one of the rogue agents in the irs cincinnati office. initially blamed for the improper targeting of tea party groups. she and carter hall, veteran irs lawyer, testified before congress thursday, and confirmed that officials in washington, including an obama appointee had a direct handing in delaying the applications of conservative organizations. for more joined by "wall street journal" assistant james freeman. senior editorial page writer and all things irs, collin levy. editorial board member steve moore. collin, give us the summary here of what we learned at the hearing on thursday. >> right, paul. we learned that the hearing -- at the hearing thursday this scandal didn't end in cincinnati and went through the office of chief counsel williams and went through the office of lois lern lerner. what you heard from elizabeth there was very clear. she said she was getting her orders from management in washington and knew exactly what she was doing. now, her management in washington was carter hall. he was the irs attorney looking at these c

election irs officials and even the white house blames it on lower level employees at the irs cincinnati office the employees fired back. >> you and other people in the office say you are being unfairly blamed with this political activity going on in the washington office. >> i can't comment on others but personally i felt like they were planning this. >> a former irs employee said an obama appoint tee was blamed for the delay. the agency inspector general for not mentioning it early. >> a political appoint tee i expect this dispute. i don't know if i deserve it. i expect it. my career people neither deserve it nor should they have to expect it. >> that inspector general in turn blames the irs for not providing documents to that extent last week. until last week. this investigation is going to continue. >> doug luzader live in washington, thanks. >> a couple watching their dogs they end up catching a cat burglar in the act. >> everybody laughed at me that we had web cams. how much does it work and how much does it cost? >> the thief eventually dropped the couple's stuff and ran off through a ba

from the beginning, washington irs officials blaming workers in the cincinnati irs office, people say they were targeted testifying before state lawmakers. justin thomas was one of them, he joins us, nice to see you, sir. >> nice to see you again, greta. >> you have been listening to the targeting business, is this a phony scandal, give us your thoughts on this? >> phony impacts quite a few of us here. i don't know how many thousands of people qualify before we go from phony to real? >> what do you think when you hear the president say this? i mean, the president said, on may 15th, it's serious and he will not tolerate it and it's terrible. and now six or eight weeks later, something that was serious before is now phony? >> yeah. a bit of consistency issue. i can tell you it's not funny to me. my name on the questionnaire is a serious issue and has serious ri risks for me and my family. >> when you talk about your name on a questionnaire, as i understand it, it's a questionnaire given to one particular tea party group, not one that you were a member to. they basically said, what do yo

>> reporter: jon, it promises to be interesting as we hear the washington irs and cincinnati irs field office perspectives from two key witnesses. the house oversight committee will hear from a total of five witnesses today but a lot of focus will be on carter hull, who recently left the irs in washington as tax law specialist and they did not like being scapegoated for the irs mess. >> chichi was there early on and it was quickly sent to washington where the orders continually seemed to come to do what the former acting commissioner called, not distressing. you know the truth is, that decisions were made as far as we can tell, problem properly in the beginning and this grouping was a way to stop literally hundreds of applications. >> reporter: we will also be looking for signs of tension as chairman darrell issa and the top democrat on the panel, elijah cummings have been engaged in a very public spat over this particular investigation, jon. >> there is also, mike, this revelation that the chief counsel's office at the irs wanted to know about the political activities of some of these groups

i'm sure of interest to the viewers, occurred from the baltimore office, instead of the now infamous cincinnati irs office. >> whether we like it or not, the irs audits people all the time. some is legitimate. i'm curious. what makes you think that your audit was unfair or was targeted because you're conservative? >> well, there's three things, greta. the first is the timeline. the audit of us as an existing organization closely parallels the audits of all the new conservative organizations applying for tax status for the first time. the second is that a new conservative organization, the hawaii tea party was specifically asked about their relationship to the leadership institute and to turn over the training materials that they received from us. the third is the nature of the questions that we received from the irs. so there's either amazing tell ep think occurring across the irs offices or something going on behind the scenes. >> what were the questions you thought were inappropriate or made you suspicious this was an an appropriate political targeting? >> there were a wide range of questions. th

