Former Treasury official Nancy Killefer said Tuesday that she was withdrawing her candidacy to be the nation's first chief performance officer because of a tax issue.
President Obama had named Killefer, an assistant Treasury secretary under President Bill Clinton, to work in a new position aimed at increasing government efficiency and eliminating waste.
Killefer said in her Feb. 3 resignation letter that she didn't want her tax problem with the Washington, D.C. government to be a "distraction."
"I recognize that your agenda and the duties facing your chief performance officer are urgent," Killefer said in her letter to Obama. "I have also come to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid. Because of this, I must reluctantly ask you to withdraw my name from consideration."
Questions arose almost immediately about Killefer's problems over nonpayment of unemployment taxes — the third Obama administration nominee to have tax issues.
The Associated Press reported last month that the District of Columbia government had filed a $946.69 lien on Killefer's home in 2005 for failure to pay unemployment compensation taxes on her household help.
Republicans have criticized two of Obama's Cabinet nominees — former Sen. Tom Daschle and Timothy Geithner — for their failure to pay some back taxes. Geithner was confirmed as Treasury secretary last week. Daschle has been tapped by Obama to head the Health and Human Services Department.
Ignoring payroll taxes on household help has sunk nominees in the past. Failure to pay Social Security taxes for a nanny and chauffeur kept corporate lawyer Zoe Baird from becoming Clinton's attorney general in 1993. Similar problems either blocked or bedeviled other nominees. Still others overcame them, such as Shirley S. Chater, the university president who was confirmed to head the Social Security Administration under Clinton despite failing to pay Social Security taxes for a part-time baby sitter.
Bobby Tucker, chief of D.C.'s unemployment insurance tax division, said filing tax liens is "not a common practice" for his office. D.C. law authorizes such liens when an employer "neglects and refuses" to pay the levy that helps fund unemployment benefits for those laid off or fired. Tucker said his auditors have discretion to use tax liens based on "the number of attempts to collect contributions owed, whether or not the employer responds to written attempts, phone calls and/or in-person visits" to collect the tax.
Tucker said, however, that his department's lawyers would not let him discuss the specifics of Killefer's case.
Since Killefer's unemployment tax error was disclosed Jan. 7, White House spokesman Tommy Vietor has declined to amplify or answer follow-up questions. Vietor had said he couldn't respond because Killefer was still completing the Obama transition team's questionnaire for nominees.
From NPR staff and Associated Press reports