Hiroyuki Yamada of Tokyo, Japan, winner of the TGI Friday’s World Bartender Championship at the House of Blues in Dallas TX Wednesday March 6, 2013. Credit: Richard W. Rodriguez

TRENTON, N.J. (AP) — At one bar, a mixture that included rubbing alcohol and caramel coloring was sold as scotch. In another, premium liquor bottles were refilled with water – and apparently not even clean water at that.

State officials provided those new details Thursday on raids they conducted a day earlier as part of a yearlong investigation dubbed Operation Swill.

Twenty-nine New Jersey bars and restaurants, including 13 TGI Fridays, were accused of substituting cheap booze – or worse – for the good stuff while charging premium prices.

As part of Operation Swill, investigators collected 1,000 open bottles of vodka, gin, rum, scotch, whiskey and tequila from the wells of the bars, state Attorney General Jeffrey Chiesa said.

New Jersey Attorney General Jeffrey Chiesa, right, talks about an investigation dubbed “Operation Swill,” in which 29 bars and restaurants in New Jersey are accused of putting cheap booze in premium brand liquor bottles and selling it, during a news conference, Thursday, May 23, 2013, in Trenton, N.J. Thirteen of the restaurants cited are TGI Fridays located in central and northern New Jersey. Credit: AP

“This alleged scheme is a dishonest ruse to increase profits and is a slap in the face of the consumer,” Chiesa said.

Within seven days, the establishments must turn over records to help state authorities determine how many patrons were overcharged and by how much. They also will have to inform the state which employees were at work the days samples were covertly taken earlier this year.

State officials would not say what establishment used the rubbing alcohol or which one used dirty water, or water not from a tap. They said no health issues were reported.

TGI Fridays Inc. said it was conducting its own investigation, working with the franchisee that owns the 13 restaurants cited, The Briad Group.

Briad, based in Livingston, said it “takes great pride in the quality of food and drink” served at its TGI Fridays franchises and was troubled and surprised by the allegations. It said in an emailed statement it would take immediate steps to correct any problems it identified.

“We want every assurance possible that our guests can continue to feel confident in the great food and drink they order at our T.G.I. Friday’s restaurants,” said Rick Barbrick, president of The Briad Restaurant Group.

Operation Swill started after the state began receiving more complaints than usual about possibly mislabeled drinks, said the director of the Division of Alcoholic Beverage Control, Michael Halfacre. An informant with knowledge of the industry contacted the agency in the fall to help in the investigation, he said.

In January and February, investigators went to 63 establishments they suspected were scamming liquor customers. They ordered drinks neat – that is, without ice or mixers – and then covertly took samples for testing.

Of 150 samples collected, 30 were not the brand as which they were being sold.

The establishments face suspensions of their liquor licenses and possible revocations if there are enough violations.

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Nicolas Maduro, Hugo Chavez’s handpicked successor. (Getty Images)

The people of Venezuela are grappling with a nationwide shortage of toilet paper, an all too common occurrence in socialist states.

But rather than revisit the country’s approach to economics and price controls, President Nicolas Maduro said this week that shortages in luxury items are the result of a shadowy conspiracy concocted by his wealthy and conservative opponents.

“President Nicolas Maduro, who won a narrow majority in April’s presidential elections, maintains that the country’s periodic shortages of basic goods are the result of a conspiracy by the opposition and rich sectors of society,” the BBC reports.

“Mr Maduro has vowed to uphold the legacy of his late predecessor, Hugo Chavez, whose ‘21st-Century socialism’ involved sweeping nationalisation and extensive social programmes,” the report continues.

Of course, many analysts believe that the Venezuelan government’s overbearing controls are to blame for the shortages, not some shadowy right-wing conspiracy.

“Price controls, for example, act as a disincentive to local producers, forcing them to cut output,” said Consensus Economics, a survey organization.

“The resulting scarcity forces up inflation, defeating the entire purpose of price controls in the first place,” the group adds.

But don’t worry: Venezuela’s National Assembly has a plan that they say will address the shortages.

The Assembly has “backed plans to import 39 million rolls of toilet paper, in an effort to relieve a chronic shortage,” BBC reports. “Lawmakers voted to approve a $79m credit for the country’s ministry of commerce, which will also be used to buy toothpaste and soap.”

“The oil-rich nation relies on imports, but currency controls have restricted its ability to pay for foreign goods,” the report adds.

Of all the countries in Latin America, Venezuela has the highest inflation rate (currently about 25 percent). Meanwhile, the country’s currency (the bolivar) has devalued precipitously over the past couple of years, falling by as much as 32 percent in February:

This five-year chart shows the VEF-USD exchange rate. The line dropping means that the Venezuelan currency has become weaker against the U.S. dollar (remember, it’s bolivar to dollar). (Bloomberg)

But it’s probably the work of the wealthy.

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“Food stamps are only 1 of 80 means-tested public assistance programs,” the senator’s office explained.

“If all spending on federal welfare and public add was converted into cash one could send a check for $60,000 to each household living beneath the poverty line.”

And the Alabama senator, a long-time proponent of fiscal restraint, is not happy with the data.

“No longer can we measure compassion by how much money we spend on poverty but how many people we help to rise out of poverty,” the senator said.

“That is why compassion requires us to reform a broken welfare state that is fostering dependency, hurting families and communities, and failing in the most important goal of helping people achieve self-sufficiency,” he added. “Welfare spending has increased thirty percent in the last four years, but poverty has gone up, not down.”

The senator continued:

The best example of our broken welfare state may be the food stamp program: food stamp spending has increased every single year since 2000, even when the economy is improving. 1 in 6 Americans are now on food stamps and the USDA has an aggressive campaign to enroll millions more—whether they need the benefit or not.

We must return to the moral principles of the 1996 reform and the idea that, over time, welfare damages not only the Treasury but the recipient. Normal support structures like family, church and community are replaced by federal bureaucracy.

President Obama recently said that ‘every dollar we budget, every decision we make has to be an expression of who we wish to be as a nation, our values.’ It is through that prism that we should address the need to reform our welfare programs, ensure resources are targeted to those in genuine need, and help more people transition from dependence to independence.

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Jack Bauer from the hit Fox show “24.” (Source: whatculture.com)

Rep. Trey Gowdy (R-S.C.) became a viral sensation on Wednesday with his tough questioning of former IRS head Doug Shulman during a House hearing on the IRS targeting of conservatives.

And if you liked him then, you may love him today after he delivered an interview where he was able to sneak in a Jack Bauer reference.

Lois Lerner, the IRS official at the center of the increasingly serious IRS scandal, caused a stir on Wednesday after she declared her innocence before the House Oversight and Government Reform Committee and then invoked her Fifth Amendment right to remain silent.

She steadily refused to answer the committee’s questions and was later excused from the hearing by Congressman Darrell Issa, R-Calif.

However, Lerner’s decision to claim innocence in her opening remarks has raised some people questioning whether she accidentally waived her Fifth Amendment right.

“You don’t get to say, ‘I didn’t rob the bank but I’m not going to answer the prosecutor’s questions,’” Gowdy, a former federal prosecutor, explained in an interview Thursday morning. “That would never happen.”

Rep. Gowdy continued, explaining Rep. Issa’s options.

“Let’s play this out. Let’s assume he brings her back. I promise she’s not going to make the same mistake today that she made yesterday,” he said. “She’s going to invoke — you can’t make someone talk unless you’re name is Jack Bauer.”

“You can’t force some to talk,” Gowdy continued. “You can’t make people talk unless you’re will to do what Jack Bauer does.”

Jack Bauer is the main character in the hit Fox TV series “24,” an action-drama about counterterrorism in the US. Played by Kiefer Sutherland, Bauer is an agent with the fictional Counter Terrorist Unit who “plays by his own rules,” “is a one-man wrecking crew,” etc.

“So are we going to hold her in contempt? Are we going to put her in jail? Are we going to offer her immunity, which I would not be a fan of, or are we going to try to build a case without using her testimony?” the congressman asked.

Gowdy continued, adding that these questions will be reviewed and answered at the chairman speaker level:

The South Carolina congressman isn’t alone in thinking Lerner may have accidentally waived her Fifth Amendment right. Harvard law professor Alan Dershowitz said Wednesday that she could be held in contempt of court and jailed for refusing to testify before Congress.

“She’s in trouble. She can be held in contempt,” Dershowitz told the “Steve Malzberg Show.” “Congress . . . can actually hold you in contempt and put you in the Congressional jail.”

“You can’t simply make statements about a subject and then plead the Fifth in response to questions about the very same subject,” he added. “Once you open the door to an area of inquiry, you have waived your Fifth Amendment right . . . you’ve waived your self-incrimination right on that subject matter.”

“The law is as clear as could be, that once you open up an area of inquiry, you can’t shut off the spigot – that’s the metaphor that the Supreme Court has used,” he said.

However, a few pundits think there may be a problem with this argument.

“While you may not selectively invoke the 5th in a criminal trial, you probably can at a Congressional hearing, so she won’t be held in contempt,” the Ace of Spades HQ blog notes.

“She will, however, be made to look awful, which sounds about right,” it adds.

Then there’s this from New York magazine:

First, unlike in a trial, where she could choose to take the stand or not, Lerner had no choice but to appear before the committee. Second, in a trial there would be a justifiable concern about compromising a judge or jury by providing them with “selective, partial presentation of the facts.” But Congress is merely pursuing information as part of an investigation, not making a definitive ruling on Lerner’s guilt or innocence.

“When somebody is in this situation,” says Duane, a Harvard Law graduate whose 2008 lecture on invoking the Fifth Amendment with police has been viewed on YouTube nearly 2.5 million times, “when they are involuntarily summoned before grand jury or before legislative body, it is well settled that they have a right to make a ‘selective invocation,’ as it’s called, with respect to questions that they think might raise a meaningful risk of incriminating themselves.”

In fact, Duane says, “even if Ms. Lerner had given answers to a few questions — five, ten, twenty questions — before she decided, ‘That’s where I draw the line, I’m not answering any more questions,’ she would be able to do that as well.” Such uses of selective invocation “happen all the time.”

And this excerpt from Hot Air is worth considering:

What happens when Issa brings her back and the questions begin? Could be that she’ll cave and start answering, but I assume her lawyer will tell her to take the Fifth again, in which case it’s Issa’s move. He could try to hold her in contempt, which would probably ignite a court battle and would certainly ignite lots of media concern-trolling about the GOP crushing Lerner’s rights as a way to change the subject from the underlying scandal. The court battle would slow down the investigation and might spark a bit of public sympathy for Lerner and the IRS…

Politically, it might even be worth losing the court battle: Litigation will only call more attention to the fact that Lerner doesn’t want to talk for mysterious reasons, which makes the IRS’s actions look that much shadier.

… why not bring her back and make her sit through an hour or so of serially re-asserting her privilege to dozens of questions? Worst-case scenario, the dodginess of the spectacle puts even more pressure on the IRS. Best-case scenario, she’ll decide to answer questions selectively, which will add a bit more information to what the committee knows.

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The following letter — which came out this weekend — shows that J. Russell George, the inspector general who uncovered the scandal, most definitely agreed to provide committee chairman Rep. Darrell Issa (R-Cali.) with details of the IRS audit:

Obviously, this didn’t happen. Congress only became aware of the details of the the IG’s report after the presidential election.

And it’s not as if the Oversight committee didn’t try to learn more about the IG audit.

The following emails — released late Wednesday — show that the Oversight committee in 2012 repeatedly asked for updates on the audit, but didn’t receive them:

Rep. Issa on Wednesday brought up these emails and questioned George about why he didn’t keep Congress informed of the audit’s findings. The IG excused his keeping Congress in the dark, but he did not dispute the congressman’s timeline:

Was the report withheld because it wasn’t ready? Was it withheld so that it wouldn’t sway the presidential election?

We can speculate all day long as to why the IG didn’t release the audit on schedule. But what is beyond speculation, according to committee chairman Darrell Issa (R-Calif.), is that the IG should have kept Oversight members updated about the report’s findings. From POLITICO:

Issa is referring to part of the Inspector General Act that requires watchdogs to report serious problems to Congress through the head of an agency within seven days. It’s known as the “seven-day rule” — but it’s often used sparingly.

The Oversight Committee asked the inspector general about conservative group targeting a number of times, and Issa read some of the emails in the hearing Wednesday.

George also raised concerns that incremental information provided to lawmakers would ultimately leak to the public.

“That is not fair to the people we are investigating,” George said.

Issa responded that the White House is the source of plenty of leaks as well.

True, Rep. Issa said last year that he knew the basics of the report. But as Hot Air notes, “it’s one thing to think you know based on a leak and another for the IG to confirm it with an update.”

Furthermore, it’s important to note that the IG kept details of its delayed report a secret even after the IRS had conducted its own internal investigation and found that its targeting of conservative groups was “inappropriate” (that report was also hidden from Congress).

“Just yesterday the committee interviewed Holly Paz, the director of exempt organizations, rulings and agreements, division of the IRS,” Congressman Issa said Wednesday.

“While a tremendous amount of attention is centered about the Inspector General’s report, or investigation, the committee has learned from Ms. Paz that she in fact participated in an IRS internal investigation that concluded in May of 2012 – May 3 of 2012 – and found essentially the same thing that Mr. George found more than a year later,” he added:

“Think about it,” the congressman continued. “For more than a year, the IRS knew that it had inappropriately targeted groups of Americans based on their political beliefs, and without mentioning it, and in fact without honestly answering questions that were the result of this internal investigation.”

So why didn’t the IG keep Congress informed? As of this writing, it’s not entirely clear. Here, this excerpt from Hot Air sums up where things stand right now:

The media starts picking up reports of tea-party complaints in February 2012, and soon thereafter the director of the exempt organizations puts a halt to IRS demands for more intrusive info from conservative groups. Three months later, in May, they hold a “workshop” providing guidance on tax-exempt groups to its analysts and approv more neutral criteria for scrutinizing applications.

That’s probably why Issa’s committee had an inkling at the time — because the IRS itself already knew it had done wrong and was moving to undo it to some extent. And yet no one, including the IG, felt moved to confirm for the committee until this month that yes, “mistakes were made” and it was now safe to tell the public that.

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Applications for jobless benefits fell by 23,000 for the week ending May 18, bringing the total to 340,000, down from last week’s revised figure of 363,000, the Labor Department announced on Thursday.

The four-week moving average, a “less volatile” figure, fell by 500, bringing the total to 339,500, down from the previous average of 340,000.

“The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 11, unchanged from the prior week’s revised rate,” the report reads.

“The advance number for seasonally adjusted insured unemployment during the week ending May 11 was 2,912,000, a decrease of 112,000 from the preceding week’s revised level of 3,024,000. The 4-week moving average was 2,995,250, a decrease of 23,750 from the preceding week’s revised average of 3,019,000,” the report adds.

The states with the largest increases in initial claims for the week ending May 11 were California (+15,060), North Carolina (+1,826), Mississippi (+1,341), Florida (+1,329), and Georgia (+1,118).

