• With: Rep. Darrell Issa, R-Calif.

    This is a rush transcript from "Your World," August 14, 2013. This copy may not be in its final form and may be updated.

    (BEGIN VIDEO CLIP)

    PRESIDENT BARACK OBAMA: It's inexcusable. And Americans are right to be angry about it. And I'm angry about it. I will not tolerate this kind of behavior in any agency, but especially in the IRS. We're going to hold the responsible parties accountable.

    (END VIDEO CLIP)

    NEIL CAVUTO, HOST: Well, remember that? We usually don't alert ancient press conferences, but we wanted to replay that and alert that to make the point that what's happened since that, because it's been three months since that, and there's no alert, no updates, no results of said investigation.

    To a man trying to change that, the House Oversight Committee chairman, Republican Congressman Darrell Issa.

    Congressman, if anything has changed, it's the fact that now this and a host of other scandals have been reduced to being phony. What do you think of that?

    REP. DARRELL ISSA, R-CALIF., OVERSIGHT AND GOVERNMENT REFORM COMMITTEE CHAIRMAN: When the president says phony scandals, he never names a single one, so I'm assuming he doesn't mean Benghazi, he doesn't mean Fast and Furious and he certainly doesn't mean the IRS, where Lois Lerner has taken the Fifth, and we continue to see documents showing that this was not an isolated incident in Cincinnati, but rather an orchestrated group, large group of over 200 organizations that were never given a yes or a no on their applications, which left them really incapable of doing what they were formed for.

    CAVUTO: What did Lois Lerner know? Now we're getting wind of the fact she was, maybe still is using her private e-mail to still conduct business, even though she's on paid leave.

    It gets really hairy. And methinks -- and I'm no lawyer -- that maybe it's some sort of an attempt on her part or maybe your committee's part to sort of work out an agreement where she can speak. Where does that stand?

    ISSA: Well, the committee has decided based on counsel's advice and looking at case law, that she didn't properly take the Fifth, that in fact she testified as to a number of questions we had. We expect eventually to have her back.

    But in the meantime, we have been looking into the people that she interfaced with and finding she was to a great extent a hub, a hub of other agencies, a hub that corresponded downstream to both Cincinnati and lesser individuals in Washington, but also upstream.

    And I think the fact that this goes to the office of the chief counsel, a political appointee, that is beginning to have us understand how critical she and why she might in fact want to feign innocence, but not answer questions.

    CAVUTO: Here's what I don't know. Maybe you can clarify a couple of things since you and I last chatted. There's talk that, well, the mainstream media is sort of dropping this story because it's -- we now know liberal groups that were targeted.

    I tried to the best of my ability, Congressman, to get some of these liberal groups on to talk about it, because normally if you have been targeted by the IRS, you're itching to talk about it. Well, I couldn't get them on. Now I have got all these conservatives groups that were targeting who were just fuming, but I figure that if you're targeted by the government, you're angry and you don't like the IRS picking on you and you want to shout it out. And they're not. I'm wondering if that was made up.

    ISSA: Well, it was to a great extent made up.

    I think here's the important thing. You can hear a lot of things in Washington. The question is who will put out real fact and cite real specifics? In our case, as Chairman Camp of the Ways and Means Committee and I looked into it, we did find that a number of progressive groups came up in the search, but they were all, as far as we can tell, granted a yes or a no, which means they either got their approval or they had the right to appeal or change what they were proposing doing so it would comply with the law.

    CAVUTO: And they got it more quickly. Wasn't the key issue too, sir, that they got it more quickly, that a lot of conservative groups were left stewing for quite some time, to this day, in fact, but not them?

    ISSA: Exactly.

    We have groups that as of today still haven't received an answer. They're over three years, which -- and they were asked inappropriate questions. I think, Neil, being asked four your donor list, being asked question after question related to political activities when the law is clear, they have every right to do political activities, and you have every right to keep your donors list, if you're a 501(c)(4) private.

    And particularly when you consider they keep calling these non -- or tax-exempt organizations. They don't pay tax on the gifts they receive, but the individuals who give money do not get a tax deduction. And that's important, because this is a category that is not a charity for the most part --

    CAVUTO: Right.

    ISSA: -- 501(c)(4)s were targeted because they wanted to do what they're allowed to do, which is to be advocacy groups and education groups.

    (CROSSTALK)

    CAVUTO: And you're right. The individuals therein are individuals, American citizens and they pay taxes.

    Let me ask you finally about where the administration is going with its own investigation. The argument was that it was going to get to the bottom of what happened here. The targeted groups here, whether it was out of Cincinnati, whether it was Washington, whether it involved Lois Lerner, yadda, yadda, yadda, and then I'm hearing the FBI director came up. He couldn't even name the investigator, couldn't cite its progress.

    And then all the groups that were targeted don't remember a phone call or an inquiry from said investigation, which raises my doubts again as to whether an investigation is even going on.

    ISSA: The only investigation that seems to be going on is the administration, even when we don't ask for documents directly related to progressive groups, gives them to us.

    They drop the keywords we wanted searched, add keywords that would give them potentially -- quote -- "progressive groups" and then send us that information.

    Here's the problem, Neil. This is a real scandal. It has nothing to do, in my opinion, with the president, but it's a real scandal that happened under his watch. And it's the best example where the president said he wanted to get to the bottom of it. And, clearly, he's not doing it.

    (CROSSTALK)

    CAVUTO: I'm sorry, sir, so, unequivocally, you're saying it's not involving the president? So, those who were kind of thinking that it led to him, you don't think it has or does?

    (CROSSTALK)

    ISSA: One of the challenges of my committee is not to overstate what when know.

    CAVUTO: Got you.

    ISSA: We know it goes to the chief counsel's office.

    CAVUTO: All right.

    ISSA: We continue following the facts.

    The terrifying thing is, even when it doesn't appear to go to the president, it seems impossible to get him to carry out his promises and get to the bottom of it. That's one of the challenges we have in Washington is, how can you trust somebody that even when they say it's wrong and they want to fix it will not cooperate?