we could soon hear from an irs agent at the cincinnati office. that's where officials say staffers targeted some groups applying for tax exempt status. fox news has learned a house committee has invited elizabeth houghacre to testify on thursday. she accused the irs official lois lerner of launching a nuclear strike on the cincinnati office by blaming rogue agents for the targeting. she told the congressional aids that kept close eye on staffers so these two rogue agents running amuck for three years, for three months it would never happen. historic day in the nation's capital george h.w. bush back at the white house to celebrate a special milestone. [ applause ] his volunteer organization points of light gave out its 5,000th award to a charity today. president obama invited bush 41 to the white house so the two president could say present the award together. >> first, of course thank president and mrs. obama for this wonderful hospitality. it's like coming home for barbara and me. the rest of us just coming to this magnificent house and be greete

irs targeting of the tea party and conservative groups. ashley: now possible yeah. >> possibly five irs offices across the country in california and baltimore, maryland, not just cincinnatitions to the washington, d.c. irs office. look what they're talking about in the bill. in other words they want to restrict irs targeting. unless they see that the irs is implementing the treasury ig recommendations, until they see the irs doing that, this bill would hold back 10% of the funding. 10%. it also seeks to ban conferences where they were basically line dancing. that $4 million spent on the one conference which caused so much controversy. ashley: yeah. >> bonuses and videos like the "star trek" video you guys were showing. it would force the irs to disclose the way irs uses its funds and look at that, stop the irs from implementing health reform. sources in washington say it is unlikely this bill will see the light of day. probably face a lot of democrat opposition. but this is a, again, basically the gop, hey, putting down a marker. we're still upset with irs about not cleaning shop. tracy: you can cut funds six ways till tuesday, if they are going to target, they will targ

irs scandal. the two officials from that local office in cincinnati that were blamed for all of this are going to testify under oath, and we expect them to say that it goes higher up in washington. house oversight committee chairman darrell issa will join us, he'll tell us what he expects to hear from the whistleblowers today on capitol hill. bill: that is moments away. also, investigators saying they now know what caused this rocket to crash seconds after liftoff, martha. martha: plus, no money? no problem, folks. how one city is using a wild west fire sale to try to pay down their debt. ♪ i'm back in the saddle again out where a friend is a friend. hey, the new guy is loaded with protein! really? 25 grams of protein. what do we have? all four of us, together? 24. he's low fat, too, and has 5 grams of sugars. i'll believe it when i--- [ both ] oooooh... what's shakin'? [ female announcer ] as you get older, protein is an important part of staying active and strong. ensure high protein... fifty percent of your daily value of protein. low fat and five grams of sugars. see? he's a good egg. [ major

employees at the irs office in cincinnati say they will not take the fall. >> personally i, i felt itear strike. i felt they were blaming us. golt and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection. mhandle more than 165 billionl letters and packages a year. that's about 34 million pounds of mail every day. ever wonder what this costs you as a taxpayer? millions? tens of millions? hundreds of millions? not a single cent. the united states postal service doesn't run on your tax dollars. it's funded solely by stamps and postage. brought to you by the men and women of the american postal worker's union. we replaced people with a machine.r, what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally. ...and a great deal. . thanks to dad. nope eeeeh... oh, guys let's leave the deals to hotels.com. ooh that one! nice. got it! oh my gosh this is so cool... awesome! perfect! yep, and no angry be

irs employees from that cincinnati office pointing the finger back at washington that the scope of the targeting extended from the tax agency's highest offices. let's bring in the executive director for the american center for law and justice. great to see you. >> thanks, alisyn. >> sounds like you and i have to play a little bit of the chase the blame game here, the pin the tail on the higher up because everybody's pointing fingers in different directions. here's what we know. elizabeth hofacre there says it was not her, not a rogue agent in cincinnati, a higher up, i think she pointed towards carter hall, a 50 year long irs specialist who says he also got directives from higher-ups to give more scrutiny to these conservative groups. where does this end? >> there's a good indication when people don't take the fifth amendment, alisyn. when carter hull decided to testify and testify in full as he did today, it changed where the focus was. the focus was lois lerner who took the fifth and still very much involved in the finger-pointing towards her. but what carter hull had that came out l

