no one at the white house knew about the wrong doing in cincinnati. accept that first of all? and given that, what's the most important unanswered questions at your hearing this week? >> well, george, first, we just don't know yet. there was an audit done by an inspector general. a bipartisan investigation is necessary. i also think that special counsel is going to end up being necessary here. what we do know politics was put ahead of the public interest. it was done in two of the most sensitive areas of our government. and second, our national security. second, look, i was one of the people that sent a letter, in march a year ago, what's going on here? we're hearing from all of these consecutive groups. there seems to be targeting. the irs apparently took a look at it. responded to our letter, indicated that there was no problem. unfortunately, they were informed of it and within a week of our letter being responded to, they actually had a briefing, the deputy commissioner of the irs, of these problems. they never bothered to correct it. over a year

the belly of northeast. looks like tea partiers are getting beastly. leaders in cincinnatis whole irs crackdown started, tea partyers are just starting. with me george brennan. nothing fires up the base like being debased and, you guys seem jazzed. what is happening? >> we're right here in cincinnati, which unfortunately turned out to be the center of the universe for the entire problem here, but it also happens to be the center of the universe for a lot of the tea party movement. >> neil: what are they doing when they rally ask talk about this? not brought the tea party back to life, and even those media groups critical of the tea party are saying, we might not always agree but at it like a public image comeback. >> it's a boon and a lot of it has to do with the fact the president did us a favor by attacking the ap a week before our story hit so they were more than primed to talk about it. but it's definitely brought us back to life and gotten more new people to start looking. if anything that unidentifies citizens it's seeing the irs emblem in their mail box and those who

you really got into the bowels of that place in cincinnati. doesn't get how something this screwed up could happen as mr. owens was talking about, where people flag organizations that have the name tea party. >> i'm going to say up front what i don't know and we all don't know. which manager and which specialist set into motion that search for tea party groups and why they did it. i think those are the key unanswered questions out of cincinnati. what we to know, this is a mixture of interviews and the report from the ig, this was a unit that had incredible turnover. they had more managers than, you know, spinal tap had drummers. they constantly had turnover of specialist. they were moving responsibility for these cases from one group to another. it is complicated stuff as marcus was saying. it's not really very easy to say with finality, this group is doing too much politics. and they have to consult with lawyers back in washington to get real close advice on the tax rules. it's not an easy process. they screwed it up. >> i hate to call it a hu

now we're down to the cincinnati office of the irs. that's what we're going to have to deal with here for the next month and i think the president needs to get ahead of it and probably put a new person in there and find out what happened and report to the american people and it will burn itself out, too, and it will move to the next thing. >> the "new york times" as peter baker wrote today this is getting a lot of play social media wise, but the president has talked longingly of going forward. a reference to the 1998 warren beatty movie to say what he really thought. right now, people on the right think that the president legitimized the irs issue as a real scandal and there is something for them to grab on to and put their teeth around. >> that's what they're down there. remember that the earth is warm and that the economy is growing, the deficit is shrinking, that health care costs are flat and out and benghazi was nothing and as i said, there may be something amiss in the cincinnati office of the irs. if there is, we should find out

>> we know it had to go up the chain in cincinnati at this office but there are reports that some of this was getting bounced back to washington for secondary review. >> paul: kim, what about the white house response to this. the basic point is, we didn't want to interfere with an investigation so we took hands off. nobody told the president. president didn't need to know. does that pass to the kred battle test? >> no. this week was all about the white house shifting stories who knew what and when. increasingly the press and congress is saying, it's what you knew and didn't do over the past two years. reality is if you have a president and a campaign team that themselves back in 2008 were often as a campaign were targeting conservatives, there was no knowledge or understanding about what could be happening in the irs given all these reports that were bubbling up and congress was looking into it seems harder and harder to believe. it's also hard to understand the white house's strange proposition they could not get involved in this in any way because the inspector general. >> paul: i s

