[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
IRS OBSTRUCTION: LOIS LERNER'S MISSING EMAILS, PART II
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JUNE 24, 2014
__________
Serial No. 113-127
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
89-596 PDF WASHINGTON : 2014
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan Vacancy
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on June 24, 2014.................................... 1
WITNESSES
Ms. Jennifer O'Connor, Office of the White House Counsel, The
White House
Oral Statement............................................... 6
The Hon. David S. Ferriero, Archivist of the U.S., National
Archives and Records Administration
Oral Statement............................................... 7
Written Statement............................................ 9
Mr. Paul Wester, Chief Records Officer, National Archives and
Records Administration
Oral Statement............................................... 12
APPENDIX
Opening Statement of Chairman Issa............................... 76
June 18, 2014, letter from the White House to Reps. Camp and
Wyden, submitted by Rep. Horsford.............................. 81
Opening Statement of Rep. Cummings............................... 82
Aug 29, 2013, NARA Bulletin, subject: Guidance, submitted by Rep.
Duckworth...................................................... 84
Nov. 21, 2013, TIGTA Press Release, submitted by Chairman Issa... 90
June 23, 2014, letter from the White House to Chairman Issa...... 92
May 14, 2013, TIGTA Highlights of a report, submitted by Rep.
Lynch.......................................................... 94
April 7, 2014, Majority Staff Report ``Debunking the Myth that
the IRS Targeted Progressives'' submitted by Chairman Jordan... 95
Aug. 2, 2013, letter from IRS to Chairmen Issa and Jordan,
submitted by Rep. Davis........................................ 142
June 18, 2014, Politico Article ``White House hits back in IRS-
Lois Lerner flap''............................................. 149
Letter providing update on IRS document productions to Congress.. 150
IRS OBSTRUCTION: LOIS LERNER'S MISSING EMAILS, PART II
----------
Tuesday, June 24, 2014
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to call, at 9:35 a.m., in Room
2154, Rayburn House Office Building, Hon. Darrell E. Issa
[chairman of the committee] presiding.
Present: Representatives Issa, Mica, Turner, Duncan,
McHenry, Jordan, Chaffetz, Walberg, Gosar, Meehan, DesJarlais,
Gowdy, Farenthold, Lummis, Woodall, Collins, Meadows,
Bentivolio, DeSantis, Cummings, Maloney, Norton, Tierney, Clay,
Lynch, Connolly, Speier, Duckworth, Kelly, Davis, Welch,
Horsford, and Lujan Grisham.
Staff Present: Molly Boyl, Deputy General Counsel and
Parliamentarian; Lawrence J. Brady, Staff Director; David
Brewer, Senior Counsel; Ashley H. Callen, Deputy Chief Counsel
for Investigations; Sharon Casey, Senior Assistant Clerk; Steve
Castor, General Counsel; Drew Colliatie, Professional Staff
Member; John Cuaderes, Deputy Staff Director; Adam P. Fromm,
Director of Member Services and Committee Operations; Linda
Good, Chief Clerk; Tyler Grimm, Senior Professional Staff
Member; Erin Hass, Senior Professional Staff Member; Frederick
Hill, Deputy Staff Director for Communications and Strategy;
Christopher Hixon, Chief Counsel for Oversight; Mark D. Marin,
Deputy Staff Director for Oversight; Ashok M. Pinto, Chief
Counsel, Investigations; Jeffrey Post, Senior Professional
Staff Member; Laura L. Rush, Deputy Chief Clerk; Jessica Seale,
Digital Director; Andrew Shult, Deputy Digital Director;
Jonathan J. Skladany, Deputy General Counsel; Peter Warren,
Legislative Policy Director; Rebecca Watkins, Communications
Director; Aryele Bradford, Minority Press Secretary; Susanne
Sachsman Grooms, Minority Deputy Staff Director/Chief Counsel;
Jennifer Hoffman, Minority Communications Director; Elisa
LaNier, Minority Director of Operations; Juan McCullum,
Minority Clerk; Valerie Shen, Minority Counsel; Donald Sherman,
Minority Chief Oversight Counsel; Katie Teleky, Minority Staff
Assistant; and Michael Wilkins, Minority Staff Assistant.
Chairman Issa. Good morning. The committee will come to
order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
As I said last night late for many of you, and I say again
this morning, the Oversight Committee exists to secure two
fundamental principles: First, Americans have a right to know
that the money Washington takes from them is well spent; and
second, Americans deserve 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
hold government 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 citizen
watchdogs, to deliver the facts to the American people and
bring genuine reform to the Federal bureaucracy. This is our
mission, this is our passion, and this is what we are here for
today.
The committee meets today to continue our effort to get to
the truth about the IRS's targeting of conservative groups.
Last night, we heard testimony from the Commissioner about how
and why the IRS came to not save and, in fact, to destroy the
disk drive that contained emails of the now well understood and
criminally charged by the House former head of the Exempt
Organizations, Lois Lerner. And I say that again: Lois Lerner
has been referred for criminal charges, multiple criminal
charges by the Ways and Means Committee and held in contempt by
the full House. Her disk drive is missing.
His testimony included a number of significant admissions
and facts. For example, the Commissioner testified that he has
seen no evidence that there was any attempt in 2011 to retrieve
6 months of lost Lois Lerner emails from backup tapes or, in
fact, from the main hard drive of the server. He testified that
he does not know who at the IRS was involved in leaking the
knowledge about Lois Lerner's emails to Treasury and on to the
White House. He further testified that he did not believe
leaking to the White House was a problem because the White
House itself does not leak information. We will chalk that one
up to naive, not perjury. He testified that because he does not
know what was in Lois Lerner's email, he has no grounds to
believe they contain Federal records.
While I appreciate his time and effort, our relationship
with the IRS and the Commissioner was not improved by his
disappointing performance. In fact, one of the most troubling
portions of his testimony was to tell us that someone, who he
could not name, who worked for him, had told him sometime in
the entire month of April, not the 1st of April, not the 15th
of April, when we all have to pay our taxes, and not the end of
April, but just sometime in a 30-day period someone, he could
not remember, had told him one of the most important pieces of
information any of us could imagine, that thousands, tens of
thousands, or perhaps more emails of Lois Lerner were gone
forever.
I hope the witnesses before us today can help us understand
further how we can have an agency that expects all Americans to
maintain critical documents for at least 7 years and, in fact,
the agency itself systematically destroys records after 6
months. They are worried about data integrity for a
catastrophic event but not for criminal wrongdoing of their own
employees, not for waste, fraud, and abuse within the agency.
This is an agency the Commissioner was sent to fix. This is
an agency that had lavish partners and did not even live up to
the requirement for tax filing by its own members when it held
a party, complete with a very expensive video, at Disneyland.
This is an agency that targeted conservatives for their
political beliefs, that asked them for who their donors were
and whether they said prayers at the beginning of an event.
What they did in every way and held out their application for
501(c)(4) like a carrot, never informing them that even the
President's 501(c)(4) wasn't registered.
Today, the committee will hear testimony from Jennifer
O'Connor, a former IRS attorney who directly managed the IRS's
production, or lack thereof, of documents to this committee and
others. During a transcribed interview last year, IRS Chief
Counsel William Wilkins testified that Ms. O'Connor was one of
the two key supervisors overseeing the IRS' response to
congressional oversight. In fact, Ms. O'Connor was hired by the
IRS for the sole purpose of overseeing the agency's response to
congressional investigations of the targeting scandal. From May
2013 to November 2013, Ms. O'Connor led the IRS' response to
congressional oversight of the IRS' targeting of conservatives.
In May of this year, Ms. O'Connor was promoted to the White
House Counsel's office to work on responding to all
congressional oversight across the entire administration. The
IRS supposedly has spent $10 million in its response to
Congress. I am hoping Ms. O'Connor will enlighten us about how
the IRS spent so much of the taxpayers' money but supposedly
took them over a year to realize 2 years of emails from the
most critical witness had gone missing and, in fact, that same
year since she first took the Fifth. The idea that the IRS just
didn't notice is without believability.
We will also want to know from Ms. O'Connor how the White
House came to have insider knowledge about Ms. Lerner's missing
emails and, more broadly, what role the White House plays in
this investigation.
Today we will also hear from the Archivist of the United
States, David Ferriero, about the rules and regulations for
preserving Federal records. These laws include the Federal
Records Act that were put in place precisely for the purpose of
preserving important Federal records. In particular, I want to
ask the Archivist about one claim the Commissioner made last
night. The Commissioner said the IRS did not report a loss or
destruction of Federal records because there is no way to know
what was in Ms. Lerner's missing emails. But, in fact, we do
know some things about where--that were in Ms. Lerner's lost
emails. We know that, from 2010, email correspondence we found
at the Department of Justice, that Ms. Lerner sent over 1.1
million pages of a database to assist the possible prosecution
of those same groups that were targeted, and that that
information included 6103 personal identifiable information,
including donors.
I am hoping the Archivist can offer an opinion about
whether such correspondence and documents are, in fact, covered
by the Federal Records Act and whose loss and destruction would
and should have been reported in 2011.
The hearing today continues the committee's oversight
efforts of the IRS' targeting to get to the basic answers for
the American people. The committee will continue to
aggressively search for answers about how and why the IRS
allowed to be destroyed Lois Lerner's emails. This information
is critical to the committee's investigation of the IRS
targeting of conservative organizations.
I might add in closing, the Archivist is a welcome friend
of this committee. The Archives fall within our primary
jurisdiction. We take great pride in the work that the National
Archives does. Just last night, very proudly, I showed to the
Commissioner and put in the record a little piece of history of
General Jackson demanding that his government in 1803 return
some of the tax revenue taken from him for liquor that could
never be produced because his still burned. That is a piece of
history that was not covered by the Federal Records Act. But
because of the unique work that National Archives does, often
with volunteers from around America who come and study and
research, we know what we did not know then and would have not
ever demanded to store.
So I would say here today to my ranking member and to all
the members of the committee, the Federal Records Act is a
minimum of what must be stored. But there can be no limit to
the maximum of what will benefit generations unborn if we can
preserve a greater amount of documents with the massive
capability that our electronic era gives us.
With that, I recognize the ranking member.
Mr. Cummings. Good morning.
And I welcome the opportunity to hear this morning from the
Archivist of the United States about outstanding challenges at
Federal agencies with electronic records retention. During the
Bush administration, Federal agencies admitted to losing
millions, millions of emails related to ongoing congressional
and criminal investigations, including the U.S. attorney
firings and the outing of covert CIA agent Valerie Plame, and a
host of other matters.
Our committee played an integral role in investigating
these problems. Representative Henry Waxman, our former
chairman, engaged in a constructive effort to find solutions to
these challenges. He hosted monthly meetings with the Archivist
and the White House Counsel's Office to monitor progress in
implementing recommendations.
I believe the Archivist would agree with his predecessor
that those meetings served a useful purpose.
Today, the White House system automatically preserves
emails from all employee email accounts. Since 2008, there has
been additional progress. On November 28, 2011, President Obama
issued a directive to agencies managing Federal records. The
President also directed the Archivist and the Director of the
Office of Management and Budget to craft a modernized framework
to improve agency performance and begin managing email records
in electronic formats by 2016. I look forward to hearing a
status report on these efforts.
Also, the Archivist, Mr. Ferriero, will give us his view on
legislation I introduced last year, the Electronic Message
Preservation Act, which would require Federal agencies to
preserve email records electronically. The committee voted on a
bipartisan basis to approve my legislation, but it has
languished since then. And the Republican leaders have declined
to bring it to the floor for a vote. Although today's hearing
could have the potential to help improve agency systems for
managing electronic records, I was just made last night that
Chairman Issa issued a unilateral subpoena to compel Ms.
O'Connor to appear here today. Today's hearing title is, ``Lois
Lerner's Missing Emails.''
It is true that Ms. O'Connor used to work at IRS. She
worked there from May to November of last year. The problem is
that Ms. O'Connor left the IRS 7 months ago, in 2013, well
before these recent discoveries about Lois Lerner's emails. As
Commissioner Koskinen testified last night, IRS officials
learned there was a potential problem in February of 2014. And
it was not until May of 2014 that they understood the scope of
the problem, completed their investigation, and determined the
extent to which emails were available or not.
Ms. O'Connor left the IRS before any of these discoveries
occurred. So why is she here? According to the chairman's own
press release, it's not because of her old job; it's because of
her new one. She currently works at the White House Counsel's
Office. She has worked there for less than a month. One month.
But apparently that's enough to warrant a subpoena from the
committee.
Last night, the Republicans demanded to know when the White
House first became aware that the IRS was having difficulty
locating Ms. Lerner's emails. I am sure my colleagues will
repeat those questions today over and over and over and over
again. But we already know the answer. The White House sent a
letter to Congress on June 18th, and it said this, ``In April
of this year, Treasury's Office of General Counsel informed the
White House Counsel's Office that it appeared Ms. Lerner's
custodial email account contained very few emails prior to
April 2011 and that the IRS was investigating the issue and, if
necessary, would explore alternate means to locate additional
emails.'' That was in April.
But Ms. O'Connor did not start her job at the White House
until at least a month later.
I ask unanimous consent to enter this June 18th letter into
the record.
Chairman Issa. Without objection, so ordered.
Mr. Cummings. Today's hearing is not about policy. Today's
hearing is not about policy or substance. It's about politics
and press. Today, Ms. O'Connor will join the ranks of dozens of
other officials during Chairman Issa's tenure who have been
hauled up here unnecessarily, without a vote, without any
debate, as part of a partisan attempt to generate headlines
with unsubstantiated accusations against the White House.
Regardless of how many times the Republicans claim the White
House was behind the IRS actions, there is still no evidence,
none, that the White House was involved in any way with
screening applicants for tax-exempt status. No one of the 41
witnesses we have interviewed has identified any evidence of
White House involvement or political motivation. Not one. And
the inspector general has also, by the way, who was appointed
by President Bush, has also identified no evidence to support
these baseless claims. Issuing a subpoena to a White House
lawyer does not change that fact.
I sincerely hope that today's hearing will focus on a
serious examination of the longstanding and widespread
challenges of retaining electronic records and on constructive
solutions. And I actually look forward to the statements of our
witnesses.
With that, Mr. Chairman, I yield back.
Chairman Issa. I thank the gentleman.
Members may have 7 days to submit opening statements for
the record.
It's now my pleasure to welcome our panel of witnesses. Ms.
Jennifer O'Connor is an attorney currently in the Office of the
White House Counsel and, prior to that, as Mr. Cummings said,
worked as the primary deliverer of discovery to this committee
while at the IRS.
The Honorable David Ferriero is the Archivist of the United
States at the National Archives and Records Administration.
Additionally, Mr. Ferriero has asked that he be accompanied by
Paul Wester, the chief records officer at the National Archives
and Records Administration.
And as I understand and I ask unanimous consent that he
also be allowed to join the panel and answer questions. And he
will be sworn in. And my understanding, for all of us, is that
in fact Mr. Wester is the man most knowledgeable of and working
with the CIOs throughout government to ensure that the Records
Act, or the Federal Records Act and Presidential Records Act,
are adhered to and, as a result, is in fact--and Mr. Ferriero,
I appreciate your bringing him--the man who probably knows the
most about what has been asked of government and what
government could and should deliver, and at what budget.
So, with that, I would ask that you all please rise
pursuant to the committee rules and take the oath.
Please raise your right hands. High, please.
Thank you.
Do you solemnly swear or affirm the testimony you are about
to give will be the truth, the whole truth, and nothing but the
truth? Thank you.
Please be seated. Let the record reflect that all witnesses
answered in the affirmative.
For those who have not testified here before, there is a 5-
minute clock in front of you. I do not gavel people at 5
minutes, but I would ask that as you see it go yellow,
summarize. As you see it go red, bring it to a conclusion as
quickly as possible.
Ms. O'Connor, please give us your opening statement.
WITNESS STATEMENTS
STATEMENT OF JENNIFER O'CONNOR
Ms. O'Connor. Chairman Issa, Ranking Member Cummings, and
members of the committee, my name is Jennifer O'Connor. I am an
attorney by training. I practiced for many years at the law
firm Wilmer Hale, where I managed large complex litigation
matters.
On May 30 of 2013, I joined the IRS as counselor to Acting
Commissioner Werfel. I left that position on November 30th of
2013. I understand the committee is interested in my time at
the IRS, and I look forward to answering all of your questions
today. Thank you.
Chairman Issa. Thank you.
Mr. Ferriero.
STATEMENT OF THE HONORABLE DAVID S. FERRIERO
Mr. Ferriero. Chairman Issa, Ranking Member Cummings, and
members of the committee, thank you for this opportunity to
provide testimony on maintaining email records in Federal
agencies and NARA's response to the recent reports regarding
the alleged unauthorized disposal of email records at the IRS.
Accompanying me today is Paul Wester, the chief records
officer of the United States Government and a member of my
senior management.
First, concerning the reported unauthorized disposal,
Federal agencies are responsible for preventing the
unauthorized disposition of Federal records, including their
unlawful or accidental destruction, deletion, alteration, or
removal from Federal custody. Agencies should carefully monitor
the implementation of approved record schedules to prevent such
unauthorized destruction.
In accordance with the Federal Records Act, when an agency
becomes aware of an incident of unauthorized destruction, they
must report the incident to us. The report should describe the
records, the circumstances in which the unauthorized
destruction took place, and the corrective steps being taken to
properly manage the records in the future. If we hear about the
incident before the agency has reported it, we will notify the
agency and request similar information. The goal of this
process is to ensure that the circumstances that may have led
to the loss of Federal records are corrected and not repeated.
NARA learned of the alleged unauthorized disposal of the
IRS records through a letter, dated June 13th, 2014, from the
IRS to Senators Wyden and Hatch. In this letter, the IRS
reported the loss of email records of Lois Lerner, the former
head of IRS Exempt Organizations Division, dating from 2009 to
2011, as a result of the failure of a hard drive.
Accordingly, NARA asked the IRS to investigate the alleged
disposal of records, and whether it was broader than was
reported in the June 13th, 2014 letter. As is typical when we
send a letter such as this, we asked for a response within 30
days.
On a daily basis, NARA staff and records and information
professionals in each Federal agency work to ensure records
management policies and practices meet the needs of the
agencies, protect the rights and interests of the government
and its citizens, and identify the permanently valuable records
that document the national experience.
In November 2011, the President issued a memorandum on
managing government records, which resulted in the Archivist of
the United States and the Director of OMB issuing the Managing
Government Records Directive in August 2012. It has two high
level goals: First, require electronic record keeping to ensure
transparency, efficiency, and accountability; and second,
demonstrate compliance with Federal records management statutes
and regulations. There are a number of activities associated
with each of these goals, but the two major actions are by the
end of 2016, Federal agencies must manage all email records in
an electronic format, and by the end of 2019, all permanent
electronic records in Federal agencies will be--all permanent
records in Federal agencies will be managed electronically to
the fullest extent possible.
The effective management of email is a central animating
issue for the National Archives as we work to meet the
requirements of the directive. To help agencies meet the goal
of managing their email in electronic form by the end of 2016,
NARA has issued updated email guidance, known as Capstone. NARA
developed the Capstone approach as part of our ongoing efforts
to evaluate how agencies have used various email repositories
to manage email records. They provide agencies with a workable
and cost-efficient solution to email records management
challenges, especially as they consider cloud-based solutions.
It also offers the agencies the option of using a simplified
and automated approach to manage email, as opposed to either
print and file or click and file systems that require staff to
file individual email records. The Capstone approach allows for
the capture of records that should be preserved as permanent
from the accounts of officials at or near the top of an agency
or an organizational subcomponent. An agency may designate
email accounts of additional employees as Capstone when they
are in positions that are likely to create or receive permanent
email records. Following this approach, an agency can schedule
all of their email in Capstone accounts as permanent records.
The agency should then schedule the remaining email accounts in
the agency or organizational unit which are not captured as
permanent as temporary and preserve all of them for a set
period of time based on the agency's needs.
The Capstone approach is part of our initial effort in
providing assistance to agencies to enable them to meet the
email records requirement in the directive. We will continue to
provide additional information and guidance as we strive to
meet all of the directive's mandates.
Thank you for the opportunity to appear today. Mr. Wester
and I look forward to answering your questions about Federal
records.
Chairman Issa. Thank you.
[Prepared statement of Mr. Ferriero follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Issa. Mr. Wester, I understand you don't have a
formal opening statement. But in order to set the tone for the
committee, if you would briefly tell the committee about what
your relationship is with CIOs, how you are working with them,
how you are working to hit the deadlines of Capstone on behalf
of the Archivist, and of course the nature of how you receive
documents, to the best of your knowledge, from Treasury and the
IRS today, including the documents such as the ones we are
discussing. If you could set the stage, I think that's a good
non partisan way to begin.
STATEMENT OF PAUL WESTER
Mr. Wester. Okay. Thank you. I work with 100 staff members
here in the Washington, D.C., area and around the country to
provide records management assistance to all Federal agencies
across the government, of which there are about 250 active
agencies that we work with. The staff that works on records
management policy activities at the National Archives works
with the CIO Council, the Records Management Council, and other
councils across the government to identify different ways that
we need to approach this records management, electronic records
management challenge. What we have been doing since the
implementation of the directive back in August of 2013 is
working with all of the different agencies across the
government to figure out how we can meet the two deadlines that
David outlined, which is by the end of the decade ensuring all
agencies are managing their permanently valuable records in
automated ways and also making sure that email records are
being managed in automated ways with temporary and permanent
emails by the end of 2016.
So there has been a number of different activities which I
can answer questions about as we go. But we work very closely
with agency records officers across the government, including
at Treasury and the Internal Revenue Service, so that they
understand where we are trying to go with electronic records
management as a government and understand what their
obligations are with the Federal Records Act and the directive
itself and how we try to bring those two things together to
make effective records management work across the government.
Chairman Issa. Thank you.
I will now recognize myself for a series of questions.
