JEFFREY BROWN: The nation's capital was alive with talk of scandal today, starting with the revelations about the Internal Revenue Service. Questions grew over reports of overzealous enforcement aimed at groups on the political right.
The day began with new disclosures about what the IRS had done and who knew about it. The Washington Post reported the targeting of conservative groups was not limited to the agency's Cincinnati office, as the IRS initially said. Instead, The Post said agency officials in Washington and at least two other offices were also involved.
That prompted new calls by Republicans for more information. Senate Minority Leader Mitch McConnell demanded full transparency.
SEN. MITCH MCCONNELL, R-Ky.: So this morning, I'm calling on the president to make available completely and without restriction everyone, everyone who can answer the questions we have as to what's been going on at the IRS, who knew about it and how high it went, no stonewalling, no more incomplete answers.
JEFFREY BROWN: President Obama on Monday said singling out conservative groups for tax scrutiny would be -- quote -- "outrageous."
And at the White House today, Press Secretary Jay Carney said again the president is determined to get to the bottom of the scandal.
JAY CARNEY, White House Press Secretary: If what we're seeing in some of these reports about specific targeting and actions taken by personnel within the IRS turns out to be true, then people should be held accountable. And what that means in concrete action, we will have to see, based on the information and the facts that are gathered, principally, at least at first, by the inspector general.
JEFFREY BROWN: The acting commissioner of the IRS was heard from, too, for the first time. In a USA Today op-ed column, Steven Miller acknowledged agency workers reported to -- quote -- "shortcuts" because they had so many applications for tax-exempt status. Miller conceded the actions demonstrated -- quote -- "a lack of sensitivity to the implications of some of the decisions that were made."
Yesterday, the IRS said Miller had learned last year that groups with “tea party,” “patriot,” or “9/12 Project” in their names were targeted, but he did not notify Congress, despite inquiries by some lawmakers.
This afternoon, Republican Sen. Orrin Hatch of Utah said that failure raises serious questions.
SEN. ORRIN HATCH, R-Utah: He purposefully misled me, because I wrote a letter. I had other senators on the letter. I got a letter back from him basically saying that's no problem, when he knew. According to the information I have right now, he knew that that wasn't true.
JEFFREY BROWN: Another Republican, Missouri Sen. Roy Blunt, said if the reports about Miller are true, he should resign or be fired.
But the chamber's Democratic majority leader, Harry Reid, said such talk is premature.
SEN. HARRY REID, D-Nev.: The person who was working on this at the time it happened was a Republican appointee during the Bush years. The man acting now is temporary. He's acting. And there's work being done now to get a permanent person there. So to act -- to have some temporary guy resign -- his name is Miller -- as far as I know, he's done a good job.
JEFFREY BROWN: Lawmakers will have the opportunity to question Miller on Friday, when he testifies before the House Ways and Means Committee.
Meanwhile, Attorney General Eric Holder said he's ordered the FBI to see if any laws were broken.
ATTORNEY GENERAL ERIC HOLDER, United States: Those were, I think, as everyone can agree, if not criminal, they were certainly outrageous and unacceptable, but we are examining the facts to see if there were criminal violations.
JEFFREY BROWN: A full report on the matter by a Treasury Department inspector general is expected to shed further light on the matter.
And that report has, in fact, just been released a short time ago.
Joining us now with the latest, Juliet Eilperin, White House reporter for The Washington Post, and Eliza Newlin Carney. She covers campaign finance issues for CQ Roll Call.
Well, Juliet, I guess you have been doing some fast reading over there. What can you tell us about the I.G. report? What does it say?
JULIET EILPERIN, The Washington Post: So the most significant new information coming from the I.G. report is essentially saying that because of this screening criteria that they applied to conservative groups, there was virtually no work done in terms of approving these groups for 13 months.
And over a period of 18 months, they had criteria that, again, singled out groups with names such as “tea party,” “patriot,” and “9/12.” So that's the most interesting new information. It also points out that some groups faced considerable delays, including in some cases more than three years, spanning two election cycles.
So it gives you a sense of what was the real-world impact of this effort by the IRS to categorize all of these conservative groups in one place.
