If you've tried and failed to avoid taxes over the past decade or so, blame J. Russell George. President George W. Bush nominated him as the Treasury inspector general for tax administration in 2004, just six years after President Bill Clinton created the position. Every year, his 800-person agency generates hundreds of audits, saving the Treasury billions of dollars in taxes that might otherwise go uncollected.
One of those audits, issued last week, has become perhaps the Obama administration's biggest bogeyman: an accounting of the measures the IRS' tax-exempt and government entities division in Cincinnati took to filter the deluge of Tea Party–affiliated groups applying for tax exemptions. It's already toppled the head of that division and the IRS' acting commissioner, and congressional Republicans are howling for more blood.
But so far, George has testified that what the IRS did isn't strictly illegal—just "unusual." On Tuesday, he'll testify again, this time before the Senate Finance Committee, and what he says could affect just how much damage this tempest will do to Obama's second-term agenda. There's reason for the president to be hopeful: George has found plenty of government failings, but none of his findings appear to have been politically motivated. Or at least, the ones he's allowed to talk about.
"There's section of the code that limits tremendously the type of information we can convey," George told me Monday, speaking on the condition that he couldn't pre-empt Congress' questions about the Tea Party report. "I find it amusing when people say Mr. George is low key. I am low key, but it makes it sound like the organization isn't busy."
If George plays according to type, the GOP won't have reason to doubt him, since he's worked for Republicans his entire career.
George's conservative credentials start with Kansas Senator Bob Dole, for whom he interned in high school and worked all the way through college at Howard University. After graduating from Harvard Law School in 1988, George returned to his home borough of Queens to serve as a prosecutor. A couple years later, he was tapped by the first Bush administration as an assistant general counsel at the Office of Management and Budget, then handled policy at the Office of National Service. He followed that up with a few years at a corporate law firm back in New York, but returned to Washington for the last time in 1995 to run investigations for the House Subcommittee on Government Efficiency for moderate Long Beach Republican Steve Horn.
Under Horn, a pro-choice former California State University president who was endorsed by the Sierra Club, George dinged the Pentagon for overspending, drafted proposals for better tax collection, pushed agencies to prepare for Y2K, and probed the travel habits of Clinton's cabinet—but not for political reasons, he said. "We are not being unreasonable," George told The Washington Post in 1996. "This is not an election-year, get-the-Democrats effort." For his efforts, Horn won the Project on Government Oversight's first Good Government Award. When President George W. Bush appointed George inspector general of the Corporation for National and Community Service in 2002, Horn gave a floor speech in his honor.
George barely had time to find evidence of profligacy in Americorps, which the Corporation manages, before being pulled from his position to take the inspector general job at Treasury that had been vacant since the guy who first held the $170,000-per-year position went to oversee the U.S. Postal Service. At that time, when Congress was relatively simpatico with the White House, inspectors general became increasingly important, carrying out the oversight role that the ruling party isn't good at performing on itself. George's young office, known as TIGTA, is unique among inspectorates general in that it also has law enforcement authority to pursue violators. And it did: During the Bush administration, George found that the IRS had lost expensive equipment, exposed the loss of billions of dollars in payroll taxes annually, and chronicled failings in the software used by low-income taxpayers.
Firing inspector generals has been considered bad form ever since President Ronald Reagan canned them all in 1980, so President Barack Obama let George stay on in 2009. George kept on going, bringing to light $513 million in homebuyer tax credits that shouldn't have been paid out, the IRS' failure to serve people with hearing impairments, and $7 billion in child tax credits paid to foreign workers living in the country illegally. But often, George would cite congressionally imposed staff cuts as a reason for the IRS' flubs (his own agency had 1,100 staffers when it was formed, and has since lost several hundred, which he says has limited its ability to pursue as many investigations as it otherwise might). And he's also validated some of Obama's initiatives, like the bailout of Wall Street, finding that the firms paid back all the money they'd been loaned.
How does George decide what problems to look into? Many audits are specifically mandated, such as anything that threatens the safety or integrity of the IRS. Some are discretionary, undertaken after an assessment of the risk they pose to taxpayers. But as a White House appointee who's accountable to Congress, George is kept busy by legislators' errands, like the Senate Finance Committee's request for an opinion on whether an Obama official had improperly released information about Koch Industries in 2010. That's another one of those things he can't talk about. Even if he had issued a verdict, George told me, he's prohibited by statute from saying anything about a private company's finances.
The recent investigation of the IRS' Cincinnati office had been requested by Oversight Committee chairman Darrell Issa, so George apprised him of its progress months ago. But George's background suggests he isn't going to supply Issa with a smoking gun.