Former adviser to the President Austan Goolsbee was accused of looking into private tax records of White House critics. An IG investigation of the matter was completed two years ago but has never been released. Ten days ago, on Twitter, Goolsbee announced it was all a big mistake.

Austan Goolsbee is an economist who served on President Obama’s Council of Economic Advisers. He became involved in a potential scandal when his comments on a conference call appeared to demonstrate some inside knowledge of Koch industries tax structure. The Weekly Standard, which broke the story, quotes Goolsbee as saying “in this country we have partnerships, we have S corps, we have LLCs, we have a series of entities that do not pay corporate income tax. Some of which are really giant firms, you know Koch Industries is a multibillion dollar businesses…” Portions of the same comments were also reported in a Wall Street Journal story (pdf).

The day after the Weekly Standard story, an unnamed administration official responded with a letter sent to Ben Smith (who was then at Politico). The administration response claimed “No senior administration officials have any access to anyone’s tax returns–individual or business…We assume it came up from publicly available information such as the
Forbes magazine annual report listing Koch as one of the largest private
companies in the nation or the fact that a high fraction of the largest
companies within Koch Industries are listed on the Koch website as
LLCs, LPs or other frequent pass-through entities.”

This explanation did not satisfy the Koch brothers’ attorney who released a response saying “contrary to the administration official’s statement on what sources were
used by the administration, neither the Koch website nor Forbes’ list
of private companies has information regarding Koch’s tax filing
status.  This is confidential information.”

At this point six Senators led by Senator Grassley got involved. They sent a letter to Inspector General J. Russell George–recently seen at congressional hearings on another IRS scandal–asking him to investigate where Goolsbee migh have gleaned the information on the Koch brothers’ tax structure. The letter reads in part “the statement that Koch is a pass-through entity implies direct
knowledge of Koch’s legal and tax status, which would appear to be a
violation of section 6103.” The letter concludes with three questions for IG George, the last of which is “If violations of 6103 did not occur, what was the basis for the
statement regarding Koch’s legal and tax status and was the statement
appropriate?”

A new report published today by the Examiner reveals that the IG did investigate but its final report has never been released, even after FOIA requests. According to the Examiner an August 2011 email from a Treasury official claimed “the final report relative to the investigation of
Austan Goolsbee’s press conference remark is completed, has gone
through all the approval processes.” But neither the final report nor a summary of its findings was ever sent to any of the six Senators who requested the investigation.

The contents of the investigation has also been kept from the Koch brothers’ attorney. The same August 2011 email from Treasury indicates that the report should be “available through a Freedom of Information (FOIA) request.” The Koch brothers’ attorneys made the appropriate FOIA request in September 2011 and received an odd response refusing to admit such a report even existed.

But as pointed out by the Examiner, Goolsbee himself did offer an explanation just ten days ago. Prompted by a critical comment on Twitter from a conservative who goes by the handle “joe republic,” Goolsbee announced:

That link is to a story published by the St. Petersburg Times in December 2003. The story does broadly discuss the structure of corporations in Florida and does quote William Koch. However William Koch is not one of the two brothers usually referred to as “the Koch brothers.” That appellation is usually a reference to David and Charles Koch.

Recall that Goolsbee’s statement during the conference call was “Koch Industries is a multibillion dollar businesses…” But now Goolsbee is claiming his 2010 conference call statement was a reference to a seven year old story. Not only that, it was a reference made in error since the article in question only mentioned William Koch’s Oxbow Corp, not Koch industries as a whole. It’s the idiot defense all over again.

Given the fact that the IRS leaked tax information to liberal news outlet ProPublica, it is no longer unreasonable to worry something might have leaked to the White House as well. The White House, of course, denies this as does Goolsbee, but the administration also denied targeting Tea Party groups until the IG report was about to be released. Then the truth came out.

It is time for Treasury or the IG to release the investigation into Austan Goolsbee, lest their refusal to do so suggest they have something else to hide.