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WASHINGTON — The threat was addressed to all the witnesses, but it was obvious the congressman had just one in mind, the woman at the center of the IRS scandal, Lois Lerner.

Rep. Stephen Lynch, D-Mass., loudly threatened in his opening statement that if witnesses refused to testify, it would leave Congress no option but to appoint a special prosecutor to look into abuse by the IRS.

“There will be hell to pay if that’s the route we choose to go down,” he warned.

But that’s just what Lerner did, refusing to testify before the House Committee on Oversight and Government Reform by invoking her constitutional right against self-incrimination.

Lerner said she would not answer questions because the Justice Department has launched a criminal investigation into the IRS scandal.

Lerner has blamed abusive IRS practices on low-level employees in the Cincinnati office. But IRS sources told National Review, “From the outset, Internal Revenue Service lawyers based in Washington, D.C., provided important guidance on the handling of tea-party groups’ applications for tax-exempt status.”

Lerner heads the IRS unit that oversees applications for groups seeking tax-exempt status. She triggered an uproar nearly two weeks ago when she announced the IRS began targeting conservative groups for extra scrutiny in 2010.

 Committee chairman Darrell Issa, R-Calif., subpoenaed Lerner to testify Wednesday.  He has accused her of lying to Congress four times last year when lawmakers began looking into complaints of IRS agents asking intrusive questions of tea party groups seeking tax-exempt status.

Lerner presented her side of the argument in an opening statement. She claimed she is innocent of wrongdoing and said that because members had accused her of lying to the committee, she was taking the advice of her attorney to not answer questions.

“I have not done anything wrong. I have not broken any laws or provided false information to this or any other congressional committee,” she said.

Lerner also claimed she had not violated any IRS rules or regulations.

By refusing to testify, Lerner said, “People may assume I have done something wrong.”

“I have not,” she insisted.

Rep. Trey Gowdy, R-S.C., then contended she had waived her Fifth Amendment right by telling her side of the story during an opening statement that Issa said made “assertions.”

“That’s not the way it works,” Gowdy said, prompting applause in the hearing room.

Issa then tried to ask Lerner two questions but she refused to answer both times.

Issa then excused Lerner and her counsel.

Lerner has admitted the IRS harassed hundreds of conservatives over the last two years but there is also evidence she harassed a religious group during her tenure as head of the Enforcement Office at the Federal Election Commission (FEC.)

The Weekly Standard reported the FEC investigated the Christian Coalition in the late 1990′s for allegedly coordinating issue advocacy expenditures with a number of candidates for office.

The FEC deposed 48 people, forced the Christian Coalition to produce tens of thousands of documents and spent hundreds of thousands of dollars investigating but never found any evidence supporting the accusation.

It was reported last week that IRS agents under Lerner quizzed tea party groups about such information as the content of their prayers. The attorney for the Christian Coalition says the FEC asked equally intrusive questions to his client.

In fact, James Bopp Jr.,testified before the congressional Committee on House Administration in 2003 that FEC attorneys had asked, “[W]hat occurs at Coalition staff prayer meetings” and what churches specific people belonged to. Additionally, pastors were asked about their federal, state and local political activities.

After the Christian Coalition was cleared of any wrongdoing Lerner was promoted to acting General Counsel at the FEC before going to the IRS.

Lerner’s dismissal at Wednesday’s hearing left former IRS Commissioner Douglas Shulman, Treasury Department Inspector General J. Russell George and Deputy Treasury Secretary Neal Wolin to testify.

Issa would soon become furious over a major development revealed at Wednesday’s hearing that opens new questions about whether the IRS harassment was politically motivated.

He said the committee was just informed the IRS had completed its own investigation confirming abuse of conservative groups six months before the 2012 election but kept the results hidden.

Issa accused the IRS of intentionally misleading Congress by failing to alert lawmakers about the abuse a year ago.

“Just yesterday the committee interviewed Holly Paz, the director of exempt organizations, rulings and agreements, division of the IRS,” Issa said.

