IRS official apologizes for lavish $4M conference

Says agency followed government rules

6/6/2013

WASHINGTON — An Internal Revenue Service official whose division staged a lavish $4.1 million training conference and who starred as Mr. Spock in a “Star Trek” parody shown at the 2010 California gathering conceded to Congress today that taxpayer dollars were wasted in the episode.

“We’re now in a very different environment” with new IRS spending curbs, Faris Fink, who was a top deputy in the agency’s small business division at the time, told the House Oversight and Government Reform Committee. Fink, who now heads that 24,000-employee division, said he believes many of the expenditures “should have been more closely scrutinized or not incurred at all and were not the best use of taxpayer dollars.”

The mea culpa by Fink was echoed by new acting IRS chief Danny Werfel as the embattled agency struggled to contain public and congressional ire over its targeting of conservative groups seeking tax-exempt status and its spending of $49 million on 225 employee conferences over the past three years.

Werfel called the 2010 gathering in Anaheim, Calif., “an unfortunate vestige from a prior era” and said IRS spending on travel and training has fallen 80 percent since then.

“Our work in this area is one part of a much larger effort to chart a path forward in the IRS. This is obviously a very challenging time for the agency,” Werfel said.

Werfel, who testified after Fink had left the committee room, became acting commissioner last month after President Barack Obama forced Steven Miller out of the job.

Werfel appeared a day after putting two IRS officials on administrative leave for accepting free food at a party in a private suite at the Anaheim conference.

Fink insisted that his agency followed federal guidelines in planning the gathering for 2,600 IRS workers in Anaheim. He said the conference was justified because at the time, around 30 percent of its managers were new and the agency was facing increased security threats.

Sitting at the same witness table was J. Russell George, the Treasury inspector general whose scathing reports on the IRS’ targeting of conservatives and conference spending have rocked the agency. George said he uncovered no criminal violations involving the conference.

Those comments didn’t shield Fink from a three-hour tongue-lashing from the panel.

Committee Chairman Darrell Issa, R-Calif., called the spending for the California conference “at best maliciously self-indulgent.”

Top panel Democrat Elijah Cummings of Maryland said he viewed the “Star Trek” video at 3 a.m. today and said, “I tried to get to the redeeming value. Can’t get there.” And Rep. Carolyn Maloney, D-N.Y., called the video “an insult to the memory of ‘Star Trek.’”

Fink sat stoically as TV screens in the hearing room showed excerpts of that nearly six-minute video, in which he and other IRS employees wore “Star Trek” uniforms on a set resembling the bridge of the series’ Starship Enterprise and Fink sported pointy ears and a black wig.

“It’s embarrassing and I apologize,” he told the lawmakers. He called the video “a well-intentioned way to use humor to open the conference.”

George’s report concluded that rather than saving money by negotiating lower room rates with the three Anaheim hotels, the IRS paid a standard government rate of $135 per room but accepted perks in return.

Asked why the IRS didn’t negotiate for lower room rates, Fink said, “I was not aware we had the ability to do that.”

The perks included some tickets to Los Angeles Angels baseball games and free upgrades for some executives to fancy suites that normally cost up to $3,500 per night and included wet bars and billiard tables. The report said 132 IRS employees got room upgrades.

The report found the IRS used two private event planners whose commissions were based on the hotel bills and therefore had no incentive to save money; spent $50,000 on the “Star Trek” video and another showing IRS employees line dancing; and paid $135,000 to 15 outside speakers.

It also spent $35,800 for IRS workers to make three planning trips to the conference site; paid $30,000 for 45 IRS workers in local offices to stay in hotels and collect per diem expenses from the government; and spent more than $64,000 for gifts including bags and journals with the conference logo.

The conference included two dozen workshops, including one led by IRS officials entitled, “Political Savvy: How Not to Shoot Yourself in the Foot.”

Fink left the hearing with companions and ignored reporters’ questions as the group walked briskly away from the hearing room.

Meanwhile, Werfel said he would encourage another IRS official, Lois Lerner, to appear before the Oversight committee as it investigates the agency’s screening for conservative groups from 2010 to 2012.

Lerner, who has headed the IRS unit that targeted tea party and other conservative groups seeking tax exemptions for close scrutiny, cited her constitutional right against self-incrimination when she declined to answer questions from the committee last month, though she also proclaimed her innocence. A day later, she was placed on paid administrative leave.

After being repeatedly pressed by Rep. Jim Jordan, R-Ohio, Werfel said, “I encourage anyone, including Miss Lerner, to come in front of this committee, to cooperate with the Justice Department, to cooperate with the inspector general.”

The IRS was screening the groups’ applications because agents were trying to determine their level of political activity. IRS regulations say tax-exempt social welfare organizations can engage in some political activity but the activity cannot be their primary mission. It is up to the IRS to make that determination.