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IRS officials tied to conference spending put on leave

June 5, 2013 at 6:22 PM   |   Comments

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WASHINGTON, June 5 (UPI) -- Acting Internal Revenue Service head Danny Werfel said Wednesday two top officials are on administrative leave for ethics violations at a California conference.

Citing sources they did not identify, Politico and The Hill both reported one of the two is Fred Schindler, IRS director of implementation oversight for the Affordable Care Act. The other official has not been identified.

Politico said Schindler and the other officials received $1,100 in free food and other items at the conference in Anaheim in August 2010, at which the IRS is reported to have spent $4.1 million. Werfel -- the acting IRS commissioner -- is scheduled to testify Thursday at a House Oversight and Government Reform Committee hearing on reports the IRS spent almost $50 million on conferences between 2010 and 2012, Politico said.

Committee Chairman Darrell Issa, R-Calif., said after the Treasury Department released an audit reporting the $4.1 million IRS meeting in 2010 there is a "culture of excess" at the agency.

The Anaheim meeting -- the most expensive of 225 audited IRS conferences totaling $49 million from the 2010 fiscal year through fiscal 2012 -- was paid for in part by using $3.2 million from a budget intended to hire more tax-enforcement officers, the Treasury Inspector General for Tax Administration report said.

The $3.2 million transfer for the conference took place the same year the IRS began singling out Tea Party and other conservative groups that sought tax-exempt status, in part because the agency said it didn't have the personnel to handle the overwhelming amount of applications.

Among the Anaheim conference's expenditures was $17,000 for a speaker who drew pictures of singer Bono, physicist Albert Einstein, basketball star Michael Jordan and the Statue of Liberty to inspire IRS employees to "find creative solutions to challenges," the report said.

Another speaker earned $25,000 and demanded $2,500 for first-class air travel to give two speeches about "how seemingly random combinations of ideas can drive radical innovations," said the contract cited in the report.

"No travel receipts were obtained by the IRS for our review, and the contracting officer did not know whether the speaker traveled first class or not," the report said.

The IRS -- noted for being strictly disciplinarian when it comes to regular taxpayers' record-keeping -- "was unable to provide documentation to support all costs associated with the conference," the report said.

The $4.1 million conference for 2,609 employees of the IRS's Small Business/Self-Employed Division may have actually cost $4.3 million, the report said.

"In addition, we requested supporting documentation related to the $50,187 expended for 'videos,'" the report said. "However, IRS management stated that this was an estimated cost and could not provide detail on how this cost was estimated. In addition, IRS management could not provide any supporting documentation detailing how this money was spent."

Those videos included a "Star Trek" parody and a "Cupid Shuffle" line dance.

Werfel said ahead of the Tuesday report the conference spending "should not have occurred" and called the event "an unfortunate vestige from a prior era" he said wouldn't take place today.

The audit indicated such expenditures fell dramatically when the Obama administration clamped down on travel and conferences after a scandal erupted over how much the General Services Administration spent on conferences.

IRS spending for such meetings was $4.8 million in the 2012 fiscal year, which ended Sept. 30, down from $37.5 million in fiscal 2010.

Issa said the IRS was "an agency in crisis."

"The wasteful Anaheim conference is one example of a culture of excess that plagues the IRS and many federal agencies," he said in a statement Tuesday.

"Taxpayer money meant to pay for a core agency mission, the hiring of more enforcement personnel, was instead spent on a lavish party," he said. "Perhaps most disturbingly, there appears to have been little or no effort by the IRS to hold those responsible for this wasteful spending accountable."

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