also testifying today on capitol hill cincinnati irs worker who says she was deeply offended by the blame placed on her officeme how you felt when lois lerner with the planning question on may 10th says this was inappropriate actions by line people in cincinnati? >> sir, like i said before, it was like a nuclear strike and i still -- >> that's a term you used with -- >> with the earlier interviews. >> with your interview, a nuclear strike. >> lois lerner sat where those witnesses sat several weeks ago and these two witnesses put on a uniform and defend thd country and the constitution so she could hide behind the constitution invoke her fifth amendment right but only after she blamed them. >> trey gowdy joins us. good evening sir. >> good evening. how are you? >> very well. after today's hearing how high up in the irs are you suspicious that some of this targeting went on? >> well, i want to take a good hard look at the chief counsel for myriad of reasons. number one, he's a political appointee. what we learned today is that the chief counsel knew of a guide sheet, i want -- i don't want to call it a bolo, a

tracy: cincinnati office of the irs says don't blame the tea party for this scandal. what?earing on capitol hill is looking for answers on who is to blame. details are coming up. >>> first top of the hour. the dow is is up 80 points. we have good earnings report. nicole on the floor of the new york stock exchange. people must be happy. >> if you're a bull out there, watching the 401k or ira you're really happy, right? you're hitting the dow hit all-time record intraday highs that is something. this is a day that goes down in history. today now the dow is up about 80 points. it had been up 120 points earlier today but still posting gains and likely to post gains for the week if it stays around these levels which is four weeks in a row. you mentioned earnings. we've seen good earnings from morgan staaley. the banks are doing well, united health care. look at unitedhealthcare which is hittings an all-time high today. second-quarter earnings came out and they easily beat the estimates. the whole health care sector is doing very well along with energy and as i noted some of the

the committee heard from two irs witnesses today, one of who was from the infamous cincinnati office.appointed to discover that she must have left her smoking gun at home. >> during the transcribing of the interview, you were asked if you were aware of any political bias by employees in the cincinnati office against tea party organizations. and you responded no, quote, no, i am not, is that correct? >> yes, sir, that is correct. >> and you still stand by that? >> yes, sir. >> you also asked this question, are you aware of any political motivations behind the developing and screening of any tea party organizations? again you responded no, i am not. >> and is your testimony the same today? >> yes, sir. >> okay, so based on your own personal experience did you ever receive direction from anyone in the white house concerning your handling of the tea party applications? >> no, sir, i did not. >> you know, we heard exactly the same thing from every -- just to let you know, we heard the same thing that you just said from every single person we interviewed. 16 of them. of you all. so i don't

that doesn't mean it it goes to the white house, but it means that the irs in washington, not just the cincinnati office about this and was involved in some way. >> so willie, you do care! >> he's checked in, joe. >> our thanks to david maraniss. >> you're cutting willie off. he has more to tell uls. >> no, i'm good. i have to get back to the royal baby odds. i'm busy. >> he's on royal baby watch. david, thank you very much. and ben smith, thank you as well. >>> up next, new york's balancing act between privacy and security. we'll discuss the stop and frisk policy with darius char knee and william bratton. you're watching "morning joe" brewed by starbucks. "i'm part of an american success story," "that starts with one of the world's most advanced distribution systems," "and one of the most efficient trucking networks," "with safe, experienced drivers." "we work directly with manufacturers," "eliminating costly markups," "and buy directly from local farmers in every region of the country." "when you see our low prices, remember the wheels turning behind the scenes, delivering for millions of americans, e