Mr. Ferriero, last night we finished late, so I wasn't able
to get to Best Buy. But 2 days before, I needed to acquire a
storage device, so I spent about $150 and bought a 3 terabyte
hard drive for about $149 plus sales tax. The IRS Commissioner
last night told us that it would cost about $10 million if he
was going to maintain the kind of data that we were interested
in. The 80 or so depositories, as I understand, would have been
a fraction of 3 terabytes, a fraction of $149 if they were
simply moving them to a single NAS and then backing that up.
So I guess, Mr. Wester, it may be more your bailiwick, but
is it true realistically that a few hundred dollar drive and
then a duplicate of that drive realistically would be able to
hold all of the data that those 80 depositories typically set
aside as important permanent documents?
Mr. Wester. Chairman Issa, I think you identify one part of
the larger records management challenge that we have to deal
with, which is being able to store and preserve email and other
electronic records. And as you identified, the costs of doing
this are coming down tremendously. And that is not a huge
factor within the issue that we are talking about.
The issue that agencies are confronting is that they need
to be able to organize that data and be able to provide access
to it, which is separate from the storage piece. And that is
where there are additional costs that agencies need to incur to
be able to do that.
Having said that, a lot of agencies, to be able to be
responsive to FOIA requests, be responsible to committees like
this one, to be responsible for other kinds of requests and
business needs that they have, have to develop search
capabilities to be able to access those materials that are on
those drives. And so that is where some of the complexity and
the costs start to add up. So as agencies are doing that kind
of procurement anyway to be able to support their business
needs, we believe that a purchase like the Capstone email
approach allow agencies to be able to do that effectively.
Chairman Issa. Thank you.
Mr. Ferriero, there is a document being put up on the
board, dated October 6, 2010, in which Lois Lerner sent about
1.1 million documents, including personally identifiable 6103
information, to Department of Justice in order to aid potential
prosecution. Have you viewed that email?
Mr. Ferriero. Yes, I have.
Chairman Issa. Would you say that that is a record under
the Federal Records Act?
Mr. Ferriero. Not having access to the records schedule
that was created by which this was--this message was created,
it is an email that is record. Whether it's a temporary record
or a permanent record I can't tell.
Chairman Issa. But when the Commissioner said that in fact
he didn't know if the lost emails, of which this is one,
included items covered under the Federal Records Act, he was
mistaken. Is that correct?
Mr. Ferriero. All I can say is that if it was created, from
what I read, it is a record. What I can't tell is whether it's
a temporary record or a permanent record.
Chairman Issa. Okay.
Lastly, this committee has jurisdiction over FOIA. Is it
reasonable to destroy, after 6 months, data routinely so that a
FOIA request simply goes to data that isn't there any longer?
If you want to know what was said or done, if it doesn't happen
to have been maintained by choice, it is gone at the end of 6
months at the IRS.
Mr. Ferriero. That's right.
Chairman Issa. So FOIA requests essentially to the IRS are
pretty useless. And we now know at the FTC, for example, it's
45 days. Is that, in fact, in the best interests of freedom of
information, in your opinion?
Mr. Ferriero. There, again, if it was a permanent record
then it is not best practice.
Chairman Issa. Ms. O'Connor, you declined to come here
voluntarily so we subpoenaed you. Clearly, you are not pleased
to be here, but it is important that you are here. You were at
the IRS and hired when we began our investigation and requested
selected documents of Lois Lerner in May of 2013. Is that
correct?
Mr. Connolly. I started on May 30th.
Chairman Issa. Okay. So they hired you as soon as we said
we want a bunch of documents. Correct?
Ms. O'Connor. Mr. Werfel, who was the acting Commissioner.
Chairman Issa. Yes or no, please. You are a hostile
witness. Yes or no, were you hired?
Ms. O'Connor. I am not at all a hostile witness.
Chairman Issa. Yes, you are. So you were hired in May. In
June, when we were not getting delivery, we went and
subpoenaed. In August, you were at the IRS. Is that correct?
Ms. O'Connor. I was there in August.
Chairman Issa. In August of 2013, we requested all Lois
Lerner emails and not any selection, not any limited group. Are
you aware of that?
Ms. O'Connor. Yes.
Chairman Issa. And what did you do to determine the
envelope or the window of ``all'' at that time, in August of
2013?
Ms. O'Connor. So can I explain the process a little bit? I
think it would help to----
Chairman Issa. My time has technically expired, so I would
just ask that you be full and complete in--wait a second. Okay.
Just full and complete in what you did from August until the
time you left to secure all the documents, please.
Ms. O'Connor. So I think a little background is helpful.
When I arrived on May 30th, the IRS had a team that was already
in place collecting materials and beginning to respond to the
congressional investigations. I joined, at Mr. Werfel's
request, to be his counselor and perform a number of different
things, a piece of which was helping to respond to the four
different congressional committees and the IG and others who
were seeking materials. And so I played a role that was a
liaison to him. His direction was to be cooperative and try and
gather and produce the materials as quickly as possible, and
also to be a liaison to your staff and the staff of the other
committees who were interested in figuring out how they could
get their priorities to them as quickly as they could. And by
that, what I mean is identifying the employees whose materials
they wanted to see first and using search terms in order to
identify the documents at interest.
The reason search terms were necessary as opposed to just
turning every everything over wholesale, among others, is I
know you know there is a statute called Internal Revenue Code
6103, which is an important--it's a criminal statute passed by
the Congress that requires the IRS to protect taxpayer
information. And the way in which they do that in situations
like this is they have to read every single document to see if
there is taxpayer information in it and then redact it if
necessary before producing it.
So a big piece of the effort was to figure out how we could
move information as quickly to the congressional committees and
move them what they were looking for. So, in May, what that
amounts to is when I arrived, Ms. Lerner's material had already
been collected, as had some other employees' materials. There
was more collection that went on after that. And the process,
as they explained it to me--and I am not a tech expert--but the
IRS' material is protected with careful encryption. And, so, it
needs to be processed before it can be reviewed. So, they have
to load it and then flatten it and then decrypt it. And the
decryption, I was told, creates errors sometimes. Then they
have to do it again. And in that piece of the process, which is
the first piece of the process, they would run the terms that
the congressional committee staff had identified over the
material. And then, once that was done and the material was
viewable, they would move it over into a review tool.
And when I first got there, one of the things that I was
doing was talking about how in order to move the volume
quickly, we would need to add people because the IRS had never
encountered something like this, didn't have staff in place to
do this kind of a document review and production. In addition,
the technical infrastructure wasn't really there to support it.
So we had a lot of issues that we had to deal with in terms of
adding servers and adding capacity and having technical experts
deal with the systems that it would be stable.
When we got to August, which is I think where your question
was, you did express an interest in all of the emails. We were,
at that point, already sort of well into a process that had
begun in May with Ms. Lerner and other--everybody else's emails
that had been loaded at that point had been loaded with all of
the terms. And so they were being reviewed. And so the staff
who were working on this day to day continued to review all of
that material. It was Mr. Werfel's intention that as soon as we
got all of that done, we would circle back and make sure the
subpoena was complied with.
And I left in November. We were still in the process of the
rolling production. It wasn't finished yet. But it was
certainly my understanding, and I believe it to be true--I have
no reason to think it's not true--that they intended to
continue to produce information. But the difference between the
selected Lois Lerner information and all of Lois Lerner's
information comes from the fact that, initially, the process
was organized around material that was--had search terms
applied to it versus the material at the end.
I hope that sort of lays that out clearly.
Chairman Issa. I just want to summarize and go to the
ranking member. So, in August of 2013, your testimony is that
when receiving a subpoena and explicit instructions that this
was our highest priority, that we wanted all the emails of the
person who took the Fifth in front of this committee and who,
in fact, was not cooperating, and who indications were was at
the center of this targeting of conservatives, the decision was
made to get to it after you got done with all the others. So
when you left the agency, they had not yet done the extensive
search--they had not yet looked for all of her emails, and as a
result, that's why we go until April of this year before we
discover that all her emails were never to be found.
Ms. O'Connor. So, I wasn't there when the discovery of the
lost emails occurred, so I can't really speak to that from my
personal knowledge.
Chairman Issa. That's why I was saying that on the day you
left, they had not set out to discover all her emails, but, in
fact, had not complied with the subpoena in the sense that they
had not gathered all of her emails, that they were waiting
until they got done with all these other things they wanted to
do, and then they would go look for all of the emails.
Ms. O'Connor. I am sorry, that wasn't what I meant.
Chairman Issa. I would like to know what you meant, because
obviously, they didn't know they were missing in the months
that you were there after a subpoena asked for all of them. And
I appreciate that you told us in great detail, and I appreciate
that, it helps us all understand, you told us in great detail
about the process that you went through. But of course, the
process you went through was a process that you determined that
you wanted to go through. We issued a subpoena. And 6103
redaction doesn't take the place of your gathering all of that.
TIGTA was entitled to receive all of her emails without
redaction and so was Ways and Means, if they chose to receive
it.
Ms. O'Connor. Right. I believe that they--I understood--it
was gathered before I got there. But my understanding from the
team, and I didn't interact with them directly, but my
understanding from the team who did gather it was they gathered
everything that was there. And so in the, you know, process
from the point at which I got there to the point at which I
left, the team, who was working very hard on being able to get
you materials, was reviewing and processing and redacting as
necessary all the material that had been loaded and to which
the search terms that your staff and the staff of the other
committees had identified. The process--I wasn't there when the
process of going back to look at the ones that had originally
been loaded but hadn't hit the search terms were reviewed. But
when I left, my understanding was that that was something that
was going to continue because the agency seemed fully intending
to continue to comply with your subpoena. And I have no reason
to think that it didn't.
Chairman Issa. Thank you.
Mr. Cummings.
Mr. Cummings. Thank you very much.
Ms. O'Connor, let me ask you this. You were at IRS for
about 6 or 7 months from May to November of last year. Is that
right?
Ms. O'Connor. Six months. From May 30 to November 30, sir.
Mr. Cummings. And you said--I was wondering when you came
in, what instructions were you given with regard to production
of documents? In other words, what did Mr. Werfel tell you were
his priorities and what were you instructed to do? I am just
curious.
Ms. O'Connor. His strong imperative was that we gather and
produce everything that the congressional investigators and the
inspector general wanted. And he wanted it to be done as
quickly as possible. He was interested in being completely
transparent. And the directives he gave to me, one of my roles
was to sort of be his liaison to the team that was working full
time on the document production. And in that capacity, one of
the things I tried to do and worked on doing was to help them
to get stuff out faster, to review faster so that more volumes
of the material that the committee was looking for--and it is
four committees, actually, there are four different committees,
four different investigations. But he wanted to be able to get
all of it to the investigation staff and committee members, in
part because the IRS had been asked by the inspector general
not to conduct its own investigation, not to interview
witnesses. So the investigative activity was happening in the
congressional committees and at the IG. And so it was important
to get them all that material. That's what he told me to do.
And that's what I worked with the team on doing.
Mr. Cummings. And is that what you tried to do?
Ms. O'Connor. That's very much what I tried to do.
Mr. Cummings. And so you left in November. Is that right?
Ms. O'Connor. Yes.
Mr. Cummings. Of 2013. So you were not there this past
February when the IRS first identified potential issues with
Lois Lerner's emails. Is that right?
Ms. O'Connor. That's correct.
Mr. Cummings. You said something that was very interesting.
You said, when you got there, Ms. Lerner's information had
already been collected. Is that you what you said?
Ms. O'Connor. Yes, that's correct.
Mr. Cummings. What does that mean?
Ms. O'Connor. Well, to my understanding--and I didn't
directly interface with the staff who did this--but
professional long-term IRS staff went to Ms. Lerner's computer,
took the hard drive and imaged it, took the emails that were on
it, made copies of all of that. My understanding is that a set
of staff--and again, it happened before I got there, so this is
my, you know, understanding--also went through her office to
collect any paper copies that were--I think they collected
probably everything and then went through it to find out what
was responsive.
Mr. Cummings. So they actually went through her office, to
your knowledge, to try to find paper copies, in addition to
everything else?
Ms. O'Connor. To my knowledge, yes. Again, I want to
clarify that I didn't witness it. I wasn't there. But that's
what I was told.
Mr. Cummings. I understand. I see. And so let me ask you,
did you feel that you were able to carry out the instructions
of Mr. Werfel? In other words, you said he told you to do
things quickly. He told you to be transparent. And he told you
to--that's what you told us. Did you do that?
Ms. O'Connor. We did our best. I mean, there were hurdles
with the technology. And we had to add resources. We had to add
staff. We had to add technological resources. And so I think,
you know, nobody thought it was as quick as they would have
liked. But we worked very hard to get the material to the
committees as quickly as we could.
Mr. Cummings. Now, you were not there in April when the
Commissioner learned that some of Ms. Lerner's emails might not
be recoverable. Is that right?
Ms. O'Connor. I was not there in April, no.
Mr. Cummings. You weren't even working at the IRS when Mr.
Koskinen was Commissioner. Is that right? Were you there at any
time that he was there?
Ms. O'Connor. No, we didn't overlap.
Mr. Cummings. So you never worked for him.
Ms. O'Connor. No.
Mr. Cummings. And how long have you worked at the White
House?
Ms. O'Connor. About a month. I just got there.
Mr. Cummings. You just got the job?
Ms. O'Connor. Yes.
Mr. Cummings. So, Ms. O'Connor, Congress received a letter
from the White House last week, on June 18th, and it explains
how the White House found out about Ms. Lerner's emails. It
says, ``In April of this year, Treasury's Office of General
Counsel informed the White House Counsel's office that it
appeared Ms. Lerner's custodial email account contained very
few emails prior to April 2011 and that the IRS was
investigating the issue and, if necessary, would explore
alternate means to locate additional emails.'' So the Treasury
told the White House in April, which would have been a month
before you started at the White House. Is that right?
Ms. O'Connor. That's what that letter says. I wasn't there,
so I don't know.
Mr. Cummings. Now, Ms. O'Connor, I want to thank you very
much for being here today. I know this is difficult. But are
you a lawyer?
Ms. O'Connor. I am.
Mr. Cummings. Do you know what a hostile witness is?
Ms. O'Connor. I do.
Mr. Cummings. You do. And the chairman told you that you
were a hostile witness, and you said you were not. Is that
right?
Ms. O'Connor. That's correct.
Mr. Cummings. Do you consider yourself a hostile witness?
Ms. O'Connor. I am definitely not hostile.
Mr. Cummings. So you got a subpoena last night, a
unilateral subpoena. No committee vote, no debate at all,
nothing. And then you had to turn around and testify here this
morning.
And so I want to state for the record that we have seen no
evidence that Ms. O'Connor did anything inappropriate
whatsoever.
And we want to thank you for your service and for your
testimony.
Mr. Ferriero, let me turn to you. The challenges at IRS are
not unique. Many Federal agencies have had problems retaining
electronic records. I know the President has made some
improvement with his memorandum in 2011 and that you and the
Office of Management and Budget have set target dates for
agencies to improve their electronic data systems. But we can
always do better, can't we?
Mr. Ferriero. We sure can.
Mr. Cummings. As you know, I introduced the Electronic
Message Preservation Act a year and a half ago. This bill would
amend the Federal Records Act to require you to establish
minimum standards for Federal agencies to manage and preserve
email records electronically. The bill would complement your
efforts to get agencies to modernize their recordkeeping
systems. This bill passed our committee with bipartisan
support, I am very pleased to say. You have testified several
times in support of the legislation. Do you think the
legislation could help improve the quality of the Federal email
preservation?
Mr. Ferriero. I certainly do. And, in fact, the directive
relied heavily upon the language of EMPA as we were crafting
the directive.
Mr. Cummings. You know, I sat here last night, I think we
were here until 10:10, and I listened to, you know, the
testimony, and this goes to you, Mr. Wester, and I am trying to
figure out how do we--it seems as if when--it seems like our
system at IRS, and probably other agencies-- is we are so far
behind the electronic--I mean, the IT modern world. How do we
get a hold of that and move forward? Because it sounds like
that was part of the problem here. Mr. Ferriero?
Mr. Ferriero. And that's what we addressed in the
directive. I agree with you we have a lot of work to do in the
Federal Government, working with our CIO partners.
Mr. Cummings. Is it too big to solve?
Mr. Ferriero. No, it's not. It's not too big. We have
created something within the National Archives, this Capstone
project, which is one solution that takes advantage of existing
technologies. The biggest problem over time, and this is in the
paper environment as well as in the electronic environment, is
whenever you have a human being in the middle of it making
decisions, then you have problems. And our focus has been on
getting the human being out of the process and relying on
technology to capture the information that we need to capture.
Mr. Cummings. My last question. What can we do? You know, I
can see us sitting here--I probably won't be here--but in 5
years, 10 years from now, sitting here going through the same
situation. What can we do as Members of Congress during our
watch to help address this issue? I mean, you said people.
Well, we got to have people. So we can't let everybody go. So
what do we do?
Mr. Ferriero. Well, we have the directive, and we are
moving ahead, so we have the support of the administration for
this, and we have the EMPA bill. If you could convince your
colleagues to get the EMPA bill passed and get it through the
Senate, that would also help us, because that would legislate
the change in the Federal Records Act that we need. The Federal
Records Act today says ``print and save.'' This is 2014, and we
are printing and saving? This is embarrassing.
Mr. Cummings. Thank you very much.
Thank you, Mr. Chairman.
Chairman Issa. Thank you. I just want to make sure I make
the record clear on something the ranking member said.
I checked with Congressman Gowdy, who has a lot more
knowledge of law as a prosecutor than I do. And he said the
term I should have used was noncooperative witness rather than
hostile, since you and the White House refused to provide your
services here on an ordinary request, and we had to subpoena
unilaterally based on the denial that you would appear
otherwise. So I want to make sure that I don't use a word that
perhaps does make people think something that isn't true. This
is simply a witness that refused to cooperate without a
subpoena.
Mr. Mica.
Mr. Mica. Thank you, Mr. Chairman.
And just for the record, I heard the ranking member start
with the comments that we were hauling people up here
unnecessarily. That was his phrase.
And I would take great difference with that comment. First
of all, last night, we brought Mr. Koskinen back, the
Commissioner. And we brought him back, and I went through his
testimony when he came to us in March. And he never mentioned
any problem with the emails back in March, Lois Lerner's
emails. The chairman showed everyone on the committee, both
sides of the aisle, asking for Lois Lerner's emails. He came
and said to us that last week--this is his testimony in March--
last week, we informed this committee and others that we
believe we completed production of all of the requests under
the inspector general's report of May 2013.
And he in fact testified last night in his written
testimony that he had been aware of technical problems back in
February. So I think we had every right to call him back.
The other side, when it intimates that this is some kind of
Republican stirring things up, my goodness, last week, the
entire country and the Congress was stunned to find out that 27
months of Lois Lerner's emails had supposedly been destroyed or
her computer crashed. So I think we have every right.
Mr. Archivist, the law says that--the Federal records law
requires that the National Archives be noticed when documents
are destroyed or lost. Is that the law, sir?
Mr. Ferriero. That is the law.
Mr. Mica. Okay.
And, Ms. O'Connor, you were brought on board after this
report. This is not a Republican report. This report was
prepared by the Treasury Inspector General for Tax
Administration to see if groups were targeted. And it confirmed
that. You are aware of this report, Ms. O'Connor?
Ms. O'Connor. I have read the report, yes.
Mr. Mica. And you were brought on to what, to compile the
records from and all the information pertaining to what was in
that report or----
Ms. O'Connor. I was brought on to give advice to Acting
Commissioner Werfel on a number of things.
Mr. Mica. But we had requested in May certain documents.
When you came on in early June the IRS sent documentation
retention notices to employees who were identified as having
documents, including relevant email, potentially relevant
information to investigators. You were part of that request and
notice to employees in early June. You were there in early
June?
Ms. O'Connor. I was there in early June, but my
understanding is that a subset of employees had already----
Mr. Mica. Well, this had been sent out, but you're aware
that that request had been made to employees to preserve and
present documents?
Ms. O'Connor. Absolutely it's important----
Mr. Mica. Yes. And that was your job.
Ms. O'Connor. Yes.
Mr. Mica. So it's appropriate that you're both here today.
When did you first learn that there were emails missing?
Ms. O'Connor. I learned that Ms. Lerner's emails were
missing as the result of a computer crash the week before last.
Mr. Mica. So you were in charge from May until November of
compiling information from Congress and you never heard before
that that there was any missing documentation as far emails?
Ms. O'Connor. I didn't hear that any of Ms. Lerner's emails
were missing, no.
Mr. Mica. Now, when you were compiling this information for
the four committees of Congress and working with Mr. Werfel,
who did you report to?
Ms. O'Connor. Mr. Werfel.
Mr. Mica. Okay. And were you aware that he was reporting
your activity and what was being found? You were in charge of
compiling the information, reporting to Mr. Werfel, right? Did
you interact at all with anyone at the White House?
Ms. O'Connor. Not when I was there.
Mr. Mica. Between May and November when you were there, if
I get your emails, your schedule, like Shulman or the--who is
the----
Ms. O'Connor. I cannot recall ever having any conversation
with----
Mr. Mica. Shulman was there before that. He came and
testified to us that the only time he went to the White House
was for egg rolling. And then we subpoenaed the White House
records, find he went there 113 times, or something like that.
But you had no contact with the White House during that period?
Ms. O'Connor. Actually you're jogging my memory, and I
actually want to use that as a footnote to just say that I'm
doing this completely by the fly off my memory because of the
subpoena coming last night.
Mr. Mica. Was there some contact? Because now you----
Ms. O'Connor. Yes. I'm going to tell you what it is.
Mr. Mica. Yeah. And now you wind up in the White House. You
had a subsequent job, I guess helping with the Obamacare
situation.
Ms. O'Connor. Could I answer that question?
Mr. Mica. Yes, go right ahead.
Ms. O'Connor. I feel like it's something important to
finish the sentence. Mr. Werfel went to the White House in I
think late June with Secretary Lew in order to give the
President his report, and I went into the White House with him.
