Why the Senate Is Asking the Wrong Questions About Tom Daschle’s Finances–and Why Obama’s Lobbyist Pledge Doesn’t Mean Much

As the Senate Finance Committee continues to review HHS nominee Tom Daschle’s financial records, and Daschle himself apologizes for “the errors that required me to amend my tax returns,” what isn’t commanding attention seems far more significant than what is.

There are plenty of things in Daschle’s financial history that ought to  alarm everyone involved a lot more than a car and driver he forgot to report to the IRS. Apparently, however, neither the Committee nor the White House are much bothered by the riches Daschle has quite legally reaped from private health care companies–a fact that in itself reveals the inherent weaknesses in Obama’s ban on former lobbyists serving in government.

Massachusetts Senator John Kerry was one of several leading Democrats who defended Daschle on the Sunday morning news shows. Kerry declared that Daschle’s tax issues were an “innocent mistake” that would not affect his ability to perform his job “one iota.”

Yes, it’s probably true that being driven around in a Cadillac and not paying taxes on it won’t compromise Daschle’s ability or independence as HHS secretary or “health czar.”  The same cannot be said about all the income that Daschle did report to the IRS. As described by the New York Times:

As a politician, Mr. Daschle often struck a populist note, but his financial disclosure report shows that in the last two years, he received $2.1 million from a law firm, Alston & Bird; $2 million in consulting fees from a private equity firm run by a major Democratic fundraiser, Leo Hindery Jr. (which provided him with the car and driver); and at least $220,000 for speeches to health care, pharmaceutical and insurance companies. He also received nearly $100,000 from health-related companies affected by federal regulation.

Mr. Obama has instituted rules requiring former lobbyists in his administration to pledge not to deal with former clients, though he has made exceptions for two nominees, one at the Pentagon and one at the health agency. As a strategic adviser to companies, Mr. Daschle did not have to register as a lobbyist, and is not technically covered by those rules.

“He’s never lobbied, therefore he’s not in violation of the pledge,” Mr. Gibbs said. “The president is comfortable with Senator Daschle’s variety of experiences and backgrounds. It’s why he believes he’s best suited to the efforts to reform our health care system.”

In fact, InterMedia Advisors, the private equity firm that provided him with the car and driver, is one of the few sources of  Dascle’s income that had nothing at all to do with the health care industry (though it does own a few questionable properties, including the magazines Guns & Ammo, Handgun, and Shooting Times–all of them acquired while Daschle was chairman.)

When Daschle was first nominated, the Times described his role at Alston & Bird, which “represents dozens…of pharmaceutical companies, health care providers, and trade groups for nurses and nursing homes”:

Although not a registered lobbyist, Mr. Daschle, a South Dakota Democrat who was party leader in the Senate, provides strategic advice to the firm’s clients about how to influence government policy or actions. The firm’s Web site declares, “Our health care legislative and policy team has the significant advantage of including two former U.S. Senate majority leaders–Senators Bob Dole and Tom Daschle–both resident in our Washington office and champions of many health care issues in their Senate Finance Committee and leadership roles.”

As examples of the firm’s achievements the Web site lists matters involving Medicare and Medicaid reimbursements, approvals of federally regulated drugs and medical products, fraud investigations, medical waste disposal, privacy and other compliance issues.

Daschle, of course, is no different from hundreds of other high-stature elected officials who use their political influence to provide what Alston & Bird calls “significant advantage” to private corporations dealing with the federal government. Few of them ever become registered lobbyists–so few would be disqualified by Obama’s pledge.

The future of health care reform depends largely on the Democrats’ ability to stand up to the drug companies and insurance companies who drive up costs and drive down access and benefits. As HHS secretary and health czar, Tom Daschle will lead this reform effort. Personally, I’m less concerned about his tax-free car rides than I am about his work on behalf of the very industries he must now reign in for the public good.

One response to “Why the Senate Is Asking the Wrong Questions About Tom Daschle’s Finances–and Why Obama’s Lobbyist Pledge Doesn’t Mean Much

  1. Love your blog! It fills a real gap…right in a demographic/economic space where no one is looking, but about a third of us SHOULD be.

    Senator Daschle is (I fear) becoming fatally compromised before he even starts. This is so depressing.

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