Friday, January 30, 2009
Tom Daschle's tax fraud
I'm blogging from the bar at the Lowe's Regency at 61st and Park, very much enjoying myself while waiting for the TH Daughter to emerge from a party up the street. All very slick, nearly as I can tell. The TH Daughter has figured out how to move in much tonier circles than I do.
Anyway, Glenn Reynolds calls our attention to the tax deadbeat of the week, Tom Daschle. Daschle, we belatedly learn, failed to pay more than $100,000 in taxes due on car services received from a client until it became clear that he would have to get through a Senate confirmation hearing.
After being defeated in his 2004 re-election campaign to the Senate, Daschle in 2005 became a consultant and chairman of the Executive Advisory Board at InterMedia Advisors.
Based in New York City, InterMedia Advisors is a private equity firm founded in part by longtime Daschle friend and Democratic fundraiserLeo Hindery, the former president of the YES network (the Yankees' and Devils' broadcast network).
That same year he began his professional relationship with InterMedia 2005, Daschle began using the services of Hindery's car and driver.
The Cadillac and driver were never part of Daschle's official compensation package at InterMedia but Mr. Daschle -- who as Senate majority leader enjoyed the use of a car and driver at taxpayer expense -- didn't declare their services on his income taxes, as tax laws require.
Because I've had a couple of beers I'm going to split some hairs and say that Daschle's malfeasance is quite a bit dirtier than mere "nanny tax" evasion. Yeah, yeah, there is no excuse for not paying all the taxes for your domestic help (we in the TH household have always been neurotic on the point), but there are considerations other than greed that influence nanny-tax avoidance. First, a lot of excellent domestic workers will not work on the books, and not simply because they fear the INS. You can say that's tough darts, and it is, but the decision is often in the hands of one's spouse. What do you do if your wife insists you hire Maria Poppins, and she will only do the job off the books? Second, it certainly used to be the case that the nanny taxes were very challenging from a bureaucratic perspective, particularly at the state level. I remember Mrs. TH having to borrow a typewriter back in the day because either Illinois or New Jersey, I cannot remember which, required that the return be filed on a state-supplied three-part form that had to be typed. I seem to recall a lot of gnashing of teeth, and perhaps even a few bad words. (Yes, we did our own taxes until just a few years ago -- it is the only way you can really understand how they are nailing you.)
Contrast that to Daschle's freebie car and driver. First, there is no theory that his wife insisted that Daschle be chauffered around. Second, there is no ambiguity in the law, or no theory that he did not know that he owed the money. It is obviously an in-kind payment for services. Of course he knew he owed the taxes. Finally, there is no tedious extra bureaucratic obstacle to paying this tax. You just drop a number right on to the 1040. You know, that document that you signed under penalty of perjury. Yep, you got it. Mistakes are obvious and when it comes to the tax laws I am more than sympathetic to people who make them, but it is very hard for me to believe that this was one. Genuinely intentional misstatements on a tax return usually require penance more onorous than mere restitution.
MORE: Via Mr. Minuteman, TaxProf points out, at least by implication, that Daschle's "mistakes" are more difficult to explain than even my post suggests.
37 Comments:
By 
, at
Fri Jan 30, 09:28:00 PM:
Good assessment. I also wonder if his wife is still a lobbyist? Should pull down a lot more now that he's been "pomoted."
By , at
Fri Jan 30, 09:42:00 PM:
And Geithner accepted the tax money from the IMF (to be paid) to the IRS (US gov't).
Are theyboth thieves?
By , at
Fri Jan 30, 10:11:00 PM:
Is it some kind of prerequisite to being a member of that exalted party to fraudulently evade tax?
By 
TigerHawk, at
Fri Jan 30, 10:12:00 PM:
Well, I claim no expertise on the Geithner thing, but as I understood the story it involved a far more unusual and idiosyncratic situation, what with the deal between the IMF and the IRS. That seems to me something that somebody could innocently screw up, or that one's tax advisor could get wrong. Daschle's car and driver not so much.