I wasn't in their meeting.
Mr. Mica. Was this matter discussed at all?
Ms. O'Connor. I wasn't in the meeting. I just accompanied--
--
Mr. Mica. You weren't.
Ms. O'Connor. --him to the building.
Mr. Mica. Okay. So we would find that record. No other
contact in the White House during that period?
Ms. O'Connor. No.
Mr. Mica. But you're aware--would you be aware that your
activities were being reported to Mr. Werfel? And usually they
have the counsel or someone, it might have been Treasury,
reporting to the White House as to what was going on, say, with
this report. You're not aware of what took place there?
Ms. O'Connor. So in terms of the IG report, I have no idea
what, if anything, was reported to the White House. The visit
that I had with Mr. Werfel was to give his 30-day report to the
President.
Mr. Mica. No, but again, your activity was reported to
Werfel, where you were in the investigation and compiling for
Congress, you weren't aware of it being transmitted beyond him?
Ms. O'Connor. No.
Mr. Mica. Okay. Thank you.
Chairman Issa. Thank you.
We now go to the gentlelady from New York, Mrs. Maloney.
Mrs. Maloney. Thank you. I regret I was not able to join
you last night for the hearing. We had a Financial Services
Committee--or rather a bill on the floor that I had been
working on and we were in debate on the floor. But I just
wanted to make a brief statement about the hearing that we had
last night on the overall IRS. And this whole IRS mess seems to
flow directly from confusion over just how the IRS should
enforce a law that was passed by this Congress that gives tax-
exempt status to not-for-profits, but only if they are
essentially politically nonpartisan. And what the IRS was
looking at is whether these activities of these not-for-profits
really merited being tax exempt because they're getting 100
percent deduction and putting a great deal of money into
political campaigns.
Now, we don't have----
Chairman Issa. Would the gentlelady yield?
Mrs. Maloney. Okay.
Chairman Issa. You probably were not here when this was
discussed, but 501(c)(4)s do not get 100 percent deduction. You
are not tax deductible on your donations of 501(c)(4)s.
Mrs. Maloney. At all?
Chairman Issa. Not at all, not a penny.
Mrs. Maloney. Not a penny.
Chairman Issa. They are tax exempt in that the money they
receive from taxpayers who have paid their taxes and then give
them their after-tax income, they don't count it as profit.
They simply spend it on their behalf. But they are not tax
deductible the way a charity is, and it's a very significant
difference. It is one of the reasons that they can do up to
half of their activities in these. These are social welfare
groups, not charities.
Mrs. Maloney. They are social welfare groups and they don't
get a tax deduction?
Chairman Issa. When you give to a 501(c)(4), you do so
without a tax deduction. It is taxable, and then you give your
after-tax. It's exactly the same kind of tax deduction you get
when you receive a political campaign. Your donors pay their
taxes and then give you after-tax income. It is not a charity.
Mrs. Maloney. Not at all?
Chairman Issa. Not at all.
Mrs. Maloney. Well, I stand corrected. I thought 501(c)(4)s
had a tax treatment that was favorable to them, and I was
saying why not just have a rule that no one gets a tax
deduction that gets involved in political activities.
But I think, getting back to the emails, when 22 million
emails from the Bush White House went missing in 2003 and 2005,
which was only discovered under the Valerie Plame affair, our
colleagues across the aisle had a different take on how things
should happen. And were there any provisions put in place after
this loss of emails between 2003 and 2005 that made it less
likely that emails could go missing again? I ask anyone who
would like to answer that.
There was a terrible debacle in 2003 and 2005. What changes
were put in place to prevent this from happening again?
Mr. Wester. So I would suggest that that's an example of
some of the challenges that all Federal agencies across the
government have as it relates to managing email. And the
instance that we're talking about today with the IRS is also
another where agencies need to be able to understand how their
email systems work, how their email systems work in connection
with the Federal Records Act, and how they're ensuring that
preservation is occurring according to disposition schedules.
So that's been a wakeup call for the entire Federal Government.
Mrs. Maloney. Well, I would also say that a wakeup call is
that you need your infrastructure to be high tech and in place.
And, Mr. Ferriero, as you may be aware, the IRS has a 1
billion IT infrastructure, but the Federal Times recently
reported that sequestration and other cuts have imposed
terrible restrictions on the IRS, including a reduction in the
agency's supplies and materials and budgets. And so you
basically have an antiquated IT system, in addition to not
putting reforms in place, so can you discuss how maintaining an
antiquated IT system might impact an agency's record-retention
capability? What does this mean, these budget cuts and not
having an updated IT system?
Mr. Ferriero. It certainly plays a role in this particular
case in terms of the capacity of their hard drives to retain
information, the number of emails that they're actually able to
capture at one time.
The upside of the directive that we're in the process of
implementing is that it gives us the authority to work with the
industry, the electronic mail industry, the high-tech industry
to create solutions that will work for the Federal Government,
efficient, effective, and cost-benefit solutions to this
problem. So I'm optimistic about the future.
Mrs. Maloney. Well, has funding been a significant
challenge to some of these agencies in modernizing their IT
records and retention infrastructure?
Mr. Ferriero. It certainly has.
Mrs. Maloney. The Commissioner testified, and I read his
testimony, he has proposed $400 million to $500 million of
modernization and improvement activities, but this has not
become a reality in the budget. Others have complained that the
department still has not completed the switch from Microsoft
Windows XP to Windows 7. What kind of problem is that? Can you
elaborate a little further?
Mr. Ferriero. This is a problem across the government in
terms of the investment in technology.
Mr. Connolly. Would my colleague yield?
Mrs. Maloney. Absolutely.
Mr. Connolly. At last night's hearing, it was established
that the IRS has had over $800 million worth of cuts in its
budget in the last 4 years, and it's slated for an additional
$350 million this year. You can't have it both ways. You can't
be cutting the IRS that kind of amount and then decry the fact
that they've got antiquated IT systems.
I thank my colleague for yielding.
Mrs. Maloney. My time has expired. Thank you.
Chairman Issa. I thank the gentlelady. And I thank the
gentleman for pointing out the 10,000 less workers, but not in
fact a smaller IT budget.
Mr. Connolly. But I know the chairman shares my concern
about the IT investment.
Chairman Issa. You know what, I really do, and I wish you
had stayed longer last night to hear the accolades from both
sides of the dais for the IG and his independence, his
nonpartisan, the TIGTA's efforts, and how much he's relied on
as a nonpartisan. I think it would have been very, very
insightful.
Mr. Connolly. You know, Mr. Chairman, I appreciate that. My
wife is ill, and I have had to go home at night to----
Chairman Issa. Well, you certainly have our sympathies.
Mr. Connolly. I know that he would appreciate that.
Chairman Issa. Thank you.
The gentleman from Ohio, Mr. Jordan, is recognized.
Mr. Jordan. I thank the chairman.
Ms. O'Connor, in the 6 months you were at the Internal
Revenue Service who was the person in charge of getting the
documents that Congress wanted to--this committee and to the
Ways and Means Committee?
Ms. O'Connor. I guess I would say that that's Mr. Werfel,
because he directed the agency at the time and told us what his
directives were to----
Mr. Jordan. But in the people who were working on document
production, who was in charge?
Ms. O'Connor. So I served, as I think I was describing, as
sort of the liaison between him and the team, the big team of
people----
Mr. Jordan. So it was you? Was it you? Were you the person
in charge?
Ms. O'Connor. I wasn't working on it full-time because I
had a number of other responsibilities.
Mr. Jordan. Well, when we interviewed Mr. Wilkins, who is
the Chief Counsel at the IRS, he said it was you. He said
employees who have been responsible for collecting and
producing documents, we asked him who was responsible for that
process, and he said it is Tom Kane and Jennifer, are the two I
identify as the key supervisors. And then he said, Ms.
O'Connor? And he said yes. So he identified you as the chief
person.
So in the 6 months you were there, this is a huge story,
you got the key player in this who took the Fifth, it's in the
news every day, and in that time, you're telling us, you did
not have any inclination that a bunch of Lois Lerner's emails
were lost.
Ms. O'Connor. I did not know that her emails were missing
and unrecoverable and that there had been a laptop crash that
had caused that.
Mr. Jordan. Okay. So when you did learn, what was the date
that the White House Counsel's office learned--Mr. Koskinen
told us last night he thought he had no duty to disclose, that
he knew in February that there was a problem, he knew in March
that there were lost emails, he didn't tell us at the end of
March, but he did--well, someone at the White House learned in
April. We didn't learn until June when they sent us a letter
just a week and a half ago. So when did the White House
Counsel's office learn that there were lost emails?
Ms. O'Connor. So I just got there.
Mr. Jordan. I understand, but I'm asking when the Counsel.
How big--there's only, like, 25 lawyers in the whole----
Ms. O'Connor. I wasn't there in April. I have seen the same
letter that you've seen, and it, you know, describes there----
Mr. Jordan. But Do you know the date?
Ms. O'Connor. I don't.
Mr. Jordan. Is it fair to say April? I mean, that's what
your boss Mr. Eggleston said, he said it was in sometime in
April when they learned from the Treasury. Is that accurate?
Ms. O'Connor. I have no reason to doubt that it's true. I
just wasn't there.
Mr. Jordan. Okay. And then do you know who from Treasury
told the White House Counsel's office that emails were lost, do
you know who that person was?
Ms. O'Connor. I don't know.
Mr. Jordan. You don't know who was in that meeting or if it
was a meeting or if it was a phone call, how it was
communicated?
Ms. O'Connor. I'd love to be helpful. I just started, so
I'm unable to answer your question. I just wasn't there yet.
Mr. Jordan. And do you know if anyone in the White House
Counsel, once they got that information, did they tell anybody
else? Did your boss, did the White House Counsel's office, did
they tell the Chief of Staff at the White House, did they tell
the President? Who was that communicated to?
Ms. O'Connor. Again, I'm sorry, I don't mean to be a broken
record, but I wasn't there.
Mr. Jordan. You didn't talk? I mean, we asked you to come
to this hearing a week ago, so in the week you didn't ask,
like, what happened here? We learned in April, the Congress
didn't learn until June, you didn't ask any of your colleagues
in that. How many lawyers are in the White House Counsel's
office? Approximately 25?
Ms. O'Connor. I'm sufficiently new that I have not done a
head count. I honestly don't know.
Mr. Jordan. Well, our understanding it's around 25 lawyers.
You'd think maybe you would talk to those folks and get the
details about what you're going to come to this committee and
have to answer questions about. You didn't do that?
Ms. O'Connor. So, the letter that I received from Chairman
Issa said that the reason that you wanted to talk to me was to
understand what I learned at my time at the IRS. I obviously
did not have much time to prepare, but I prepared to come and
tell you about that.
Mr. Jordan. But you didn't even think to ask about the fact
that the White House knew in April and the people's house
doesn't know until June, you didn't think there was a duty to
figure out, you know, who gave you the information, who you may
have shared that information with? I mean, it seems like
everyone knows this stuff except the Congress, and we don't get
it for months later.
Ms. O'Connor. So again, what I'd like to be able to do is
be as helpful as I can with what I knew when I was at the IRS.
Mr. Jordan. Well, it would have been helpful if you'd have
had those answers to those questions. Do you know if the White
House Counsel's office, once they got this information that, in
fact, Lois Lerner's emails in a critical 2-year timeframe were
lost, do you know if the White House Counsel's office told the
FBI and told the Justice Department?
Ms. O'Connor. So, what I can tell you is what I knew when I
was at the IRS.
Mr. Jordan. No, no, I'm talking about now. You work at the
White House Counsel's office. They knew this information in
April. We didn't know it till June. There's a 2-month time
difference there. In that time, did the White House Counsel's
office tell the FBI? Remember what the President said. He said
he's angry about this, people have to pay, this is outrageous,
there's no place. This is all the things he said when this
scandal broke. So I'm wondering, if you get important
information like Lois Lerner's emails are lost, did you share
that with the agency doing the criminal investigation? Did you
say, hey, this is serious, we better get this information to
the FBI and to the Justice Department? Did you guys do that?
Ms. O'Connor. I'm happy to answer questions about my time
at the IRS. I was there for 6 months.
Mr. Jordan. I'm asking did your boss, did the folks you
work for at the White House Counsel's office when they got this
critical information, did they share it with the Justice
Department?
Ms. O'Connor. Mr. Eggleston actually started the same day
that I did. So our tenures are the same.
Mr. Jordan. He's the one who wrote the letter to Dave Camp
saying they learned of it in April from the Treasury's Chief
Counsel. When he got that important information, did he get it
to the folks who were running the criminal investigation?
That's important. Or do you think there's no duty for the White
House when they got critical information, there's no duty, no
obligation to share that with the Justice Department who's
running a criminal investigation? You don't think they have to
do that? They can just sit on the information?
Ms. O'Connor. So can I answer the question?
Chairman Issa. The gentleman's time has expired. You may
answer.
Ms. O'Connor. Can I answer the question? I'm happy to work
with you and with your staff to try to get you information as
we can to answer your questions about my time at the White
House.
Mr. Jordan. Mr. Chairman, if I could, that wasn't the
question. The question was, do you think the White House
Counsel's office has a duty to share critical information about
lost emails with the Justice Department when you knew that 2
months ago?
Chairman Issa. Okay. I think the question is now
understood. Can you answer that question, please?
Ms. O'Connor. And my answer would be----
Ms. Speier. And can she not be interrupted?
Ms. O'Connor. My answer would be that I am here as a
witness about the facts that I learned at the IRS. To the
extent you have questions about activity at the White House,
I'm happy to work with you and see what we can do to get you
answers. That's not what I'm prepared to talk about today.
Chairman Issa. Actually, from the chair, I need to advise,
when a question is asked and you're an attorney and he's asking
if you have an opinion as to whether or not knowledge of a
crime should be referred or the knowledge of something you
think is a crime should be referred, it really is a yes or no
or I do not feel----
Ms. O'Connor. I'm happy to answer that.
Chairman Issa. Please.
Ms. O'Connor. I think knowledge of a crime should be
referred to the FBI, yes.
Chairman Issa. Thank you very much. And I thank you.
The next is the patient gentlelady from Illinois, Ms.
Duckworth.
Ms. Duckworth. Thank you, Mr. Chairman.
Ms. O'Connor, has it been determined that the crashed hard
drive was a crime?
Ms. O'Connor. Not as far as I know.
Ms. Duckworth. Thank you. So when the White House--well,
let's go back. Last night Commissioner Koskinen testified that
he found out about the crashed hard drive in April of this
year. Were you working at the White House at that time?
Ms. O'Connor. I was not.
Ms. Duckworth. When did you start at the White House?
Ms. O'Connor. Just about a month ago.
Ms. Duckworth. About a month ago, so middle of May?
Ms. O'Connor. Yes.
Ms. Duckworth. Middle of May. Okay. So would you have any
information prior to the middle of May or in April, would the
White House have called you and told you that they received
information or did not receive information from the IRS before
you started working there?
Ms. O'Connor. Nobody called me from the White House to tell
me they received information from the IRS.
Ms. Duckworth. Okay. So you would not have known?
Ms. O'Connor. No.
Ms. Duckworth. The current Commissioner testified that he
only learned in April that the crash had happened and that in
that process they were still trying to recover some of the lost
emails, and in fact, they had managed to recover some of the
emails that were lost because, even though they were crashed
and lost from the ``from'' account, Ms. Lerner's account, they
were actually found in the 2 accounts of the 82 custodial
accounts, the people that received the emails, and they were
sort of going through that process. It's by no means complete,
but they were going through the process. Again, this happened
in April. Would you have had any knowledge of that?
Ms. O'Connor. I didn't have any knowledge of that in April.
I do think that the measures that they described that they went
through sounds exhaustive and appropriate.
Ms. Duckworth. But let's go back to the 5-1/2--5 months you
worked at the IRS. My colleague indicated that there had been
previous testimony you were identified as the person in charge
of employees whose job it was to produce the documents that had
been requested by the various committees. Did you write the
evaluations for all of those employees?
Ms. O'Connor. None of them directly reported to me. My role
was as an advisor, and I did my best to help them and advise
them and work with them and work with the committees and
essentially make sure that the team that was working day to
day, all day long, you know, to do this, and all night long, I
mean, they worked very, very long hours, knew what the
priorities were for which employee's material was going to be
produced, what the search terms were supposed to be.
Many of the investigating committees, including this one,
had, you know, specific requests, please get me the BOLO
spreadsheets or please get me the training materials or
whatnot, and I tried to facilitate that and help the team
figure out how to prioritize what reviewers were looking at
what materials that they could move quickly, those kinds of
things. So I played a role, but I didn't write any performance
evaluations because none of them directly reported to me.
Ms. Duckworth. Okay. So you played an advisory role, but
you had no direct responsibilities in terms of evaluation them,
direct them exactly how they should go about doing the data
gathering, you simply advised them as they were going through
the process, and then your job was to report back to Mr. Werfel
on the progress of the effort. Is that correct?
Ms. O'Connor. I don't want to leave the impression I didn't
work closely with them. I did.
Ms. Duckworth. Okay.
Ms. O'Connor. It's just that I was not their direct
supervisor.
Ms. Duckworth. Okay. Thank you.
Mr. Ferriero, I'm really interested in the Capstone
process, and I want to make sure we give that enough of
attention. One of the things that really astounded me last
night was when I learned that only records that IRS employees
determine relevant would be printed out and then those would be
archived, but it was up to the individual employees to decide
what would be and what would not be. I'm looking at the
National Archives and Record Administration Bulletin 2013-02
titled, ``Guidance on a New Approach to Managing Email
Records,'' which talks about Capstone.
And, Mr. Chairman, I would like to have this entered into
the record also.
Chairman Issa. Without objection, so ordered.
Ms. Duckworth. Thank you.
And in point 8, it actually talks about pre-accessioning
policy, that talks about how pre-accessioning, if that were to
be conducted, would mean that you would actually assume
physical custody of copy of all the records usually well before
this time to assume legal custody. Can you sort of describe
that process and then how that would interact with the
individual employees, whether that takes them out of the
picture?
Mr. Wester. I will take that.
Ms. Duckworth. Oh, okay, I'm sorry. Thank you, Mr. Wester.
Mr. Wester. So with the pre-accessioning policy, what we
want do is offer agencies the opportunity to transfer physical
custody of email records to us so that we can ensure their
preservation at the National Archives so that they are not in
any kind of danger or anything in an agency. So this is a way
to ensure adequate preservation of archival records, those 2 to
3 percent of records that agencies create that have permanent
value that would come into the National Archives. We'd bring
them in through that pre-accessioning policy and maintain them
physically, and then at the time of transfer, which may be in
15 or 20 or 30 years after that date of their creation, then
make available through the National Archives access programs.
Ms. Duckworth. So once you have it, then those IRS
employees, for example, whatever agency it is, couldn't
actually go and delete the copy that you have, correct?
Mr. Wester. No, they would be entrusted to the National
Archives itself. They would be in our physical custody, even
though they would still be in the legal custody of the IRS.
Ms. Duckworth. But that would be useful.
My time is up, Mr. Chairman. I yield back.
Chairman Issa. Thank you.
I'd ask unanimous consent that the press release from the
Treasury Inspector General For Tax Administration, TIGTA, dated
November 21st, 2013, be placed in the record. Without
objection, so ordered.
Chairman Issa. It's entitled, ``Increased Oversight is
Needed of the Internal Revenue Service's Information Technology
Hardware Maintenance Contract,'' and it goes into the tens of
millions of dollars that were spent in 2012 fiscal year on
maintenance that was neither needed nor was it performed.
We now go to the gentleman from Michigan, Mr. Walberg.
Mr. Walberg. Thank you, Mr. Chairman.
Mr. Ferriero, just to review a bit, in your testimony you
state that when agencies become aware of unauthorized
destruction of Federal records, that they're required to report
the incidents to the Archives. At any time in 2011, through
last Monday, did the IRS report any loss of records related to
Lois Lerner?
Mr. Ferriero. No.
Mr. Walberg. Is it fair to say that the IRS broke the
Federal Records Act?
Mr. Ferriero. They're required--any agency is required to
notify us when they realize they have a problem that could be
destruction or disposal--unauthorized disposal.
Mr. Walberg. But they didn't do that.
Mr. Ferriero. That's right.
Mr. Walberg. Did they break the law?
Mr. Ferriero. I'm not a lawyer.
Mr. Walberg. But you administer the Federal Records Act.
Mr. Ferriero. I do.
Mr. Walberg. If they didn't follow it, can we safely assume
they broke the law?
Mr. Ferriero. They did not follow the law.
Chairman Issa. Mr. Walberg, I think you've got a witness
who's smart enough to know that he knows he would have liked
those records, he'd like to have gotten those records, he was
entitled to those records, but he'll let the lawyers argue out
the law.
Mr. Walberg. Let the lawyers argue out. The general
American public who wouldn't get away with that if they were
before the IRS themselves and said that they didn't report a
specific page or a specific document, I mean, that's the
frustration. I hope those that are watching understand we're
dealing with a law here that was broken, that was broken by an
agency that has the power to tax, which is also the power to
destroy.
Mr. Ferriero, in general, I guess could you briefly
describe for us the print and file recordkeeping process and
how it works?
Mr. Wester. I would like to take that question for you.
First of all, I need to apologize about intimating that the
Federal Records Act itself says print and file. So, the Federal
Records Act, as the Archivist has said, does not stipulate that
you have to print and file, but it is a practical activity that
most agencies have adopted as part of their policy so as to
ensure that Federal records, as defined in the Federal Records
Act, are identified and put into official recordkeeping systems
within agencies.
The connection to the Federal Records Act is that it is
based on an analog and paper model for managing records, and as
a practical matter, most agencies, if not all agencies across
the government have had print and file policies where
individual employees are required to identify what the Federal
records are and put them into the recordkeeping copy within
their agency for retention according to records control
schedules that the Archivist of the United States approves.
