Acting IRS commissioner resigns in wake of agency scandal

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President Obama announced Wednesday that acting IRS Commissioner Steven Miller has resigned in the wake of the agency scandal in which conservative groups were targeted.

The president made the announcement in a brief statement at the White House, following a meeting with Treasury Secretary Jacob Lew  and other top department officials in which they reviewed a highly critical inspector general’s report on the practice. The report concluded poor management allowed agents to improperly target Tea Party and other groups for more than 18 months, starting in 2010.

Obama said Lew asked for the resignation and Miller agreed, after being on the job since November 2012.

“Americans have a right to be angry about it, and I’m angry about it,” Obama said from the White House. 

Republicans, who along with Democrats have slammed the IRS for the practice, welcomed the resignation Wednesday but made clear they would continue to investigate and press for accountability. 

Rep. Vern Buchanan, R-Fla., said the resignation "is a necessary first step but more heads need to roll." 

Miller’s resignation was part of three-step plan Obama outlined to fix the problem.

The other steps are to put in place the safeguards recommended in the IG report and to work with Congress as it investigates. 

“The good news is we can fix this,” Obama said. 

Miller became acting commissioner after Commissioner Douglas Shulman completed his five-year term. Shulman had been appointed by President George W. Bush.

The president has proceeded cautiously since the IRS controversy was made public Friday. While he initially said the accusations were "outrageous," he also said he wanted to wait until the report was released before addressing what should be done to hold accountable those responsible.

Obama said he would hold a press conference Thursday.

The report lays much of the blame on IRS supervisors in Washington who oversaw a group of specialists in Cincinnati who screened applications for tax-exempt status. It does not indicate that Washington initiated the targeting of conservative groups, but it does say a top supervisor in Washington did not adequately supervise agents in the field even after she learned the agents were acting improperly.

The Justice Department is also investigating the IRS targeting, as are three congressional committees.

Sources told Fox News that Miller will remain on the job "for a couple of weeks." 

The House Ways and Means Committee said after the announcement of Miller's resignation that he still will attend a hearing Friday.

And the House Committee on Oversight and Government Affairs sent a letter Wednesday afternoon to the IRS  requesting five employees named in the IG audit be made available for transcribed interviews by committee staff.

The Republican-led committee wants to start the interviews Monday.

The names and titles of the IRS employees requested are Holly Paz, a director; John Shafer, a manager; Gary Muthert, a screener; Liz Hofacre, a case coordinator; and Joseph Herr, a manager.

"The resignation of Steven Miller is a positive and important step as this agency struggles to try to regain the public’s trust," said Utah Sen. Orrin Hatch, the top Republican on the Senate Finance Committee. "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."

Earlier in the day, White House Press Secretary Jay Carney sidestepped a question about whether Obama still had confidence in Miller, saying he wouldn't discuss personnel matters. He said Obama has expressed his overall view that IRS personnel had acted inappropriately. 

"He wants to see that the actions taken, as revealed by the Treasury report, that are inappropriate, are met with consequences," Carney said. "He will make clear to Treasury Department leaders that he expects action." 

Carney said Obama wants the public to "understand and believe that the IRS applies our tax laws in a neutral and fair way to everyone."

The Associated Press contributed to this report. 

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Sources: IRS official won't plead fifth at hearing on scandal

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  May 14, 2013: A general view of the Internal Revenue Service (IRS) Building in Washington.Reuters

Steven Miller, the embattled acting commissioner of the Internal Revenue Service, has assured congressional investigators he will cooperate fully with lawmakers in upcoming Capitol Hill hearings on the IRS’ targeting of Tea Party groups, and will not exercise his constitutional right to refuse to answer questions on the grounds that doing so may incriminate him in the ongoing FBI probe, Fox News has learned. 

Rather, sources say, Miller has agreed to provide his best testimony on the sudden swirl of allegations surrounding last week’s disclosure that the IRS had systematically singled out conservative-leaning groups for delays in their applications for tax-exempt status. Miller was reportedly made aware of the practice, which commenced early in 2010, as early as March 2012, but shortly thereafter assured lawmakers the IRS was not engaged in such targeting.

Congressional investigators have sought an informal deposition with Miller in advance of Friday’s hearing by the House Ways and Means Committee, but believe it unlikely Miller will grant such a session, sources said.

In addition to determining who was ultimately responsible for initiating the practice – culpability the Treasury Department’s Inspector General for Tax Administration failed to assign in his report on the subject, issued Tuesday – Capitol Hill investigators are said to be examining two other critical aspects to the scandal.

