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CNN "State of the Union with Candy Crowley" - Transcript - IRS Targeting Controversy


Location: Washington, DC


CROWLEY: Those are IRS employees you're watching doing the Cupid Shuffle, an apparent team building exercise in preparation for a conference in 2010. That same IRS conference included training videos that cost an estimated $50,000 and some pretty well paid speakers.

The information is part of a report due on IRS spending throughout this week. Congressional investigators tell CNN the report finds the IRS spent over $50 million on 225 employee conferences over a two-year period.

The man at the helm of the Thursday hearing looking at excessive spending, Darrell Issa joins me now. Congressman, thanks for joining me.

One of those speakers, by the way, taught -- or gave a presentation of leadership through art. $17,000.

So, look, we know...

ISSA: One might just call it leadership through entertainment.

CROWLEY: Whatever. $17,000 -- and I'm all for speakers fees, but nonetheless these are folks spending taxpayer money which I assume is the focus of what you're doing.

But the truth is that the administration a couple of years ago when similar allegations and videos surfaced from the GSA clamped down on how money could be spent. And you heard from the acting director recently who said, look, we have fixed this. They can no longer spend money like this. So what's the hearing about? Why are you having it?

ISSA: Well first of all, we're looking at the IRS for how big the problem is. As you know, as late as last week the administration's still trying to say there's a few rogue agents in Cincinnati when in fact the indication is they were directly being ordered from Washington.

Secondly, the culture of the federal workforce is one where I don't think you can underestimate that if you don't keep reminding the voters but also the federal workers that we're watching, this will happen again.

CROWLEY: So you don't think it's been fixed? ISSA: Well, it doesn't stay fixed. You know, understand that some of the things that they're saying, well, this wouldn't happen again, they would still happen again. One example in Anaheim when they bought their tickets they said, well, we'll pay the per diem rate for these hotel rooms. They didn't negotiate, they didn't bid it. And this was 2,700 folks. So they could have gotten a considerable reduction. Instead what they said is we'll pay full boat, but we want some perks. So they ended up with free drinks, they ended up with tickets to games, basically kickbacks.

This is hard to find. This is where inspector generals do their work both on behalf of...

CROWLEY: And it's also coming at a time, we should add, when the IRS is saying, gee, we can't get all of the people not paying their taxes because we don't have enough money, which gives it I think probably some resonances as you all keep going.

I want to move on to the other thing that you're talking about because we were provided from your committee some of the transcripts of some of the interviews that you have done with the front line agents in Cincinnati. The ones that supposedly...

ISSA: Mention this -- these were done both with the Ways and Means people in the room, Republicans and Democrats.


And one of the excerpts we were given, and I want to talk about how problematic it is to get excerpts, because we know that you interviewed these people probably for hours and you get little excerpts which it's hard for us to kind of judge what's going on, but here's one of those -- just some IRS agent, again, from the Cincinnati office.

The investigator said, "so is it your perspective that ultimately the responsible parties for the decisions that were reported by the IG," that is the decision that target tea party and Patriot applications, "are not in the Cincinnati office?"

The employee says, "I don't know how to answer that question. I mean, from an agent standpoint, we didn't do anything wrong. We followed directions based on other people telling us what to do."

Investigator, "and you ultimately followed directions from Washington, is that correct?"

The employee, "if direction had come down from Washington, yes."

The investigator, "but with respect to the particular scrutiny that was given to Tea Party applications, those directions emanated from Washington, is that right?"

The employee answers, "I believe so."

It's totally not definitive.

ISSA: Well, that one isn't.


ISSA: But I will tell you, one of the agents asked for and got a transfer because that person was so uncomfortable that they wanted out of it.


ISSA: And they've said categorically they thought it was inappropriate and that's why that person requested a transfer.

CROWLEY: And you give those transcripts as well.

ISSA: Right.

And these transcripts will all be made public.

CROWLEY: Why don't you put the whole thing out? Because you know our problem really is -- and you know that your critics say that republicans and you in particular sort of cherry pick information that go to your foregone conclusion, so it worries us to put this kind of stuff out. Can you not put the whole transcript out?

ISSA: The whole transcript will be put out. We understand -- these are in real time. And the administration is still -- they're paid liar, their spokesperson, picture behind, he's still making up things about what happens in calling this local rogue. There's no indication -- the reason the Lois Lerner tried to take the fifth is not because there is a rogue in Cincinnati, it's because this is a problem that was coordinated in all likelihood right out of Washington headquarters and we're getting to proving it.

We have 18 more transcribed interviews to do.

CROWLEY: But as yet, you don't -- you don't have that direct link. You have the front line agents going, yeah, I mean, we figured it was from Washington or I believe it was, but as of yet you don't have that definitive, yeah, this guy called me and said, people, go look for Tea Party and Patriot applications.

ISSA: The president's spokesperson is saying whatever is convenient at the time and the story changes. What we have is people coming in to transcribed interviews. They're saying under penalty of crimes that certain things are true. We have subpoenaed documents that would support that, that they say, e-mails that went back and forth.

