all of the production of documents regarding the determination process, which is what the i.g. report focused on.

we have said that that's the first priority we've had. we have never said we're not going to provide you the rest of the documents, and in fact, trying to figure out the most efficient way to do it, we have said we will provide you lois lerner e-mails, on everything with regard to examinations appeals and the regulatory process, as it goes forward. and i've said, when we're done with all of that, if you want to actually get e-mails, and you want them all, we'll give them all to you. but if you want to actually take a more focused investigation on the regulatory process or otherwise, we're happy to work with you to figure out how that goes. but in light of this chairman's view, as soon as we can finish the rest of these redactions and go forward, we'll provide you volumes of e-mails which are many of them going to be irrelevant, which is what i said at congressman mica's comment. not that the material you have are irrelevant. the ones you're likely to get in volume are irrelevant. and if you want it without any selective process we'll redact them. there's going to be thousands of pages, and we're happy to provide them to you.

but it's not going to expedite the conclusion of this investigation, and as i say, a significant part of it's going to be irrelevant. >> thank you. >> for the gentleman, because it's a good question, one of the reasons that we requested all is that back when we were in the minority we began digitally evaluate i evaluating this kind of information. and when we have all and the ones that the commissioner is talking about, if they were irrelevant and quite frankly there's no redaction, if they don't have 6103 there's no redaction appropriate, if that's the case, we do search terms, and we look at only what we need to look at. but we can constantly search and re-search to try to get to the bottom of it. as you can imagine, we would not have found lois lerner talking to her daughter about overtly partisan political activity if we had only looked for determination. it wasn't relative to determination. but it was relative to possible

motivation. the ideas, you know, wasn't aware of the speech at duke university in which it was clear that lois lerner was saying in pretty plain terms that she was going to act on what the s.e.c. couldn't act on. so this is part of the investigation, it's the reason we've asked for all, and quite frankly it takes a lot less time to just go through and view these things and say oh, that's got no 6103 and you just start sending it. and that's what we had hoped for when we issued the subpoenas for all, because these are people, as you know, who have said things before a committee or failed to say things in some cases, in which they become what law enforcement might call a person of interest, and lois lerner, holly paz, and so on, and the other individuals, are people of interest because of their possible role. >> so in other words any e-mail with anybody talking to their

daughter, if there's any relevance whatsoever, if they say i just don't like democrats, i mean, and say that was in any way you could connect that with an investigation, and they're talking to their daughter -- >> i appreciate that. >> but i just want to make sure the context. these are government e-mails from a government account, back in and out. this is the use of irs assets to communicate. we would presume that the majority of it is not shopping online. as a matter of fact, in the case of lois lerner, she did her shopping online in a hotmail account. which she also did 6103 material on. so, you know, in the normal case, this would not be something you'd look through, but we and the department of justice, if they're actually doing the investigation they claim to, we have an obligation to look and figure out whether we can opt out these communications which in this

case were always the product of the government, always available, and as you know, it is a given that communication on government computers is, in fact, open to government review. i just wanted to make sure the public understands that. thank you, mr. connolly. >> thank you, mr. chairman. i would say to the ranking member, sounds like his understanding is correct. and i would hope we'd do the same with, oh, i don't know, the i.g., mr. russell george. i'd like to see all of the overly partisan political e-mails. i'd like to see if he e-mailed relatives. staff members, this mitty. i think that would be relevant to putting in context his khiendings, and to determining whether he, in fact, is an objective source of information and analysis. but that's a different matter. mr. koskinen, as i said the

declaration of independence, written largely initially the first draft by thomas jefferson but it was subject to an editorial committee. he didn't like that. he thought his words were pretty good. among those words were, americans were entitled to life, liberty, now hear the editorial committee did not act. he said, and the pursuit of happiness. but it sounds like some people would substitute that, unfettered and unquestioned access to 501(c)3 and 501(c)(4) stacks extell status. do you read that in the declaration of independence? >> i don't read that -- >> no it doesn't read that way. so it's not really an explicit entitlement or right. it's a process you have to qualify for, is that correct? >> correct. >> there are many different ways of trying to figure out how somebody qualifies, and whether they qualify, is that correct? >> yes. >> and by and large,

historically, irs has had a standard operating procedure for determining those -- that status. either 501(c)3 or 501(c)(4) or other status. is that correct? >> correct. >> in this particular case, what we're all excited about is that a filter was created in a regional office that seemed to target people for their political views, both right and left, but apparently mostly right. is that right? >> they were -- as noted, inappropriate criteria used primarily 9 name of the organization to select them for further review. >> now one of the problems with that here is an add verb. the word used in the statute is exclusively, a social welfare exclusively devoted to that purpose. is that correct? >> that's correct. >> and yet despite the fact that congress wrote that adverb into the law, irs took upon itself, long before your tenure, to actually interpret that meaning primarily. is that correct?

