'Tax issues' emerge in Tom Daschle's nomination

WASHINGTON (AP) — The White House acknowledged Friday that "some tax issues" had emerged in connection President Barack Obama's nomination of Tom Daschle as health secretary. But a spokesman says the president is confident the former Senate Democratic leader will be confirmed. White House officials confirmed a broadcast report Friday that Daschle failed to pay taxes on a car-and-driver service provided to him for three years after he left government.

He later paid the taxes and interest for the error, which has delayed his confirmation to head the Health and Human Services Department and to become Obama's point man to overhaul the nation's health industry.

ABC News first reported on the tax issue Friday evening, saying he owed more than $100,000.

A Daschle spokeswoman did not immediately return a message seeking comment.

White House spokesman Bill Burton confirmed details of the story but said Daschle's role in the new Obama administration was not in danger of being derailed.

"The president has confidence that Sen. Daschle is the right person to lead the fight for health care reform," White House spokesman Bill Burton said. "In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them. They filed amended return with the IRS and made payments with interest."

It explains why Daschle, one of the Democratic Party's top minds on health policy and a popular party elder, didn't win quick approval from the Democratic-controlled Senate.

After losing a brutal re-election bid in 2004, Daschle became a consultant to a New York-based private equity firm, InterMedia Advisors, ABC reported. That company's founder — Leon Hindrey, a Daschle friend and Democratic fundraiser — allowed Daschle to use his car-and-driver service. Daschle did not pay taxes for the use of the car, a problem officials discovered while going through his financial documents.

Daschle paid the IRS taxes and interest for the error, which has delayed his confirmation.

Daschle was one of Obama's first announced Cabinet choices. He was also offered a newly created post, director of the White House Office on Health Reform. Combined, the two titles gave the former South Dakotan large sway over a campaign to change how the country addresses its health care and insurance systems.

The White House insisted that Daschle, 61, would move forward in those roles. Daschle planned to meet Monday with Senate Finance Committee members to address their questions on his taxes.

"Senator Daschle will be confirmed as secretary of Health and Human Services. He has a long and distinguished career and record in public service and is the best person to help reform health care in this country," Jim Manley, a spokesman for Senate Majority Leader Harry Reid said in a statement. "Senator Reid looks forward to a swift hearing and is confident Daschle will be confirmed."

Daschle was an early Obama supporter and a chairman campaign. He was one of Obama's top advisers on health care, having seen how the Clinton administration bungled it during the 1990s, and urged Obama to make his efforts more transparent so the public had faith in them.

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