These include the dissemination of privileged tax data amassed during the targeting exercise to the left-leaning news outlet ProPublica; and allegations that conservatives listed by the targeted groups as donors were in turn singled out for adverse treatment by IRS.

The alleged improper conduct toward those donors would have been performed by a different office at IRS, sources said, than that which was responsible for the slow-walking of the conservative groups’ applications for tax-exempt status.

Both initiatives, Capitol Hill staffers told Fox News, could suggest a greater level of coordination on the overall project among – or even beyond – IRS management echelons.

Key congressional aides do not rule out the possibility that the targeting was conceived and executed by “rogue” elements in middle-management positions within IRS. But the bureaucratic culture within the agency is said to place an exceedingly high premium on compliance with orders from above – to the point of securing them, often in writing, when they are absent – and accordingly not one that would foster the emergence of so rigorous and enduring a targeting system without some measure of management supervision.

The IG report concluded that organizations with the words “Tea Party,” “Patriots” or “9/12” in their titles faced special treatment by IRS in their applications for tax-exempt status, including the agency’s application of “inappropriate criteria” to trigger reviews and other dilatory actions towards the applications.

While Miller will face more intense scrutiny, J. Russell George, the inspector general for IRS’ Tax Administration division, whose office released Tuesday’s damning intra-agency report, will also be confronted with tough questions, sources said. Capitol Hill staffers told Fox News they regard George’s report as “watered down” and are eager to ask him why his probe failed to fix ultimate responsibility for the targeting, and why he didn’t raise alarms about the practice sooner.

An IRS spokesperson did not immediately return an email seeking comment for this article.

James Rosen

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Acting IRS commissioner resigns in wake of agency scandal

President Obama said Wednesday that acting IRS Commissioner Steven Miller has resigned in the fallout of the agency scandal in which conservative groups were targeted.

The president made the announcement in a brief statement at the White House, following a meeting with Treasury Secretary Jacob Lew in which they reviewed an inspector general’s report on the issue.

Obama said Lew asked for the resignation and Miller agreed, after being on the job since November 2012. The targeting of Tea Party groups and others appears to have started as early as 2010.

“Americans have a right to be angry about it, and I’m angry about it,” Obama said from the White House.

The Treasury Department inspector general report found the tax-collection agency, in examining applications for tax-exempt status, improperly selected conservative groups for further review. 

Miller’s resignation was part of three-step plan Obama outlined to fix the problem.

The other steps are to put in place the safeguards recommended in the report and to work with Congress in its oversight capacity.

“The good news is we can fix this,” Obama said.

Earlier in the day, White House Press Secretary Jay Carney sidestepped a question about whether Obama still had confidence in Miller, saying he wouldn't discuss personnel matters. He said Obama has expressed his overall view that IRS personnel had acted inappropriately. 

"He wants to see that the actions taken, as revealed by the Treasury report, that are inappropriate, are met with consequences," Carney said. "He will make clear to Treasury Department leaders that he expects action." 

Carney said Obama wants the public to "understand and believe that the IRS applies our tax laws in a neutral and fair way to everyone."

Also early Wednesday evening, the House Committee on Oversight and Government Affairs sent a letter to Miller requesting that he make available five employees, named in the IG  audit, for transcribed interviews by committee staff.

The Republican-led committee wants to start the interviews Monday.

The names and titles of IRS employees requested are Holly Paz, a director; John Shafer, a manager; Gary Muthert, a screener; Liz Hofacre, a case coordinator; and Joseph Herr, a manager.

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New IRS scandal revives past allegations against agency

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WASHINGTON –  The IRS’s admission it targeted conservative groups for special scrutiny has drawn political condemnation but it isn’t the first, second or third time the agency has been accused of playing fast and loose with the law.

The latest scandal has effectively revived past allegations of partisan behavior at the IRS, with some lawmakers as well as the alleged victims calling for those complaints to now get a second look. The unresolved cases include claims of media leaks on private donor information during last year’s presidential race and other instances of political profiling.

"This whole episode reinforces and confirms the American people’s worst fears about big government run amok,” Sen. John Thune, R-S.D., told Fox News. 

"The startling revelations give real credibility to numerous reports over the last year that the IRS 'inadvertently' released donor information from conservative groups -- and that information ended up in the hands of political opponents," Sen. Jerry Moran, R-Kan., who is pressing the Treasury Department and IRS for more details on those past cases, said in a statement.  

The newest allegations of the IRS overstepping its authority only feed into claims that those within the powerful agency routinely disregard the law and use their authority to intimidate and target at will. 