irs, co eleven levy and steve moore. give us the summary here what we learned? >> we learned the hearing on thursday that this scandal didn't end in cincinnati. it went to the officechief counsel of wilkins and also lois lerner. you heard that she was getting her orders from management in washington. her management in washington was carter hull and he was looking at the cases. he said specifically when on he had a couple of test cases he was required to run them up the chain to ms. lerner and to the chief counsel and we unable to sign off those cases without their permission. >> paul: and the general counsel's office role, william wilkins because there is only two political appointees, wilkins and whoever is running the irs. so this isjc-'ñ significant. what is the irs saying about wilkins' role? >> the irs is some pains that he wasn't at a key meeting where his office was reviewing some of these applications, but i think it's very interesting because one of the reasons that mr. wilkins was hired presumably when the white house hired him, they said specifically they admired his expertise in dealing with nonprofit organizations. so the idea he wasn't in the loop an

cincinnati. it has moved to d.c., right? >> we're talking about the washington, d.c. office of the irs. not necessarily the white house. >> it has gone to the chief white house -- the chief irs scandal, a political appointee, who did indeed hold a meeting inside the white house. >> i will argue with the daily caller's reporting. you asked him important questions. what they're doing at this daily caller which as you know is a very right wing perspective newspaper. he has an agenda. all he's doing is drawing guilt by association. you asked him pointblank whether he had any evidence whatsoever that these procedures were discussed. he had none whatsoever. the only reason he has this information is because the white house visitor logs are public which the obama administration in an historic commitment to transparency has made public. it's backfiring a little bit politically because right wing reporters have access to those logs. >> hold on a second. we have scott here from townhall.com. you think it's not a fake scandal. make your point. >> it's not a fake scandal. a fake scandal is what the

witnesses today claimed innocence in the cincinnati office and pointed instead the finger of blame at the washington d.c. office held by one of two, one of two irsointees of the president. fox news chief congressional correspondents with our report. >> the investigation into the ira starting of conservative groups focus on hearing from two key figures, recently retired 48-year veteran of the irs said is handling a two-party applications was delayed by the office led by william wilkins, and a obama appointee. >> he said one group should be approved for tax-exempt status and what should be disapproved and get further information. is that correct? >> that's correct. >> the given to someone who had no experience and to come away from you after you met with the chief counsel's office. is that correct. >> as correct. >> in cincinnati agent said washington was involved in her work on two-party applications as well. >> i was frustrated because of what i perceive as micromanagement. >> after the targeting scandal broke the early political narrative was it was the fault of to rogue agents in cincinnati >> did you and other people in the cincinnati office

member cummings and members of the committee since 1999 i have been an irs employee in the office of exempt organizations in cincinnati. as of april 2010 my position was in a eulogy termination specialist. at the time i have been assigned to serve as the emerging issues coordinator. in this role as test with handling applications and identified issues. in late april i was assigned by my supervisor to handle all applications that have been identified as applications by tea party groups applying for 501(c)(3) or 501(c)(4) exemption status. initially around april 302010 approximately 20 tea party applications were assigned to me. subsequently received a steady flow tea party applications. there were occasions when other agents and applications from liberal or nontea party type groups. when that occurred pursuant to the instructions i have been given i would send those applications of general inventory since they were not within the scope of the tea party issue. around the same time these applications were assigned to me i also learned that to tea party application that ben assigned to carter hull pedestal that was the to

irs? directorching a former of the cincinnati office who said that that office that works on the 50 c three -- 501(c)(3) taxes is always understaffed and the workers are overworked. he said that is one of the problems. that the number of tax-exempt organizations that apply for tax-exempt status have ballooned in the past 10 years. and the staff of that office has not increased. so who advocates for these workers that have been accused of all kinds of crimes when they are overworked? a lot of applications that are not fully filled out. the internal revenue service has theged exclusively for primary. who gave them the authority to change that status? host: this training issue and staffing issue is something you talk about in your report. yes, the employees and cincinnati obviously have their own attorneys and things like that. but since about 2005 i have been pointing out in my december report to congress where i am told i law to identify 20 of the most serious problems that the and governmental entities organizations, specifically the exempt organizations unit, has been understaffed in many,

