Testimony: IRS Needed Only Two Days to Confirm Lerner Hard Drive Crash

July 22, 2014

Issa and Jordan write DOJ with new information about IRS delay in reporting loss to Congress and Criminal Investigators

WASHINGTON – House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) and Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs Chairman Jim Jordan (R-OH), today urged Deputy Attorney General James Cole to appoint an independent special prosecutor to investigate why IRS Commissioner John Koskinen delayed informing Congress and the Justice Department about the destruction of critical evidence to congressional and criminal investigations. The request follows new testimony by IRS Deputy Associate Chief Counsel for Procedure and Administration Thomas Kane testified that senior IRS leadership first became concerned about the possibility of missing Lois Lerner e-mails on February 2, 2014, and confirmed a hard drive crash only two days later.  Last week, Deputy Attorney General James Cole disclosed in testimony before the Committee that the Department of Justice is investigating the Internal Revenue Service’s (IRS) delay in alerting other agencies that they had lost former IRS official Lois Lerner’s emails.

“The Committee has obtained information that senior IRS leadership knew in February 2014 that e-mails on Ms. Lerner’s hard drive were unrecoverable,” Issa and Jordan write in today’s letter.  “The IRS’s failure to disclose in a timely manner that it had destroyed evidence critical to congressional and criminal investigations is further reason that a special prosecutor is needed to thoroughly and independently investigate all facets of the IRS targeting.”

The letter continued:

“On July 17, 2014, the Committee conducted a transcribed interview of Thomas Kane, the IRS Deputy Associate Chief Counsel for Procedure and Administration.  During the interview, Mr. Kane testified that senior leadership in the IRS became aware of problems with Lois Lerner’s e-mails in early February 2014.  According to Mr. Kane, on February 2, 2014, Catherine Duval, Counselor to the Commissioner, noticed a discrepancy in the number of e-mails gathered from Ms. Lerner’s account.  The IRS had gathered 16,000 e-mails from the period after April 2011 and ‘less than 100’ from the period before April 2011.

“After becoming aware of the discrepancy in the number of e-mails, Mr. Kane asked a subordinate, Paul Butler, to look into the cause of the discrepancy.  Two days later, on February 4, 2014, senior IRS leadership learned that Ms. Lerner’s hard drive had crashed in 2011 from her former administrative assistant, Dawn Marx.  Mr. Kane testified:

Q             And so do you remember precisely when you became aware of the hard drive crash?

A             We were – Paul Butler had talked to someone who worked for Lois at about the time when the emails had a great discrepancy and was told by her that there had been a hard drive crash at that particular point in time.

Q             Do you know the name of the person that Mr. Butler spoke with?

A             Dawn Marx. Marx with an “x.”

***

Q             Do you know, sir, when Ms. Marx informed Mr. Butler about the hard drive crash?

A             February 4th.

Q             Of 2014?

A             Correct.

Q             And why does that date stand out to you in your memory?

A             The date stands out to me because we first found out about it on February 2nd, and it was only 2 days afterwards.

Q             So it didn’t take long then for you to figure out what happened?

***

A             It didn’t take us long to figure out that it was reported that there was a hard drive crash at or about the time that the discrepancy in the emails took place.

***

Q             And upon learning on February 4th of the hard drive crash, who did you communicate that to?

A             That was relayed to Kate [Duval].

Q             By who?

A             I would have been the one to do it, yes.

According to Mr. Kane, senior IRS leadership became aware in mid-February 2014 that Ms. Lerner’s hard drive had been recycled and that any e-mails on the hard drive were “unrecoverable.”[[1] Id.1] Mr. Kane testified:

Q             And do you recall when Mr. Butler gave you that information, the hard drive had been recycled?

A             I don’t recall a specific date or time period, or time, but it certainly would have been within the period of time when he was actively interacting with the IT people, in early to mid February.

***

Q             Do you have an understanding now as to what that term, “recycled,” means?

A             I do have some knowledge as to what happened to the hard drive.

Q             What happened to the hard drive?

A             After the CI forensic analysis determined that it was – that the material on it was unrecoverable, it was returned to the IT people, who at some point in time degaussed it to make sure that if there was anything else on it, particularly from a 6103 perspective, that it would not be recovered.  It was then sent to New Carrollton again. A lot of our IT functions are housed out there, and they have a recycling function out there where material is eventually recycled to an outside contractor.  And I have no idea what the outside contractor does with these materials.

***

Q             And, sir, do you know the identity of the outside contractor to which the hard drive was recycled?

A             I have been told that the contractor for this purpose was UNICOR, U-N-I-C-O-R.

The lawmakers continued in the letter: “It is clear…that senior leaders within the IRS knew that all information from Ms. Lerner’s hard drive was unrecoverable no later than mid-February 2014.  Despite this awareness, Commissioner Koskinen failed to mention any problems with Ms. Lerner’s e-mails during his March 26, 2014, testimony before the Committee.”

Read the full letter here.

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