By , at
Fri Jan 30, 10:38:00 PM:
The other thing about this that has not yet been said here.
This has been known for some time by the committee and is only now, on a Friday night, being dumped into the news cycle.
This episode and the way it is being "massaged" in the news is distasteful, to say the least, and just outright DISHONEST and HYPROCRITICAL.
Remember, VP Joe says we need to pay more taxes to be patriotic!
Amelia P.
By , at
Fri Jan 30, 10:39:00 PM:
Nancy Pelosi's "Culture of Corruption" has very deep roots it seems.
By , at
Fri Jan 30, 11:24:00 PM:
And Daschle's client is Leo Hindery, former CEO of Global Crossing, one of the biggest bankrupties and scams ever in American business. Of course Terry McAuliffe was fortunate to exit just before Global Crossing crashed, making millions on a minimal investment. Who said it's not possible to time the market. Just depends upon who you know!! Wink, wink. Yea, right.
By , at
Sat Jan 31, 12:24:00 AM:
Seems like then Senator Tiny Tommy was in hot water on his property taxes a few years back. He was getting a tax break on his DC area house by declaring it his 'primary residence' even though his SD home was his primary residence. I never did hear if he had to pay any back taxes in that case or not.
By Escort81, at
Sat Jan 31, 12:51:00 AM:
"Of course he knew he owed the taxes"
Is it at all possible that Daschle was that ignorant of the tax laws that he helped enact? In some ways, I think that kind of institutional ignorance is more disqualifying to a prospective cabinet member than the dishonesty. I mean, we now expect all politicians to have some dirt on them (not to go all Robert Penn Warren here), but at least we want them to be smart crooks.
The nomination for Daschle was simply a thank you from President Obama, since Dashcle (then the defeated and outgoing minority leader) was instrumental in helping first year Sen. Obama position himself within the Senate for a run at POTUS. He was one of the group of "wise men" (using that term loosely) that Sen. Obama relied upon from 2004-08 for counsel, according to the recent Frontline program. If Daschle has to leave the stage, well, we know that the wheels on the bus keep turnin' 'round. No big deal.
By Escort81, at
Sat Jan 31, 01:00:00 AM:
"The TH Daughter has figured out how to move in much tonier circles than I do."
Isn't that a pretty low bar for a Tiger Inn member? A bad Cheeser joke, obviously. But it undoubtedly helps that (based solely upon the various photos you have posted over the past few years) she has apparently inherited her mother's good looks and none of her father's sense of fashion.
By Purple Avenger, at
Sat Jan 31, 04:08:00 AM:
If he owed 100 large in taxes on the car/driver, then the value of the services had to be in the range of $300K.
Did Daschle wind up owning the Caddy or something like that?
I can get a 10 passenger stretch Caddy on demand for $60/hr in Ft Lauderdale.
$300,000/$60 = 5000 hours @ $60/hr
Even at double the Ft Lauderdale $60/hr rate, that's still 2500 hours.
How could anyone spend 2500 hours in a limo over the span of a few years?
Daschle is a slimeball, but that tax bill sounds grossly inflated to me.
By davod, at
Sat Jan 31, 07:02:00 AM:
Did Daschle do any lobbying in this position?
By TourPro, at
Sat Jan 31, 07:09:00 AM:
The image behind the Democrat Rorschach test is emerging.
By davod, at
Sat Jan 31, 07:26:00 AM:
"Well, I claim no expertise on the Geithner thing, but as I understood the story it involved a far more unusual and idiosyncratic situation, what with the deal between the IMF and the IRS"
Th: Geitner's problem may seem more complicated only because you are outside the culture.
I used to work at an Embassy, both as a National employed from that country and as an employee hired here in the USA. Because of the effect on take home pay, taxes were always a big topic of office gossip. I knew people who worked at the IMF and the World Bank and it was the same in those institutions.
American Nationals have few of those institutions great benefits (I hear he benefits have been reduced now) and all of the US tax obligations.
I find it hard to believe Geitner did not understand he had to pay the taxes. More likely, he hoped the IRS would not pick him on it.
