Bob Woodward on IRS Scandal: 'Obviously Something Here''

"And for the President to take that position is very, very unusual and say there is not a smidgeon of evidence here."

Bob Woodward, one of the key figures in investigating Watergate, says there are a lot of unanswered questions in the IRS scandal worth looking into. When asked about the brewing scandal on Fox News Sunday, Woodward responded, "Well, there is obviously something here...And, you know, we should dig into it," arguing that the President's denial of even a "smidgeon of evidence" was "very, very unusual." 

The segment began with the controversy surrounding whether or not there should be an investigation at all, referring to Rep. Elijah Cummings' objections and the President's statement that there was not a smidgen of evidence that conservatives were targeted.

Host Chris Wallace turned to George Will and asked why he thought the scandal was so big.

Wallace: George, I was struck, a couple of days ago on our sister broadcast, Special Report, when you said there had been three great scandals over the last 40 years here in Washington: Watergate, Iran-Contra, and IRS. A couple of questions: One, why do you think this rises to that level, and why do you think the investigation has stalled?

Will: The investigation to take last first, has stalled because the Justice Department has already leaked its conclusion, which is that no one would be prosecuted. It rises to that level because the Internal Revenue Service is the most intrusive and potentially the most punitive institution of the federal government and has been thoroughly politicized. Let me give you five things we know that she’s done right now. She said the delay on approving conservative groups is caused by a serious uptick in applications. The inspector general of the IRS says that is just not true. She said the Tea Party group was very dangerous. In Texas and Kentucky and probably elsewhere, IRS employees have violated the Hatch Act by using federal resources for campaigning and obviously for Barack Obama.

Wallace: Can we — I just want to point out — because the office of Special Council came out this week with a report and they said, now, there weren’t vast cases, although in Dallas they apparently — they were wearing campaign buttons and there are screen saver that said Obama and stuff like that. But there was at least one case where if you called the helpline this person was in effect tell you when you should vote for Obama and not for the Republicans because they’ll keep you in this mess. On the IRS helpline. So, go ahead with you recitation, I’m sorry.

Will: Confidential taxpayer information of the organization, the National Organization for Marriage was leaked to a rival group. And finally, when Senator Schumer and Durbin and others were exerting the IRS to be more political in their application of views, she said with regard to Crossroads GPS, the most important conservative group, we are working on a denial of the application. Not expediting, not coming to a quick conclusion, but we are working on denial of it. That’s why this rises because as Bob Woodward remembers, the Watergate scandal was fundamentally in the words of John Dean using the machinery of the federal government to punish our enemies.

Wallace: All right, Mr. Woodward, you know something about scandals. And if that’s forgetting them, how serious is the IRS scandal and, you know, I think one of the key questions is, does this really begin and end with a midlevel bureaucrat who we never heard of a year ago named Lois Lerner?

Woodward: Well, there is obviously something here. And the question is does this committee know how to investigate? And they’re worried about this one person who has invoked her Fifth Amendment rights not to answer questions and you have congressmen on the committee going on and saying we have evidence she’s involved in criminal activity. I don’t think you should cross that line. The second thing is there’s always one person who’s not going to talk. And when you conduct an investigation like this, I have not gone into the details, you need to find people who will talk. And there are always people who will do this. And, you know, we should dig into it. There should be answers. It’s quite correct. And for the President to take that position is very, very unusual and say there is not a smidgeon of evidence here. I mean George has got a good list — I think, actually, there’s more. And there’s a question and you’re right, the IRS particularly this week as we know will file our tax returns has a big place in everyone’s life. And they have immense power. And the power of the federal government to come and say we’re auditing you or we’re going to do something to you, I mean it’s a ten ton truck coming at you. And it’s the sort of thing that the leadership and the White House should take a position. Look, we will not tolerate this.