Old Ways Doomed New Job for Daschle

Some See Failed Nomination as Harbinger of Change

A classic rule of Washington's political culture -- that public service can lead to personal riches -- seemed to collide yesterday with the presidential promise that the time has come for a break with the past.

Former senator Thomas A. Daschle, whom President Obama once called "the original no-drama guy," suddenly was forced to step aside as the president's nominee for secretary of health and human services because of problematic ties to wealthy private interests.

It was a jarring twist to Daschle's 30-year career in Washington, one built on a reputation of integrity and decency. After losing his Senate seat while serving as that body's most powerful Democrat in 2004, he swiftly signed on as a special policy adviser to a 900-member law firm and pulled in a multimillion-dollar salary. It is a well-worn path, trod by dozens of ex-lawmakers in the past decade.

But some observing the debacle wondered if the capital's ways were changing. The story of how he fell in with the monied elite and out with the popular mood involves a longtime Democratic financier, Leo Hindery Jr., and his keen interest in currying influence with powerful politicians. The outcome caught many in Washington off guard.

"I think it's possible this is some sort of bridge between an old Washington and the new Washington," David Arkush of Congress Watch said of the initial backing of Daschle and the sudden reversal.

Until this week, Daschle was regarded as a shoo-in for confirmation. His undoing came with the release of his financial disclosure forms last Friday and information that he had paid $146,000 in back taxes and interest to resolve problems flagged by Obama's vetters.

Although Daschle, as a former member of the Senate Finance Committee, helped write tax laws, he explained to the committee on Monday that he did not understand that the around-the-clock car and driver in his new life was subject to taxation and not just a gift from a friend.

It was the relationship with that friend, wealthy media entrepreneur Hindery, that ultimately ended Daschle's return to public life.

Hindery, Daschle said last June in a Las Vegas speech, is "as close to a brother as I'll ever have." Daschle called Hindery someone "I have turned to over and over again for guidance, for direction and inspiration," including on the subject of national health insurance. Daschle even pushed him for a job with the Obama administration, though none was offered.

Hindery had no comment on yesterday's events. Though both Daschle and Hindery have long experience in Washington's ways, they found themselves entangled in a political mess neither had anticipated.

Hindery is an immensely sociable, self-confident corporate dealmaker and race-car driver with strong policy opinions. He has a large network of confidants in Washington: Two former senators, besides Daschle, sit on his corporate board; he was John Edwards's chief campaign adviser on economic matters; and he is a board member of the Gephardt Group, run by the former House majority leader, on whose campaign finance board he once sat. In 2004, Hindery was Daschle's candidate to become head of the Democratic National Committee, and a former assistant at a media company Hindery ran is now a senior policy adviser to Senate Majority Leader Harry M. Reid (D-Nev.).

Hindery's access in Washington has been lubricated by his personality, his ideas and the wealth he accumulated at a succession of media firms -- Tele-Communications Inc., AT&T, Global Crossing and InterMedia Partners. He spread that money around to nonprofit groups and politicians, donating first to Republicans and more recently to Democrats. His checks for at least $1 million in the 2002 election, and hundreds of thousands of dollars before that, arrived at moments when some of the 240 separate corporate deals in which he says he played a role were subject to intense regulatory and tax scrutiny.