Senior aides in the White House, the Treasury Department and the IRS debated the best way to tell the public what surely would ignite a storm of criticism, the coming report that the IRS earlier had targeted conservative groups for extra scrutiny. The plan eventually chosen: the "incredibly bad idea" of secretly planting a question in the audience when an IRS official spoke May 10.
The evolving story of how the administration planned to tell the country about the explosive IRS scandal was revealed in more detail Tuesday. At the same time, Congress learned that it likely will not hear anything from a key player in both the scandal and the way it was revealed.
Lois Lerner, who oversaw the IRS office that targeted conservative groups, notified the House Committee on Oversight and Government Reform through a lawyer Tuesday that she will invoke her Fifth Amendment rights and refuse to answer questions at a hearing Wednesday.
"Ms. Lerner remains under subpoena from Chairman Issa to appear at tomorrow's hearing," committee spokesman Ali Ahmad said, speaking of Rep. Darrell Issa, R-Calif. "Chairman Issa remains hopeful that she will ultimately decide to testify tomorrow about her knowledge of outrageous IRS targeting of Americans for their political beliefs."
Lerner was in a key position during the time from 2010 to 2012 that the IRS scrutinized conservative groups applying for tax-exempt status as social welfare operations. First made aware of the operation in 2011, she also was part of the internal debate this year over how to acknowledge the since-stopped practice before it would be detailed in a coming report from the Treasury Department inspector general for tax administration, J. Russell George.
While White House officials insisted that aides and advisers deliberately kept Obama in the dark about the coming report, they said they and the Treasury Department started debating the best way to inform the country.
"There were discussions (with Treasury) about the timing of the release of this information and the findings of the report," White House press secretary Jay Carney said Tuesday.
Involved in those discussions, he said, were Treasury's offices of chief of staff and general counsel and the White House offices of chief of staff and general counsel.
"The conversations were just about finding out when that information was going to be released and what it was going to say, because I think, as I made clear yesterday, until we had the report, we did not know the final conclusions of the inspector general," Carney said.
"There were some conversations at a staff level between Treasury and IRS," Treasury Secretary Jacob Lew told the Senate in a hearing Tuesday. It was "the discretion of the IRS to decide how to manage this matter," Lew said in answer to questions from Sen. Mike Crapo, R-Idaho.
In the process, IRS officials decided to secretly arrange to have someone in the audience ask about it when Lerner spoke on May 10 at an American Bar Association conference. When asked, Lerner acknowledged the practice had occurred and apologized on behalf of the IRS.
The admission and apology sparked widespread news coverage. Obama said those stories were the first he heard of the scandal.
"Obviously, the entire thing was an incredibly bad idea," Acting IRS Commissioner Steven Miller told the Senate Finance Committee on Tuesday. "I think what we tried to do . is get the apology out and start the story. The report was coming, and we knew that."
While Miller suggested last week that he was a passive participant in the plan to plant a question as a way of managing the release of the story, he said Tuesday that he helped devise the ploy.
"I will take responsibility for that," Miller said, suggesting a botched effort at damage control. "We had all the facts. We thought we'd get out an apology."
A Treasury official who demanded anonymity to speak freely added Tuesday that agency officials learned in April that Lerner might make a speech acknowledging the targeting and "expressed some concern about the idea of a speech, but ultimately deferred to the IRS on that issue."
The speech never happened, and Treasury learned later that Miller might make an apology in congressional testimony, the official said. Eventually Treasury staff "was made aware that Lerner would be asked a question about the issue at the ABA conference on Friday, May 10. Treasury again deferred to the IRS on their interest in making a public apology," the Treasury official said.
White House officials were aware of the first two possibilities but not the planted question, the Treasury official said, adding that Lew was unaware of the plant.
Senators were incredulous Tuesday that the IRS had failed to notify lawmakers who had been inquiring about alleged IRS harassment for nearly two years. These lawmakers were told repeatedly by Miller and other top IRS officials that there was no targeting.
Miller maintained that words and names such as "tea party" and "patriot" were used as shortcuts, not targeting, to flag applications for special scrutiny.
But the IRS letters sent to Susan Martinek, who sought tax-exempt status for the Coalition for Life of Iowa, suggest otherwise.
Martinek said that the IRS said her application was ready for approval but first required a letter signed by her board members that the anti-abortion group wouldn't picket in front of Planned Parenthood offices.
"That's outrageous," said Sen. Charles Grassley, R-Iowa, suggesting that groups were asked to forgo their First Amendment rights in order to get tax-exempt status for their organization.
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