TOM DASCHLE: THE CREDIBILITY PROBLEM.
As the post below indicates, I'm not convinced that Tom Daschle's future is substantially imperiled by his shoddy tax returns. Nor am I convinced that it should be. Few actually believe that Daschle meant to cheat the government out of a $100,000 in tax revenue at the cost of his future political viability. His tax problems have little obvious bearing on the job he's being considered for. The same cannot be said for the money he's earned giving speeches to the health care industry.
Over the past two years, Daschle has made more than $220,000 giving speeches to health care stakeholders. This includes $40,000 for two speeches to America's Health Insurance Plans, $30,000 for a speech to CSL Behring, $16,000 to the National Association of Boards of Pharmacy, $15,000 from a talk at the Principal Life Insurance Co. given policy advice to United Health, and much more. These are payments from the parties with a direct interest in the eventual shape of health reform. Responding to my query, Jennifer Backus, Daschle's spokeswoman, e-mailed:
Tom Daschle is one of the strongest advocates for health reform in this country. He has literally written a book on the topic and has been out there leading the fight for reform and making the case for change. He has done that as a Senator and a Congressman, he has done that as a fellow at the Center for American Progress, he has done that as a professor as Georgetown and he has done that in speeches. Some of his speeches are paid – some of his speeches are free –but his message is the same – we need to reform health care in this country. His commitment to bringing down costs and providing access to all Americans is clear.
That's all true. Daschle is not an opaque nominee. He has, as Backus says, written a book on health care and given endless public and private talks on the subject. He is solidly within the Democratic consensus on health reform. Nothing in his book, or even in his speeches, conflicts with Obama's positions, except where Daschle is actually more liberal. As someone who has read Daschle's book, watched his speeches, interviewed him, I trust his sincerity. I trust that the guy who spends his weekends reading Health Affairs isn't in this for speaking fees. But Daschle can't rely on every American reading his book and picking through his testimony. He needs prima facie credibility. And Daschle is less credible today than he was a week ago.
It will be harder for him to tell single payer advocates that he neutrally considered their views on the worth of the private insurance industry given that AHIP put $40,000 in his pocket. So too with those concerned by the medical device industry. Indeed, the Washington Post reports that "the Health Industry Distributors Association, a trade association representing medical product distributors, wrote to Daschle last week to express concerns about proposed Medicare changes and reminded him of the $14,000 speech he delivered at its conference last year." It may not be the case that these groups actually succeeded in buying sympathy when they paid Daschle to speak. But it was certainly their intent.
These speeches will not pose a threat to Daschle's nomination. They are par for the course in Washington. As Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, says, "Daschle is the quintessential Washington story. You leave a powerful position, and you leverage it to make a fortune." Daschle is not the only one of Obama's nominees and advisers who has made money giving speeches to the very groups he must regulate. This corrupt bargain is so constant that the Senate has little interest in embarrassing anyone over it. But it is a corrupt bargain. And it's unnecessary. Daschle's wife is a lobbyist. He was a senior fellow at the Center for American Progress and served as on the board of directors and as a consultant for multiple major companies including BP and InterMedia. The Daschles own three houses, including a DC residence valued at nearly $3 million. The speech income was piddling amidst this wealth. It was unnecessary. Which makes it all the more galling: This type of exchange is so common that even though he didn't need the money, Daschle didn't see a reason to refuse the check and just take expenses. No one even worries that these optics are damaging anymore.
The tax problems appear to be a legitimate mistake. This, however, is reflective of a systemic disease in Washington. It is unlikely to imperil Daschle's nomination. But it will impede his work and damage his credibility among those who disagree with his decisions and can now judge them motivated by profit rather than evidence. This is why people don't trust the government. And it needs to stop. Indeed, the one question I'd like to hear Daschle answer at his hearing on all this is the simplest one: Why? Why, when AHIP offered $40,000 for two speeches, did he say "yes?" As his spokesperson said, he was writing books on these issues and speaking out and working Congress. He knew he wanted to be a public voice on these issues. That should have made him more careful about industry money, not less. Why trade even an iota of public credibility for such a small payoff?
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COMMENTS (22)
Daschle has been cashing in for years through his wife. When he retired from the Senate, he cashed in via consulting, sitting on boards and giving speeches. He got those jobs because he was a former Senator. The speech money was just one small part of larger mosaic -- accepting $40k for a couple of speeches was not at all inconsistent with his overall behavior.
