WASHINGTON, DC - Ways and Means Committee Ranking Member Sander Levin (D-MI) today released the full transcript of a Committee deposition of a former Internal Revenue Service (IRS) employee regarding cost-sharing reduction payments in the Affordable Care Act (ACA) following a vote by the Committee to release the transcript. The deposition was unprecedented and covered the same subject of an ongoing House Republican lawsuit against the Administration.
What the Republicans had hoped to find in their deposition was a manipulative political process relating to the funding of the cost-sharing reduction payments. But instead what they found was that David Fisher believed Commissioner Koskinen “gave me plenty of time to air my concerns" and “made the choice that I bet you 99 out of 100 people would have made." Mr. Fisher said that there was “free and open discussion, as Commissioner Koskinen really always does in his management approach," adding that Commissioner Koskinen “is not only a phenomenal leader but one of the best managers we've ever had in government."
House Republicans have had more than 60 votes on the House Floor to repeal or undermine the ACA. This so-called investigation on the cost-sharing program continues House Republicans’ partisan attacks on the ACA, which has provided 20 million Americans with affordable health insurance and offered millions more protections against discrimination for pre-existing conditions, age, and gender.
Read the full transcript here.
Highlights from the Ways and Means Committee deposition of former IRS employee David Fisher:
Mr. Fisher: So I'm here under subpoena. It would have been far preferable to me for the executive branch and legislative branch to resolve this dispute independently and not sort of put me in the middle of being the arbiter of what to say or what questions to answer and what not to answer. [Pages 14-15]
**********
Mr. McDermott asked Mr. Fisher about the number of meetings that he’s been in where there was a disagreement within the Department about how a particular issue should be resolved or administered.
The Witness. They're not that unusual. This was perhaps a more ‑‑ probably a stronger disagreement than is typical, but disagreements certainly occur all the time in the course of, you know, meetings where all sides get aired on their perspectives.
I'm trying to think through the case at the IRS with Commissioner Koskinen. You know, oftentimes, it's certainly desirable to resolve those disputes before you get to the agency head, if possible, amongst other senior colleagues. But I think part of the transparency drive that the Commissioner was trying to institute with an enterprise risk management program was to make sure that if there was disagreement or risks that had been identified that were not being resolved and he needed to be part of the resolution, then he wanted them brought to him. That's what he felt was his responsibility as the agency head. [Pages 67-68]
**********
Mr. Fisher was asked by Ms. Neely about a meeting he attended with Commissioner Koskinen during the week of January 13th.
Q Do you recall ‑‑ or could you explain what happened in the course of that meeting?
A So the Commissioner gathered together all of the people who had attended the meeting at OMB. There were some additional attendees that would typically attend a senior‑leader meeting with the Commissioner ‑‑ as I recall, his chief of staff, his deputy chief of staff, the Deputy Commissioner for Services and Enforcement ‑‑
Q Who was that?
A John Dalrymple was there. There may have been a couple of others. But it was sort of the typical senior folks that you would expect to be with the Commissioner when a meeting of some import was taking place.
And it was a free and open discussion, as Commissioner Koskinen really always does in his management approach. He is not only a phenomenal leader but one of the best managers we've ever had in government. And his advocacy for transparency of opinions was, frankly, a major support component of our enterprise risk management program. And he not only, you know, talked the talk, he walked the walk. And his management style was to make sure, if a decision needed to be made and he needed to be in the loop, we would hold those meetings, and we always have a free and open exchange.
In this case, there were really just a couple of perspectives. He was informed of ‑‑ well, two things. There was a memo that was circulated at that meeting that you shared with me last week in the transcribed interview that showed ‑‑ I believe it was a memo from Mark Mazur to Secretary Lew that Secretary Lew had signed and initialed "Approve" that was more of the directive kind of note that Treasury had concluded that ‑‑ now it was Treasury's counsel ‑‑ had concluded that these payments were appropriate. I recall that memo. We discussed that briefly. And that was provided ‑‑ I don't remember who brought that memo. It was either through the Chief of Staff or Chief Counsel ‑‑ was brought to the group, and the Commissioner became aware of that.
