- The Washington Times - Monday, March 2, 2009

The string of President Obama’s cabinet nominees with tax problems continued Monday as a Senate committee revealed that the 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 President nominated Mayor Kirk because of his proven ability at the negotiating table — building consensus between opposing stakeholders in Dallas and crafting deals to create opportunities for U.S. businesses overseas,” Mr. LaBolt said.

“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. The nomination is on track. The Committee has scheduled a hearing for next Monday.”

Mr. Kirk did not return a call to his office at Vinson and Elkins LLP, a Dallas-based law firm.

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.

But Mr. Obama’s nominee for Secretary of Health and Human Services, former Senate Majority Leader Tom Daschle, withdrew after it came to light that he had paid $128,000 in back taxes only after being nominated.

The same day Mr. Daschle withdrew, chief federal government performance office 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.

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

Mr. Kirk’s past tax issues were raised with him by the Senate Finance Committee on Feb. 6, three days after Mr. Daschle withdrew from consideration for his cabinet posts. The committee “submitted several questions to Mr. Kirk,” said a report released Monday by the committee.

Mr. Kirk, who was announced as Mr. Obama’s trade rep 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 questionnaire indicated that Mr. Kirk had assigned speaking fees to Austin College on approximately 16 different occasions. In all, $37,750 of honoraria were not reported as income for tax years 2004, 2005, 2006 and 2007,” the report said.

Mr. Kirk did not report the honoraria as income but did claim four speech fees in 2005 as charitable contributions, despite not having reported the honoraria as income.

The total income tax effect of the honoraria is $5,800, the finance committee said.

Mr. Kirk will also have to pay 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.

He has verified through receipts or records that $9,900 of the money he deducted for these games was spent on games where business was conducted.

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