IRS Official Pleads The 5th

Lois Lerner, director of the Exempt Organizations Division of the Internal Revenue Service (IRS), invoked her 5th Amendment right not to testify but denied any wrongdoing in a statement to the House Committee On Oversight and Government Reform this morning.

“I have not done anything wrong,” she said, nor has she broken any laws, IRS regulations or provided false information to any congressional committees. “While I would very much like to answer questions before the committee today, I’ve been advised by counsel to not testify or answer questions on the subject of this hearing,” Lerner.

The committee opened a hearing this morning about the IRS and its scrutiny of 501(c)(4) tax-exempt applications, many of which were conservative organizations with the phrases “tea party” or “patriots” in their names.

Committee Chairman Darrell Issa (R-Calif.) asked Lerner to reconsider her decision not to testify. He also asked whether she’d be willing to answer specific questions about her opening statement or answer a more narrow scope of questions. She declined.

After about 20 minutes, Issa dismissed Lerner as a witness, subject to recall after the committee seeks specific counsel about whether the constitutional right of the 5th Amendment was properly waived.

The opening statement rankled at least two congressman – Trey Gowdy (D-S.C.) and Jim Jordan (R-Ohio) – who took issue with Lerner being able to make a statement yet not be subjected to a form of cross-examination.

“That’s not the way it works,” Gowdy said, explaining that Lerner waived her constitutional right to the 5th Amendment by issuing an opening statement, drawing some applause from the chambers. “We have a right to cross-examination,” he said.

Since she learned of the focus on conservative groups in June 2011, Lerner had 14 opportunities to set the record straight during interactions with the Ways and Means Committee but chose not to, Jordan said. “Yet they expect us to believe it was not systematic but just the work of two rogue agents in Cincinnati,” he said, referring to the Determinations Unit, which works out of the Cincinnati, Ohio office.

Prior to Lerner’s statement, Congressman Steven Lynch (D-Mass.) warned that there would be “hell to pay” if the IRS does not cooperate with federal lawmakers. Obstruction or refusal to answer questions, he said, would leave the committee no other option but to seek the appointment of special counsel or special prosecutor.

He referenced a previous Congressional hearing where witnesses had no names, no direction as to who led the investigations, who chose the terms to be used, and “basically stonewalled” the committee. “That cannot continue, we know where that will lead, and that is a special prosecutor and special counsel that will get to the bottom of this. I hope that’s not the approach IRS is going, because there will be hell to pay,” Lynch said.

Other witnesses who did testify this morning were Treasury Inspector General for Tax Administration J. Russell George, former IRS Commissioner Douglas Shulman and Deputy Treasury Secretary Neal Wolin. It’s the third time since Friday that IRS officials or former officials have been summoned to The Hill to answer questions about the application process.

An audit by the Treasury Inspector General for Tax Administration (TIGTA) released May 14 blamed the IRS for ineffective management oversight that caused almost 300 organizations to have their applications delayed or come under added scrutiny.

Lerner has been a government employee for more than 34 years, coming to the IRS in 2001 from the Federal Election Commission (FEC). She became director of the EO Division in 2006. The division oversees 1.6 million organizations, processes more than 60,000 applications annually, and has an annual budget of $100 million, responsible for 900 employees nationwide.

Lerner spoke at a tax conference in Washington, D.C., on May 10, the first IRS official to acknowledge that the agency was inappropriately targeting groups or asking for unnecessary information.