He had also been informed that the Justice Department had seen the memo and had been approving of it, obviously was aware of OMB's position. This is, again, mostly through the General Counsel or Chief Counsel's communication to the Commissioner.
And so there was a very strong consensus of the people who had been in the loop on this at, you know, fairly senior positions in government that these payments were appropriate.
I was in the dissent. I think I was wearing two hats in that perspective. As the Chief Risk Officer, I felt there was some risk to making these payments with respect to the appropriations law and the Antideficiency Act, recognizing that there were other opinions on the other side. I expressed that I felt that the memo that we read was not compelling to me to counter my concerns about the Appropriations Act issues related to the payment, as I read the law over and over again to try to convince myself, you know, what's the appropriate reading of this, recognizing that many others have now come to a different conclusion.
The Commissioner gave me plenty of time to air my concerns. And, in the end, he made the decision that I actually would expect him to make. It was a decision that I disagreed with. But when a senior leader, an agency head, has brought his senior advisers together, he is given a lot of information ‑‑ there was nothing held back. He had, I think, a presentation that did appear to him to be compelling, that these payments out of the permanent appropriation were appropriate, again, with multiple components within the executive branch concurring that that's the appropriate thing to do, including the memo that we had in hand from the leadership at the Treasury Department.
He listened to my concerns and thanked me, actually, in the meeting for expressing those concerns but felt the appropriate course was to go forward and make the payments, you know, per the strong majority of folks who believed that they were appropriate. [Pages 37-40]
**********
Mr. Roskam asked Mr. Fisher if he recalls other people raising objections in the meeting with Commissioner Koskinen.
The Witness. I would say Mr. Kane and/or Mr. Canady ‑‑ so Mr. Canady being the CFO, Mr. Kane being the Deputy CFO ‑‑ I would say voiced some concern; I wouldn't say "objections." My sense was that they were not necessarily completely convinced that, from an appropriations standpoint and an accounting standpoint, this was totally authorized, but they were not objections. Mine was more the stronger dissent.
Mr. Roskam. Were there voices that were stronger than yours or yours was the strongest in dissent?
The Witness. On the dissent side, I would say mine was the strongest. [Pages 43-45]
**********
Ms. Neely asked Mr. Fisher about when Mr. Kane, the Deputy Chief Financial Officer at the IRS, raised concerns related to sequestration and the funding of the CSR subsidies.
Q So, Mr. Fisher, turning back to the timeline, in that late fall/December time period of 2013, when Mr. Kane first came to you, he raised sequester concerns. Had he also identified this appropriation concern that you're talking about now, or did that come up in the course of those conversations at some other point?
A I don't recall that being expressed at the outset. Because, again, at the outset, the question was sequester.
Q Right.
A Which is complicated enough from an accounting standpoint. Especially with all the different kinds of accounts and outlays that the IRS has, getting that right, you know, takes some real thought and effort and sometimes even parsing of language just to make sure what accounts are affected or not. Because, in general, most accounts were affected, but there were exceptions, and the IRS had some of those exceptions. And so this was the natural course of accountants doing what they are supposed to do.
That was initially all we really focused on. As it became clearer that that was not going to be an expected issue because of the migration ‑‑ well, not migration ‑‑ the path to use the permanent appropriation, which is not subject to sequester, the sequester issue sort of went off the table. And that's when this subsequent question of whether or not an appropriation has been made to use the permanent account specific to cost‑sharing reduction payments ‑‑ that was the question.
And there was concern raised from the accounting folks. I raised concern from a risk standpoint. And then we engaged with the broader community at OMB. We got guidance from Treasury, Justice Department involved, IRS's counsel that ultimately concluded that the payments were appropriate.
And, as I said previously, given the strong consensus to support that perspective that was presented to the Commissioner, I was certainly not surprised that he supported that with this level of senior advice given to him as, you know, what should we go do. He made the choice that I bet you 99 out of 100 people would have made. It's just one that I happen to disagree with in terms of my understanding of both appropriation law and my reading of the statute.
Q When did ‑‑
A And I expressed that. And, again, I was not in the final determination, and my position did not carry the final say, and I was okay with that. [Pages 56-58]
**********
The full transcript can be found here.
