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Back Taxes, Part Two
First Tim Geithner, now Tom Daschle

Tuesday, February 3, 2009

THE TAX PROBLEMS plaguing the nomination of former senator Thomas A. Daschle to be secretary of health and human services are troubling -- as were the problems of Treasury Secretary Timothy F. Geithner. In both cases, the nominees had failed to pay the full amount of taxes they owed. While there is no evidence of willful evasion in either instance, it is difficult to understand how people of their sophistication could have blundered in this way.

Mr. Geithner had been on notice from his former employer, the International Monetary Fund, that he was being reimbursed for, and would have to pay, the employer's share of the payroll tax. Yet for four years he failed to do so, and he did not pay the amounts owed for two of those years until he was chosen for the Treasury post. As Treasury secretary, Mr. Geithner will oversee the Internal Revenue Service. Despite all this, we did not oppose his confirmation because of Mr. Geithner's qualifications and the sizable deference due any president, Democrat or Republican, in staffing his administration.

Now comes Mr. Daschle, who failed to treat the receipt of a car and driver as taxable income and missed some other payments as well. Mr. Daschle says he considered the car service a gift from his friend Leo J. Hindery Jr., a longtime political supporter. But Mr. Daschle was in business with Mr. Hindery; Mr. Hindery's company, InterMedia Advisors, paid for the car. Mr. Daschle became aware that he might have a tax problem after his preferred candidate, Barack Obama, clinched the Democratic nomination and appeared to have a good chance of winning the presidency. The six-month delay between Mr. Daschle's recognition of the problem and his filing amended returns raises questions about whether he would have addressed the problem had he not been nominated for a Cabinet post.

Mr. Daschle is not the first former lawmaker to parlay public service into private-sector wealth, but his haul after leaving the Senate -- more than $5 million over two years -- hardly comports with Mr. Obama's assertions that he would end Washington business as usual. Mr. Daschle earned $2.1 million from a law firm, Alston & Bird, where he served as "special public policy advisor"; $2 million from InterMedia, a private equity firm; and $220,000 for speeches to health-care companies, pharmaceutical manufacturers, insurers and others. Isn't this the sort of thing Mr. Obama criticized on the campaign trail?

And yet: Mr. Daschle deserves to be judged also on the basis of his long career in public service and his knowledge of and interest in health-care reform. Ordinary Americans who pay their taxes may well wonder why Mr. Obama can't find Cabinet secretaries who do the same. But if Mr. Obama still wants Mr. Daschle in the job, and he said yesterday that he does, based on the record known so far he's entitled to have him.

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