A top pick for US President Barack Obama’s Cabinet failed to pay back taxes, which the White House on Friday downplayed as an oversight which since has been “fixed.”
Obama’s choice to head the US Department of Health and Human Services, Tom Daschle, failed to report as income services by a wealthy friend, the White House said in a statement.
But, “in preparation for his nomination, Senator Daschle and his accountant identified some tax issues and fixed them,” the White House said, adding that the money owed to the US government was paid, with interest. News reports said that Daschle owed over US$100,000 in back taxes after failing to report services from a wealthy friend.
Nevertheless, “the president has confidence that Senator Daschle is the right person to lead the fight for health care reform,” according to the statement which expressed certainty that the former Senate Democratic leader “will be confirmed.”
Daschle, whose nomination had been expected to easily win confirmation, was forced to amend his tax returns on Jan. 2 during the vetting process for his nomination, which went before a Senate committee just six days later, the New York Times reported.
An administration official told the Times that the failure to pay the taxes had been “a stupid mistake” but should not derail the nomination.
The controversy stems from a chauffeur service provided by Leo Hindery, founder of private equity firm InterMedia Advisors, where Daschle was chairman of the advisory board after he lost his 2004 Senate re-election campaign, reports said.
The car and driver were not part of Daschle’s official compensation package from the company but he failed to declare the services on his income taxes as required by law, ABC News reported.
It quoted an unnamed Democratic Senate ally of Daschle describing the revelation as a “speed bump.” The reports helped explain the delays to Daschle’s confirmation, which had been expected before Obama took office on Jan. 20.
A spokesperson for the nominee said “he deeply regretted his mistake,” and that when he recognized his error “he corrected it rapidly.”
Daschle is the second Obama cabinet nominee in as many weeks to hit a tax snag.
Timothy Geithner was confirmed as US treasury secretary on Monday despite his admitted failure to pay US$34,000 in taxes to the Internal Revenue Service — an error he said he has rectified.
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