cheryl: the people who work in the cincinnati office, all of that. is defense. i know nothing, i see nothing. that ain't going to sell. cheryl: that is good. dennis: stocks, let's go down t the floor of the new york stock exchange with jonathan core tea of meridian equity partners. tweeting today that the fed chairman was speaking out of both sides of his mouth. any idea what they mean? >> i think so. year after a member that these comments are coming out of washington, so like all the politicians that we have done that talk and a both sides of their mouth. clearly what bernanke has been doing and what is being referre to is hedging his wording, hedging this strategy moving forward. this is not something new. what he is trying to do is manage expectations. we talked about where they will go, and at some point we know that the funding of our economy will have to stop. when is the big question or wha bernanke was doing today was tr to manage expectations of putting in a sock time line on when that could actually start, the process, and the effect of whe

i mean, this is a very important issue and you know, back to blaming it all on the cincinnati office.s from "the new york times," it was a strange front page article the times had on sunday by a reporter who is otherwise pretty good. he apparently hasn't been following the news on the story he was reporting. even the news in his own newspaper. because he keeps pushing the angle of oh, there was just chaos and confusion. they were overworked. the overworked excuse ought to explain why they were rubber stamping everything. not why they're going into overdrive and doing more work and harassing tea party and what their tweets are and every member of their family and resumes. they're saying we worked hard to harass partiers because we were overworked. then you look at true the vote, one of the groups who applied for 501 c 3 and 4 status. statement they're audited by the overworked cincinnati office, they're being investigated by the fbi, by the atf, because they were at a manufacturing plant with a license to make guns and they weren't making guns. >> epa. >> osha. there was one person the

>> well, we know for sure that it had to have gone up the chain within the cincinnati office, but there are also reports, you know, individual reports, that some of this was getting bounced back to washington, you know, for a secondary review. >> kim, what about the white house response to this? their basic point is, look, we didn't want to interfere with an investigation so we took complete hand's off, nobody told the president, the president didn't need to know. does that pass the credibility test? >> no. you know, this week was all about the white house's shifting story. who knew what and when. but increasingly, the press and congress is starting to say, what really matters is not what you knew over the last two months, it's what you knew and what you didn't do over the past two years. and the reality is you've got a president and a campaign team that themselves back in 2008 were often as a campaign, were targeting conservatives. the idea that there was just no knowledge or understanding about what could be happening in the irs, given all of these reports that were bubbling up and th

and i don't have the history. >> in your view of this situation have you identified in cincinnati the individuals who have developed this bolo list? >> we have not yet. >> why not? >> we have had some difficulty in terms of getting clarity from some of the irs employs we've interviewed. keep in mind this is an audit. the people we've been interacting with her not under oath, and so if this matter develops further and changes its character, that might change the willingness of people to be more forthcoming with information. >> no, the committee yesterday interviewed the manager of the ruling an agreement office in washington, d.c., and for at least part of the time period of question she oversaw approximate 300 employees in cincinnati unit that determines whether or positions qualify for tax-exempt status. she said that she was the first person in washington office to learn about the use of inappropriate criteria. do you agree with that? is that in your report? >> i've no information on that, but if you'll, if i can beg your indulgence for one minute. >> the gentlelady's time has expir

this small group of people in the cincinnati office grew up. screwed up nobody is quite to deny that. they simply screwed up. this committee messed up by not giving any clear criteria for what a real charitable organization is. the law is not clear and people have to make judgments. that means we have to collect a lot of data to try to figure out what people are actually up to. mr. miller, there is clearly a problem in our current way of determining what a primary purpose of an organization is. i want you to think about what i am talking about. as i watched this conversation shift from what is right and wrong to the irs's problem. we could have appealed that along with obamacare yesterday. it is also about republican storyline in this agenda. we need to find some truth here. i have heard members of this committee now talk about it. the irs cannot access your medical files, is that true? >> correct. >> they cannot find out your private medical information. >> that is correct. >> their job in obamacare is to simply collect paid financial informati

the activity down in cincinnati. we haven't been told what the discipline has been for those individuals. then the question of how cincinnati was supervised as jay is saying and you are saying, judge, from the group headed by lois. it was slow and took way too long. and then the question of how the super vision was exercised overall from the front office. this is no secret. i got calls from fox and other players saying what do you think of all of the c4s and i didn't take the calls. i didn't know much about it. in my watch it was about the c3s. there was no secret here. the front office should have gotten on this and found out what was going on when people like jay were raising issues and people like orrin hatch. >> judge jeanine: unless they already knew and there was nothing to stop. coming up work scandal after scandal hitting the obama administration people are starting to use the "i" word. is impeachment a possibility. and the honeymoon is definitely over for our grou creep of the. within days of saying i do you

