Politics & Government

House Republicans hounded him, but IRS commissioner set to leave on his own terms

IRS Commissioner John Koskinen testifies on Capitol Hill in Washington, Thursday, April 6, 2017, before the Senate Finance Committee.
IRS Commissioner John Koskinen testifies on Capitol Hill in Washington, Thursday, April 6, 2017, before the Senate Finance Committee. AP

As he approaches his third — and, perhaps, final — retirement, John Koskinen has a list of things to do: reading, traveling and cheering on his beloved Duke Blue Devils.

But even with just weeks left in his tumultuous term as IRS commissioner, the 78-year-old Koskinen can’t escape the withering criticism from Republicans that has come to define his last chapter of government service.

“Yes, I’d like to see Koskinen removed,” said Rep. Louie Gohmert, a Texas Republican and member of the conservative House Freedom Caucus. “It’s a stain on the reputation of Congress that we allow people to lie to us and obfuscate over and over and then we still just allow them to keep their position. It’s just not appropriate.”

Koskinen’s term ends Nov. 12. President Donald Trump has yet to announce a replacement.

The Duke alumnus made a career — and a fortune — as a corporate turnaround specialist, in both the private and public sectors. He sold Trump, then a 29-year-old aspiring real estate developer, a hotel in New York City as part of the managed bankruptcy of the Penn Central Transportation railroad in the 1970s. He clerked for a district judge, worked for a mayor and a senator and for the Office of Management and Budget. He was tasked with preparing the United States, and then the world, for Y2K and later with running Freddie Mac after the government took over the mortgage finance company. In between, he served as deputy mayor and city administrator for Washington, D.C. He donated heavily to Duke over the years.

In 2013, President Barack Obama tabbed Koskinen for another gig: reforming the embattled IRS, which was accused of unfairly scrutinizing conservative nonprofit groups. It took him 15 seconds to ditch retirement for a second time and accept the post, he said in an interview.

“I sign up for things where people say, ‘Why would you do that?’ I’ve done several of those. For me, what I’m really not interested in doing is something that’s safe. I’ve always admired people who take something that isn’t under threat or attack and run it effectively. It’s not who I am,” said Koskinen, who is worth between $7 million and $27 million, according to federal disclosure forms. He has donated heavily to Duke.

Despite four years of budget cuts, long contentious televised congressional hearings and threats of impeachment, Koskinen said he doesn’t regret taking the post, which he cheerily described as “the most satisfying” of his career because of its impact on funding the government and touching more American taxpayers’ lives than other agencies.

“I would do it in a heartbeat again,” said Koskinen, a grandfather of four.

IRS Commissioner John Koskinen talks to reporters on Capitol Hill in Washington, Wednesday, July 26, 2017 following his testimony before the Senate Appropriations subcommittee hearing on the fiscal 2018 federal budget. Manuel Balce Ceneta AP

Koskinen touted the improvements the IRS has made in customer service, fighting identity theft, making inroads against organized crime and going after overseas accounts all while dealing with budget constraints during his tenure.

“I always tell people there is no political way to run tax administration. Run a filing season effectively, respond to taxpayers as much as we can; the goals of the IRS and tax administration haven’t changed even with the change of administration and they didn’t change with the previous change of administration,” said Koskinen, a Democratic donor who stopped making political contributions when he was appointed to the position.

Koskinen donated to a long list of Democratic candidates and the party from 1990 through 2013, including former Presidents Barack Obama and Bill Clinton, former presidential nominees Hillary Clinton, John Kerry and Al Gore, Rep. David Price of Chapel Hill and Sen. Mark Warner of Virginia.

Republican critics, however, contend the IRS was being run in a political manner before Koskinen arrived and that he helped to cover up matters related to groups being singled out based on their names — such as ones that included “tea party” or “patriots” — to examine whether they should lose their tax-exempt status because of political activity. Republicans accused him of not being fully truthful with Congress about missing emails or the extent of the problem.

In 2016, House members brought a motion to force a vote on impeaching Koskinen, which would have been the first impeachment of an appointed executive branch official since 1876. The impeachment resolution said Koskinen failed to prevent the destruction of evidence, made false statements to Congress and failed to act “with competence and forthrightness in overseeing the investigation into Internal Revenue Service targeting of Americans because of their political affiliations.”