By , at
Sat Jan 31, 12:16:00 PM:
Gee I haven't heard that "Culture of Corruption" since dems took over Congress. Funny I haven't seen all those news stories listing a Big D with the name of each dem having these criminal and civil law and ethical issues, in the mainstream tv/cable/DNClackey reports, where in 2006, it was a 24/7 marathon on all those BAAAD corrupt Republicans and the Dems were going to save the country from them. Well what a difference two years seem to make?
By , at
Sat Jan 31, 12:18:00 PM:
No wonder Democrats don't mind paying more in taxes...they're simply not going to pay them.
By , at
Sat Jan 31, 12:25:00 PM:
Tom Daschle is a professional Democrat politician. Those of that Ilk are naturally inclined to believe they are more equal pigs. If he admitted to that much in non-payment, it's a sure bet he is up to his corrupt neck in other shadier dealings.
By Escort81, at
Sat Jan 31, 12:41:00 PM:
PA - I had the same thought, that it had to be one heckuva limo.
But here is the Senate Finance Committee Statement describing in detail the issues. It is three years worth of limo services from '05-'07, ranging from $70,000 to $95,000 per year, or around $1,700 week (probably less than 20 hrs./week, a doable number including idle wait time). Your South Florida rate of $60/hr is quite low relative to NYC or D.C., but no doubt the parties in a 10 person limo are more fun!
By , at
Sat Jan 31, 01:00:00 PM:
If Daschle hadn't been picked and vetted for this position, would he have paid the back taxes anyway?
By , at
Sat Jan 31, 01:04:00 PM:
How was he able to leave Congress a millionaire?
By , at
Sat Jan 31, 01:13:00 PM:
Everytime I see that some Democrat has lied and committed perjury I remember the defense the left put up for Bill Clinton. "You would lie too if you were having an affair!"
Perjury was not a crime the way they explained it. It was actually reasonable and the human thing to do. I keep waiting for another Democrat to use the same "reasonable and human argument" when defending one of their own:
"Of course he/she lied. You would lie too about having an affair/not paying taxes/taking bribes/breaking housing laws/visiting prostitutes/abuse of office/conspiring to sell a senate seat. He/she is only human. You would do the same thing if you were in his/her shoes."
And the media helped spin the notion that it was okay to commit perjury since "it was only sex."
By caseym54, at
Sat Jan 31, 01:15:00 PM:
Most of the time, if you report a mistake to the IRS and pay the back tax, penalties and interest, there is no criminal charge. When you go to them, you get the benefit of the doubt.
Contrast with Tim Geithner, who didn't pay a tax that ANY tax program would have at least suggested he owed, based solely on having 1099s. Further, the IRS called him on it (the tax being so obvious), and yet he still didn't fess up to 2 more years where he owed the same thing (yes, statute of limitations, but did he know that and not Schedule SE? Not likely.)
Daschle got an in-kind payment, but not all in-kind payments are considered taxable (see car leases), so the claim of mistake is at least defensible. Not so Geithner's "I forgot" defense.
By , at
Sat Jan 31, 01:28:00 PM:
Democrats can't be expected to claim all of theor income. After all, they don't have charitable dedctions to offset them like the rest of us.
By , at
Sat Jan 31, 01:31:00 PM:
Daschle's issues are even worse than originally reported.
What a clown show this government is turning into, tax cheats everywhere one looks, overlapping responsibilities creating confusion, the Defense Department budget being heavily reduced in the midst of two wars, the Congress being left in charge of getting us out of the Depression, Protectionism on the rise has our bilateral trade treaties in shreds, terrorists about to be set free from prison without trial...
The President isn't running the government well, and it is a horribly bad time to have poor leadership.
By , at
Sat Jan 31, 02:16:00 PM:
The Corner says Daschle might soon be accused of operating as an unregistered a lobbyist for this company, itself under investigation by the IRS. If the accusation is true, his failure to register as a lobbyist has helped him avoid the Obama swiss-cheese prohibition against employing lobbyists, but at a cost of getting him into potentially even greater trouble with the Feds.
