Analysis: Obama's Taxgate Continues To Grow

(CBS/AP)

Former Sen. Tom Daschle, above right, joined recently confirmed Treasury Secretary Timothy Geithner as a high profile favorite of President Obama who made mistakes on his tax returns. The two were joined today by Nancy Killefer, above left, who withdrew her name as nominee for Performance Czar in the Obama administration due to a $946.69 tax lien on her home related to the nonpayment of employment taxes for household help.

4743150At this point Timothy Geithner, at left, the newly donned Treasury Secretary, is the only nominee with a tax problem exposed in the vetting process, who survived the confirmation gauntlet. He will likely be the last one until Obama's Taxgate blows over.

Clearly the cascading tax problems are not an outrageous scandal of great magnitude, but for a president set on leading a new era of responsibility, issues with nominees unable to pay taxes properly don't play well in middle America or with Republicans.

For the "clean up Washington" Obama administration, it's an embarrassment and a thorny distraction from getting the people's work done.

Daschle has profusely apologized for his tax judgment lapse, but it appears that he didn't fully address his tax problem until after the Cabinet position vetting process had commenced. Daschle's error was discovered and dispatched as follows according to a Senate Finance Committee statement:

"Senator Daschle told staff that in June 2008, something made him think that the car service might be taxable and disclosed the arrangement to his accountant. Senator Daschle estimated that he used the car and driver 80 percent for personal use and 20 percent for business use. On January 2, 2009, Senator Daschle filed amended returns for 2005, 2006 and 2007 reporting the value of the car service as income."

Odds are that Daschle could have gutted out the hearings and won confirmation, but he and/or the Obama administration weren't willing to deal with the distraction and were concerned about his lobbyist-like activities.

While Daschle was not a registered lobbyist, skirting the ethics provisions regarding conditions for employment by lobbyists recently set by Mr. Obama, he collected large fees for advising clients on issues related to working with or influencing the U.S. government.

It turns out that Mr. Obama's best and brightest are not the brightest when it comes to their taxes, and the vetting process needs some fine tuning. As a consequence, there is an emerging new standard when it comes to the qualifications of Mr. Obama's nominees and appointees -- no representation without paying your taxes fully.

Yesterday, Mr. Obama said that he would continue to back Daschle. White House Press Secretary Robert Gibbs chimed in during his daily press conference yesterday, saying that "nobody's perfect" in assessing Daschle's tax issue.

But today, nominees must be perfect in their tax preparation and payments.

Daniel Farber is editor-in-chief of CBSNews.com.
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