I.R.S. Request for More Terrorism Investigators Is Denied
The Bush administration has scuttled a plan to increase by 50 percent the number of criminal financial investigators working to disrupt the finances of Al Qaeda, Hamas and other terrorist organizations to save $12 million, a Congressional hearing was told on Tuesday.
The Internal Revenue Service had asked for 80 more criminal investigators beginning in October to join the 160 it has already assigned to penetrate the shadowy networks that terrorist groups use to finance plots like the Sept. 11 attacks and the recent train bombings in Madrid. But the Bush administration did not include them in the president’s proposed budget for the 2005 fiscal year.
The disclosure, to a House Ways and Means subcommittee, came near the end of a routine hearing into the I.R.S. budget after most of the audience, including reporters, had left the hearing room.
It comes as the White House is fighting to maintain its image as a vigorous and uncompromising foe of global terrorism in the face of questions about its commitment and competence raised by the administration’s former terrorism czar, Richard A. Clarke, and its first Treasury secretary, Paul H. O’Neill.
Representative Earl Pomeroy, a North Dakota Democrat whose question to a witness about one line on the last page of a routine report to Congress prompted the disclosure, said he was dumbfounded at the budget decision.
“The zeroing out of resources here made my jaw drop open,” Mr. Pomeroy said. “It just leaps out at you.”
“There are some very tough questions that have to be answered about why the decision was made to eliminate these positions because going after the financial underpinnings of terrorist activity is crucial to rooting terrorism out and defeating it,” Mr. Pomeroy said.
The White House would not comment directly on the reasons for striking the 80 positions the I.R.S. sought. Claire Buchan, the White House deputy spokeswoman, said that a proposed 16 percent increase in Treasury Department financing to fight both terrorism and financial crimes was enough. The I.R.S. is part of the Treasury Department.
“The president’s budget provides a very robust 16 percent increase that demonstrates his robust commitment” to disrupting terrorist financing, she said.
The proposal would increase such financing to $54.3 million in the 2005 fiscal year from $46.8 million in the current year.
Juan C. Zarate, the deputy assistant Treasury secretary for terrorist financing, said that “the I.R.S. certainly had a clear vision of how they wanted to allocate the funds, but there is a clear balance that needs to happen in the I.R.S., where they have to balance terrorist-financing investigations with other responsibilities, like drug trafficking and, perhaps most important, enforcement of the tax laws.”
“And,” he continued, “the administration has to keep its hand on the pulse of that balance.”
He said not having 80 more financial experts dedicated full time to pursuing terrorists’ funds and disrupting their networks did not mean that no additional I.R.S. agents would be assigned, just that those needed would be drawn from other assignments as needed to pursue terrorist-financing issues.
Normally the budget requests of agency heads like Mark W. Everson, the I.R.S. commissioner, are secret. His request is known only because Congress, since 1998, has required the I.R.S. to submit its budget proposals first to the I.R.S. Oversight Board, a bipartisan volunteer panel of seven financial, management and technology experts that Congress created to monitor the tax agency.
The board appeared before the House I.R.S. oversight subcommittee on Tuesday to make its case for an increase in the I.R.S. budget that is twice the 4.6 percent proposed by the Bush administration. The board said the Bush administration’s plan would result in further deterioration in tax enforcement and warned of a growing tide of tax cheating and attitudes that encourage cheating, especially among young adults.
Representative Amo Houghton, the New York Republican who is chairman of the subcommittee, gave 50 minutes to remarks and questions for Mr. Everson, who is widely thought to be under consideration for a senior post in the Department of Homeland Security.
When the time came for the Oversight Board’s presentation, Mr. Houghton said he would allot three minutes.
Mr. Houghton then turned his back to talk to two aides and looked down to read papers for about half of the four-minute presentation by Nancy Killefer, the international management consultant who is chairwoman of the Oversight Board.
The board’s disclosing that the Bush administration had rejected the request for added investigators drew a rebuke from a Republican lawmaker who was instrumental in creating the Oversight Board.
“I do think it’s a little dangerous” for the Oversight Board to be involved in such matters, said Representative Rob Portman, Republican of Ohio.
“We did not select you for your expertise on terrorism,” he added. “I am frankly disappointed the board made this recommendation.”
Mrs. Killefer, a senior executive with the McKinsey consulting firm, then explained that the proposal came from the I.R.S. and that the Oversight Board was saying only that it agreed with the agency and supported its proposal.
Mr. Pomeroy, the lone Democrat to appear at the hearing, said he wanted to know more about the proposal and the reasons it was rejected. “Do we have sufficient resources on this important task?” he asked after the hearing.
“Of course not. If we did we would have heard a lot more about successes in bringing down the global financial underpinnings of terrorism.”