Meanwhile, New Mexico (-754), Oregon (-751), New Jersey (-747), Kentucky (-683), and Tennessee (-488) posted the biggest decreases in initial claims.

Markets don’t look like they poised for great things this morning:

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BERLIN (TheBlaze/AP) — German software giant SAP AG said Tuesday it plans to recruit people with autism to take make full use of their talents to process information.

Autism is a developmental disorder characterized by difficulties in communicating, emotional detachment and rigid or repetitive behavior. But some people with mild autism can perform complex mathematical tasks much better than the average population.

“SAP sees a potential competitive advantage to leveraging the unique talents of people with autism, while also helping them to secure meaningful employment,” the Walldorf, Germany-based software maker said.

An estimated one percent of the world population has a form of autism and the company wants to reflect that in its 65,000-strong workforce, spokesman Hilmar Schepp told The Associated Press.

The jobs for which SAP will be recruiting people with autism include software testing, programming, and quality assurance.

The announcement follows a pilot project SAP undertook in India which resulted in productivity improvements, the company said. It will be expanded to the United States, Canada and Germany this year.

The company is partnering with Danish company Specialisterne, which helps people with autism work in technology jobs. Specialisterne has previously worked with Microsoft and SAP’s rival Oracle.

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Getty Images.

The U.S. House of Representatives on Wednesday voted 241-175 to approve a bill that would bypass the president and speed the approval of the Keystone XL oil pipeline from Canada to Texas.

Democrats criticized the legislation as a blatant attempt to allow a foreign company to avoid environmental review. Republicans said the measure was needed to ensure that the long-delayed pipeline, first proposed in 2008, is built.

“This is the most studied pipeline in the history of mankind,” said Rep. Lee Terry, R-Neb., the bill’s sponsor.

“When is enough enough?” added Rep. Jeff Denham, R-Calif. “Five years? Six years? Ten years?”

But Rep. Raul Grijalva, D-Ariz., called the bill a “reckless attempt to avoid environmental review.” The bill would deem the project approved without a presidential permit, as required under current law, and with no further environmental review. The legislation also would limit legal challenges to the project.

The White House says President Barack Obama opposes the bill because it would “circumvent longstanding and proven processes” by removing the requirement for a presidential permit.

The $7 billion pipeline, proposed by Calgary-based TransCanada, would carry oil extracted from tar sands in western Canada to refineries along the Texas Gulf Coast. The 1,700-mile pipeline would travel though Montana, South Dakota, Nebraska, Kansas, and Oklahoma on its way to refineries in Houston and Port Arthur, Texas.

Supporters say the pipeline would create thousands of jobs, help lower fuel prices, and bolster North American energy resources.

Opponents call the project a “carbon bomb” that would carry “dirty oil” that could trigger global warming. They also worry about a spill. Converting tar sands into oil can uses as much as 15 percent more energy than conventional oil production.

Obama has twice thwarted the pipeline project amid concerns about a proposed route through environmentally sensitive land in Nebraska. The bill approved by the House would apply to an 875-mile portion of the pipeline from Canada to Nebraska.

The State Department, which has completed more than 15,000 pages of environmental review on the proposed pipeline over the years, said in a draft report this spring that the project was unlikely to cause significant environmental impact to most resources along the planned route. The report also said other options to move the oil from Canada to Gulf Coast refineries, such as trucks or rail cars, would be far worse for climate change.

The State Department expects to issue a final report this summer. The department has authority over the pipeline because it crosses a U.S. border.

This latest attempt to speed the pipeline marks at least the fourth time the House has tried to do so.

Rep. Fred Upton, R-Mich., defended the House actions, even though the Keystone bill is unlikely to be taken up by the Democratic-controlled Senate.

“There may be a few of my colleagues who are tired of Keystone bills, but the American people are also tired – tired of $3.70 a gallon gasoline, tired of unemployment above 7 percent, and tired of four years of delays that continue to block this critical jobs and energy project,” Upton said.

Here’s a complete breakdown of the vote (Rep. Justin Amash voted “present”?):

We reached out to Rep. Amash’s office for comment on his vote.

“He supports the construction of the pipeline but he opposes singling out a particular company or individual in a bill,” a spokesman told TheBlaze in a statement.

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But unlike yesterday’s Senate hearing on the same topic, Wednesday’s House Oversight and Government Reform Committee hearing was packed with explosive and enlightening exchanges between U.S. lawmakers and the government officials directly involved in the IRS scandal.

So without any further introduction, here are the seven most riveting moments from Wednesday’s hearing on the IRS scandal [in no particular order]:

7. I Did Nothing Wrong

Lois Lerner. (AP)

Lois Lerner, the IRS official who first acknowledged the scandal two weeks ago while responding to a planted question from Washington-based tax lawyer, announced this week that she would invoke her Fifth Amendment right to remain silent.

She appeared before the House committee on Wednesday determined to defend herself while refusing to answer questions.

“I have done nothing wrong,” she said in her opening statement. “I have not broken any laws. I have not violated any IRS rules or regulations and I have not provided false information to this or any other committee.”

Lerner then repeated that she would invoke her right to avoid incriminating herself.

“One of the basic functions of the Fifth Amendment is to protect innocent individuals, and that is the protection I am invoking today,” she said.

However, her opening statement, coupled with her refusal to talk, did not go over so well with certain members of the committee.

Rep. Trey Gowdy (R-S.C.) demanded that Lerner testify, adding that she waived her constitutional privilege by delivering her defensive opening statement.

“You don’t get to tell your side of the story and not be subjected to cross-examination. That’s not the way it works. She waived her right to Fifth Amendment privilege by issuing an opening statement, she ought to stand here and answer our questions,” Gowdy said, earning applause from the audience.

Despite Rep. Gowdy’s objections, Lerner refused to answer questions from committee chairman Rep. Darrell Issa (R-Calif.) and was eventually excused from the hearing.

As of this writing, there is still some discussion about whether the IRS official waived her rights by delivering an opening statement and whether Rep. Issa can make her talk.

It’s unclear whether that argument will stick.

6. Bipartisan Agreement: This Scandal Stinks

Rep. Elijah Cummings (D-Md.) (AP)

Though he generally disagrees with his Republican colleagues, Rep. Elijah Cummings joined with his GOP counterparts on Wednesday in reprimanding former IRS Commissioner Doug Shulman for his dereliction of duty.

And he pulled no punches:

5. There Will be Hell to Pay

Rep. Stephen Lynch (D-Mass.) (AP)

Speaking of criticism from the left, here’s Democrat Congressman Stephen Lynch promising Doug Shulman that “there will be hell to pay” if IRS officials can’t truthfully answer questions regarding the agency’s targeting of conservative groups:

And here’s a clip of Rep. Lynch raking Shulman over the coals for saying in 2012 that there was “absolutely no” targeting of conservative groups by the IRS:

Ouch.

4. The IRS Held May 2012 Internal Probe from U.S Lawmakers

Rep. Darrell Issa (R-Calif.) (AP)

The IRS performed an internal investigation of its targeting practices one year before the Treasury Department Inspector General report was completed, according to Rep. Darrell Issa.

The agency hid its findings from Congress.

“Just yesterday the committee interviewed Holly Paz, the director of exempt organizations, rulings and agreements, division of the IRS,” Congressman Issa said.

“While a tremendous amount of attention is centered about the Inspector General’s report, or investigation, the committee has learned from Ms. Paz that she in fact participated in an IRS internal investigation that concluded in May of 2012 – May 3 of 2012 – and found essentially the same thing that Mr. George found more than a year later,” he added.

So, yes, the IRS knew of the political targeting in May – but agency official apparently didn’t think it was worth mentioning to Congress.

“Think about it,’ he added. “For more than a year, the IRS knew that it had inappropriately targeted groups of Americans based on their political beliefs, and without mentioning it, and in fact without honestly answering questions that were the result of this internal investigation.”

3. Trey Gowdy Goes Scorched Earth

Rep. Trey Gowdy (R-S.C.) (AP)

South Carolina Congressman Trey Gowdy wasn’t interested in listening to a former IRS official mince his words — so he went right for the throat.

“Why was the culture such under your watch that an employee felt comfortable targeting conservative groups?” Gowdy asked. “Did you investigate that?”

“From my reading of the report, um, I can’t tell if it was political motivation or if it was tone-deaf, somebody trying to expedite a way –” Shulman started.

“You still don’t know that this was political?”

“Excuse me?”

“You still don’t know that this was political?”

“I defer to the inspector general.”

“Well, I’ll tell you this, Mister Shulman, your predecessor said that he wasn’t sure if it was partisan and that requires the listener to be as stupid as the speaker.”

2. Oh, Really? You Don’t Accept Responsibility?

Former IRS Chief Dough Shulman. (AP)

Shulman said Tuesday that he is not responsible for the IRS’ targeting of conservative groups.

“I certainly am not personally responsible for creating a list that had inappropriate criteria on it,” Shulman told Texas Senator John Cornyn. “What I know, with the full facts that are out is – from the Inspector General’s report – which doesn’t say that I’m responsible for that.”

Shulman on Wednesday repeated the claim, arguing that he shouldn’t have to bear the burden of responsibility even if he was IRS chief at the time of the targeting.

Illinois Congresswoman Tammy Duckworth, a U.S. Army veteran who lost both her legs in Iraq, was not impressed with Shulman’s dodging and decided to give it to him with both barrels:

1. Easter Egg Roll?

Courtesy @JohnEkdahl

Between 2010 and 2011 (i.e. during the height of the IRS’ political targeting), Shulman visited the White House 118 times.

And when he was asked why he visited the White House 118 times, the former IRS chief paused for a moment and responded by citing the annual Easter Egg Roll:

Unsurprisingly, Shulman couldn’t say whether he discussed the IRS’ targeting of conservatives or the implementation of Obamacare during those 100+ visits.

But he does remember the Easter Egg Roll.

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But let’s step back for a moment and explain what this means. For an analysis of this milestone, we turn to Zero Hedge.

The bulk of Fed reserves (i.e. cash) have been “parked not with US banks, but with foreign banks with US-based operations,” the Hedge reports.

But how is this possible? How have foreign banks in the U.S. bulked up their cash reserves?

The Fed has been “providing a constant cash injection to foreign banks courtesy of the rate on overnight reserves which is the amount Fed pays to banks that hold reserves with it,” the report notes.

In short, foreign banks operating in the U.S. have been collecting interest.

In fact, the Fed’s policies “have led to foreign banks operating in the US holding an all time high amount of reserves, surpassing $1 trillion for the first time, or $1,033 billion to be precise,” the report adds.

So what does this mean?

It means that “the only recipient of ongoing Fed money printing are not US banks, but foreign banks operating in the US,” Zero Hedge notes.

And to help visualize what this means, here’s a chart illustrating cash held by U.S. and foreign banks along with the amount of total reserves created by the Fed since the beginning of the 2008 financial meltdown:

Courtesy ZH.

“And just to prove that ALL the unsterilized cash from both QE2 and QEternity has essentially gone to support offshore banks, here is the conclusive chart showing the change in Fed reserves and cash held by foreign banks:

Courtesy ZH.

And here’s a chart that shows the difference between cash in U.S. banks versus cash in foreign banks operating in the U.S.

Courtesy ZH.

“At $1.03 trillion in foreign cash, the Fed’s policies have once again led to more cash being held by foreign banks than all cash held by domestic banks,” Zero Hedge notes.

–

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Rep. Gowdy explained why he thinks Lois Lerner should be called back to testify after botching her 5th Amendment plea. And he delivered that explanation in a viral way, too. See it here.

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South Carolina Congressman Trey Gowdy showed up to Wednesday’s House hearing on the Internal Revue Service scandal in a fighting mood (as noted here on TheBlaze) and he only became more fired up as the day wore on.

“If there’s inappropriate conduct being done on your watch in the IRS,” Rep. Gowdy said, “then that inappropriate conduct can last as long as the inspector general’s investigation lasts.”

The congressman’s remarks were in response to former IRS Commissioner Doug Shulman saying he didn’t stop the agency’s political targeting of conservative groups because the IG was looking into it.

“Is that what you’re telling me?” Gowdy continued. “You’re not going to step in and stop it? If there’s someone wielding a knife in the parking lot, are you going to call the inspector general? Are you going to wait until his or her investigation is over until stop it?”

There was a long pause after that question.

“Did you do anything to verify that the practice — as insidious as it was — was stopped?” the South Carolina congressman persisted, a response to Shulman saying that when he found out about the targeting he also was under the understanding that it had stopped.

“Um, the inspector general was going to be looking into it and that’s — ” Shulman started to say.

“Is it that you can’t say ‘yes’ or ‘no’ or you’re just choosing not to say ‘yes’ or ‘no’? Can you answer the question: Did you do anything personally to make sure that this insidious, discriminatory practice was stopped? Yes or no?”

Things continued to become heated between the two, Shulman hedging his responses and Gowdy demanding answers:

“Why was the culture such under your watch that an employee felt comfortable targeting conservative groups?” Gowdy continued. “Did you investigate that?”

“From my reading of the report, um, I can’t tell if it was political motivation or if it was tone-deaf, somebody trying to expedite a way –” Shulman started.

“You still don’t know that this was political?”

“Excuse me?”

“You still don’t know that this was political?”

“I defer to the inspector general.”

“Well, I’ll tell you this, Mister Shulman, your predecessor said that he wasn’t sure if it was partisan and that requires the listener to be as stupid as the speaker.”

–

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Left to right: Lois Lerner, the director of the exempt organizations unit at the Internal Revenue Service, and ex-IRS chiefs Steven Miller and Douglas Shulman. (Getty Images)

Despite the Obama administration’s repeated promises to get to the bottom of the Internal Revenue Service’s political targeting scandal, nothing has been done.

And it looks like nothing can be done for quite some time.

Although IRS officials have known about the targeting of conservative groups since at least 2011, not a single employee has been reprimanded. In fact, according to a spokesperson for the National Treasury Employees Union, the union for IRS employees hasn’t even been contacted to deal with certain personnel.

“Why weren’t more people fired?” Senate Finance Committee Chairman Max Baucus (D-Mont.) asked Tuesday during a hearing on the scandal.

Indeed, if employees engaged in behavior that even President Obama has characterized as “outrageous,” then why hasn’t anything been done?

POLITICO explains: “Most employees involved in the targeting program are covered by protections for federal workers that could drag out the termination process.”

In fact, according to the same report, the process for firing someone like Lois Lerner, the top IRS official who first acknowledged the agency’s inappropriate targeting of conservative groups two weeks ago, is an arduous, bureaucratic nightmare.

Here’s how the Washington-based news agency explains the process:

The incoming acting IRS Commissioner, Daniel Werfel, could try to clean house — but he’d have to be prepared for a lengthy appeals process.

Under federal rules, a fired government worker has the right to appeal to the Merit Systems Protection Board. He or she can challenge the decision, argue that their actions don’t meet the threshold for termination and ask to be reinstated — especially if there was no warning of trouble in past performance reviews.

The board is set up so fired employees appealing their termination get two chances to prove they should stay. Their first stop is at the merit board’s regional level, which — for the Cincinnati-based IRS employees in question — would be in Chicago.

