Apologetic Daschle Not Out Of Woods Yet

When Washington veteran Tom Daschle was nominated to be Secretary of Health and Human Services, everyone thought he was a shoo-in. But that hasn't been the case.

Daschle's former Democratic colleagues were rallying to his defense after he met behind closed doors with the Senate Finance Committee to discuss problems with back taxes and potential conflicts of interest, but lawmakers promised he will face more questions.

Daschle, one-time Senate Democratic leader, is President Barack Obama's nominee to oversee the Health and Human Services Department.

Republican members of the committee avoided reporters after the meeting Monday, but an aide to Sen. Charles Grassley, R-Iowa, said the senator still has a lot of questions he will explore at Daschle's confirmation hearing Feb. 10.

Those questions will focus on tax issues, such as the $128,203 in back taxes and $11,964 in interest that he paid last month, said the aide. Daschle will also be questioned about the potential conflicts of interests he would face because he accepted speaking fees from health care interests, said the aide, who asked not to be identified because the aide was not authorized to speak publicly on the matter.

Daschle also provided advice to health insurers and hospitals through his work at a law firm.

Nobody was predicting defeat for Daschle's nomination, but it was proving an unsavory pill to swallow for senators who only last week confirmed Timothy Geithner as treasury secretary despite his own tax-payment problems. It's an issue that strikes a nerve among lawmakers' constituents, who are struggling with their own serious money problems.

Daschle did get warm words of support from numerous Democratic senators. Sen. Max Baucus, D-Mont., gave him an especially important endorsement, since the two men have had tussles in the past over Baucus' handling of GOP tax-cut proposals, Medicare changes and other issues.

"His tax mistakes are regrettable," Baucus said. "But his tax mistakes do not change his qualifications to lead on health care reform. They do not change my support for his nomination."

Some senators laid the blame for Daschle's tax woes on his employers rather than on Daschle. Sen. Jay Rockefeller, D-W.Va., said the friend that provided him with a chauffeur service for three years, Leo Hindery Jr., should have given Daschle a tax form that would make clear the service was to be treated as income.

Daschle's Post-Senate Career

When Daschle lost his seat in 2004 after 17 years in the Senate, CBS News senior White House correspondent Bill Plante reports that he joined the law and lobbying firm Alston and Bird - but he's not "technically" a lobbyist.

"What Tom Daschle does is the more sophisticated form of lobbying that we have in Washington, and that's a 'consultant,'" said Melanie Sloan, Executive Director of Citizens for Responsibility and Ethics in Washington (CREW). "He talks to people about the strategy for getting legislation passed."

The Alston Bird firm represented a long list of clients in health services, among them: HealthSouth Corp., Alliance for Quality Nursing Home Care, and Viant Health Payment Solutions.

Daschle also joined media investor Leo Hindery to chair a new company of regulatory experts called InterMedia Partners. He was paid over $2 million, $83,000 of which was not reported because of a clerical error.

Hindrey also gave Daschle the use of his private car and driver. But it was only last June that Daschle asked his accountant if he owed taxes on the use of the car - and December when he paid $140,000 in taxes and penalties on the car and the unreported income.

"Maybe the truth of the matter is you need some of those Washington insiders in order to make your government work," Sloan told CBS News. "Well, then, let's just say that."

Daschle says if he's confirmed, he'll take no part in any decisions affecting former clients … and that he is sorry.

"It was completely inadvertent, but that's no excuse," he said. "I apologize to President Obama, to my colleagues and to the American people."

Backing The Nominee

President Obama said he was "absolutely" sticking with his choice for health secretary.

The White House both underscored the magnitude of the problem and tried to downplay it in the space of seven words. "Nobody's perfect," said press secretary Robert Gibbs. "It was a serious mistake."

In a letter released Monday, Daschle sought to explain how he overlooked taxes on income for consulting work and the use of the car service. He also deducted more in charitable contributions than he should have.

Gibbs noted Daschle's long tenure as a senator from South Dakota and said it would be up to the Senate to weigh a "serious but corrected mistake against that three-decade career in public service."

"We still think he's the best person to do health care reform and shepherd a very complicated process through Congress to achieve savings and cut costs for the American people," Gibbs said. The White House also had suggested Geithner was indispensable for the national economic revival in arguing for his confirmation despite tax problems.

CREW's Sloan noted the Geithner nomination in saying she suspected tax problems would not prevent Daschle from becoming the next health secretary.

"If the guy who is overseeing the IRS can get away with a tax problem, how are you going to hold up the health and human services secretary over taxes?" she asked.