By Unknown, at
Sat Jan 31, 02:42:00 PM:
We sure are seeing every crook and blood-sucking leech crawl into the Obama administration in record time. This latest "stupid mistake" seems to be the democrat mantra. I have to wonder if the IRS would let me get away with "oh I didn't know I had to pay taxes" which is code for if I'm a politician there's no need to follow the rules.
I have an idea, since the Democrat Majority in Congress over the last two years and now the total dictatorship have caused the problems in order to, as Reid would say, "pick up seats" and power in the 2008 election. Spending bills and anti business and energy restrictions have choked Americans.
I think it's time to hold them responsible and do it now. They would have been tar and feathered and run out of town on a rail in the olden days or worse. Perhaps we can't do that but we can demand that the raise increase be repealed. Salary, benefits, pensions, and staffers cut immediately. Every dime spent or projected must be open for public comment since these people have shown themselves NOT to represent the country. NO NEW SPENDING and while we're at it, start impeachment proceedings for a president that is either over his head(incompendent) or an enemy of this country (treason).
By , at
Sat Jan 31, 03:09:00 PM:
If I recall, Bush's cabinet nominations weren't free from tax scandals either. Nancy Chavez ring a bell? Berbnard Kerik?
By , at
Sat Jan 31, 04:23:00 PM:
Bush did not defend Chavez and Kerik. They withdrew. Don't bet on any democrat withdrawing. Hope and change, you know.
By SeniorD, at
Sat Jan 31, 05:06:00 PM:
Just look at the history. The Democrat Party is corrupt: Boss Tweed & Tammany Hall, Chicago's Daleys (all three), both Clintons (Whitewater, etc.), Lyndon Johnson and Precinct 13, Marion Barry and Washington D.C., John Murtha and Kucera.
Whoever it was that said Daschle is into more sinister, shadier dealings is spot on. We'll never know the true Titanic depths of Democrat corruption.
By Admin, at
Sat Jan 31, 05:12:00 PM:
Thanks so.
By Lynn, at
Sat Jan 31, 07:36:00 PM:
On the Plus side, it appears that having a Democratic President stimulates tax cheats to cough up back taxes....
By , at
Sun Feb 01, 08:51:00 AM:
By , at
Sun Feb 01, 09:12:00 AM:
Bush did not defend Chavez and Kerik. They withdrew. Don't bet on any democrat withdrawing. Hope and change, you know.
Check your news archives, anon at 4:23 pm. Bush was behind Kerik before he decided to throw him under the bus. Just because you withdraw doesn't mean you weren't pushed.
The vote to confirm Geithner was 60-34, with nearly a third of the Republicans voting Yeah.
Dollars to donuts Daschle will be confirmed too, and with Republican support.
By , at
Sun Feb 01, 09:18:00 AM:
On the Plus side, it appears that having a Democratic President stimulates tax cheats to cough up back taxes....
Excellent, Lynn:)
By , at
Sun Feb 01, 01:37:00 PM:
It's beginning to look as if paying one's taxes becomes a litmus test for high office, the Democrats will have to hire an employment agency to scrounge up their candidates.
howardhughes
By , at
Sun Feb 01, 10:26:00 PM:
Not so long ago this would have been trumpeted as the "Culture of Corruption". Oh yeh, those were Repulicans.
By , at
Mon Feb 02, 06:08:00 PM:
Georges Marciano who has been begging the IRS to audit him for over three years states that he owes IRS in the millions .....yes I said millions. I have emailed the IRS, we have sent letters. He has received a refund check from them and at the same time they sent him a letter stating he never filed? Georges has sent all the documents to the IRS, FBI, Los Angeles Sherriffs department, Beverly Hills police department and yet nothing....they have not even assigned anyone to the case....
http://irstaxneverfiled.wordpress.com/ on this site it shows the absolutely rediculous documents from the IRS . The question is why do they make such a big deal over Daschle and Geithner and their taxes and yet the Georges Marciano who actually wants to pay his taxes they are ignoring?