What we're trying to do with the Capstone policy and the
activities with the directive on managing government records is
to automate this process so that we can eliminate the human
intervention and the likelihood or the possibility of humans
making errors and us--and agencies losing control of records.
So print and file has a long history of human intervention,
whether it's printing it on paper and putting it into a file
folder or clicking and dragging an electronic file into an
electronic file folder.
Mr. Walberg. But the IRS has--they have that policy?
Mr. Wester. Their official policy, as we understand it, is
the print and file.
Mr. Walberg. In general, do you think it would be
sufficient for the Federal Records Act for an employee to save
emails that are Federal records to a local folder on their
computer's hard drive instead of printing those emails out?
Mr. Wester. It's inconsistent with the guidance that the
IRS has given to their employees, and their official guidance
is to print and file email records in this case to paper and
put them in the official recordkeeping system.
Mr. Walberg. If an employee were to deliberately not comply
with the FRA by not printing out their emails, would they be
subject to any sanctions under the FRA? If so, what sanctions?
Mr. Wester. I am also not a lawyer, but it's not an
enforcement statute. What we do with agencies when these sorts
of issues arise is have them report to us what has occurred in
the instance where emails or other kinds of records have been
alienated or destroyed and then what are their plans for
reconstructing those records or putting things in place to make
sure that this sort of activity does not happen again in the
future.
Mr. Walberg. Let me just complete the questioning here. If
a Federal employee's hard drive crashes with no warning and no
backup of the email exists, do you believe it's proper for an
agency to assume that no records were lost?
Mr. Wester. No.
Mr. Walberg. That's the question, the $100 million question
that, Mr. Chairman, we hope we ultimately can get an answer to.
I yield back.
Mr. Gowdy. [Presiding] I thank the gentleman.
The chair would now recognize the gentleman from Nevada,
Mr. Horsford.
Mr. Horsford. Thank you, Mr. Chairman.
Last night the actual chairman, Chairman Issa, took an
extreme action by issuing a unilateral subpoena to the White
House. He demanded that Ms. O'Connor show up here today within
24 hours and under threat of contempt. There was no vote on
this subpoena. The committee did not debate it. Members did not
have the opportunity to weigh the gravity of what the chairman
did in the committee's name. Now we find out how misguided that
subpoena really was.
Ms. O'Connor, let me just confirm what we've heard here
this morning. You were not at the IRS when employees were using
inappropriate search terms. Is that correct?
Ms. O'Connor. I was not at the IRS during the period
covered by the Inspector General's report.
Mr. Horsford. You joined the IRS after the Inspector
General issued his report. Is that correct?
Ms. O'Connor. Yes, I joined on May 30, 2013.
Mr. Horsford. And you left the IRS in 2013, which was long
before the IRS made these recent discoveries this spring about
Ms. Lerner's email. Is that correct?
Ms. O'Connor. That's correct, yes.
Mr. Horsford. And you joined the White House less than a
month ago.
Ms. O'Connor. About a month ago.
Mr. Horsford. And according to a letter we received from
the White House, that was after the Treasury Department
informed the White House in April about potential problems with
Ms. Lerner's email. Is that right?
Ms. O'Connor. Right. I've seen that letter, and it refers
to an April referral or informing in April, yes.
Mr. Horsford. Thank you. I quite honestly do not understand
how Chairman Issa was able to rush to issue this subpoena, to
force you, Ms. O'Connor, to be here today within 24-hour
notice. Your connection to this topic of today's hearing is at
best a stretch, and all of these questions could have been
answered by simply picking up the telephone and asking. It's
just a continuation of the same charade that unfortunately this
chairman continues to use this committee to perpetuate. And
what's further insulting about this is that the chairman
promised to use the authority of this committee responsibly.
Let me read what the chairman said back in 2011, ``I'm
going to take the thoughts on why you object seriously. To be
honest, I will ask other members of my committee, am I doing
the right thing? I will also undoubtedly talk to other Members
on your side and say, am I nuts, am I wrong, is this somehow a
subpoena that is outside the mainstream? So, I don't intend on
simply writing subpoenas endlessly.'' But that's exactly what
Chairman Issa has done.
Since he became chairman 4 years ago he has issued more
than 50 unilateral subpoenas. He has never once allowed a
debate, and he has never allowed a vote. Not only do these
actions contradict the promises that he made 4 years ago as the
chairman, but they result in unwarranted and abusive subpoenas
like the one he issued last night.
Now, many constituents do care about the issue of the
wrongdoing that occurred at the IRS, and there are Members on
the other side of the aisle who I have listened to, to try to
understand the concerns about the lack of accountability of
those individuals who should be held responsible. But
unfortunately that is not what the chairman has allowed us to
focus on in any of the hearings that we've had dealing with
this matter. In fact, he's used this process to politicize the
process and to not focus on the proper oversight or government
reform function of the committee.
But perhaps this should not be a surprise, because during
an interview on August 19, 2010, before Chairman Issa became
committee, he was asked what he planned to do with the ability
to issue subpoenas, and his response was, ``Cabinet officers,
assistant secretaries, directors, I will be able to take on
everybody that the President hires and relies upon.'' Well, he
has certainly made good on that promise.
I yield back my time.
Mr. Gowdy. I thank the gentleman from Nevada.
The chair would now recognize the gentleman from Arizona,
Dr. Gosar.
Mr. Gosar. Thank you, Mr. Chairman.
You know, the ranking member brings up new legislation
about electronic preservation. Mr. Ferriero, that's pretty much
immaterial if you don't uphold the rule of law, right.
Mr. Ferriero. Well, the hope is that you----
Mr. Gosar. Well, the hope is, but I mean, if you don't
uphold the rule of law, you can pass all the legislation you
want to, it doesn't make a hill of beans about it, right?
Mr. Ferriero. That's true.
Mr. Gosar. How about you, Ms. O'Connor, would you agree
with that statement?
Ms. O'Connor. The importance of upholding the rule of law?
Mr. Gosar. Yeah.
Ms. O'Connor. It's very important.
Mr. Gosar. I want to read, former Supreme Court Justice
Brandeis made a comment. ``In a government of laws, the
existence of the government will be imperiled if it fails to
observe the law scrupulously. If government becomes a
lawbreaker, it breeds contempt for the law; it invites every
man to become a law unto himself; it invites anarchy.'' So if
civil society is important, following the rule of law is very
important. Would you agree, Ms. O'Connor?
Ms. O'Connor. Absolutely.
Mr. Gosar. Yeah.
Mr. Ferriero, you found out about the potential loss of
documentation by the IRS or through a letter to Senators Wyden
and Hatch.
Mr. Ferriero. Through that letter in June.
Mr. Gosar. You are aware that Federal Regulation 36 CFR
Part 1230.14 states that agencies must report promptly any
unlawful or accidental removal, defacing, alteration, or
destruction of records in the custody of that agency to the
National Archives and Records Administration, Modern Records
Programs, true?
Mr. Ferriero. True.
Mr. Gosar. Yeah. That's what I thought. So once again we've
got a problem. Last night I cited the articles of impeachment
for President Richard Nixon, actually cited the inference about
the IRS. People are scared of the IRS because the power to tax
is the power to destroy. Wouldn't you agree, Mr. Ferriero?
Mr. Ferriero. I know that people are afraid of the IRS,
yes.
Mr. Gosar. Yeah. Missing documents, kind of similar to
missing tape minutes. Wouldn't you agree, Mr. Ferriero?
Mr. Ferriero. I'm not sure they equate.
Mr. Gosar. Whoa, whoa, whoa, whoa, whoa, missing material,
missing material, missing records, missing records, the same.
Agreed?
Mr. Ferriero. Missing material.
Mr. Gosar. Yeah. And then we haven't followed the rule of
law. So everybody is scared to death that there's one
application to bureaucrats and there's another application to
the regular lay people on the street, you know. It defies me.
Ms. O'Connor, I mean, you've been in the Clinton White
House, you used to help with the Clinton administration with
the Teamster Union strike. In fact, you've been quoted as being
a veteran of Washington battles. Would you agree with that?
Ms. O'Connor. I've been here a long time.
Mr. Gosar. So you know the process, right?
Ms. O'Connor. I'm not sure which process you're referring
to.
Mr. Gosar. The bureaucratic inside-the-Beltway politics
process. You know about these recordkeeping and aspects of that
as well.
Ms. O'Connor. I'm not a recordkeeping expert. Certainly I
have----
Mr. Gosar. But you have to--you're an attorney. You have to
know that when there's a problem and you don't have records,
where there's a problem with records, you know to report it,
right?
Ms. O'Connor. I know that if you discover that records have
been lost and they're not recoverable, it needs to be reported,
yes.
Mr. Gosar. Let's go back through this again. The accidental
removal, defacing, alteration, or destruction of records in the
custody. So it's not just loss, it's potential problems with
it. So in your tenure over at the IRS, there was no inferences,
Ms. O'Connor, that there was some sequencing problems or some
problems with the emails out of Ms. Lerner's office, none?
Ms. O'Connor. Nobody raised to me what I understand to be
the issue that arose here, which is an identification that some
of the emails were----
Mr. Gosar. I didn't ask about missing. That there were some
problems with her email. Because even the Commissioner said
that it was known that there was problems with that--with her
records.
Ms. O'Connor. I don't recall knowing that there were
problems with the records.
Mr. Gosar. No one reported to you that there was any
problems?
Ms. O'Connor. I don't recall anybody telling me that there
were problems with the records.
Mr. Gosar. Would you consider the conduct of Ms. Learner
normal?
Ms. O'Connor. Which conduct?
Mr. Gosar. The conduct in front of this committee and her
conduct in front of, you know, supplying a question to the
audience, seeding a question to the audience? I mean, as an
employee and somebody supervising records and looking at it,
would you say the conduct of Ms. Learner as being normal?
Ms. O'Connor. Well, just to break it out, the question at
the conference, it wouldn't be something I would advise. In
terms of the laptop situation, my understanding from the
material that's become public in the last week or so is that
she took quite a number of efforts to have the laptop
reconstructed, and that seems to be appropriate.
Mr. Gosar. You could also look at it from the standpoint of
America looking at it is covering up her crime, too.
Ms. O'Connor. I have no evidence that that's what's
happening.
Mr. Gosar. Well, if you're from the inside out, I mean,
it's pretty interesting that you could actually try to cover
that up in regards to the way that you look like you're coming
off on disclosure.
Let me ask one last question. So the way she took the
Fifth, is that normal, Ms. O'Connor?
Ms. O'Connor. I don't have any point of reference for that.
Mr. Gosar. You've seen plenty of taking the Fifth, have you
not?
Ms. O'Connor. I have not.
Mr. Gosar. You have not? Okay.
I yield back.
Mr. Gowdy. I thank the gentleman from Arizona.
The chair will now recognize the gentlelady from Illinois,
Ms. Kelly.
Ms. Kelly. Thank you, Mr. Chair.
Mr. Ferriero, the National Archives and Records
Administration is required by law to ensure the investigation
of all allegations of unauthorized disposal of Federal records.
Is that correct?
Mr. Ferriero. We don't actually do investigations, but we
are charged with ensuring that we follow up on any reports that
we have and urge the agencies to conduct such an investigation,
yes.
Ms. Kelly. So you just said you don't investigate the
allegation yourself, but you do instruct the entity to conduct
on their own and report back.
Mr. Ferriero. Right.
Ms. Kelly. Okay. During the Bush administration from 2001
to 2008, the National Archives reported that they opened 92
cases into whether agencies improperly disposed Federal
records. Does that sound correct?
Mr. Ferriero. I believe so.
Mr. Wester. It does
Ms. Kelly. Okay. If you do the math, that was a little more
than 11 years ago, or almost 1 per month. Is it fair to say
that such allegations are relatively common?
Mr. Ferriero. You have the data.
Mr. Wester. The allegations are common. I would suggest
that it's not unique to administrations, but it's reflective of
the challenges that all Federal agencies have with this issue.
Ms. Kelly. Okay. On June 17 the National Archives and
Records Administration sent a letter to the IRS chief in the
Office of Records and Information Management indicating that
the loss of some of Ms. Lerner's emails may constitute an
unauthorized disposal of Federal records. Is that correct?
Mr. Wester. That is correct.
Ms. Kelly. Do you think that records retention is a problem
exclusive to the IRS?
Mr. Wester. No
Ms. Kelly. A 2008 Government Accountability Office
investigation found evidence that several Federal agencies,
including the Department of Homeland Security and the
Department of Housing and Urban Development, admitted at least
one requirement of National Archives regulations related to
proper management of electronic records. It certainly appears
that Federal agencies across administrations have struggled
with records retention.
What is the NARA's role in developing a long-term solution
to this problem that will endure even after this administration
is over?
Mr. Ferriero. Let me start with just describing the state
has been self-identified. Over the past 5 years, 4 years, we
having working with each of the agencies to develop a self-
assessment of where they stand in terms of their control over
especially the electronic records, and the data shows that a
high percentage of the agencies self-report that they are at
high risk. So that's why we have created the directive and are
moving ahead to create the solutions to those problems.
Ms. Kelly. And what can agencies do to mitigate this
longstanding problem? What ideas?
Mr. Wester. There are a number of ideas, most of which are
captured within the managing government records directive. As
we've talked about earlier, agencies need to identify ways to
automate these processes, to take the human intervention out of
the activity, because that is where the highest risk for error
to occur or other things to occur that do not ensure good
recordkeeping. So to the extent that we're able to have
industry days and identify private sector vendors and get their
ideas about how this auto-categorization and automation can
take place with email and other electronic records and then
identify what the minimum electronic records management
requirements are that the National Archives needs to promulgate
to the vendor community and also to Federal agencies so that
they can better manage on this electronic content. Those are
some of the things that we're working on so that we're able to
meet those deadlines within the directive.
Ms. Kelly. Because it would seem as though as our
technologies continue to improve, the amount of information
that agencies mustmanage and appropriately store increases. So
how important is it for agencies to make improvements to
information systems to ensure full compatibility with new
technologies?
Mr. Wester. It's very important. They need to think about
this in several kind of sectors. One is the policy piece, which
the National Archives is most responsible for in getting that
piece organized so that they are thinking more creatively and
differently about how to manage records in automated sorts of
ways with our support.
Also thinking about the technology issues, working with the
vendor community in the private sector to understand how
automation can be added in cost-effective ways to make this
happen. Then identify ways that agencies can, in a fiscally
responsible kind of way, add this technology and implement
these policy changes so that agencies are managing their
records to meet their business needs, protect the rights and
interests of the government, and then from the National
Archives' perspective, make sure that we're able to get the
currently valuable records into the National Archives so we can
make them available to future generations.
Mr. Ferriero. And there are a couple of other aspects of
this directive that we haven't touched on that are very
important. The directive calls for the appointment of--
identification of a senior agency official, not the records
manager, but senior agency official who takes responsibility
for records management within that agency, raises the profile
of records management in the agency.
At the same time we are working with the Office of
Personnel Management to create for the first time in our
government the job family ``records manager.'' There is no such
thing right now in the records management environment. So we
have a variety of credentials that are in operation now across
the Federal Government.
Ms. Kelly. Thank you. My time is up. I yield back.
Mr. Gowdy. Thank the gentlelady from Illinois.
The chair would now recognize the gentleman from Tennessee,
Dr. DesJarlais.
Mr. DesJarlais. Thank you, Mr. Chairman.
Ms. O'Connor, I just wanted to ask you a few questions.
What was the reason you were hired in May of 2013 to join the
IRS?
Ms. O'Connor. So, Mr. Werfel called me the day after he
started and said that he had undertaken this significant
challenge and was trying to add a few extra people to help
him--a chief of staff, a risk officer, and a counselor--and our
project was to help him, as needed, in various ways to run the
IRS, which at that point was facing new leadership and had the
problems that I know your committee knows about.
Mr. DesJarlais. Your Chief Counsel, William Wilkins,
testified before this committee that you were a key supervisor
of the IRS' document review and production process. Would you
think Mr. Wilkins was correct?
Ms. O'Connor. I don't quibble with what he said, but as I
was trying to explain earlier, I wasn't working on that full-
time. There was a large number of people who were working very
hard full-time, but I worked with them to try to help them.
Mr. DesJarlais. In your time at the IRS from May 2013 to
November, did you coordinate the IRS' response to congressional
requests for documents?
Ms. O'Connor. I worked with the staff of the committees to
make sure I understood what they needed. I was certainly a part
of the process of making sure that what they were asking for
was delivered to them.
Mr. DesJarlais. Did you review emails related to IRS
targeting?
Ms. O'Connor. So the review process involved an enormous
number of people who were in sort of tiers.
Mr. DesJarlais. Okay. Did you review emails?
Ms. O'Connor. I wasn't in the, you know, set of employees
who were doing the first level review or the second level
review, that sort of thing.
Mr. DesJarlais. Did you redact emails related to IRS
targeting?
Ms. O'Connor. I didn't do any redacting, no.
Mr. DesJarlais. None at all?
Ms. O'Connor. No.
Mr. DesJarlais. Okay. Did you determine the schedule of
making document production to the committee?
Ms. O'Connor. The schedule was basically as quickly as we
can----
Mr. DesJarlais. So you did do that?
Ms. O'Connor. --and so it was determined by the calendar.
Mr. DesJarlais. Okay. So you did make the schedule?
Ms. O'Connor. It was determined by the calendar. Basically
we looked at how quickly we could amass a sizeable----
Mr. DesJarlais. Who decided when the IRS would make a
document production? I mean, who specifically?
Ms. O'Connor. It really was the calendar.
Mr. DesJarlais. Okay.
Ms. O'Connor. I mean, the effort was to do it as quickly as
could be when there was enough to produce.
Mr. DesJarlais. Did you interact with the Treasury
Department while at the IRS?
Ms. O'Connor. Yes.
Mr. DesJarlais. Okay. How?
Ms. O'Connor. How? Telephone call. In person.
Mr. DesJarlais. Okay. What did you discuss with the
Treasury Department?
Ms. O'Connor. It was a variety of things. You know, the IRS
obviously is part of the Treasury Department. Mr. Werfel
reported to Secretary Lew, and, you know, there were a variety
of different things at any meeting.
Mr. DesJarlais. So did you update them about the response
to the congressional investigation and targeting?
Ms. O'Connor. I did provide updates when we were going to
produce documents that we would be doing it, and things like
how many documents were in it and that kind of thing, yes.
Mr. DesJarlais. Did you interact with the White House while
at the IRS?
Ms. O'Connor. I didn't. As I explained earlier, I had the
one interaction where I went with Mr. Werfel as he presented
his 30-day report to the President. Other than that----
Mr. DesJarlais. So Just one time?
Ms. O'Connor. I didn't have communications with the White
House about my IRS work when I was at the IRS.
Mr. DesJarlais. Who was your point of contact at the White
House?
Ms. O'Connor. For what?
Mr. DesJarlais. When you were interacting with them? You
said you interacted once.
Ms. O'Connor. I didn't have one.
Mr. DesJarlais. You didn't have a point of contact. Okay.
When you joined the IRS, were you given training on
preserving Federal documents--or Federal records?
Ms. O'Connor. There was an enormous amount of training
right in the onboarding, and I think it did include records
management. But there was so much it's actually hard for me to
remember now.
Mr. DesJarlais. So it included emails?
Ms. O'Connor. I think so.
Mr. DesJarlais. Federal records. Who provided the training
for you?
Ms. O'Connor. I think it was computer based.
Mr. DesJarlais. Okay. Did you back up your emails or
official records while at the IRS?
Ms. O'Connor. I think that my computer, because I was in
the Counsel's office, was being backed up, and when I left, my
records were all copied by the IT staff in the Counsel's
office.
Mr. DesJarlais. Okay. Were you ever aware of an attempt not
to preserve IRS records by any IRS employee while you were
there?
Ms. O'Connor. No, I'm not aware of that.
Mr. DesJarlais. Do you know, did you store your emails on
your hard drive?
Ms. O'Connor. I don't know.
Mr. DesJarlais. Okay. Do you know what the size of your
email box was?
Ms. O'Connor. I don't know.
Mr. DesJarlais. Okay. That's fair enough. I have no further
questions.
Ms. O'Connor. Thanks.
Mr. Gowdy. I thank the gentleman from Tennessee.
The chair will now recognize the gentlelady from
California, Ms. Speier.
Ms. Speier. Mr. Chairman, thank you.
I would just like to point out that the Speaker of this
House today admonished all of us that we need to show respect
to all the witnesses who come before us. In fact, he said we
invite people to come and provide testimony, and frankly, they
should be treated with respect. And I believe respect includes
asking a question and then allowing a witness to fully answer
the question and not cutting them off. So I'm hopeful that as
this hearing and other hearings move forward we will continue
to show respect as the Speaker of the House has recommended to
us.
Let me ask Ms. O'Connor a question or two. Chairman Issa
issued a report entitled, ``How Politics Led the IRS to Target
Conservative Tax-Exempt Applicants for Their Political
Beliefs.'' The report alleged that the President's political
rhetoric, quote/unquote, is what, quote, ``led the Internal
Revenue Service's targeting of tax-exempt applicants.''
Ms. O'Connor, did you see any evidence that IRS employees
were motivated by politics or political bias in screening
applicants for tax-exempt status?
Ms. O'Connor. So as I said earlier, I joined the effort
after it started at the end of May, and I left midstream at the
end of November, and so I didn't see all the documents that
were produced even while I was there and more continued to be
produced after I left, and I didn't talk to witnesses. All that
said, I didn't see any evidence of that, no.
Ms. Speier. Are you part of a government-wide conspiracy to
target President Obama's political enemies?
Ms. O'Connor. Absolutely not.
Ms. Speier. Are you here voluntarily and not a hostile
witness?
Ms. O'Connor. I'm not hostile. I did receive a subpoena.
Ms. Speier. Would you have come had you not received a
subpoena last night?