least in part from the office of the consol, a political appointment position, one of two in the irs. >> talk about it a little bit. elizabeth hofbaker is some agent in cincinnati holding back conservative groups' approval process in the 501(c)4s, i believe. above her was carter hall. >> that's right. >> lois lerner, was she above carter hall? >> absolutely. >> what are we doing with lois lerner? >> we intend to have her back. as you know, the committee voted she waived her fifth amendment rights as to the questions we wanted to ask her, when she made extensive statements on the subject and then refused to answer additional questions. that will be a next step. but ultimately it is part of the stumbling in this case. had lois lerner answered our questions truth fully, we could have undoubtedly gotten to the truth of this much sooner. >> so you bring her to the stand, she will likely raise her hand and won't she take the fifth again? >> we have a number of ways to get this information. we are calling on the irs to free up communications related to this and to make other people available. but at the end of the day, yes. if government employees who continue to be g

it wasn't a couple rogue agents in cincinnati but instead a variety of offices across the country, from california to baltimore, the closer it gets to the top of the irs, the more the administration has been saying, oh, this is nothing, don't worry about it. but that wasn't where they were at the beginning of this. let's be clear. >> go ahead. >> let's be clear. there is one other thing -- there are two other things going on here. one is that the economy is not good. we are in the worst recovery in the recorded economic history of the united states. at the current rate of job creation, it will take us 11 months to get back to the number of people working in december of 2007 when the recession started. 11 more months. and in the meantime, those seven years, depending on what economist you listen to, between 8 to 12 million additional americans will have entered the work force without a job. so it will take us seven years to get back to where we were when we started, which is terrible, compared to every previous economic recovery that we've recorded in america, and in the meantime, we'll have that many more people, 8 to 12 million, without a job. at the

cincinnati. that is false because as you look at the map, there were four irs offices that targeted conservatives working groups in the irs, and an irs lawyer in washington, d.c. by the name of carter hall oversaw the cincinnati targeting. so it was not just a few low level people in cincinnati. >> gretchen: the argument number two is a conservative republican in cincinnati started the whole thing and that argument came from congressman cummings. listen to this. >> he is a conservative republican working for the irs. i think this interview and these statements go a long way to what's showing that the white house was not involved in this. >> brian: he also closed the investigation. he felt like we had all the answers. >> steve: it's false because he was saying it was john schaefer who spent 21 years at the irs and yet, you can see right there, highlighted in highlighter, it's lois lerner herself who sent letters to a bunch of the tea party groups. so get rid of that argument, too. >> brian: progressives were targeted. look at the numbers comparing the two over close to 300 groups that were conserv

in the irs, it is defense when it came to the question of targeting conservative groups was, well, washington doesn't quite know-- washington doesn't know what its cincinnati office is doing. the nsa is mad at edward snowden for excellent reasons but to one is ask be how is it some 29-year-old kid walks out with i zip drive and apparently the crown jewels of the american-- of american intelligence. obamacare was just delayeds it is the implementation of the employer mandate was delayed by a year because they looked at these rules and are incredibly complex. so increasingly we've become a country that just can't get stuff down. i think by the way that is one of the things that deeply impresses americans when they go to china. there's losses wrong with china. when you go to china you see buildings getting built, bridges leting builtment some of these buildings and bridges aren't of the best quality but look, i live within eye shot of ground zero, okay. i have watched for nine years for this site to be developed, okay. it's impressive, i understand it's a big construction project. but really nine years to develop, not quite two office towers. this he is a basic prob

irs employees to rush those applications through? i guess if you're not a republican you wouldn't. all of those applications have to go through a special unit, as we know now in the cincinnati office as has been widely reported. and here is what the manager of that group told the republican committee staff about how overwhelmed they are with tax exempt applications. on an annual basis, we receive upwards of 70,000 applications each year. on a monthly basis there could be 5,000 applications that would go through my group. they would typically look at 20 to 25 cases daily. it is just that the volumes, i hope you can appreciate the volumes that we're dealing with here. and you know, with limited resources the 70,000 cases a year, it gets to be daunting sometimes. yeah, i would think. when the republican committee staff heard that they had the bright idea to cut the budget of the irs. but the irs is the government's big profit center, every dollar spent on irs enforcement actually makes money for the federal government. here is how the acting irs commissioner explained that to house republicans last month, when he was hopelessly asking for an increase in the irs budget. >> we have ask