>> that's correct. >> now, if i said to my spouse, honey, we have an exclusive relationship and i mean by that 29%. i'd probably have problems in my relationship to her, and to me exclusively means, just you. all the time. 100%. so how in the world could we get to a situation where the irs, on its own, outside of statutory authority, decided to interpret this as primarily? because to me that's part of the problem. exclusively ought to mean exclusively. and if congress wants to change that we should change the law. but, i don't remember congress investing irs with the authority to actually decide to interpret it radically different. not just, well, kind of a little fudge factor here. this is radically different. and it seems to me, therein is

the problem. because clearly some of these organizations are not exclusively social welfare agents. i mean, clearly they're largely designed to be political. partisanly political. that concern the chairman has over-partisan communication. and i share that concern. and all too many of these organizations hide under the umbrella of social welfare when, in facts what they really mean is partisan political activity. can you address this dilemma for me. how the irs could possibly take the word exclusively, and reinterpret it to mean mostly, sometimes, just shy of 50% primarily? >> needless to say i wasn't around in 1959 when that regulation was -- >> which is -- >> -- with the irs. one of the reasons in response to the inspector general's recommendation that clarification be provided, that the draft regulations were issued for comment, was to, in

fact, solicit discussions about what the definition of political activity ought to be. how much of it ought to be allowed before you jeopardize your tax exemption or are ineligible for a tax exemption and to which organizations in the 501 c complex should that be applied. the 150,000 comments address all three of those issues. the proposed draft was designed to, in fact, review and revisit with the public and with comments and with congress exactly that issue. what should exclusively really mean. >> thank you. my time is up, mr. chairman. i certainly hope after all the sturm and drang for this issue we might come together on a bipartisan basis. >> i certainly hope so. i hope the gentleman remembers that 501(c)(4)s are not tax exempt to the contributor. so they really are no different than any corporation that spends all of its money doing anything. but, it is an interesting

question of what social welfare was in 1959, and whether promoting a reduction in smoking, or something else would have been considered political prior to the creation of the federal election commission. >> you know, mr. chairman, if i may, we may even decide, frankly, look, let's just have a new category that, if you want to be political, and you want to hide who your donors are, hopefully you don't, there's this category. so that we're not playing, frankly, with words, and in a sense all being complicit in this disingenuous exercise. so i take the chairman's point, and would add to it. thank you. >> i thank the gentleman. we now go to gentleman from ohio. >> thank you, mr. chairman. mr. koskinen, what part of "all" don't you and the irs understand? you've said like ten times now, if you give us all lois lerner's e-mails we're going to get

irrelevant information. frankly, with all due respect, we don't care what you think is irrelevant. the committee has asked for every single -- if i asked for it clear back in august from danny wuerffel and he told me the same thing you did, we're trying we're going to get there some day, some time. we want them all. because if you limit it to what you said earlier to determinations of appeals, exams and rule making just those categories what if there's an e-mail from the white house that says halo us, keep up the great work, we appreciate what you're doing. what if there's that kind of e-mail. that wouldn't fit under the categories and search terms that you're talking about where we say all, we want every single e-mail in the time period in the subpoena that was sent to you. plain and simple. now, let me ask you this, do you agree with the audit report that came out, you agree there are columns and you're trying to comply with the audit report is that accurate, mr. koskinen? >> that's correct. >> i'd like to put up slide one. these are inappropriate criteria and questions that were sent out

to tea party groups that tigta identified as going too far, inappropriate, issues that are important to the organization and asked that the organization indicate regarding such issues, type of conversations you have in your meetings, inappropriate questions you can see they're highlighted there. second slide. this is one of your -- this is judith kindell e-mail she sent to holly paz, same list talking about how these were inappropriate questions that were asked of tea party groups. now we move to the proposed rule that's gotten so much controversy, i think approximately 150,000 comments, more comments than any other rule the irs has ever proposed. is that accurate mr. koskinen? >> make sure you take all the comments from the last seven years and double them. >> yes. and is it fair to say the vast majority of those comments are negative? >> i have no idea.

