Obama's Cabinet Picks Running into Money Trouble

Daschle, Killefer latest to Withdraw After Tax Questions Arise

Two more Obama appointees ran into money problems and withdrew their Cabinet nominations on Feb. 3.

Former senator Tom Daschle, President Barack Obama’s choice for the Secretary of Health and Human Services, withdrew his nomination the day after headlines into the $140,000 he owed in back taxes dominated news Web sites. He spent much of Feb. 2 committing himself to the fight, with Obama committed to standing by him. He decided Tuesday to withdraw, to the surprise of many, according to a New York Times article by Jeff Zeleny.

“To be chosen by President Obama to run the Department of Health and Human Services and to lead the reform of America’s health care system is one of the signal honors of an improbable career,” Daschle said in a statement released Feb. 3 by the White House. “But if 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction.”

Avoiding distractions and delaying the important matters at hand was also cited by Nancy Killefer, Obama’s appointment to chief White House performance officer, a position created by this administration to scrutinize government spending, according to the New York Times. Killefer, who was appointed on Jan. 7, withdrew on Feb. 3 because of unpaid employment taxes. She is the head of McKinsey and Co.’s D.C. office.

Bill Richardson, the governor of New Mexico who was a presidential contender early in the primary elections, pulled out of the Commerce nomination on Jan. 4 because of a federal investigation into his alleged pay-to-play politics with a California firm, CDR Financial Products. CDR donated about $110,000 to three political committees that Richardson formed, according to an Associated Press article, and won a state transportation contract that netted the company almost $1.5 million in 2004 and 2005.

Richardson insisted the investigation would clear him, but realized after he was nominated that it would take longer than he anticipated. He said he did not want the process of nominating Cabinet members bogged down by the investigation, so he removed his name from the running and returned home to New Mexico. This was the third strike for a politician who sought first for the presidency and then for the Secretary of State nod. Sen. Judd Gregg, R-N.H., was appointed instead.

The only embattled appointee who has made it through the confirmation process thus far is Tim Geithner, who was confirmed as Treasury Secretary on Jan. 27. His confirmation was supposed to happen quickly so he could tackle the financial meltdown, but the process met a snafu when tax questions arose. Geithner owed $43,000 in Social Security and Medicare taxes from 2001-2004, which were not paid until the Obama camp investigated him in preparation for the confirmation hearings, according to a Jan. 14 Wall Street Journal article. A few other small tax inconsistencies were found.

He acknowledged the error and said it was unintentional but that he should not have made it. Geithner, who was head of the Federal Reserve Bank until his swearing-in, was confirmed by a vote of 60-34, the most nay votes in history for a Treasury Secretary. The Internal Revenue Service, which takes care of taxes, is the biggest budget item for the Treasury Department.

  1. “Tom Daschle Withdraws as Health Nominee.” Jeff Zeleny, New York Times, Feb. 3, 2009.
  2. Statements by President Obama and Tom Daschle, The White House, Office of the Press Secretary, Feb. 3, 2009
  3. “Citing Tax Troubles, an Obama Appointee Withdraws.” Jeff Zeleny, New York Times, Feb. 3, 2009.
  4. “Bill Richardson Withdraws Commerce Secretary Nomination.” Nedra Pickler, Associated Press. Jan. 4, 2009.
  5. “Geithner’s Tax History Muddles Confirmation.” Jonathan Weisman, Wall Street Journal, p. A3. Jan. 14, 2009.
Writer Heidi Toth, Joshua Toth

Heidi Toth - BA in journalism, MBA from Texas TechI spent three years at The University Daily (now The Daily Toreador), the college newspaper, ...

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