Daschle, Too, Has a Tax Problem


President Obama's designee for Health & Human Services Secretary, former Senate leader Tom Daschle, owed back taxes

A Washington mini-mystery over why President Obama's chosen architect for health reform, Health & Human Services Secretary-designee Tom Daschle, hasn't been confirmed has finally been explained: Daschle appears to have a Timothy Geithner problem.

The Administration acknowledged on Friday, Jan. 30, that Daschle, the former Senate Democratic leader, had not paid until Jan. 1 as much as $100,000 in taxes from 2005, 2006, and 2007 on the free use of a car and driver. InterMedia Advisors, a private equity firm, had provided Daschle, who was chairman of its advisory board, with the transportation, a White House official said.

"Senator Daschle brought these issues to the Finance Committee's attention when he submitted his nomination forms and we are confident the committee is going to schedule a hearing for him very soon and he will be confirmed," White House Press Secretary Robert Gibbs said in statement on Friday evening.

HHS Looms Larger

As in Treasury Secretary Geithner's case, the nominee's mistake is likely only to delay his confirmation. Senate Finance Committee members are to meet in a closed-door session on Monday, Feb. 2, to discuss how to proceed.

Daschle, the former Democratic senator from South Dakota, has also been something of a mentor to Obama. He was initially considered for Obama's chief of staff—another sign that the top health job would loom more significantly in the Obama Administration than in some past Administrations.

Daschle, Senate majority leader from 2001 to 2003, has been working in Washington for the law firm Alston + Bird as a "public policy adviser" to the firm's commercial clients on financial services, health care, and energy—three big challenges for Obama. Daschle also gives advice on trade, telecommunications, renewable energy, and taxes, according to the firm's Web site. He is not an attorney and is not a registered lobbyist, either.

Geithner's nomination at Treasury was slowed after it was revealed that he had originally failed to pay $34,000 in Social Security and Medicare taxes while he worked for the International Monetary Fund. Geithner paid the back taxes, apologized during his confirmation hearing, and was confirmed by the Senate on Jan. 26.

Epstein is a correspondent in BusinessWeek's Washington bureau.

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