New IRS chief Danny Werfel goes from White House budget office to center stage

McClatchy Washington BureauMay 27, 2013 

Obama IRS

Danny Werfel is seen at the White House in Washington, on Nov. 9, 2011, in this file photo.


— It’s a tall order straight from the president: Find anyone at the Internal Revenue Service who improperly targeted conservatives. Hold them responsible. Fix the system so it never happens again.

And you have 30 days. Report back then on your progress.

Daniel Werfel, who goes by Danny, might be used to it. He’s spent most of his career since earning a master’s in public policy from Duke University and a law degree from the University of North Carolina -Chapel Hill working for a Republican and a Democrat in the White House’s Office of Management and Budget.

“We are confident that he will hit the ground running,” Deputy Treasury Secretary Neal S. Wolin assured the House Committee on Oversight and Government Reform on Wednesday, Werfel’s first day on the job.

On Day 2, Werfel replaced Lois Lerner, the head of the IRS unit that decides on tax-exempt status.

The IRS scandal makes the agency a hot potato. But colleagues say Werfel has the work ethic, skills and integrity for the job.

And add a sense of humor. He keeps a photo of Heisman Trophy-winning Florida quarterback Danny Wuerffel in his office.

Werfel the career civil servant most recently was controller of the Office of Management and Budget. It’s a job similar to a chief financial officer in a business. All the federal agencies reported to him about spending.

He had a central role in instructing them how to cut spending across the board in the sequester. Before that, he helped manage President Barack Obama’s stimulus spending.

Kenneth Baer worked with Werfel at that time in the OMB. People of both parties like to make fun of federal bureaucrats, said Baer, now a managing director at The Harbour Group, a Washington public relations firm.

“But the truth is, by and large there’s a group of very senior managers who are 100 percent committed to good government, to delivering for the American people, to making sure every tax dollar is spent wisely in these very large organizations, and who just really give their all,” he said.

“And Danny is one of the best.”

Now Werfel is moving from a senior job in a White House office with about 500 people, where he spent most of his career, to manage the IRS with its 90,000 employees and a budget of more than $11 billion.

Baer entered the OMB when Obama started office. Werfel already was there in a senior position, having worked through the administration of President George W. Bush. The economy was in free-fall. Congress passed the economic recovery legislation, and Werfel had a key role in overseeing the stimulus spending.

“That’s why we hit ground running in January 2009. Danny was there already,” Baer said. “We could not have gotten that up and running without Danny and his ability to get his team to execute on that.”

Stephen McMillin, who was deputy director of OMB during the Bush administration, said Werfel was a nonpolitical career official who was “just no-nonsense, calm and understood his issues, which could be arcane at the controller’s office at OMB.”

At the end of the Bush administration, “we actually named him acting head of that part of the agency,” or acting controller, McMillin said, and then “he was so well-regarded by the incoming folks that they decided to name him to the political position” as the controller.

“It was the kind of thing that just pure competence and capability outweighed any political connections you’d expect when you talk about a political position that’s confirmed by the Senate,” he said.

As for the new job, “I wouldn’t wish it on my worst enemy, of course, considering the circumstances the IRS finds itself in,” McMillin said. “But I think he’s an excellent choice to have his hand on the tiller, to right things while they look for longer-term leadership.”

Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, met with Werfel on Thursday for the first time.

“If I was the president I would find the very best businessman I possibly could who’d be willing to take it (the IRS) over and have the authority to be able to straighten the mess out,” Hatch said in a statement. “I don’t know whether Werfel has that kind of dimension or not, but I hope he does.”

Werfel, 42, didn’t respond to a request for an interview. He earned his undergraduate degree in 1993 in industrial and labor relations from Cornell University and his joint degrees from Duke and UNC-Chapel Hill in 1997.

“He’s the hard-working kind of person who does what needs to be done,” said Donna Dyer, the director of career services at the Sanford School of Public Policy at Duke. “I’ve never heard anything negative about Danny.”

Dyer said she’s kept up with Werfel as part of the school’s outreach to alumni. Generally a few of the school’s students have summer internships at OMB.

Obama named Werfel as acting commissioner of the IRS in mid-May after firing acting Commissioner Steven Miller in a move to quell a growing scandal. The Treasury Department’s inspector general had confirmed what he called an inappropriate scrutiny of conservative groups that applied for tax-exempt status.

After Werfel’s appointment, Treasury Secretary Jacob Lew said he’d known him for more than 15 years.

“Danny has a strong record of raising his hand for – and excelling at – tough management assignments,” Lew said in a statement, adding, “I am confident that his self-evident integrity and outstanding management skills will make an immediate difference in helping to restore public confidence in the IRS."

U.S. Chief Information Officer Steven VanRoekel took over leading the management team at the White House’s Office of Management and Budget in Werfel’s absence.

“Danny’s tremendous management skills – his discipline and organization, coupled with his relentless focus on doing the right thing – has been a driving force leading the entire government through the sequester and many other challenges over the years,” VanRoekel said in response to a request for comment.

Werfel talked in 2007 about his own career during the Bush administration in an interview now online from the IBM Center for the Business of Government.

“I never would have guessed that I would have ended up in financial management particularly,” Werfel said at the time. He began at OMB’s Office of Information and Regulatory Affairs, reviewing regulations, and found a niche in civil rights regulations.

Then he moved to working as a lawyer in the Justice Department’s Office of Civil Rights for a couple years. But he said he “realized that my home and my heart was at OMB,” and he went back.

“Every time I worked on a management issue, I like to say that I was throwing right-handed because it seemed to come naturally to me and (was) something I could get very passionate about.”

Kevin G. Hall of the Washington Bureau contributed.

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