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Daschle apologizes for tax lapses

Democrats move to strengthen the chances of President Obama's nominee to head Health and Human Services after the former senator meets with the Senate Finance Committee.

February 03, 2009|Noam N. Levey

WASHINGTON — Congressional Democrats moved Monday to shore up Tom Daschle's nomination to become President Obama's secretary of Health and Human Services as the former senator apologized publicly for not paying more than $128,000 in income taxes.

"The American people have high expectations for those of us who serve the public good. That's especially true when it comes to taxes. They pay their fair share, and they expect all of us to do the same," Daschle told reporters after meeting with the Senate Finance Committee to answer questions.

"I deeply apologize to President Obama, to my colleagues and to the American people."

Daschle, the second of Obama's Cabinet nominees to confront tax problems, has been under scrutiny for more than a month for failing to pay taxes on a car and driver and other income provided to him by a wealthy friend after he left the Senate in 2005.

That has delayed his confirmation at a time when the new administration is launching an ambitious push to overhaul the nation's healthcare system.

Nonetheless, the president seemed to be in little jeopardy of losing his choice to lead his reform campaign.

Democratic lawmakers, who hold a commanding majority in the Senate, cheered Daschle's apology, standing with him as he addressed his tax problems for the first time since news of the issue leaked Friday.

"The fact is, Tom Daschle remains eminently qualified to serve as secretary of Health and Human Services," Senate Finance Committee Chairman Max Baucus (D-Mont.) told reporters. "His tax mistakes are regrettable. But his tax mistakes do not change his qualifications to lead on healthcare reform."

Baucus said Daschle could get a confirmation hearing next week.

Republicans on the Finance Committee declined to talk about Daschle after Monday's closed-door meeting, a standard practice for the committee when considering nominations or marking up legislation.

But few GOP lawmakers have indicated much interest in obstructing the nomination of a man who served alongside them for decades.

Monday evening, senior Democrats on the committee -- including Baucus, John D. Rockefeller IV of West Virginia and John F. Kerry of Massachusetts -- said several Republicans had expressed support for Daschle in the meeting. They declined to name the lawmakers.

Earlier in the day, Obama told reporters that he "absolutely" stood behind Daschle's nomination.

When Obama nominated Daschle in December, the former Senate majority leader was cheered as a consensus-builder who could rally support for the kind of major health reform that has eluded policymakers for nearly a century.

But for the last month, Finance Committee staff members have been looking into his failure to report as income a car and driver provided by InterMedia Advisors, a New York private equity fund that Daschle has worked for since 2005. InterMedia is owned by longtime Daschle friend Leo J. Hindery Jr.

Due to an apparent clerical error at InterMedia -- which paid Daschle $1 million a year for consulting services -- Daschle also failed to pay taxes on one month's salary. And he improperly deducted several thousand dollars in charitable donations.

A 2006 audit by the Internal Revenue Service did not flag any problems, according to a Daschle spokeswoman. But after his nomination, Daschle paid $140,167 in back taxes and interest. Daschle said the failures were "inadvertent."

"All of my life, I've . . . tried to pay my taxes in full and on time," he said. "My failure to recognize that the use of a car was income and not a gift from a good friend was a mistake. When I realized the mistake, I notified officials, and I paid the tax in full."

Timothy F. Geithner was confirmed as Treasury secretary last month after revelations of his tax lapses.

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noam.levey@latimes.com

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