Tax issues shadow Obama health nominee Daschle

WASHINGTON (Reuters) - President Barack Obama’s choice to spearhead U.S. healthcare reform, Tom Daschle, paid more than $100,000 in back taxes for a three-year period, setting up a potential roadblock to his nomination, documents showed on Friday.

Former Senator Tom Daschle testifies before the Senate Health, Education, Labor and Pensions Committee hearing about his confirmation for Secretary of Health and Human Services on Capitol Hill in Washington, January 8, 2009. REUTERS/Larry Downing

White House press secretary Robert Gibbs said Daschle, a former Senate majority leader, had filed amended tax returns to the Internal Revenue Service and made payments with interest.

A Senate Finance Committee report obtained by Reuters showed Daschle paid $128,203 in back taxes and $11,964 in interest for 2005 to 2007, to cover income for consulting, the use of a car service and lower deductions for charitable contributions.

“He didn’t think to report it to the IRS. He didn’t think of it as taxable income, but it came up during the vetting process,” said a congressional aide, who asked not to be identified.

Gibbs said the president still expected Daschle, a Democrat who represented South Dakota in the Senate, to be confirmed to lead the Health and Human Services Department.

“Senator Daschle brought these issues to the (Senate) 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,” Gibbs said in a statement.

“The President has confidence that Senator Daschle is the right person to lead the fight for health care reform. In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them.”

Daschle is not the first high-profile nominee for Obama’s Cabinet to run into trouble with taxes. Treasury Secretary Timothy Geithner’s nomination faced criticism for his late payment of $34,000 in self-employment taxes to the IRS. He was eventually confirmed.

A Senate Finance Committee aide said the committee chairman, Max Baucus, had called a meeting for Monday afternoon to talk about nominations.


Sen. Charles Grassley of Iowa, ranking Republican on the committee, believed all relevant information about a nominee should be made public in order for the confirmation process to go forward in the committee, a spokeswoman said.

“The public’s business ought to be public, and committee members must weigh all the facts of a nominee’s record,” she said.

The congressional aide said it was premature to predict Daschle’s confirmation.

“I don’t think anyone should make a presumption. Some members might get tired of what they see as a pattern,” the aide said.

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.

The car services added $73,031 to Daschle’s income in 2005, $89,129 in 2006 and $93,096 in 2007, according to the report.

The amended tax returns also reflected a May 2007 consulting payment of $83,333 -- one of 12 monthly payments Daschle received each year from InterMedia Advisors -- that was inadvertently left off his IRS Form 1099, said the report.

Additional reporting by Susan Cornwell; Editing by Peter Cooney