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IRS official takes the Fifth in House contracting investigation

Jun. 26, 2013 - 06:00AM   |  
By JIM McELHATTON   |   Comments
IRS official Gregory Roseman evokes the Fifth Amendment during a House Oversight and Government Reform Committee hearing on IRS contracts with Strong Castle Inc.
IRS official Gregory Roseman evokes the Fifth Amendment during a House Oversight and Government Reform Committee hearing on IRS contracts with Strong Castle Inc. (Thomas Brown / Staff)

An IRS technology official at the center of a House investigation into whether he pushed for contract awards worth up to $500 million to a company owned by a friend pleaded the Fifth Amendment and refused to testify at a House hearing Wednesday.

The hearing came a day after a House Oversight and Government Reform Committee report said Greg Roseman, an IRS deputy director, may have influenced the IRS to award information technology contracts to Strong Castle Inc.

The same report said that the company had given the Small Business Administration misleading information so it could obtain set-aside contracts, and that its Veterans Affairs Department status as a service-disabled, veteran-owned company was based on a decades-old foot injury of its owner, Braulio Castillo.

Roseman’s decision marked the second time an IRS official cited the Fifth Amendement in deciding not to testify to the panel. Last month, Lois Lerner, head of the IRS tax exempt division, declined to answer questions about the IRS singling out for scrutiny tea party and other groups.

Appearing before the committee, Roseman declined to testify other than giving his title.

The House report called the relationship between Roseman and Castillo “cozy.”

“Text messages … show that Castillo and Roseman had a long-term friendship that extended well beyond a professional relationship,” the report said, adding that many of the messages were vulgar.

Investigators also found a February 2012 email from Roseman to Castillo in which Roseman provided the name of a supervisory contract specialist at the General Services Administration, where Roseman previously worked, who could help Castillo get a contract on GSA’s Schedule 70, a catalog of governmentwide contracts for information technology products and services. In the email, Roseman told Castillo, “I’ve talked to her and she will look into expediting.”

Castillo told the committee that neither he nor his company did anything wrong.

The committee report said the company, previously called Signet Computers, had little experience, but Castillo pushed back on that assertion, saying the firm had 15 years’ experience.

Still, Rep. Darrell Issa, R-Calif., chairman of the committee, said the company had little experience because employees under the previous owner from years ago were no longer around.

Beth Tucker, a deputy IRS commissioner, said the agency is in the process of severing its relationship with Strong Castle.

Issa said the IRS hadn’t indicated in recent days whether it would continue doing business with the company, but Tucker characterized new text messages uncovered in the House probe as a surprise to IRS officials.

She said Roseman was asked by supervisors if he had a personal relationship with Castillo and “he denied it.”

Meanwhile, Rep. Tammy Duckworth, D-Ill, who lost her legs and the use of her right arm as a helicopter pilot in Iraq in 2004, pressed Castillo on his 1984 injury, during his single year as a student at the U.S. Military Academy Preparatory School, and on his subsequent status as the owner of a service-disabled, veteran-owned firm.

The House investigative report found Castillo filed a claim with VA seeking compensation for a service-related disability 27 years after his prep school injury, but around the same time he purchased a government contracting company.

The report said Castillo first told committee investigators he injured his foot playing football in the fall of 1984, but then later he said it was an injury he got during a military school exercise, which he called orienteering. During his testimony Wednesday, Castillo said he got hurt playing football and then aggravated the injury weeks later while orienteering. Nonetheless, Castillo would later go on and play quarterback and linebacker in college, the report said.

He later told congressional investigators that his injury was debilitating and that he’d had three foot fusions. Had Castillo completed his year at the preparatory school without injury, he wouldn’t have been considered a veteran, but a VA official told House investigators that cadets injured at school become veterans due to service-connected disability, the report said.

Still, Duckworth was livid.

“So I’m sorry that twisting your ankle in high school has now come back to hurt you in such a painful way, if also opportune for you to gain this status for your business as you were trying to compete for contracts,” she told Castillo.

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