President Obama set out to create an administration with higher ethical standards and fewer ties to the lobbying industry in Washington. Obama also set out to assemble the most experienced, plugged in and hyperconnected team of Cabinet members and top-level staffers ever. Were these two goals mutually exclusive?
This is MORNING EDITION from NPR News. I'm Renee Montagne.
President Obama says he is responsible for the failure of two high profile nominations.
President BARACK OBAMA: This is a self-induced injury that I'm angry about and we're going to make sure we get it fixed.
MONTAGNE: The president spoke on ABC and other television networks after his nominees pulled out of contention because of personal tax problems. One was Tom Daschle, his pick for health and human services secretary. The other was Nancy Killefer, tapped as chief performance officer, a new position aimed at making government run more efficiently. It was a major setback for a new president who set out high standards for his administration.
Joining us now for some analysis is NPR's Juan Williams. He's at member station KUER in Salt Lake City this morning and joins us live.
JUAN WILLIAMS: Good morning, Renee.
MONTAGNE: What hurt Tom Daschle the most? I mean, was it his failure to fully pay his taxes or was it something less tangible?
WILLIAMS: Well, in isolation, Renee, the tax issue wasn't enough, but it came after Tim Geithner, now the Treasury secretary, was confirmed despite his tax problems, failure to pay some back taxes. And then the nation's editorial pages became vociferous in condemning Daschle for not paying his taxes. Also, you've got to think about it in political terms. The Republicans in the Senate chose not to attack Geithner, who's the real golden boy on Wall Street. Some Republicans eventually, of course, voted against Geithner, but they knew he had the votes to be confirmed at that point.
Daschle, on the other hand, ran into a hail of criticism from Republicans -conflict of interest charges, especially about the speaking fees that came from healthcare companies that he would now have some say about dealing with them in terms of healthcare reform. So this was a real moment in which you saw him, Daschle, being portrayed as a limousine liberal.
And it was damaging not only to efforts about healthcare reform, but I think also to President Obama, who had developed a reputation for managerial, you know, adept - being an adept manager during the campaign and running things smoothly. Here was Tom Daschle, Geithner and Killefer, as you mentioned, creating a huge image problem for the administration.
MONTAGNE: Just two days ago, though, President Obama said he absolutely backed Tom Daschle. What does the loss of this particular nominee mean for the president?
WILLIAMS: Boy, I tell you, Renee, Daschle was a mentor to President Obama - a big brother in so many means. I mean, in the Senate it was Tom Daschle who really helped the new senator from Illinois get his political feet under him. In the presidential campaign Tom Daschle, again, was someone who was so central to giving credibility early on to President Obama. And don't forget Tom Daschle's a hero among Democrats, much admired as a decent Midwestern, plain spoken man, who they felt was unreasonably targeted when he was defeated in the Senate.
So, in a way, President Obama was blind to any thought of an ethical lapse by his hero Tom Daschle. And Daschle didn't inform him fully of any tax problem before the nomination. So Obama's trust here was not repaid.
MONTAGNE: There was a second failed nomination yesterday, as we said. Nancy Killefer stepped aside, though her tax problem was, you know, relatively minor. We're talking hundreds of dollars. And she did not need Senate confirmation. Why did she withdraw? [POST-BROADCAST CORRECTION: Killefer's nomination as deputy director at the Office of Management and Budget would have been subject to confirmation by the Senate.]
WILLIAMS: Critical mass, Renee. You know, you're right. It was a small problem. But one administration official told me yesterday it grew as an issue in light of what had happened with Geithner and then Daschle, because she was going to be in charge of accountability and the czar of government efficiency. And it just was too much at this point. It had reached the breaking point.
Even the Chicago Tribune, President Obama's hometown paper, editorialized that Obama, who had set such high standards, was now either hypocritical or obtuse, to quote them.
MONTAGNE: Juan, given all this, later today the president is scheduled to appear with newly confirmed Treasury Secretary Geithner, who was confirmed, despite his tax problem. Is it possible that this will spark a fresh round of criticism?
WILLIAMS: I think it's inevitable, Renee. Today's event is to announce a ceiling on executive pay at companies that take federal bailout money. The administration sees it, therefore, as advertising their virtues, but I don't see how it could not turn into more discussion about Geithner and Daschle.
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Health and Human Services Secretary: Tom Daschle, a former Senate majority leader, was under fire for failing to pay taxes on the personal use of a car and driver provided to him by a firm for which he was consulting. He recently filed amended tax returns and paid $128,203 in back taxes and $11,964 in interest owed. Daschle also faced questions about potential conflicts of interest related to speaking fees he had received from health care interests. He withdrew from consideration Tuesday.
Chief Performance Officer: Nancy Killefer, a former Treasury official, faced questions about nonpayment of unemployment taxes. The District of Columbia filed a $946.69 lien on Killefer's home in 2005 for failure to pay unemployment compensation taxes on her household help. She withdrew her candidacy to be the nation's first chief performance officer Tuesday, saying she did not want to distract from President Obama's "urgent" agenda.