And there was nothing "piddling" about it.
Posted by: ostap | February 2, 2009 8:37 AM
"As someone who has read Daschle's book, watched his speeches, interviewed him, I trust his sincerity."
Shorter Ezra: I've looked into Daschle's eyes and seen his soul.
Shorter Ezra 2: I don't care about universal healthcare nearly as much as I care about pimping for someone who might return my calls.
Posted by: Petey | February 2, 2009 8:38 AM
I kind of feel the need to offer my personal take on this, but Petey seems to have a desire to clog up all the threads on the issue, so I'll let this one go.
Have at it Petey, it's all yours.
Posted by: Tyro | February 2, 2009 8:43 AM
Is it just me, or does anyone else get the feeling that the term "healthcare reform" really means some sort of cover for the private insurance industry that will allow Congress and the President to say they've done something when they're really just going to figure out a way to feed more money to private insurers without dramatically improving the system?
Posted by: zyxw | February 2, 2009 9:00 AM
The question I would ask is: now that you wish to fulfill a public role in revising healthcare, why not return the money to AHIP et. al.(particularly the Health Industry Distributors Association--who has openly tried to influence you) so as to remove the apparent conflict of interest?
Posted by: kgov | February 2, 2009 9:21 AM
I've a diary on this over at DKos and it's interesting the level of vitriol over there regarding Daschle.
http://www.dailykos.com/story/2009/2/2/83443/48496/653/691942
Posted by: KD | February 2, 2009 9:26 AM
Ezra,
There really hasn't been a post on Daschle's appointment to HHS, so this comment is a little broader than just the credibility issue, but I'll touch on that.
Let's start with this-- Daschle is not a good pick for HHS. Just as quick review, HHS oversees Medicare, CDC, FDA, AHRQ, The Health IT office (ONCHIT) and the Surgeon General. This is a serious position, one that is the public official that is effectively overseeing a 2 trillion dollar sector of the economy. A sector that is widely acknowledged to have many issues that need significant reform. So who does Obama nominate for the post? This guy-- in your words:
He has, as Backus says, written a book on health care and given endless public and private talks on the subject. He is solidly within the Democratic consensus on health reform. As someone who has read Daschle's book, watched his speeches, interviewed him, I trust his sincerity. I know that the guy who spends his weekends reading Health Affairs isn't in this for speaking fees.
Wrote a book? Reads Health Affairs? That's just not good enough. Period. If you look at most of Obama's picks, Daschle is likely the least qualified relative to the scope and importance of the Cabinet post. He has no real experience in health care, not even a history of legislative oversight like a Kennedy or a Stark. He got interested in health care in the last few years. Like a lot people. He reads Health Affairs-- is that really the wonky justification for his appointment? It was a poor pick on the substance.
But let's talk about the political-- Daschle really is the counter to the spirit of what "Change" is supposed to be all about. Again, your words:
Daschle's wife is a lobbyist. He was a senior fellow at the Center for American Progress and served as on the board of directors and as a consultant for multiple major companies including BP and InterMedia. The Daschles own three houses, including a DC residence valued at nearly $3 million. The speech income was piddling amidst this wealth.
The issue isn't just the speeches. Its the whole thing. The fact you're OK with the rest of this description as "legit"-- just not the speeches-- its such as DC-centric view of what "acceptable" is. But there's a big one you missed. He's been a lobbyist making a couple million per year. Of course, not technically a lobbyist, but "policy advisor" in DC-speak: because companies love spending millions on "policy advice." This is is a pure example of the wink, wink culture of DC, that while I really hate Petey's comments (say something different please already), his point has some truth here-- the fact you don't see it, and just thinking the speaking fees are the problem, you're getting sucked into this too. "Change" for those of us not in DC, is getting rid of the people just like Daschle. People that take their connections to cash in on board seats, consulting gigs, lobbying fees and have family members that cash in on the promise of implicit influence. (Brother Podesta just worked really hard this past year to become the fastest growing lobbyist in town last year, right?)
