Former Senate Majority Leader Tom Daschle is flanked by former Senate Majority Leader Bob Dole, left, and wife Linda Daschle, center, during his Senate confirmation hearing before the Senate Health, Education, Labor and Pensions Committee Jan. 8 (Photo by Mark Wilson / Getty Images)
by Noam N. Levey
Former Sen. Tom Daschle, tapped by President Obama to lead his healthcare reform campaign, failed to pay more than $128,000 in taxes in the three years before Obama nominated him in December to head the Department of Health and Human Services.
The disclosure -- involving unreported income and the use of a car and driver provided to Daschle -- comes 2 1/2 weeks after Obama's choice to head the Treasury Department, Timothy Geithner, admitted that he had not paid about $43,000 in taxes.
Geithner was ultimately confirmed by the Senate, but the revelations about Daschle's taxes cast a shadow over the man that many hoped would be able to build political consensus behind an ambitious effort to reshape the nation's healthcare system.
Daschle did not comment publicly Friday on his tax problems, which are being investigated by the Senate Finance Committee ahead of his confirmation hearing before the panel.
But a spokeswoman for the former Senate majority leader and close Obama ally stressed Friday evening that the tax errors were the result of simple mistakes that Daschle had worked in good faith to correct.
"Sen. Daschle is embarrassed and disappointed by these errors," spokeswoman Jenny Backus said.
The bulk of the unpaid taxes -- first reported Friday by ABC News -- stems from a lucrative business relationship that Daschle began with a wealthy investor shortly after Daschle left the Senate in 2005.
That year Daschle was paid $83,333 a month -- or $1 million a year -- to advise a private equity fund, according to a confidential draft report prepared by Republican staffers on the Senate Finance Committee.
See the rest of the report on Daschle's tax problem in Tribune newspapers and here in the Swamp:
The South Dakota Democrat was hired by Leo J. Hindery Jr., a longtime friend of Daschle's, to consult for InterMedia Advisors. The private equity fund invests in media companies, including the Christian publishing house Thomas Nelson, the Gospel Music Channel, and Cine Latino, a leading Spanish-language movie channel.
Hindery, a Democratic donor who made a fortune in cable television, also provided Daschle with a car and driver beginning in April 2005.
Daschle estimated that 80% of his use of the car was for personal reasons. But he did not pay any taxes on the service until Jan. 2, 2009, when he filed amended returns for 2005, 2006 and 2007.
Daschle this month paid more than $100,000 in taxes and interest for the car service, according to Backus.
He paid an additional $32,491 to cover taxes and interest for a monthly payment that was not reported in 2007.
According to the committee report, InterMedia officials told committee staffers that unreported payment was the result of an employee being out on maternity leave when the May 2007 payment was processed. InterMedia had also not generated the proper tax form for Daschle at the time.
Finally, Daschle paid nearly $6,000 in taxes and interest on donations that he had improperly classified as tax-exempt charitable donations.
Backus said Daschle and his wife had believed their donations to a wounded Iraq war veteran were tax-deductible. While Obama's vetting team reviewed Daschle's tax records, however, they discovered the payment had not gone through a qualifying charity.
Daschle has thus far paid a total of $140,167 in back taxes and interest, according to the draft committee report.
After news of the tax issues leaked Friday evening, White House Press Secretary Robert Gibbs issued a statement supporting the Obama nominee.
"The president has confidence that Sen. Daschle is the right person to lead the fight for healthcare reform," Gibbs said.
A month ago, Obama's pick for Commerce secretary, New Mexico Gov. Bill Richardson, withdrew his name from consideration because of an investigation of a campaign donor who had obtained state contracts. Whether Daschle will face greater difficulties with members of the Senate remains unclear.
Republican committee staff members are continuing to look into Daschle's travel on a corporate jet owned by education loan provider EduCap Inc., according to one staffer who was not authorized to speak publicly about the issue.
And Iowa Sen. Charles E. Grassley, the ranking Republican on the Senate Finance Committee who is leading the inquiry, has been careful in recent days to avoid discussing Daschle's prospects.
Friday, his spokeswoman Jill Gerber issued a statement pledging an open process.
"Sen. Grassley's position for this nomination is the same as it has been for every other nomination processed by the Finance Committee since 2001, that all relevant information about a nominee must be made public in order for the confirmation process to go forward in the committee," she said.
The committee, which will meet privately with Daschle on Monday, has yet to schedule a confirmation hearing.
Comments
NO MORE 'STIMULUS' MONEY FOR BANKS AND BIG CORPORATE ENERGY!!!! WE DON'T NEED A NEW GRID! WE NEED SMALL STIMULUS PACKAGES FOR PEOPLE!!! WE CAN FEED OUR GENERATED ENERGY INTO THE EXISTING GRID.
"I don't understand why a man who just won a sweeping victory...and the other side is crawling off with its tail between its legs...and he goes to that party and says he wanted a majority of Republican party votes as well as the Democrats. ... Why go to them? Let them come to you?"
http://www.pbs.org/moyers/journal/01232009/watch.html
Posted by: REAL PEACE CANDIDATES DON'T BOMB WITH DRONES ON DAY 4 | January 31, 2009 10:59 AM
If this keeps up, looks like Obama's cabinet will set a record having Tax Cheats in it.
Makes you wonder if they are capable of cheating on anything else.
