Former Senate Majority Leader Tom Daschle paid $100,000 in back taxes after using a company-paid limo and driver for free – throwing a stumbling block in front of his nomination as Barack Obama’s health and human services secretary.
Daschle used a Cadillac and driver while working as a consultant to a New York City private equity firm, InterMedia Advisors, and didn’t report the limo service to the IRS. Intermedia has paid Daschle more than $2 million in fees since 2005, his financial disclosure form shows.
News of Daschle’s tax delinquency, first reported Friday night by ABC’s Jake Tapper, represents an embarrassing repeat for Obama’s administration, which just won the confirmation of Treasury Secretary Timothy Geithner earlier this week despite his failure to properly pay taxes.
But Obama aides say the president is committed to ensuring Daschle’s confirmation.
“The President has confidence that Senator Daschle is the right person to lead the fight for health care reform,” Obama deputy press secretary Bill Burton told Politico.
Those familiar with Daschle’s thinking say he will continue to pursue the nomination.
"Yes he will," one source close to Daschle told Politico when asked if the former senator would go forward.
Daschle spokeswoman Jenny Backus said that Daschle "he expressed his regret, he knew he made a mistake and he was fully responsible for it. He fixed it to the nth degree by filing all these amended returns. He is embarrassed. He fixed it and answered all these questions about it."
She added, "He is the one who brought it to their attention. It is a stupid mistake."
Democrats have called a meeting for 5 p.m. Monday among Senate Finance Committee members to discuss the prospects for Daschle’s nomination.
At a minimum, the revelations, along with the tax problems that dogged the finally succesful nomination of Treasury Secretary Timothy Geithner, are sure to provide Republicans and conservatives with rich fodder for lampooning two of Obama's most prominent appointees.
A top Republican aide, speaking on condition of anonymity, predicted that Daschle would step aside to avoid an embarrassing public grilling.
"Imagine what the story would be, what the Democrat reaction would be, if a [Republican had done what Daschle did]," the staffer said. "Democrats would be howling, and they’d filibuster his ass while linking him to every member of his party in Congress. They’d ask everyone to return his donations. They’d call for an immediate investigation into why the administration kept it quiet. It would be ugly."
As part of the nomination process, Daschle and his accountant detected the outstanding taxes and filed an amended return with a payment of $101,943 earlier this month, according to administration officials.
“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,” Burton said.
Democratic sources say the car and driver was not Daschle’s but that of Leo Hindery, a Democratic fundraiser and executive who founded InterMedia Advisors. Hindery was once thought to be in the running to be Obama’s Commerce Secretary.
Still, Daschle was required to pay taxes on his use of the service.
One of the president’s closest advisers and somebody once thought to be a potential Chief of Staff, Daschle is in line to not only run HHS but play the leading role in expanding health insurance as director of a newly-fashioned White House Office on Health Reform.
In all, InterMedia provided Daschle with $182,520.26 worth of “company provided transportation,” he reported on a financial disclosure form released Friday by the Office of Government Ethics.
The company as paid him $2,074,963 in consulting fees, according to the form, which indicates he’s been a consultant and chair of the company’s advisory board since January 2005.
He also reported a stake in the company worth between $200,000 and $500,000, as well as a “5 % limited partner profit sharing interest.”
But only about half of his interest is vested, and Daschle indicates that “upon confirmation, I will divest all my vested shares and unvested shares and relinquish any benefit to which I may otherwise be entitled.”
The former Senator endorsed Obama early in the Democratic primary and many of his top staffers and political loyalists assumed key positions in the campaign and now in the administration.
Despite his own tax problems, Geithner cleared the committee and Monday won confirmation, 60-34, before the full Senate.
Glenn Thrush, Kenneth P. Vogel and Amie Parnes contributed to this report.