This is what Obama promised to change. So here's where the substance and politics comes together. Of course there's going to need to be some exceptions to the rule. The Army guy that Obama's brought in from Raytheon, I don't know whether he's really qualified or not, but given his background, its probably a reasonable exception. Daschle isn't that guy. He's someone with a questionable substantive background with loads of conflicts of interest issues. He's an extremely disappointing pick.
Posted by: wisewon | February 2, 2009 9:41 AM
I guess I agree that Daschle's tax issues won't hold up his confirmation and that his credibility is now badly damaged.
He has hurt the Obama administration (coming on the heels of the Geither tax problems and the waivers for two of his nominees who have recently been lobbyists). You can't win back that trust that has been undermined. Obama is now being postured as just more of the same in the blog comments on many topics. I'm afraid that Obama's 'loyalty' is beginning to look like Bush's loyalty to unworthy staff.
The biggest problem IMO is he looks and acts just like the incestuous DC permanent infrastructure - his explanation of his self-perceived entitlement to a private car and driver was the worst piece of PR in memory.
When Tom was majority leader in Senate, his centrism was excused as being necessary to get elected in a conservative state, but their was the suspicion (now confirmed in my mind) that he was not a reformer.
Finally, given his lack of executive experience, he's really not an obvious candidate to head HHS, a huge agency.
Both Obama and Daschle would be far better off if Tom fell on his sword and withdrew his nomination at HHS. That he is unlikely to do so speaks all that could be said of DC politics as No Change that isn't believable.
Posted by: JimPortlandOR | February 2, 2009 10:12 AM
As for Daschle being on balance a good guy, I don't really care. He cashed in so fast it makes my head spin; he played cutesy games with his taxes; and somehow he still feels entitled to be head of HHS. Screw that mess. If I wanted that nonsense I would have voted for Hillary and all the Clinton hangers-on.
(I note that the Clintons managed to cash in to the tune of $108 million but still obeyed the laws. Apparently it can be done. Daschle just couldn't be bothered.)
I'm not saying Daschle should tarred and feathered. He's welcome to make a million dollars a year a be chauffered around in a limo. He made his choice and went for the money. Fine. But what is so magical about Tom Daschle that he's entitled to the money AND the limo AND cheating on his taxes AND be the head of HHS?
Posted by: hubcap | February 2, 2009 10:38 AM
Are you serious?
For the last 8 years we have heard that it is exactly this type of arrogance that needs to be replaced.
Now the tide has changed and you take either a neutral or supporting postion on the same type of crap you've railed against?
Odd.
Posted by: m - dos | February 2, 2009 10:40 AM
I guess I'm more sympathetic to Ezra's position than most here. The base problem here is that high ranking government officials don't get paid enough. plain and simple. The president makes what, $400,000 a year? And he's the most powerful man in the world? My gut feeling is that Tom Daschle is an overall good man who wants to do good things for his country. But he is still a human, and when a human is one of the most powerful positions in the world he is entitled to live a fairly luxurious lifestyle, not the upper-middle class income of a Senator who also has the high living expenses of Washington DC. So I don't find it surprising that people like Daschle "cash in" on their position through lobbying, speeches, etc. I think Americans are being extremely naive to expect their public servants to live in a 2,000 sq ft split level ranch with an old toyota camry in the driveway.
Posted by: nathan | February 2, 2009 10:50 AM
Come on folks, "mistakes were made" is laughingly euphemistic. He chaired the committee that wrote these laws. And he's not lobbying for $5 million over 2 years? He was duplicitous at best in not being forthright with Obama on his "mistake"
Posted by: Kap | February 2, 2009 10:56 AM
Still, I hope he withdraws the nomination. Despite the fact that I blame the american people for being naive, politicians should fucking realize we are stupid and adjust accordingly. Especially since democrats want to be the party of responsibility. Daschle didn't.
Posted by: nathan | February 2, 2009 11:00 AM
He's saying the framus intersects with the ramistan at approximately the paternoster.
Posted by: Sophocles | February 2, 2009 11:02 AM
Few actually believe that Daschle meant to cheat the government out of a $100,000 in tax revenue at the cost of his future political viability.
Well, that's a bit of a strawman, isn't it? No one -- or mostly no one, anyway -- commits a crime or other malfeasance thinking that they will ultimately pay the cost for it. (Setting aside minor things like parking/traffic violations, etc.) Rather, they do it because they don't think they'll get caught and have to pay that price.