they're being analyzed -- >> based on what we've heard based on the hearing we had just a few weeks ago where we had the aclu and the tea party saying this things stinks and we shouldn't have it, vast majority of those i'm going to hazard a guess are negative comments. if we could go to the third slide now. this is a -- this is a newsletter that came out just three weeks ago. irs exempt organization newsletter march 4th, 2014. are you familiar with this newsletter that goes out to the exempt organizations division of the internal revenue service? >> i do not see those. >> okay. well this is put out by the exempt organizations division, same division where all these problems took place over the last three years, it came out, again, just five days after the comment period on the proposed rule ended, at the end of february. and i want to just highlight a few of the questions that are asked, so there's a category that says, what if the irs needs more information about your c-4 application. new sample questions.

if we could put up the side by side. now the first slide are the targeted questions that tigta said were inappropriate and you agree are inappropriate. judith kindell agreed are inappropriate. and now just five days after the proposed rule comment period ends, you issue a newsletter from the exempt organizations division highlighting the new questions you're going to ask. and i just want to look how similar the two questions are. let's take the second category whether an officer director has run for public office. the new question says this, do you support a candidate for public office who is one of our founders, officers or board members? same thing -- i mean, it's basically the same -- this reminds me of when i was in grade school and the teachers told us we shouldn't plagiarize and you change a few words and basically plagiarize. this is the same thing. here's what i don't understand if you're trying to comply with the tigta report, if the new c-4 rule is a way to deal with what the audit said and not what i

believe, as what i believe is a continuation of the project lois lerner started, why are you asking the same darn questions? >> as i noted, i haven't seen that and can't read it on the chart. i would be delighted to sit down and go over all of those questions with you and with the exempt organization organization. all of the tigta report didn't blanket say you should never ask questions about this. thank you for the chart. >> let me read from your testimony, mr. koskinen. page 7 of your testimony you submitted to the committee yesterday. talking about our notice of proposed rulemaking is consistent with the tigta recommendation. you said this in your testimony you gave the committee. >> well, okay. >> and yet consistent with tigta recommendations, they said these kinds of questions are inappropriate and now just three weeks ago, exempt organizations division issues a newsletter where you're asking almost verbatim, a few word changes so you don't look just like you're totally plagiarizing or doing the exact same question almost ver baiten the same darn question. >> i don't think -- the first question says provide a list of

all issues that are important to your organization and indicate your position regarding those. the new question says describe how you prepare voter guides. >> what do you think voter guides are about? they're about the issues. they're about issues important to organizations. have you ever seen a voter guide? i have, i've answered those questions. >> i submit -- >> as a candidate for office i've answered those. >> i appreciate having a copy of this. that if i look at the first question and the revision the revision is very different -- >> very different. oh, yeah, right. >> the third question, what type of conversations and discussions about your members and participants have during the activity. that is now, describe how you determined what questions to ask of candidates. doesn't say anything about what discussions or conversations your member had. it's -- >> you think they don't discuss it? >> doesn't ask for your conversation. >> okay. >> -- participation -- >> you defend that. you defend that. and you defend the statement that you're complying with our notice for rulemaking proposed rulemaking is consistent with the tigta recommendations. i don't think it is. what i know is the same day this

comes out you send me a letter our primary goal, same day, letter you responded, one of my primary goals and responsibility is to restore whatever public trust has been lost over the course of the last several months. yet you're asking almost, almost the same questions that your people said were inappropriate to ask pea party groups when all the targeting took place. and now as a response to the new c-4r rule oh, we've changed the questions a little bit. >> i think if you ask an organization independently which are the questions have there been changes i think that these are new questions. they do not probe the discussions you had the conversations you had. they don't disclose how do you disclose your position on this. these are, in fact, new questions. >> i would disagree and i think the vast majority of people who were harassed over the last three years would agree with my position. >> i'm happy to have this in the record and let the public decide whether or not we responded appropriately. >> let me ask you one other question. >> the gentleman's time has expired. i apologize. we now go to the gentleman from missouri, mr. clay. >> thank you, mr. chairman. and commissioner, the chairman

issa wrote a letter to you yesterday complaining that you are guilty of a failure to comply with the committee's demands for documents. he also said, and i quote, your continued noncompliance with these requests also contravenes your pledge to fully cooperate with congressional investigation. so even though you have already produced more than 400,000 pages to the committee, even though you have 250 employees working on producing more, he accuses you of violating your pledge and frustrating congressional oversight. and i think this is shameful, and it's even more so when you actually look at the unbelievably broad demands the chairman has made. let's look at just one of these

demands. number eight, in mr. issa's letter, it demands the following, and i quote, all documents referring or relating to the evaluation of tax exempt applications or the examination of tax exempt organizations from january 1, 2009, to august 2nd, 2013. let me read that again, all documents from 2009 to 2013, nearly four years, referring or relating in any way to tax exempt applications. mr. commissioner, how broad is this request? >> that request would be not thousands but probably millions of documents. the chairman is focusing on e-mails but you're exactly right. the full sweep of the subpoena will mean that we will be at this for months, if not years, collecting that information, redacting it, and then providing it.

