Kirk, Obama's trade pick, owed taxes

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By Jon Ward

The string of President Obama's Cabinet nominees with tax problems reached five Monday as a Senate committee revealed that his nominee for U.S. trade representative has nearly $10,000 in unpaid taxes.

Ron Kirk, the former mayor of Dallas, has agreed to pay around $9,975 in back taxes from 2005 to 2007, the Senate Finance Committee said.

Much of the unpaid taxes came from speaking fees Mr. Kirk had failed to report because he had donated the honorarium to his alma mater, Austin College, and from tickets to professional basketball games that he had deducted as professional entertainment expenses.

The White House, however, is "confident that Mayor Kirk will be confirmed," said spokesman Ben LaBolt.

"The mayor is working with the Finance Committee on a few minor issues, mostly relating to a scholarship fund he set up at his alma mater, Austin College," Mr. LaBolt said. "The nomination is on track. The committee has scheduled a hearing for next Monday."

This is the fifth time that an Obama nominee has come under scrutiny for tax problems. Mr. Obama's Treasury secretary, Timothy F. Geithner, paid $34,000 in back taxes but was still confirmed because lawmakers said his position was too important to be left unfilled in time of an economic crisis.

News of Mr. Kirk's problems came to light on the same day that Mr. Obama formally appointed Kansas Gov. Kathleen Sebelius to be secretary of the Department of Health and Human Services. Mr. Obama´s first choice, former Sen. Tom Daschle, withdrew when it came to light that he had paid $128,000 in back taxes only after being nominated.

The same day Mr. Daschle dropped out, chief federal government performance office nominee Nancy Killefer also resigned because of a $946.69 lien against her home filed by the D.C. government because she had not paid unemployment-insurance taxes for a household employee.

Labor Secretary Hilda L. Solis was confirmed only after lawmakers looked closely at her husband's payment of more than $6,000 to settle outstanding liens against his business.

On Monday, Mr. Obama simultaneously named a new White House health czar to fill the second post Mr. Daschle had planned to fill. Nancy-Ann DeParle, 52, will serve as director of the White House Office of Health Reform.

Eric Hargan, a former deputy secretary at HHS in the Bush administration, said the Obama administration was "doing themselves a real service by splitting those offices up."

"It's too much. Sebelius would be handling the largest civilian department in the [federal] government. It's a quarter of the federal budget, an enormous place," he said. "And to add to that to try to handle all the White House things herself, it was a recipe for disaster."

Mrs. DeParle is a former Clinton administration official turned private equity financier at CCMP Capital who has spent the past several years as a national health care policy specialist, serving on a variety of boards and commissions and teaching at the University of Pennsylvania.

Mr. Kirk, who was announced as Mr. Obama's trade representative nominee on Dec. 19, had alerted the Obama transition team to his practice of donating honoraria to Austin College in a questionnaire during the vetting process.

"Since he asked for the honoraria to be assigned to Austin College, he did not think the honoraria were taxable income to him. His paid preparer also thought this was proper," said the Senate Finance Committee report.

The finance committee said Mr. Kirk owes about $5,800 for the honoraria and roughly $2,600 in taxes because he could not substantiate that all of the Dallas Mavericks basketball games he attended from 2005 to 2007, at a cost of $17,382, were for business purposes.