E-mails show IRS attempts at damage control

WASHINGTON — The day that former Internal Revenue Service official Lois Lerner publicly apologized for using "inappropriate criteria" to delay tax exemptions for Tea Party groups, she told her colleagues that they were being "beaten up by the press for all the wrong reasons."

It was only going to get worse, she told them in an e-mail, and there was no way around it other than to "ride it through."

Then she left for a week's vacation in Canada.

That e-mail comes in 1,706 pages of newly released documents that shed light on the damage control happening at the IRS — and at the watchdog agency investigating it — as the scandal blew up last year.

Lerner has emerged as the central figure in the IRS' handling of tax-exemption applications by conservative groups before the 2012 election. The Exempt Organizations office she headed subjected groups with names such as "Tea Party" and "Patriots" to more scrutiny and longer wait times than similar liberal advocacy groups, according to congressional Republicans.

The Democratic-controlled Senate Permanent Subcommittee on Investigations released the documents Friday along with a report finding that mismanagement, and not political bias, was responsible for the targeting.

The documents show Lerner's efforts to persuade Treasury auditors that there was no institutional bias at the IRS, the agency's attempts to head off a damaging investigation with a pre-emptive apology, and Lerner's pep talk to her staff after the apology.

Lerner has refused to testify about her role in the targeting, and the House has voted to hold her in contempt of Congress. The e-mails give an account of what she might say if she were to testify.

In an e-mail to Treasury inspectors four months before they released their report last year, Lerner blamed "front-line staff people using less-than-stellar judgment."

"I am willing to take the blame for not having provided sufficient direction initially, which may have resulted in front-line staff doing things that appeared to be politically motivated, but I am not on board that anything that occurred here shows that the IRS was politically motivated in the actions taken," Lerner wrote.

Lerner told her bosses that auditors focused too much on the "be-on-the-lookout" list, which included conservative and liberal buzzwords that IRS screeners should send to a specialist, "as a 'bad' thing without looking at the entire program."

As the audit progressed, it became clear that it would paint the IRS in a bad light.

The idea for a public apology to head off the audit came at least a month before. Lerner was set to give a speech at Georgetown University and was "begging" for some newsworthy information, IRS chief of staff Nikole Flax said in an e-mail.

"We may want to use it to burst a bubble," said then-acting IRS commissioner Steven Miller in response. He later joked that Lerner could use the speech to "apologize for undermanaging."

Speechwriters at the IRS started working up a draft of an apology Lerner could give at the Georgetown conference: "The IRS should have done a better job of handling the review of c4 applications. We made mistakes, for which we deeply apologize. But these mistakes were in no way due to any political or partisan reason."

It was "an error, not a political vendetta," the draft of the speech said.

Lerner never gave that speech. Instead, she spoke at Georgetown about an IRS review of colleges and universities.

Two weeks later, Lerner spoke at another conference. She planted a question with a friend in the audience and used that question to deliver the apology.

The apology sparked an avalanche of questions from reporters and members of Congress.

The IRS wanted to tell The Washington Post's editorial page that "organizations from all parts of the political spectrum received the same, evenhanded treatment." Lerner insisted that line come out of a draft statement because that would imply that the IRS kept track of the ideology of groups applying for exemptions. "It sounds like we track it, and we don't," she said.

Over at the inspector general's office, officials were annoyed that Lerner had "jumped the gun" with the apology, spinning the contents of the audit report before it was released.

"This is a brilliant pre-emptive strike by the IRS," wrote David Holmgren, the deputy inspector general for Inspections and Evaluations. "When we release next week, it will be old news."

In response, the inspector general worked to move up the release of the audit.

Lerner adviser Sharon Light sent a supportive e-mail to her boss. "What a whirlwind, huh? I hope being in Canada will give you some emotional distance from this, too. I'm glad to be helping set the story straight."

"I'm afraid that I have little confidence that most folks making the stink care about what is true," Lerner wrote in reply. "They've already decided they know without regard to the facts."

Lerner was suspended two weeks later and eventually retired.

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