Former Sen. Tom Daschle, picked by President Barack Obama to lead his health reform efforts, recently filed amended tax returns to report $128,203 in unpaid taxes and $11,964 in interest, according to a Senate document obtained by The Associated Press.
The White House acknowledged Friday that "some tax issues" had emerged in connection with the nomination, but a spokesman said the president is confident the former Senate Democratic leader will be confirmed as the new health secretary.
Daschle filed amended tax returns for 2005, 2006 and 2007 to reflect additional income for consulting work, the use of a car service and reductions in charitable contribution deductions. He filed the returns after the announcement that Obama intended to nominate him to head the Health and Human Services Department.
Most of the additional taxes resulted from unreported income from the use of a car service provided him by a close friend and business associate. The unreported income for that service totaled about $250,000 over the three years.
Daschle also had unreported consulting income of $88,333, in 2007. He also had reductions to charitable contributions totaling about $15,000 over the three years covered, according to the Senate Finance Committee document. The document, marked "Confidential Draft," is a committee statement concerning Daschle's nomination.
Free ride?
The car service and the consulting income were received in connection with Daschle's business relationship with InterMedia Advisors of Englewood, Colo. Daschle is a limited partner and chairman of its executive advisory board. Daschle is also an independent consultant to InterMedia Advisors LLP of New York City.
Beginning in 2005, Daschle was provided the use of a car and driver by Leo Hindery, InterMedia's managing partner. The two have been personal friends for many years, the Finance Committee report said. Charges for the car and driver services were billed to InterMedia.
"Senator Daschle told staff that in June 2008, something made him think that the car service might be taxable and disclosed the arrangement to his accountant," said the committee statement. "Senator Daschle estimated that he used the car and driver 80 percent for personal use and 20 percent for business use. On January 2, 2009, Senator Daschle filed amended returns for 2005, 2006 and 2007 reporting the value of the car service as income."
The committee is scheduled to meet in executive session to discuss Daschle's nomination on Monday. A Democratic aide declined to comment on any issues discovered in the vetting process.
ABC News first reported on the tax issue Friday evening.
Daschle spokeswoman Jenny Backus told The Washington Post that Daschle "naively" believed the car service was a "generous offer from a friend," and he discovered only last summer that it is considered reportable income.
Nomination on track?
White House spokesman Bill Burton said Daschle's role in the new Obama administration was not in danger of being derailed.
"The president has confidence that Sen. Daschle is the right person to lead the fight for health care reform," Burton said. "In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them. They filed amended return with the IRS and made payments with interest."
Jim Manley, a spokesman for Senate Majority Leader Harry Reid, also predicted Daschle would be confirmed. "He has a long and distinguished career and record in public service and is the best person to help reform health care in this country," Manley said in a statement. "Senator Reid looks forward to a swift hearing and is confident Daschle will be confirmed."
A spokeswoman for Sen. Chuck Grassley, R-Iowa., ranking member of the Senate Finance Committee, said Grassley's position "is the same as it has been for every other nomination processed by the Finance Committee since 2001, that all relevant information about a nominee must be made public in order for the confirmation process to go forward in the committee. The public's business ought to be public, and committee members must weigh all the facts of a nominee's record."
Daschle is the second Cabinet nominee of Obama's to face questions of tax malfeasance.
Tim Geithner, former president of the Federal Reserve Bank of New York, won confirmation Monday as treasury secretary despite personal tax lapses that turned more than a third of the Senate against him. He apologized to Congress for what he called "careless mistakes" in failing to pay $34,000 in taxes between 2001 and 2004.