cincinnati but according to testimony by carter hull, long-time irs attorney, directions and instructions how to target conservative groups actually came from the top of the irs and the irs chief counsel's officemainly chief counsel william wilkins, now, he is a long-time democratic donor, has been loyal to democrats since the 1980s. in 2008 he actually represented former reverend wright, proopinion know, and now we have heard that he actually was in charge of coming up with these tactics to target these groups. >> let's get to that point. i read he also donated to g.o.p. lawmakers, too, that were active in tax law, even though he does have a democratic background. so, how unusual is it, just taking a look at the structure, how unusual that the chief counsel of the irs would be involved in this sort of level of screen if you want to use that word? >> well, it's not particularly unusual, but the point here is that they blamed it on cincinnati, and said that no political appointees were in charge. william wilkins was appoint it bid president obama to the irs and we heard these indicates were kicked up to him when they were first coming out after the 2010 house election when tea party groups got

irs chief counsel's office to put these questions together. one thing that happened, we how know it's not two rogue agents in cincinnati and went to the highest level appointee, an office i served in when i graduated law school a long time ago, my first job was with the chief counsel's office, with the office in atlanta at the time. the idea the chief counsel just meeting and two days later happenstance creates this new set of inquiries. hard to buy it. they can answer the questions by being put under oath and address the issues and find out what the chief counsel knew. this was in the middle of the 2010 election cycle. there are significant questions. this keeps going up the ladder. it started in cincinnati, then it went to washington then to lois lerner and her level. she takes the fifth amendment. now, it's again to the chief counsel's office and people talking about the chief counsel himself and a lot of questions have to be answer. >> you mentioned carter hull, a long-time employee at the irs and asked about the tea party cases and then told to go to the chief counsel, william wilkins and after his decades of service there and determinat

office beyond cincinnati was a bombshell. is that in and of itself significant? >> it is because it shows what the information that we are getting, both from the white house and from the irs, is not true. when they tell thus was only mapping in cincinnati and find out that it is -- not, that -- untruthful must certainly questions all of the answers we received both from the white house and irs on this issue. it gives us the importance of going poured. it is also questionable so many say this was not politically motivated. when you target people based on their political beliefs it is absolutely politically motivated. this certainly targeted conservatives and tea party groups and those of which trying to oppose the president and now we have an obama appointee involved in the chain of command here. we certain sly to continue and get to the bottom of this. >> i want to make clear some liberal groups say they were targeted as well. what do you have to say about that? >> george said the initial evidence he received did not indicate groups were targeted. that's something that came forward now as a possible offshoot. i think certainly it is suspect that it has been -- such a dela

irs lawyer. we talked about him a few weeks ago. there was somebody in the cincinnati officerom carter hull. now he's retiring. but could it be that it was actually carter hull's boss, a gentleman named mr. wilkins, who was the one who wanted to see these particular applications from tea parties. now it would go up to the chief counsel in washington. today could we find out that there has been a link between that person and the white house? that is the $25 million question today. >> steve: so when we heard this story in the beginning, oh, it's just some rogue low level people, rogue agents in cincinnati, some of those agents in cincinnati are going, wait a minute. we're not rogue. we were just following orders. in fact, elizabeth hofacre is one of the agents in cincinnati. she will be testifying. carter hull will be testifying. what's different about what they're going to say than lois lerner is reportedly mr. hull is not going to take the fifth. he's going to name names and tell people what happened. >> brian: according to the depositions, they're indicating they're going to

