Issa: IRS commissioner faces new grilling by House investigators since Lois Lerner's 'lost' emails do exist

This is a rush transcript from "On the Record," August 25, 2014. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: The House Oversight Committee discovering an alleged conflict of interest with a Justice Department lawyer in their investigation.

And Oversight Committee Chair Darrell Issa joins us. Good evening, sir.

REP. DARRELL ISSA, CHAIRMAN, HOUSE OVERSIGHT COMMITTEE: Good evening, Greta, and thank you for covering what's emerging to be just an amazing sequence of cover-up, delay, denial, even what now appears to be a false statement from the new IRS commissioner in which he said he moved "heaven and Earth" to get us Lois Lerner's lost emails.

And now we find out from the Judicial Watch that in fact they exist, but they simply haven't been asked for. They're too burdensome. They do exist. And we look forward to finding how the commissioner can say they don't exist, when, in fact, they do.

VAN SUSTEREN: Well, what -- what do you do about that? The commissioner came and he talked to me and it seemed like he's being candid. Now we find out they do exist. What in the world are you going to do about this? He was testifying, I think, beginning in February or April, around then. But what are you going to do?

ISSA: We're going to call him back. This time I intend to call him back for a deposition behind closed doors, where we can ask him extensively what he knew and when he knew it. We can go through day by day, how much time he spent getting briefed for his hearings, because he either lied under oath, or he chose not to know a critical fact. When he said heaven and earth was moved, and in fact somebody, many somebodies, knew that Lois Lerner's emails apparently do exist, and they simply haven't bothered to go get them from what they're calling Disaster Recovery Documents.

VAN SUSTEREN: You know, I always want to give them the benefit of the doubt, but if they exist, he did nothing to try to get them. I think he was trying to do everything he could to try to call the dog off the scent.

All right, let me turn to another issue, which is an email apparently shows that someone who works at the Justice Department, who's doing investigation, was also -- well, you explain to me the problem.

ISSA: The problem is that Andrew Strelka was on one side of this issue, in other words, part of the BOLOS and targeting of groups. And now a pro- Israel group is in fact -- he's on the other side now helping defend the IRS from what appears to be, again, their targeting of a conservative group. So it's a conflict in the sense that the IRS is supposed to be neutral and the Department of Justice has to do certain jobs. You can't both defend the IRS for their wrongdoing, and investigate them for their wrongdoing, and use people who clearly have a history. This gentleman, Andrew, worked for Lois Lerner, and knew so much, that when her hard drive crashed in 2011, he knew about it in emails. This is not a detached individual. Just the opposite. This is part of this tentacle of people around Lois Lerner that do seem to have a political bent.

VAN SUSTEREN: Let me read the email dated March 17th, 2010, 9:35 a.m., which went to the -- then he worked at the IRS. Now he works at DOJ, the lawyer investigating. He says, the email that he received is "be on the lookout for a Tea Party case. If you receive or do receive a case in the future involving an exemption for an organization having to do with the Tea Party, let me know."

I don't know what that means but it certainly is cozy that he was at the IRS, part of the group doing an investigation, and now he's over at the DOJ.

ISSA: This is one of the problems with the IRS. Political employees get embedded there. Quite frankly, my ranking member, Mr. Cummings, his chief lawyer was, in fact, embedded for a number of years at the IRS as a, quote, "technical specialist," when, in fact, before that time, she worked as a political appointee. Now she works for the minority on the committee. This is a problem at the IRS. No one is allowed to go there that is a political appointee. Certainly, when you find an ideological left or right, they need to leave there, not simply move around to convenient places, which, in this case, includes the Department of Justice. It now has at least three people who very clearly are bad choices for reasons of apparent conflict of interest.

VAN SUSTEREN: Mr. Chairman, thanks for joining us. Look forward to talking to you when you get back here. Thank you, sir.

ISSA: Thanks, Greta.