The Internal Revenue Service placed
two employees on leave for accepting free food during a party at
a 2010 agency conference that is the subject of a congressional
hearing today.
At least one of the employees works for the IRS division
administering President Barack Obama’s health-care law,
according to a congressional aide who wasn’t authorized to
discuss the matter publicly. The IRS employees accepted $1,100
in food and other items at the $4.1 million conference in
Anaheim, said the aide.
“The incident involves a party inside a private suite at a
hotel in Anaheim,” according to an IRS statement. “Food was
allegedly inappropriately provided free of charge in violation
of government ethics standards.”
The party may have involved 18 people, said Representative
James Lankford, an Oklahoma Republican who read an e-mail about
the party at today’s hearing. He said it appeared that the party
cost $44 per person in alcohol and $65 per person in food.
IRS conference spending is gaining attention as Congress
and the Justice Department separately investigate the agency’s
extra scrutiny of small-government groups that sought tax-exempt
status.
Daniel Werfel, the acting IRS commissioner, testified today
before the House Committee on Oversight and Government Reform.
So did Faris Fink, commissioner of the IRS division that ran the
conference. Fink, then deputy commissioner, stayed in a
discounted presidential suite and starred as Spock in a Star
Trek video parody made for the event.
Fink Apologizes
Fink said the conference expenses and videos were
inappropriate and he apologized.
The Anaheim event for about 2,600 employees was the most
expensive of 225 IRS conferences held between fiscal 2010 and
2012 with a total cost of $49 million, according to an inspector
general’s audit released June 4.
The IRS and the Treasury Department reduced conference
spending in subsequent years and implemented new policies on
travel and video productions. The IRS spent less than $5 million
on large conferences in 2012, compared with about $37.6 million
in fiscal 2010.
Werfel took action after learning June 4 of the situation
involving the two employees, according to the statement.
The IRS “has started the process to remove the employees
pending a further review,” according to the statement. It
didn’t identify the employees placed on leave.
Health-Care Law
The congressional aide said the IRS told congressional
officials that one of the two employees is Fred Schindler,
director of implementation oversight for the IRS division that
will administer the health-care law. Employees placed on
administrative leave are typically paid.
“When I came to IRS, part of my job was to hold people
accountable,” Werfel said in the press release. “There was
clearly inappropriate behavior involved in this situation, and
immediate action is needed.”
Senator Tom Coburn, an Oklahoma Republican, wrote a letter
to Treasury Secretary Jacob J. Lew on June 3 asking why the
department previously said it had held just five conferences
with a total cost of less than $500,000 from Jan. 1, 2005 to
June 1, 2012. IRS makes up most of Treasury’s budget.
“It appears that the response provided by Treasury was
inaccurate and incomplete,” Coburn wrote.
Similarly, Bloomberg News in April 2012 sent a Freedom of
Information request to the Treasury Department, asking for a
list of overnight conferences funded by the department and
attended by more than 50 employees since 2005.
Excel Spreadsheet
Treasury, after charging $276.46 for processing, sent an
Excel spreadsheet with five conferences listed. When asked why
events were missing from the list, the FOIA office said the list
only included events for “Departmental Offices of the
Treasury.” IRS events weren’t on the list.
After a Bloomberg News reporter noted that the request
hadn’t differentiated between components of the Treasury
Department, the FOIA office sent an e-mail with procedures for
filing an appeal. Bloomberg didn’t appeal the request.
The IRS is one of several federal agencies being criticized
for excessive conference spending in the past several years.
The General Services Administration and the Department of
Veterans Affairs had similar audits last year of employee
conference spending. GSA expenditures included $823,000 for a
Las Vegas event featuring a clown, a mind reader and a $75,000
bicycle building exercise. Martha Johnson, the GSA
administrator, resigned.
Veterans Affairs
Department of Veterans Affairs employees improperly
accepted gifts such as massages and incurred $762,000 in
unauthorized and wasteful expenses tied to two conferences in
Florida, the agency’s inspector general reported last year. John
Sepulveda, the VA’s assistant secretary for human resources.
The IRS constructed a mock set at its television studio in
New Carrollton, Maryland, at a cost of $2,400 to make the Star
Trek video, the inspector general’s report said. Executives
featured in the video bought their costumes with personal funds,
it said.
They made a separate line-dancing video featuring some of
the same employees.
To contact the reporters on this story:
Richard Rubin in Washington at
rrubin12@bloomberg.net;
Kathleen Miller in Washington at
kmiller01@bloomberg.net
To contact the editor responsible for this story:
Jodi Schneider at
jschneider50@bloomberg.net
Two IRS Officials Said to Be on Leave Over Free Food at Event
Andrew Harrer/Bloomberg
The House Oversight and Government Reform Committee is holding a hearing tomorrow on Internal Revenue Service conference spending.
The House Oversight and Government Reform Committee is holding a hearing tomorrow on Internal Revenue Service conference spending. Photographer: Andrew Harrer/Bloomberg