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Fed official: IRS did not follow the law

By Lisa Desjardins, CNN Capitol Hill Reporter
updated 3:38 PM EDT, Tue June 24, 2014
STORY HIGHLIGHTS
  • House committee conducts another hearing on IRS targeting controversy
  • National Archives official says the IRS failed to tell his agency about lost emails
  • IRS lost two years' worth of e-mails from former administrator Lois Lerner

Washington (CNN) -- To the pile of accusations against the IRS, now add one of the first opinions by a nonpartisan official that the agency went outside the law.

That conclusion on Tuesday from the official responsible for managing historically important U.S. records came at a congressional hearing during which Republicans also tried to widen the spotlight of IRS scandal to include the White House.

David Ferriero, who heads the National Archives and Records Administration, told a House panel that the IRS "did not follow the law" when it failed to tell his agency about the loss of emails belonging to former IRS official Lois Lerner.

IRS hearing; Biden's struggle

The Lerner emails are of particularly high-interest because she was the most senior manager so far connected to IRS targeting of tea party and other political groups.

Lerner retired last year and has refused to testify before Congress, exercising her constitutional right not to do so.

The House has charged her with contempt as a result and her lack of testimony has frustrated Republican investigators.

Over a week ago, the IRS revealed that Lerner's hard drive crashed in 2011, destroying thousands of emails and documents. The agency insists it has retrieved some 24,000 of the missing emails by checking the accounts of other IRS employees who corresponded with Lerner.

Republicans have pounced on the technical aspects of the crash as well as on whether the IRS followed federal records keeping law by not having a better backup system to retain electronic information. Those laws also require agencies to notify the archives of any loss of official records.

Tuesday's hearing before the House Oversight Committee followed a contentious session on Monday night during which the panel grilled agency commissioner John Koskinen.

In questioning before the panel on Tuesday, Ferriero told lawmakers that Lerner's emails were certainly federal records -- either temporary or permanent. And he said the IRS has yet to report the loss of the hard drive and the emails to his agency.

"Did they break the law?" Rep. Tim Walberg, a Michigan Republican, asked.

"I'm not a lawyer," Ferriero answered.

"Can we safely assume they broke the law?" Walberg followed.

"They did not follow the law," Ferriero concluded.

White House official testifies

The IRS has maintained that it did not realize the full extent of the hard drive crash until late April or early May.

Koskinen testified the IRS waited to tell Congress because it was trying to retrieve and reconstruct what information it could at first.

The same hearing included testimony from White House attorney Jennifer O'Connor, who worked at the IRS from May to November of 2013.

Oversight Committee Chairman Darrell Issa subpoenaed O'Connor after the White House initially said that she left the IRS before the agency knew about the hard drive crash and could not offer any meaningful testimony. She agreed to appear following the subpoena.

That set up immediate tension, as the California Republican opened his questioning by accusing O'Connor of being a hostile witness, demanding quick yes or no answers.

"I'm definitely not hostile," she answered in an almost gentle voice, stressing that she was eager to cooperate and ultimately sparking Issa to say the term "hostile" was not accurate.

As the White House foretold, she shed no light on the Lerner hard drive crash. But O'Connor did give one of the most detailed public descriptions yet of how the IRS initially responded to the congressional investigations into the tea party targeting.

Tedious process

She laid out a tedious five-step process to find and collect tens of thousands of emails, for which the agency was unprepared at first.

"The IRS' material is protected with careful encryption," O'Connor said. "So it needs to be processed before it can be reviewed. They have to load it and flatten it and then decrypt it. ... Then, they would run the (search) terms that the congressional committees had identified over the material and once that was done and the material was viewable, they would move it over into a review tool."

O'Connor said that then acting IRS Commissioner Dan Werfel was emphatic in directing that the agency turn over documents as fully and quickly as possible in response to congressional requests.

But when she arrived, O'Connor saw an IRS that did not have the resources in place for such an operation.

"We (needed) to add people because the IRS had never encountered anything like this," O'Connor told the panel. "We didn't have the staff in place to do this kind of document review production."

She added that the agency also had to add significant server capacity to handle the requests.

"I think the record of the IRS reflects very very hard work to produce the documents," O'Connor concluded.

IRS blasted over lost hard drive, but no apology from agency chief

Key questions about the controversy

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