New Obama tax-evasion scandal: Tom Daschle; Update: Even more evasion!

posted at 8:10 pm on January 30, 2009 by Ed Morrissey

So far, the incoming Barack Obama administration has given us a tax cheat/incompetent to run the IRS (Tim Geithner) and at least three lobbyists to regulate their industries (William Lynn, Mark Patterson, Neal Wolin).  Now we’re back to tax evasion, and once again it’s a major Cabinet appointment:

ABC News has learned that the nomination of former Senator Majority Leader Tom Daschle, D-SD, to be President Obama’s Secretary of Health and Human Services has hit a traffic snarl on its way through the Senate Finance Committee.

The controversy deals with a car and driver lent to Mr. Daschle by a wealthy Democratic friend, a chauffer service the former Senator used for years without declaring their use on his taxes. …

Based in New York City, InterMedia Advisors is a private equity firm founded in part by longtime Daschle friend and Democratic fundraiser, Leo Hindery, the former president of the YES network (the Yankees’ and Devils’ broadcast network).

That same year he began his professional relationship with InterMedia 2005, Mr. Daschle began using the services of Hindery’s car and driver.

The Cadillac and driver were never part of Daschle’s official compensation package at InterMedia but Mr. Daschle — who as Senate Majority Leader enjoyed the use of a car and driver at taxpayer expense — didn’t declare their services on his income taxes, as tax laws require.

Daschle’s team claims that the former Senator deserves the credit for revealing the problem himself.  Daschle did report this — but only after getting picked as HHS Secretary.  If that sounds familiar, it’s because that’s when Geithner suddenly discovered that he owed Uncle Sam money too, only Daschle paid back a lot more: over $100,000.

How many more people will Obama nominate who either are too incompetent or too dishonest to declare all of their income and pay all of their taxes?  Is this the new career track for tax cheats — a Cabinet office?

Update: Apparently, Daschle can’t even use the Geithner “I’m so stupid” excuse, as ABC also discovers that he flat-out failed to report direct income:

The report indicates that Daschle’s failure to pay more than $101,000 taxes on the car and driver a wealthy friend let him use from 2005 through 2007 is not the only tax issue the former Senate Majority Leader has been dealing with since his December nomination prompted a more thorough examination of his income tax returns.

Mr. Daschle also didn’t report $83,333 in consulting income in 2007.

Plus, Daschle claimed almost $15,000 in charitable donations over three years to organizations that don’t qualify for the deduction.

How many Americans make so much money that they could forget about $83,000 of it in a year?


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One of the true attractions of Barack Obama was that he had not been in Washington long enough to get sucked into this game, and so he might actually do some things to put an end to it. Guess not. He is rewarding its worst practitioners.

That was the press. Of course, it discounts the fact that the filthy bastard comes out of the cesspool of Chicago politics which makes DC corruption look like child’s play. It’s clear now that the Obama administration is the most corrupt in history. They don’t even make a pretense of ethical standards.

highhopes on January 31, 2009 at 9:02 PM

the wheels on the bus…..thump thump thump

Ricki on January 31, 2009 at 9:17 PM

Very “scary” take on things. Many would say some/much/most of what this link contains is over-the-top. I’m not so sure. Not for faint of heart.

Here It Comes?

Our new President was elected to office by the people who were tired of Washington DC influence peddling, pervasive fraud and theft and the economic damage it has wrought on this land. President Obama now has two high-level appointees he has continued to support after they were revealed to have “ethics issues” (at best.) If President Obama does not choose here and now to stand with American citizens and against the fraud and corruption of the previous twenty years he will at best be a one-term President and at worst there won’t be an economy or nation worth being President of within the next year or two. The situation really is this grim and neither the markets or the people are going to sit still for any more of “business as usual.” Words will not cut it – it is only deeds that count now.

This is not the time for “bipartisanship” or any such thing. It is time for President Obama to demonstrate that he is the leader the people elected and to stand up for the common man – not through “paying back” organized labor with things like “card check” and ordering the removal of disclosure statements of union worker rights related to the ability to “opt out” of political activity, but rather by standing with the common man against the pervasive fraud, abuse, theft and lies that have been perpetrated by Wall Street, K Street and Washington DC in general over the previous twenty years.

The road ahead is a rough one. Our nation faces an unprecedented economic mess of which we have only seen the beginning, but that mess is of our own making. We have “enjoyed” false prosperity for more than a decade fueled by intentionally-overinflated asset prices that represented not real wealth but rather a chimera grown from ridiculous and outrageously fraudulent actions by many throughout our credit, banking and regulatory systems.