“While a tremendous amount of attention is centered about the Inspector General’s report, or investigation, the committee has learned from Ms. Paz that she in fact participated in an IRS internal investigation that concluded in May of 2012 – May 3 of 2012 – and found essentially the same thing that Mr. George found more than a year later.”

“Think about it,” Issa continued, “For more than a year, the IRS knew that it had inappropriately targeted groups of Americans based on their political beliefs, and without mentioning it, and in fact without honestly answering questions that were the result of this internal investigation.”

Everyone who knew about the extra scrutiny “could have and should been a whistle-blower,” Issa said.

He also accused the Obama administration of placing a “higher priority on deniability than addressing blatant wrongdoing.”

Issa also told George, who’s IRS audit was not completed until a week ago, that he had a legal obligation to inform Congress of his findings as he was completing his audit.

Both Democrat and Republican lawmakers were frustrated with Shulman during Wednesday’s hearing, saying either that he should have known of the targeting of conservatives earlier than he did or he was not being truthful about when he learned about it.

Lawmakers suggested Shulman would have easily known about the problem if he had just asked his staff.

“You made not one inquiry before testifying before Congress about what the truth of that is,” said Rep. Rob Woodall, R-Ga.

“I’m not saying you were lying; I’m saying you were derelict in inquiring about what the truth was,” he added.

Democrat Lynch essentially did accuse Shulman of lying.

“You misled Congress. Make no question about it,” Lynch told Shulman.

Lynch told Shulman he “did nothing” and “abdicated” his responsibility by not reporting concerns of abuse when he first learned in the spring of 2012 that IRS agents were targeting conservatives.

Shulman tried to explain it was his understanding conservative groups were not the only ones getting such invasive scrutiny.

Lynch appeared frustrated with the answer.

In another development Wednesday, the IRS failed to comply with a Senate request for crucial evidence.

The House Ways and Means Committee demanded records of IRS communications with the White House and Treasury Deprtment that could reveal what the Obama administration knew about the targeting of conservatives and when it knew it.

The IRS missed the May 21 deadline to respond to a letter in which top committee members asked, “Did the IRS at any time notify the White House of the targeting of conservative or any other groups?”

The White House said Monday that Chief of Staff Denis McDonough and other senior officials learned last month about the Treasury Department inspector general’s inquiry into IRS abuse. The White House said the officials did not inform President Obama about the review  because it was not complete and he did not learn of the abuse until news reports May 10.

It’s unlikely anyone at the IRS will lose their job over the scandal.

“Why weren’t more people fired?” Senate Finance Committee Chairman Max Baucus, D-Mont., demanded at Tuesday’s hearing.

Politco discovered it’s not so easy.

Most employees involved in the targeting of conservatives are covered by protections for federal workers that include a long series of steps including two rounds before boards of appeal that would take more than a year.

No one yet has apparently been formally reprimanded, no less fired.

Latest developments in IRS scandal:

  • A group of leading conservatives today released a letter to the House and Senate Republican leadership, and their Republican Conferences, demanding legislation be passed to compensate those groups and individuals who were targeted for political discrimination by the Obama administration’s IRS.
  • An investigation by Cincinnati Fox 19 reporter Ben Swann reveals how claims of “rogue” low-level IRS employees in Cincinnati targeting conservative groups are “falling apart.”
  • Bonnie Esrig, former IRS Cincinnati manager, rejects the idea low-level employees were responsible for targeting conservative and tea-party groups. Esrig tells NBC News that even if an employee went “rogue,” management is required to supervise and sign off on everything they do.
  • Former Clinton White House counsel Lanny Davis said the growing IRS scandal has robbed Democrats of the so-called “trust edge” they held over Republicans and is now jeopardizing hopes that Hillary Clinton will replace President Obama in 2016, the Washington Examiner reports.

The IRS controversy is just one of a list of scandals plaguing the Obama White House. Others include the still-unanswered questions about the Benghazi terror attack that killed four Americans and the the Department of Justice’s secret seizure of the telephone records of reporters covering Washington.

 

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