The latest startling claim came Tuesday from an unexpected source -- ProPublica, a Pulitzer Prize-winning progressive journalism group -- which said the same Cincinnati IRS branch accused of targeting conservative groups released nine confidential applications of conservative groups to them last year. 

Critics had long questioned how ProPublica got that information. ProPublica put the speculation to rest on Tuesday. The media outlet said it had requested 67 applications for nonprofits in 2012. They were given 31. Of those, nine had not been approved and therefore should not have been made public.

ProPublica ultimately published six of them, despite late-breaking objections from the IRS -- the agency apparently told the organization that it should not have received the confidential applications. 

Considering this and other cases, White House Press Secretary Jay Carney took some heat Tuesday after he told reporters that nobody in the Obama administration had targeted conservative groups in the past. 

Many questioned the statement and pointed to a 2010 incident involving Austan Goolsbee, Obama’s former chairman of the Council of Economic Advisers. Goolsbee told reporters on Aug. 27, 2010 that Koch Industries, a billion-dollar energy company run by the politically influential Koch brothers, paid no income taxes.

The tax records of Koch Industries -- a private company – would not have been public information and therefore should not have been known to Goolsbee. At the time, the Obama team backpedaled and said the information was made public in two places – which turned out to be untrue. Then the Obama administration said Goolsbee had misspoken and that he had guessed the company’s confidential tax information.

At the time, the IRS had promised to look into the Goolsbee gaffe but a report was never publicly released.

A source familiar with the situation suggested to FoxNews.com Tuesday that Goolsbee’s comments were a “calculated” attempt by the administration to insert Koch’s name into his discussion about companies that don’t pay taxes.

Accusations of improper IRS behavior surfaced again in 2012 when a prominent anti-gay marriage group accused the agency of leaking private tax files that listed then-presidential candidate Mitt Romney's group as a contributor. The National Organization for Marriage documents were later published by a group whose president was tied to the Obama re-election campaign.

NOM claimed that someone from the IRS fed the liberal Human Rights Campaign documents listing its 2008 contributors. On that list was a $10,000 donation from Romney’s political action committee. The Human Rights Campaign then published the documents online, saying it had uncovered one of the group’s “top secret donors,” and accused Romney of attacking lesbian, gay, bisexual and transgender equality.

The donation came as NOM and other conservative groups were fighting for the Proposition 8 measure banning gay marriage in California. 

Conservative think tank The Heritage Foundation said they, too, were targets of the IRS.

“We endured politically-motivated audits under both the Carter and the Clinton administrations,” Heritage senior media associate Kim McIntyre told Fox News. “Back then, Washington’s ‘enemy lists’ were restricted to well-established groups. But targeting fledging Tea Party groups is different.”

McIntyre questioned whether smaller groups targeted by the IRS can even afford to fight back and says that “expensive audits could very well strangle them in a cradle. Bringing the weight and resources of the federal government to bear against small organizations threatens not just punishment, but extinction.” 

Some say the allegations against the IRS are not a surprise given the agency’s storied past of mean-spirited power plays that stretch back to President Franklin Roosevelt -- accused of using his political sway to get the independent agency to lean on his critics.  

President Kennedy’s administration authorized the “Ideological Organizations Project” that went after conservative organizations, while President Johnson was accused of promising tax favors in exchange for votes.

Claims of shady moves made by IRS saw a sharp rise in the 1960s and 1970s. Some say the agency has not been able to shake off the bad rap.

The IRS now says that its latest program of flagging conservative groups for additional scrutiny was inappropriate, but not partisan. An inspector general report unveiled Tuesday urged the IRS to clean up its operation, and Attorney General Eric Holder also announced he had “ordered an investigation” into the IRS controversy and that his office was “examining the facts to see if there were criminal violations.”

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Liberal media spin Benghazi scandal to protect Team Obama

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Ex-South Carolina Gov. Mark Sanford wins old House seat back after scandal

Published May 07, 2013

Associated Press

CHARLESTON, S.C. –  Former South Carolina Gov. Mark Sanford has redeemed a political career sidelined by scandal by winning his old congressional seat.

Sanford defeated Elizabeth Colbert Busch Tuesday in the state's 1st Congressional District. Colbert Busch is the sister of political satirist Stephen Colbert. With 71 percent of precincts reporting, Sanford has 54 percent of the vote.

At one time, Sanford was mentioned as a possible GOP presidential contender.

But his career unraveled when, as governor four years ago, he disappeared for five days, telling his staff he was hiking the Appalachian Trail. He returned to admit he had been in Argentina with his mistress. Sanford later paid a $70,000 ethics fine, the largest in state history.