I mean, for example, do you think Clarence Thomas meant to sexually harass Anita Hill at the cost of his future political/legal viability? Do you think Nixon ordered the Watergate break-in assuming it would cost him his Presidency? You get my point.
Now, I don't know what was in Daschle's mind, but I do not find it so inherently implausible that at the time he thought he could skip these taxes and no one would ever know.
Posted by: Glenn | February 2, 2009 11:07 AM
I'm going to take another at-bat while this game is still going.
Ezra: This is why people don't trust the government. And it needs to stop.
Precisely! It isn't whether his former congressional colleagues trust him, but whether his errors will undermine the public's confidence that a major health overhaul is in their interest - or just something that the insiders cooked up to feed their egos and pockets.
Daschle should withdraw, NOW.
TPM is reporting that Daschle didn't report this tax thing to Obama's team until several weeks AFTER he was nominated. This is not transparency or minor oversight.
Posted by: JimPortlandOR | February 2, 2009 11:15 AM
I always liked Tom Daschle, but get rid of him. Maybe he can help from the sidelines, but not from a high profile position. Enought with the I'm sorry I made a mistake on my taxes. It ain't that hard to do your taxes correctly. And if you have a very aggressive accountant and your in public life tell him to err on the pay too much side. I'm really sick of this stuff. I think Geithner is a mistake, and I think the problem with Dashle isn't only with not paying the taxes, it is with accepting the favor in the first place.
What is the matter with these people? What planet do they live on?
Posted by: csull | February 2, 2009 11:24 AM
Gawd....has it only been 2 weeks of the Obama Administration??
Seems like forever, already
Posted by: El_Viajero | February 2, 2009 11:25 AM
Wisewon is right and you, Ezra, are wrong. Washington insiders like Daschle can't fix healthcare even if they have good intentions. Real reform will require painful and continuing sacrifices by all stakeholders- doctors, patients, hospitals, lawyers, state governments and especially drug companies. Look at the doctors who implanted 8 embryos into a woman who already had 6 children. They were prostitutes. Daschle is a smart prostitute, probably smarter and less honest than most physicians. Glenn Greenwald overstated the case in his column http://www.salon.com/opinion/greenwald/, but he was basically right. We'll never have a law to prevent every act of prostitution that hurts society.
Nobody trusts American financial institutions, the Federal Reserve, American hospitals and doctors or the FDA. Trust is essential if we are to climb out of this deep hole, because this change will have to come from the bottom up. Clinton, Kerry, Ted Kennedy and Dole who endorse Daschle just don’t get it- the old boy network and its top down deception is broken. They only accelerate the decline and fall of the American Empire. Dole also works for Alston and Byrd.
We won't be able to get every new drug or treatment even if we have a fatal illness. There isn't enough money, even if the entire DOD budget were added to that of HHS. Who in the boondocks will accept sacrifices when the insiders and greedmeisters Bernanke, Geithner, Daschle and Gupta are the face of government? Are you on our side or the side of the greedmeisters?
Posted by: color me angry | February 2, 2009 11:46 AM
I guess I'm more sympathetic to Ezra's position than most here. The base problem here is that high ranking government officials don't get paid enough. plain and simple. The president makes what, $400,000 a year? And he's the most powerful man in the world?
This only makes sense if you assume that there's such a thing as enough money. There isn't, at least not for the kind of person for whom the question matters. Why didn't Bernie Madoff stop at his first $10 million? When will Wal-Mart stop building more stores?
The politicians and high rollers in business who bend or break the rules like this don't have some target annual income in mind and if their nominal salary is less than that they schedule just enough speeches or "forget" enough taxes to make up the difference, and then stop. Call it an addiction or a moral failing or a universal trait of human nature that everyone would give in to in certain circumstances, but you can't satiate greed just by paying someone a higher salary.
Posted by: Cyrus | February 2, 2009 1:12 PM
What I don't quite get is how borrowing the boss's chauffeured limo on weekends for two years could run up a six-figure tax liability. I mean, that's a lot of driving around, isn't it?
Posted by: SqueakyRat | February 2, 2009 3:38 PM
There's an easy solution for any professional that wants to avoid a conflict of interest with speaking fees--donate all fees to a charity.
I know doctors who do this with drug company honorariums all the time.
Posted by: Jason | February 2, 2009 4:03 PM