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President Obama Vows New IRS Management

By: Associated Press Email
By: Associated Press Email

CBS Web Copy

President Obama will appoint senior White House budget officer Daniel Werfel to be acting commissioner of the Internal Revenue Service, effective May 22, the White House announced Thursday.

Werfel will replace Steven Miller, ousted Wednesday amid revelations that the IRS improperly singled out conservative groups for special scrutiny.

"Throughout his career working in both Democratic and Republican administrations, Danny has proven an effective leader who serves with professionalism, integrity and skill," Mr. Obama said in a statement.

"The American people deserve to have the utmost confidence and trust in their government, and as we work to get to the bottom of what happened and restore confidence in the IRS, Danny has the experience and management ability necessary to lead the agency at this important time."

The 42-year-old Werfel is the controller of the Office of Management and Budget, a job akin to a chief financial officer. Though Werfel was appointed to that job by Obama, he also worked during the administration of President George W. Bush.

After days of inaction, Obama has tried to move swiftly in response to reports of inappropriate targeting by the IRS.

Mr. Obama said Thursday he had no knowledge about controversial IRS practices under investigation until news outlets reported on the subject last Friday, and he vowed to "fix" problems plaguing the agency through a comprehensive examination of what happened and how.

"I can assure you that I certainly did not know anything about the [inspector general] report before the I.G. report had been leaked" to the press, Mr. Obama said at a press conference in the White House Rose Garden with Turkish Prime Minister Recep Tayyip Erdogan.

The Obama administration and the IRS have been under harsh scrutiny since Friday, when the agency apologized for having singled out particular groups -- particularly those with tea party ties -- for extra scrutiny when seeking tax-exempt status. On Tuesday, a report was released showing that in the spring of 2010, the IRS began targeting groups with keywords like "Tea Party," "Patriot" and "9/12 Project" in their names to flag for heightened, typically burdensome, scrutiny.

Mr. Obama has repeatedly decried any potential discriminatory behavior at the IRS, and on Wednesday his administration requested and accepted Miller's resignation. There is no evidence to suggest anyone at the White House had prior knowledge about their practice of targeting conservative groups, but Mr. Obama did not say definitively Thursday that no one at the White House could have known about these IRS activities.

"What I'm absolutely certain of is that the actions that were described in that I.G. report are unacceptable," he said.

A timeline released in Tuesday's report showed the IRS in the spring of 2010 began targeting groups with keywords like "Tea Party," "Patriot" and "9/12 Project" in their names to flag for heightened, typically burdensome, scrutiny. The agency insisted last week that no high-level employees were aware of the practice, but the IG report alleges that Lois Lerner - an IRS official in charge of oversight of tax-exempt groups - knew about it as early as June 2011.

CBS News has confirmed that Miller was informed of the IRS's targeting policy in May 2012. On July 25, 2012, Miller testified before a House Ways and Means Oversight subcommittee, but he did not mention the agency's heightened scrutiny for the applications of conservative groups. After learning of the controversial IRS practice, he also wrote at least two letters to Congress explaining the process for reviewing tax-exempt status applications; in neither of those letters did he mention the targeting.

Ranking member of the Senate Finance Committee, Orrin Hatch, R-Utah, said that while "a great number of questions remain" about the controversy, Miller's resignation is a "positive and important step as this agency struggles to try to regain the public's trust."

"A clean slate at the IRS with new leadership is imperative to fix this egregious encroachment on the lives of honest, hard-working Americans whose only sin was that they want to express their beliefs," Hatch said in a statement. "Whether a conservative, moderate or a liberal, what happened at the IRS is chilling and violates the most basic American principle that our liberty requires restraints on government."

Senate Minority Leader Mitch McConnell, R-Ky., added in his own statement: "If the President is as concerned about this issue as he claims, he'll work openly and transparently with Congress to get to the bottom of the scandal - no stonewalling, no half-answers, no withholding of witnesses.

"These allegations are serious - that there was an effort to bring the power of the federal government to bear on those the administration disagreed with, in the middle of a heated national election," he continued. "We are determined to get answers, and to ensure that this type of intimidation never happens again at the IRS or any other agency."

With McConnell and Hatch at the helm, all 45 Republican senators Wednesday demanded in a letter to the president utmost cooperation in upcoming probes "so that the public has a full accounting of these actions."

They wrote that Miller told them in 2012 there was "an unbiased, technical screening process used to determine which applications for 501(c)(4) organizations merited further review," and in two separate letters he "failed to note that explicitly political screens were used in reviewing applications, despite the fact the practice was apparently well known within the IRS as early as 2010."

A congressional hearing is scheduled for Friday and two additional hearings have been scheduled for next week. Several witnesses have been invited to testify about their knowledge of and participation in the targeting practice.

The House Oversight Committee is also requesting that five individuals be made available for transcribed interviews by committee staff beginning May 20, 2013. Attorney General Eric Holder on Wednesday told Congress that the possible criminal violations in the IRS case include "false statement violations" that may have been made.

Meanwhile, a congressional source tells CBS News that two Cincinnati, Ohio-based employees of the IRS have been disciplined and are "off reservation" in light of the Tuesday report. The source added that the investigation is ongoing and does not rest with the two employees. Senate Finance Committee Chairman Max Baucus, D-Mont., said "nothing determinative" about the Cincinnati pair's status was discussed in a closed-door meeting Tuesday with Miller.

CBS News' Major Garrett contributed to this report.

© 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.


Associated Press Release

WASHINGTON (AP) -- President Barack Obama is promising to work with Congress to make sure the IRS doesn't abuse its power.

Speaking to reporters today about the agency's targeting of conservative groups for special scrutiny, Obama said, "I think we're going to be able to fix it." He vowed to make sure the agency is doing its job "without even a hint of bias."

An administration official says Obama will name a new acting commissioner of the Internal Revenue Service this week to replace ousted commissioner Steven Miller, who was forced to resign. The official would not say who the new commissioner will be.


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