The blame for this cannot be laid at the feet of either political party to the exclusion of the other. Both sides of the aisle are to blame, as both have held the reins of power during this period of time. There are dozens of Senators and Representatives who have dirty hands, including many who personally profited from “special deals” doled out by some of these firms, in many cases to the tune of tens of thousands of dollars. Reported frauds have been intentionally ignored and both lawmakers and regulators have not only looked the other way but in many cases have been actively complicit.

Our nation truly stands on the precipice of history. We cannot borrow and spend our way out of this mess, we cannot pass $800 billion dollar “stimulus bills” that do not actually stimulate the economy and we cannot rob Peter to pay Paul. Asset prices must contract to reasonable, supportable values, and they will – whether we like it or not. Those who are overlevered and in debt up to their eyeballs will and must default, and have that debt cleared. Transparency must not be a word, it must be a deed throughout our financial system and markets.

MB4 on January 31, 2009 at 9:28 PM

Finally, that taxpayer anger and falling tax receipts, plus the government continuing to hand money to people who demonstrably not only made bad bets but engaged in outrageous and perhaps even illegal and fraudulent conduct, yet have returned nothing of what they stole sets up a very real risk of a tax revolt by Americans. It would be ruinous and nearly impossible to control if Americans decided en-masse to simply refuse to pay and to the extent possible went “off grid” through barter and underground transactions, or started modifying W4s to greatly limit withholding and then simply didn’t file. Anecdotes related to this occurring are already popping up. I realize this is extremely illegal but at some point the American public is going to reach it’s breaking point with the government literally stealing their money to bail out those who robbed them in the first place!
- Karl Denninger

MB4 on January 31, 2009 at 9:39 PM

UGHHHHH, I am sooooo tired of this crap (already!). I just got home from working a$$ off (to pay for the “stimulus”) and this is what I see……GRRRRRRR…figures, this is the “hope&change” I get to try to live thru for next 4.

NY Conservative on January 31, 2009 at 9:47 PM

Is it me or does it seem that on the whole, Democrats seem to suffer from greater memory loss during tax season than Republicans do? Yet these are the people who are always trying to RAISE taxes. I guess if you’re planning on not paying them anyway, what the heck, eh?

NoLeftTurn on January 31, 2009 at 10:06 PM

POLITICS OF PAYOFF

Only 10 percent of the “stimulus” to be spent on 2009.

Close to half goes to entities that sponsor or employ (or both) members of the Service Employees International Union, federal, state, and municipal employee unions or other Democrat-controlled unions.

How long until the debt incurred under this program is so immense that it causes a downgrade in the nation’s sovereign debt? What happens to us then?

This has been a punch in the solar plexus to the kind of responsible, far-seeing, mature government processes that are needed to protect America. This is more than pork-barrel – this is a coup for the constituencies of the party in power and against the idea of a responsible government itself. A bleak day.

Unfortunately, it is only the latest in a long series of such days stretching across decades of rule by both parties, to the point where truly responsible government is only a distant echo of our forgotten ancestors.
- Ben Stein

MB4 on January 31, 2009 at 10:59 PM

For the love of God.
Every day there is a new corrupt,lying a$$ democrat in the news.

No wonder Pelosi can’t “clean up the swamp”.
If she did,no democrats would be left.

Baxter Greene on February 1, 2009 at 12:20 AM

I realize this is extremely illegal but at some point the American public is going to reach it’s breaking point with the government literally stealing their money to bail out those who robbed them in the first place!
- Karl Denninger

MB4 on January 31, 2009 at 9:39 PM

This is absolutely true.
democrat or Republican,one thing that has been ringing true and found agreement beyond partisanship is the fact that the vast majority of Americans have lost confidence and trust in our government as a whole.

As times get harder and the special folks up on the hill continue to do everything to line their pockets and leave us hanging out to dry,these problems will spill out into the streets.

Especially after all the hype and selling of “Hope and Change” comes crashing down to “Reality’s a bitc$ suckers”.

Baxter Greene on February 1, 2009 at 12:33 AM

There’s a rumor going around that states cannot go bankrupt.” German Chancellor Angela Merkel said recently at a private bank event in Frankfurt. “This rumor is not true.

Of course she’s right. Countries can go bankrupt if they allow their deficit spending to spin out of control and are no longer able to service their interest payments. Merkel’s comments can be read as a warning that countries need to keep their deficit spending in check. The message is: If governments go too far in trying to bail out companies and the economy, they could face insolvency themselves.
- Spiegel Staff

MB4 on February 1, 2009 at 12:42 AM

”Mr. Daschle also didn’t report $83,333 in consulting income in 2007”

So is Daschle now going to be Obama’s NEW VP?