Ms. O'Connor. Well, the initial response that we gave
pointed out that I didn't have a lot of relevant information
because I had only been at the IRS for the 6 months and it was
after Ms. Lerner's material was collected and it was before the
discovery that she had emails that were not recoverable
connected to a computer failure. So I think the initial
reaction was there would be many better witnesses to assist the
committee.
Ms. Speier. All right.
Now, Mr. Ferriero, for a long period of time the IRS did
not back up their records, and in fact it was incumbent on each
of the employees to print a copy of any email that they thought
was relevant for historical perspective, which is alarming in
and of itself. It's also pretty alarming that they are still
using Windows XP, which was first used in 2001, and Microsoft
does not even support that anymore.
So I think for every American who pays taxes there's a
great sense of insecurity in not knowing that any communication
they have with the IRS may in fact be lost, and if there is one
agency that we want to have comprehensive backup, it would be
the IRS. Is that correct?
Mr. Ferriero. I agree. But I also can testify that this
issue about outdated technology exists in many agencies across
the government.
Ms. Speier. All right. So this is a problem we should be
looking. Maybe this committee could undertake something that
was constructive in nature and look at all of these agencies
and whether or not there is sufficient backup of documentation.
As I understand it, when Mr. Werfel came to the agency back
in May of 2013, he made a decision, implemented IRS-wide, that
would require that there would be a daily backup of its email
servers. Is that correct?
Mr. Ferriero. I don't know that.
Ms. Speier. So you don't know that.
Do you know that, Ms. O'Connor?
Ms. O'Connor. He did
Ms. Speier. He did. So now we can confidence in knowing
that at the end of every day, there's a backup. All emails that
have transpired during the day are backed up within the IRS. Is
that correct?
Ms. O'Connor. That was my understanding when I was there.
Ms. Speier. All right. So my only question is, on the one
hand, last night the Commissioner said we have had all these
cutbacks and we need more money to be spent to be able to have
the kinds of servers necessary to retain all this information.
Mr. Werfel did take steps to back up everything. Are we at a
point where everything is backed up, or do we still need more
technology?
And, Mr. Ferriero, maybe you can answer that.
Mr. Wester. Actually, the point I'd like to make about that
is that having a backup system in place is not a recordkeeping
system, and that's, I think, part of the discussion about what
kinds of technologies do agencies need to have to have
effective electronic recordkeeping. The actions that have been
described that the IRS has taken meet the needs of being able
to produce emails and other electronic records for inquiries
like from committees like this one, but it does not deal with
the electronic recordkeeping issues that agencies need to deal
with around disposition and preservation and access for
business needs within agencies necessarily.
Ms. Speier. All right.
Mr. Chairman, I know my time has expired, but I just wanted
to point out on behalf of our colleague, Mrs. Maloney, that her
point was that 501(c)(3)s and 501(c)(4)s are tax exempt, not
that the donors' contributions necessarily are tax exempt, but
that the 501(c)(3)s and (c)(4)s are tax exempt for purposes of
collection of taxes.
Chairman Issa. [Presiding] Well, you know, I appreciate
your pointing that out. I think the point--and I received a
text from the Ways and Means who thanked us for helping point
that out because it's one of their frustrations over at that
committee. The fact is that corporations in America, if they
take in, let's just say that they're providing a computer
service, if they take in a million dollars and they spend a
million dollars doing support and they have nothing left over
at the end, they also pay no taxes.
Ms. Speier. That's correct.
Chairman Issa. So a 501(c)(4) who takes in a million
dollars from people who want to have it do some service and
spends it all pays no taxes. So the difference is a 501(c)(3),
people may give a million dollars and avoid nearly half a
million dollars in personal taxes. So the difference in
scrutiny for a 501(c)(3)'s activities, not being political
because political contributions are not tax deductible, the
501(c)(4)s follow the same rules as your PAC.
Ms. Speier. Except that my PAC has to disclose who makes
donations to me.
Chairman Issa. And I truly appreciate----
Ms. Speier. And the 501(c)(4) does not.
Chairman Issa. And I truly appreciate that. The fact is
that Congress in its wisdom has not legislated that disclosure.
We did not put it under the Federal Election Commission, a
place where Lois Lerner worked for many years, we did not
empower that. So the President's OFA does not have to disclose.
That's just simply the law as it is.
I just want to make sure, and I think Mrs. Maloney was very
surprised, that people do not get a tax write-off for giving to
501(c)(4)s, therefore the term ``tax exempt'' doesn't have the
meaning that most people think it has when they lump together
charities, 501(c)(3)s.
And it is extremely important. The American Heart
Association, the American Cancer Association cannot engage in
49 percent of its activities in favor of promoting candidates
because it's a charity, and there is a huge difference, and
it's a difference I think the Ways and Means is sensitive to
because legislating changes is serious business. 501(c)(4)s, in
fact, do not enjoy that, just as your homeowners association
doesn't.
Ms. Speier. Except that 501(c)(4)s are supposed to be
exclusively for social worker purposes.
Chairman Issa. I appreciate that, but the court's
standing----
Ms. Speier. And they are not.
Chairman Issa. --is majority.
I now recognize Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman. I want to
ask the chairman to admit into the record a letter dated June
23, 2014, from the White House, Neil Eggleston, Counsel to the
President. This is a follow-up on what was just----
Chairman Issa. The letter from the White House will be
placed into the record, without objection.
Mr. Cummings. --explaining what Ms. O'Connor was saying
with regard to hostile witness. Just explaining, just as you
explained yours.
Chairman Issa. Noncooperative witness, they refused to
provide her. She has been informative. I appreciate that.
Mr. Cummins. Mr. Chairman, you admitted it?
Chairman Issa. It's in the record.
Mr. Cummings. Thank you
Chairman Issa. The gentleman from Texas is recognized.
Would the gentleman yield me 10 seconds?
Mr. Farenthold. Certainly.
Chairman Issa. I just want to put it in perspective for Mr.
Wester, and if you agree, you can answer on the gentleman's
time. If we continue to collect data the way they're
describing, what you're doing is effectively taking all the
data at the end of 6 months and throwing it in a trash heap.
And then the difference, if you just collect a bunch of tapes,
is the equivalent of owning the yard that your trash is hauled
to and saying it's all there.
If I understand correctly, what you're trying to achieve
with Capstone, Mr. Ferriero is, in fact, to have the meaningful
data retained so that it's searchable and usable while
recognizing that the vast majority of data is likely not to be
of any value. And certainly you would not want to search
through it to find the important data that is effectively being
thrown out today.
Mr. Wester. Yes.
Chairman Issa. Thank you.
Thank you, Mr. Farenthold.
Mr. Farenthold. Thank you.
Ms. O'Connor, I want to follow up on some questions Dr.
DesJarlais asked. He mentioned, and you said you had gone
through extensive training with the IRS on their document
retention records policy and that you felt like your laptop was
probably automatically backed up. But the actual document
retention policy doesn't have to do with back up or saving
files. It has to do with printing out things that you believe
fall under the Records Act. How many, in your tenure at the
IRS, you have an idea how many things you printed out to keep
for the archives?
Ms. O'Connor. I have no volume, but just to get back to
the--I just want to make sure it was clear what I said. I went
through extensive computer-based training. I don't think that
much of it was on records retention. All that said, I did
understand----
Mr. Farenthold. Did you print out any to save?
Ms. O'Connor. Oh, absolutely.
Mr. Farenthold. Would it have been more than one or two a
day?
Ms. O'Connor. I don't have a recollection, but what I
explained is that what happened with my electronic material
when I left is that the IT people in the Chief Counsel's office
collected that and copied it, they made a copy of it. And my
paper records were all transferred so that they could continue
to be used by my successor.
Mr. Farenthold. And so when you printed them out was there
just like an inbox type thing on your desk, you stuck them in?
What did you do with them after you printed them out?
Ms. O'Connor. I had files in my office.
Mr. Farenthold. Was it one big file or was it broken up
under files based on subject matter? Do you recall how that was
done?
Ms. O'Connor. It was in different categories. I can't
really remember.
Mr. Farenthold. Okay. I guess what I'm getting at is, I'm
trying to imagine the amount of work necessary to go in and
recover, say, something from Ms. Lerner, and then the amount of
work that eventually goes in when those documents get to the
National Archives for sorting them out.
Ms. O'Connor. I don't have a good point of reference.
Mr. Farenthold. Mr. Ferriero, let's talk about the records.
I mean, assuming you have got your Capstone project, would you
rather have more records or less records?
Mr. Ferriero. I would rather have the right records. And
the identification, the work that goes on between the records
manager and the agency and my records management staff is the
creation of schedules.
Mr. Farenthold. But you don't always know what's going to
be an important record at the time you get the email. I mean,
if there was an email about what parking place somebody is
going to get assigned, that probably isn't an important record
until maybe, God forbid, an employee comes in with a car bomb
and parks in that parking place. All of a sudden it becomes
relevant. So trusting an individual at the time it's happening
to decide what is a Federal record probably is not a very good
way to do it.
Mr. Ferriero. I agree, I agree, and that's why the Capstone
takes that part of the process completely out. It captures
everything for the senior executives of the agency.
Mr. Farenthold. So what's the cost of implementing it? I
mean, does it work just like something that plugs into the
network and captures email, I mean, in a broad general term?
Mr. Wester. So in general when agencies look to deploy a
Capstone sort of solution to manage their email, they are
usually doing it in the context of upgrading their email
system. So at the National Archives in the past couple of years
we've transitioned the email systems, and part of what we have
done is rolled out this Capstone technology implementation
along with the policies.
Mr. Farenthold. And so you've got it, it's off the shelf,
if somebody wants it, they can buy it for their agency?
Mr. Wester. It's not quite that simple, but it's COTS
products that then have to be integrated by the IT shop.
Mr. Farenthold. So again, I used to work in IT. I mean, is
it as simple as plugging in a server and loading some software
and making sure you have enough storage space on it? I mean, is
there much more to it? I mean, obviously, configuration and
such. But I can't believe the IRS Commissioner testified $10
million to put in a solution like that last night. Is that an
accurate number?
Mr. Wester. I don't know if it's an accurate number or not,
but what I would say is that as agencies are moving to the
cloud and as they're trying to identify solutions that can make
Capstone work, it's not a free activity. There are costs
associated with doing integration and other sorts of things.
Mr. Farenthold. But certainly saving it digitally is a lot
cheaper than printing something out when industry standards say
each page you print out costs between 5 and 8 cents. It's got
to be a massive savings over that.
Mr. Wester. There are probably massive savings with moving
to electronic recordkeeping. Then also it's much easier to
provide access electronically than having to provide boxes on
carts in research rooms as we do today.
Mr. Farenthold. All right, I see my time has expired.
Chairman Issa. I thank the gentleman.
We now go to the gentleman from Missouri, Mr. Clay.
Mr. Clay. I'm in shock, Mr. Chairman, but thank you anyway.
Chairman Issa. Oh, wait a second.
Ms. Norton, I apologize.
Mr. Clay. It's Ms. Norton.
Chairman Issa. They said Clay, but you have returned, and
I'm thrilled to see the delegate from the District of Columbia,
Ms. Norton.
Ms. Norton. Thank you very much, Mr. Chairman. I just
thought you were looking through me.
We have been asking about backups here. And by the way, as
the last member, my friend from Texas indicated, and I couldn't
agree more about electronic backup as opposed to paper, of
course it costs money to do hardware and to get those things.
And so when you already have the old-fashioned stuff you go
with the more costly old-fashioned stuff. And that's been the
story of the IRS, and of many of our Federal agencies, because
it takes money to do things like that. It takes money to save
money.
Before I go any further, we've been talking about Federal
records of the kind of course that Congress would subpoena.
Those are not the records that the average American would be
most concerned about. The Federal records they would be most
concerned about, for example, are their own taxpayer documents.
Could I ask if there is backup for taxpayer documents, when you
file your income taxes, for example?
Mr. Wester?
Mr. Wester. I do not know the answer to that question. That
would be most appropriately brought up with the IRS.
Ms. Norton. Mr. Ferriero?
Mr. Ferriero. I agree that that's an IRS question.
Chairman Issa. If the gentlelady would yield?
Ms. Norton. I'd be pleased to yield.
Chairman Issa. We earlier had an oversight of IBM's role in
the subcontracts to Mr. Castillo and so on. At that time I
became aware that, yes, the electronic data for filing of
taxpayer records, which is the vast majority of filing today,
which is far greater and far more vast than these emails we're
discussing, does have a system and a backup, and it is a big
part, a significant part of the $1.8 billion spent on IT.
That's actually one of the interesting points of, this is the
small back end of the IRS compared to their massive spending in
that database.
Ms. Norton. Mr. Chairman, could I ask you, at the same
time, did we discover at that time whether there's backup for
the healthcare data that's coming into the IRS, since these
witnesses apparently don't have that----
Chairman Issa. You know, my confidence is high that it does
exist in that data trove, but that came in after our
investigation. But it is a significant part, hundreds of
millions of dollars of the IRS' new budget go forward is the
maintenance of those transactions.
Ms. Norton. As the chairman says, this is kind of the back
end, and this doesn't come up very often. It's very important.
And let me say, because there has been a lot of back and forth
and contentious--not testimony, contention among members--so
let me just say for the record, whenever anybody loses emails
there is always going to be a suspicion. So I just want to say
that for the record.
My concern was that nothing that Lois Lerner did,
contemporaneous emails, and the question is, if you do lose--if
you do crash, could I ask both of you, if you crash, if you're
in the old IRS, because that's where these people are now, what
should you do when you know that you may be called before a
committee of Congress? What should you do when they tell you
they couldn't retrieve your emails? What precautions should you
take?
Mr. Wester. So what we counsel agencies to do is to make
sure that IT, the legal counsel, and the records management and
records officers are all working together on the different
aspects of the Federal Records Act to make sure that records
are identified and preserved and policies are being followed.
If there were a crash of an individual's hard drive----
Ms. Norton. Apparently there have been a great number of
crashes.
Mr. Wester. Yes. So a crash in and of itself doesn't
necessarily mean that Federal records have been lost, but it
does indicate that there are probably issues that need to be
addressed with the IT organization, with the records
organization, with the----
Ms. Norton. I'm now assuming the records have been lost.
Obviously, that's catastrophic.
Mr. Wester. Yeah.
Ms. Norton. And somebody is going to be accused, as has
occurred here, because there is hardly any way to prove that
negative. So I want to know what precautions should be taken.
They tell you the records are lost, it's a crash, what should
be done? Because we may have this situation again, and now we
know that the suspicion will come up. And I don't regard the
suspicion as unfounded. I just think that the suspicion needs
to be shown. So I need to know what you should do since I don't
see any way we can avoid this happening again, and so if we get
new software and new computers.
Mr. Ferriero. So the first step is to notify the National
Archives that there is a problem so that we can start the
process.
Ms. Norton. Do you know whether this was done in this case?
Mr. Ferriero. It was not done.
Ms. Norton. So that's the first thing, to notify the
National Archives, even before you try to retrieve it. Just
say, look, I've lost something. I want you to know it. Go
ahead.
Mr. Ferriero. And we would, as we did in this case when we
found out, write a letter to the records manager there.
Ms. Norton. When did you find out in this case?
Mr. Ferriero. We found out when you did, that letter to
Senators Wyden and Hatch, and we submitted our letter.
Ms. Norton. So what's the point of notifying you, just for
credibility sake? Is that it?
Mr. Ferriero. Well, no, because it's we're demanding that
they investigate and report back to us in 30 days what's the
situation.
Ms. Norton. Yeah. Of course they were already doing that.
So it must be more than that. I mean, they weren't just sitting
there.
Mr. Ferriero. This is the first indication we had that
there was a problem. So we snap into action when we're
notified. We weren't notified----
Ms. Norton. But you were convinced that they were already
trying to do that?
Mr. Wester. Well, what was going on at the time, it was
clear that activity was going on. What was not clear to me
until that letter appeared was that there were emails that
potentially were not able to be reproduced and were lost. And
that's the difference for us. There is a lot of activities that
go on across the government every day to recover, you know,
crashed hard drives or other kinds of IT issues. But it becomes
a serious concern of ours when it becomes increasingly clear
that records may have been lost. That's when we do get into
action.
Ms. Norton. Yes, sir?
Chairman Issa. Go ahead. If the gentlelady would close up.
Ms. Norton. I was going to say, when it becomes clear, I
mean, it either is clear or not clear. It can't be increasingly
clear. Someone has to look and it may take some time. At the
end of that search, then you can conclude it's lost or not
lost.
Chairman Issa. You can answer if you would.
Mr. Wester. Actually, I wanted to make a couple of points
related to this if it was okay.
Chairman Issa. Sure.
Mr. Wester. An individual in an agency should be working
with their records officer to make sure that they're managing
their records within the official recordkeeping system. I am
not familiar with too many official recordkeeping systems that
entail saving records on a hard drive to maintain them. You
would do that for access purposes or reference purposes or
things like that, but not as an official recordkeeping system.
So part of what we would counsel agencies to do is be in
contact with your records officer, be in contact with your IT
staff, be in contact with your counsel so when these issues
happen you can figure out what needs to be done from a Federal
Records Act perspective.
Going forward with the directive and having agencies manage
email in automated ways by the end of 2016 and pursuing
Capstone and other sorts of policy ideas that we have
promulgated with the directive, we anticipate a day where we'll
be able to remove human intervention from this sort of activity
and then be able to manage these records more effectively.
Chairman Issa. Thank you.
Ms. Norton. Thank you, Mr. Chairman.
Chairman Issa. We now go to the gentleman from North
Carolina for 5 minutes. I would ask for just 10 seconds if I
may.
Mr. Wester, would it be fair to say that when you should
have been informed if Lois Lerner knew that there could be
Federal records on the lost drive, it would have been at the
point that she discovered her drive was broken and/or at the
point they were convinced they couldn't recover it? At that
point wouldn't it have come to the National Archives as now you
get to try to recover them if there are known to be Federal
records on them? That would have been the timeframe is what I
think I asked.
Mr. Wester. It would have been preferred for us to know
about it when there was an issue that would have indicated that
email was lost.
Chairman Issa. Right. And on hundreds of other places where
Lois Lerner could have helped you look for and find the records
that would have existed in real time rather than years later.
Mr. Wester. The reason I'm having difficulty answering that
question, it's more of an operational issue within the IRS as
opposed to a National Archives sort of issue.
Chairman Issa. But prompt reporting to you makes a
difference.
Mr. Wester. Yes, because the prompt reporting to us allows
the agency itself to be on notice to itself with our imprimatur
that they need to take action.
Chairman Issa. Thank you.
Mr. Meadows.
Mr. Chaffetz. Mr. Chairman, can I ask unanimous consent
that the gentleman from North Carolina be allowed to----
Chairman Issa. Without objection, so ordered.
Mr. Chaffetz. Thank you.
Mr. Meadows. I thank the gentleman from Utah.
And thank you, Ms. O'Connor. It's good to have you back,
good to see you again. In your testimony, you talked about when
you got to the IRS in May of 2013 that all of Lois Lerner's
emails were in this area to be redacted and worked on. Is that
correct? That's what you had----
Ms. O'Connor. I think they were still in the processing
part where they were being flattened and decrypted, but they
had been gathered already.
Mr. Meadows. So they had all been gathered. Was there not
anybody who looked and saw this huge hole between 2009 and 2011
and says, man, this is really strange that the email activity
during this period, a lot of it disappeared. Was there anybody
that looked at it, like you would look--like Treasury would
look at a counterfeit dollar and say, gosh, this is a fake. Was
there not anybody that raised that concern?
Ms. O'Connor. So it wasn't brought to my attention, and----
Mr. Meadows. Would you be mad about that? Since you were
overseeing that, wouldn't you be mad if somebody saw that and
didn't bring it to your attention?
Ms. O'Connor. If somebody had seen it, I would have hoped
that it would have been brought to my attention.
Mr. Meadows. So, you think that somebody didn't see it?
Ms. O'Connor. I have no reason to think that anybody saw it
and didn't say anything about it.
Mr. Connolly. Mr. Chairman, can I ask the witness please to
speak into the microphone, Ms. O'Connor?
Mr. Meadows. Ms. O'Connor, can you move it closer?
Ms. O'Connor. Yes, I'm sorry.
Mr. Connolly. If you could speak into it. Thank you.
Ms. O'Connor. Sorry about that.
Mr. Meadows. So, who is responsible for making sure that
all the documents and materials are complete to submit to this
committee, or any other committee, who is responsible to make
sure that that body of work is complete?
Ms. O'Connor. I think it's probably the head of whichever
agency has been asked----
Mr. Meadows. And so we just trust them to make sure that
it's complete. So there's no real oversight within the IRS to
make sure that what we get is complete?
Ms. O'Connor. I mean, within the IRS we had a whole number
of different layers of sort of quality checking to make sure
that the materials that were being reviewed were appropriately
redacted and were then produced.
Mr. Meadows. But there was no--all those layers, there was
really nobody that was there saying, well, we've got everything
we need?
Ms. O'Connor. The thing that I think is challenging about
the situation is that I believe that the people who collected
all of Ms. Lerner's material most likely believed they had it
all because they got successfully what was on her hard drive. I
think the missing piece was not knowing that there had been a
crash.
Mr. Meadows. So when they looked at, and they were going
back to 2009, they didn't see that there was a whole big hole
of where all of a sudden the email volume picked up in June of
2011 when she got her new hard drive. They wouldn't have seen
just this unbelievable anomaly of additional emails?
Ms. O'Connor. So nobody brought it to my attention. I
didn't----
Mr. Meadows. So let me go on a little bit further because
here is the bombshell in all of this. Every one of us have been
counting on the TIGTA report for a chronological of who knows
what when. Over 65 percent of what they reported were solely
based on emails. So if we have a whole lot of emails that are
missing, wouldn't that suggest that the whole TIGTA timeframe
is at best incomplete?