Sanford has never lost a political race.

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After Georgia cheating scandal, could school choice finally be the right answer?

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My first question after reading about seven teachers in an Atlanta, Ga., public school accused of altering standardized test scores to make it appear students performed better than they actually did was: How could they!?

The seven were nicknamed "the chosen" and, according to Georgia state investigator Richard Hyde, the less than magnificent seven sat in a locked room without windows, erasing wrong answers and inserting correct ones. It's one thing for a child to cheat on a test; it's quite another for teachers to do it.

Compounding the cheating scandal is that the children in this elementary school are mostly poor and African-American. How are they helped to develop a moral sense, not to mention an academic foundation that will lift them out of poverty, if they get the message that cheating is better than achieving?

Public school children are subject to all manner of manipulation and disservice by people charged with educating them.

According to The New York Times, the scandal goes beyond cheating. Retired district superintendent Beverly L. Hall is among 35 Atlanta educators indicted by a Fulton County grand jury. Dr. Hall was charged with "racketeering, theft, influencing witnesses, conspiracy and making false statements." Hall reportedly earned more than $500,000 in performance bonuses. She faces up to 45 years in prison.

Dr. Hall has received considerable recognition for her achievements, which later turned out to be counterfeit. Secretary of Education Arne Duncan invited her to the White House. 

In 2009, The American Association of School Administrators named her Superintendent of the Year. 

It was a case of something being too good to check. Who doesn't want to see poor and minority children succeed in school? It appears these teachers cared more about themselves than the children.

Even the reliably liberal and pro-public school columnist Eugene Robinson is disturbed. Writing in The Washington Post, Robinson says, "It is time to acknowledge that the fashionable theory of school reform -- requiring that pay and job security for teachers, principals and administrators depend on their students' standardized test scores -- is at best a well-intentioned mistake, and at worst nothing but a racket."

Robinson quotes Post education reporter Valerie Strauss, who has written that while there have been "dozens" of allegations of cheating around the country, "only Atlanta's has been aggressively and thoroughly investigated." Strauss wrote, "We don't really know" how widespread the problem might be. 

Isn't it long past time to find out?

The problem is that a monopoly always protects itself. The teachers' unions and many Democratic politicians, who receive their campaign contributions, oppose school choice, which would improve not only public schools, but also the chances of poor and minority children to have a better life. 

The current approach appears to be to keep disadvantaged children in underperforming schools so that underperforming teachers keep their jobs and the politicians they support keep theirs. As long as the monopoly survives, we can expect more cheating and corner-cutting and less real achievement for children who ought to be everyone's first concern.

Instead, as Atlanta would suggest, public school children are subject to all manner of manipulation and disservice by people charged with educating them. Perhaps if parents had the freedom to send their children to a school they believed would offer them a better shot at true success they would fare better. Could school choice be the answer?

Indiana thinks so. Last week, the state's Supreme Court upheld a voucher program that gives poor and middle-class families access to tax dollars to help them pay private school tuition. Parents should decide where their children go to school.

It's not the children who cannot achieve. It's the system that fails them. "Our schools desperately need to be fixed," writes Robinson. "But creating a situation in which teachers are more likely than students to cheat cannot be the right path. ... Students are not widgets. I totally reject the idea that students from underprivileged neighborhoods cannot learn. Of course they can."

Authorities should pursue investigations of alleged cheating by teachers and school administrators. Meanwhile, for this and many other reasons, the school choice movement is gaining strength. It is seen by increasing numbers of Americans as the best way to prevent cheating children out of the decent education they deserve.

Cal Thomas is America's most widely syndicated newspaper columnist and a Fox News contributor. Follow him on Twitter@CalThomas. Readers may e-mail Cal Thomas at tmseditors@tribune.com.

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Nearly 60 charged in Florida gambling scandal as lieutenant governor quits amid probe

TALLAHASSEE, Fla. –  Florida's lieutenant governor resigned and nearly 60 other people were charged in a widening scandal of a purported veterans charity that authorities said Wednesday was a $300 million front for illegal gambling. 

Lt. Gov. Jennifer Carroll's resignation came a day after she was questioned in the investigation. Her public relations firm did work for the St. Augustine-based charity Allied Veterans of the World, but she has not been accused of wrongdoing. 

Authorities said the probe involved 57 arrest warrants and 54 search warrants issued at gambling operations in 23 Florida counties and five other states: South Carolina, Georgia, Alabama, Nevada and Pennsylvania. 