The initial appeals take an average of 93 days to process, said William Spencer, a spokesman for the board.

If the regional board rules against the IRS employees, they could appeal to the national Washington, D.C.-based board, which takes on average another 245 days.

The IRS employees wouldn’t collect a paycheck during the appeals process. They would get back pay only if they are ultimately reinstated.

Of course, you could always go the Raymond Maxwell route and force employees to take “administrative leave.”

“But IRS workers could always fight back if they’ve had positive performance reviews until now — and the board has been known to mitigate penalties if an employee is a first-time rule violator,” POLITICO notes.

“Making this case about conduct does make it easier, however, to skip one part of the disciplinary rules for federal workers.”

Federal rules are written in such a way that if a public employee is terrible at his job, he is given a chance to improve before being fired.

However, if it’s a “conduct case” (like the IRS scandal), the agency is not required to inform the employee that he needs to “improve.” And here’s something else to consider: an IRS commission can let go of any employee — without appeal — if said employee commits any of the “10 deadly sins” explained in the agency’s 1998 overhaul law.

“The ‘sins’ include falsifying information or destroying documents to cover up mistakes, violating a taxpayer’s constitutional rights, abusing privacy clauses to conceal information from a congressional inquiry and threatening to audit taxpayers for personal gain or benefit,” the report notes.

J. Russell George, the Treasury Inspector General for Tax Administration, at Tuesday’s hearing said IRS employees could be let go under these circumstances.

However, he added, it depends on whether it can be proven that they knowingly committed the “sins.”

And if none of the above options work, you can always hope bad employees resign.

“Outgoing acting IRS Commissioner Steven Miller, for example, could have hung on if he’d really wanted to,” POLITICO notes. “Just because he was filling in for a politically appointed position doesn’t mean he can be fired by the president like political appointees typically can.”

But pressure and public outcry put Miller in a position where it became obvious that he couldn’t stay on as department interim chief. The same type of pressure could be applied to Lerner.

Click here to read the full report.

On TheBlog: Vote: How will Obama scandals impact the GOP?

———-

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The 38-year IRS veteran said she was shocked when she saw headlines blaming the scandal on “rogue” employees. She added that she was equally surprised when she saw headlines tying the scandal to the Obama White House.

“Those were things that were not consistent with my knowledge of the way the organization works,” she said:

She said she does not believe a few employees in the Cincinnati office are responsible for the targeting of nearly 500 conservative groups. You may recall that when this scandal started to unfold, a congressional source told CNN “two rogue” employees were to blame for the targeting.

“The idea of two rogue employees,” Esrig said, “is inconsistent with the kinds of checks and balances that are inherent in the way the organization is set up.”

She added that, contrary to what the IRS told the inspector general, these were not “mistakes” made by “front-line career employees.”

“Front-line employees (at the Cincinnati office) do not make key decisions about policy and how work is processed,” Esrig told NBC News.  “Work is reviewed by the managers. The employees don’t operate autonomously where there is no review. The managers review.

“I think that even if an employee were to veer off in a separate direction briefly, I would be very surprised if anyone could sustain that before management became involved,” she added.

However, she was careful to add that she believes the IRS official(s) who orchestrated the targeting did so for “efficiency” purposes and “not out of any political or partisan viewpoint.”

“I don’t believe that it was in any way political,” she said, adding that in al her years with the department, she never saw partisan behavior.

Ousted IRS interim chief Steven Miller claimed last week that IRS employees looked for terms such as “tea party” and “patriot” because it was more “efficient.” Esrig said this is entirely plausible.

“I absolutely believe that cases could be grouped for reasons that had absolutely nothing to do with partisan concerns,” she said. “I don’t think that there is anything political about the grouping of cases.”

She also stated that she doesn’t believe the department was acting on outside orders.

“The way the IRS operates,” Esrig said, “over my years of experience in various roles, including working in Washington, D.C, I have never seen anything come down where the administration was directing the IRS to handle something in one way versus another way.”

Esrig “worked as an area manager in the Determinations Unit of the IRS’ Exempt Organizations department in 2011 and 2012,” NBC reports.

“Esrig worked on tax-exemption status issues in the IRS office, but for other types of organizations, such as charter schools – not on the political advocacy groups cases at the center of the controversy. She retired from the IRS in January,” the report adds.

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“The destruction of a 3.5 kilometer viaduct in the Chinese city of Wuhan has set a record for the longest concrete bridge ever demolished in China,” ITN notes.

“With 100,000 volt wires running alongside, 30 major gas pipelines underneath and residential buildings all around it was also one of the most difficult demolitions ever undertaken in China,” the report adds:

Considering that the viaduct was built in 1997 as part of the main highway between Shanghai and Tibet, according to Bloomberg, it seems a little early to scrap the whole thing, doesn’t it?

Then again, the Chinese are really, really into infrastructure investments.

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Witnesses at the four-hour hearing included former IRS Commissioner Douglas Shulman, who headed the agency during the period when it “aggressively” discriminated against conservative groups, Treasury Department Inspector General J. Russell George, and ousted IRS interim chief Steven Miller.

And despite the fact that the hearing was dominated by Shulman and Miller’s “I don’t knows” and “I’m not sures,” there were still a few noteworthy moments.

Here are the five most intriguing moments from Tuesday’s hearing on the IRS’s targeting of conservative groups [in no particular order]:

5. Ex-IRS Chief’s Pseudo “Apology”

Ousted IRS Chief Steve Miller, left, and former IRS Commissioner Douglas Shulman are sworn in on Capitol Hill in Washington, Tuesday, May 21, 2013, prior to testifying before the Senate Finance Committee hearing on the Internal Revenue Service (IRS) practice of targeting applicants for tax-exempt status based on political leanings. (AP Photo/Charles Dharapak)

Sen. John Cornyn (R-Texas) asked former IRS Commissioner Douglas Shulman if he planned on apologizing for the IRS’ “overly aggressive” targeting of the senator’s constituents.

“I’m deeply, deeply saddened by this whole set of events,” Shulman said. “I’ve read the IG’s report and I very much regret that it happened and that it happened on my watch.”

“Is that an apology?” Cornyn asked.

“To your constituents?” Shulman responded. “I don’t know the details of our constituents. I don’t know what happened to them.”

Shulman continued, arguing that between 2008 and 2012, he had nothing to do with cases that involved political activity.

“So, it’s not your responsibility,” Cornyn said. “The buck doesn’t stop with you.”

“I certainly am not personally responsible for creating a list that had inappropriate criteria on it,” Shulman replied. “What I know, with the full facts that are out is – from the Inspector General’s report – which doesn’t say that I’m responsible for that.”

4. Sen. Hatch: You Lie!

(AP Photo/Charles Dharapak)

Sen. Orrin Hatch (R-Utah) was one of the few senators to address the IRS’ political targeting as it happened during the 2012 presidential election.

So Hatch took the opportunity on Tuesday to give Miller a dressing down for not being, as the senator claims, forthright with Republican senators when they approached him last year with their concerns.

“Why did you mislead me and my colleagues?”

“Mr. Hatch, I did not lie,” Miller responded.

“That’s a lie by omission,” Sen. Hatch shot back. “There’s no question about that in my mind. It’s a lie by omission.”

“Frankly,” Miller added, “the concept of political motivation here — I did not agree with that in May. I do not agree with that now. We were not politically motivated in targeting conservative groups.”

3. Oh, Now  I Remember All About That Planted Question

Steve Miller, center, flanked by former IRS Commissioner Douglas Shulman, right, and J. Russell George, Treasury Inspector General for Tax Administration, listens on Capitol Hill, in Washington, Tuesday, May 21, 2013. (AP Photo/Charles Dharapak)

Disgraced Internal Revenue Service interim chief Steven Miller on Tuesday took full responsibility for the planted question that put the IRS scandal directly in the spotlight, adding that the scheme was actually “an incredibly bad idea.”

“I will take responsibility for that,” Miller said in response to a question from Republican Senator Chuck Grassley. “The thought was to – now that we had the TIGTA [Treasury Inspector General for Tax Administration] report, you had all the facts. We had our response.”

“We thought we’d get out an apology,” he added. “The way we did it — we wanted to reach out to Hill staff about the same time … — did not work out. Obviously, the entire thing was an incredibly bad idea.”

Washington-based tax lawyer Celia Roady (i.e. the “plant”) asked senior IRS official Lois Lerner two weeks ago at the American Bar Association conference in the nation’s capital a prepared question involving the agency’s targeting of conservative groups.

Lerner’s canned response, and supposed “apology,” kicked off the major scandal.

Technically, Miller didn’t say last week during the House Ways and Means committee hearing that he didn’t know anything about the planted question. Still, his response today shows that he knew much more than he let on last week, which raises serious questions about his credibility.

2. Really, the Targeting Wasn’t ‘Politically Motivated’

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. left, accompanied by the committee’s ranking Republican Sen. Orrin Hatch, R-Utah, questions ousted IRS Chief Steve Miller, former IRS Commissioner Douglas Shulman, and J. Russell George, Treasury Inspector General for Tax Administration, on Capitol Hill. (AP Photo/Charles Dharapak)

The message presented by ex-IRS officials in both hearings is clear: Although the targeting was bad, it wasn’t “politically motivated.”

However, Sen. Pat Toomey (R-Pa.) on Tuesday made a good point while trying to figure out who was responsible for compiling the list of conservative groups [from the Washington Examiner]:

If neither former IRS Commissioner Douglas Shulman, nor outgoing commissioner Steven T. Miller, can point to the employee or employees who hatched this plan, which they have repeatedly insisted they cannot, how can they be so sure that the individual or individuals behind it weren’t politically motivated to aid President Obama and the Democrats?

Obama and congressional Democrats are clearly outraged about what happened at the IRS; possibly not as much as conservatives would prefer, but it’s apparent that they are not pleased with what happened at the nation’s tax administration agency.

But until Treasury investigators or a congressional committee, or both, can figure out who was responsible for the targeting, and question them about how and why they developed their approach, it would appear premature, as Toomey suggests, to settle on a conclusion to one of the biggest unanswered questions that remain since the House Ways and Means panel launched the congressional committee phase of this scandal…

Why did it occur in the first place?

Indeed, if the targeting wasn’t “political,” then why did it happen at all? And if IRS officials aren’t exactly sure who is responsible, then how do they know that it wasn’t “political”?

1. Ex-IRS Chief: I Have no Idea How This Happened

Associated Press.

The one thing former IRS Commissioner Douglas Shulman wanted to make clear during today’s hearing was he is totally ignorant of what went on under his watch.

“The man who led the Internal Revenue Service when it was giving extra scrutiny to tea party and other conservative groups seeking tax-exempt status told Congress on Tuesday that he knew little about what was happening while he was still commissioner,” the Associated Press notes.

“Douglas Shulman, who vacated his position last November when his five-year term expired, told the Senate Finance Committee he didn’t learn all the facts until he read last week’s report by a Treasury inspector general confirming the targeting strategy,” the report adds.

Shulman in his first public remarks since the scandal was broken said: “I agree this is an issue that when someone spotted it, they should have brought it up the chain. And they didn’t. I don’t know why.”

–

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White House press secretary Jay Carney speaks during his daily news briefing at the White House in Washington, Tuesday, May, 21, 2013. Carney announced that Homeland Security Secretary Janet Napolitano will travel to Oklahoma Wednesday to inspect damage from the deadly tornado that struck there. Credit: AP

White House Press Secretary Jay Carney on Tuesday revealed some rather startling details about how the Obama White House operates.

First, Carney defended Kathryn Ruemmler’s alleged decision to not inform the Commander-in-Chief about the impending Internal Revenue Service scandal because – well, she simply decided that the president shouldn’t be informed about it.

“People in the know and people who understand why it’s important to maintain distance from these kinds of things for the White House understand that that was the right call,” Carney said.

Second, according to Carney, the president is aware pretty much everyone in his administration knew about the IG’s report before him – and he’s okay with that.

Third, the White House knew well in advance of the release of the IG report that things weren’t going to go over so well and they actually coordinated with the IRS on how to present the public with the IG’s findings.

“There was ‘discussion about the possibility of a speech’ by Lois Lerner, who oversaw the IRS’s work on tax-exempt groups,” Politico explains, citing Carney, “and conversation about testimony by the acting commissioner of the agency and ‘what he would say’ if asked about the issue.”

Now the first two points raise serious questions about the president’s leadership style (just who’s running this country anyway?). But the third point is equally troubling because it calls into question the White House’s account of events.

The Treasury Department, according to the press secretary, worked with deputy White House chief of staff Mark Childress to coordinate the release of the IRS news.

Carney, however, was careful to note that he was among those who were not informed of White House’s attempts to contain the story.

But whether he knew the exact details or not, Carney knew of the report and of the upcoming scandal. Why didn’t he say anything?

“He also said he didn’t inform reporters about the discussions earlier because he hadn’t been asked ‘precise’ enough questions,” Politico notes.

“I gave you the information in response to the questions and we have provided an enormous amount of information about the communication we’ve had, who learned what about this and when, the fact that the president was not informed,” he said.

But, again, the words coming out of Carney’s mouth raise serious questions about the White House’s supposedly honesty account of events.

From Politico:

On Monday, a senior White House official confirmed to POLITICO that Treasury Department staffers told White House Counsel Kathryn Ruemmler the inspector general report was nearing completion during the week of April 22.

Carney had originally acknowledged that the counsel’s office had been told of the investigation during a press briefing the previous week. But he hadn’t explicitly said Ruemmler had learned that conservative groups were targeted and how they were singled out.

Later, during Monday’s White House briefing, Carney told reporters that some staff in the counsel’s office were told of the report — and others nearing completion — a week earlier, on April 16.

Ruemmler did inform chief of staff Denis McDonough’s office of the investigation, Carney said then, and other senior staff were also told of the report. Carney wouldn’t say Monday who those other staffers were, but did say there were communications between White House and Treasury Department staff ahead of the first news reports of the IRS investigation 10 days ago.

Though senior staff knew of the probe, Carney said Ruemmler had concluded that the investigation was “not a matter she should convey to the president” until the report was finalized.

Carney’s defense?

“I said that I didn’t know (these details) until Friday, but I’m getting this information to you now,” he said.

BONUS: CBS New’s Major Garrett during Tuesday’s press briefing asked Carney if the White House believes Republican inquiries about recent scandals (i.e. the IRS, the DOJ snooping on the AP and Fox News, Sebelius’ fundraising efforts, and the administration’s handling of the Benghazi debacle) are “legitimate.”

“We could go down the list of questions — we could say, ‘What about the president’s birth certificate? Was that legitimate?’” Carney said.

–

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From the report:

A top IRS official in the division that reviews nonprofit groups will invoke the Fifth Amendment and refuse to answer questions before a House committee investigating the agency’s improper screening of conservative nonprofit groups.

Lois Lerner, the head of the exempt organizations division of the IRS, won’t answer questions about what she knew about the improper screening – or why she didn’t reveal it to Congress, according to a letter from her defense lawyer, William W. Taylor 3rd.

Lerner was scheduled to appear before the House Oversight committee Wednesday.