Ms. O'Connor. So one of the things that I think is
important in this is that my understanding is what the IRS has
done is provided all the emails to----
Mr. Meadows. But that's after the TIGTA report. During the
TIGTA report, what they reported, because this is new since
then, wouldn't you agree that at best it is incomplete? Yes or
no? You're a smart person. I have dealt with you before. Yes or
no? Wouldn't you agree that it would be incomplete?
Ms. O'Connor. I can't answer, and I can tell you why. The
reason why is because my understanding of the TIGTA report is
that it was based on interviews, extensive interviews.
Mr. Meadows. It was based on 30 percent interviews, 65
percent--I have read the TIGTA report more--it has put me to
sleep a number of times. So in that, if most of it's based on
emails, wouldn't you say that if you didn't have all the emails
that the TIGTA report might not be the full story? It's a real
easy answer.
Ms. O'Connor. If there were a significant and relevant
email that was missing then that might be true, but----
Mr. Meadows. And now we know that there are thousands of
emails that they never got to see from Lois Lerner, and maybe
several others.
Ms. O'Connor. I'm not sure that we know that there are
thousands that we haven't----
Mr. Meadows. Okay. All right. So let me go on very quickly
to my good friend there with the National Archives, and I say
that in a sincere fashion. Now that we found last night that
not only is it Lois Lerner's hard drive, but it's a number of
other people at the IRS, do they call you on a regular basis to
say, listen, we may have this problem? Have you gotten a number
of notifications from those higher officials that have had hard
drive issues?
Mr. Ferriero. Not to date.
Mr. Meadows. Neither of you?
Mr. Wester. No.
Mr. Ferriero. So we have a Federal law that is being
ignored by the IRS.
I'll yield back.
Mr. Chaffetz. [Presiding] Thank the gentleman.
Now recognize the gentleman from Missouri, Mr. Clay, for 5
minutes.
Mr. Clay. Thank you, Mr. Chairman.
And let me provide a recent history lesson to my
colleagues. During the administration of President Bush
government officials lost millions of emails, including
significant numbers of White House emails in the midst of
congressional and criminal investigations. In one instance, the
Bush administration lost nearly 5 million emails related to
various White House matters under investigation by Congress. At
the time a White House spokesman stated, ``We screwed up and
we're trying to fix it.''
Mr. Ferriero, your predecessor Allen Weinstein wrote to the
White House counsel at the time, Fred Fielding, and said this:
``It is essential that the White House move with the utmost
dispatch both in assessing any problems that may exist with
preserving email and in taking whatever action may be necessary
to restore any missing email.'' Those Bush era documents were
also pertinent to criminal and congressional investigation.
In 2006, special prosecutor Patrick Fitzgerald hit a
roadblock when emails relating to the Valerie Plame leak
investigation went missing. Fitzgerald explained, ``Not all
email of the Office of the Vice President and the Executive
Office of the President for certain time periods in 2003 was
preserved through the normal archiving process on the White
House computer system.'' In 2009, the Department of Justice
investigated a so-called torture memo, but one key Bush
administration official's relevant emails had been,
``deleted,'' and reportedly were not recoverable.
Mr. Ferriero, I understand that you were not the Archivist
in the previous administration, but I assume you agree that the
IRS is not the only agency to have lost emails related to
congressional investigations. Is that correct?
Mr. Ferriero. That's correct.
Mr. Clay. And I assume you also agree that the Federal
Government has had significant and longstanding challenges with
records retention, especially that of emails. Is that----
Mr. Ferriero. From the very beginning of the government.
Mr. Clay. From the very beginning of us using emails.
Mr. Ferriero. And using paper. This is not just an email
problem. This is a records management problem.
Mr. Clay. And according to the General Counsel of the
Archives at the time, the Archivist's requests to the Bush
White House went largely ignored. My, my, what a few-- how a
few years changes things.
You know, the General Counsel reported that the National
Archives knew, ``virtually nothing about the status of the
alleged missing White House emails.'' Mr. Ferriero, can you
discuss some of the policy changes President Obama has made to
improve records retention throughout the Federal Government?
Mr. Ferriero. As I described earlier, he has issued a
memorandum on records management, the first time since the
Truman administration that the White House has gotten involved,
recognized an issue around records management, and authorized
the creation of a directive by the Office of Management and
Budget and myself that went to all the agencies outlining what
we need to do to get our act together, as well as a set of
promises about how the Archives is going to support that work
involving industry partners in creating new tools, creating
more visibility, credibility within all of the agencies around
records management, professionalizing records management across
the government, doing a better job of training every member of
the Federal Government in terms of their records
responsibilities. So there has been a huge focus on records
management.
Mr. Clay. So you have seen a change in how IT managers at
the different agencies archive?
Mr. Ferriero. There has been a great deal of interest,
support, and collaboration for the first time that I can see
between the records management community and the CIO community
in the Federal Government.
Mr. Clay. And do you believe that President Obama has made
retention of these records a priority of his administration?
Mr. Ferriero. The administration certainly understands the
problem and has authorized the direction for us to implement
new ways of solving this problem.
Mr. Clay. Thank you.
Mr. Connolly. Would my friend yield for a question?
Mr. Chaffetz. The gentleman's time has expired.
Mr. Connolly. I would ask the chair for a little leeway
given the fact that the chair of the full committee has many
times been granted time throughout this hearing.
Mr. Clay. I have been patient, Mr. Chairman, all morning.
Mr. Connolly. I simply have a question for my colleague if
the chair would allow it.
Mr. Chaffetz. Proceed.
Mr. Connolly. I thank the chair. Is it not true, you
brought the Bush administration experience, is it not true that
many of the 5 million emails that were lost that you described
were, in fact, deleted. It wasn't because of crashed computers.
They were actually deleted.
Mr. Clay. Sure. Intentionally deleted----
Mr. Connolly. Intentionally deleted.
Mr. Clay. --in order to hide whatever it is they didn't
want the public to see----
Mr. Connolly. I thank my friend.
Mr. Clay. --out of the Vice President's office, of all
places.
Mr. Connolly. I thank my friend. I thank the chair for his
courtesy.
Mr. Chaffetz. The gentleman's time has expired.
I now recognize the gentleman from Pennsylvania, Mr.
Meehan, for 5 minutes.
Mr. Meehan. I thank the chairman and remind my colleagues,
Mr. Fitzgerald was a colleague of mine. There were people that
were investigated and convicted as a result of that matter. We
have gone a long way in this without even getting close to that
particular issue.
Ms. O'Connor, I have great respect for your history as an
attorney, and you, yourself, have identified that you managed
complex litigation matters before you came here. So I'm asking
for some of your insight even though this may have been prior
to your actual involvement. But in June--early in June 2011, in
fact, June 3, chairman, Ways and Means Chairman Dave Camp sent
a letter to Doug Shulman, the Commissioner, in which he
identified alleged discriminatory practices on the part of the
IRS very specifically. From your perspective, when somebody
alleges discrimination, do you think that there is ever a
chance that that matter gets to litigation?
Ms. O'Connor. Allegations of discrimination do sometimes
get to litigation, yes.
Mr. Meehan. Yeah, so they do sometimes get to litigation,
don't they now?
Mr. Connolly. Mr. Chairman, could I please just ask the
witness to speak into the microphone?
Ms. O'Connor. I'm very sorry, sir.
Mr. Meehan. Around 2011, in fact, very similar to the same
time, there were a series--there had only been 2,000 pages of
responsive materials when these original requests had come in,
only 2,000 pages, but hundreds of those 2,000 pages that came
from the IRS were materials and emails that were purportedly
showing that the efforts were being directed not just to
conservative organizations, but at liberal organizations as
well.
So we have, in my mind, a very responsive body on the part
parsing the materials that are being returned in response to
the Ways and Means subpoena. So knowing that there are
discriminatory allegations and knowing that the IRS and those
who are advising the IRS and the very limited return are using
great degrees of discretion in the form of the materials they
are returning, how do you comport with the responsibility under
the law of what is emails which may be subject to electronic
discovery? This is not ambiguous. Certain electronic records
may need to be identified and preserved when litigation is
anticipated. Why was there not an effort undertaken on the part
of people to preserve those records as far back as 2011?
Ms. O'Connor. Which records in particular?
Mr. Meehan. The records of Lois Lerner. And she was advised
in January of 2011 very specifically that her communications
were potentially the subject of discriminatory practices. And
by your own admission there is a recognition that those emails
may be subject to litigation by the requirements in preparation
for litigation. As an attorney, I used to receive those. You
are required to maintain those. Why weren't those emails
retained in 2011 when she had notice that she was potentially
subject to discriminatory practices?
Ms. O'Connor. I don't know. I wasn't at the agency then.
Mr. Meehan. Well, I do have a question about that, and
that's one of the problems, because it appears that that also
happens to be just the same timeframe, just the same timeframe
within weeks in June 2011 that seven people from IRS had their
computers crash. Pardon me for being suspicious about the
timing.
Now, in terms of response, and response to emails that have
actually been sent to us here--well, I'm sorry, my time has
expired. I had one more follow-up question, but I'm not going
to be able to do it.
Mr. Chaffetz. You still have 15 seconds. Go ahead.
Mr. Meehan. Yeah, I need a document. Wait a second. I have
it. I have it right here.
The question is responsing to all emails. There have been
numerous requests from this committee and others for all of
Lois Lerner's emails. And yet, in a letter that just came only
probably a week or two ago, we have the IRS telling us that
fulfilling the request would require that you go beyond the
search terms that were originally loaded for review. So let me
ask, why are there search terms for emails when every email is
being requested, and this is only weeks ago that we're finding
this response? What is ambiguous about every Lerner email?
Ms. O'Connor. So I believe all of the--I don't know if it's
all, but many of the pieces of correspondence that accompanied
the documents that were produced referred to the fact that they
were produced according to the terms that we had talked with
your staff and other staffs about, the committee staff. I mean,
there are four different committees doing investigations. We
met with all four staffs, asked them to provide search terms.
The staff of this committee provided many of those terms.
Mr. Meehan. But you're saying it was their response. What
is ambiguous about all?
Mr. Chaffetz. I'm sorry, the gentleman's time has expired.
You may complete your answer.
Ms. O'Connor. The reason that in any large document
production search terms are applied is that it enables the
people who are seeking the material to get what they want
faster. That's the reason for the use of search terms.
Mr. Chaffetz. The gentleman from Virginia, Mr. Connolly, is
now recognized for 5 minutes.
Mr. Connolly. I thank the chair.
Mr. Ferriero, there are 90,000 employees in the IRS, is
that correct, to your knowledge?
Mr. Ferriero. To the best of my knowledge, yes.
Mr. Connolly. How many of them have computers?
Mr. Ferriero. I have no idea.
Mr. Connolly. Mr. Wester, any guess?
Mr. Wester. I do not have one either.
Mr. Connolly. Do you know how many computers? We had
testimony last night from Commissioner Koskinen, so far this
year, and it's only June, 3,000 IRS computers have already
crashed. Were you aware of that fact?
Mr. Wester. From the testimony last night, yes.
Mr. Connolly. So that's a pretty high percentage. Well,
let's assume, therefore, if we stay on that trajectory, we're
going to have 12,000 computers crash in the IRS alone, right?
If you double the number? I mean, excuse me, 6,000.
Mr. Wester. Six thousand.
Mr. Connolly. Six thousand. That is a pretty high
percentage every year of, if you assume 90,000 computers, the
maximum number, that's a lot. And my friend from Pennsylvania
sees some conspiracy, it's just coincidental that right after
her computer crashed, Lois Lerner, seven people in Cincinnati
go rogue on us and created BOLOs that, you know, seem to be
nefarious. But the fact of the matter is, there is no evidence
that because of one thing happening in Cincinnati it is
related. I mean, that is a logical fallacy that is taught in
law schools and in logic courses. The two are not necessarily
related. In fact, there is no evidence the two are related
unless one wants to treat Lois Lerner's computer crashing as a
unique event in the IRS, which is indisputably not true. Would
you agree with that, Mr. Ferriero?
Mr. Ferriero. I agree with that.
Mr. Connolly. And this isn't unique to the IRS, is it? I
mean, we're dealing with an aging set of IT investments in the
Federal Government because we don't keep up with investment.
The chairman and I, Chairman Issa, have introduced a bill,
FITARA, the Federal Information Technology Acquisition Reform
Act--a mouthful--otherwise known as Issa-Connolly, which, thank
God, is being marked up this week in the Senate. Passed the
House three times unanimously. And it is designed to try to
upgrade our investments. We spend $82 billion a year in IT
investments; $20 billion at least is inefficiently used for
just maintenance of legacy systems. And that's got to be of
enormous concern, and if Congress wants to do something about
it, wouldn't it be a wise thing to try to make some prudent and
targeted investments, Mr. Ferriero, so we're not dealing with
this kind of issue?
Mr. Ferriero. It sure would, and you'd have a lot of
friends in both the CIO and the records management community if
this gets passed.
Mr. Connolly. Right. Now, I heard you say earlier that the
Federal Records Act requires print and save as the policy.
Mr. Ferriero. And I misspoke. It doesn't--that language is
not actually in the law, but that's the guidance that many
agencies are following.
Mr. Connolly. All right. So based on that law, some
guidance was issued that says, at least for now, print and
save. I assume the reason for that guidance is because with
antiquated systems we don't want to take the risk of backup
that could crash.
Mr. Ferriero. Well, actually, the guidance came before
electronic mail was even----
Mr. Connolly. Oh, so we haven't even updated?
Mr. Ferriero. That's right.
Mr. Wester. That's right. The guidance issue precedes the
IT problem.
Mr. Connolly. Well, Lord almighty.
Mr. Ferriero. Which is why EMPA is very important, to get
that passed.
Mr. Connolly. Yeah. By the way, why not use the cloud? I
mean, our legislation would consolidate data centers throughout
the Federal family. Why not move to the cloud? Do you have
security concerns, Mr. Ferriero, with respect to the cloud such
that we shouldn't do that as an alternative to paper backup?
Mr. Ferriero. We are using the cloud in the National
Archives. We're using the Federal cloud.
Mr. Connolly. Okay. Because we heard from Mr. Koskinen last
night that he was a little concerned about security, and I
understand that concern, but one could make the argument,
especially after the Lois Lerner computer crash, that actually
security might be better in the cloud, in the private sector-
managed cloud, than, frankly, relying on these old, cranky,
obsolete, hard-to-maintain systems in the Federal Government.
Mr. Wester?
Mr. Wester. I would say that the 6103 issues that were
brought up last night are very serious concerns, and we have
them as well for IRS records that we work with the IRS to
maintain and provide access to. But your point is well taken,
and it's actually one of the items within the directive to move
the Federal Government to the cloud and ensure that as agencies
move into the cloud that effective records management policies
and practices are implemented.
Mr. Connolly. I just want to say, Mr. Chairman, in closing,
and I thank the chair for his indulgence, I understand some who
want to pursue a conspiracy theory and try to use an isolated--
well, not such an isolated event, the crash of a computer at
IRS, and ascribe to it all kinds of nefarious reasons. I prefer
to say from an IT perspective, frankly, unfortunately, this is
par for the course. This is what happens when we allow the
degradation of our IT investments throughout the Federal
Government, and I don't know how we can be surprised. And the
fact that there were 3,000 computer crashes already this year
in one agency, the IRS, I think makes the point that, sadly,
what happened to Lois Lerner's computer is hardly unique. I
thank the chair.
Mr. Chaffetz. I thank the gentleman.
Now recognize the gentleman from South Carolina, Mr. Gowdy,
for 5 minutes.
Mr. Gowdy. Thank you, Mr. Chairman.
Mr. Archivist, I want to thank you again for coming to
South Carolina. You were and remain a big hit with everyone who
had a chance to hear you, and I had a number of people ask that
you come back to South Carolina and that I not come back to
South Carolina.
So with respect to the retention of documents, can you give
us, not as an expert, just 35,000-foot level, why is it
important that we as a Republic retain documents?
Mr. Ferriero. So that the American people can hold their
government accountable, so that they can see for themselves how
decisions were made, so that they can learn themselves from the
original documents about our history.
Mr. Gowdy. Right. There strikes me that there is a
historical component, there is a constitutional component, so
you can have checks on the separation of powers, and there is
also a legal component. And you were gracious enough to brag
about not being a lawyer earlier. We have an expert lawyer
sitting beside you, so I am going to ask Ms. O'Connor what
spoliation of evidence is.
Ms. O'Connor. So I encountered that once in a case. And
what happened was that after the case had begun, somebody who
worked for one of the parties, without realizing the material
was supposed to have been kept, destroyed it, burned it is what
happened, and then it wasn't available for the trial.
Mr. Gowdy. Right. And from an evidentiary standpoint what
happens? There is a presumption that whatever you destroyed or
altered would not have been good for you, right?
Ms. O'Connor. So the judge had to go through an effort of
evaluating whether or not there should be a negative inference
from that.
Mr. Gowdy. Well, the jury can decide that. The judge
decides whether or not to charge that, but the jury ultimately
determines whether or not to draw that inference. And it's
important for us to note that the reason we have that
spoliation of evidence in the law is so that people don't
destroy evidence that would not be favorable to them. I mean,
it's commonsensical. If you can get away with destroying
evidence that is not favorable to you, everyone would do it. So
we have to have a presumption built in.
And with respect to my colleague, the former United States
Attorney from Pennsylvania, you talked about search terms. I
have got to be candid with you, I don't know what search term
you would use if you're looking for an email where Lois Lerner
responds ``yoo-hoo'' when somebody says a Democrat beat a
Republican the night before. What search term would you
recommend?
Ms. O'Connor. So I haven't looked at them in a while, but
I'm pretty sure ``Democrat'' and ``Republican'' were on the
list.
Mr. Gowdy. But what if ``Democrat'' and ``Republican''
weren't in the email? What if they used the name of the
Democrat who beat the name of the Republican, and her response
was ``yoo-hoo.''
Ms. O'Connor. So most of the terms came from the majority
staff of this committee and included many politicians,
actually.
Mr. Gowdy. But what's wrong with the search terms being
``to'' and ``from''?
Ms. O'Connor. Well, that would get you everything, which
would----
Mr. Gowdy. Right. That's my point.
Ms. O'Connor. --purposes of reducing the amount to review
in order to get----
Mr. Gowdy. But why? Why reduce it? If you want access to
all of the information, if you want access to all of the truth,
why are you reducing the search terms? Why not just ``to Lois
Lerner'' and ``from Lois Lerner''?
Ms. O'Connor. Right. As I explained earlier, I can't
remember if you were here, at the beginning of the project we
met with the staffs of the four committees----
Mr. Gowdy. Right. And it's important to note that that was
your request to meet with them because you thought the original
request was too voluminous. And my response is, when any
administration, Republican, Democrat, Whig, Bull Moose, don't
care, but when you come to a committee of Congress and you try
to negotiation a reduction in the search terms because of time
constraints or resources and this happens, let me tell you the
next subpoena you're going to get is going to be simply ``to''
and ``from,'' and you can save yourself a trip to come over and
try to negotiate the terms. It was done to make life easier for
you, not for Congress. Agreed?
Ms. O'Connor. Honestly, honestly, it was done in order to
get you the material you wanted faster.
Mr. Gowdy. Well, it didn't wind up happening. So shame on
us if we let it happen again.
What negative inference would you draw from the failure to
retain the documents in this particular case.
Ms. O'Connor. You're talking about Ms. Lerner's hard drive
crash?
Mr. Gowdy. No, what I'm talking about is the failure to
retain, whatever the mechanism of the failure, whether it's
intentional or just negligent. You have someone who said maybe
the FEC will save the day. You have someone who said we need a
project, but we need to make sure it's not per se political,
and then the emails disappear. What negative inference would
you draw, if you were just one of our fellow citizens watching
this, you know that initially there was a denial of targeting,
you know that she picked a very obscure ABA conference to
disclose that targeting had taken place, you know that
initially it was blamed on two rogue agents, in fact, Jay
Carney perpetuated that myth, you know that Lois Lerner took
the Fifth Amendment, you know that the President of the United
States said there is not a smidgeon of corruption, and now
you're told that the evidence doesn't exist, email don't exist.
What negative inference, if you were just a regular citizen
sitting at home watching this, and you've got that litany of
failed defenses, those false exculpatory statements, and now
you're told that evidence doesn't exist, what negative
inference would you draw?
Ms. O'Connor. One of the things that I found instructive in
the material that became public in the last week was that Ms.
Lerner had sent her hard drive to the Criminal Investigative
Unit for them to attempt to recover it. And the inference that
I would draw is that if she wanted intentionally to destroy the
material she would not have sent it to the Criminal
Investigation----
Mr. Gowdy. Did she ever use her personal computer?
Ms. O'Connor. I don't know.
Mr. Gowdy. She did.
Mr. Chaffetz. The gentleman's time has expired.
Now recognize the gentleman from Vermont, Mr. Welch, for 5
minutes.
Mr. Welch. Thank you very much. Thank you, Mr. Chairman.
A couple of things. First of all, I want to thank you all
for being here, subpoena or not. I appreciate the work that you
do.
Second, I want to say a couple of things. One is, I am a
strong supporter of congressional oversight, and I do believe
that when Congress requests information it should be provided.
But I have some significant concerns about the way we've
proceeded on this hearing.
When you go back to the basics here there is a very serious
question about what happened to the emails, and we're
investigating that. The IG has investigated that. But there is
also a very serious question about the abuse of the 501(c)(4)
status. And that, in my view, is a worthy topic of
investigation. No group should be targeted because of their
political affiliation, whether they're conservative or liberal.
I totally agree with that. But no one should be allowed to
abuse the 501(c)(4) status. That's worthy, in my view, of
investigation. It's not a tax exemption, as Mr. Issa mentioned,
but it's a way of funneling money under the cover of doing
social welfare work which is really about political advocacy.
And political advocacy is fine, but do it in the daylight,
not in the dark, and don't undercut the merits and the
legitimacy of 501(c)(4) social welfare organizations by turning
them into political operations. And, frankly, I'd like to see
our committee giving equal weight to that investigation. This
dark money that's going into politics in my view is really
pernicious for democracy.