working his way up through the irs, from the bottom towards the top and has exploded what was the initial lie about this particular scandal it was centered in the cincinnati office and it was all lowdown bureaucrats no one cared about who were responsible. bill: maybe in the end it fleshes out, maybe it doesn't. alan, i think you would agree there are questions that still remain. regarding targetting of journalists talk to james rosen's parents if you don't think that is scandal. what do you think about that? >> i think there is issues like the james rosen issue and nsa issue. by calling everything a scandal republicans hurt their own cause everything is not a scandal. i'm concerned about the nsa. i'm concerned about civil liberties. i'm concerned about targeting of journalists. when you call everything a scandal, you lose whatever force you have and there is no, no discerning point of view. darrell issa was embarrassed when elijah cummings released all the information about the irs found a number about groups were not just conservative tea party groups were targeted. bill: we'll check the box on nsa for both of you. we'll continue to talk about this. rich, alan

cincinnati. it was about washington. second and probably most important, shannon, we "happening now" -- know that this went to the irs chief counsel's office, a political appointee, mr. wilkins. that office looked at the two tea party test cases -- when they were recommended that they actually approve one and deny the other, they said no, we are going to take the cases from a 48-year veteran of the irs, the expert in this area, we are going to take them from him and give it to someone who had been at the irs 4 months. when theyda they dthey never made a decision. that's how they really harassed the tea party groups, they never gave them a resolution, we know that that went to the chief counsel's office. you mentioned the chief counsel. william wilkins is a political appointee. is it plausible that he didn't share to the white house or someone in the obama administration at some point about this specific issue? >> yeah. we don't know. mr. wilkins will be coming in for his disposition. that's where you find out, when they near, under oath and we get the chance to ask them questions for a long period of time, that's when you find out these th

irs agent, her testimony could be key in figuring out the controversy. they are calling out the agent from cincinnati saying there was no way there were rogue agents in her office targeting tea party groups. martha: the boy scout thinned out. what to make on the obese scout being told they can't go to the scout biggest event which only comes up once every four years. we'll be right back. man: the charcoal went out already? ... forget it. vo: there's more barbeque time in every bag of kingsford original charcoal. kingsford. slow down and grill. >> with hotwire's low prices, we can afford to take more trips this year. hit the beach in florida... >> and a reunion in seattle. when hotels have unsold rooms, ey use hotwire to fill them. >> so we got our four-star hotels for half price! >> men: ♪ h-o-t-w-i-r-e, hotwire.com. ♪ martha: the ntsb is wrapping up its on scene investigation of the asiana crash at san francisco international. they are completing the investigation of the wreck and and the runtway. the next phase will continue with interviews and closer analysis offsite of the plane. 3 people were killed. dozens were injured on july 6. bill: one of the 6 female

irs scandal. the fact is it's far different than what you said. at the beginning, you said it was just the cincinnati office out more people in washington are involved, and then this past week we found out, despite what any of us think of the investigations on capitol hill -- and i see you smiling. i don't know that there's anything to smile about -- that it wasn't a couple of crazy people in cincinnati, that this information actually went up to the chief counsel of the irs, which was one of two political appointees by the president of the united states and the entire irs. so it doesn't sound phony to me, jay. >> i greatly appreciate that is the line pushed by republicans who want washington to be focused on scandals instead of the economy. >> no, no, no, no, jay, that doesn't work. is that the truth or not, jay? is that the truth or not? you said, jay, this was limited to cincinnati. that wasn't true. i want to talk about the economy, but talk to me -- >> give me a chance, joe. >> don't give me talking points because that doesn't work on this show. and you've been here long enough to know it doesn't work o

the committee's irs and the conservs are not talking enough about that, and that through the committee's investigation, you have found out that this really was in ohio, the cincinnati office -- that people in washington were not fully aware nor did they give the order for cincinnati to be doing that? guest: what we do know is lois lerner was involved. we know the office of legal counsel was informed. what we do not know is if the chief counsel new about this. our hearing last week, what we came to find out, was that an individual was overseeing the 40 years ofd 30 to experience and was replaced by somebody that was junior and very new to the irs and he questioned superiors about his removal from these cases. we do not know where that they call came from -- play call came from. washington was informed. the question is where did the play call come from and we have not gotten to the bottom of that, oh a we are dealing with, and what chairman darrell issa is dealing with, is a ranking democrat, elijah cummings, who is very intelligent, capable, and a strong partisan in his own right. he declared about a month ago that this case was closed, so it is difficult to say we are not