“She has not committed any crime or made any misrepresentation but under the circumstances she has no choice but to take this course,” Taylor said in a letter addressed to committee Chairman Darrell E. Issa, R-Calif.

Her lawyer said that the DOJ has “launched a criminal investigation,” and that the House committee has asked Lerner to explain why she provided “false or misleading information” to the committee four times last year, the L.A. Times notes.

But because Lerner has decided to remain silent on the subject, her lawyer has asked that she be excused from Wednesday’s hearing because it would “have no purpose other than to embarrass or burden her.”

Rep. Issa was not swayed by the letter and has issued a subpoena to Lerner anyway, according to National Journal.

“The subpoena was delivered after the committee received the letter from Lerner’s attorney,” the report adds.

Lerner discovered in June 2011 that the IRS was targeting groups that used terms like “Tea Party” and “Patriots,” according to the IG’s report.

However, Lerner failed to mention the political intimidation in 2012 when she participated in several Congressional hearings.

–

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“I will take responsibility for that,” Miller said in response to a question from Republican Senator Chuck Grassley. “The thought was to – now that we had the TIGTA [Treasury Inspector General for Tax Administration] report, you had all the facts. We had our response.”

“We thought we’d get out an apology,” he added. “The way we did it — we wanted to reach out to Hill staff about the same time … — did not work out. Obviously, the entire thing was an incredibly bad idea.”

Miller is referring to Washington-based tax lawyer Celia Roady asking senior IRS official Lois Lerner at the American Bar Association conference two weeks ago a prepared question involving the agency’s targeting of conservative groups.

Lerner’s answer, and subsequent “apology” to conservative groups, was the first shoe dropped in what has now become a major scandal.

And make no mistake about it, Roady was most definitely a plant. She admitted to it last week [via Talking Points Memo]:

On May 9, I received a call from Lois Lerner, who told me that she wanted to address an issue after her prepared remarks at the ABA Tax Section’s Exempt Organizations Committee Meeting, and asked if I would pose a question to her after her remarks.

I agreed to do so, and she then gave me the question that I asked at the meeting the next day. We had no discussion thereafter on the topic of the question, nor had we spoken about any of this before I received her call. She did not tell me, and I did not know, how she would answer the question.

“The planted question reveals coordination at high levels of the IRS with regard to the disclosure of the sensitive information,” National Review Online notes.

“Lerner and Miller testified before Congress two days before Lerner addressed the ABA, but said nothing about the IRS’s scrutiny of tea-party groups.”

But issues of information coordination aside, let’s go back to Miller taking responsibility for the planted question. Let’s go back and look at what he said last week during his four-hour interrogation by the House Ways and Means Committee.

First, Rep. Devin Nunes (R-Calif.) had an interesting exchange with Miller regarding this exact topic.

“Did you know that Ms. Lerner was going to appear last Friday, May 10th, on a panel called ‘News From the IRS and Treasury’ at the American Bar Association conference?” the California congressman asked.

“I knew she was appearing; I did not know the topic,” he replied.

“Did you or any of your subordinates direct Lois Lerner to make the public statement at the panel discussion acknowledging the targeting of tax-exempt groups?”

“It was a prepared Q-and-A.”

“Do you know Ms. Celia Roady, a member of IRS’s Advisory Council on Tax-Exempt and Government Entities?”

“I do.”

“Was Ms. Roady’s question to Ms. Lerner about targeting conservative groups planned in advance?”

“I believe that we talked about that, yes.”

But that’s not all. There were many more questions where that came from:

“Who told her to ask the question?” Republican Congressman Kenny Marchant asked.

“I don’t know, actually, I’m not sure, might have been Lois Lerner,” Miller answered.

Wait. What?

Lastly, there was this exchange between Miller and Rep. Peter Roskam (R-Ill.) [via the Wall Street Journal]:

REP. ROSKAM: You admit that you spoke with Ms. Lerner and Celia Roady about the planted question beforehand. Can you tell us more about that conversation?

MR. MILLER: I did not speak to Celia Roady, and I believe I did talk to Lois about the possibility of, now that the TIGTA report was finalized, now that we knew all the facts, now that we had responded in writing and everything was done, did it make sense for us to start talking about this in public.

REP. ROSKAM: Can you walk me through the logic that animated in your mind at that time, where you thought it would be a good idea to make a public disclosure to the American Bar Association rather than coming and following up on your duty to disclose that to the House?

MR. MILLER: So we were going to do it at the same time, I believe; that our intent was to talk to you all at the same time.

REP. ROSKAM: But that didn’t happen, did it?

MR. MILLER: It did not happen, I don’t believe.

Later, he turns his questions to why lawmakers weren’t updated, and if the IRS made any effort to update lawmakers before the disclosure at the ABA conference.

REP. ROSKAM: Now, you’re a lawyer and I’m a lawyer. You know that in the process of discovery, Mr. Miller, that when you find subsequent information, counsel has a duty to disclose that to the opposite party. There’s no Perry Mason moments. There’s no gotcha moments. There’s no litigious situation where somebody comes in and says, oh, we are just showing up, Your Honor, with this information and we haven’t disclosed it to the other side.

Don’t you acknowledge that you had a duty, based on your testimony before this committee, of what your actual knowledge was — didn’t you have a duty, Mr. Miller, to come forward and disclose that to the committee, based on all the cascading inquiries that had happened from the Ways and Means Committee directed to you?

MR. MILLER: So I don’t believe so, sir. What was happening was I was in possession of some facts, was not in possession of all facts. ….

REP. ROSKAM: So you weren’t concerned about the timing of the TIGTA investigation when you and Ms. Lerner made the decision to move forward and do the planted question. Is that right?

MR. MILLER: It was done.

REP. ROSKAM: It was done. And so you had the –

MR. MILLER: We had all the facts, and we had made our written response –

REP. ROSKAM: Right. I understand that. So in other words, you had the actual information. The totality of the information that you’re describing today — you had it all in your possession at the time at which you were under a scheme with Ms. Lerner to go and do a planted question. Is that right?

MR. MILLER: I sort of object to the term “scheme.” We had the information. We were reaching out to the committee at the same time.

[...]REP. ROSKAM: What form did that outreach take?

MR. MILLER: We called to try to get on the calendar.

REP. ROSKAM: You called to try and get on the calendar. Is that all you got?

MR. MILLER: It’s the truth.

You can watch their exchange here:

Now although an argument can be made that Steven Miller didn’t technically state falsehoods during his testimony last week, today’s admission that the planted question was a “terrible idea” that didn’t live up to expectation seems to show that the former interim chief knew much more about the Lerner/Roady plan then he let on last week.

–

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Former IRS Chief Douglas Shulman. (Getty Images)

WASHINGTON (TheBlaze/AP) — The man who led the Internal Revenue Service when it was giving extra scrutiny to tea party and other conservative groups seeking tax-exempt status told Congress on Tuesday that he knew little about what was happening while he was still commissioner.

Douglas Shulman, who vacated his position last November when his five-year term expired, told the Senate Finance Committee he didn’t learn all the facts until he read last week’s report by a Treasury inspector general confirming the targeting strategy.

In his first public remarks since the story broke, Shulman said: “I agree this is an issue that when someone spotted it, they should have brought it up the chain. And they didn’t. I don’t know why.”

Shulman testified at Congress’ second hearing on an episode that has largely consumed Washington since an IRS official acknowledged the targeting and apologized for it in remarks to a legal group on May 10. Shulman and the two officials who testified at Tuesday’s three-and-a-half hour session – the outgoing acting commissioner, Steven Miller, and J. Russell George, the Treasury Department inspector general who issued the report — were all sworn in as witnesses, an unusual step for the Finance panel.

Shulman said he first learned about the targeting and about the inspector general’s investigation in the spring of 2012, during the presidential election. He said that in a meeting with Miller, he was told that IRS workers were using a list to help decide which groups seeking tax-exempt status should get special attention, that the term “tea party” was on that list and that the problem was being addressed. But he said he didn’t know what other words were on that list or the scope and severity of the activity.

Pressed by committee Chairman Max Baucus, D-Mont., on how the improper screening system could have occurred in the first place, Shulman said, “Mr. Chairman, I can’t say. I can’t say that I know that answer.”

He said he did not tell Treasury officials about the improper activity.

“I don’t recall talking to anyone about it,” Shulman told the committee. “This is not the kind of information” that, with an inspector general’s probe underway, “should leave the IRS.”

Asked by Sen. John Cornyn, R-Texas, whether he owed conservative groups an apology, Shulman said, “I’m certainly not personally responsible for creating a list that had inappropriate criteria on it.”

That was a reference to a list of words IRS workers looked for in deciding which groups to screen, a list that included the terms including “tea party” and “patriot.”

“I very much regret that it happened and that it happened on my watch,” Shulman said.

–

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In this photo released by the Bell County Sheriff’s Office, Nidal Hasan is seen in a booking photo after being moved to the Bell County Jail on April 9, 2010 in Belton, Texas. (Photo by Bell County Sheriff’s Office via Getty Images)

Did you know that under the Military Code of Justice the U.S. Army can’t suspend pay for an employee who has been accused of a crime unless he is proven guilty?

It’s true.

And it’s the reason why Nidal Hasan, the accused Fort Hood shooter, has been paid more than $270,000 by the U.S. government since the Nov. 5, 2009, mass shooting that left 13 dead and 32 injured, NBC DFW reports.

“If Hasan had been a civilian defense department employee,” the report continues, “the Army could have suspended his pay after just seven days.

Personnel rules for most civilian government workers allow for “indefinite suspensions” in cases “when the agency has reasonable cause to believe that the employee has committed a crime for which a sentence of imprisonment may be imposed.”

But that’s not the case here.

Nov. 10, 2009: A memorial to victims of the Fort Hood shooting. (AP)

And if you think it’s outrageous that Hassan has been receiving paychecks while he awaits trial, keep in mind many of the soldiers wounded by his alleged rampage are still fighting to get pay and medical benefits given to those wounded in combat.

Retired Army Spc. Logan Burnett, for example, was shot three times when the shooting spree took place inside the Army Deployment Center.

“I honestly thought I was going to die in that building,” said Burnett. “Just blood everywhere and then the thought of — that’s my blood everywhere.”

In the years after the attack, Burnett has had more than a dozen surgeries – but all without the U.S. military assisting him as it would a soldier wounded in combat.

“I refuse to continue letting Nidal Hasan win. And I leave the ‘Major’ part out, because even though, unfortunately, he’s still being paid better than I am, he doesn’t deserve that rank,” said Burnett.

Why has the U.S. military refrained from helping these soldiers? Well, as many Blaze readers know, it’s because the shooting has been classified as “workplace violence.”

“Sickens me. Absolutely sickens me. Workplace violence? I don’t even know if I have the words to say,” said Burnett, who has recently joined other Fort Hood victims in a lawsuit against the U.S. Army demanding the benefits they say they’ve been unjustly denied.

“They don’t need to be treated like this. They don’t need to sit and fight every day for this benefit or that,” said Torey Burnett:

“The Army could get some money back from Hasan by demanding re-payment for the cost of treating the wounds he sustained when a police officer shot him during the incident,” NBC 5 reports.

Hey, at least there’s that.

“What happened here is not a case of workplace violence,” said Rep. Thomas Rooney (R-Fla.), a former prosecutor at Fort Hood.

“What happened here was an attack on our military by a terrorist element specifically targeting our military, which just so happened to be in the United States of America,” continued, adding that it has “resulted in an embarrassing lack of care and treatment for the victims and their families.”

Click here to read the full report.

On TheBlog: Ft. Hood shooter is still collecting a paycheck

–

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Treasury Secretary Jack Lew. (Getty Images)

The U.S. government on Sunday reached its borrowing limit — again.

“After a brief hiatus, the nation’s debt limit has returned as a major hurdle for Washington to overcome, and one that will play a central role in fiscal fights heading into the fall,” The Hill reports. “Congress agreed to suspend the nation’s $16.4 trillion borrowing limit the last time they approached it, at the beginning of the year. But that suspension expired May 19.”

During the suspension, U.S. debt grew by an estimated $300 billion, putting the total at around $16.7 trillion.

“With the government once again operating under a borrowing cap, the Treasury is back to employing special measures to free up space under the limit,” the report notes.

“In a nod to how common debt-limit battles have become in recent years, Treasury Secretary Jack Lew told Congress Friday he was prepared to deploy the ‘standard set of extraordinary measures.’”

“He told congressional leaders that the Treasury is preparing to employ its extraordinary measures to free up room to maneuver under the cap, and gave a hint as to how long Congress could haggle over raising it before a damaging default — after Labor Day,” the report adds.

Lew’s letter also made it clear that the Obama administration is not interested in bargaining over raising the debt ceiling

Here’s a full copy of his letter:

One of the “extraordinary measures” at Treasury’s disposal involves the issuance of State and Local Government Series securities (SLGS).

“State and local governments buy the securities as they work to refund municipal bond deals,” The Hill explains.

However, issuing those securities affects the debt limit bottom line, so Treasury would put the brakes on that until further notice.

“The Treasury also has the power to halt new investments in federal employee retirement funds, which would be reimbursed once the limit is hiked. It also can stop reinvesting in its Exchange Stabilization Fund used to buy and sell foreign currencies,” the report continues.

These options would be used to free up billions of dollars to supposedly give U.S. lawmakers more time to come to an agreement over the debt limit.

Of course, that all depends on whether Congress can agree on a plan – and whether the White House will play ball.

“We will not negotiate over the debt limit,” Lew wrote in a letter sent to Congress Friday. “The creditworthiness of the United States is non-negotiable. The question of whether the country must pay obligations it has already incurred is not open to debate.”

We’ll see where this goes from here.

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(Photo: Getty Images)

When you get right down to it, the political targeting and stalling of tax-exempt applications by the IRS was an effort to defund the Tea Party. Rick Santelli, one of the Tea Party founders and my CNBC colleague, was the first to make this point. I’ve taken it a step further: The IRS was taking the Tea Party out of play for the 2012 election, as it looked to avoid a repeat of 2010 and another Tea Party landslide.

There are a lot of numbers out there. Some say Tea Party applications for tax-exempt status averaged 27 months for approval, while applications from liberal groups averaged nine. In one extreme case, according to the Washington Post, the IRS granted the Barack H. Obama Foundation tax-exempt status in a speedy one-month timeframe. Yet some conservative groups waited up to three years, and some still haven’t received approval.

But there can be only one reason for the stalled-out approval process for conservative groups. The IRS was trying to put them out of business. Thus far, there’s not one wit of contradictory evidence.

Think of this: If the IRS wasn’t politically targeting conservative groups, why did its leading spokespeople lie? This was not even cognitive dissonance. It was outright lying before Congress. Lois Lerner, a key player in the IRS’s tax-exempt division, is being accused by the House Oversight and Government Reform Committee of no fewer than four lies. The inspector general’s report shows that she knew about the targeting problem in June 2011, but wouldn’t admit to it in correspondence with Congress over the next two years.

Then there’s former IRS commissioner Douglas Shulman, a Bush appointee. He apparently knew about the targeting in May 2012, but told Congress in August 2012 that he didn’t.

