Daschle delayed revealing tax problem
Paid $140,000 to treasury Jan. 2
WASHINGTON - Thomas Daschle waited nearly a month after being nominated to be secretary of health and human services before informing then-President-elect Obama that he had not paid years of back taxes for the use of a car and driver provided by a wealthy New York investor.
Daschle, one of Obama's earliest and most ardent campaign supporters, paid $140,000 to the US Treasury on Jan. 2 and about two days later informed the White House and the Senate Finance Committee, according to an account provided by his spokeswoman and confirmed by the Obama administration.
Although Daschle had known since June 2008 that he needed to correct his tax returns for 2005 to 2007, he never expected the amount to be such a "jaw-dropping" sum and "thought it was being taken care of" by his accountant, spokeswoman Jenny Backus said.
Daschle is expected to face tough questioning from GOP lawmakers on the Senate Finance Committee about underpaying his taxes and his extensive work for clients in the healthcare industry, Republican aides said yesterday.
White House press secretary Robert Gibbs said last night that Obama stands behind his friend and confidant. "The president believes nobody's perfect but that nobody's hiding anything," Gibbs said.
The disclosure of Daschle's tax problems coincided with the release of the financial statement he submitted to the Office of Government Ethics, which details for the first time how, without becoming a registered lobbyist, he made millions of dollars giving public speeches and private counsel to insurers, hospitals, realtors, farmers, energy firms, and telecommunications companies with regulatory and legislative interests in Washington.
Daschle's expertise and insights, gleaned over 26 years in Congress, earned him more than $5 million over the past two years, including $220,000 from the healthcare industry, and perks such as chauffeured Cadillacs in Washington, according to the documents.
In mid-December, Obama's transition team discovered that $15,000 of the $276,000 in charitable contributions claimed by Daschle and his wife over three years lacked proper receipts. But the former Senate majority leader did not mention the larger tax liability until after his accountant had filed amended returns.
The Senate Finance Committee has scheduled a private session tomorrow to discuss Daschle's tax problems. Daschle, visiting an ailing relative, was unavailable for comment this weekend.
Meanwhile, the disclosure of Daschle's lucrative ties to private companies with Washington interests have begun to raise eyebrows among those who expected Obama to be wary of relying on wealthy insiders to stock his administration.
"Daschle is the quintessential Washington story. You leave a powerful position, and you leverage it to make a fortune," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a nonprofit government watchdog group.
In his principal campaign speech on government ethics in June 2007, candidate Obama decried the "morally offensive conduct" of lobbyists and lawmakers who help large industries and special interests exercise "an effective veto on our progress."
He singled out the drug and insurance industries for particular scorn, saying they had pushed for a new Medicare prescription drug benefit and that lawmakers and Bush appointees who made it happen were rewarded with "cushy lobbying jobs that pay millions."
In recent months, Daschle has advocated changes to the health system that are unpopular with sizable portions of the industry, including some physicians, drug makers, and insurance companies. Daschle has nonetheless prospered from a stream of income from the health sector, including $220,000 in speaking fees in the past two years, according to the ethics filing.