one from cincinnati who testified, and created a direct link to washington and we heard from mr. hull, a 48-year veteran of irs. he continued the link up to both lois lerner's office and indicated one of the two political appointee -- did you get that far? how far have you gotten in tracing it up the line? part of the audit we didn't interview anyone from chief council office. our timeline show it was consulted at some point. >> you can confirm that -- >> we can confirm. >> we are all in an ongoing review how it started, who was responsible. we have miss lerner exercised initially fifth amendment right. we may be call her back. this is an ongoing process. do you think it should be closed down, mr. george? >> not at all. if i may, the moment i was made aware of the fact that other groups were similarly, you know, you know, spotlighted by the irs i directed my staff to commence review of that. however, give the work we're doing with the fbi and with the department of justice we have to hold many of the things we otherwise would be doing allow for the completion of their work or that work. >> you're dotting your i's and crossing your t's. >> precisely. >> you are sub

irs is ridiculous and will not happen. you advocate for taxpayers. who advocates for the workers of the internal revenue service? i was watching of formal -- former director of the cincinnati officehas alwayst office been understaffed and overworked. he said that is one of the problems. the number of the tax-exempt organizations have ballooned in the past 10 years, and the fact that office -- the staff at the office has not increased. who advocates for these workers that have been accused of all kinds of crimes when they are overworked? not fullyations are filled out because the internal revenue service has changed exclusively for social welfare to primary. who gave them the authority to change the status? host: this is something you talk about the report. guest: the employees in cincinnati have their own attorney and things like that, but i can say that since 2005 i have been pointing out in my december report where i am told by law to identify 20 of the most serious problems that tax- exempt and governmental entity organizations has been understaffed in many ways. they are directly relevant to this issue. exempt organization unit has been getting an increasing number of applica

just cincinnati and a local office and bureaucrats, there were direct instructions if these applications said tea party or patriot on it, that got kicked up to washington, the chief counsel, the irsinted. that is -- that is at lead something that journalists should follow, right, to see exactly why that is. do you agree with that? >> joe, at the risk of incurring your wrath, i don't fault you for taking the story seriously. i think it's totally valid for reporters to get as much detail about what happened here as possible. but i think that, you know, if you fault the president for trying to dismiss the story like this and turning back to the economy, i think it's hard to fault him. i think people get a little bored about the debates about what to do about the economy. weem heard him say most of it about 1,000 times. but we still have millions of people unemployed. more important, we're coming up against potentially crossroads of enormous consequences -- >> i agree with you 100%. no, you're not going to incur my wrath, i just asked you a question. this is a question from me to you as a journalist. should journalists, after we found out last week in a hearing, found out that there

irs scandal heated up again yesterday on capitol hill. new bombshells released by the attorneys in the chief counsel office. these were the guys in dc, remember this is supposed to be only rogue people in cincinnatiw. but he decided to testify, unlike lois lerner. he did not take the fifth. and he actually said that his boss, an obama appointee, mr. wilkins, also was involved in signing off on some of these applications from tea party. >> steve: what's extraordinary is carter hull said he was ready to go ahead and approve some of these applications from tea party groups, but dc simply put -- essentially put everything in a holding pattern, extraordinarily, right through two major election cycles. elizabeth hofacre, in charge of processing the tea party applications, she said she was so frustrated by the micro management from dc, she said it was, quote, like working in lost luggage. so she apply to do transfer out of that department someplace else. >> brian: so the story goes that the irs chief wilkins was out of the loop. but he has a specialty and that was 501 c 3 and 4 applications before he even got the job. one of the cases he worked on pro bono, which steve, you can translate to mean for fre