And it's terrible if we have any agency of government
that's not providing requested information. There is always a
fair question if there has been a computer crash, how did that
happen? Was it intentional? But there is also this fundamental
question about the money and politics and the use of the
501(c)(4) organizations by liberal or conservative groups
basically to hide the money that's going into political
advocacy.
A second thing Mr. Chairman, is that, yes, we have to
examine these questions, but I do not think that jumping to
conclusions and assuming the worst possible interpretation is a
way to, A, give respect to folks who dedicate their lives to
public service, whether it's in the IRS or any other agency;
and B, any way to educate the American people about what the
problems may be in an organization because the whole point of
accuse first and examine facts second is to attack the very
legitimacy of the organization that's being investigated.
And I'd point out that when you lose information it does
raise a question, but I know Mr. Issa, our chairman, during the
Bush administration had to explain that oftentimes that can
happen with computers. Was it innocent? Was it deliberate? We
don't know.
And one suggestion, talking to Mr. Lynch, who may discuss
this, why not have the IG take a look at this? Why not have the
IG do it? You know, we've got a partisan situation going on
here that's getting in our way of getting to I think what is a
shared goal of getting to the bottom of this.
Chairman Issa. Would the gentleman yield?
Mr. Welch. I will yield.
Chairman Issa. This won't surprise you. The way this
investigation started is I went to the IG, TIGTA, because they
had the ability to look at 6103 and we were interested and they
began that investigation. One of the problems is the IG was
never given that drive, nor were any entities independent and
outside the IRS, which is, you know, one of the reasons that as
an IT background guy, I've never seen a disk drive that has
zero left on it.
Mr. Welch. Well, may I, reclaiming my time, thank you. And
I thought that was a good move on your part. I think we're
getting a little bit off the rails now, because I think if we
got the IG to look into this question where essentially there
is a motivation issue that both sides without the facts can
come to their own conclusions, and usually we all come to
conclusions to suit our political bias, I think it just creates
a swamp, you know.
The dysfunction that we have in this committee, Mr. Issa,
as you know, and I appreciate your aggression, but there has
got to be, in my view, a balance where, yes, we investigate
real hard, but it doesn't so overwhelm that this fundamental
question about the 501(c)(4) abuse, in my view, suddenly is not
an issue. I mean, I was one of the people who was concerned and
wrote a letter to the IRS saying, what's going on? Do your job.
Investigate.
And, you know, there's no free ride around here. If you're
a taxpayer and you're not paying your taxes, I think the IRS
should investigate you. I think if you're a 501(c)(4)
organization and you're essentially a cover for a liberal or
conservative political ideology and you're not doing social
welfare work, you should lose your 501(c)(4) investigation.
And thank you, Mr. Issa, for doing that with the IG
initially, and I'd like to see us get back on track here and
maybe they can help us out with the specific question that
we're dealing with now.
And I yield back.
Mr. Chaffetz. I thank the gentleman. I'll now recognize
myself for 5 minutes.
Ms. O'Connor, the IG, the Inspector General issued their
report on May 14, 2013. You were then appointed, I believe, on
May 30 of 2013. What did you do? What's the first thing that
you do when you walk onto this new role?
Ms. O'Connor. I got a badge. I had some training. I think
the 6103 training----
Mr. Chaffetz. But how did you organize? Who did you bring
into the room and say, all right, we need to move forward, this
is what I got to do? Who do you bring into the room at that
point?
Ms. O'Connor. Well, it wasn't like that. I mean, it really
was--the first and most important thing was the 6103 training,
because----
Mr. Chaffetz. Okay. So after you got trained, then what did
you do?
Ms. O'Connor. And then I believe I met with Mr. Werfel to
see kind of what was on the plate and what the marching orders
were.
Mr. Chaffetz. Okay, after that, yeah?
Ms. O'Connor. I can't remember the sort of play by play,
honestly.
Mr. Chaffetz. Who did you gather around you to get your job
done?
Ms. O'Connor. I didn't gather anybody around me to get my
job done.
Mr. Chaffetz. There was nobody, you just did it all by
yourself?
Ms. O'Connor. No. I mean, my job, as I explained earlier,
was to advise the Commissioner on a variety of things. One of
the things that I did was to work with a team that was fairly
small at that time, but got very large later.
Mr. Chaffetz. Who was on that team?
Ms. O'Connor. It's a whole number of IRS people and it
changed over time.
Mr. Chaffetz. Go ahead and start with somebody. I'd like a
list, please.
Ms. O'Connor. I think the best way to get you accurate
information on that would be to ask the IRS.
Mr. Chaffetz. No, I'm asking you. You were the IRS at that
point. You were the person in the room that they were reporting
to. So you come with great title. Tell me who you were
interacting with.
Ms. O'Connor. The team had some 6103 experts on it. It had
some tax litigators on it.
Mr. Chaffetz. Who? Who? Name a person. I want actual names.
Ms. O'Connor. Honestly, I would like to be able to have
accurate and complete testimony, and it's going to be hard for
me to recreate it.
Mr. Chaffetz. Can you name even one person that you
interacted with?
Ms. O'Connor. Well, I certainly interacted with Mr. Werfel
quite a lot.
Mr. Chaffetz. Okay, Mr. Werfel. Who else?
Ms. O'Connor. Mr. Wilkins was the Chief Counsel and I
interacted with him.
Mr. Chaffetz. We assume that, those are the people you
reported to. I want to talk about who reported to you. Name
some people that reported to you.
Ms. O'Connor. I think that the best way to do it is
to----
Mr. Chaffetz. I know, but you're here in front of Congress,
you knew this was going to happen. Name one person that you
interacted with.
Ms. O'Connor. I interacted with a lot of people.
Mr. Chaffetz. I know you did, a lot of people. Name
somebody.
Ms. O'Connor. Who I interacted with?
Mr. Chaffetz. Yes.
Ms. O'Connor. The Deputy Chief Counsel, Chris Sterner.
Mr. Chaffetz. Chris Sterner. Anybody in the IT arena?
Ms. O'Connor. I didn't actually interact directly with
people in the IT arena. There was somebody whose name was--I
can't even remember his last name. I think his first name may
have been Ben.
Mr. Chaffetz. So a guy named Ben, a dude named Ben. Who
else?
Ms. O'Connor. I don't recall.
Mr. Chaffetz. You were there 6 months. You had people
around you that would jump at your very presence. Who are these
people?
Ms. O'Connor. Nobody ever jumped at my very presence, I can
assure you of that.
Mr. Chaffetz. I'd like to ask them that. Who are these
people?
Ms. O'Connor. Again, I didn't interact with the IT staff
very much.
Mr. Chaffetz. You were there 6 months. You had some people
reporting to you, did you not?
Ms. O'Connor. I didn't have any direct reports, no.
Mr. Chaffetz. Did you have people that were responsive that
you asked questions of?
Ms. O'Connor. On any variety of issues----
Mr. Chaffetz. Who did you ask questions of?
Ms. O'Connor. I worked with a lot of people in the Chief
Counsel's office. If we could get----
Mr. Chaffetz. Ms. O'Connor, you're a very bright person,
you're very bright, you're a very personable person. Why are
you being so elusive. Why don't you just tell us who you asked
questions of, who interacted with you? You haven't named a
single person.
Ms. O'Connor. I've named Deputy Chief Counsel Chris
Sterner.
Mr. Chaffetz. You named three people that you report to. I
want to hear of people that you asked questions to, that ran,
got the information, and then came back and gave you
information. Name one person in that category.
Ms. O'Connor. People who I asked questions of who ran and
got me the information? I don't even think I can characterize
anybody that way.
Mr. Chaffetz. Did you ever ask anybody in the IRS to
provide you information?
Ms. O'Connor. Sure, yes.
Mr. Chaffetz. Give me one example.
Ms. O'Connor. In the Tax Exempt organization, the person
who replaced Ms. Lerner, whose name is Ken Corbin, was somebody
who I would call to ask for information about how the unit was
working and----
Mr. Chaffetz. Okay, there is one. How many people do you
think you asked information of?
Ms. O'Connor. Probably a lot of people.
Mr. Chaffetz. Can you name more than one?
Ms. O'Connor. I've named a couple now.
Mr. Chaffetz. Why are you being so elusive?
Ms. O'Connor. I'm not being elusive. I haven't been there
for----
Mr. Chaffetz. How long would it take you to get that
information and provide that information to me?
Ms. O'Connor. The IRS can provide that information to you.
Mr. Chaffetz. Why can't you provide that information?
Ms. O'Connor. Because I'm not there anymore and I don't
have any records from when I was there.
Chairman Issa. Mr. Chairman?
Mr. Chaffetz. Yes.
Chairman Issa. I think you may be unfair to the witness.
The fact is that last night the Commissioner could not remember
60 days ago who told him about the importance of losing those
documents. Last night, he could not narrow 60 days--less than
60 days ago within 30 days when he was told. I think that, in
fact, the ability to remember at the IRS is simply limited.
Mr. Chaffetz. Do you know Thomas Kane?
Ms. O'Connor. I do.
Mr. Chaffetz. Who's that?
Ms. O'Connor. I think his title was Associate Deputy Chief
Counsel.
Mr. Chaffetz. And did you interact with him?
Ms. O'Connor. I did.
Mr. Chaffetz. I think my time has expired here. And in
deference to what this committee does, I can't believe that
you're not more candid with us and just telling us who you
interacted with, a simple, easy question. It's hard to believe
that it took 5 minutes to try to extract out a dude named Ben
and one other person.
I yield back. I'll now recognize the gentleman from
Massachusetts, Mr. Lynch, 5 minutes.
Mr. Lynch. Thank you, Mr. Chairman.
I think sometimes the search for conspiracy is interfering
with the meaningful oversight that we should be doing. I think
sometimes my colleagues on the other side of the aisle are
reaching for the most grandiose conspiracy theory and
forgetting that we do have some evidence of wrongdoing here
that we should be going after. I just want to try to refocus on
that.
In spite of all the conspiracy allegations, there is some
evidence here before us--and I have been hearing from some of
my colleagues on this side of the aisle that there is no
evidence of wrongdoing. And look, I am not here to make excuses
for the IRS. I am not here to, you know, to protect the IRS or
to downplay what they have done here. But let me try to refocus
here. There was serious wrongdoing on the part of the IRS here.
There is evidence that they used improper search terms. They
used: ``Tea Party'' search terms, ``patriot'' search terms. If
you had a complaint in your file about government spending or
taxation or if your case file, in applying for 501(c)(4)
status, included statements that criticized how the government
was run, the IRS targeted you. The IRS also asked
inappropriate--asked for inappropriate information. They asked
for the names of donors. They asked for the list of issues that
the applicant cared about and what their positions were on
those issues. They asked whether the applicant or officer
intended to run for office. They asked the political
affiliation of the applicant for the 501(c)(4).
Now, Ms. O'Connor, are you aware--I know you weren't at the
IRS when this analysis was going on, but you went there later.
And also I think you might have been on some of the interviews
we had with some witnesses from the IRS. Are you aware of an
IRS BOLO, Be on the Lookout listing for groups with
``progressive'' in their name?
Ms. O'Connor. Yes.
Mr. Lynch. Okay. Are you aware of evidence that the IRS
employees treated progressive organizations in a similar manner
as conservative groups?
Ms. O'Connor. Certain, yes.
Mr. Lynch. I ask unanimous consent, we actually have a
report here of the IRS, entitled ``Inappropriate Criteria Were
Used to Identify Tax-Exempt Applicants for Review.'' And we
also have a letter here from Acting Commissioner Werfel that
indicates the progressive groups that were also targeted.
Ask unanimous consent that they be entered into the record.
Mr. Jordan. [presiding.] Without objection, so ordered.
Mr. Jordan. I would also ask unanimous consent to enter the
report from the majority staff, ``Debunking the Myth that the
IRS Targeted Progressives.''
Mr. Lynch. My information is more recent and is completely
accurate, and it includes a disavowal by the inspector general
of your report, which he testified in.
Mr. Jordan. I would stand behind the accuracy of this
report as well. I am just saying we are going to enter this in
the record and you are going to enters yours in the record.
Mr. Lynch. Okay. We can fight it out.
Mr. Jordan. All right. Thank you.
Mr. Lynch. The IRS subsequently released information that
the IRS targeted Emerge America, ACORN-affiliated group. Now,
look, I am not saying this to mitigate the wrongdoing or the
misconduct of the IRS. This makes it worse. It makes it worse
that the IRS was actually violating the constitutional rights
of progressive groups and conservative groups. This is
wrongdoing. It doesn't help the conspiracy theorists, but it
certainly indicates wrongdoing, serious misconduct on the part
of the IRS, probably our Nation's most powerful agency. It's
got information on health care, finances, knows everything
about you. So they are violating the free speech of our
citizens, violating their freedom of association of our
citizens, violating the freedom to petition the government of
our citizens, and violating I think the constitutional right
against search and seizure because of the way they are
conducting themselves.
And this isn't just evidence; the IRS has stipulated this
in their report. They said, Yeah, we did this. So we have some
serious wrongdoing. And now, in pursuing the evidence of that
wrongdoing, we have 27 months of emails disappear. And I am
asking you, how do we restore the trust in this? How do we
pursue this in a way that--look, I am not going after President
Obama here, but I am going against the IRS because of their
misconduct. And that's the thing we are overlooking here. In
going for this grand conspiracy theory, you are overlooking the
stipulated fact that the IRS conducted misconduct here. And I
think we are missing what we should truly be going after. Can
you suggest what we should be doing? Any of the witnesses here?
In terms of getting to the bottom of this, getting to the IRS
misconduct?
Mr. Jordan. Witnesses, if someone wants to respond? Great.
If not, we will move to our next.
Mr. Lynch. Okay.
Mr. Jordan. I thank the gentleman.
The gentleman from Ohio is recognized.
Mr. Turner. Thank you. I appreciate Mr. Lynch's statements
that this was wrongdoing and misconduct. The issue that we have
that we are all struggling with, which is how Mr. Lynch ended
his question, is what do you do to pursue that wrongdoing and
misconduct? We are still sitting here without a complete
understanding of the basics of an investigation, which are who,
what, when, where? Everybody knows the four Ws, who, what,
when, where. And we know that the missing emails in part thwart
the ability to complete that story, as also included is Ms.
Lerner's failure to willingly testify before this committee. I
want to put all that aside for a second.
Ms. O'Connor, you are White House Counsel. I am a lawyer.
You are a lawyer. I want to step away from the IRS problem and
investigation for a minute and just have a comparative
discussion, because I think in the responses there may be some
misunderstanding with respect to the independent--the Treasury
Inspector General for Tax Administration. And I would like to
talk to you a minute about their powers. Not with the IRS, but
just in general. I would like to compare the powers of the
Treasury Inspector General for Tax Administration with the FBI.
Because one of the things that we heard from the commissioner
yesterday is, well, we are going to do--the Inspector General
is going to do an investigation. And that is probably a good
thing. There are many who don't believe it's enough. But you
and I, having a discussion on a comparative just of authority
and powers, perhaps can let other people decide whether or not
that's sufficient investigation or whether an additional
investigation is going to take it. So let's talk about the
inspector general and the FBI. The inspector general's mission
statement is that they were established under the IRS
Restructuring and Reform Act to provide independent oversight
of IRS activities. They promote the economy, efficiency, and
effectiveness of the administration of the internal revenue
laws. It is committed to the prevention and detection of fraud,
waste, and abuse within the IRS. The Department of Justice says
the FBI includes upholding and enforcing criminal laws of the
United States. Pretty big distinction. So let's go down with
some of those powers. Because the FBI is involved in criminal
investigations, and the inspector general is involved in
internal investigations in the IRS. We give them different
powers. Let's go over some of those. Now, the inspector general
does not have the ability to compel people to testify outside
of the IRS. Isn't that correct?
Ms. O'Connor. I believe that's correct.
Mr. Turner. The FBI does. Correct?
Ms. O'Connor. Yes.
Mr. Turner. Yes. So when the inspector general undertakes
an investigation of the IRS, they are only going to be able to
interview those people that are there. Only the people at the
IRS are the only ones that they can compel to testify. If there
is somebody outside the IRS who may have been involved or have
information about it, the inspector general falls short,
doesn't have the ability to do that. They can't even do that
with respect to contractors. So when people say the IG is doing
an investigation, it's not the same. Let's go to another one.
The IG doesn't have the ability to arrest anybody. Right?
Ms. O'Connor. So I want to be helpful, but I am not an
expert on the IG act.
Mr. Turner. You know the IG cannot go and arrest someone.
Right? You are a lawyer, I am a lawyer. Ms. O'Connor, you know
this. You are the White House General Counsel. They wouldn't
hire you unless you knew this basic--the five things I am going
to ask you are real basic, simple comparatives. The IG cannot
go arrest someone, right?
Ms. O'Connor. I trust what you are saying, but I haven't
reviewed the IG act.
Mr. Turner. We both know the FBI can, right?
Ms. O'Connor. Yes.
Mr. Turner. Okay. Excellent. Warrants. The IG does not have
an ability to execute a warrant; the FBI does. So the
difference here is that the FBI can go seize things, where the
inspector general has to request them like we do, and ask for
things to be delivered to them. So the FBI can actually go in
and take hard drives and take materials that could lead them to
an investigation. The IG is in a responsive or requesting mode.
Subpoena power.
Again, the IG has that, but only of Treasury employees. The
FBI, as you will agree, the FBI can subpoena anybody who is
relevant to the investigation. Right?
Ms. O'Connor. Yes.
Mr. Turner. Okay. So the issue that we have here is when
people say, well, we are doing an investigation, the IG is
doing an investigation, you and I can agree it is not the same
type of investigation the FBI would do. And the FBI's mission
is enforcing the criminal laws of the United States. And as you
know and as Mr. Lynch was saying, the concern that people have
of this wrongdoing and misconduct is that perhaps a law was
broken. Now, if you are going to do a criminal investigation,
wouldn't you agree that the FBI is the one that should be doing
a criminal investigation versus the IG?
Ms. O'Connor. So my----
Mr. Turner. I am not talking about the IRS, just in
general. Just come with me on the issue of just in general if
you have a criminal investigation and you are the White House
Counsel, Ms. O'Connor, do you assign that to an inspector
general or do you assign that to the FBI? Where would you put
that as an attorney?
Ms. O'Connor. My understanding of the situation here is
that----
Mr. Turner. No, we are not in a situation here. I am saying
if there is a criminal matter and you are assigning it, do you
assign it to the IG or the FBI? Come on, you can give me this
one. You would give it to the FBI, right?
Ms. O'Connor. I recall when I was at the IRS, that the IG
had a number of deputies, one of whom was--his deputy for
investigations. They seemed to be very hardworking.
Mr. Turner. I am certain they are incredibly competent
people, but by law, they are limited in their investigative
powers. And the scope that they are given of their mission is
not the scope we gave the FBI. We don't need five FBIs. So
wouldn't you agree that if there is a criminal matter, you
wouldn't choose the IG; you would choose the FBI.
Ms. O'Connor. If the matter is what happened to a laptop
within the IRS----
Mr. Turner. No, I am not asking your opinion on this
matter. Just criminal. I tell you what. It belongs in the FBI.
The IG has very limited powers. They should not be the sole
source of this investigative authority.
Thank you.
Mr. Jordan. I thank the gentleman.
The gentleman, Mr. Davis, is recognized for 5 minutes.
Mr. Davis. Thank you.
Thank you very much, Mr. Chairman.
Ms. O'Connor, let me continue the focus of your work during
your tenure at the IRS, because supposedly that's the reason
you were subpoenaed to testify here today. When were you hired
by the Internal Revenue Service?
Ms. O'Connor. May 30 of 2013.
Mr. Davis. And it's my understanding that you had a role in
assisting Acting Commissioner Werfel in complying with the
numerous congressional investigations into IRS employees'
handling of applications for tax-exempt status. Is that
correct?
Ms. O'Connor. Yes.
Mr. Davis. And according to an August 2nd, 2013, letter
from Mr. Werfel to this committee, and that would be back when
you were still there, the Internal Revenue Service went to
extraordinary lengths to cooperate with Congress. The letter
explains that the IRS dedicated, ``more than 100 employees who
are working diligently to gather documents, to review them, and
protects the taxpayer-specific information in them as required
by law.'' Is that correct? And if so, did you have a role in
setting up that process?
Ms. O'Connor. I had a role in advising and helping the
people who were engaged in that process, yes.
Mr. Davis. Thank you.
Then, Mr. Chairman, I would ask unanimous consent to enter
this August 2nd, 2013, IRS letter into the record.
Mr. Jordan. Without objection, so ordered.
Mr. Davis. Thank you.
Ms. O'Connor, when the IRS set up the process, what was the
goal?
Ms. O'Connor. The goal was to get as much information as
Congress and the four different committees and other
investigators, such as the IG, to get them what they needed to
be able to conduct their investigations, and to do it
accurately and with care with regard to the redactions, and as
quickly as we could.
Mr. Davis. There appear to be a lot of confusion about why
the IRS did not discover the lost emails earlier. So let's see
if we can clear that up. It is my understanding that it was
Congress, not the Internal Revenue Service, that prioritized
what documents you searched for, and Congress, not the IRS,
that provided the search terms. Is that correct?
Ms. O'Connor. Yes, that's correct.
Mr. Davis. Well, in addition to using Congress' search
terms, what did the IRS do to further facilitate the production
of documents?
Ms. O'Connor. Among the things the IRS did was to ask
lawyers and other staff people who were dedicated to things
like implementing the tax laws and enforcing them to put aside
their jobs and work full time to review documents. The IRS
increased the IT resources to the effort, bought servers, got
additional IT resources in order to stabilize a very large
system. We also, I, personally, and Mr. Werfel as well, met
with and talked with the staff of the investigative committees,
who in addition to saying who the employees were, whose
material they wanted, and which search terms they were
interested in, they also had very specific requests for certain
types of documents. For example, I would like the training
materials, you know, from this period of time, things like
that. And we worked hard to satisfy those sort of one-off
requests, as well as getting to everybody the large body of
material that was sought.
