IRS spied on tea party after granting tax-exempt status

Republicans investigating the IRS targeting scandal said Wednesday that the agency continued to conduct secret surveillance on tea party groups even after approving them for tax-exempt status.

Acting Commissioner Danny Werfel said he shut down the monitoring program after he found out about it, and said he has halted all audits of tax-exempt organizations based on political activity as he tries to get a handle on the embattled agency.

Mr. Werfel, who was tapped four months ago to clean up the Internal Revenue Service after the targeting came to light, also told Congress he is troubled by emails sent by Lois G. Lerner, the woman at the center of the targeting scandal, that raise questions about her behavior. He said he has asked internal investigators to follow up on those emails.

“There are certain documents that raise questions, and when I looked at them I thought they raised questions,” Mr. Werfel said. “The ones that I thought raised questions I provided directly to [the inspector general], and I also provided them to the accountability review board within the IRS, which is set up to review this matter to see what actions may warrant personnel action or discipline.”

In one of those emails Ms. Lerner wrote that dealing with tea party applications was “very dangerous,” and in another she seemed to indicate that she was looking for ways to deny the charitable organization label to groups without having to accuse them of political activity.

In both cases, Mr. Werfel said, it wasn’t fully clear what Ms. Lerner was intending, which is why he asked for the reviews.

Several congressional committees also are investigating the IRS, and the House Ways and Means Committee said scrutiny has expanded to the surveillance program, in which dozens of organizations — most of them conservative-leaning — were monitored even after they were approved.

“Four months after Lois Lerner’s apology for targeting, there are many questions that are still outstanding. And frankly, we still don’t have all the answers that we need,” said Rep. Charles W. Boustany Jr., Louisiana Republican and chairman of the Ways and Means oversight subcommittee.

In May, the IRS acknowledged subjecting conservative groups to intrusive scrutiny and delaying applications for far too long before approving them. Some applications are still awaiting approval after three years.

The newly revealed surveillance, however, applied to applications that had been approved, but where the IRS apparently wanted to determine whether the groups strayed too far into political activity to keep their tax-exempt status.

Mr. Werfel quibbled with calling the continued “surveillance” and said he didn’t see any evidence that groups on the list for scrutiny was improperly influenced by any IRS employees.

But he said the program was troubling enough that he shut it down two weeks ago.

After months of investigating, Republicans have found no evidence that IRS officials were ordered to give special scrutiny to tea party applications for tax-exempt status, though a report this week shows that agency employees were well aware of top White House and Democratic lawmakers’ concerns over the groups’ participation in the political process.

Democrats said Republicans are erring by continuing to pursue a political angle to the scandal.

“My friends on the other side of the aisle continue to frame this issue as a partisan one as only affecting conservative groups,” said Rep. John Lewis, Georgia Democrat. “Time and time again, the facts have shown that both Republican-leaning and Democrat-leaning groups were singled out during the application process.”

The numbers show, however, that more conservative groups were subject to scrutiny, both in initial applications and in the ongoing surveillance program.

Investigators said they still have to look through hundreds of thousands of pages of email and documents, though at this point Ms. Lerner, who ran the exempt organizations division, remains a chief focus of the inquiries.

She is on paid administrative leave but has not resigned. Her attorney didn’t return a message seeking comment on the latest questions.

Ms. Lerner declined to testify to Congress this year, citing her right against self-incrimination, though she did give a brief statement declaring her innocence.

Some congressional Republicans said that statement amounts to a waiver of her Fifth Amendment rights and want to call her back and compel her to testify.

On Wednesday, members of the subcommittee peppered Mr. Werfel with questions about Ms. Lerner.

Rep. Tom Reed, New York Republican, said Ms. Lerner has few friends left on Capitol Hill and prodded Mr. Werfel for answers about her emails, which some Republicans say show clear bias against tea party groups that sought tax-exempt status.

Mr. Werfel said he has not had any recent conversations with Ms. Lerner and did not know what Ms. Lerner meant in some of the more controversial emails — though they did concern him enough that he flagged them for the inspector general.

Mr. Reed lashed out at Mr. Werfel after he refused to say whether he asked Ms. Lerner to resign. “I will hold you accountable!” Mr. Reed shouted.

Mr. Werfel said that he would consult with his staff and his legal counsel about privacy laws and get back to Mr. Reed with an answer if possible.

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