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Daschle kept tax woes from Obama

Sun., Feb. 1, 2009, midnight

Nominee paid IRS $140,000 on Jan. 2, then fessed up

WASHINGTON – Thomas Daschle waited nearly a month after being nominated to be Secretary of Health and Human Services before informing Barack 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 campaign supporters, paid $140,000 to the U.S. 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, 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.

White House press secretary Robert Gibbs said Saturday 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 exactly 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 complex 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 health-care 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 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 for him.

The Senate Finance Committee has scheduled a private session Monday to discuss Daschle’s tax problems. Daschle 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 government watchdog group. “He is not alone … (and) it would be hard for Obama to fill his administration without ever turning to someone like that. That said, these are the kind of Washington insiders that Obama campaigned against.”

The Obama team is “learning that it’s easier to campaign on that than govern under it,” Sloan added.



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