Posted by: Inky | January 31, 2009 11:19 AM
Let's just keep it simple. Daschle is a crook and should be heading to jail not the Cabinet. With two high-profile nominees having MAJOR tax "mistakes" is there any question that the wealthy are cheating the IRS and the rest of us out of enormous amounts of money? Where there's smoke there's fire.
Posted by: Ted | January 31, 2009 11:46 AM
I'm starting to wonder if Obama's speed in picking appointments is at the expense of classical vetting.
That said, I don't think the errors on his part are a real problem. I just had a republican investment advisor friend of mine get audited and had to pony up for the same thing (not separating bus. miles from personal miles). An easy mistake to make, but it should have been caught long before this.
And if giving $6,000 to a wounded Iraq veteran is not charity, than may Alla help us all!
Posted by: Xcellentform | January 31, 2009 11:51 AM
If Daschle is approved by the Senate then "the greatest deliberative body in the world is dirty".
Daschle should be audited, Geitner should have been audited as well.
These guy's are not God's and they can be replaced, with maybe doing community work in stead of jail time.
In my view this will test how the Democrat controlled Senate will vote, and how many Republicans will go along.
I would NOT vote for him.
Posted by: PG | January 31, 2009 1:26 PM
Oh, and acknowledging this late on a friday, doesn't help the White House either because they also knew.
Posted by: PG | January 31, 2009 1:31 PM
If Daschle is approved by the Senate then "the greatest deliberative body in the world is dirty".
Daschle should be audited, Geitner should have been audited as well.
These guy's are not God's and they can be replaced, with maybe doing community work in stead of jail time.
In my view this will test how the Democrat controlled Senate will vote, and how many Republicans will go along.
I would NOT vote for him.
Posted by: PG | January 31, 2009 1:26 PM
.Sure the Illionois Senators will vote for Daschle
and possible get a Chicago Tribune Endorsement..
Posted by: Inky | January 31, 2009 3:05 PM
This news coming out on on a Friday is typical. Brainwashed folks don't pay as much attention to the news over the weekend.
I love how the "media" (more like Obama's personal PR company) keeps referring to these tax problems, er tax cheating problems as "simple mistakes" and "errors." Keep it up, though, media, because there are enough people smart enough to see through this nonsense. Folks do understand taxes and when the so-called tax writers and tax enforcers get away with murder, people recognize that. The media continually covering up for the Obama administration only continues to show just how corrupt the media is.
If these were Republican having these "problems," the media would be in ultra attack mode and the Left would be having cows.
So far, Obama is giving us the most corrupt administration ever! Change we truly can believe in!
Posted by: John D | January 31, 2009 3:33 PM
I suppose this also was an oversight!
Most everyone of Obama picks are tainted in one way or another. The only one so far that's as clean as of whistle is the Director of Home Land Security.Richardson is history.
Geithner,Daschle, and Holder
should also disappear.If this is the best this president can come up with, I'm afraid we are in for a long ride This is CHANGE we don't need.
Posted by: Paul | January 31, 2009 3:44 PM
That’s One Helluva “Speed Bump!”
I always thought speed bumps were those annoying little, raised concrete things on semi-private roads designed to slow traffic or to break an axle or two if drivers hit them going 50 mph or more.
However, it seems in the new D.C. Doublespeak a speed bump can now refer to a prodigious obstacle for Democratic politicians which is reinterpreted to mean an inconsequential road pimple.
Not too long ago, speed-bumpy charges of “nannygate-ism” sank two of Bill Clinton’s female candidates for attorney general and we ended up with the Democrat answer to British woman wrestler, Pandora Boxxx, none other than Janet Reno, the other Waco wacko:
More recently, we have witnessed Obama’s nominee to run the Commerce Department, New Mexico Governor Bill Richardson, get derailed by accusations of sticky fingers in awarding contracts in the Land of Enchantment.
The Richardson withdrawal was followed by various other blips in the new administration such as Obama flipflops on banned lobbyists. There shalt be no such people working for me, proclaimed the president! Yet they miraculously became un-banned and not problematic under certain circumstances.
Then came the most ironic speed bump in the history of administrations, which was skillfully graded until the road was as smooth as a superhighway.
Of all people, Treasury Secretary-designate Timothy Geithner...
(Read the rest of this article at http://genelalor.com/.)
Posted by: Gene Lalor | January 31, 2009 4:31 PM
Hey, give Obama credit for finding a new revenue stream. If we could just create more cabinet positions...
Posted by: Karl | January 31, 2009 6:30 PM
I thought VP Biden said it was patriotic to pay ones taxes and that we should actually not mind paying more - especially those of us with the means to - that would include SenatorDaschel and his wife the DC Lobbyist.
Now I understand why the dems always call for raising taxes - they don't pay them anyway.
Posted by: Terry | January 31, 2009 8:33 PM
green party
Posted by: INSTANT RUNOFF 2ND CHOICE BALLOT FOR A 3RD PARTY WITHOUT RISK OF REPUGS NEXT TIME KIDS | January 31, 2009 9:31 PM
If Obama can get everyone in government to pay their back taxes the financial crisis may be wiped out by Spring.
Posted by: chuncha | January 31, 2009 9:44 PM
Please feel free to add others as a co-sponsor to the "Stimulus Bill".
The "Geitner, Daschle, Rangel Stimulus Bill".
It's based on you and I, keeping our money (taxes) like the above sponsors, to spend as we wish.
Posted by: PG | February 1, 2009 11:07 PM