>> let me ask you this. the evaluation of tax exempt applications is the function of the exempt organization division of the irs. is it my understanding that about 800 people work in the division. is that correct? >> that's correct. >> so the chairman has gone on national television and threatening you with contempt unless the irs produces every document produced by 800 people over nearly a four-year time period. is that -- mr. commissioner, even if you wanted to comply with this demand, how long would you estimate that it would take the irs to complete this document? >> we've already spent ten months, $15 million, and had 100,000 hours and 250 people working to produce the documents that we, in fact, agreed with

the committee would be relevant. this is a much broader, more sweeping request to all of those documents. and i have continued to press our people, because i am anxious to get documents to the committees and investigators as fast as possible, how long it would take even to complete the redaction and i cannot get a clear answer, because it's a very complicated, difficult process. my guess is, there's no way we would get you this information totally before the end of the year. >> to me, this shows how our committee has moved from government oversight to government abuse. these ridiculous demands are not overbroad, and irrelevant, but they will force

to me, this is a partisan witch hunt, which has already cost the irs more than $14 billion. in compliance with these outranlgs requests will only cause that number to continue to grow and it certainly doesn't reflect a good oversight, mr. chairman. and i'm really, really appalled at this, that this investigation has gone to this level. >> will the gentleman yield? zblie certainly do. >> do you feel asking for all of lois lerner's e-mails so we can search through whether or not she inappropriately was, in fact, actively doing more than

we already know, do you think that's inappropriate? >> i don't have a problem asking for lois lerner's e-mail. i do have an issue of asking for 800 people's e-mail. are all 800 connected to this investigation? >> like i say, we haven't received all of lois lerner's e-mails, one of the things we asked for. >> can we be more specific about what we're looking for, for lois lerner, from her e-mail? >> no, we cannot. >> the gentleman's time has expired. we now go to chaffetz. >> did you receive the subpoena, correct? >> yes. >> the date on this is february 14th? >> correct. >> you understand what it means

stlch . is there any question on what it means? >> i don't think so. >> do you believe it was duly issued by the house of representatives? >> i'm assuming that. i have no independent basis for determining that. >> the schedule, which is just eight items all communications sent or received by lois lerner to august 22nd, 2013, is there any ambiguity in your mind? >> no. if you want to go through all eight i have no doubt of what any of them mean. as noted some of them mean you're going to take months or years to get the information. there's no doubt about it. >> there's no -- so you have no ambiguity about what it means. you believe it's been a duly issued subpoena. >> right. >> and you have not complied with it. is that correct? >> there is physically no way anyone could have complied between february 14th and now. we have never said we won't comply. we have said, in fact -- >> are you going to comply or not? >> we are complying.

i will tell you, to comply with this -- >> no, no. >> you will be next year still getting document. >> commissioner, what e-mail system do you use there at the irs? >> what e-mail system? >> outlook or -- >> microsoft. at least i have microsoft office. >> you go on there. you want to find all the items you sent under your name, how long would that take? >> well, it would take a while. because they're not all on my computer. they're all stored somewhere. >> but your i.t. specialist, how long do you think it takes of the 90 plus thousand employees there at the irs, how long would it take to find all the e-mail that is included her e-mail address? >> just lois lerner's alone? >> just lois lerner. >> it would take a while. >> how long? minutes? >> there are millions of e-mails -- i don't know. i don't think it would be minutes. >> that's one of the brilliance of the e-mail system. you go in and check the sent box and the inbox and you suddenly have all the e-mails. correct?