Or there’s former IRS acting director Steve Miller, who was just pushed out. He also knew about the targeting in May 2012, but later refused to admit it to Congress during testimony.

In fact, the whole bloody agency may have known about it on August 4, 2011. According to the Treasury Department IG report, various IRS big wigs met that day to talk about the conservative-targeting problem. That meeting may have included the IRS’s chief counsel; while the IG report says he was at the meeting, the IRS has denied that he was. But if one of his minions was at the meeting, the chief counsel would have known about the problem.

And it turns out the Treasury’s inspector general, J. Russell George, told senior Treasury officials in June 2012 that he was auditing the IRS’s political-organization screening. That means White House appointees in the Treasury, including deputy secretary Neal Wolin, were aware of the IRS scandal before the presidential election. According to the New York Times, IG George “did not tell the officials of his conclusions that the targeting had been improper.”

No one knows the exact facts, which presumably will come out in the hearings. But this is important stuff. It is conspiracy stuff. Criminal stuff.

We already know that IRS employees gave heavily to Obama in 2008 and 2012, and very little to candidates McCain and Romney. But who was the quarterback in all this? Who was managing the targeting operation in the bowels of the IRS?

It could have been Sarah Hall Ingram. She served as commissioner of the IRS’s tax-exempt division between 2009 and 2012. And she got a $100,000 bonus for her efforts. And now — incredibly — she’s running the IRS’s Affordable Care Act (Obamacare) office, leaving her successor Joseph Grant to take the fall. But he just turned tail and resigned.

And now get this: President Obama has named OMB controller Daniel Werfel acting director of the IRS. And he’s only going to serve between May 22 and the end of the fiscal year, which is September 30. Are you kidding?

In four months, we’re to believe Mr. Werfel is going to piece together the lies, finger the quarterback, and replace everybody who was involved, not just in the now-infamous Cincinnati office, but in offices in Washington, D.C., two towns in California, and even Austin, Texas. (That’s the latest count.) And this guy Werfel is also supposed to manage the agency which is adding Obamacare to its income-tax-collection responsibilities. In four months.

Nuts.

An independent special counsel with subpoena power is the only possible solution. This counsel must find out exactly what happened and who was involved, and then come up with a fix so it never happens again. Of course, Obama charged Treasury Secretary Jack Lew with straightening this out. But Lew’s an Obama political operative.

By the way, a special counsel will have to do a special investigation, since we’re already learning the inspector-general investigation was a very superficial operation. And an independent special counsel can investigate any possible White House connections with senior Treasury officials, connections that could lead to the Oval Office.

We may hate the IRS because of its taxing power. We may hate it more because of its new Obamacare power. But it is a massively important government agency. And now we know that it is fraught with corruption and a liberal-left political agenda.

Only an independent special counsel could possibly straighten this mess out.

–

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©2013 CNBC LLC. All Rights Reserved. Larry Kudlow. Featured image Getty Images.

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Health and Human Services Secretary Kathleen Sebelius. (Getty Images)

Potential donors to a nonprofit group committed to promoting the Affordable Care Act are supposedly second-guessing whether they want to associate their money with Health and Human Services Secretary Kathleen Sebelius’ “scandalous” fundraising efforts.

“Would-be givers are ‘gun-shy’ after reports that Health and Human Services Secretary Kathleen Sebelius called on private industry executives to contribute to Enroll America, a nonprofit that is encouraging Americans to sign up for health care markets tied to the Affordable Care Act,” the Washington Times reports.

It’s true: HHS Secretary Kathleen Sebelius earlier this month asked companies in an industry that she has an enormous amount of influence over to donate money to help implement Obamacare.

The Washington Post reports:

Health and Human Services Secretary Kathleen Sebelius has gone, hat in hand, to health industry officials, asking them to make large financial donations to help with the effort to implement President Obama’s landmark health-care law, two people familiar with the outreach said.

Her unusual fundraising push comes after Congress repeatedly rejected the Obama administration’s requests for additional funds to set up the Affordable Care Act, leaving HHS to implement the president’s signature legislative accomplishment on what officials have described as a shoestring budget.

Over the past three months, Sebelius has made multiple phone calls to health industry executives, community organizations and church groups and asked that they contribute whatever they can to nonprofit groups that are working to enroll uninsured Americans and increase awareness of the law, according to an HHS official and an industry person familiar with the secretary’s activities. Both spoke on the condition of anonymity to talk openly about private discussions.

Considering Sebelius’ power and sway over the health care industry, her fundraising efforts have raised a few eyebrows.

Rep. Marsha Blackburn (R-Tenn.) told TheBlaze that the house energy and commerce committee will be looking into the allegations that HHS Secretary is raising funds from companies she also regulates.

“She should not be out asking for contributions from people they regulate and oversee and that she’s going to be regulating through this Obamacare process,” she said.

Blackburn said many people have made comparisons to the Iran-Contra affair, in which an end-run around Congress was made. “It sounds worse to me,” she said of the current allegations.

Sen. Lamar Alexander (R-Tenn.) also expressed concern that the HHS secretary might be raising funds from people she regulates and passing that on to a private entity in an end-run around Congress, similar to the Iran-Contra affair.

Enroll America “to do what Congress refused to do.” Alexander said he and several other senators have asked the Government Accountability Office to investigate the details and provide facts.

Sen. Alexander said it sounds like the secretary is “doing what Congress refused to do” by using private donations and a non-government entity, Enroll America.

“If Congress says no and you go ahead and do it anyway, then that’s illegal,” he added.

Meanwhile, a few bloggers have voiced their concerns in — less diplomatic terms.

“I’m sure people who decline her generous invitation to pay up won’t suffer and negative consequences,” the Ace of Spades HQ blog notes.

It’s not like the Obama administration “used the IRS to target conservatives. Oh, right. And naturally there won’t be a little something extra in the regulations for those that pony up,” the site adds.

Still, despite the backlash against Sebelius’ behavior, the department stands by her efforts, “noting aspects of the Public Health Service Act allow the secretary to engage with nonprofits to promote the president’s agenda,” the Times reports.

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–

A new story from The American Spectator that has been gaining steam begins with this startling intro:

Is President Obama directly implicated in the IRS scandal?

Is the White House Visitors Log the trail to the smoking gun?

The stunning questions are raised by the following set of new facts.

The story focuses on Colleen M. Kelley, president of the National Treasury Employees Union (i.e. the union for IRS employees), and her meeting with President Obama on March 31, 2010 — one day before the IRS started targeting conservative groups.

White House visitor logs available on TheBlaze show the visit:

“[T]he very day after the president of the quite publicly anti-Tea Party labor union — the union for IRS employees — met with President Obama, the manager of the IRS ‘Determinations Unit Program agreed’ to open a ‘Sensitive Case report on the Tea party cases,’” the American Spectator’s Jefferey Lord reports, citing the Treasury Inspector General for Tax Administration audit of the fed agency.

Lord provides some background on the NTEU:

The NTEU is the 150,000 member union that represents IRS employees along with 30 other separate government agencies. Kelley herself is a 14-year IRS veteran agent. The union’s PAC endorsed President Obama in both 2008 and 2012, and gave hundreds of thousands of dollars in the 2010 and 2012 election cycles to anti-Tea Party candidates.

But let’s back up for a second and clarify a few things.

First, Kelley visiting the White House in March of 2010 is not in of itself an extraordinary event. Indeed, according to Visitor Logs, she had already met with President Obama on a few occasions.

Second, we must point out that 117 “total people” were present at the 2010 White House forum on “Worplace Flexibility,” which the log lists as the reason for the visit. To be fair, that seems to point to a larger event as opposed to Kelley meeting with Obama behind closed doors.

Third, according to visitor records, the 2010 forum was held in the White House’s South Court Auditorium, which as former White House communications worker Josh King points out, is simply a large auditorium.

“On most days, South Court Auditorium is a generic, stadium-style meeting room with four or five rows of seats; space in the back of the room for cameras sitting on tripods; a small buffer area in front of the stage for still photographers to capture the key moment; and handy backstage doors for easy ingress and egress by the principals,” King explains.

Not exactly top-secret, private meeting material here.

Colleen Kelley, president of the National Treasury Employees Union. (Army Times Publishing Co.)

But here’s something interesting: President Obama in 2009 handed Kelley’s union an unprecedented amount of control over the IRS.

“President [Obama] issued Executive Order 13522,” Lord notes. “The Executive Order, titled: ‘Creating Labor-Management Forums To Improve Delivery of Government Services’ applied across the federal government and included the IRS.”

The directive specifically allows “employees and unions to have pre-decisional involvement in all workplace matters.”

The fact that Kelley’s 2010 White House visit coincides so perfectly with the IRS’ targeting of conservative groups, the level of power the president recently granted her union, and the ability by someone within the administration to grant either a quick private meeting or briefing away from the group has raised a few eyebrows.

Just think of it this way, says Lord:

…the IRS union chief went to the White House to meet personally with the president on March 31. The union already had Executive Order 13522 behind it, issued by the President barely three months earlier. An Executive Order directing that the IRS must “allow employees and unions to have pre-decisional involvement in all workplace matters….”.

The very next day after that March 31 meeting at the White House, the IRS, with the union involved in its decision-making, was setting up its “Sensitive Case Report on the Tea Party.”

Coincidence? Perhaps. Odd? A little.

Needless to say, this has raised some very troubling questions [via AmSpec.]:

• Did the President himself ever discuss the Tea Party with Kelley?
• Did the President ever communicate his thoughts on the Tea Party to Kelley — in any fashion other than a face-to-face conversation such as e-mail, text, or by phone?
• What was the subject of the Obama-Kelley March 31, 2010 meeting?
• Who was present at the Obama-Kelley March 31 meeting?
• Was the Tea Party or any other group opposing the President’s agenda discussed at the March 31 meeting, or before or after that meeting?
• Is the White House going to release any e-mails, text, or phone records that detail Kelley’s contacts with not only Mr. Obama but his staff?
• Will the IRS release all e-mail, text, or phone records between Kelley or any other leader of the NTEU with IRS employees?
• What role did Executive Order 13522 play in the IRS investigations of the Tea Party and all these other conservative groups?

Clearly, the IRS scandal may be much bigger than originally thought. Perhaps that’s why Kelley has kept her mouth shut since the targeting was first revealed.

For instance, in a recent Washington Post article titled “IRS, union mum on employees held accountable in ‘sin’ of political targeting,” Kelley really didn’t want to talk about the scandal:

NTEU is working to get the facts but does not have any specifics at this time. Moreover, IRS employees are not permitted to discuss taxpayer cases. We cannot comment further at this time.

There you have it.

Click here to read the full American Spectator Report

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Stocks:

Getty Images.

Stocks are opening slightly lower on Wall Street as the stock market comes off of four straight weeks of gains.

The Dow Jones industrial average fell 21 points to 15,332 shortly after the opening bell Monday, a loss of 0.1 percent.

The Standard & Poor’s 500 index was off a point at 1,665, or 0.1 percent.

The Nasdaq composite fell less than a point to 3,498, or less than 0.1 percent.

Investors will be looking to Federal Reserve Chairman Ben Bernanke’s testimony to Congress, scheduled for Wednesday. The Federal Reserve’s super-easy monetary policy has been a factor driving stock indexes to record highs this year.

Oil:

Getty Images.

The price of oil fell Monday ahead of the release later this week of economic data from the U.S. and China, the world’s two largest economies, and a speech by the Federal Reserve chief.

Benchmark crude for June delivery was down 55 cents to $95.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to close at $96.02 a barrel on Friday.

Later in the week, the U.S. government will release home sales and durable goods orders for April and HSBC will release its monthly survey on China’s manufacturing growth.

Brent crude, a benchmark for many international oil varieties, fell 56 cents to $104.08 a barrel on the ICE Futures exchange in London.

Markets:

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The Associated Press contributed to this report.

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Yahoo! CEO Marissa Mayer. (Getty Images)

SAN FRANCISCO (TheBlaze/AP) – Yahoo is buying online blogging forum Tumblr for $1.1 billion as CEO Marissa Mayer tries to rejuvenate an Internet pioneer that had fallen behind the times.

The deal announced Monday is Mayer’s boldest move since she left Google 10 months ago to lead Yahoo’s latest comeback attempt. It marks Yahoo’s most expensive acquisition since the Sunnyvale, Calif., company bought online search engine Overture a decade ago for $1.3 billion in cash and stock.

Yahoo is paying mostly cash for Tumblr, dipping into what remains of a $7.6 billion windfall reaped last year from selling about half of its stake in Chinese Internet company Alibaba Holdings Group. Taking over Tumblr will devour about one-fifth of the $5.4 billion in cash that Yahoo had in its accounts at the end of March.

While hailing Tumblr as a fount of creativity that attracts 300 million visitors each month, Mayer told analysts Monday that she is “making a sincere promise to not screw it up.”

David Karp, a high school dropout who started Tumblr six years ago, will remain in control of the service in an effort to retain the same “irreverence, wit and commitment to empower creators,” Yahoo said.

The deal is expected to close during the second half of this year.

However, as popular as Tumblr has become, the service remains unprofitable. That is likely to raise questions about whether Yahoo paid too much in Mayer’s zeal to gain control over a hot service. Facebook Inc. faced similar doubts last year when it bought Instagram, a rapidly growing photo sharing site, that also hadn’t been trying to make money. Facebook initially agreed to pay $1 billion in stock for Instagram, but the value had fallen to $715 million by the time that deal closed. Facebook still hasn’t proven it will be able to make money off of Instagram.

If this deal pays off the way Mayer envisions, Tumblr could help Yahoo finally get its stock price to $33. That would be a major coup because many investors soured on Yahoo after a previous regime led by co-founder Jerry Yang squandered an opportunity five years ago to sell the entire company to Microsoft for $33 per share. The stock spent more than four years trading below $20 before the recent surge. The shares gained 14 cents to $26.66 in Monday’s afternoon trading.

Still, the deal could backfire though if Yahoo’s effort to make more money alienate a Tumblr user base that so far has been subjected to hardly any advertising during the service’s six-year history.

Mayer is hoping that Tumblr will provide Yahoo with a captivating hook to reel in more traffic and advertisers on smartphones and tablet computers. That rapidly growing market is expected to become even more important during the next decade as people increasingly consume digital content on mobile devices instead of laptop and desktop machines.

More than half of Tumblr’s users connect to the service through the mobile app, and engage in an average of seven sessions per day.

Tumblr founder David Karp. (Getty Images)

Besides offering one of the top mobile apps, Tumblr also runs one of the world’s busiest websites, featuring 75 million daily posts about everything from politics to pets. Advertising has been a missing ingredient so far as Tumblr, like many online services in their early stages, focused on building a loyal audience before turning its attention to making money.

Tumblr could help Yahoo recapture some of its cachet with teens and adults in their early 20s, a demographic that has become tougher for Yahoo to reach in recent years as it fell behind the technological curve and struggled to develop compelling services.

