Lavish Hotel Costs, Exorbitant Speaker Fees, and Start Trek Spook Demonstrate Stupidity and Insensitivity to American Values

By now you have heard that the IRS used the power of its offices to harass conservatives and Tea Partiers in hopes of forcing them to stay out of the 2012 election cycle. However, that may not be their most egregious offense against the American people and the values we hold. Now we find out the IRS was treating themselves to millions of dollars in fancy hotel stays and related public-funds squandering activities.

A new report by J. Russell George, the Inspector General for the Treasury Department, informs us that the IRS held 225 employee conferences at luxury hotels since 2010 and some of the $49 million went to expensive hotel rooms that the IRS paid full price to reserve. The hotel rooms were charged at full price to the U.S. government even though the IRS should have been contacting the hotels for lower, package rates as required by agency guidelines – a procedure followed by most business people in America today. We understand the value of responsibility and accountability. The IRS does not.

The IRS official who signed off on a $4.1 million California conference featuring parody videos, tax­payer-paid gifts and upgrades to lavish hotel suites apologized and said the agency used poor judgment. “In hindsight, many of the expenses that were incurred should have been more closely scrutinized or not have been incurred at all,” Faris Fink, commissioner of the tax-collection agency’s small business and self-employed division, told a congressional committee.

Fink, a top deputy in the department that flew 2,600 managers to Anaheim for three days in 2010, described a culture that did not blink at what the Treasury Department’s inspector general called excessive spending. But the 32-year employee — who was promoted the following year — said the IRS is “now in a very different environment.”

“We would not hold this same type of meeting today,” Fink told the House Committee on Oversight and Government Reform. That’s encouraging but doesn’t answer the question what type of meeting would be held today and whether it would abuse the position of trust we place in all government agencies, especially the IRS.

The committee is investigating $49 million in conference spending by the agency from fiscal 2010 to 2012, with a particular focus on Anaheim. Lawmakers disclosed an e-mail showing that two top managers placed on administrative leave this week took $1,162 in free food from an outside event planner, and took pains to hide the gift.

“It is to be kept confidential,” Jill Mirich, an employee of the Anaheim Hilton, told her colleagues, referring to an after-hours party the managers held for 18 employees in their private suites.

“The beer and wine will be paid by a credit card given to you at the end of the function by Mr. Donald Toda or Fred Schindler,” Mirich wrote on Aug. 21, 2010. “Do not post to room it can’t be shown as room charge.” The last sentence is underlined for emphasis.

Acting IRS Commissioner Danny Werfel said Schindler, director of implementation oversight for the 2010 health-care reform law for the IRS, and Toda, a California-based manager in the small business and self-employed division, violated government ethics rules by accepting the food and other items. He said he is moving to fire them.

The report by the Inspector says the IRS spent tens of thousands of dollars for gifts and for 15 speakers, one of whom cost taxpayers $27,500 plus $2,500 for a first-class plane ticket.

When asked by committee Chairman Darrell Issa (R-Calif..), “What were you thinking?” when Fink stayed in a luxury suite and starred as Spock in a “slick Star Trek” video about a planet with ineffective auditing practices, Fink called the spoof “an attempt, in a well-intentioned way, to use humor to open the conference.” Here it is. You make the call. Personally, I do not think the new crew of the Enterprise we saw in the movie Star Trek into Darkness has anything to worry about. 

“The fact of the matter is that they’re embarrassing. . . . They’re embarrassing, and I regret the fact that they were made,” he said of that video and another featuring IRS managers in a line dance that closed the training event. For helping organize the conference, Fink and five other managers took home a total of $6,000 in bonuses.

The IRS needs to be monitored by an independent party and undergo a complete operational audit done by independent auditors, not the Government Accountability Office. There is no reason to trust the GAO’s competence any more than that of the IRS.

Blog posted by Steven Mintz, aka Ethics Sage, on June 20, 2013