IRS official: Lavish 2010 meeting "not the best use of taxpayer dollars"

Updated: 1:47 p.m. ET

Under congressional scrutiny for $50 million worth of spending for a series of lavish training conferences, IRS official Faris Fink on Thursday expressed regret over "many of the expenses that were incurred" during a particularly high-cost conference in 2010, and conceded that the expenditures were "not the best use of taxpayer dollars."

"In hindsight, many of the expenses that were incurred... should have been more closely scrutinized or not incurred at all, and were not the best use of taxpayer dollars," Fink, the IRS Small Business and Self-Employed Division commissioner, told members of the House Oversight Committee at a hearing examining the expenditures. "We would not hold this same type of meeting today."

Earlier this week, the Treasury Inspector General (IG) released a report detailing $50 million worth of IRS expenditures on a series of lavish conferences between 2010 and 2012, piling yet more scrutiny -- and criticism -- onto the recently embattled agency.

According to the report, the IRS spent $4.1 million on a single conference in 2010, paying high prices to book speakers, spending heavily on perks for attendees, and declining to follow the government practice of negotiating lower room rates when booking hotels for the conference. The IRS also used private event planners to arrange the conference, which added more than $100,000 in commission fees. Finally, the IRS spent thousands of dollars to create two videos -- one a "Star Trek" parody in which Fink played the Mr. Spock character, one a dance rehearsal -- that were shown at the conference but appear to suggest little in the way of training value.

At the oversight hearing on Thursday, Rep. Elijah Cummings, D-Md., expressed his outrage over the videos -- the value of which he said he'd tried to understand by watching them over and over again at 3 a.m. -- and the general waste on conference spending.

"I swear to God, I have looked at that video over and over again and I swear I do not see the redeeming value," he said. "The money that was spent on that - that's my money." Referencing hardworking folks in his neighborhood who struggle to get by, he added, "the lady up the street who got the early bus this morning [to get to a low-paying job] - that's her money... The gentleman up the street from me who makes $45,000 hauling trash - that's their money. And so it was wasted."

Asked to explain the videos, Fink said they were "well-intentioned" attempts to use humorous videos to open and close the conference.

"Frankly, they were not appropriate," he said. "The fact of the matter is, it's embarrassing, and I apologize... I regret the fact that they were made."

Rep. Darrell Issa, R-Calif., the chair of the House oversight committee, stressed that "professional education is critical and the IRS more than any other organization needs to be well trained" -- but that IRS employees were denied those opportunities in the name of wasteful, "maliciously self-indulgent" spending.

"For the tens of thousands of workers who could have received great training... they were cheated out of additional education and meaningful training by this waste," he argued.

The IG report offered a series of recommendations for the IRS to amend its spending practices, and says the IRS has agreed to do so. Among those recommendations are that the IRS track its conference costs and verify that they have done so, that IRS employees plan conferences, that conference attendance is tracked, that guidelines are established for planning these conferences, and more. In a statement, the Treasury Department also points out various measures the agency has taken to reduce its conference spending, including the creation of the Accountable Government Initiative and the Campaign to Cut Waste, both of which "prioritize cost savings and the prudent use of taxpayer dollars."

Acting IRS commissioner Daniel Werfel stressed in an afternoon panel that "sweeping new spending restrictions" have been put in place since the 2010 meeting, and that "costs related to large meetings dropped 80 percent" between the 2010 and 2012 fiscal years. He also noted that two IRS officials tied to inappropriate spending at the 2010 conference have been placed on administrative leave.

"We will move to correct these problems quickly and in a robust manner," Werfel said. "These kinds of expenses are no longer permitted and such a conference would not take place today."

Potentially excessive spending for IRS conferences is hardly the end of the agency's problems these days: In recent weeks, it has come under fire for having targeted for higher scrutiny conservative groups applying for tax-exempt status; various IRS officials have been specifically questioned on their knowledge of the practice and why they did not tell Congress about it until directly asked.

Comments