JEFFREY BROWN: Does it tell us anymore about who is making these decisions, what the -- name names or anything within the IRS?
JULIET EILPERIN: No.
In fact, of course, it does raise some questions. There's a great deal that's redacted, including the fact that there is event at the very beginning of the timeline in February 2010 which is completely blacked out. So it still does raise some real questions about who knew what when and really what was the instigation for this program in the first place.
JEFFREY BROWN: Eliza, what about the announcement of the FBI starting a criminal investigation? What do we know about what they're looking at?
ELIZA NEWLIN CARNEY, CQ Roll Call: Well, it is, in fact, a violation of law for the IRS to engage in discrimination in the enforcement of the tax code.
So there could have been criminal violations here. And I think, to some degree, this reflects the Obama administration trying to get a little bit ahead of this controversy.
JEFFREY BROWN: And what do you see? You have had a chance to look at some of the I.G. report. What does it tell you about the workings of the IRS here?
ELIZA NEWLIN CARNEY: Well, the IRS has long been subject to complaints from groups on both sides of the aisle that its enforcement of this area of tax law, namely, political activity by tax-exempt groups, is vague and inconsistent.
And everything we see in this report and in the reports about this so far suggest that the IRS to some degree really didn't know what it was looking for, what it was trying to accomplish. The officials were said first to look for one set of criteria, then to look for another set of criteria. The criteria kept changing from year to year.
So it creates an impression of an agency that, frankly, didn't know what it was doing.
JEFFREY BROWN: And when, as we saw, the acting director today said -- wrote today that the agency took short cuts because of so many applications coming. The context there is the changes in the campaign finance laws?
ELIZA NEWLIN CARNEY: Yes.
And we should say that in the IRS' defense, they had literally thousands of applications for tax exemption. These had more than doubled since the Citizens United ruling in 2010, which deregulated political spending, and which to some degree invited these groups to play a bigger political role.
So, at the same time, the IRS had cuts in its budget, cuts in its staff. So they clearly were overwhelmed. But it doesn't take away from the fact that they have long been criticized for having subjective and vague criteria for how to regulate these groups.
JEFFREY BROWN: Juliet Eilperin, one thing we do know from your story this morning is that this did go beyond the original reports, beyond the office in Cincinnati. Right? So where's the focus that you see for all of these questions right now?
JULIET EILPERIN: Well, I think still ultimately these are questions that people like Steven Miller will have to answer, the acting commissioner.
It's obvious that while, again, Cincinnati played the central role because that was the division charged with considering these applications for tax-exempt organizations, you had other field offices as well as headquarters involved in it, and really they're going to have to answer some key questions about to what extent did people beyond Lois Lerner make decisions about what was the approach that IRS rank-and-file employees were taking when they were targeting these groups.
JEFFREY BROWN: And what do you see -- Juliet, staying with you, what do you see as the White House response so far? Can you tell? We can see what they're saying publicly. Can you tell what's going on behind the scenes?
JULIET EILPERIN: Well, it's a little unclear, though, I think. And as the clip that you played from Senate Majority Leader Harry Reid indicated, I wouldn't be surprised if they're working very quickly to get a new nominee for commissioner of the IRS in place, so that, for example, they can at least address that one aspect now that Steven Miller is coming under fire.
It wouldn't surprise me if they were trying to come up with a new replacement who wouldn't be associated with these activities. So -- but, publicly, they have been very tentative. They said they wouldn't comment in detail until the I.G. report was released. Now that it is, we haven't got our comment yet, but we're hoping that they will be a little more forthcoming.
JEFFREY BROWN: And, Eliza, last word, what do you see behind the scenes?
ELIZA NEWLIN CARNEY: I think this is just going to escalate. This problem of how the IRS regulates political groups isn't going go away. There aren't easy answers. It is somewhat difficult to draw bright lines around political activity.
JEFFREY BROWN: You mean the larger picture?
ELIZA NEWLIN CARNEY: The larger picture. And this is going to continue. And I think it is going to continue to be a political problem for the administration.
JEFFREY BROWN: All right.
Eliza Newlin Carney, Juliet Eilperin, thank you both very much.
ELIZA NEWLIN CARNEY: Thank you.
JULIET EILPERIN: Thank you.