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Daschle's Taxes Come Under Fire
By Joe Murray, The Bulletin
The confirmation proceedings of Former Senate Majority Leader Tom Daschle, President Barack Obama’s pick to be Secretary of Health and Human Services, stumbled out of the gate Friday when it was reported the Senate Finance Committee would be taking a closer look at his tax returns.
The controversy centers on Mr. Daschle’s use of a car and driver service, compensation he did not claim on his taxes. After his 2004 defeat, the South Dakota Democrats became a consultant for InterMedia advisors. InterMedia is owned by Leo Hindery, a longtime Daschle confidante and Democrat fundraiser.
Mr. Daschle used the services of Mr. Hindrey’s car and driver, but never declared the services on his taxes as federal tax law requires. Mr. Daschle used the services for years with making the necessary declarations.
The Health and Human Secretary-designate voluntarily paid the IRS over $128,203 in back taxes, along with $11,964 in interest penalties, during the vetting process by amending his tax returns for 2005 through 2007. These payments included the value of the car and driver services Mr. Daschle received.
In explaining why he waited so long to make the necessary changes, Mr. Daschle said something just made him think the car and driver services were taxable in June, so he decided to dig deeper into the question.
The Senate Finance Committee announced it would be meeting privately to discuss the situation today as lawmakers on Capitol Hill began to question how the revelations would impact Mr. Daschle’s confirmation hearings.
When asked whether such tax violations should disqualify Mr. Daschle, U.S. Sen. Jim DeMint, R-S.C., told ABC News, “It may be. I — I want to find out more about it.”
“But it’s disheartening, obviously. I mean, people are struggling to pay taxes on a very small amount of income. And when he’s got this huge amount of — you know, I can see now why liberals don’t mind if the tax rate goes up, because they’re not going to pay it anyway.”
The Senate’s No. 2 Republican, U.S. Sen. John Kyl, R-Ariz., told Fox News the Daschle development demonstrated how hard it was for Mr. Obama to create an “ethical administration.”
“I know President Obama wanted to have a very ethical administration starting out but I think he’s seeing how hard it is to avoid these kind of problems,” Kyl said, referring to the back-tax payments of Treasury Secretary Timothy Geithner.
Senate Democrats, however, rushed to Mr. Daschle’s defense and argued the former Democratic lawmaker had been proactive in addressing the issue.
“Months ago, Tom personally and proactively addressed the taxes issue and took all necessary steps to correct his innocent error,” U.S. Sen. John Kerry, D-Mass., chairman of the Finance Committee, said in a statement released over the weekend. Mr. Kerry defended Mr. Daschle’s record in the Senate and claimed he was best suited to head HHS.
And while the news ignited some concerns on Capitol Hill, the White House remained supportive of their nominee
“The president has confidence that Sen. Daschle is the right person to lead the fight for health-care reform,” White House spokesman Robert Gibbs said Friday. “In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them. They filed an amended return with the IRS and made payments with interest.”
But Republicans stilled raised concerns, arguing while the issue may not disqualify Mr. Daschle, it was a troublesome development.
“I like Tom Daschle, and I think on the merits of the job he is very qualified, however, I certainly want to see more of the background of what wasn’t paid before, so I need to know more information,” U.S. Sen. Kay Bailey Hutchinson, R-Texas, said on NBC’s “Meet the Press.”
The Texas senator said she would have voted for Mr. Daschle without question, “but for this.”
Joe Murray can be reached at jmurray@thebulletin.us
The controversy centers on Mr. Daschle’s use of a car and driver service, compensation he did not claim on his taxes. After his 2004 defeat, the South Dakota Democrats became a consultant for InterMedia advisors. InterMedia is owned by Leo Hindery, a longtime Daschle confidante and Democrat fundraiser.
Mr. Daschle used the services of Mr. Hindrey’s car and driver, but never declared the services on his taxes as federal tax law requires. Mr. Daschle used the services for years with making the necessary declarations.
The Health and Human Secretary-designate voluntarily paid the IRS over $128,203 in back taxes, along with $11,964 in interest penalties, during the vetting process by amending his tax returns for 2005 through 2007. These payments included the value of the car and driver services Mr. Daschle received.
In explaining why he waited so long to make the necessary changes, Mr. Daschle said something just made him think the car and driver services were taxable in June, so he decided to dig deeper into the question.
The Senate Finance Committee announced it would be meeting privately to discuss the situation today as lawmakers on Capitol Hill began to question how the revelations would impact Mr. Daschle’s confirmation hearings.
When asked whether such tax violations should disqualify Mr. Daschle, U.S. Sen. Jim DeMint, R-S.C., told ABC News, “It may be. I — I want to find out more about it.”
“But it’s disheartening, obviously. I mean, people are struggling to pay taxes on a very small amount of income. And when he’s got this huge amount of — you know, I can see now why liberals don’t mind if the tax rate goes up, because they’re not going to pay it anyway.”
The Senate’s No. 2 Republican, U.S. Sen. John Kyl, R-Ariz., told Fox News the Daschle development demonstrated how hard it was for Mr. Obama to create an “ethical administration.”
“I know President Obama wanted to have a very ethical administration starting out but I think he’s seeing how hard it is to avoid these kind of problems,” Kyl said, referring to the back-tax payments of Treasury Secretary Timothy Geithner.
Senate Democrats, however, rushed to Mr. Daschle’s defense and argued the former Democratic lawmaker had been proactive in addressing the issue.
“Months ago, Tom personally and proactively addressed the taxes issue and took all necessary steps to correct his innocent error,” U.S. Sen. John Kerry, D-Mass., chairman of the Finance Committee, said in a statement released over the weekend. Mr. Kerry defended Mr. Daschle’s record in the Senate and claimed he was best suited to head HHS.
And while the news ignited some concerns on Capitol Hill, the White House remained supportive of their nominee
“The president has confidence that Sen. Daschle is the right person to lead the fight for health-care reform,” White House spokesman Robert Gibbs said Friday. “In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them. They filed an amended return with the IRS and made payments with interest.”
But Republicans stilled raised concerns, arguing while the issue may not disqualify Mr. Daschle, it was a troublesome development.
“I like Tom Daschle, and I think on the merits of the job he is very qualified, however, I certainly want to see more of the background of what wasn’t paid before, so I need to know more information,” U.S. Sen. Kay Bailey Hutchinson, R-Texas, said on NBC’s “Meet the Press.”
The Texas senator said she would have voted for Mr. Daschle without question, “but for this.”
Joe Murray can be reached at jmurray@thebulletin.us
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