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'Reformer' Daschle Had Big Paydays From Insurers

Sunday, 01 Feb 2009 08:13 PM

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WASHINGTON – Tom Daschle collected nearly a quarter of a million dollars in fees in the last two years speaking to leaders of the industry President Barack Obama wants him to reform as the administration's health secretary.

That was just a portion of the more than $5.2 million the former South Dakota senator earned as he advised insurers and hospitals and worked in other industries — real estate, energy and telecommunications among them, according to a financial statement filed with the Office of Government Ethics.

Daschle's finances are drawing additional scrutiny because he failed to pay his taxes properly. Although he has made amends with the government, senators said Sunday they are awaiting guidance from the committee reviewing Daschle's nomination before deciding whether the tax problem could stall or even derail his confirmation.

Obama has said that no one in his administration who has lobbied on a set of issues within the past two years can deal with the same subject matter. The president has already approved a few exceptions, one of them a former Goldman Sachs lobbyist picked to be chief of staff for Treasury Secretary Timothy Geithner. Daschle, however, is not a registered lobbyist.

Jenny Backus, a spokeswoman for Daschle, said the hundreds of thousands of dollars he earned in speaking fees from health care interests do not pose conflict for the health care reform Obama wants him to lead.

"He welcomed every opportunity to make his case to the American public at large and the health industry in particular that America can't afford to ignore the health care crisis any longer," she said.

Among the health care interest groups paying Daschle for speeches were America's Health Insurance Plans, $40,000 for two speeches, CSL Behring, $30,000, the National Association of Boards of Pharmacy, $16,000, and the Principal Life Insurance Co., $15,000.

Daschle said in a letter to the Department of Health and Human Services ethics office that if he's confirmed by the Senate, he will resign as a senior policy adviser at the Washington law firm of Alston and Bird LLP. He reported earnings of more than $2 million from that firm during the past two years.

Daschle also earned more than $2 million in consulting fees from InterMedia Advisors LLC of New York, an investment firm specializing in buyouts and industry consolidation. He said he also intends to resign from that firm upon his confirmation.

Among other earnings, Daschle reported $250,000 in director's fees from the energy company BP PLC. He was a paid director for four other companies and organizations, among them the Freedom Forum, a nonprofit group that advocates First Amendment rights and funds the Newseum, a Washington museum focused on the news media.

Daschle's financial disclosure report was released after he acknowledged that he had recently filed amended tax returns to report $128,203 in back taxes and $11,964 in interest. The amended returns reflect additional income for consulting work, the use of a car service and reduced deductions for charitable contributions.

Former Senate colleagues on Sunday described Daschle as a popular public servant knowledgeable in health issues, yet they wondered how he could find himself in a tax mess — and why the matter escaped Obama's team of background checkers.

Democrats expressed strong support for Daschle and credited him with coming forward and acknowledging a mistake. Republicans took some shots at the new administration now that a second Cabinet pick had run into tax problems and an earlier nominee withdrew amid a grand jury investigation.

The Senate Finance Committee planned to meet in executive session Monday to discuss the nomination.

"I'm going to wait until they give me their opinion," said Senate Republican leader Mitch McConnell of Kentucky. The latest disclosure about a nominee's tax problems "does raise some questions about the vetting process," he said.

His deputy, Sen. Jon Kyl, who is on the committee, said members will question Daschle and try to understand his explanation. "I think it's too early to tell," said Kyl, R-Ariz. "Well, sure, you have to be troubled by it."

But a Democratic committee member, Sen. John Kerry of Massachusetts, brushed aside concerns that Daschle's nomination was in jeopardy. "Not for me and I hope not for fair-minded and thoughtful people," he said.

"It's obviously a mistake. But I think it's an innocent mistake. I don't think it affects one iota his ability to do the job," Kerry said.

Sen. Jim DeMint, R-S.C., said the problem could disqualify Daschle but that he wanted to learn more about the matter. "It's disheartening, obviously. People are struggling to pay taxes on a very small amount of income and he's got this huge amount," DeMint said.

Before Daschle's difficulties over back taxes, Geithner's confirmation as treasury secretary was delayed after it was revealed that he had failed to pay more than $34,000 in taxes.

Obama's first choice for commerce secretary, New Mexico Gov. Bill Richardson, took his name out of consideration when his confirmation appeared headed toward complications because of a grand jury investigation over how state contracts were issued to political donors.

Kyl appeared on "Fox News Sunday," DeMint was on ABC's "This Week," Kerry spoke on NBC's "Meet the Press," and McConnell was on CBS' "Face the Nation."

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