Beltway animal behavior
Tom Daschle and his tax-free limo
Beltway animal behavior
Barack Obama has billed himself as a new broom in Washington, but some of the town's rituals apparently endure. For instance, there's the venerable tradition of releasing embarrassingly bad news at Friday twilight, presumably when few people are paying attention. Such was the case as darkness fell last Friday, when we suddenly learned that Tom Daschle, the ex-Democratic Senate leader and current Obama sidekick, had failed for three years to pay any taxes on his free limousine (which, of course, came with a driver).
It's instructive just to watch the clock on this one: ABC News had the story at 6:29 p.m. Politico had it at 9:05. The Associated Press had a fuller version at 11:21. And the major broadsheet newspapers had to run their stories on Saturday, which every White House knows to be a low-readership day.
The problem, however, is that the Daschle story is too substantively embarrassing to simply live and die in one news cycle. It's alive and well today, because Daschle - the Obama team's choice to be the Health and Human Services secretary - is being compelled to explain himself behind closed doors on Capitol Hill; and because Daschle is already circulating a mea culpa. His letter to the Senate Finance Committee reads: "I am deeply embarrassed and disappointed by the errors that required me to amend my tax returns. I apologize for the errors and profoundly regret that you have had to devote time to them."
But that admission only prompts me to wonder: What was this guy thinking in the first place? And how badly has he embarrassed the new administration?
Here's a sophisticated Washington player, with decades of political know-how, presumably well schooled in the power of perception, presumably well aware (from the numerous incidents he has witnessed) that ambitions can be dashed overnight by revelations of past errant behavior...and yet Daschle still played fast and loose with the tax man, gaming the system in ways that are foreign to the average working stiff.
While earning big money in the private sector over the past few years (following his '04 Senate defeat), Daschle clearly envisioned returning to government in a position of influence. He authored a book, released one year ago, entitled Critical: What We Can Do About the Health Care Crisis, and he signed on early to the Obama campaign as a national chairman. Last year, he dropped hints to the press that he was interested in universal health care and that he'd gladly serve as HHS secretary in a Democratic administration.
So, given the fact that Daschle was pondering public-service options, and that 2008 was shaping up to be a strong Democratic year, why wouldn't he have sought to ensure that his private sector record was spotless when the public spotlight swung his way? Wouldn't that have been the logical course of action?
Instead, he took a free car and driver from one of his many private-sector patrons (a private equity firm), and used it for personal pursuits 80 percent of the time. That's a violation of the IRS code, which requires that the value of transportation services provided for personal use has to be reported as income. Daschle's unreported income, with respect to the limo, totaled roughly $255,256 in the three years from 2005 to 2007.
He didn't pay the back taxes and interest on that income (totaling about $140,000) until Jan. 2 of this year - after Obama had tappped him to be HHS secretary, and therefore after it became clear that he needed to clean up fast, in advance of his confirmation hearing.
A few other tax issues are dogging Daschle at the moment (such as $88,000 in unreported consulting income in 2007), but the limo episode gives us a window into the psyche of an ex-pol living life in the fast lane, paying scant heed to the tax laws, and facing up to the political ramifications only when there was no avenue of escape.
The Democratic-run Senate Finance Committee, in a report on Daschle released Friday, included this gem of a sentence: "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."
Something made him wake up...Well, it's not hard to determine what that something was. On June 3, 2008, Obama clinched the Democratic nomination. That same week, Daschle told the press that he was "interested" in being "helpful" to an Obama administration on the health care issue. Translation: With his dream of an influential Obama post becoming more real by the day, with his ambitions on the line, he suddenly developed religion about the tax laws.
Reportedly, however, he didn't share his new-found religion with the Obama transition team until mid-December, after he was tapped for the HHS job; only then did he share the news about the car-and-driver matter.
The result today, of course, is that he has badly embarrassed Obama. The new president has set a high bar on ethics and accountability, yet here's another prominent Cabinet nominee (with baggage worse than Treasury Secretary Tim Geithner) who can't seem to hurdle it.
On the other hand, it was Obama's decision to nominate Daschle in the first place; presumably, he knew all along that this guy was a classic Beltway animal. Scads of lawmakers have left Capitol Hill and promptly cashed in on their connections and expertise by signing up with the deep-pocket companies that they once regulated. Daschle epitomizes that traditional Washington two-step. He has taken in roughly $5.3 million in the last two years alone - including $300,000 from health-care companies that he would have to regulate if he is confirmed as HHS secretary. And he was savvy enough to elude the strictures that are imposed by lobbyists, because, while he has been giving "policy advice" to private sector clients, he has never registered as a lobbyist.
Will Daschle be confirmed? A Senate Democratic spokesman said yes, citing Daschle's "long and distinguished career and record in public service." Translation: Daschle is a member in good standing of the Senate club, and it's hard to imagine that club members will sandbag one of their own, for the behavior that they too would indulge in the private sector if given the chance.
Obama has signaled that he is sticking with Daschle. No doubt Daschle believes that the president is sincere. Last June, Daschle offered this praise for his patron: "Those who accomplish the most are those who don't make perfect the enemy of the good. Barack is a pragmatist."
Daschle, demonstrably less than perfect, appears to be reading Obama correctly.