cincinnati. there are and haful of people around the country that report in to cincinnati as well. >> in 2011 the report finds that the director of exempt organizations eo on this chart, and i'm afraid it is not on the screen yet, this is miss lerner's position became aware of the inappropriate criteria. she ordered the criteria changed and it was changed in 2011 to no longer refer by name tea party or patriot. mr. george, is that correct? >> that is correct, sir. >> mr. miller, as then deputy, were you aware of the problem with the criteria in june and july of 2011? >> i was not, sir. >> in january 2012 the criteria were changed again to an, i quote, organizations involved in limiting expanding government, educating on the constitution and the bill of rights, and social, economic reform movement. the ig's report indicates that this change was again made in the cincinnati determinations office without executive approval. mr. george, is that correct? >> that is correct, sir. >> it was changed, without executive approval? >> that is our understanding? >> the may 2012 criteria are in place today, it

now the irs continues to blame the targeting of conservatives and a few rogue employees in h the cincinnati office which handles applications for tax exempt status. sources say the irs commissioner told them two employees there have been disciplined. but a veteran lawyer told us today that this problem was not limited to cincinnati, that her clients who were also targeted received letters as well from california and even from washington, d.c. now, the attorney general has tried to take the initiative by promising congress a nationwide investigation to see if employees broke the law. >> is your investigation going to go beyond cincinnati, beyond ohio? is it going to be a national investigation? >> yes, it would. the facts will take us wherever they take us. it will not be only one city. we'll go wherever the facts lead us. this is something that we will base -- at least at the beginning stages we are basing it in washington. and that way i think we can have a better impact nationwide. >> brian, at last count we have four congressional investigations. >> lisa, we keep hearing cincinnati in co

cincinnati. there are a handful of people around the country that report into cincinnati as well. >> in 2011, the report finds that the drug of exempt organizations, yo on the sir, and i'm afraid it's not on the screen yet, this is ms. learners decision, became aware of the inappropriate criteria. she ordered the criteria change and it was changed in 2011 to no longer referred by name tea party or patriot. mr. george, is that correct? >> that is correct, sir. >> mr. miller, as then deputy were you aware of the problem with the criteria in june and july of 2011? >> i was not, sir. spent back in january 2012, the criteria was changed again to come adecco, organizations involved in limiting expanding government, educating on the constitution and the bill of rights, and social economic reform movement. the ig's report indicates that this change was again made into cincinnati determination's office without executive approval. mr. george, is that correct? >> that is correct, sir. spent it was changed without executive approval? >> that is our ndering. he may 2012 criteria in place today, it states, org

the cincinnati office identified some of those applications using screening terms. what was the nature of the other 202 applications? are they filed by liberal groups or moderate groups? we cannot measure the full impact without knowing the nature of these additional applications. who is responsible? we know officials tried to stop this behavior. who in cincinnati perpetuated his behavior? one person, two persons? we do not know. we have launched an investigation. we've requested additional documents as part of our inquiry. we'll follow the facts and see where they take us. this inspector general's report shows the need for congress and this commission to overhaul tax code. we have come a long way of the tariff act of 1894. when congress first created exemptions for educational organizations. today, there are countless political organizations on both end of the spectrum masquerading as social welfare groups. these 501(c)(4) groups seek status. it allows them to keep the identity of their donors secret. data collected by opensecrets.org showed groups spent billions of

she is the manager of the tax exempt division in cincinnati. is also the only common link to the rest of those six agents. and, in 2012 she released information to investigative journalist group about conservative groups who apply for nonprofit status. also released, private information about conservative groups that were never approved for the nonprofit status. so, when you talk about the hierarchy, megyn, when you get below lois lerner who is in washington and you get into ohio and cincinnati, the person below lois lerner is cindy thomas. she may be the next person that investigators and congress would like to talk to. >> megyn: yet, she has not yet been called to testament trace, thank you. joining me now jim jordan a member of that oversight government reform committee. congressman, great to see you, what do you make of that? will cindy thomas be added to the witness list and forced to come in and answer to whether she had a role in this? >> i think the chances are very strong. i mean, look. she answers to lois lerner, the very lady who took

