Daschle's Tax Dodging: (Of Course) There's Even More Than Originally Reported

January 31st, 2009 10:03 AM

Daschle0109.jpgSleep a little, miss a lot.

As noted Friday evening (at NewsBusters; at BizzyBlog), Jake Tapper at ABC's Political Punch blog revealed that former South Dakota senator Tom Daschle, Barack Obama's nominee for Secretary of Health and Human Services, had failed to pay over $100,000 in federal income taxes for 2005, 2006, and 2007, because he did not originally report the "the services of (a free) car and driver" provided to him by his employer, private equity firm InterMedia Advisers.

At 11:24 last night, Tapper posted a separate update (HT to NB commenter "slickwillie2001") indicating that Daschle's tax problems involve larger amounts, go well beyond the matter of a "mere" car and driver, and are not completely resolved (bolds are mine):

Mr. Daschle also didn't report $83,333 in consulting income in 2007.

The Senate Finance Committee Report also notes that during the vetting process, President Obama's Transition Team "identified certain donations that did not qualify as charitable deductions because they were not paid to qualifying organizations. Daschle adjusted his contribution deductions on his amended returns for 2005, 2006 and 2007 to remove these amounts and add additional contributions." This adjustment meant a reduction in the amount he contributed to charitable foundations of $14,963 from 2005 through 2007.

With the unreported income from the use of a car service in the amounts of $73,031 in 2005, $89,129 in 2006 and $93,096 in 2007; the unreported consulting income of $83,333 in 2007; and the adjusted reductions in charitable contributions, Daschle adds a total of $353,552 in additional income and reduced donations, meaning an additional tax payment of $128,203, in addition to $11,964 in interest.

On January 2 of this year, Daschle filed amended tax returns to pay the $140,167 in unpaid taxes.

The Finance Committee staff still is reviewing whether travel and entertainment services provided Tom and Linda Daschle by EduCap, Inc., Catherine B. Reynolds Foundation, Academy Achievement, and Loan to Learn should be reported as income. Earlier this month, the Wall Street Journal reported that Daschle made use of the jet belonging to EduCap, a non-profit student loan organization.

The timing of these revelations smacks of "clever" Obama administration news management that I believe would have brought howls of outrage from establishment media if it had occurred during the previous administration:

  • The car and driver item that was trotted out first, while admittedly large, can be (and was) framed as somewhat understandable (poor guy, "he thought it was a gift").
  • Failure to report income, which ABC apparently had to find on its own once Team Obama dangled the driver angle, is quite another matter. Daschle almost certainly received a Form 1099 relating to that income. Barring unusual circumstances, he should have reported the amount listed. It appears that he didn't.
  • The charitable deductions problem, while smaller, could also be more embarrassing, especially if we ever get to learn the identities of the organizations that really weren't qualifying charities.
  • Given that there are four separate different organizations that provided "travel and entertainment services" to the Daschles, there may be a web of relationships that, if uncovered, might reveal conflicts of interest.

The news release strategy appears to have been to get the media to focus on the car and driver, and make them dig up the rest over the weekend while no one is paying attention. I suspect the media outrage over this degree of apparent news management will be a big, fat zero.

The potentially most odious aspect of the Daschle dodge is that even a Senate turndown may not keep him out of the Obama administration. In a post last Sunday (at NewsBusters; at BizzyBlog), I noted a Politico.com report on the Obama adminstration's unprecedented concentration of power in non-Cabinet positions that report directly to the President. As Tapper reiterated in his original post yesterday, Daschle has one of those positions:

Should Daschle have difficulty being confirmed -- a prospect that seems unlikely given the benefit of the doubt senators frequently extend to one another, not to mention the Senate's Democratic majority -- he doesn't have to worry about finding another job in the administration, since President Obama has also appointed him to serve as director of the new White House Office on Health Reform.

Cross-posted at BizzyBlog.com.