Top IRS official denies wrongdoing, invokes the Fifth

By Richard Simon and Melanie Mason Tribune Washington Bureau

WASHINGTON – A top Internal Revenue Service official invoked the 5th Amendment and declined to testify Wednesday before a House committee investigating the agency's mishandling of applications by some conservative groups for tax-exempt status.

Lois Lerner, director of the IRS' exempt organizations unit, spoke deliberately and crisply in her opening remarks to the House Oversight and Government Reform Committee, the first time she has appeared before Congress since she revealed earlier this month that the division she oversaw inappropriately screened and questioned Tea Party and other groups seeking nonprofit status.

"I have not done anything wrong. I have not broken any laws," said Lerner, who first disclosed that the agency had targeted conservative groups. "I have not violated any IRS rules or regulations, and I have not provided any false information to this or any other congressional committee."

The fireworks started from the hearing's outset, the third congressional showdown on the IRS controversy in less than a week. Chairman Darrell Issa, R-Calif., in his opening remarks, had harsh words not only for IRS and administration officials, but for the Treasury inspector general as well, whose audit was initiated at Issa's request. Issa said J. Russell George, the Treasury inspector general for tax administration, did not inform him soon enough about the results of his review.

George was one of four witnesses who appeared before the committee Wednesday, along with former IRS Commissioner Douglas Shulman, deputy Treasury secretary Neal Wolin and Lerner. It was Lerner's refusal to answer questions that prompted a combative early exchange.

"While I would very much like to answer the committee's questions today, I've been advised by my counsel to assert my constitutional right not to testify or answer questions related to the subject matter of this hearing," Lerner said. "After very careful consideration, I've decided to follow my counsel's advice and not testify or answer any of the questions today.

Issa asked Lerner to reconsider.

"I will not answer any questions or testify about the subject matter of this committee's meeting," she responded.

Issa then dismissed Lerner and her attorney, criminal defense lawyer William W. Taylor III, from the hearing room, prompting an objection from his Republican colleague, Rep. Trey Gowdy of South Carolina.

"You don't get to tell your side of the story and then not be subjected to cross-examination. That's not the way it works," said Gowdy, a former prosecutor. "She waived her right to 5th Amendment privilege by issuing an opening statement. She ought to stand here and answer our questions."

The committee's top Democrat, Rep. Elijah Cummings of Maryland, interjected. "Unfortunately, this is not a federal court, and she does have the right, and we have to adhere to that," he said.

According to an inspector general's report, Lerner found out in June 2011 that some staff in the IRS Cincinnati field office had used such terms as "Tea Party" and "patriots" to select applications for additional scrutiny. The report stated Lerner ordered changes to the inappropriate criteria. But neither Lerner nor anyone else at the IRS told Congress, even after repeated queries from several committees about whether some groups had been singled out unfairly.

The New York Times contributed to this report.