Tumblr emerged as a trendy online hangout by providing a service that makes it easy to share blog posts, photos, video and other content in an enthralling mosaic. The service says it has amassed more than 50 billion posts from 108 million blogs. Tumblr users rely on a dashboard to pinpoint the kinds of blogs that they want to track and also have tools to pass along the posts that interest them.

That wealth of content could be interwoven into Yahoo’s other services that provide coverage of general news, sports, finance and entertainment. Tumblr also will fill Yahoo’s gaping void in the realm of social media. Yahoo so far has had to connect its services to Facebook and Twitter to give its users a social networking outlet.

Having its own social networking service will also give Yahoo more insights into the things that people like – a key to distributing ads to consumers most likely to be interested in a specific products. That data, in turn, should help Yahoo sell more ads and accelerate its revenue growth.

After three successive years of declines, Yahoo’s revenue rose slightly last year, but lagged far behind the growth at Google and Facebook. Mayer has vowed to bring Yahoo’s revenue growth back to at least the level of the overall Internet ad market.

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The bad news is that terrorism is still a real threat to America.

In Europe, “the overall risk levels in France and Spain are actually equivalent to China and Russia, presumably on the basis of the former countries’ recent, heated demonstrations protesting austerity,” Business Insider’s Rob Wile notes.

Meanwhile, as the following map clearly indicates, the safest havens in the world are Denmark, Finland, Japan, Australia, Iceland, Uruguay, and Botswana:

Aon (Click to enlarge)

Aon.

Personally, the map doesn’t concern us one way or the other. After watching that video of a bear mauling a camera, we weren’t planning on leaving the house anyway. Ever.

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But his remarks left much to be desired.

“Can you assure the American people that nobody in the White House knew about the agency’s actions before your Counsel’s Office found out on April 22nd?” a reporter asked the president.

“I can assure you that I certainly did not know anything about the IG report before the IG report had been leaked through the press,” the president said.

Well, she didn’t actually ask about the inspector general’s report. Come to think of it, he didn’t even answer for the White House. He only answered for himself.

And we’re not the only ones who think the president’s answer was overly cautious and lacking in substance.

Conservative columnist and commentator Charles Krauthammer thinks the president’s rhetorical handling of the IRS scandal makes even Bill Clinton (the same man who famously said “It depends on what the meaning of the word ‘is’ is”) look unsophisticated:

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“Their question, specifically asked from the IRS to the Coalition for Life of Iowa: ‘Please detail the content of the members of your organization’s prayers,’” Rep. Schock said while grilling ousted IRS interim chief Steven Miller, .

“Would that be an inappropriate question to a 501(c)3 applicant?” the Republican congressman asked. “The content of one’s prayers?”

“It pains me to say I can’t speak to that one either,” Miller answered, adding later that her would be “surprised” if a question of that sort was asked of any conservative group.

The report Schock is referring to comes from Thomas More Society, a not-for-profit organization committed to fighting for religious liberties:

Coalition for Life of Iowa found itself in the IRS’s crosshairs when the group applied for tax exempt status in October 2008. Nearly ten months of interrogation about the group’s opposition to Planned Parenthood included a demand by a Ms. Richards from the IRS’ Cincinnati office unlawfully insisted that all board members sign a sworn declaration promising not to picket/protest Planned Parenthood. Further questioning by the IRS requested detailed information about the content of the group’s prayer meetings, educational seminars, and signs their members hold outside Planned Parenthood.

Here’s a complete copy of the Thomas More Society’s case:

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And although a slightly bored-looking Miller spent most of the four-hour interrogation doing his best U.S. Attorney General Eric Holder impersonation (i.e. playing the “I don’t know” game), some important facts came to light today.

Here are the top four most important takeaways from Friday’s hearing [in no particular order]:

4. Plant Confirmation

Lois Lerner, head of the IRS’ tax-exempt organizations division.

The question that prompted IRS official Lois Lerner to apologize last week for IRS misconduct was planted, National Review Online’s Kevin Williamson theorized Tuesday.

He explains:

The question at the ABA conference came from Washington-based tax lawyer Celia Roady, a lobbyist in the firm of Morgan Lewis.

Roady is certainly well-versed in the issue at hand: She was named to the influential Advisory Committee on Tax Exempt and Government Entities in 2010 by Douglas Shulman, at that time commissioner of the IRS. Lerner is the director for tax-exempt organizations at the IRS.

Roady was serving on the Advisory Committee on Tax Exempt and Government Entities while tea-party groups and other conservative organizations were being targeted by the IRS. Not exactly a question out of the blue — Capitol Hill sources described the question as “planted” and say the IRS has informally admitted as much.

It would appear, according to Miller himself, that Williamson’s suspicions were spot-on and that the question was indeed from a planted audience member:

It’s a good thing Miller answered the way he did (being under oath and all that), because in a statement obtained by Talking Points Memo, Roady said she was most absolutely a plant:

On May 9, I received a call from Lois Lerner, who told me that she wanted to address an issue after her prepared remarks at the ABA Tax Section’s Exempt Organizations Committee Meeting, and asked if I would pose a question to her after her remarks.

I agreed to do so, and she then gave me the question that I asked at the meeting the next day. We had no discussion thereafter on the topic of the question, nor had we spoken about any of this before I received her call. She did not tell me, and I did not know, how she would answer the question.

Obviously, the fact that this was all started with by a rehearsed question from an audience member raises some serious questions.

“The planted question reveals coordination at high levels of the IRS with regard to the disclosure of the sensitive information,” NRO notes.

“Lerner and Miller testified before Congress two days before Lerner addressed the ABA, but said nothing about the IRS’s scrutiny of tea-party groups.”

3. Treasury Knew About the Audit During the 2012 Election

J. Russell George (l) and Steven Miller (r). (Associated Press)

Treasury officials were informed in June 2012 that the Treasury Department’s inspector general was looking into the Internal Revenue Service’s process for screening “politically active” groups applying for tax exemptions.

This means that top Obama officials knew something was up during the 2012 presidential election.

However, some important clarifications need to be made. From the New York Times:

At the first Congressional hearing into the I.R.S. scandal, J. Russell George, the Treasury inspector general for tax administration, told members of the House Ways and Means Committee that he informed the Treasury’s general counsel of his audit on June 4, and Deputy Treasury Secretary Neal Wolin “shortly thereafter.”

[…]

Mr. George told Treasury officials about the allegation as part of a routine briefing about ongoing audits he would be conducting in the coming year, and he did not tell the officials of his conclusions that the targeting had been improper, he said.

Audits are not that uncommon and, as George stressed, he did not reveal the results of the IG’s audit to Treasury officials. He merely informed them that his office was conducting an audit.

Watch for yourself [relevant comments at the 01:27:40 mark]

Still, the “revelation nonetheless raised a fresh set of questions about who was aware of the problem within the Obama administration,” the Wall Street Journal notes.

2. More Investigations Are on the Way

Getty Images.

If IRS officials think the IG report is all they have to deal with, they may be grossly mistaken.

“There are additional investigations coming down the pipeline that potentially could uncover [partisan behavior within the IRS], isn’t that correct?” asked Rep. Tom Reed (R-NY).

“That is an accurate statement, sir,” George replied.

Later, while Rep. Tim Griffin (R-Ark.) was speaking, George was asked whether his office is performing additional investigations into the IRS’ behavior.

“I’m not in a position, sir, to discuss whether or not –”

“That means you are!” Rep. Griffin interjected.

Watch here [relevant comments at 01:29:17 and 01:43:50]

On a side note, if the IG is conducting additional investigations into the IRS’ partisan behavior and had planned on keeping it quiet, well, that was all undone today.

1. Why Didn’t IRS Officials Say Anything About This Earlier?

George & Miller. (Getty Images)

Miller, who was appointed interim head on Nov. 9, 2012, knew of the conservative targeting in May of the same year.

However, during a congressional hearing in July 2012, he made no mention of the scandal.

Rep. Paul Ryan (R-Wisc.) was unimpressed with the disgraced IRS official’s non-disclosure.

“The law … requires you to not only tell the truth, but to tell the whole truth,” an annoyed Ryan said. “You ‘cannot conceal or cover up, by any trick scheme or device, any material fact.’ How was that not misleading this committee?” Rep. Ryan asked.

“You knew the targeting was taking place. You know the terms ‘Tea Party’ [and] ‘Patriots’ were being used. You just acknowledged a minute ago they were outrageous. And then when you were asked about this after you were briefed about this, that was the answer you gave us? How can we not conclude that you mislead this committee?” he added.

“I did not mislead the committee. I stand by my answer then, I stand by my answer now. Harassment discussion that was part of that question implies political motivation,” Miller responded. “Um, there is a discussion going on. There is no political motivation.”

“I answered the question truthfully,” he answered.

Miller’s “answer” is reminiscent of the excuse offered by Lerner when she was asked last week why the IRS decided now (of all times) to apologize for its behavior: No one ever asked.

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kcisradio.com

Dr. James Dobson, a well-known Christian author and radio host, has come forward to discuss the disturbing details of his alleged run-in with the Internal Revenue Service.

It all started when he decided to create a 501(c)(4) for his radio ministry, Family Talk. TheBlaze interviewed his son, Ryan Dobson, about the 18-month debacle.

The organization, according to Dobson, submitted its application to the IRS on September 2, 2011.

Despite having what he called a “good attorney” who has been working in the industry for 26 years and who has never had an application denied, the IRS allegedly made the process needlessly difficult — at one point threatening to refuse approval.

Problems began shortly after the application was first submitted.

Dobson said Family Talk didn’t hear back from the government for six months. And when they finally did hear back, the IRS allegedly flooded them with odd questions.

“There were all kinds of questions — ones we’ve never seen before,” Ryan told TheBlaze, adding that the agency asked for their political opinions and for copies of past broadcasts and transcripts.

Despite meeting the IRS’ latter demand, Dobson said they didn’t hear back from the agency for another six months. Finally, the attorney for Family Talk contacted the IRS, asking for additional information.

Again, silence.

It wasn’t until March 19 of this year — 18 months after the time-frame of the original application — that the IRS appeared ready to discuss the group’s application.

“We inquired about our status and [the agent] said she was probably going to recommend that our application not be [granted],” Dobson told TheBlaze. “She said we were political and we had criticized President Obama … and she said we did it when he was a candidate.”

Dobson found this particularly odd, as he noted that his father has been in radio for 36 years and has worked under both 501(c)(3) and 501(c)(4) regulations.

“He explicitly understands [IRS law]. He does not cross that line,” Dobson said. “So to accuse us of something like that, it makes your hair curl.”

Equally troubling, Dobson said that the agent told Family Talk that they sounded like a partisan, right-wing group and that, because the organization doesn’t represent all viewpoints, it cannot be considered educational.

The agent, according to Dobson, asked the organization if it would like to revise its application, supposedly to fix the purported issues that were presented. Family Talk declined and threatened to take the IRS to court if the delays continued. Nine days later, the application was apparently approved.

Getty Images.

While Dobson said the group isn’t currently planning to take any legal action, its members are speaking out about what unfolded.

“I have to be honest. It’s a very scary time for a nation right now. We’re kind of at a watershed moment,” he told TheBlaze. “We’re just trampling the Constitution. It’s bulling. It’s just a straight bully tactic. … that’s not the country our forefathers foresaw.”

Dobson made an interesting point — that not everyone would have had the means or patience to push back against the IRS. Considering how long it took Family Talk to secure its status, he wonders how many other groups simply gave up in the midst of government push-back.

As for political opinions being sought by the IRS, Dobson was perplexed. Family Talk was interested in addressing policy issues — something that couldn’t be adequately done under their 501(c)(3) status, which is why they were seeking out the 501(c)(4) application.

“What are our political opinions in the implications of what we do as a ministry?” he asked. “Again, those questions have no bearing on a 501(c)(4) application whatsoever.”

He called the questions “inappropriate.” While Dobson declined to quote his attorney directly, he made it clear that the lawyer had never been treated in such a manner in his entire career.

This is not the first faith group to come forward, alleging IRS intimidation. As the situation unfolds, it seems more individuals and organizations are coming forward with similar claims.

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Ashley Warden, a former Chili’s restaurant waitress, posted a picture and comment disparaging of local police officers to her Facebook wall, causing a viral uproar that resulted in her losing her job, KOTV-TV reports.

The post read: “Stupid Cops better hope I’m not their server FDP” (“FDP” is shorthand for “f**k da police”). Unsurprisingly, her post sparked outrage, leading many to contact the restaurant, the report adds.

(Image: KOTV)

The picture Warden posted were of three Oklahoma County Sheriff department deputies who had just finished volunteering as escorts for a funeral held for a Catholic priest.

“This is what she posts and what she chooses to post during Law Enforcement Week when we are honoring those who have died in service to our citizens, I think that’s pathetic,” Sheriff John Whetsel told KOTV-TV.

“I was extremely disappointed that here are these dedicated public servants got called names and then get threatened by a lady that doesn’t have a clue about who they are or what they do or the service they provide.”

Watch KOTV-TV’s report:

Piedmont Police Officer Scott Gibbons saw the post, according to KOCO-TV, and re-posted it, saying he ”felt the need to let other members of the community know that they might reconsider where they eat.”

Chili’s issued a statement that confirming Warden had been fired, citing its Social Media Guidelines, which ask team members to “always be respectful of our guests and to use proper judgment when discussing actions in the work place.” 

–

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Getty Images.

Immigration and Customs Enforcement officials in February released hundreds of illegal immigrants with criminal records, a supposedly unintentional result of the department’s sequester preparations.

The shocking news was revealed by Sens. John McCain (R-Ariz.) and Carl Levin (D-Mich).

“Of the 2,226 detainees that were released in February, the department revealed, ‘622 have been identified as having some type of criminal conviction,’” FOX News reports.

And of the 622 detainees with criminal backgrounds, at least 32 have multiple felony convictions.

ICE, obviously realizing the seriousness of its error, claims to have re-apprehended 24 of the 32 detainees guilty of committing felonies.

The agency said at the time of the release that it was a necessary preparation for the March 1 automatic spending cuts.

Sen. McCain says those responsible should be punished.

“ICE’s reprehensible actions put Arizona at risk by setting free into our communities hundreds of detainees who were guilty of criminal offenses,” he said. “The ICE officials responsible for this must face disciplinary action and must take all actions necessary to ensure that this never happens again.”

But what kind of crimes are we talking about? The FOX report offers some details:

One of them released in Phoenix had a second-degree robbery conviction and convictions for prostitution and solicitation for lewd conduct.

Another had been convicted of an “extreme” case of driving under the influence, harassment, and causing criminal damage to property. And yet another had prior convictions for carrying a gun, felony possession of drugs, burglary, vandalism and trespassing.

ICE defended itself Thursday by claiming, “these decisions were made on a case-by-case basis, by career law enforcement officials in the field, in order to ensure that ICE maintained sufficient resources to detain serious criminal offenders and other individuals who pose a significant threat to public safety through the end of the continuing resolution.”

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But now an appeals court ruling — the second of its kind — claims his appointment was unconstitutional and invalid.

“A second appeals court has joined the D.C. Circuit in ruling that President Barack Obama’s recess appointments to the National Labor Relations Board were unconstitutional, concluding that some board actions taken in the wake of those appointments were also invalid,” POLITICO reports.