The administration is so far not providing those documents. As we get those documents, as we will get Fast and Furious documents eventually and so on, we will learn the whole truth.

CROWLEY: And again, going to the notion out there a couple rogue agents in Cincinnati did this and it wasn't a grand scheme, the same employee we quoted earlier in the transcripts we were provided said this, "as an agent we are controlled by many, many people. We have to submit many, many reports. So the chance of two agents being rogue and doing things like that could never happen."

And then the agent you're talking about who is slightly higher in that Cincinnati office sort of made the same point. And he did say, "I tried to get out of there. I thought something inappropriate, I was looking for a different job," and he said and I quote "I mean rogue agent? Even though I was taking all my direction from EO technical, which from the flowchart we believe is in Washington, I didn't want my name in the paper for being this rogue agent for a project I had no control over." Are you finding any contrary evidence to this? Do you look at this with at least some sort of jaundiced eye saying could it have come out of that office?

ISSA: Well, of course we do. One of the challenges is these folks cannot get a pass by saying I was ordered to do it, because ethically they clearly knew this was wrong. They should have become whistleblowers. They should have done something on behalf of the American people.

The culture at the IRS when we're done, when the reorganizations and the changes are made, have to do two things. They have to have checks and balances, but they also have to have that individual responsibility.

If there's a rogue agent or if somebody orders someone to do something and it's wrong, you can't say I knew it was inappropriate and then not have told somebody like the IG. If the IG had been told I'm being ordered to do this, this investigation might have ended very differently.

CROWLEY: Do you come into this with a preconceived notion? Certainly a lot of the things we're getting at random news conferences is that Republicans, and you're leading this charge at least in your committee, really want to tie this to the White House, that you all are out to say this somehow happened at the White House, went to the IRS and the IRS did the president's bidding.

ISSA: Look, do I have a belief that this administration doesn't seem to be able to control the various branches of government and that that's been a consistent problem whether it's at the NLRB, whether it's at Labor, whether it's at Justice? Yes. I've seen that in multiple investigations.

We've never tried to tie things to the president, tie things to the cabinet officers. What we've tried to do is get the kinds of transparency we were promised, which we're not getting. And then try to get the reforms that we need so that government...

CROWLEY: What does your gut tell you? What does your gut tell you now this far into the investigation?

ISSA: My gut tells me that too many people knew that this wrongdoing was going on before the election. And at least by some sort of convenient benign neglect, allowed it to go on through the election, allowed these groups, these conservative groups, these, if you will, not friends of the president, to be disenfranchised through an election.

Now, I'm not making any allegations as to motive, that they set out to do it. But certainly people knew it was happening that could have done something and would have done something, I'm sure, if these had been progressive groups or groups that supported the president. That's what I think we know.

We're really more interested in fixing the IRS. This, we cannot quit our investigation until we're sure this couldn't happen again. And, Candy, the I.G. himself said he doesn't know that this is the only time something like this happens because he said that he doesn't believe the controls are in place for the IRS to tell us that this doesn't happen in other places.

CROWLEY: And I got to quickly turn you to one more subject, and that's Eric Holder, a man that you certainly have had some dust-ups with, particularly in the last couple of weeks. This is what he testified to at the Judiciary Oversight hearing May 15th. Take a listen.


ERIC HOLDER, U.S. ATTORNEY GENERAL: With regard to the potential prosecution of the press for the disclosure of material, that is not something that I've ever been involved in or heard of or would think would be a wise policy.


CROWLEY: So we've since learned that the attorney general did sign off on an application for a warrant to go through e-mails and such of James Rosen, a reporter for Fox. Do you think that the attorney general lied under oath to Congress?

ISSA: Well, he certainly could have been more candid, if he remembered. And he should have remembered. This is one of those --

CROWLEY: Is that kind of a, no, you don't think he lied intentionally?

ISSA: This attorney general maliciously covered up and will not give us the facts as to when Congress was lied to in the Fast and Furious case. He got the president to claim a privilege that doesn't exist. We're in court. So now when he does something similar, tries to cover up his tracks potentially as to a warrant he signed, am I surprised? No. This is somebody who should have given us the truth in the ATF Fast and Furious situation. Instead, he's using the court to slow down that process.

CROWLEY: But in the present, in that -- in this particular case of James Rosen and the application for a warrant before a judge and what he said to Congress, do you feel that was a lie? Or just, you know --

ISSA: It would be kind to say he misled Congress. It would be--

CROWLEY: Doesn't sound like you think so.

ISSA: -- less kind and more accurate to say that would rise to be a lie by most people's standards. By the American people's standard, you don't sign a warrant and then pretend you wouldn't know about it, it wouldn't come to you.

One of the things about perjury, this is the attorney general. Don't use perjury lightly. Perjury is a criminal charge that has to be proven. But certainly it's hard to have confidence in what this attorney general says or his people say when so often it turns out not to be true.

CROWLEY: Do you think he should resign, yes or no?

ISSA: That's up to the president.

CROWLEY: Chairman Darrell Issa, thank you for coming by. You need to do it again. There's a lot to talk about.

ISSA: I certainly will.


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