And at the time at which I left, more than 400,000 pages of
material I think had been produced. And I have read in the
media that at this point, the IRS has produced somewhere near
three-quarters of a million pages of material. And I think that
it is a lot of material, and to have been able to produce in
that period of time I think reflects a very serious effort to
be able to provide what the committees were seeking in a speedy
fashion.
Mr. Davis. Let me ask you, how do you respond to
allegations from Republican Members of Congress that you were
part of some IRS plot to obstruct Congress?
Ms. O'Connor. Well, it is not at all true. And I think that
the record of the IRS while I was there and since then reflects
very, very hard work and diligence at providing the materials
that the investigating committees were seeking through them.
Mr. Davis. My time is up. So I thank you very much.
Thank you, Mr. Chairman, and I yield back.
Chairman Issa. [presiding.] We now go to the gentlelady
from Wyoming, Ms. Lummis, for 5 minutes.
Mrs. Lummis. Thank you, Mr. Chairman.
Some of our colleagues on the other side of the aisle have
opined that maybe we are getting a little off base about the
attention that we are focusing in this investigation.
So I would like to focus back on some of my concerns about
the failure of Lois Lerner to testify, her failure to testify
truthfully about whether she broke no laws, whether she
violated no rules, and whether she did nothing wrong. My
concern here is if someone could come before this committee and
say that and then assert their Fifth Amendment right against
self-incrimination, and then subsequently this committee finds
that their own emails refute the fact that she did nothing
wrong and that she violated no laws, that we should be
aggressive in trying to find those emails. We already have some
of them. And some of those emails suggest that she was very
actively involved in violating laws. We know that she gave
confidential taxpayer information to another agency, and that
that violates the law. We know that she specifically, while
saying that it was rogue agents in Cincinnati who were involved
in this, was actively involved herself in looking at, for
example, Crossroads GPS, which is a Karl Rove-linked
organization, Karl Rove being one of the agitators that the
political left most dislikes.
Here, as the Wall Street Journal editorial board writes,
Ms. Lerner twice refused to testify before Congress; IRS
General Counsel William Wilkins claimed 80 times that he
couldn't recall events.
And subsequently it goes on to explain that the most
troubling new evidence are documents showing that Ms. Lerner
actively corresponded with liberal campaign finance group
Democracy 21 and the Campaign Legal Center, which had asked the
IRS to investigate if conservative groups, including Crossroads
GPS, were violating their tax-exempt status. After personally
meeting with the two liberal outfits, Ms. Lerner contacted the
director of the Exempt Organizations Examination Unit in Dallas
to ask why Crossroads had not been audited.
I believe that Ms. Lerner was appropriately held in
contempt of Congress. I, quite frankly, believe that Ms. Lerner
should be tried for her violations and that she should become
an example that's held up to Federal employees and especially
employees in the IRS who violate the rights of Americans in
their role and capacity as public servants. And that is why I
am interested in knowing why her emails are not--all of her
emails are not available. That's why I want to know why we find
out just now that her email crashed. So I believe that this
investigation is on the right track; it's perfectly legitimate.
And I am of the opinion that this inquiry is well placed.
You know, every single night the University of Wyoming
backs up every email for the entire State of Wyoming. And every
night the State of Wyoming backs up every email for the
University of Wyoming, along with their own. So they not only
have a backup system, they back up each other so there is a
redundant backup system for all of the emails in the Wyoming
State Government and the University of Wyoming, because they
are reciprocating with each other. Why that kind of thing isn't
happening in an agency like the IRS, where people are relying
on the veracity of what's going on there to get consistent,
clear, rules and regs interpretation, guidance to taxpayers,
and fair treatment of the people of this country, is beyond me.
Now, here is my question, Ms. O'Connor. During your time so
far in the White House, have you been aware of any instances of
the White House reviewing documents requested by Congress under
the guise of White House equities?
Ms. O'Connor. As I explained earlier, and I am not sure if
you were here yet, I came today to be able to answer questions
about my time in the IRS, the 6 months that I was there, which
is what the chairman's letter to me said that this hearing
would be about. And so I am not prepared to talk about my other
experiences today.
Mrs. Lummis. Now, if we were to subpoena you and ask you to
talk about whether you were aware of any instances of the White
House reviewing documents requested by Congress under the guise
of White House equities, would you come back and answer that
specific question?
Ms. O'Connor. Well, I have been here for a long time today.
But what I would say about the issue of questions about the
White House, I am happy to work with you and the staff to see
if we can accommodate and provide some of the information or
what we can do. I am happy to provide that kind of assistance
to support legitimate oversight inquiries.
Mrs. Lummis. Thank you, Ms. O'Connor.
Mr. Chairman, I yield back.
Chairman Issa. Thank you.
Mr. Cummings, you have anything further? I am going to
close. I was going to let you close first.
Mr. Cummings. Let me ask you something, Ms. O'Connor.
Going back to some of Mr. Gowdy's questions. I was sitting
here trying to figure this out. I take it that you went to--you
said the search terms were given to you by the committees. Is
that right?
Ms. O'Connor. Yes.
Mr. Cummings. So Mr. Gowdy made a big deal that maybe you
shouldn't have used search terms; you should have just said
from and to.
I assume, and correct me if I am wrong, I take it what you
were all trying to do was to get the relevant documents out
first? Is that how that works? In other words, because you had
the 6103 issues, you had to go through the documents. I take it
that--how did it come about that you even got the committees to
even be giving you search terms? You follow what I am saying?
Ms. O'Connor. I do. The volume of material, what I recall,
was there were 82 or 83 employees. And the way the IRS went
about collecting their material was just to pull all of their
emails that were on whatever computer they had, and from
employee to employee, that was massive. And because of 6103,
which is the law that requires the IRS to protect taxpayer
information and, therefore, in this instance, to redact
taxpayer information, every scrap of that information would
have to be reviewed before it's produced. And that would take a
very, very long time. And in order to make it much more
efficient and to get you the documents about the subject at
issue, the tax-exempt organizations and their screening process
and how applications were processed, we said to the committees,
If you could tell us the terms you want us to use, we will zero
in on the material in this vast body of information and get you
the material about the tax exempt organization process. Our
staffs were very cooperative and provided us----
Mr. Cummings. And staff knew what was going on. They knew
what was going on there. And you were trying to get the
information out as out as fast as you could that the committees
wanted. Is that right?
Ms. O'Connor. Yes.
Mr. Cummings. Now, so when you get that information, let's
say, for example, you use the search terms, you cull out the
search term emails, what happens with the ones that are left?
In other words, so you have gotten--you are trying to get them
out, but you still got some left that might very well have
information in them that the committee would be interested in.
And a lot has made of making sure that you got--we got all of
the emails. So what happens? Do they go back then and look at
those? Do you follow what I am saying?
Ms. O'Connor. So when I left the IRS, we were still
producing the rolling productions of documents that had been
culled through the search term process. And I don't know
whether than from what I have seen in the media, what exactly
they did after I left, but my understanding with from what I
read, is they pulled at least Ms. Lerner's and I don't know if
other people's from the initial set that hadn't hit the search
terms in order to provide them to the committees.
Mr. Cummings. Do you know whether that was the plan to go
back and pick up the ones that you may not have gotten at the
beginning? Do you follow me? After the initial search terms?
Ms. O'Connor. At the point at which I left, which was mid-
stream, the plan was to continue complying with the subpoenas.
A lot of the decisions were being made just sort of day to day
what's next. But the intent was to continue to comply with the
subpoena.
Mr. Cummings. Thank you.
Mr. Ferriero, you know, this whole thing of 2,000 computers
crashing, we are in trouble, aren't we? I mean, in IRS, 2,000
so far this year.
Mr. Ferriero. As I said earlier, the state of technology in
the Federal Government is not where it should be.
Mr. Cummings. I mean, that's a lightweight description. It
sounds like we are in the Dark Ages. I am not trying to be
funny. If you got computers crashing, 2,000, and we are only
half a year, and there was something that was entered into the
record not long ago about services for repair of computers,
services not being needed, and apparently, it said something
about not delivered, there is one thing to have the money. It's
another thing to spend the money effectively and efficiently. I
mean, from what you have seen, are we spending the money
effectively and efficiently in these various agencies,
including IRS? Or do we need to do something differently?
Mr. Ferriero. I think we are on the right track. We have--
for the first time, we have the CIO Council and the Records
Management Council working together on solutions. We have
engaged the industry in developing new tools to help the
agencies do their work more efficiently. So we are on the right
track. And from what I just heard about your support for
increased funding for IT, that makes me very optimistic.
Mr. Cummings. I want to thank you all for being here.
Thank you, Mr. Chairman.
Chairman Issa. Thank you. I now want to correct the record
as best I can. I know Mr. Lynch will not agree with this. But
he cited a number of reports, August 19, 2013, and a follow-up
report. I just want to make it clear our comprehensive staff
report of April 7, 2014, ``Debunking the Myth That the IRS
Targeted Progressive Groups,'' stands for itself. And it comes
after these earlier questions. I know none of you are here for
the core question of----
Mr. Lynch. Mr. Chairman?
Chairman Issa. No, it is my time--for the core questions of
who was targeted. So we are going to leave that aside, and we
will let the report speak for itself. I think the paper record
is fine.
Mr. Lynch. I actually asked the witness, though, Mr.
Chairman. I derived that information from the witness using the
documents there. I wasn't relying on the documents alone. I had
independent, you know, reassurance from the witness what the
document indicated. That's why I used it.
Chairman Issa. From Ms. O'Connor.
Mr. Lynch. Ms. O'Connor, yes.
Chairman Issa. Somebody who had absolutely nothing to do
with the underlying investigation.
Mr. Lynch. No, she was actually there when the witnesses
from the IRS came forward and said that they had targeted
progressive groups. That was her testimony.
Chairman Issa. Okay.
Ask unanimous consent I start over then.
Ms. O'Connor, what's your independent knowledge that
progressive groups were targeted and treaty unfairly by the
people in Cincinnati, Lois Lerner, or others in Washington?
Ms. O'Connor. So I now can't remember the exact question.
But----
Chairman Issa. That's my question.
Ms. O'Connor. The BOLO spreadsheets had progressive and
other terms on them that reflected progressive organizations.
Chairman Issa. Isn't it true they had the couple of terms
that might have done it in another section, and when they
looked for reconstituted ACORN, that was a criminal enterprise,
that was an entity that went out of business because it was
found to have committed crimes? So is that really the same as
looking at all Tea Party Patriots?
Now, I will ask you the question again, not a rhetorical
question that we know the answer to. What treatment are you
aware of to any progressive group that gave them unfair
questions, hauled them over the coals as to who their donors
were, whether anyone in their organization intended to run for
political offices, or any of that treatment that has been
specified as what conservative groups went through. What is
your knowledge of that?
Ms. O'Connor. So my knowledge is limited. And I want to
make that clear.
Chairman Issa. What is your firsthand knowledge of any of
that?
Ms. O'Connor. My only firsthand knowledge of it is the fact
that I did see some of the emails, and not all of them, that
were produced in the period of time when I was at the IRS. And
the email production was not complete, obviously. I didn't
conduct a----
Chairman Issa. So you have no personal knowledge of abuse
of progressive groups or liberal groups at all. Studies have
shown that there were a number of names that came up that were
not all conservative patriot groups. But the unfair treatment
of these groups, the 2 years and more of withholding their
approval, granting them neither a yes nor a no, do you have any
knowledge--do you have any knowledge of that treatment or
mistreatment occurring to any progressive left-leaning group?
Ms. O'Connor. So my knowledge is not direct from being
there. I saw some of the emails. I saw, for example----
Chairman Issa. I just want to make sure I understand, your
answer is, no, you do not have direct knowledge.
Mr. Lynch. Mr. Chairman, the title of the report that you--
--
Chairman Issa. No, wait a second. This is my time. Does the
gentleman have a question, a point of order?
Mr. Lynch. Yeah. What's the title of your report? It says,
``Debunking the Myth of Progressives Being Targeted.''
Mr. Cummings. Did you shut the mike off?
Chairman Issa. No, I stopped the clock to let him go as
long as he wants.
Anything else, Steve?
Mr. Lynch. Okay. Sir, my line of questioning was to counter
the assertion in your report, and the title of your report that
progressives were not targeted. The questions to the witness
indicated that progressive search terms and BOLOs were used to
target progressive groups. That's the simple point I was trying
to make. And I think it's relevant, and I think it's
admissible. That's all.
Chairman Issa. And Steve, I appreciate that. But as you
know, there were additional names added sort of after the jig
was up that brought additional names, progressive names in. But
no evidence has been found of their being unfairly treated,
which is different than a search term.
Mr. Lynch. They were targeted, though. They were targeted.
They are going out--it is relevant in both cases of the IRS
intent, which is to go after certain people with those search
terms.
Chairman Issa. The IRS' intent, Lois Lerner's intent has
been well demonstrated in over a thousand pages of multiple
reports.
Mr. Lynch. And it includes these progressive names as well.
That's all.
Chairman Issa. Lois Lerner's intent was to overturn
Citizens United, which she objected to. And her emails show
that. That's what we really have. We have the President shaking
his fist at Citizens United, and then her saying in public
statements, they want us to do it, they want us to do it.
Mr. Lynch. That is a characterization.
Chairman Issa. No, those are her words.
Ms. O'Connor, just one more time, you have no firsthand
knowledge of mistreatment of progressive groups, do you?
Ms. O'Connor. All of my knowledge is based on having seen--
--
Chairman Issa. Okay. So written records that have been
provided to this committee would be the best for both sides to
put out in their reports.
Ms. O'Connor. Written records, and the records of the
witnesses that you have spoken with, yes.
Chairman Issa. Okay. Now, we called you here because in
fact you were at the IRS during the time in which a vast amount
of documents were delivered pursuant to search terms. Is that
correct?
Ms. O'Connor. I think you called me here because I was
there for 6 months during----
Chairman Issa. During the time that vast amounts of
documents were delivered pursuant to search terms. You have
been testifying to that. I just wanted to set the stage. During
that time, in August, because in fact, we were getting
voluminous amounts of documents based on search terms not of
our choosing, but of everybody's choosing, they just kept
adding to it, and we were not getting the--and they were being
prioritized. We were getting, quote, progressive stuff
seemingly first. And the minority was using it at hearings and
so on. And we knew that Lois Lerner was beginning to emerge as
a key figure. I issued a subpoena, and item one on my subpoena
said all documents on Lois Lerner, all her emails. Did you have
any question but that I was saying stop, at least as to this
committee, both sides, stop bombarding us with documents that
your organization would constantly say we have--we have given
you 64,000, we have given you 64 million, we have given you 64
billion. What we wanted was Lois Lerner's emails, and you never
went and looked for them for the rest of your time. They were
not safeguarded. It was not discovered they weren't there. We
asked for Lois Lerner because she became a person of interest
for being the center of the unfair treatment and the deliberate
effort to overturn Citizens United using the power of the IRS.
So we issued a subpoena. That subpoena was very clear. And we
reissued it in February. We wanted all her emails, while the
IRS continued to, as you said it, slowly go through these
search terms. Right? And deliver other documents first. You
have testified to that today, they delivered other documents
first even after our subpoena was issued.
Ms. O'Connor. Your subpoena asked for a number of things.
Chairman Issa. It asked for, and we made it very clear in
testimony and in communication, we wanted all her emails.
Ms. O'Connor. I understand that. The subpoena was much
broader than that. And all the material that the IRS continued
to produce was responsive to your subpoena as well as to the
other committees. And I know it's----
Chairman Issa. It's a question of first.
Ms. O'Connor. --frustrating that there were many committees
that were investigating, but there were.
Chairman Issa. Right. And I am just going to close with
something.
Ms. O'Connor. There were a lot of demands.
Chairman Issa. I want to make sure one thing since you were
at the IRS. You said four committees. There is really two
committees times two sides of the Capitol. There is us and our
Senate co-partners, there is the Ways and Means and Senate
Finance. Senate Finance and Ways and Means have the ability to
see all documents unredacted. Right?
Ms. O'Connor. Yes.
Chairman Issa. Did you, in fact, as soon as you got a
printout, just send it to them in bulk?
Ms. O'Connor. No.
Chairman Issa. No. So you applied much of that $10 million
worth of time and effort going through and selecting what to
give. You never gave those documents in bulk to the 6103
entities that were allowed to receive it. Had you given all of
Lois Lerner's emails, looked for all of them and given them to
Ways and Means and Senate Finance, then you would have known
there were substantial amounts missing much sooner, wouldn't
you?
Ms. O'Connor. Could I just address what you just said?
Chairman Issa. Absolutely.
Ms. O'Connor. The reason that even the committees that can
receive the 6103 information didn't just get massive quantities
of anybody's emails is because from the beginning of the
investigation, their request letters were specific. They wanted
certain kinds of material. They wanted training materials. They
wanted BOLO lists. They wanted emails to and from this person
or to and from that person. There was a lot of very specific
material. And even your subpoena, I think, identified a number
of different witnesses that you wanted. And I don't believe it
said only give us the first one first. That said, I did hear
you in August say that you had a priority on her emails. I
think I heard Mr. Jordan say that Mr. Wilkins was a priority of
him. I mean, there was a lot of competing demands. And the IRS
tried to balance all of that. It was really a challenge. I
think at the end of the day, a lot of information has been
provided. And I gather--I completely understand that it's
frustrating to not get, you know, the stuff that you wanted
first. But I will say that they were doing their best to try to
get a lot of material to a lot of requesters.
Chairman Issa. Mr. Lynch, you have anything?
Mr. Davis?
Then I will close with no further questions, other than a
short comment. I have spent almost 30 years in business. I have
gone from non-network to PC networks to Novell networks to
Microsoft networks. I have gone through Lotus Notes and
exchange servers. I have gone through a lot of technology.
Today, my entire companies are run on an Amazon cloud. It backs
up every day. And incrementally, I can name any day for as far
back as I want to go the date, and they can restore in a very
short period of time a functional copy so that I can search it.
The tools exist at my former company, which is not a large
company. It's a few hundred million dollars. They exist to
search the entire record of years' worth of millions of emails
and millions of other factual events, invoices and the like,
and do so, compliant with Federal rules of discovery, because,
in fact, the Federal rules of discovery do not tolerate you
saying, here is paper, sort through it, or our dog ate it, or
we destroyed everything by simply not backing it up after 6
months.
So as this committee, including Mr. Cummings, looks at
holding the Federal Government and all agencies to a level, we
will look to the Federal Government's own rules of discovery,
the Federal Government's own rules of what we hold the private
sector responsible for.
I think for the Archivist, Mr. Ferriero, there is no
question that if we held ourselves to the same level that we
hold corporate America for, and the IRS holds them accountable
for, we would get a very different result. The IRS, in fact,
insists on direct transparency when they are doing an audit as
to data and information. That's expected. And in fact, Price
Waterhouse Coopers also insists on that. We have gone too long
having excuses. We purge after 45 days. We purge after 6
months. We allow 90,000 disk drives that are unsupervised,
including laptops, to download 6103 information and go home.
Not too many years ago, we had one of the great scandals,
millions of Social Security numbers of our veterans that were
on a laptop that left. Reforms were insisted at that time to
try to protect information. Very clearly, no one knows what was
on Lois Lerner's laptop that entered and left as a portable, as
I understand it, or any of these others. The protections that
we expect the private sector to do, and we are handling a case
right now where the FTC holds the private sector responsible if
there is a loss of personal information, we don't hold
ourselves responsible for.
So I am delighted, Ms. O'Connor, that you accepted our
subpoena.
Mr. Ferriero, Mr. Wester, I am even more delighted that you
are partners in us trying to bring a level of accountability to
the Federal Government to maintain the important records the
American people have a right to.
And I look forward to follow-up investigations and follow-
up legislation, including portions of Mr. Cummings' bill if we
can find offsets for the cost of the bill, so that we can, in
fact, bring up the standards of the Federal Government in
accountability. Because the American people right now do not
believe or trust that, in fact, we are getting the honest
answer from the IRS. And much of it is based on not getting
prompt answers to questions. But much of it is based on the
systematic failure to retain documents for a period of time
that the American people assume the documents will always be
kept at. I want to thank you. I believe this panel was unique
in that it really had people that you ordinarily wouldn't see
next to each other. But it played well together for a problem
we are dealing with, and Mr. Ferriero and Mr. Wester, for a
problem we are going to deal with together for many years.
I now recognize the ranking member.
Mr. Cummings. Thank you very much, Mr. Chairman.
I just wanted to say as I was listening to you--first of
all, I thank you also for being here.
And thank you, Mr. Chairman. I will be very brief.
But Ms. O'Connor, I know the IRS employees are watching
this. And I want them to know that we appreciate their efforts.
When I listen to what you were saying, the four committees and
what you had to do, and these employees are working very, very
hard. And I just want to thank them for what they do. And I
know it's kind of difficult sometimes. And I know you are no
longer there. But you said they were working very, very long
hours, hard hours trying to deal with various priorities,
getting all kinds of information from staff, and trying to
balance all of that. And I am sure many of them have come under
criticism. But I just want them to know, on behalf of our
Nation, we appreciate them.
Chairman Issa. Thank you.
And there is always one more thing that arrives at the end
of a hearing that gets into the record.
This one is from Mr. Cummings. H.R. 1234, his bill that has
been mentioned several times, has a score by the Congressional
Budget Office of only $15 million for the entire government,
which says very clearly that, in fact, the $10 million claimed
last night by the Commissioner would seem to be an excess cost
compared to CBO's government-wide score in order to meet Mr.
Cummings' legislative initiative.
So I look forward to working with the ranking member and
Mr. Ferriero to try to make this a reality. And I guarantee you
we will find the $15 million. And with that, we stand in
recess.
[Whereupon, at 1:13 p.m., the committee was adjourned.]
APPENDIX
----------
Material Submitted for the Hearing Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]