IRS Principal Deputy Commissioner Daniel Werfel has received a letter from House Oversight Committee Chairman Darrell Issa and House Ways and Means Committee Chairman Dave Camp. The letter, dated July 17, 2013, includes excerpts of transcribed interviews with IRS employees. These interviews reveal that the IRS Chief Counsel’s office was involved in holding up tax-exempt applications.

Via House Oversight:

…testimony from career IRS officials in Washington, D.C. that Director of the IRS Exempt Organizations division Lois Lerner overruled the judgment of a career Washington, D.C. IRS lawyer and ordered Tea Party cases to go through a multi-layer review that included her senior advisor and the IRS Chief Counsel’s office. The IRS Chief Counsel’s office is led by William Wilkins, one of two Obama Administration political appointees at the IRS.

Of course, the part of the scandal that is getting the most media attention involves the tax-exempt applications of Tea Party groups being held up. What’s not gotten as much attention is the expeditious and likely illegal treatment given to the tax-exempt application of the Barack H. Obama Foundation (BHOF), headed by the president’s half-brother, Malik Obama. Worse still is who Malik consorts with.

That he was given tax-exempt status at all may have been illegal. This should make Lois Lerner, the former Director of Tax Exempt Organizations whose signature is at the bottom of the BHOF approval letter, very nervous. She has already said she wants immunity in exchange for testimony. Based on witness testimony about IRS Chief Counsel involvement in delaying Tea Party applications, is it a stretch to believe that Chief Counsel was involved in BHOF receiving such favorable treatment?

Perhaps Ms. Lerner should be granted immunity to tell us. If not, it’s her signature on the approval letter.

Let’s get back to evidence of White House involvement, starting with Elizabeth Hofacre, a tax-exempt revenue agent in Cincinnati. According to the interview excerpts, Hofacre sent these Tea Party applications to D.C. for final approval by tax specialist Carter Hull. Hofacre grew frustrated that these approvals were not coming back to her.

According to Hull, his recommendations that these tax-exempt applications be approved, fell on deaf ears.

Via the Letter to Werfel:

…according to Michael Seto, the head of Mr. Hull’s unit in Washington, Ms. Lerner, gave an atypical instruction that the Tea Party applications undergo special scrutiny that included an uncommon mulit-layer review that involved a top advisor to Lerner as well as the Chief Counsel’s office.

As to Hofacre’s frustration…

“Mr. Hull testified that he could not provide advice to Ms. Hofacre because his hand were tied by his superiors in Washington. Therefore, none of these applications were approved or denied during the time he worked with Ms. Hofacre on the cases.”

Is this not evidence that Lerner was personally involved in both granting BHOF tax-exempt status illegally (retroactively) and expeditiously (less than 30 days) whilst preventing Tea Party groups from getting approved?

Note: Another IRS employee’s name appears on this letter as well – Renee Railey Norton. It is not clear exactly what her role is but if she is the contact person listed on BHOF’s approval notification, it would stand to reason that she would be aware of any details / inconsistencies with the approval. Perhaps she should be interviewed as well.

Evidence Lerner gave expeditious and illegal treatment to Malik Obama

Contrast that with what Mr. Hull told congressional investigators during his interview:

…according to Mr. Hull, sometime in the winter of 2010-2011, the senior advisor to Lois Lerner told him the IRS Chief Counsel’s office would need to review these applications. Mr. Hull also indicated this was the first time he sent an application to Ms. Lerner’s senior advisor. Hull testified about how this was unusual and a break from ordinary procedure…

Again, the favorable treatment received by the president’s half-brother also appears to be ‘unusual and a break from ordinary procedure’. Now we’ve learned that a White House appointee at the IRS was involved in the unfavorable treatment inflicted on Tea Party groups.

Oversight Committee staff also interviewed Cindy Thomas, head of the Cincinnati IRS office that processes tax-exempt applications:

Q: So the cases that [Cincinnati employee] was working from October 2010 through September 2011 were still in kind of a holding pattern awaiting guidance from Washington? Is that right?

A: That’s correct.

An interesting aspect to Thomas was uncovered by Ben Swann of WXIX in Cincinnati this past May (Swann has since left WXIX). During a news report, Swann presented an organizational chart of the IRS office in Cincinnati. Note that Agent Hofacre is seen in the chart:

IRS Cincinnati Organizational Chart

As you will see in Swann’s report, Cindy Thomas, who told Committee staffers that Tea Party applications were in a holding pattern, spent more time with Lois Lerner than she did with her own immediate supervisor, Holly Paz.

According to Swann (2:27 mark):

“Sources tell me it was Lerner who visited the Cincinnati office far more often than Paz. Sources also say the relationship between Thomas and Lerner is ‘very close’.”

It is important to underscore the point that while the Oversight Committee is rightfully honing in on one side of the IRS scandal, it appears to be ignoring the much more nefarious side.

Both sides involve… Lois Lerner.