By Adriel Bettelheim CQ Staff
Published: 02-04-09
From the earliest days of his candidacy Barack Obama repeatedly vowed to change the culture of Washington and build an administration known for unsurpassed transparency and accountability.
But once he was elected president Obama said he’d need an experienced team well-versed in the ways of the nation’s capital to effect the ambitious agenda he envisioned.
Those wishes have been difficult to reconcile.
Tom Daschle’s decision on Tuesday to withdraw his nomination as secretary of Health and Human Services in the face of questions about back taxes and potential conflicts of interest — a decision that came just hours after Nancy Killefer the administration’s chief performance office and budget watchdog resigned over unpaid taxes — underscored the extent to which Obama has become a captive of the high ethical expectations he set.
Experts say it also demonstrated how trespasses on Wall Street and corporate boardrooms have made it more difficult for public officials to live down undisclosed mistakes from the past.
“The public’s less forgiving at a time like this and we’re also talking about a lot of money in some of these cases” said W. Clyde Wilcox professor of government at Georgetown University. “Many Americans report tips and other stuff they receive. Then they see someone with a stratospheric income not paying taxes ... it’s quite a black mark.”
Daschle a former Senate Democratic leader and Killefer an ex-Clinton administration Treasury Department official were two of the Beltway veterans Obama tapped early during the transition period to fill out his brain trust. Since leaving the Senate in 2005 Daschle has followed a path not uncommon to other high-profile public officials giving speeches to trade groups serving as an adviser for the law firm Alston & Bird and as chairman of the board of InterMedia Advisors a private equity fund. He was paid more than $4 million for his work and accepted more than $195000 more in speaking fees to health care groups.
Fred Wertheimer a longtime advocate of campaign-finance overhaul and president of the nonprofit Democracy 21 said Daschle’s problems should not obscure Obama’s desire to reduce influence-peddling in Washington which were evidenced by a set of ethics rules Obama imposed on his staff on his first day in office.
“You can’t judge President Obama’s efforts to change the way the city works only on individual cases” Wertheimer said. “There are larger stakes in terms of whether a culture that benefits lobbyists and special interests can be placed in a better balance with the interests of the American people.”
Tuesday’s twin embarrassments nonetheless revived questions about the administration’s vetting process which became the object of comment and concern after it was disclosed that Treasury Secretary Timothy F. Geithner failed to pay Social Security and Medicare taxes while he was an employee at the International Monetary Fund between 2001 and 2004 — and also had employed a housekeeper whose work permit had lapsed. Geithner who wound up paying $43000 in back taxes and penalties was confirmed by the Senate last week by a 60-34 vote.
Obama’s first nominee for Commerce Secretary Bill Richardson withdrew in January amid reports that a federal grand jury has been looking into whether a California company won a state contract after contributing to Richardson’s political causes.
Tax problems have grounded Cabinet-level nominations in the past. Former President Bill Clinton’s first two picks to head the Justice Department Zoe Baird and Kimba Wood were both forced to withdraw because they had employed illegal immigrants at their homes. Baird’s problem was compounded by a failure to pay Social Security taxes.
However most senators decided to look past Geithner’s problems fearful that the economy would suffer if Obama would have to select another Treasury candidate.
That decision did however lay a trap for other officials in the Cabinet and the Executive Office of the President by raising sensitivities about any other officials’ tax delinquencies.
Killefer quit her post after the Associated Press reported earlier this month that she failed to pay $298 in District of Columbia unemployment compensation taxes. (She had a $946.69 lien placed on her house as a result.)
Her decision spelled the end for Daschle — who owed $128203 in taxes plus $11964 in interest — because any decision to stand behind the South Dakotan would have smacked of gender hypocrisy a charge already lobbed during Geithner’s confirmation.
White House press secretary Robert Gibbs said Daschle and Killefer both realized their tax problems would be a distraction. Obama took responsibility for the nomination snafu saying in an interview tih CNN’s Anderson Cooper “I campaigned on changing Washington and bottom-up politics. And I don’t want to send a message to the American people that there are two sets of standards one for powerful people and one for ordinary folks who are working every day and paying their taxes.”
Good government groups say the episodes have left the administration bruised and without a clear-cut policy on owing back taxes.
“It seemed like we were on the brink of deciding that tax issues would no longer trip up nominees and maybe that’s OK because American taxes are complicated and ... if you demand purity from all nominees maybe you won’t be able to have any officials” said Melanie Sloan executive director of Citizens for Responsibility and Ethics in Washington. “Now we’re back to the original policy but there’s an exception if you’re the potential savior of the American economy.”
Sloan says one thing is fairly certain as the White House begins to evaluate candidates for Daschle and Killefer’s jobs. “I expect Obama’s people to be going over people’s taxes with a fine tooth comb” she said.
