Former Sen. Tom Daschle, tapped by President Obama to lead his healthcare reform campaign, failed to pay more than $128,000 in taxes in the three years before Obama nominated him in December to head the Department of Health and Human Services.
The disclosure -- involving unreported income and the use of a car and driver provided to Daschle -- comes 2 1/2 weeks after Obama's choice to head the Treasury Department, Timothy Geithner, admitted that he had not paid about $43,000 in taxes.
The bulk of the unpaid taxes -- first reported Friday by ABC News -- stems from a lucrative business relationship that Daschle began with a wealthy investor shortly after Daschle left the Senate in 2005.
That year Daschle was paid $83,333 a month -- or $1 million a year -- to advise a private equity fund, according to a confidential draft report prepared by Republican staffers on the Senate Finance Committee.
Hindery, a Democratic donor who made a fortune in cable television, also provided Daschle with a car and driver beginning in April 2005.
Daschle estimated that 80% of his use of the car was for personal reasons. But he did not pay any taxes on the service until Jan. 2, 2009, when he filed amended returns for 2005, 2006 and 2007.
Daschle this month paid more than $100,000 in taxes and interest for the car service, according to Backus.
He paid an additional $32,491 to cover taxes and interest for a monthly payment that was not reported in 2007.
Daschle has thus far paid a total of $140,167 in back taxes and interest, according to the draft committee report.
Republican committee staff members are continuing to look into Daschle's travel on a corporate jet owned by education loan provider EduCap Inc., according to one staffer who was not authorized to speak publicly about the issue.
The aide said there were also concerns about Daschle's participation in several trips to Jordan and the Caribbean with a student loan company, EduCap, aboard the nonprofit company's $31 million private jet.
"There's a question of whether a nonprofit organization that was charging students an 18 percent interest rate should be spending money on going to Jordan and the Caribbean on a $31 million corporate jet, which costs a lot of money to run as well," said the aide.
The committee report did not include any details about the EduCap trips, but said staffers were still reviewing whether travel and entertainment services provided by EduCap, the Catherine B. Reynolds Foundation, Academy Achievement and Loan to Learn should be reported as income.
President Obama’s choice for health secretary, Tom Daschle, was aware as early as last June that he might have to pay back taxes for the use of a car and driver provided by a private equity firm, but did not inform the Obama transition team until weeks after Mr. Obama named him to the health secretary’s post, senior administration officials said Saturday.
As Senate Democrats rushed to save the nomination of Mr. Daschle, their former leader, the White House spent the day trying to explain how he survived its vetting process despite his failure to pay $128,000 in taxes.
The White House would not say when the president himself learned of the tax issue, but said Mr. Obama is standing by his nominee.
“The president believes that nobody is perfect, but that nobody is trying to hide anything,” Robert Gibbs, the president’s press secretary, said in an interview
It’s totally shocking,” an aide to a Democratic senator said Saturday. “Why do we have to continue to have the same story over and over again with these nominees?”
Mr. Daschle, who has paid the back taxes with interest, is the latest of Mr. Obama’s cabinet choices who have run into trouble, and the revelations about his finances — which include more than $300,000 in income from health-related companies that he might regulate as secretary — raise questions about the presidential vetting process, as well as Mr. Obama’s ability to keep his pledge to run an administration free of outside influence.
As a politician, Mr. Daschle often struck a populist note, but his financial disclosure report shows that in the last two years, he received $2.1 million from a law firm, Alston & Bird; $2 million in consulting fees from a private equity firm run by a major Democratic fundraiser, Leo Hindery Jr. (which provided him with the car and driver); and at least $220,000 for speeches to health care, pharmaceutical and insurance companies. He also received nearly $100,000 from health-related companies affected by federal regulation.
Mr. Obama has instituted rules requiring former lobbyists in his administration to pledge not to deal with former clients, though he has made exceptions for two nominees, one at the Pentagon and one at the health agency. As a strategic adviser to companies, Mr. Daschle did not have to register as a lobbyist, and is not technically covered by those rules.
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