DSchoen on February 1, 2009 at 1:59 AM

Oh forgot to mention, Daschle wife is a lobbyist for the airline industry.

http://macsmind.com/wordpress/2009/02/01/daschles-problem-not-new-revisting-his-wifes-lobbyist-ties-in-2003/

“he couldn‘t survive scrutiny of his persistent service to the clients of his wife. Linda Daschle has been one of the airline industry’s top lobbyists for two decades —

when she wasn‘t busy running the Federal Aviation Administration (FAA), which explains why, just 11 days after the 911 attacks, her husband rushed through the Democratic Senate, which he controlled, the $15 billion bailout for the airline industry, a notorious taxpayer rip-off.”

DSchoen on February 1, 2009 at 4:09 AM

I’m much more worried about Daschle’s conflict of interest in taking $220K for speaking engagements and consultations from health care entities when he is to be HHS Secretary.(Of course, conflicts of interest didn’t stop Hillary.) And I also understand that Daschle isn’t in favor of sweeping us entirely into nationalized healthcare, probably because the people who don’t want that have been paying him hundreds of thousands to say so. And of course he’s married to a lobbyist and I don’t even wwant to think of the pillowtalk. And he’s also a tax evader and dumb.

gracie on February 1, 2009 at 8:40 AM

All Obama has to do is hunker his jug eared A$$ down until he can appoint the judges and pack the Supreme Court with Ginsburg clones.

At that point he and the rest of the kleptocracy will be able to go hog wild. $100 dollar steaks will be a thing of the past as being too commonplace and cheap.

Also, watch to see him do everything possible to bribe, coerce, threaten and cajole the media into either burying future stories like this and/or putting a mind boggling spin on it.

bullseye on February 1, 2009 at 9:17 AM

Now I understand why Democrats are against tax breaks.

They don’t pay taxes.

drjohn on February 1, 2009 at 9:43 AM

One thing this demonstrates is that the tax code is so ludicrous and inexplicable that even its most ardent supporters ignore it when convenient, hypocritical though that may be. It’s time for either a flat tax applicable to everyone (even the less well off ought to have some pride in having contributed and a stake in the system) or better yet, the fair tax.

NNtrancer on February 1, 2009 at 12:36 PM

Plus, Daschle claimed almost $15,000 in charitable donations over three years to organizations that don’t qualify for the deduction.

Remember Clinton’s underwear write-offs, and don’t forget Pelosi…they all seem to “forget” to do their taxes correctly, but they never forget to tax us.

The foundation has enabled the Clintons to write off more than $5 million from their taxable personal income since 2001, while dispensing $1.25 million in charitable contributions over that period.

Clinton’s spokesman said her failure to report the existence of the family foundation and the senator’s position as an officer was an oversight. Her office immediately amended her Senate ethics reports to add that information late yesterday after receiving inquiries from The Washington Post.

Hillary Clinton’s decision to amend her Senate disclosures comes after several other high-profile politicians came under scrutiny for omitting family foundations from their financial disclosure reports, including former Senate majority leader Bill Frist (R-Tenn.) and House Speaker Nancy Pelosi (D-Calif.). They amended their disclosures, and neither was penalized.

They list their donations of used underwear, but don’t list a charity they run on Hillary’s Senate “financial disclosure” forms?

Pelosi, from 2007

U.S. House Speaker Nancy Pelosi and two other prominent Democrats have failed to disclose they are officers of family charities, in violation of a law requiring members of Congress to report non-profit leadership roles.

Rep. Rahm Emanuel of Illinois, the fourth-ranking House Democrat, and Sen. Evan Bayh of Indiana also did not report they serve as family foundation directors, according to financial disclosure reports examined by USA TODAY.

Gee, they just seem to “Overlook” the law just before elections…

right2bright on February 1, 2009 at 2:35 PM

How many Americans make so much money that they could forget about $83,000 of it in a year?

The WSJ had a link to the current Senate Finance Committee report. Among other things, the reason Daschle couldn’t seem to keep track of this $83,000 is that that was the monthly amount that he received from this payor. He was under a contract for $1 million a year for three years, it seems. In his “defense,” the payor issued him a Form 1099 that was shy by $83,000. It appears that the payor had an employee who screwed up the coding on the payment so that it wasn’t classified as compensation paid to Daschle. That said, he and his accountant knew damned well what his annual compensation was, and they didn’t inquire to get the Form 1099 to match the compensation he actually received for that year.

Another problem he has is that when he filed his amended returns on January 2, he didn’t pay any Medicare tax on the additional income from the use of the car service–that’s another 2.9% and interest he still owes.

Still another problem he has is that for many of the charities to which he made contributions, he has only canceled checks, but not the required donee acknowledgments. I admit that these acknowledgments are a dopey requirement, but they’re the law. Thus, he may still have more charitable deductions disallowed.

