Obama takes heat for third cabinet appointee that hasn’t paid taxes
Resurrecting the Clinton political machine will do that.
Suzanne Goldenberg, The Guardian
February 4, 2009
Barack Obama suffered the biggest blow to date over his promise to clean up politics in Washington yesterday, when a trusted mentor was forced to withdraw his nomination from a cabinet post because of unpaid taxes.
Tom Daschle, a former Democratic leader in the Senate who guided Obama on his arrival in Washington four years ago, withdrew from consideration for the post of health and human services secretary after newspapers called for him to step aside.
The controversy prompted a series of concessions from the US President in television interviews dissecting the situation.
“I screwed up,” he said in one interview with NBC. “It’s important for this administration to send a message that there aren’t two sets of rules you know, one for prominent people and one for ordinary folks who have to pay their taxes.
“I’m frustrated with myself, with our team. … I’m here on television saying I screwed up.”
Daschle, who paid more than $140,000 (£97,000) in arrears and penalties last month for failing to report his use of a company limousine, was the third of Obama’s appointees to have tax problems, calling into question his claims to represent a new way of doing business in Washington.
Earlier yesterday, Nancy Killefer withdrew her name for consideration as the White House performance officer because of problems over payment of payroll taxes for household help.
But Daschle’s departure shocked Washington, in part because he and Obama had been adamant 24 hours earlier that the tax lapses were mistakes that should not stand in the way of confirmation. Obama said he “absolutely” supported Daschle.
Yesterday, Daschle said he did not want to distract from the economic rescue plan now before Congress, or Obama’s plans for healthcare reform.
“This work will require a leader who can operate with the full faith of Congress and the American people, and without distraction,” Daschle said in a statement. “Right now, I am not that leader, and will not be a distraction.”
Obama said in an earlier statement that he accepted the departure of one of his closest confidantes “with sadness and regret. Now we must move forward.”
“Tom made a mistake, which he has openly acknowledged,” he said. “He has not excused it, nor do I. But that mistake and this decision cannot diminish the many contributions Tom has made to this country.”
The White House said that Daschle had not been pushed to stand aside, and that Obama could still claim to be raising ethical standards in Washington.
“The bar that we set is the highest that any administration in the country has ever set,” the White House spokesman, Robert Gibbs, told reporters.
But that claim was shaken by revelations of Daschle’s failure to pay some $128,000 in taxes owed for use of a driver and limousine provided to him by a media firm. Daschle was chairman of the firm’s advisory board.
Daschle said his failure to pay the taxes was a mistake, and paid $140,000 in arrears and penalties in January .
Last week, the Senate accepted a similar explanation from Timothy Geithner, confirming him as treasury secretary despite his failure to pay $34,000 in taxes several years ago.
But Daschle ran into greater opposition. “Daschle is one oversight case too many,” said the New York Times.
With Daschle’s swift exit, Obama hoped to put to rest questions about a White House double standard in ethics reform.
Obama took on Daschle’s most seasoned staff to run his Senate office when he arrived in Washington in 2004. A number of Daschle loyalists have jobs in the administration.
But Daschle had long faced questions about his career moves after leaving the Senate following his defeat in the 2004 elections. Though never a registered lobbyist, he earned nearly $5m (£3.47m) advising firms. His wife, Linda, was also a prominent lobbyist while Daschle was in the Senate. That record sat uneasily with Obama’s stand against the influence of lobbyists on the political process.
Questions over Daschle’s personal finances presented a problem for a president elected on a pledge to bring higher ethical and moral standards to Washington.
Contenders for jobs in the administration were required to submit to a lengthy questionnaire about their business interests and those of their family.
Candidates were also asked specifically about tax payments for domestic help – an area that sunk some of Bill Clinton’s nominations. Obama also imposed more stringent regulations on hiring lobbyists.
But Obama ran into problems even before his inauguration. Bill Richardson, the New Mexico governor, was forced to stand down for consideration for the post of commerce secretary amid an inquiry about campaign contributions.
Obama moved to fill the commerce post yesterday, nominating a Republican from New Hampshire, Judd Gregg.
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