scrutiny of the tea party began in 2010 in the tax exemption unit based in cincinnati. specialists here in charge of denying tax exemption to groups whose mission is primarily political, screening applications using three search terms, tea party, 9/12, and patriot. the words "tea party" became the shorthand term for all potential political cases. jeff cohen calls the targeting of anyone's politics appalling. >> because, remember, if groups who have the name "tea party" in their name, those words, can be targeted now, in a few years, groups with the word "progressive" in their name could be targeted by the i.r.s. it's wrong in either case. >> reporter: while the report calls the search terms inappropriate, it still concludes the cincinnati office was not politically biased. of the 298 organizations the office reviewed, only a third were triggered by conservative search terms. two-third were not. however, every tea party group was reviewed. what's missing in the inspector general's report is the question of why the searches lacked political balance? scott, these investigat

just two people in the cincinnati office, it was regrettable. now we are getting an indication it's happening in far more places across the country. this one is in el monte, california. there were other letters sent from across the country. the white house claimed this last week the targeting ended last year. really? here is jay carney on that. >> the misconduct stopped in may of 2012. so despite all the media interest in our april 2013 awareness, it's important to remember the misconduct stopped almost a year earlier. martha: look at the date on this letter. it shows one group was targeted and some might say harassed with a ploft questions about their status after they were left hang for a long time. this is may 6. just weeks ago. the white house claims this is just low-level officials. but these document show it did go higher up. dozen of letters. look at the signature on that, loisg. lerner. director of exempt organizations. it's lois lerner's signature on this letter. she doesn't have to go to work but she is still getting paid. she took the

the tip of the iceberg? cincinnatir ben swan joins us with the latest. the thought was there were only two people that were sort of targets of the investigation in cincinnati but you i underand it that you all you have learned something else? >> that's right, greta. when the story first started to break steven miller called them two rogue employees who he said had gone "off the reservation" and they were the center of all this. we started looking into the 1st story a year ago when tea party groups contacted us saying they were being unfairly targeted. we were fairly familiar with the story. we started to pull in documents and immediately found four names of sense is national field office employees who have been sending the letters with the -- asking for exorbitant amounts of information and facebook pages and website pages and wanting to see the pages on membership only area of websites. there were at least four employees in the cincinnati we were able to find. we took that information and cross referenced with a coupl

when the cincinnati office of the i.r.s. goes rogue, it's his job to show who is boss. why didn't he jump on it. taking charge. this president and his democrat alies need to show they own the i.r.s. story. and finally, told you so. the writers said again and again the government is no good. does this ineptitude from targeting the tea party to targeting the "associated press" cause for mitch mcconnell to grab control of the senate. i'm chris matthews. th us today, howard fineman, gloria borger, hunt hunt and -- kasie hunt, david ignatius. they may have resonated out in the country this week, passive, leading from behind. the opponents have ramped it up to challenge the president's very integrity. here is the republican chairman of the house ways and means committee on friday charging a white house culture of cover-ups. >> it seems like the truth is hidden from the american people just long enough to make it through an election. the american people have a right to the truth, to a government that delivers the facts, good or bad, no matter what. president obama promised to

there was an awful lot of confusion during that time, both at the local level... in cincinnatind, i think, in headquarters. >> reporter: she said the agents searched for short cuts to identify groups seeking for exemptions. >> it was looking for patterns. there are variables that may have caused some groups to come up more than others. like if there were liberal group groups but they had different names it might have been harder to detect a pattern. but if you had another group where maybe "tea party" showed up in a lot of the applications then it's like, okay, here's a lot of the same thing. >> do you understand how it could be perceived, though, out there in the country that the administration was using the i.r.s. to beat up on its political opponents? >> i can see why people who would like to believe that could believe that. i just don't think that it was realistic and i feel certain that didn't happen. >> reporter: she also told us, scott, that in her 24 years here at the i.r.s. in cincinnati, under two democratic and two republican administrations, she never heard anyone s

