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Hilda Solis, Labor nominee, faces tax questions

A Senate committee's vote on her confirmation is delayed after it learns her husband had $6,400 in unresolved tax liens filed against his business.

February 06, 2009|Peter Nicholas and Dan Weikel

WASHINGTON AND LOS ANGELES — U.S. Rep. Hilda L. Solis, President Obama's choice for Labor secretary, faced new obstacles after lawmakers who were expected to vote on her confirmation Thursday abruptly canceled the hearing amid reports of back taxes owed by her husband.

Solis, a Democrat from El Monte, is at least the fourth Obama nominee whose confirmation has been complicated by tax troubles.

The Obama administration conceded it had not discovered on its own that California tax liens had been filed against Solis' husband, Sam H. Sayyad. The White House learned about the liens -- a matter of public record -- on Tuesday in the form of questions from USA Today, according to an administration aide.

After the newspaper informed the Senate Health, Education, Labor and Pensions Committee of the tax liens, the panel called off the hearing so members could review the information. A new hearing was not immediately scheduled.

"It doesn't make [the administration's] vetting operation look too slick," said Sheila Krumholz, executive director of the Center for Responsive Politics, a watchdog group. "Hard-working Americans who pay their taxes do get upset about these hang-ups. I think that the reaction here will probably be: 'Not another one.' "

Public records show that since 1993, two state and 14 Los Angeles County tax liens totaling about $11,640 have been lodged against Sayyad and his business, Sam's Foreign and Domestic Auto Center.

The documents indicate that $6,468 in county liens remained unresolved until Wednesday, when Sayyad paid off the balance, according to the Los Angeles County treasurer and tax collector's office.

A tax lien is a legal claim filed by federal, state or local governments to collect unpaid taxes and fees from individuals and businesses. Anthony Yakimowich, chief deputy treasurer and tax collector for Los Angeles County, said Thursday that Sayyad "has paid everything he owes us."

Yakimowich said liens are not necessarily an indication that a business or an individual is trying to avoid paying taxes. Businesses can run into financial difficulties, and honest disputes can arise, he said.

Democrats in control of the labor committee said they are confident Solis will be confirmed.

"Congresswoman Solis will make an outstanding secretary of Labor and, while this issue has only recently come to the committee's attention, we are optimistic that the committee will be able to move forward with her nomination soon. We have asked the [Obama] administration to look into this and report back," said Anthony Coley, a spokesman for committee Chairman Ted Kennedy (D-Mass).

Republican members of the committee did not return calls. A Republican Senate aide said that GOP members are taking "a wait-and-see approach."

Republican senators want "to get to the bottom of this to see if it's a legitimately innocent error or, once again, another questionable tax problem with another Obama nominee," said the aide, who requested anonymity because he was not authorized to speak publicly.

Solis' nomination had already faced snags. In her appearance before the Senate committee last month, she appeared evasive in certain answers, leaving some GOP members unimpressed.

Then Republican senators suggested that her ties to a tax-exempt group that promotes unionization might pose a conflict of interest. Solis has denied any conflict and says she is within her rights to serve as an unpaid board member and treasurer of the group, American Rights at Work.

The group is a strong proponent of the Employee Free Choice Act, a bill that would make it easier for workers to form bargaining units. As a congresswoman, Solis has been a co-sponsor of the bill.

At the White House, aides sought to draw a distinction between Solis and her husband. Briefing reporters on Thursday, White House Press Secretary Robert Gibbs said that Solis is "not a partner in that business. So we're not going to penalize her for her husband's business mistakes. Obviously, her husband, I think, has and should pay any taxes that he owes."

The couple files a joint tax return, but Sayyad is the sole proprietor of his business, another White House aide said, and all tax communications about his business are sent to him at a separate address.

Sayyad paid off the debts this week to resolve questions, but he believes the liens were not accurately assessed, the aide said. He believes the liens were the result of late payment on county fees and assessments, and is planning an appeal, according to the aide.

Calls to Sayyad were unanswered. Solis' office has referred questions to the White House.

--

peter.nicholas@latimes.com

dan.weikel@latimes.com

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