Obama's Counsel Told of IRS Audit Findings Weeks Ago

The White House's chief lawyer learned weeks ago that an audit of the Internal Revenue Service likely would show that agency employees inappropriately targeted conservative groups, a senior White House official said Sunday.

That disclosure has prompted a debate over whether the president should have been notified at that time.

In the week of April 22, the Office of the White House Counsel and its head, Kathryn Ruemmler, were told by Treasury Department attorneys that an inspector general's report was nearing completion, the White House official said. In that conversation, Ms. Ruemmler learned that "a small number of line IRS employees had improperly scrutinized certain…organizations by using words like 'tea party' and 'patriot,' " the official said.

President Barack Obama said last week he learned about the controversy at the same time as the public, on May 10, when an IRS official revealed it to a conference of lawyers. The president's statement drew criticism, focusing attention on his management style and whether he has kept himself sufficiently informed about the agencies under his authority.

Others, including veterans of previous scandals, said the counsel—whose role is to advise the president on all legal matters concerning his job and the White House—was right to avoid telling Mr. Obama about the audit's early findings. Doing so could have caused a new storm by creating the appearance of meddling in an independent investigation that hadn't yet concluded, former officials said.

The White House, which declined to make Ms. Ruemmler available for comment Sunday, wouldn't say whether she shared the information with anyone else in the senior administration staff.

The new detail doesn't help answer some fundamental questions about the IRS scandal, including how it began and who, if anyone, in the administration was aware of the severity of the inspector general's probe before last November's presidential election.

Instead, it focuses attention on the White House's handling of the matter, which has blown up into the kind of crisis that could persist.

When findings are so potentially damaging, the president should immediately be informed, said Lanny Davis, who served as a special counsel to President Bill Clinton.

Of the controversies dogging Mr. Obama, including the terrorist assault in Benghazi, Libya, and the Justice Department's seizure of phone records of Associated Press journalists, the IRS case "is the most nuclear issue of all," Mr. Davis said. It involves the "misuse of the IRS" and "anyone who knew about this a few weeks ago and didn't tell the president shouldn't be in the White House," Mr. Davis said.

On the Sunday political talk shows, the White House rejected suggestions that the president should have taken action before the inspector general's office released its report May 14, a few days after the probe's findings were disclosed in news accounts.

Dan Pfeiffer, a White House senior adviser, said on NBC that the matter "was handled in the exact appropriate way. As I said, we do not ever do anything to give the appearance of interference in an investigation. What would be an actual scandal would be if we somehow were involved [in such interference]..."

Treasury Secretary Jack Lew was notified in a March 2013 meeting with the Treasury inspector general for the IRS that an audit was "forthcoming," according to the Treasury Department. But at that meeting, the inspector general didn't provide details of his findings, the Treasury said.

Jack Quinn, who served as White House counsel under former President Bill Clinton, said Ms. Ruemmler's office acted correctly in not sharing the information directly with the president.

If she had instead gotten "involved and called people over to the White House for a full briefing to know all the details, you know what we'd be talking about now? We'd be talking about whether she had tried to interfere with the IG's investigation," Mr. Quinn said.

John Podesta, a former White House chief of staff under Mr. Clinton, said: "The worst thing is if you do anything that is perceived to be interfering with an independent investigation" especially if it isn't fully complete. "That gets you in such trouble your head spins."

Republicans are expected to zero in on the question of who in the Obama administration's senior ranks knew about the IRS's targeting of conservative groups, especially before the November election last year.

Republican lawmakers on House oversight committees are pressing the investigation, with more hearings set for this week.

"Exactly who in the administration knew what about the IRS targeting is one of the key outstanding questions," said Rep. Darrell Issa (R., Calif), chairman of a House oversight committee that plans to hold a hearing Wednesday on the matter, in an emailed statement.

In waiting so long to address wrongdoing and inform the public, President Obama and his administration seem more preoccupied with having deniability than quickly addressing serious wrongdoing," Mr. Issa added.

In his comments Sunday, Mr. Pfeiffer suggested that more personnel changes could come at the IRS, after last week's ouster of acting commissioner Steven Miller by the president. Mr. Pfeiffer also went on the offensive, saying that White House cooperation with GOP investigators has its limits and that Mr. Obama won't take part in "partisan fishing expeditions."

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