Daschle, Facing Senate Panel, Apologizes On Taxes

President Obama's nominee to head the U.S. Department of Health and Human Services sought Monday to explain why he recently paid $140,000 in back taxes and interest.

Fighting to salvage his Cabinet nomination, Tom Daschle pleaded his case in a closed evening meeting with former Senate colleagues.

Afterward, Daschle had this apology: "My failure to recognize that the use of a car was income and not a gift from a good friend was a mistake. When I realized the mistake, I notified officials and I paid the tax in full. It was completely inadvertent. But that's no excuse, and I deeply apologize."

In an earlier letter to the panel, Daschle, the former Senate majority leader and Democratic senator from South Dakota, said he was "deeply embarrassed and disappointed" by the tax errors.

"I apologize for the errors and profoundly regret that you have had to devote time to them," Daschle said in a letter to Sen. Max Baucus of Montana, the Democratic chairman of the Senate Finance Committee, and Sen. Charles Grassley of Iowa, the top Republican on the panel.

Baucus said Monday he is not backing away from his support for Daschle's nomination, calling his former colleague an "invaluable and expert partner in reforming the health care system."

Obama, asked at the White House whether he was standing by his nomination, answered, "Absolutely." He did not elaborate.

The committee met in a closed session Monday afternoon. Daschle was expected to face questions from panel members.

Daschle recently filed amended returns to reflect $128,203 in back taxes and $11,964 in interest owed. A financial disclosure form turned over about a week ago also shows that he earned $200,000 in speaking fees in the past two years for talks he gave to the health care industry.

Jenny Backus, a spokeswoman for Daschle, said the money he earned in speaking fees from health care interests do not pose a conflict for the health care overhaul effort President Obama wants him to lead.

"He welcomed every opportunity to make his case to the American public at large and the health industry in particular that America can't afford to ignore the health care crisis any longer," Backus said.

Daschle's amended returns reflect additional income for the years 2005-2007 for consulting work, the use of a car service and reduced deductions for charitable contributions.

Backus said Daschle did not learn until late December that the car service — valued at more than $250,000 over three years — was subject to taxes. The issue did not come up at Daschle's first hearing before members of the Senate Health, Labor and Pensions Committee on Jan. 8.

According to a financial statement filed with the Office of Government Ethics, among the health care interest groups paying Daschle for speeches were America's Health Insurance Plans, $40,000 for two speeches; CSL Behring, $30,000; the National Association of Boards of Pharmacy, $16,000; and the Principal Life Insurance Co., $15,000.

Daschle said in a letter to the Department of Health and Human Services ethics office that if he's confirmed by the Senate, he will resign as a senior policy adviser at the Washington law firm of Alston & Bird LLP. He reported earnings of more than $2 million from that firm during the past two years.

Daschle also earned more than $2 million in consulting fees from InterMedia Advisors LLC of New York, an investment firm specializing in buyouts and industry consolidation. He said he also intends to resign from that firm upon his confirmation.

From NPR staff and The Associated Press

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