conservative groups went well beyond the office in cincinnati. lawmakers are taking new steps to get answers in the benghazi terror attack. first attorney general eric holder taking calls from both side of the aisle to step down as he is being investigated for possibly committing perjury. elizabeth prann is live for us with more. >> both sides reacting now. you remember last week department of justice acknowledged eric holder did sign off for fox news correspondent james rohns. we are learning the house judiciary committee is doing more for the attorney general when he said this. >> with regard to the prosecution of the press that is something i have never been involved with. >> holdiordering holder to cond review. he is hearing it from both sides of the aisle. liberal commentators wanting to see them out. >> it seems to me clear that the actions of the department have in fact impaired the first amendment. reporters who might have previously believed a confidential source would speak to them would have a legal of confidence. >> we have a troubling

the guys in the cincinnati field office were i think were politicly profiling. they were acting out of political malice. they were having a flood of applications and finding problems with the applications and they are painting with a broad brush stroke. some of the groups complained to members of congress who sent letters to the irs. the irs didn't fess up but did appoint an ig. now we have it up publicly and there will be remedies to this. we don't see real cover up. we don't see any evidence of outside political interference in this. as far as scandals go this is kind of self-contained and seems to be in the process of being fixed pretty quickly. >> we talk about being self contained. we see miller expressing an apology. we have lois lerner being the director of the irs tax exempt division issuing an apology while she was appearing before that crowd. we have yet to get a conversation as to whether or not she will appear. when we look at what happened in cincinnati how this bubbled up, is the big distinction of whether this targeting being such a term that the o

cincinnati. there were a handful of people around the country that report in to cincinnati as well. >> in 2011 the report finds that the director of exempt organizations on this chart, imafraid it's not on the screen yet. this as ms. lerner's position became aware of the inappropriate criteria, she ordered the criteria changed and it was changed in 2011 to no longer refer to by name tea party or patriot. mr. george is that correct? >> that is correct, sir. >> mr. miller, as then deputy were you aware of the problem with the criteria in june and july of 2011? >> i was not, sir. >> in january, 2012, the criteria were changed again to, and i quote, organizations involved in limiting expanding government, educating on the constitution and the bill of rights, and social economic reform movement. the ig's report indicates that this change was again made in the cincinnati determinations office without executive approval. mr. george, is that correct? >> that is correct, sir. >> it was changed without executive approval? >> that is our understanding. >> the may, 2012 criteria are in place today. it states,

>> i visited early in my tenure the cincinnati office which has many different operations, but i do not believe i went to cincinnati during this 2012 time frame. >> you take responsibility for an happened in cincinnati? >> dry dig responsibility for the list being done? i do not take personal responsibility for their being a list of criteria put on it, but i do accept the fact that this did happen on my watch. responsibilityke but recognize the fact that happened under your watch? >> i recognize it happened under my watch, and i'm very sorry that it happened while i was at the irs. >> one of the problems we have here is people are unwilling to take responsibilities for action that happened under their command. you have a duty, as far as i'm concerned, to find out what was going on in the cincinnati office when members of congress , 132 of them, 50 of them, 10 of them inform you that they think there is some kind of targeting going on. if that does not elevate your concern and interest, then something is fundamentally wrong between the way congress interacts with the administration and b

abused the trust. >> the apparent conduct by irs officials this cincinnati. >> the exemptfield office in cincinnati, ohio used inappropriate criteria. >> well, the president doesn't know about everything that is going on in every agency of government. should mr. bangor have known since this was a neighboring district in cincinnati where the irs office is? i don't think you can hold him accountable for what happened in the irs office. >> sean: that is probably george bush's fault, too. the administration wants you to believe they blame the lies on the few rogue irs employees in cincinnati. there is mounting new evidence that proves that top officials at the irs were in fact involved and leads right back to washington, d.c. joining me with reaction, fox news contributor, the architect, karl rove. how are you? >> i wouldn't believe nancy pelosi. what was she saying? that was just ridiculous. i have never seen a worse defense of president obama in the ineptitude of this administration than that. >> sean: there was a worse one. bob scrhum on 8 losing presidential campaigns. say

a woman was asked -- we want you to meet a man from the cincinnati area. he and his wife are personally audited because the irs said they were members of the tea party. the whole problem is too much government. it is too large. the real heroes are the moms and pops and aunts and uncles around this country remember and stood up and did not need to be told what was right or wrong. we know that this is wrong. go to local tea party website and take another look at the tea party. we are standing up for the rights of everyone. thank you for representing us. we would not have got here if it were not for them. thank you. >> thank you. [applause] we have with us next a woman who's the head of the tea party patriots. [applause] >> the irs veneer of impartiality is shattered. the irs must be audited. tea party patriots insist on independent, transparent, outside and thorough investigation because the irs cannot be trusted. the justice department is suffering from extreme lack of credibility as of the moment. tea party groups have been waiting for years for the irs to