House leadership buried the issue in committee.

Another failed measure tried to cut his salary to $0. His salary is about $165,000. Some called for Trump to fire Koskinen, but the new president — who in 2014 called Koskinen “a very good man” and “a friend of mine” — did not act. Even his staunchest critics in Congress concede Koskinen will finish out his final weeks.

“It’s a disappointment that we didn’t address this thing in such a way that we can say to the American people, ‘This is never going to happen again.’ I think the message is, in the end, it’s not reformed and it stands there as a threat to the freedom of the American people under a different president,” said Rep. Steve King, an Iowa Republican and one of the most conservative members of the House.

Those who know Koskinen well in Durham have a much different impression of him than the one advanced in congressional hearings or presented by some Republican House members.

“John Koskinen is a prince. He’s one of the most dedicated public servants of the last 50 years, an extraordinary leader and somebody who cares passionately about the country and certainly about Duke University,” said Mike Schoenfeld, Duke’s vice president for public affairs and government relations. “He’s still a good friend and adviser and he has many, many fans and friends.”

Several agencies have cleared the IRS of criminality, Koskinen said. He said the IRS has implemented every recommendation from Congress and the inspector general’s office.

“All of them got mistreated the same way. The IRS, the Justice Department and the Senate Finance Committee found out this was mismanagement. As the Justice Department said: mismanagement is not a crime,” Koskinen said. “It was important for people to understand that we were going to do whatever we could to make sure we never had that problem again.”

A report by the Treasury Inspector General for Tax Administration released last week found that the IRS may have targeted left-leaning or liberal groups based on their names as well as those on the right when examining which groups deserved tax-exempt status.

“Just because there was another apple or two in the basket doesn’t mean they weren’t targeting conservatives,” King said.

Koskinen’s tenure will be remembered for those fights, though he hopes much less-heralded changes he implemented will outlast his time in office.

“I feel bad because, with the right support, John could’ve gotten the IRS up to modern customer service standards and done a lot to improve respect for government,” Anthony Williams, who as D.C.’s mayor hired Koskinen as deputy, told The Washington Post earlier this year.

More criticism

The change to a Republican administration and the end of Koskinen’s tenure has done little to halt the criticism.

The IRS signed a $7.5-million “no-bid” contract with Equifax to verify the identities of taxpayers and prevent fraud, sparking the latest controversy. Equifax recently admitted it had been hacked, exposing personal information of more than 145 million Americans. The IRS said Equifax had provided the services under a previous contract and is one of the only companies capable of providing the service.

It provided another line of criticism for Republicans — and even some Democrats.

“The government has done nothing to hold accountable the IRS officials who targeted us, and the IRS commissioner – a man who lied to Congress and covered up the targeting scandal – is so secure in his job that he just awarded a sole-source, no-bid contract for data security to a company that just a few weeks earlier announced it had failed to protect the credit data of 145 million Americans,” said Jenny Beth Martin, co-founder of the Tea Party Patriots, at a Wednesday press conference calling for Senate Republican leaders to resign.

Soon Koskinen, who served on the Duke Board of Trustees from 1985 to 1999 including a stint as chairman, endowed a scholarship to support female athletes at the university and is the namesake of the school’s soccer and lacrosse stadium, will be free from such sniping. He already has plans for his first weekend off: taking in two Duke basketball games and a football game in Durham.

“It’s a better weekend than some I’ve had,” he said.

Koskinen said his long career prepared him for the criticism, but he’s worried about the impact of the public spats over his job on the IRS, particularly its budget, and on others from the private sector who might want to serve in government.

“Am I going to get held up to public attack or do I have to sit through hearings where 30, 35 congressmen are all grumbling at me? You would hope that people would not think that’s what public service in our federal government is all about,” Koskinen said.

“It is a risk. Keep beating about the head and shoulders of federal employees which has gone on for a long time and you’re going to reap the rewards of that, and that is you will have very talented and good people who have an instinct to do public service, who are going to say ‘I don’t know if it’s worth it.’”

Brian Murphy: 202.383.6089; Twitter: @MurphinDC