DAVID GREENE, HOST:
In Washington, the man responsible for putting the IRS in the hot seat the last couple months found himself in the same harsh glare yesterday. The Treasury Department inspector general was grilled about which groups were flagged for extra scrutiny as they applied for tax exempt status. J. Russell George's reports focused on the targeting of Tea Party groups, but Democrats have released IRS documents showing liberal groups were also on watch lists. As NPR's Tamara Keith reports, they want to know why his report didn't mention this.
TAMARA KEITH, BYLINE: Since the beginning, the IRS scandal has been replete with misinformation, missing information and innuendo. There were the statements from IRS officials that the flagging of Tea Party groups for extra scrutiny was the work of a couple of rogue agents in Cincinnati, and the TV interviews where committee chairman Darrell Issa called the White House spokesman a paid liar and said the IRS was targeting the president's political enemies. But as he opened yesterday's hearing, the California Republican was less bombastic.
REPRESENTATIVE DARRELL ISSA: And I hope everyone on both sides of the dais will reject categorically assumptions for which there is not evidence.
KEITH: The hearing did answer some basic questions and came close to putting some issues to rest. But when it came to the possible targeting of progressive groups and why the inspector general's report didn't mention it, questions remained. The committee first heard from two veteran IRS employees. Liz Hofacre workers in the Cincinnati field office and for about six months was responsible for reviewing the Tea Party cases. Utah Republican Jason Chaffetz asked her about the rogue agent storyline.
REPRESENTATIVE JASON CHAFFETZ: It was expected you would be one of those two rogue...
LIZ HOFACRE: It was inferred that I was one of them.
CHAFFETZ: Is that true? Were you...
HOFACRE: No, it was not. I was following direction from management, and they were aware of what I was doing.
KEITH: Did the problem stay in Cincinnati? Evidence and testimony shows the IRS chief counsel's office in Washington, D.C. helped determine how Tea Party cases should be handled. This contributed to delays of months, even years. But were IRS employees politically motivated? Everyone who testified said no. What about the White House? Was it involved? That's what the ranking member on the committee, Maryland Democrat Elijah Cummings, asked Hofacre.
REPRESENTATIVE ELIJAH CUMMINGS: Based on your own personal experience, did you ever receive direction from anyone in the White House concerning your handling of the Tea Party applications?
HOFACRE: No, sir. I did not.
KEITH: The real draw was the testimony, once again, of J. Russell George, the IRS inspector general. Past appearances before Congress have been almost friendly. This time, George was forced to defend his audit report and why it made no mention of progressive and Occupy groups listed in recently revealed IRS documents. His answer: The IRS didn't give him those documents until last week.
J. RUSSELL GEORGE: I am very disturbed that these documents were not provided to our auditors at the outset, and we are currently reviewing this issue.
KEITH: The terms occupy and progressive appeared on IRS watch lists known as Be on the Lookouts, or BOLOs. But the IG said there was no indication they were given extra scrutiny - that is, until the documents released last week. Pennsylvania Democrat Matthew Cartwright wasn't buying George's explanation.
REPRESENTATIVE MATTHEW CARTWRIGHT: You knew people's heads would explode if you talked about Tea Party BOLOs and you didn't mention any other ones.
CARTWRIGHT: What do you think we're doing here?
KEITH: Still, George said he stands by his report. Tea Party groups, he says, were given extra scrutiny and faced delays - not because of anything they were doing but because of their names. The IRS has never disputed this. And George and his deputies questioned why it is only now that they're hearing that IRS employees were apparently instructed to pull aside applications with progressive in their names as well.
GEORGE: I'm concerned that there may be additional pieces of information that we don't have. I am very concerned about that.
KEITH: Issa ended the hearing saying there was no evidence progressive groups had it as bad as those with Tea Party in their name. He called for them to come forward and tell their stories. Tamara Keith, NPR News. Transcript provided by NPR, Copyright NPR.