The Obama- Daschle Disaster

At first, President Obama was inclined to joke about it; in mid-January, he said the search for a family dog was harder than the search for a new Secretary of Commerce. His initial pick, Governor Bill Richardson, had earlier withdrawn from consideration because he was under investigation for corruption. After awarding state contracts to a financial advisory service, it was discovered that the firm had made substantial donations to the Governor’s election campaign in the past. Obama’s transition team was apparently aware that Richardson, who previously served as Bill Clinton’s Secretary of Energy and thus would bring considerable experience to Obama’s administration, was under FBI investigation. They apparently underestimated the scope of the accusations, however, and accepted the assurances of Richardson’s advisors that the whole affair would prove baseless.

Not long afterwards, alarm bells again sounded in Washington: It was discovered that Timothy Geithner, already approved by the Senate to become Treasury Secretary with control over the Internal Revenue Service, had neglected to pay his Social Security taxes in a timely manner. Again, Obama tried to explain it away with a dog joke. The plan to get Malia and Sasha a Labradoodle was delayed due to problems with the pet tax, his tongue-in-cheek explanation to a dinner audience, as Geithner awaited his confirmation.

After the third and fourth personnel foul ups, the president is no longer in a joking mood. “I screwed up,” he said contritely in a television interview on Tuesday, adding that he was disappointed in himself. Two of his choices had already taken themselves out of consideration on Tuesday because of tax problems – supposedly without prompting by the White House. Nancy Killefer, picked to fill the newly-created post of Chief Performance Officer, was first to go. According to media reports, she neglected to pay unemployment taxes for a domestic employee. Just hours after Killefer’s withdrawal, Tom Daschle announced that Obama would have to find another candidate for Secretary of Health and Human Services.

Meanwhile on Monday, several Democratic senators had pledged support for their one-time leader and Obama declared he would absolutely stand behind his nomination of Daschle, who had been one of his earliest supporters during the presidential campaign. Still, Daschle owed the IRS some $140,000; Geithner owed less than a third of that amount, $43,000. Besides that, Daschle’s tax problem was in connection with his lucrative work as a consultant. A New York investment firm had made a limousine and chauffer available to him in that capacity and Daschle failed to declare that as taxable income.

In addition, the IRS was investigating whether or not Daschle was also obliged to declare trips and valuable gifts donated to him by the private student loan firm Educap. How Daschle intended to reconcile his advisory work for United Health Group with his duties a HHS Secretary also came into question from Democrats as well as Republicans. The White House had advised that Daschle would cut all previous ties with the group.

While the former Senate majority leader isn’t a registered lobbyist, ever since he lost his Senate seat in 2004 he has earned millions of dollars advising customers how to influence political action in Washington. Obama wanted to profit from that knowledge as well, since Daschle is known to be “an insider’s insider.” Obama hoped to use Daschle’s skills to successfully push through health care reform.

As Daschle’s tax sins became public knowledge, the White House tried using the same argument it did with Tim Geithner: both men were ideal for their respective jobs, said Obama’s Press Secretary Robert Gibbs. But this line ran up against sharp criticism, even from the liberal left. The liberal Huffington Post blog asked whether this was really the message the president wanted to send in the first month of his administration; that it was OK to break or at least bend the law if the person was a good guy with special talents. Commentators for the “New York Times” and “The Nation” magazine led early calls for Daschle’s withdrawal.

Other presidents have experienced difficulties in putting together their Cabinets. In 1993, Bill Clinton went through three nominees for Attorney General until he succeeded. His first two nominees, Zoë Baird and Kimba Wood, had to withdraw their nominations because they had hired foreign nannies who had no work permits. George Bush also had difficulties. Again, it was the illegal alien problem that brought down Linda Chavez, his choice for Labor Secretary. His nominee for Head of Homeland Security, former New York Chief of Police Bernard Kerik, also ran into difficulties because of possible conflicts of interest and his failure to pay employment taxes for a nanny.

But Obama stoked the fires of an ethical-moral renaissance in Washington. The candidate of “change” promised to transform the entire political culture. Since the Daschle disaster, however, even Obama’s supporters are asking what difference his strict ethics rules are making. There was little of the promised transparency apparent on Tuesday. Whether assumptions that perhaps Obama’s advisors had made mistakes in vetting the candidates, Press Secretary Gibbs would only say that the President “has confidence in the vetting process.”