FOX "Fox News Sunday with Chris Wallace" - Transcript: IRS Targeting Controversy

Interview

BREAK IN TRANSCRIPT

REP. DARRELL ISSA, R-CALIF.: Well, thanks for having me back and thanks for covering what we believe is going to be a good fact-finding hearing.

WALLACE: All right. Let's talk about that because when you recall Lois Lerner under subpoena to testify again this coming Wednesday, her lawyers said can you call her but she is not going to testify. She's not going to answer any questions, continue to take the Fifth. But I understand you have some late breaking news.

ISSA: We do. Her attorney indicates now that she will testify. We've had a back and forth negotiation. But quite frankly, we believe that evidence that we've gathered causes her in her best interest to be summoned to testify.

WALLACE: But let me make sure -- Lois Lerner, former IRS official, who took the Fifth last night, will testify before your committee?

ISSA: According to her attorney.

WALLACE: This will be on Wednesday?

ISSA: Will be on Wednesday.

WALLACE: What changed her mind? Was it -- did you give her immunity for her testimony? Was she frightened by the possibility of contempt? What changed her mind?

ISSA: Well, we really don't know. What we do know is that during the intervening period, we interviewed all the people around her to build a case for why she is at the center of this targeting, why it wasn't Cincinnati as you said in your opener. It wasn't liberal and conservative groups. It was groups targeted first by their name, "Patriot" or "Tea Party," and then later at Lois Lerner's insistence, by some objective statements. But for the most part, it continued to target conservative groups.

WALLACE: A couple of quick housekeeping questions. You did not offer her immunity. She is not going to get immunity for this testimony?

ISSA: We did not.

WALLACE: Is it your understanding that she will answer all questions that you and the committee have about her involvement in the targeting of conservative groups?

ISSA: That's our understanding. As you know, our committee did vote that she had waived her Fifth Amendment rights when she made verbatim statements under oath about not having broken any rules and regulations and authenticated other statements.

WALLACE: All right. Let's get to where the rubber hits the road. What questions do you have for Lois Lerner? What are you going to ask her? What do you hope she's going to tell you?

ISSA: Well, Chris, we know what she did in most cases. What we don't know is why she did it. What we do understand, of course, is this is someone who came from the Federal Election Commission. She came with a bias towards groups having to disclose.

501C4s are different in that because they don't primarily do electioneering, if you will, they don't have to disclose donors. And that seems to be one of the questions that could lead us to understand why a liberal individual who favored disclosure wanted to make sure that Tea Party groups had to disclose who their donors were.

WALLACE: Now, when you say you want to know why she did it, does that mean you want to know does this end with her or does it go higher up than her?

ISSA: That's certainly a big part of it. We know a lot of people she coordinated with, some of the things she said, how they either acquiesced or chafed against the things she was asking them to do. We do really want to know that burning question of who else knew about it? Who else coordinated?

And candidly, I think the American people want to know that it won't happen again. And that's going to be the harder part for Ways and Means Committee and others to do is to put in checks and balances so that no one person, if it is in fact one person, can ever leave the targeting of somebody for audits or for this kind of treatment of not giving them a fair yes or no on an application.

WALLACE: Let me ask you, obviously when she testifies Wednesday, you're going to know more about this. Do you think it's possible that it's just one person that this targeting that began didn't end -- but began with Lois Lerner?

ISSA: Well, there were other people who knew or should have known better and went along it with. But certainly, she was in a powerful position and very well could have been mostly acting on her own.

But again, there should have been safeguards to see this. The accumulation of not just some but every single application of it includes Tea Party or patriot, that flies in the face of managers doing their job to oversee somebody at the IRS. You've got to hold people accountable knowing that they're human, that there will be people doing wrong in government. There have to be checks and balances. And if it's the IRS, you'd better believe the American people, from the ACLU to the NRA, across the spectrum, want to make sure that politics stay out of the IRS.

WALLACE: Now, we have received a draft copy of a report that's been written by the House Republicans on your committee. I want to put up part of that.

In the executive summary you, the House Republicans say, "She was keenly aware of acute political pressure to crack down on conservative-leaning organizations."

Congressman Issa, pressure from whom?

ISSA: That's one of our questions. She says things like they put pressure. So e-mails indicate that there was pressure. We don't know whether it was the president shaking his fingers at the House, the Senate, and the Supreme Court over Citizens United or whether it was --

WALLACE: During the State of the Union Address?

ISSA: During the State of the Union, where she felt the pressure. Only she can tell us where she thought that pressure was.

WALLACE: The report also cites a newly discovered e-mail from September 16th, 2010, in which Lerner discusses how to check whether groups seeking tax exempt status are engaged in improper political activity. This is an e-mail to other people in the IRS.

And she says, quote, "We need to have a plan. We need to be caution so it isn't a per se political project."