because what we heard initially is all cincinnati, the higher up people didn't know about it and those assurances were false and now we need to eleven what other assurance will be given right now are false and refeed to learn about it under oath i don't let the facts go where they may. but it does lack like you had some mid-level bureaucrats who did this and their names are going to come out. they are protected by the civil service. you only have two political appoint ease in the irs so there is really nobody to fire, there is no evidence that there is this isly evil. this is inappropriate excuse me i don't they hid it from congress. they would not say. >> i don't know that. >> i don't know that hiding something from congress is illegal either. >> it might not be illegal. it is wrong. >> making false statements to congress. >> how about conspiracy? depriving americans of their civil liberties? how about the hatch affect forbidding civil service from engaging in political activity for starters? >> now not when you start out with an inspector general's report saying there is no evidence

>> sean, we've investigated the chain of command in the cincinnati irs office. n mind, when the scandal first broke, the acting irs commissioner steven miller said that the targeting of conservative groups happened at the hands of only two rogue irs agents. well, already weaved identified as many as six involved. what we've now learned thanks to two fox19 sources connected to the irs, none of these six agents had the same direct manager or area manager. in fact, the only common link between all these agents is one woman named cindy thomas, the program manager of the tax exempt organization's division, and the highest ranking official in the cincinnati division. thomas not only has the only common authority over all these agents but would also have been receiving system generated red flags when these cases in the system were therefore more than nine months. one more detail on cindy thomas. remember that progress civil journalism program, the manager who signed off on that document release, cindy thomas. will congress call up cindy thomas under oath about what she

which oversees the cincinnati unit which processed these applications. share the chairman's serious questions about why mr. schulman and miss lerner failed to inform congress about these problems. between, ladies and gentlemen, we are talking about truth and trust. to me this is one of their most significant failures. and i do not bleach their answers to date have been -- i do not believe their answers to date have been sufficient. truth and trust. i want to make a request of the chairman. now that the president has designated danny workel as the new head of the irs i think the committee should hear about his steps he intend to take to restore the public trust in the irs. as i said repeatedly. to do our jobs on this committee we must focus on oversight and reform. and reform. holding a hearing with him will allow us to do both. finally i would like to say a brief word about miss lerner. her attorney has written to the committee to inform us that she intend to invoke her fifth amendment right against self-incrimination. of course, i'm disappointed we'll no

we're talking about people in cincinnati, ohio. >> cincinnati was tasked with this nationally. they had the -- you can't pigeon hole it in cincinnati. this was the national effort to go through the review of these organizations. this is where it was tasked. one place. cincinnati. you can't say it's a local operation somewhere. go ahead. >> these were low-level staffers in cincinnati. i think that the problem here is the attempt to immediately go from that to the white house. and say, well you know what -- >> i'm not doing that. >> not you. >> let me ask you a question. lois lerner, who looks at these non-profits, knew about this a year before. according to the record now. you knew about this a year before they were denying it was happening. why didn't she fire the people who did it? why weren't steps taken to seriously discipline those who had done it? i'm concerned people weren't taking responsibility on behalf of this republic within our government, not being responsible to the organization of the irs, but being responsible to the country. that's the question. >> first of all we haven't g

they contacted the cincinnati irs office who had no comment on why and when the man was promoted anddirected him to washington and washington refused to comment citing the privacy act. the question is because you have done all of this reporting on the charts of people who actually did this. you are one of the few unlike the irs commissioner steven miller who wouldn't name names who is naming names. who on the chart that you guys have put together and i note cindy thomas at the top a name that doesn't get mention the often enough. >> almost never. >> megyn: who has been dealt with in any way? >> you can see cheerly a chain of command and this is where the problem is. stephen seok is one of the agents. cindy thomas is the program manager for all of the tax exempt organizations. there have been reports including in the recent law you suit saying that there are agents all over the country taking part in this. under the restructuring of the irs that happened this 1998 every tax exempt organization specialist answers to sense national and that means they all answer to cindy thomas. >> megy