Glitch? Update: Daschle on tax enforcement in 1998

posted at 8:42 am on February 2, 2009 by Ed Morrissey

Someone needs to get the Washington Post a new headline writer.  Their coverage of Tom Daschle’s tax problems, which could derail his nomination as Secretary of Health and Human Services, has this for a headline:

Daschle Faces Questions From Senators on Tax Glitch

Glitch?  A glitch is when you write something on the wrong line of the tax return, or transpose numbers accidentally.  Daschle has failed to report income, gifts, and now apparently Medicare coverage for his driver.  He has paid over $140,000 in back taxes and penalties.

That’s a little more than just a glitch.

Paul Kane and Ceci Connolly and the Post actually report better than the headline suggests, though:

Daschle’s prospects became complicated during the first week of the year, when he detailed for the White House and the Finance Committee a series of tax filing errors made over the past three years. Most significantly, he did not pay taxes on a luxury car and driver provided by his friend and employer, Democratic businessman Leo J. Hindery Jr.

Daschle, a former Senate majority leader from South Dakota, will head to the Capitol today “ready and willing to answer any questions,” said Jenny Backus, his spokeswoman. He will also inform lawmakers that in addition to the $140,000 in back taxes and interest he paid on Jan. 2, he intends to send the U.S. Treasury an additional $6,000 to cover Medicare taxes on the driver.

Questions about the Medicare tax liability arose only Friday, Backus said, and Daschle agreed to pay the money.

The Post reported yesterday that Daschle kept Barack Obama in the dark about his tax problems for over a month after being nominated.  Connolly and other co-writers also inform readers that Daschle managed to lobby without having to register:

Thomas A. 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 and most ardent 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. …

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 a chauffeured Cadillac, according to the documents.

At some point, this nomination has to be more trouble than it’s worth.  After all, no one will buy the notion that Daschle’s “uniquely qualified” for the HHS position as some did with Geithner at Treasury.  The HHS position is a payback for Daschle’s support in the primaries, and Obama has a perfect excuse now to dump Daschle regardless of loyalty.  By keeping his tax problems secret, he’s proven rather untrustworthy.

And that gets to the heart of why the Senate should have rejected Geithner and why they should refuse to confirm Daschle.  It’s a matter of trust.  Neither man shows a compelling reason why they should have the public’s trust placed in them.  Both men will run vast bureaucracies and enforcement mechanisms, Geithner especially.  The public has the right to demand people with proven accountability, not people who blame their accountants — or their accounting programs.

Unfortunately, the public hasn’t demanded it, in part because the press has been willing to portray these as “glitches”.  Sen. Jon Kyl (R-AZ) noted the double standard of the press in covering the Obama administration and its obvious ethical issues, and wondered if a Bush nominee with even one-tenth the tax issues of Daschle would have gotten such supportive coverage.  If Daschle had been Republican, we would have seen screaming headlines pointing out how out of touch the free limo service would be for a nation struggling with economic crisis, and how Bush did nothing but appoint fat cat lobbyists to positions of power.  The silence along those lines with Daschle and Obama speaks loudly.

Update: From the Department of Delicious Irony, Michelle and many others find this Daschle quote rather germane to his confirmation:

“Make no mistake, tax cheaters cheat us all, and the IRS should enforce our laws to the letter. ” Sen. Tom Daschle, Congressional Record, May 7, 1998, p. S4507.

Maybe Geithner can arrest Daschle when the HHS nominee appears on Capitol Hill for his confirmation hearing — assuming he ever has one.


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