What do you think that e-mail shouts?

ISSA: It's a series of e-mails. And when you read them in context, what you realize is she's trying to walk back any kind of ability for someone to look at the record and say, aha, this was political targeting. And, yet, it clearly is political targeting.

WALLACE: Now, there is a new effort under way, the IRS promulgated a regulation under which it would impose new boundaries on what these 501c4s, that's under the tax code. These are social welfare groups applying for tax exempt status, new limits on how much political activity they can be involved in. And the administration and IRS sold this as a reaction to the scandal, like this is what we're doing to try to clear up the scandal.

I gather you've gotten information that this began long before the scandal broke.

ISSA: Exactly, Chris. Lois Lerner was part of the project of targeting conservative groups delaying and cracking down on existing ones. And then, this rule change was worked on all the way back at that point to a great extent we believe this is the result of citizens united. This is their attempt to get what they don't have and couldn't get at the SEC through the IRS.

WALLACE: On Super Bowl Sunday, Bill O'Reilly asked President Obama about the IRS targeting of conservative groups. And here is that exchange.

(BEGIN VIDEO CLIP)

OBAMA: There were some bone-headed decisions --

BILL O'REILLY, FOX NEWS HOST: Bone-headed decisions --

OBAMA: -- out of -- out of a local office.

O'REILLY: But no mass corruption?

OBAMA: Not even mass corruption, not even a smidgen of corruption, I would say.

O'REILLY: OK.

(END VIDEO CLIP)

WALLACE: Now, there are six current investigations going on of the IRS scandal -- four inside Congress, two inside the administration. One in Treasury, one in the Justice Department.

A couple of questions: one, have any of those investigations been completed and cleared the IRS of wrongdoing? And what do you think of the president stating there there's not a smidgen of corruption?

ISSA: Well, he'll have to define smidgen and corruption for all of us because there certainly is real evidence that there was wrongdoing and that wrongdoing was not in Cincinnati but in fact, in Washington, D.C.

WALLACE: Let me just point out just quickly that when you talk about Cincinnati, there was the initial allegation that this was a rogue office, an IRS office in Cincinnati, and that they were responsible for all this. Go ahead.

ISSA: Exactly. And that's where the president is reintroducing things that have already been disproven. But let's understand this is the administration that wants to have you believe a video launched the Benghazi murders when in fact that was disproven. And even after it was reintroduced by this administration again and again, including by this president, Senator Feinstein in the select intelligence committee in the Senate led by Democrats made it clear that the factors that led to that had a lot more to do with terrorism than it ever would a video.

WALLACE: All right. That brings up my final question for you, because you have come under fire both in the IRS and Benghazi and other investigations of your committee for political witch hunts. They point specifically to a speech you gave to GOP fund-raiser in New Hampshire in February about the Benghazi terror attack. Here's a clip.

(BEGIN VIDEO CLIP)

ISSA: Why there was not one order given to turn on one Department of Defense asset? I have my suspicions, which is Secretary Clinton told them to stand down.

(END VIDEO CLIP)

WALLACE: But "The Washington Post" fact checker cited that bipartisan report you mentioned, the Senate Intelligence Committee, that there were no stand down orders, and there is also no evidence that Clinton ever spoke to Leon Panetta, then defense secretary, that night. And for the second time, they gave you four Pinocchios, which is their highest level of falsehood.

How do you respond to that, sir?

ISSA: Well, first of all, the first one was for quoting something that was in somebody else's report, believing that it was true, which is an unusual way to get four Pinocchios.

But in this case, the secretary of state was responsible for this normalization policy that existed in Benghazi. Witnesses have told us that they asked for help. The president himself implied that he told Leon Panetta, then secretary of defense, to use what efforts they could and what we know for a fact is not one aircraft, not one rescue of DOD was launched to get there in that 8 1/2 hours.

WALLACE: But to be honest, do you not have any evidence that Secretary Clinton told Leon Panetta to stand down.

ISSA: Well, the use in answering questions in a political fund- raiser, that was in response to a question, the term "stand down" is not used in some sort of an explicit way, but rather the failure to react, the fact that only State Department assets and only assets inside the country were ever used, that members of the Armed Forces, gun carrying, trained people were not allowed to get on the aircraft to go and attempt to rescue. Those kinds of things through State Department resources represent a stand down. Not maybe on the technical terms of "stand down, soldier," but on what the American people believe is a failure to respond what they could have.

WALLACE: All right. Congressman Issa, thank you. Thank you so much for coming in today.

And again, we want to point out the big news, and the big news is that Lois Lerner, according to her attorney, is going to waive her Fifth Amendment rights and will testify before Issa's House Oversight Committee this week.

Thank you for the news. And we'll be following the hearing.

ISSA: Thank you, Chris.

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