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IRS getting grilled on Capitol Hill

This is a RUSH transcript from "The O'Reilly Factor," June 20, 2014. This copy may not be in its final form and may be updated.

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BOLLING: Hi. I'm Eric Bolling, in for Bill O'Reilly.

Our top story tonight: the IRS getting grilled on Capitol Hill. Today, IRS Commissioner John Koskinen faced a grueling hearing in front of the House Ways and Means Committee. The tax agency has been slammed after admitting it lost two years worth of emails from IRS official Lois Lerner, the central figure in the targeting of conservative groups. But apparently, the IRS doesn't think he did anything wrong.

(BEGIN VIDEO CLIP)

CAMP: What I didn't hear in that was an apology to this committee.

KOSKINEN: I don't think an apology is owed. There is not single email has been lost since the start of this investigation. Every email has been preserved that we have. We have produced or will produce by the end --

CAMP: You don't think the time period between January 2009 and April 2011 is relevant to this investigation?

KOSKINEN: It's very relevant timeframe.

CAMP: All right.

(END VIDEO CLIP)

BOLLING: While, meanwhile Democrats on the committee wasted no time today trying to discredit the entire investigation.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Have you ever been in Benghazi?

KOSKINEN: No.

UNIDENTIFIED MALE: How about Area 51 in Roswell, New Mexico, where space aliens allegedly came. Have you ever responsibility for that?

KOSKINEN: No.

UNIDENTIFIED MALE: Have you ever had custody of the president's birth certificate?

KOSKINEN: No.

UNIDENTIFIED MALE: Well, Commissioner, I believe one of the mistakes that you have made in dealing with the committee today is that you did assume professionally that this was a serious inquiry. I believe it is an endless conspiracy theory that's involved here that is being exploited solely for political purposes.

(END VIDEO CLIP)

BOLLING: Well, despite Democrats' best efforts to sweep the whole scandal under the rug, can we really still believe that there is not a smidgen of corruption involved here as President Obama put it to Bill O'Reilly back in February?

Joining us now is Steve Leser, Democrat strategist and aide for President Obama's 2008 presidential campaign.

Steve, that hearing, that hearing, I just -- I was -- my jaw dropped when the Democrats started playing that game, Area 51, birth certificate. What did you -- they were making a mockery out of it. A very serious topic, don't you think?

STEVE LESER, AIDE FOR PRESIDENT OBAMA'S 2008 PRESIDENTIAL CAMPAIGN: Well, thanks for having me on, Eric.

I have to admit I agree with him. I totally agree that this is a trumped up scandal. We can talk about the particulars here. The emails if you want to.

BOLLING: What's trumped up about a scandal? He would trying to find out if Lois Lerner the charge of the special exempt groups, she can't find two years of emails. We are trying to find out what happened there.

LESER: Well, at the very base of this scandal you have whether conservative groups were unfairly targeted, they weren't. We have a number of analyses that show that liberal and progressive groups were denied tax exempt status at the same rate.

BOLLING: Stay on these emails. Stay on these emails. Where are they?

LESER: Well, OK, regarding the emails -- I spent nearly 20 years in I.T., including two to three years consulting on disaster recovery and business continuity. You'd be surprised how many instances you see like this in the private and public sector.

BOLLING: How many?

LESER: How many, what?

BOLLING: Instances have you seen where it was two years worth of emails.

(CROSSTALK)

BOLLING: Oh, by the way, once the emails were lost, there were a lot of people who said, you know what, don't worry, they are on the hard drives. Guess what happened yesterday?

LESER: They said they couldn't find the hard drives.

BOLLING: They lost the hard drives, too.

LESER: That's actually -- you know, so when you have a position where you have public data on hard drives, and those people get new computers, you have to destroy the hard drives. Otherwise, now you have people's personal data out there, particularly in the case of the IRS. Their income, their addresses, phone numbers and things like that out there in on hard drives, then you would say that you are not doing the right thing to protect people's data.

BOLLING: Steve, there was a hearing where -- and I can't remember who it was who was testifying, said, yes, don't worry, we are going to turn over all the emails and that was in February. Now, all of a sudden in May, they can't find the emails or the hard drives. Now, this gentleman, John Koskinen, says, don't worry we have them all. We are still looking for them.

LESER: But the root of this problem is the fact that prior to 2013, the IRS had an antiquated back up -- tape backup system to protect its email data and every time -- every six months, old data was essentially deleted.

So, if you lost or had data destroyed, the clock started clicking. Six months later, if you didn't have that data recovered, it was gone. That's the problem here. And they went.

BOLLING: Or the root of the problem is that they just think the American people are fools and we are going to believe anything they are shoveling our way, including we can't find the emails.

LESER: You know what? If they had somehow circumvented the policy that was in place for email recovery and retention, I would say that there is something there to worry about, that's what you typically see when companies or organizations are trying to hide something. And they have actually circumvented corporate policy regarding emails or whatever else it is.

But they actually, this is exactly what you would expect in this kind of situation where data was lost. And more than six months transpired.

BOLLING: If I were to use that excuse to the IRS, that I just couldn't -- you know what, I lost those receipts. They were on my hard drive and guess what? I recycled my hard drive. I go to jail. So would you.

LESER: Different types of data have different requirements in terms it of safeguarding them and making sure the information is back up, sure. The IRS has critical systems where you submit, you know, your income and the taxes paid to them. They have a different requirement. The IRS's emails they are not as mission critical to what the U.S. has.

BOLLING: Someone said, well, what about all the recipients of some of the emails that Lois Lerner was sending? Guess what happened? They couldn't find those either.

LESER: They actually recovered 86,000 of those.

BOLLING: I know. But not the ones they were looking for. They were looking for period of time where Lois Lerner was emailing. We -- the committee wants to know who she was emailing. What she was saying.

I will be conspiratorial. I will throw it out there. What if she is emailing the White House? What if the White House says, yes, go after the Tea Party groups, go after conservative groups because we don't want to deal with them in 2012?

LESER: Well, here's the problem. As I said at the very beginning, conservative groups were targeted at the same rate liberal and progressive groups were, because of the requirements of these 501c organizations. These organizations are not supposed to be doing the types of things they are doing on both sides of the aisle. That's the root of the problem.

Paul Ryan wants to yell at somebody and take some action. He should create a new 501c4 organization.

BOLLING: Also part of the problem taking the Fifth. She's taking the Fifth. We can't get the emails. The servers are gone. The people she sent emails to, those hard drives are gone. Everything is gone.

Where is the transparency here, Steve? The American people aren't dumb. They watch this stuff on TV and they go, there's no way. There's no way. This just does not add up.

When it doesn't add up, it usually doesn't add up.

LESER: Well, I will agree with you there. When Lois Lerner took the Fifth, I was a little bit perturbed. I was a little bit upset.

Here is the thing though -- with all of these scandals that you see that Republicans are trying to monger here on the American people. They stop short of actually trying to find out what the truth is. They want the allegation to be out there. They don't actually go all the way to find out and get to the bottom of it, because they know at the bottom of it there is no scandal.

BOLLING: Either that or the truth is hidden in those emails. We will never know. At least we won't know.

Steve, we're going to have to leave it right there. Thank you very much.

LESER: Thanks, Eric.

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