“The issue has far-reaching implications for both the NLRB and other boards, including Obama’s Consumer Financial Protection Bureau, which has been a frequent target of conservatives and whose director was a recess appointment,” the report adds.

The U.S. Court of Appeals for the Third Circuit ruled 2-1 Thursday that recess appointments can only be made between sessions of the Senate, not any time the Senate is away on a break (such as during “pro forma” sessions).

This is basically the same ruling as the one handed down by D.C. Circuit Court in January.

“The 3rd Circuit case centered on decisions the NLRB made on the authority of three members including Craig Becker, who was appointed by the president on March 27, 2010, while the Senate was adjourned for two weeks,” POLITICO explains.

“The case was brought by a New Jersey nursing and rehabilitation center whose nurses were allowed to form a union by one such NLRB decision. The facility, New Vista, contended that the board’s decision was invalid because it did not have enough members active when the decision was issued because the naming of Becker to the board was not a valid recess appointment,” the report adds.

The labor board has five seats and needs at least three sitting members to conduct business. At the time of the New Vista ruling, it had the minimum of three, but one member was Becker, the recess appointee. Therefore, according to the 3rd Circuit, the New Vista ruling is invalid.

Becker is no longer on the board

“The opinion, written by Judge D. Brooks Smith, said the recess clause of the Constitution should be read not just to give the president executive power, but also to preserve the ‘advice and consent’ role of the Senate,” POLITICO notes.

“In his dissent, Judge Joseph. A Greenaway Jr. said the majority’s reading of the clause was needlessly narrow and ignored the Founding Fathers’ intent to give the president the ability to act when the Senate is not available to ‘advise and consent,’” the report adds.

The ruling today comes one month after the Obama administration petitioned the D.C. circuit court to overturn its January decision.

Here’s a copy of today’s ruling:

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Associated Press.

Former Alaska Gov. Sarah Palin posted a lengthy message to her Facebook wall Thursday criticizing the Obama administration for its handling the Benghazi, IRS, and Associated Press phone records scandals:

Scandalous Hat Trick

Mr. President, when it rains it pours, but most Americans hold their own umbrellas. Today in the Rose Garden you dismissed the idea of a Special Counsel to investigate the IRS scandal. With that, your galling political hubris shined bright in the midst of today’s dark clouds.

Mr. President, how can we trust your Justice Department to conduct an independent investigation when there is a systemic violation of the Hatch Act throughout your administration?

Surely you are aware that the Hatch Act prevents certain federal employees from engaging in political activity. Specifically, it’s illegal for these federal employees to engage in action in support of or in opposition to a political party, a candidate for partisan political office, or a partisan political group.

Yet that is exactly what’s happened within the IRS, the Justice Department, and in the Benghazi cover-up. This scandalous hat trick is on your watch. It is not believable that you knew nothing about Obama administration actions in dealing with these scandals. And in regards to Benghazi, when you should have taken appropriate action to save American lives – for instance by calling in the Marines – you were AWOL. Just weeks before the election your team scrubbed the Benghazi talking points in 12 different versions, lied to the American people about some YouTube video being to blame for the deaths of brave Americans who put our country first, and you prove Michael Barone right when he writes, “What actually happened in Benghazi was out of sync with the Obama campaign line.” That’s why you all did what you did. Pure raw politics were at play during a horrific time of loss.

For more evidence of Hatch Act violations right under your nose, simply consider DOJ’s “massive and unprecedented intrusion” into the free press. Do you think they picked up some political talk when tapping the phones in the House press gallery?

Your team is out of control. Those who cannot remember the past and learn from it are doomed to repeat it, and that is exactly what is happening. Look back exactly 40 years ago this week and apply that disheartening chapter of American history to the team you’ve chosen and lead today.

Some of us warned America; we cautioned voters in 2008 that a community organizer with no executive experience and no sense of accountability would be a very poor choice for the nation’s top management position.

Mr. President, you said today that you have “complete confidence” in the Attorney General. America doesn’t. Eric Holder needs to appoint an unbiased Special Counsel to investigate the illegal political action of this administration. And then Eric Holder needs to resign.

Most Americans see ominous dark clouds looming beyond the White House Rose Garden, Mr. President. They’ll roll away only when light is shined on the Obama administration’s antics, and America will only recover when you cease avoiding responsibility in this mission of yours to fundamentally transform America. For that to happen, the press had better learn from their experiences of being duped and provide a deserving public fairer, more intelligent coverage.

Speaking of coverage, glad you finally called in the Marines… shame it was just to hold your umbrella.

- Sarah Palin

Well then. Tell us how you really feel.

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It appears that the official who oversaw the Internal Revenue Service office responsible for targeting conservative groups has moved on from that post and now heads the agency’s Obamacare division.

From ABC News:

The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the health care legislation.

Sarah Hall Ingram served as commissioner of the office responsible for tax-exempt organizations between 2009 and 2012. But Ingram has since left that part of the IRS and is now the director of the IRS’ Affordable Care Act office, the IRS confirmed to ABC News today.

Her successor, Joseph Grant, is taking the fall for misdeeds at the scandal-plagued unit between 2010 and 2012. During at least part of that time, Grant served as deputy commissioner of the tax-exempt unit.

Grant said Thursday he would resign as commissioner of the Tax Exempt and Government Entities Division on June 3, TheBlaze reported. He was appointed to the post just eight days ago.

Here’s a May 8 press release announcing his extremely short-lived promotion:

But here’s something ​really ​interesting: Ingram received more than $100,000 in bonuses between 2009 and 2012, slightly before and well after her office started targeting conservatives, the Washington Examiner’s Mark Tapscott reports.

“Ingram received a $7,000 bonus in 2009,” the Examiner report adds, “then a $34,440 bonus in 2010, $35,400 in 2011 and $26,550 last year for a total of $103,390. Her annual salary went from $172,500 to $177,000 during the same period.”

News that the IRS official heading the agency’s Obamacare office used to run the division responsible for conservative discrimination comes on the heels of House Speaker John Boehner calling for a full repeal of the Affordable Care Act.

“Fully repealing ObamaCare will help us build a stronger, healthier economy, and will clear the way for patient-centered reforms that lower health care costs and protect jobs,” Boehner said shortly after the House passed a “repeal Obamacare” measure.

“Obamacare empowers the agency that just violated the public’s trust by secretly targeting conservative groups,” Rep. Marlin Stutzman (R-In.) added. “Even by Washington’s standards, that’s unacceptable.”

Senate Minority Leader Mitch McConnell summed up his reaction to the Ingram revelation:  “stunning, just stunning.”

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Here’s the latest [from the Washington Examiner’s Philip Klein]:

When President Obama was selling his health care legislation to Congress, he declared that “the plan I’m proposing will cost around $900 billion over 10 years.”

But with the law’s major provisions set to kick in next year, a new analysis by the Congressional Budget Office projects that the law will cost double that, or $1.8 trillion.

That’s trillion with a “T.”*

Klein continues:

What accounts for the dramatic difference? It’s true that at the time of passage, the CBO said the gross cost of the law’s provisions to expand insurance coverage would be $940 billion over a decade.

But as many critics of the health care law pointed out at the time, this number was deceptive because it estimated spending from 2010 through 2019 even though the program’s major spending provisions weren’t scheduled to go into effect until 2014. Effectively, the original estimate measured the cost of six years of Obamacare instead of 10.

The CBO’s trillion dollar projection accounts for fiscal years 2014-2023, the first full decade of Obamacare:

But wait! That’s not all!

“CBO now expects the Medicaid expansion to cover an additional 13 million people by 2023 (up 1 million from its February estimate) and the new government-run insurance exchanges to cover 24 million (1 million fewer than previously projected) [emphasis added],” Klein writes.

“CBO estimates that under Obamacare, 7 million fewer people in the United States will have employment-based insurance by 2023,” he adds.

Meanwhile, the White House’s twitter account reminded everyone on Thursday that the president’s health care overhaul is, in fact, the law of the land:

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*That rhymes with “P” and that stands for pool.

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An internal IRS memo says Joseph Grant, commissioner of the agency’s tax exempt and government entities division, will retire June 3. As part of his duties, Grant oversees the IRS division that targeted tea party groups for additional scrutiny when they applied for tax-exempt status.

But here’s the fun part: Grant was appointed to that position just eight days ago.

Get a load of this May 8 press release:

Grant, who started with IRS in August 2005, joins Steven Miller, who resigned as acting IRS commissioner on Wednesday.

Miller, as noted earlier on TheBlaze, was appointed acting commissioner in 2012, two years after the agency had started targeting conservative groups.

In Miller’s place, President Obama has named Daniel Werfel as the acting IRS commissioner. Werfel, 42, currently serves as controller of the Office of Management and Budget.

“Throughout his career working in both Democratic and Republican administrations, Danny has proven an effective leader who serves with professionalism, integrity and skill,” Obama said in a statement.

“The American people deserve to have the utmost confidence and trust in their government, and as we work to get to the bottom of what happened and restore confidence in the IRS, Danny has the experience and management ability necessary to lead the agency at this important time,” the statement adds.

Werfel agreed to serve through the end of September, the White House said. Presumably, Obama will nominate a new commissioner by then.

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(H/T: @sunnyright). The Associated Press contributed to this report.

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The Labor Department says the less volatile four-week average rose just 1,250 to 339,250, a level consistent with modest hiring.

Labor officials said there were no special circumstances that caused the spike.

Applications tend to fluctuate sharply from week to week and economists typically focus more on the four-week average. That remains 9 percent lower than it was six months ago.

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What Rep. Nunes meant by “tapped” was that the DOJ seized the phone records, as has been widely reported. There was a little confusion between him and the host during the conversation: He did not mean to refer to phone records of the cloakroom itself, but of the Capitol. This refers to the phone records for the AP from  the House press gallery, which the DOJ admitted to looking at.

He was explaining that if those phone records were seized, they would reveal a lot of conversations between the press and members of Congress, since reporters often speak to Members from the press gallery phones. The notion of the DOJ looking at phone records from the Capitol of conversations between Members of Congress and reporters is something that concerns Rep. Nunes, bringing up issues related to the separation of powers.

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Congressman Devin Nunes (R-Calif.) said Wednesday during an interview on the Hugh Hewitt Show that the Justice Department’s investigation of the Associated Press involved seizing phone records from the United States Capitol.

Here’s how the conversation went down [h/t Hot Air]:

HH: The idea that this might be a Geithner-Axelrod plan, and by that, the sort of intimation, Henry II style, will no one rid me of this turbulent priest, will no one rid me of these turbulent Tea Parties, that might have just been a hint, a shift of an eyebrow, a change in the tone of voice. That’s going to take a long time to get to. I don’t trust the Department of Justice on this. Do you, Congressman Nunes?

DN: No, I absolutely do not, especially after this wiretapping incident, essentially, of the House of Representative. I don’t think people are focusing on the right thing when they talk about going after the AP reporters. The big problem that I see is that they actually tapped right where I’m sitting right now, the Cloak Room.

HH: Wait a minute, this is news to me.

DN: The Cloak Room in the House of Representatives.

HH: I have no idea what you’re talking about.

DN: So when they went after the AP reporters, right? Went after all of their phone records, they went after the phone records, including right up here in the House Gallery, right up from where I’m sitting right now. So you have a real separation of powers issue that did this really rise to the level that you would have to get phone records that would, that would most likely include members of Congress, because as you know…

HH: Wow.

DN: …members of Congress talk to the press all the time.

HH: I did not know that, and that is a stunner.

DN: Now that is a separation of powers issue here, Hugh.

HH: Sure.

DN: And it’s a freedom of press issue. And now you’ve got the IRS going after people. So these things are starting to cascade one upon the other, and you have the White House pretending like they’re in the clouds like it’s not their issue somehow.

For those of you who don’t know what a congressional cloakroom is, it’s where U.S. lawmakers go to relax between sessions. The House and Senate cloakrooms, which have their own phone numbers, are ​not ​open to the media or the public.

Now, the press gallery is different. That’s obviously reserved for media. It also has phones. So if AP reporters were making calls to members of Congress via the press gallery, it appears the DOJ looked into those records (they did not wiretap the building):

The congressman’s revelation is particularly interesting considering the fact that even U.S Attorney General Eric Holder claims he provided the DOJ with ​his phone records.

“Some of my telephone records were examined,” Holder said during a congressional hearing Wednesday.

“I voluntarily turned them over,” he added.

At this point, who hasn’t had their phone records examined by the DOJ?

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“[T]he IRS has identified two ‘rogue’ employees in the agency’s Cincinnati office as being principally responsible for the ‘overly aggressive’ handling of requests by conservative groups for tax-exempt status,” CNN reports, citing a congressional source.

Steven Miller, former Acting Internal Revenue Service Commissioner, said the two “rogues” had already been disciplined, the source adds.

A “second source said Miller emphasized that the problem with IRS handling of tax-exempt status for tea party groups was not limited to these two employees,” the CNN report notes.

Steven Miller, former Acting Internal Revenue Service Commissioner. (Getty Images)

Still, boiling this scandal down to just two employees is a little hard to believe.

It’s even more difficult to imagine that this was all the work of two people given the fact that at least four IRS Cincinnati agents who may have been involved in the scandal have supposedly been identified by FOX19.

“Those four employees — whose names we have chosen to withhold until they have been officially confirmed — Have each worked in the IRS Exempt Organizations Department,” the report claims.

“This is the same department that has admitted publicly to sending letters to Tea Party and other conservative organizations,” it adds:

FOX19.com-Cincinnati News, Weather

According to the Fox report, the four Cincinnati employees in question made large requests of information from:

• The Richmond, Virginia Tea Party in January of 2012.
• The Ohio Liberty Council in January of 2012.
• Dan Backer, a lawyer based in Washington D.C. who helped six small conservative groups apply for 501c4 status in February of 2012.
• The Liberty Township Tea Party in March of 2012.

The employees, according to the Fox affiliate’s sources, claim “they simply did what their bosses ordered.”

Now it’s entirely possible two “overly aggressive” employees orchestrated this entire scandal, and that low-level employees (like the four in the Fox report) were merely pawns in their game.

However, considering the size and scope of the scandal (the number of groups flagged for extra scrutiny is nearing 500) that seems highly unlikely.

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What’s more, 57 percent believe IRS agents involved in the investigation of conservative groups should either be jailed or fired. In terms of specific break-down, 16 percent say the IRS agents should be put in jail and 41 percent believe they should at least be fired.

Only seven percent of voters believe no disciplinary action should be taken against the IRS agents while 29 percent believe that, at the very least, those involved should be formally reprimanded.

In terms of whether the Obama administration had prior knowledge about the investigations, 55 percent of likely voters think it is at least somewhat likely that the president or his top advisers were aware of the IRS probes into Tea Party and other conservative groups. That 55 percent includes 13 percent of Democrats and 34 percent of unaffiliated voters.

Only 34 percent of likely voters believe it is unlikely that the White House was aware of IRS investigations into conservative groups.

