It has happened again! Another Obama appointee has admitted to tax problems. Health and Human Services nominee Kathleen Sebelius has admitted to irregularities in her tax returns extending over the past three years. She has made good by sending off a check for $7,000. Mrs. Sebelius says problems were discovered by her accountant as she prepared for her confirmation hearings and that the debt was the consequence of “unintentional errors.” Incidentally, when she was committing those errors, she was governor of Kansas.
According to my calculations, that makes five Obama nominees who have reported similar tax irregularities, none of which was discovered until the nominee began preparing for his or her confirmation hearing. The others who have benefited the U.S. Treasury by submitting to confirmation hearings are the former president of the New York Federal Reserve, Timothy F. Geithner, and former Dallas Mayor Ron Kirk. Mr. Geithner discovered that he owed the government $34,000 and paid promptly. He is now secretary of the Treasury. Mr. Kirk discovered that he owed nearly $10,000 and presumably also paid promptly, for on March 18, he was confirmed as U.S. trade representative.
Two other Obama administration nominees withdrew from consideration when their tax problems were discovered. They are Nancy Killefer, nominated as chief performance officer, or White House performance czar, before it was discovered there had been a $946 lien on her house for her failure to pay unemployment compensation tax on household help. And of course, former Senate Democratic leader Tom Daschle withdrew his nomination to head the Department of Health and Human Services after it was discovered he owed $140,000 in taxes and interest. He also had become a millionaire while serving as one of Washington’s hated lobbyists. The Obama administration is highly critical of lobbyists and also of millionaires.
All this suggests that the Internal Revenue Service may have hit on a novel way to get tax cheats to pay up: Get them nominated to high government offices.
Given President Obama’s pledge to reform government, it is somewhat surprising to read of all these tax cheats among his nominees. On the other hand, the fact that so many high-level Democrats fail to pay their taxes might explain why they are such staunch advocates of raising taxes. They themselves do not pay taxes until they face confirmation hearings.
Not that tax irregularities were the only problem faced by an Obama nominee. There was the former Democratic presidential candidate who decided to withdraw his nomination for commerce secretary when someone told him his pending grand-jury investigation might not look good during his confirmation hearings. That would be Bill Richardson, governor of New Mexico and Clinton-administration ambassador to the United Nations. You might recall that during the Clinton hijinks, Mr. Richardson served as headhunter (if that is the right term) for the curvaceous Monica Lewinsky when the heat was on.
Ethics may yet become an issue with the Obama administration, which, like the Clinton administration, came to Washington promising an era of unparalleled ethical purity. The $410 billion omnibus spending bill is a cornucopia for graft. The$787 billion stimulus bill is yet another cornucopia for graft.
Then there is the problem upon which the Wall Street Journal recently editorialized.
It appears the Treasury Department’s plan for toxic-asset purchases will be limited to a handful of four or five huge companies bidding on the toxic assets and managing them. The Journal is too polite to bring up the term “crony capitalism,” but it does speak of the possibility of these few firms reaping huge profits in a toxic-asset purchase plan that might be of only limited effect. “We have no idea if Treasury is playing favorites,” the Journal editorializes, “but it certainly doesn’t look good. All the more so given that some of these big players may have consulted informally with the Obama administration as it was writing the plan.”
What might be done to vet this plan? Perhaps it could be sent up to Capitol Hill for a confirmation hearing. We already have seen the hearings’ hygienic effect on Obama nominees.
R. Emmett Tyrrell Jr. is the founder and editor-in-chief of the American Spectator and an adjunct scholar at the Hudson Institute.