Treasury told of probe in June

WASHINGTON

- Senior Treasury officials were made aware in June 2012 that investigators were looking into complaints from tea party groups that they were being harassed by the Internal Revenue Service, a Treasury inspector general said Friday, disclosing that Obama administration officials knew there was a probe during the heat of the presidential campaign.

J. Russell George, the Treasury inspector general for tax administration, testified alongside ousted IRS head Steven Miller, who did little to subdue Republican outrage during hours of intense congressional questioning. Both defiant and apologetic, Miller acknowledged agency mistakes in targeting tea party groups for special scrutiny when they applied for tax-exempt status, but he insisted that agents broke no laws and that there was no effort to cover up their actions.

Miller only stoked the criticism of many Republicans, who are assailing the administration on a sudden spate of other controversies, as well, even as some Democrats tried to contain the political damage.

"I don't know that I got any answers from you today," Rep. Mike Kelly, R-Pa., told Miller. "I am more concerned today than I was before."

At one point in the day's hearing, Treasury IG George said he had told the department's general counsel about his investigation June 4, 2012, and Deputy Treasury Secretary Neal Wolin "shortly thereafter." But, George cautioned, those discussions were "not to inform them of the results of the audit. It was to inform them of the fact that we were conducting the audit."

After the hearing, inspector general spokeswoman Karen Kraushaar said George "informed Department of Treasury officials that we were looking into the IRS' handling of applications for tax-exempt status, partly due to allegations raised by conservative organizations."

The Treasury Department issued a statement yesterday saying officials first became aware of the actual results of the investigation in March of this year, when they were provided a draft of George's report, a standard practice.

George's disclosure came before the House Ways and Means Committee in the first of several congressional hearings on the matter. He was joined by Miller, who spoke publicly about the controversy for the first time.

Miller was contrite as he apologized for the actions of agents who singled out conservative political groups for additional, often burdensome scrutiny.

"First and foremost, as acting commissioner, I want to apologize on behalf of the Internal Revenue Service for the mistakes that we made and the poor service we provided," he told the committee.

But the hearing turned prickly when Miller insisted he did not deceive Congress, though he repeatedly failed to reveal the controversy last year when he was asked about it by lawmakers - even after he had been briefed.

"I did not mislead Congress or the American people," Miller said.

The administration is on the defensive for a trio of issues that are threatening to derail the president's second-term agenda. In addition to the IRS case, President Barack Obama and other officials are being pressed about last September's terrorist attack in Benghazi, Libya, that killed the U.S. ambassador and three other Americans, and the government's seizure of Associated Press telephone records as part of a leaks investigation.