Finally, he also received a great deal of free use of a corporate jet from a “non-profit” outfit. The Senate Finance Committee is still trying to determine whether that use should be taxable income to Daschle too.

In the end, Daschle still has a lot of explaining to do.

BuckeyeSam on February 1, 2009 at 3:58 PM

One thing this demonstrates is that the tax code is so ludicrous and inexplicable that even its most ardent supporters ignore it when convenient, hypocritical though that may be.

***

NNtrancer on February 1, 2009 at 12:36 PM

Sorry, Daschle’s problem doesn’t prove your point. Even under the “fair tax,” you still have the threshold issue of what is “income.” Here, Daschle didn’t include $83K that he was paid but was not reported on a Form 1099. He still had an obligation to report the income and, as far as I’m concerned, though it was the payor’s mistake, Daschle should have sought to get a corrected Form 1099.

As for the car use income, same point. It’s the same issue under the current system or the “fair tax.”

From what I’ve seen, the “fair tax” would have eliminated only the issue relating to the charitable contributions.

I understand your point, but, again, Daschle’s problems don’t prove your point.

BuckeyeSam on February 1, 2009 at 4:04 PM

He is a crook, plain and simple.

pat on February 1, 2009 at 4:08 PM

Here, Daschle didn’t include $83K that he was paid but was not reported on a Form 1099. He still had an obligation to report the income and, as far as I’m concerned, though it was the payor’s mistake, Daschle should have sought to get a corrected Form 1099.

That he did not receive a 1099 should be followed-up, too. Those that paid him violated our tax laws by not issuing him a 1099-miscellaneous form. I am of the opinion that all members of Congress should be audited on a regular basis.

Will Wesley Snipes be Obama’s next appointee?

SC.Charlie on February 1, 2009 at 7:19 PM

Oops, I just read that the 1099 that he received was incorrect? However, surely Daschle had a set of books for his business that would have recorded the income anyway.

SC.Charlie on February 1, 2009 at 7:26 PM

Seth so this is what we will get with your man of change? the same old thing? you my boy are a dupe.

Jamson64 on January 31, 2009 at 8:58 PM

At least he’s not a mindless Reaganite. I’ll take that and a China-hostile Geithner over the current GOP. I’d like to see Her Majesty of Alaska have those kind of credentials. That’s how you get the deep blue around the Manufacturing belt to go red, not by killing their way of life for years on end.

sethstorm on February 1, 2009 at 8:40 PM

Guess paying taxes is just for the little guy.

Chessplayer on February 1, 2009 at 8:54 PM

Guess legalized tax evasion paying taxes is just for the little guy Republicans.

Chessplayer on February 1, 2009 at 8:54 PM

FIFY.

sethstorm on February 1, 2009 at 8:57 PM

Oops, I just read that the 1099 that he received was incorrect? However, surely Daschle had a set of books for his business that would have recorded the income anyway.

SC.Charlie on February 1, 2009 at 7:26 PM

Let’s be clear. Daschle was under a contract in 2007 that be paid a total of $1 million for that year, payable at $83K (and change) a month–and he admits that he did receive all $1M, eventhough the 1099 reported only, say, $917K to him for 2007. The report says that the payor’s normal accounts payable clerk was on maternity leave in May 2007, and her replacement mischaracterized Daschle’s payment for that month. That sounds quite plausible because I’m sure the Daschle’s compensation presented a special situation because he was treated as an independent contracter (who receives a 1099) rather than an employee
(who receives a W-2).

But you’re correct. Daschle had a duty to inquire and to get a corrected 1099. He knew damned well he was getting paid exactly $1 million a year, yet he got a 1099 showing $917K. The payor might be subject to a $50 fine for a mistaken Form 1099, but that’s it.

sethstorm on February 1, 2009 at 8:57 PM

Put up or shut up: I’ve requested links from you to establish you allegation that Republicans (only) are guilty of using tax havens. You’re a phony.

BuckeyeSam on February 2, 2009 at 8:02 AM

How many Americans make so much money that they could forget about $83,000 of it in a year?

I thought I did once. But then I woke up.

MarkTheGreat on February 2, 2009 at 8:07 AM

Wasn’t Daschle himself a lobbyist? Didn’t Ogabe promise “no lobbyists” in his administration? What is the average shelf life of an Ogabe promise? I think particles in the supercollider last longer.

SKYFOX on February 2, 2009 at 11:37 AM

Change, change, change we can believe in. The more things change the more they stay the same. Go Barry-O, GOP looking forward to 2010-12 elections. The party of corruption is now the DEMs.

generouse on February 2, 2009 at 12:35 PM

Nothing to see here. Keep moving.

Fuquay Steve on February 2, 2009 at 1:30 PM

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