Florida Attorney General Pam Bondi said charges, which will be formally filed next week, include racketeering, conspiracy, money laundering and possession of slot machines. 

"It's callous and it's despicable," Bondi said of the alleged scam, which she said "insults every American who ever wore a military uniform." 

Authorities refused to discuss any ties between Carroll, a 53-year-old Republican, and the investigation. Her aides had no immediate comment. 

Carroll, a Navy veteran who served in the Gulf War, appeared in a TV ad in 2011 promoting the organization's charitable work on behalf of veterans and their families. 

Carroll's resignation letter to Gov. Rick Scott offered no details about her reason for leaving, but the Republican governor said in a statement she resigned so her ties to the company would not be a distraction for the administration. 

"I will not elaborate on the details of her resignation further, other than to say that she resigned and she made the right decision for the state and her family," Scott said. 

Allied Veterans evolved from a charitable organization that ran bingo games and held bake sales for veterans beginning in 1979 to a group suspected of operating more than 40 illegal gambling locations around Florida, according to an Internal Revenue Service affidavit. The veterans' charity was a fraud, according to the IRS. 

"In an effort to mislead the public into believing that it is not profiting from an illegal gambling enterprise, Allied Veterans and others have engaged in a conspiracy and scheme to defraud," the affidavit said. 

One of those arrested, Jacksonville attorney Kelly Mathis, is the alleged mastermind of the scheme, authorities said. Mathis allegedly made about $6 million alone from the gambling operation. 

From 2007 to early 2012, investigators found evidence of over $6 million in what appear to be charitable donations by Allied Veterans. That amount, however, was only about 2 percent of the over $290 million made from gambling operations during that time period. Instead of going to veterans, the vast majority of the money went to for-profit companies and the individuals who operated Allied Veterans and its so-called "affiliates." 

Authorities said they seized about 300 bank accounts containing $64.7 million and assets including such exotic vehicles as Maseratis, Porsches and Ferraris. 

To play games at one of the Internet cafes, a customer gets a prepaid card and then goes to a computer to play "sweepstakes." The games, with spinning wheels similar to slot machines, have names such as "Captain Cash," `'Lucky Shamrocks" and "Money Bunny," according to the IRS. 

Winners go back to a cashier with their cards and cash out. 

The games have been the subject of much debate in Florida and some are legal as long as most of the profits are donated to charity. 

Each of the locations had a big sign prominently displayed that read: "This is not a gaming establishment." Inside were rows of computers where patrons could play the various games. 

At most of the sites, employees wore shirts emblazoned with an "Allied Veterans" logo. On the walls were photos of company executives making donations on its behalf and letters of recognition from some of the charities that received donations. 

In Anadarko, Okla., the owner of International Internet Technologies, which was accused of supplying the cafes with software, was arrested along with his wife. 

Chase Egan Burns, 37, and his wife, 38-year-old Kristin Burns, faced charges including racketeering and conspiracy in Florida. International Internet Technologies made $63 million from the Florida operation during 2007-2010, according to the IRS affidavit. 

Burns' wife's role in the company was not immediately clear. 

Chase Burns was released from the Caddo County jail on a $500,000 bond. He denied any wrongdoing. 

"What we do is legal," he told The Oklahoman on Monday. 

Calls to the Burns on Wednesday were not immediately returned. 

A telephone number listed for Allied Veterans was disconnected. Multiple emails to an address listed on the group's website weren't returned. 

Former Florida state Rep. Scott Plakon, a Republican, said he filed bills to shut down the gaming sites in 2011 and 2012. 

"I found that this is gambling, happening right next door to our Publix (grocery store) and dry cleaner and it just didn't seem right," he said. 

Carroll, an immigrant from Trinidad, served 20 years in the U.S. Navy, working as a jet mechanic before retiring as a lieutenant commander. Elected to the state House in 2003, she's served as deputy majority leader and majority whip. She's also a former executive director of the Florida Department of Veterans' Affairs. She moved to Florida in 1986. 

A married mother of three, Carroll has a son who plays defensive back for the Miami Dolphins. 

Carroll was the brunt of late-night talk show hosts last summer after she apologized for offending lesbians when she said black women who engage in those relationships don't look like her. 

Carroll, who was implying that black lesbians aren't attractive, made the remarks when she was asked about court documents in which a fired staffer claims that she walked in on Carroll and a female travel aide in a compromising position. Carroll denies that claim. 

The former staffer is charged with violating state law for allegedly giving a recording of a conversation with Carroll's chief of staff to a newspaper reporter.

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