In terms of punishment for IRS agents, 44 percent of Democrats believe those involved should be formally reprimanded.

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A symbol in the window of a local pub indicates the acceptance of Bitcoins for payment on April 11, 2013 in Berlin, Germany. Bitcoins are a digital currency traded on the MTGox exchange. (Photo: Sean Gallup/Getty Images)

The Bitcoin trading platform Mt. Gox in Tuwsday was issued a warrant that stopped its ability to send or accept transfers of the electronic currency through its Dwolla payment service.

Betabeat reported that the Department of Homeland Security issued a “seizure warrant” for the Dwolla account, and a copy of the warrant obtained by Ars Technica revealed it was for “unlicensed money transmitting.”

The warrant, in part, states:

(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
(b) As used in this section—
(1) the term “unlicensed money transmitting business” means a money transmitting business which affects interstate or foreign commerce in any manner or degree…

The warrant identifies Mark Karpeles, the president and CEO of Mt. Gox, as opening a Wells Fargo bank account in May 2011 under Mt. Gox’s subsidiary company Mutum Sigillum. The application for the account, the warrant states, explicitly asked if the company exchanges currency for customers and if it “[accepts] funds from customers or [sends] the funds based on customer instructions (Money Transmitter)?”

To both of these, Karpeles answered no.

If Mt. Gox or Mutum Sigillum were transmitting money, it would need to be registered with FinCen, and neither are, according to the records mentioned in the warrant.

The warrant goes on to show how a “confidential informant” was able to reveal that the company was “engaged in a money transmitting business but is not registered with FinCen.”

Through the Dwolla account, the feds established that it has probable caused to believe Mt. Gox or Mutum Sigillum were violating 18 U.S.C. section 1960. Due to this, the Wells Fargo account and the Dwolla account, which was held through Veridian Credit Union, were subject to seizure.

This is the latest statement Mt. Gox issued on its Facebook profile, which was nearly 24 hours ago:

Like many who have contacted us, MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. We take this information seriously. However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.

This news comes after bitcoin saw a rapid rise in its value within the last couple months.  The currency did go through a bit of a “bitcrash” but was still significantly higher than it had been before.

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Related:

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• Confused by Digital Currency? This Three Minute Video Has the Basics of What You Need to Know About ‘Bitcoins’
• Digital Currency Sees ‘Bitcrash’ After All-Time High

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President Obama. (Getty Images)

“I’ve reviewed the Treasury Department watchdog’s report, and the misconduct that it uncovered was inexcusable,” the president said. “It’s inexcusable, and Americans are right to be angry about it, and I’m angry about it.”

He added later that Steven Miller, the IRS acting commissioner, had tendered his resignation.

And that was about everything the president said.

The presser, as noted in this post’s headline, was incredibly brief. Brief to the point where more than a few people have asked: “What was the point of that?”

Conservative author and columnist Charles Krauthammer offers his analysis: “[The announcement] was a holding operation. That was the absolute minimum he could have done. He relieves one person – he obviously had to – he had to relieve at least one person and he chose, of course, the acting commissioner.”

“But I would’ve expected more,” he added. “The other actions he announced are, up to now, meaningless. Obama, this administrating, has said a hundred times they’re going to hold X, Y, or Z accountable for all kinds of behavior.”

He continued:

In Benghazi, regarding a lot of other scandals, he even speaks about Syrian generals are going to be held accountable. It means nothing.

And then he says there’s going to be an investigation from Treasury. Well, that just means that the left hand of the government investigating the right hand. He did say he’d cooperate with Congress, but then he has the chutzpa to essentially warn republicans not to make this into a political event.

[W]e’re talking about is the IRS applying political criteria — inexcusably, unconstitutionally, probably criminally — and deciding who it’s going to investigate.

“I found this the bare minimum,” he concluded. “It’ll hold them for 12 hours, but no more.”

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Miller took over as acting commissioner on Nov. 9, 2012, two years into the IRS’ political targeting, after his predecessor, Doug Shulman, vacated the position.

Miller will leave the IRS in June, not immediately, as per the terms of his assignment.

“It is with regret that I will be departing from the IRS as my acting assignment ends in early June,” Miller wrote. “This has been an incredibly difficult time for the IRS given the events of the past few days, and there is a strong and immediate need to restore public trust in the nation’s tax agency.”

News that Miller has stepped down from his position comes six days after it was first revealed that the fed agency had been targeting conservative groups with “substantial delays” and often “unnecessary” information requests.

Obama, who has been criticized for appearing uninterested in the scandal, as the Associated Press puts it, declared, “I am angry about it” and said the American people had a right to be angry as well.

The president in his incredibly brief presser vowed to hold all responsible parties accountable, adding that he has instructed Treasury Secretary Jack Lew to follow up on Inspector General’s audit of the agency:

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Small business owners in six states are suing the federal government over an IRS regulation imposed under the Affordable Care Act (i.e. “Obamacare”) which, they say, will force them to pay hefty fines, cut their employees’ hours, or burden their businesses.

“Because of Obamacare I’ve already been forced to cut my ‘hourly’ employees’ hours from 40 down to 28 so I can keep running my business and keep my employees on the payroll,” J. Allen Tharp, CEO of Olde England’s Lion and Rose and a plaintiff in the suit, told TheBlaze.

“This law has already put my employees and me in a difficult position and if the IRS regulation is allowed to stand, I don’t want to think about what the consequences will be for the economy,” the statement adds.

Charles Willey, owner of Innovare Health Advocates in Missouri, added:

I will fight to provide health insurance for my employees but this illegal IRS rule makes it cost more and blocks healthy behavior incentives. I have over 50 employees and if I am forced to comply with this mandate, I am looking at over $100,000 in fines per year for my small business.

Here’s the background on the group’s case [from their press release]:

The Affordable Care Act authorizes health insurance subsidies to qualifying individuals in states that created their own healthcare exchanges. Those subsidies trigger the employer mandate (a $2,000/employee penalty) and expose more people to the individual mandate.

But last spring, without authorization from Congress, the IRS vastly expanded those subsidies to cover states that refused to set up such exchanges.

Under the Act, businesses in these nonparticipating states should be free of the employer mandate, and the scope of the individual mandate should be reduced as well.  But because of the IRS rule, both mandates will be greatly enlarged in scope, depriving states of the power to protect their residents.

Michael Carvin, a partner at Jones Day who is representing the plaintiffs, vows to fight the IRS rule.

“The IRS rule we are challenging is at war with the Act’s plain language and completely rewrites the deal that Congress made with the states on running these insurance exchanges,” he said.

Sam Kazman, general counsel of the Competitive Enterprise Institute CEI (the group coordinating the lawsuit), pledges his support.

“Agencies are bound by the laws enacted by Congress,” said.  “Obamacare is already an incredibly massive program.  For the IRS to expand it even more, without congressional authorization and in a manner aimed at undercutting state choice, is flagrantly illegal.”

And there are many reasons why the plaintiffs decided to file suit:

One business can only afford to employ some full-time workers without providing health insurance, another wants to convert its employee health insurance to a completely consumer-driven health plan, and several individual plaintiffs (most of them self-employed) object to paying for costly insurance packages that they neither need nor want.

A total of 33 states have chosen not to create an exchange in order to avoid imposing the employer mandate on businesses. However, the IRS rule works against this.

“The IRS cannot rewrite the law that Congress passed,” said American Enterprise Institute’s Tom Miller. “Its regulation expressly flouts the statutory text of the ACA, the intent of Congress, and the reasoned choices of 33 states.”

Getty Images.

“The Obama administration plans to tax, borrow, and spend more than half a trillion dollars in clear violation of Obamacare, yet still says Obamacare is ‘the law of the land,’” said Michael Cannon, director of health policy at the CATO Institute. “The courts should stop the administration before it starts imposing these illegal taxes on millions of individuals and employers in January.”

This legal complaint argues that the IRS has no legal authority to rewrite an “essential part of the law,” the group explains.

The suit is being filed in federal court in the District of Columbia.

You can read the full complaint here:

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When Internal Revenue Service agents decided to target conservative groups with “unnecessary” information requests, they probably weren’t expecting Marion Bower, an Ohio woman who in 2010 founded her own Tea Party group.

“I was trying to be very cordial, but they wanted copies of unbelievable things,” the 68-year-old founder of American Patriots against Government Excess told ABC News Tuesday. “They wanted to know what materials we had discussed at any of our book studies.”

Yes, when applying for the group’s tax-exempt status, the IRS actually asked her for information regarding the books she and her colleagues read.

“They wanted a synopsis of all the books we read,” she said. “I thought, I don’t have time to write a book report. You can read them for yourselves.”

So she sent the IRS official handling her tax-exempt request in Cincinnati a copy of “The Five Thousand Year Leap” (a Glenn Beck favorite) and a paperback version of the United States Constitution.

“Bower, 68, said she did not want to cause trouble or be argumentative with the IRS, so she patiently responded to their questions about her group,” ABC News notes.

“Her group’s request was granted in March 2012, about two years after they originally applied,” the report continues.

The Ohio woman said the IRS’ demands, which included requests for agenda and minutes of their regular meetings, were absurd.

“I felt like, ‘My goodness, what in the world is going on here?’” Bower said. “Is this ever going to end?”

We know why the IRS was stonewalling Bowers.

Agency employees agents were instructed to flag applications that included the words “patriot” and “tea party,” senior IRS officials revealed last week. Conservative groups critical of government and groups designed to educate Americans on the Constitution were also flagged for further review.

“They wanted copies of our blog. They said they had already taken copies of our website. They wanted a list of all of our officers, what we do at our meeting, how our board is made up,” Bower said.

“The IRS says that it is part of its normal oversight responsibility to request additional information to ‘develop’ applications that need heightened scrutiny because tax-exempt groups might only engage in certain amounts and certain kinds of political activity,” ABC News explains.

“But Bower said her group consisted of volunteers who routinely passed out copies of the constitution at parades, and had informational meetings on anything from the health care law to disaster preparedness,” the report notes.

“We thought it would be a very simple process,” Bower said. “It wasn’t a simple process.”

Exit Question: Does this mean there’s a copy of the U.S. Constitution floating around somewhere in the IRS’ Cincinnati offices? If so, is anyone reading it?

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Before we get into the meat of this story, let’s do a quick recap of the Obama administration’s most recent scandals:

• Testimony provided last week by the Benghazi whistleblowers has raised serious questions about the Obama administration’s actions before, during, and after the Sept. 11, 2012, terrorist attack on the U.S. Consulate in Libya
• The Internal Revenue Service admitted last week to harassing conservative groups
• HHS Secretary Kathleen Sebelius on Friday asked companies in an industry she has an enormous amount of influence over to donate money to help implement Obamacare
• The Department of Justice was caught Monday with at least two months worth of the Associated Press’ phone records

Needless to say, it’ll take an incredible amount of concentration and political savvy for the Obama administration to make it through the next few weeks (months maybe?).

Could things get any worse for the president and his cabinet? Maybe.

The Washington Examiner’s Michal Conger reports:

Conservative groups seeking information from the Environmental Protection Agency have been routinely hindered by fees normally waived for media and watchdog groups, while fees for more than 90 percent of requests from green groups were waived, according to requests reviewed by the Competitive Enterprise Institute.

CEI reviewed Freedom of Information Act requests sent between January 2012 and this spring from several environmental groups friendly to the EPA’s mission, and several conservative groups, to see how equally the agency applies its fee waiver policy for media and watchdog groups. Government agencies are supposed to waive fees for groups disseminating information for public benefit.

“This is as clear an example of disparate treatment as the IRS’ hurdles selectively imposed upon groups with names ominously reflecting an interest in, say, a less intrusive or biased federal government,” said CEI fellow Chris Horner.

Most green groups, including EarthJustice, The Waterkeeper Alliance, and Greenpeace, saw their fees waived. In fact, according to the report, 92 percent of requests from green groups were waived by the EPA.

But of the requests that were denied, “the EPA said the group either didn’t respond to requests for justification of a waiver, or didn’t express intent to disseminate the information to the general public,” Conger reports, citing documents obtained by the Examiner. 

And here’s where things could become a headache for the Obama administration:

CEI, on the other hand, had its requests denied 93 percent of the time. One request was denied because CEI failed to express its intent to disseminate the information to the general public. The rest were denied because the agency said CEI “failed to demonstrate that the release of the information requested significantly increases the public understanding of government operations or activities.”

Similarly, requests from conservative groups Judicial Watch and National Center for Public Policy Research were approved half the time, and all requests from Franklin Center and the Institute for Energy Research were denied.

“Their practice is to take care of their friends and impose ridiculous obstacles to deny problematic parties’ requests for information,” said Horner.

“This is a clear pattern of favoritism for allied groups and a concerted campaign to make life more difficult for those deemed unfriendly,” he said, adding that he thinks the EPA is stonewalling CEI because it’s one of the few groups that tries to keep the fed agency accountable.

“The left hand of big government reaches out to give a boost to its far-left hand at every turn. Argue against more of the same, however, and prepare to be treated as if you have fewer rights.”

Exit Question – From conservative author and commentator Mark Steyn: “Where do you go to vote out the EPA?”*

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*Mark Steyn, “After America: Get Ready For Armageddon.” (Washington, D.C: Regnery Publishing, Inc., 2011) 82.

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President Barack Obama. (Getty Images)

President Barack Obama in an official statement released Tuesday evening condemned the Internal Revenue Service for targeting conservative groups, calling the agency’s actions “intolerable” and “inexcusable.”

“I have now had the opportunity to review the Treasury Department watchdog’s report on its investigation of the IRS personnel who improperly targeted conservative groups applying for tax-exempt status. And the report’s findings are intolerable and inexcusable,” the statement reads.

“The federal government must conduct itself in a way that’s worthy of the public’s trust, and that’s especially true for the IRS. The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity. This report shows that some of its employees failed that test,” it adds.

The statement continues:

I’ve directed Secretary Lew to hold those responsible for these failures accountable, and to make sure that each of the Inspector General’s recommendations are implemented quickly, so that such conduct never happens again. But regardless of how this conduct was allowed to take place, the bottom line is, it was wrong. Public service is a solemn privilege. I expect everyone who serves in federal government to hold themselves to the highest ethical and moral standards. So do the American people. And as President, I intend to make sure our public servants live up to those standards every day.

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The TIGTA report found that the IRS used “inappropriate criteria” to scrutinize conservative groups and allowed said criteria to remain in place for at least 18 months.

The following chart details the evolution of the IRS’ poltical targeting:

But the overall takeaway, according to the report, is that “ineffective management” is really to blame for the agency’s anti-conservative discrimination.

Yep, just plain, old poor management allowed agency employees to harass conservative groups with “substantial delays” and often “unnecessary” information requests.

Here are seven unnecessary questions the IRS asked conservative groups that it had flagged for additional review [as identified by TIGTA]:

The IG report notes that the IRS has taken steps to fix its anti-conservative problems, but adds that much more needs to be done so that “the public has reasonable assurance that applications are process without unreasonable delay in a fair and impartial manner.”

In fact, the report clearly states that “corrective action has not been fully implemented.”

Here’s a copy of the IG report:

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