Treasury Secretary: Timothy Geithner's personal tax lapses turned more than one-third of the Senate against him, but he did win confirmation Monday. He failed to pay all of his taxes on income received from the International Monetary Fund in 2001 and in three subsequent years. As Treasury secretary, he will direct the nation's economic recovery from the worst financial crisis in three generations.
Commerce Secretary: Sen. Judd Gregg (R-NH) was nominated Tuesday, but Obama earlier had considered New Mexico Gov. Bill Richardson for the post. Richardson withdrew in January amid a grand jury investigation into a state contract awarded to his political donors. Gregg, meanwhile, stirred his own controversy over a behind-the-scenes deal to ensure that New Hampshire's Democratic governor names a Republican to serve out Gregg's term.
Deputy Secretary of Defense: Two days after President Obama issued new ethics rules for top administration officials, his choice for this key position at the Defense Department came into question. William J. Lynn III, a former Pentagon official, was a registered lobbyist for a defense contractor within the past two years — which violates the new policy. But the Obama administration granted a special waiver, and Lynn's nomination is still in progress. Still, the nomination continues to raise objections from those who say it contradicts Obama's pledge to "close the revolving door that lets lobbyists come into the government freely."
From NPR and wire reports
In a way, it's like watching an interstate pile-up in slow motion.
One after another, several officials of President Barack Obama's nascent administration have gone into the ditch — or smashed into ethical realities — on their way to confirmation.
On Tuesday, Obama's choice for secretary of Health and Human Services, Tom Daschle, took his name out of consideration after his admission that he had not paid some $128,000 in income taxes sparked criticism. Daschle paid the bill and, as it turned out, an even dearer price.
Daschle's failure to pay taxes was compounded by the scrutiny he received for earning hundreds of thousands of dollars in consulting and speaking fees from health and pharmaceutical interests, some of which would be at the heart of any effort to overhaul the nation's health care system.
Also on Tuesday, Nancy Killefer withdrew her bid to be the nation's first chief performance officer because of her own bad performance: failing to pay employment taxes on domestic workers.
Perhaps Obama's early-days missteps are all the more surprising because he campaigned on the notion of cleaning up business-as-usual government.
"We must change Washington," Obama said in a speech delivered in Green Bay on Sept 22, 2008. "We must reform our regulations, our politics and our government, but we will not be able to make these changes with the same policies, the same lobbyists or the same Washington culture that allows politicians and special interests to set their own agenda."
Or perhaps we are seeing the results of Obama's promises to revamp Washington politics.
The New High Bar
"People are watching closely," says Mary Boyle of Common Cause, "especially on these kinds of ethics and lobbying issues that he highlighted during the campaign. That makes him especially vulnerable to be called hypocritical on this stuff, and that is certainly not how he wants to mark his first weeks in office."
But, Boyle adds, "he's also delivering on his promise to set a new bar. He issued an executive order on his first day on the job limiting the role that lobbyists could play in his administration. So what we seem to be seeing is the old way of business smacking up against the new high bar."
One nominee who is feeling the effects of Obama's new ethics standard through the confirmation process is his choice for deputy defense secretary. William J. Lynn III, a former Pentagon official, is a Raytheon executive and until recently, a former registered lobbyist for the defense contractor (sidebar). His confirmation is progressing, but not without objection over potential conflicts of interest.
Daschle and Killefer joined the parade of doomed or difficult nominations. Newly installed Treasury Secretary Timothy Geithner also owed some $34,000 in back income taxes — a fairly significant oversight for the man in charge of the Internal Revenue Service. But his nomination, amid the hopes that he might help revive the economy, was perhaps considered too big too fail. He ponied up the money and was confirmed — but only by a 60-34 vote.
Still, another Obama pick, New Mexico Gov. Bill Richardson, backed out of his nomination as secretary of commerce because of questions over political donors who received state contracts.
Obama is not the first president to suffer such birthing pains. "Most administrations have some problems with initial confirmations," says Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. President Clinton's first two choices for attorney general, Zoe Baird and Kimba Wood, withdrew, and President Bush's first labor secretary nominee, Linda Chavez, was forced to take her hat out of the ring. All three were derailed by nanny issues.
In Washington, the question is being asked: Can Obama find enough smart, committed and squeaky-clean civil servants to fill the top spots in his White House? There could be a domino effect at work. Daschle might have survived if Killefer and Richardson had not fallen before him. And if Geithner's appointment hadn't already used up a pile of Obama's political capital.
"Nearly everyone has a skeleton or two," Sloan says, "and demanding purity from our government officials will leave us disappointed and with no officials. That said, it is well-known in Washington that tax problems will sink a nomination. Anyone aspiring to high-level government service has long been on notice that they need to keep their financial house in order."
Under the klieg lights of the administration's background investigations, more eleventh-hour surprises are liable to emerge. Which also puts the vetting process itself under a spotlight all its own.
Material from The Associated Press was used in this report.
Correction Feb. 4, 2009
We incorrectly said that Nancy Killefer stepped aside although she "did not need Senate confirmation." In fact, her nomination as deputy director at the Office of Management and Budget would have been subject to confirmation by the Senate.