>> right. they get taken off and stored in servers and you have 90,000 employees. >> i'm asking to find one. they type in her e-mail address. >> we could find and we are, in fact, searching -- we can find lois lerner's e-mails. >> how long would that take? >> i have no idea how long. >> would it take a day? >> as i said, i have no idea. >> well, i just don't understand. you have a duly issued subpoena. if you were in the private sector and somebody was issued a subpoena and you didn't comply with it, what would happen to you? >> for this subpoena, the court would actually rule that it is far too -- >> oh, so you're going to make the determination? >> you asked the question. let me answer the question. in a court of law, if you had provided that subpoena, a judge would not enforce it. >> wait, wait, wait, wait. stop right there. so you're going to be the judge? >> i'm not being the judge. >> yes, you are. yes, you are. >> you asked me -- >> you have a duly issued subpoena. are you or are you not going to provide this committee the e-mails as indicated in the

subpoena, yes or no? >> we are -- we never said we wouldn't cooperate. >> i'm asking you, yes or no? >> we are going to respond to the subpoena. >> no, sir it's -- >> we are going to respond to the subpoena. to respond fully for the subpoena we're going to be at this for years not months. >> and i don't understand that. just specific to item one, lois lerner, sir, are you or are you not going to provide this committee all of lois lerne rechlt's e-mails? >> yes. we will do that. >> yes. by when? when can we have them? >> i can only tell you it's going to take me -- my group, i asked this question. just to get you the lois lerner e-mails redacted, because you have to get them redacted for examinations, appeals -- >> no, no, no. is that what the subpoena says? >> would you like to hear the answer? >> nochlt i want to know if you're going to fully comply with the subpoena. not your version of the subpoena. the actual subpoena. >> you asked me how long it would take to respond to the

lois lerner e-mails. i'm explaining to you why it's going to take time just to respond to the -- >> i don't want you to redact it. i don't want you to take certain category that is you want. that's not what this duly issued subpoena says. >> i'm telling you, just to supply the lois lerner e-mails, which we are going to supply for examinations. >> no, no, no. >> can i answer the question? >> no, sir. when it says all e-mails, why are you qualifying that? under what authority do you change this subpoena? >> i was not qualifying. you were asking how long it was going to take and i was giving you an example of why it was going to take a long time. we have to redact all of the 6103 information. we're working hard to get you the lois lerner e-mails. it's going to take you several weeks to get the e-mails for examinations, appeal. >> why are you -- it would be easier to just give them to us all. >> no. we have to redact the rest of

them. we actually selected those because in a letter from senate -- the ways and means committee also saying they need help, they focused on what they're looking for is those categories. so, prioritizing, we said we would provide -- >> the gentleman's time has expired. >> we'll be happy to provide you the rest -- >> this commissioner has no intention of fully complying with this duly issued subpoena. that's the case. that's where both of us, on both sides of the aisle need to stand up for the integrity of the house of representatives. when you have a duly issued subpoena, you comply with it. it's not optional. >> thank you. >> may i say -- >> all time has expired. the gentleman from maryland is unanimous in his consent. one minute. >> mr. chairman, i never heard mr. -- the commissioner say that he was not going to obey his subpoena. matter of fact that's all he has been saying. >> actually, if the gentleman would yield, he is, on every

single question, failed to say yes, i will give you all the e-mails. he has gone into the ones that he is prepared to give, the one that he could give to ways and means in an hour. once you do the search, you just dump it to them. he said it would take a couple of weeks. of course, the subpoena is many months old. >> i'm just saying, reclaiming this for a second. >> i just want this to be clear. what i said before, you seem to have an understanding and we seem to have an understanding and they don't seem to be the same. so, are you going to provide the

documents for lois lerner? >> yes. >> that were subpoenaed ? >> yes. >> and how long will that take? >> i do not know. i know it will take us several weeks. i asked that question yesterday. simply for the categories we're already working on and i was told that to redact those will take us several weeks longer. it will take us much longer than that, but we will provide them. notwithstanding the congressman who has now departed, his view, we never said we wouldn't comply. we're simply trying to help refine the search so that, in fact, we could get this done some time in the near future. that is, this year. but at the rate we're going, if, as noted by an earlier question, if you want all the categories of all the applications of everybody who has been through the c-4 process for the last four years, we can do that and we will do that, but it's going to take years. >> thank you. >> i thank the gentleman. thank you for your questions.

but hopefully, we all understand that asking for all the e-mails, the ones that you seem to be least willing to put first are the ones that probably have no 6103. they're very quick to go through and somebody simply looks and goes oh, she's talking to an outside entity. by definition there can't be any 6103 there. right? >> correct. all the ones that are easy are easy. the ones that are difficult are difficult. there are more of the difficult ones than we would all like. >> of course, the ones that was gentleman was asking for before he had to leave were the ones that were not being given, which by definition very often are ea easy? >> right. i would just note for the record that all the