As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, February 02, 2009

Beltway Ethics and Tom Daschle

Tom Daschle is awfully sorry about overlooking his tax burden and wants to get his high-level cabinet post, please.

Fighting to salvage his Cabinet nomination, Tom Daschle pleaded his case Monday evening in a closed meeting with former Senate colleagues after publicly apologizing for failing to pay more than $120,000 in taxes. President Barack Obama said he was "absolutely" sticking with his nominee for health secretary, and a key senator added an important endorsement [...]

Nobody was predicting defeat for Daschle's nomination as secretary of health and human services, but it was proving an unsavory pill to swallow for senators who only last week confirmed Timothy Geithner as treasury secretary despite his separate tax-payment problems. It's an issue that strikes a nerve among lawmakers' constituents who are struggling with their own serious money problems.

Daschle's tax problem is nothing more than an example of the Washington favor factory used by every out-of-work lawmaker. Trent Lott and Bob Dole and J.D. Hayworth and John Breaux and Richard Pombo and about 20 kajillion other lawmaker-turned-lobbyists aren't up for a cabinet position, but if they were you'd hear the same thing.

Beyond the ramifications for Mr. Daschle’s ascent to the cabinet, the disclosures about Mr. Hindery and the many clients Mr. Daschle advised on public policy offers a new window into how Washington works. It shows how in just four years an influential former senator was able to make $5 million and live a lavish lifestyle by dint of his name, connections and knowledge of the town’s inner workings.

There is no evidence that Mr. Daschle pulled strings for Mr. Hindery. Indeed, Mr. Hindery’s firm appears to have had few interests before the government. But interviews and a review of public documents show that in his work for a Washington law firm, Mr. Daschle did take on an array of clients seeking influence with the government, including concerns involved in Indian gambling, ethanol, health care, telecommunications and federal contracting.

Worse, he accepted multiple speaking fees from health care industry groups, the same ones who he would presumably be trying to derail in reforming the system:

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.

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.

This isn't about Daschle conniving to defraud the government of $100K, it's about a culture of Beltway backscratching that treats life the same way as the horse-trading inside the Capitol. It's why he'll be swiftly confirmed, because his former colleagues in the Senate want the SAME kind of treatment when they are cast out into the "real world". Tom Daschle and his wife epitomize Beltway ethics, which thinks nothing of perks and speaking fees and other corrupting activities. Simply put, there is a premium paid to former lawmakers by those who want to influence the system, to buy their knowledge and expertise. Matt Taibbi has much more on all of this.

In Washington there are whores and there are whores, and then there is Tom Daschle. Tom Daschle would suck off a corpse for a cheeseburger. True, he is probably only the second-biggest whore for the health care industry in American politics — the biggest being doctor/cat-torturer Bill Frist, whose visit to South Dakota on behalf of John Thune in 2004 was one of the factors in ending Daschle's tenure in the Senate [...]

Regarding Daschle, remember, we're talking about a guy who not only was a consultant for one of the top health-care law firms in the country, but a board member of the Mayo Clinic (a major recipient of NIH grants) and the husband of one of America's biggest defense lobbyists — wife Linda Hall lobbies for Lockheed-Martin and Boeing. Does anyone really think that this person is going to come up with a health care proposal that in any way cuts into the profits of the major health care companies?

Daschle is just a symptom of an accountability-free system in Washington and throughout the country among the upper echelons of the elite. They evade taxes like it's their job. They pass favors back and forth to any fellow member of the club. And the working class pays for it. This story is from the UK, but it could just as easily be from the US.

British taxpayers are being left to plug a multibillion-pound hole in the public finances as hundreds of the country's biggest companies increasingly employ complex and secretive tax arrangements to limit the amount they hand over to the exchequer.

An extensive Guardian investigation has examined the accounts of the UK's biggest companies - many of them household names - and discovered a series of sophisticated tax strategies which, critics say, amount to an almost unstoppable tide of perfectly legal corporate tax avoidance.

The veil of confidentiality that covers these tax avoidance schemes is so difficult to penetrate that nobody knows exactly how much tax goes missing each year. But HM Revenue & Customs estimated that the size of the tax gap could be anything between £3.7bn and £13bn. The Commons public accounts committee put it at a possible £8.5bn and the TUC said £12bn.

This is all legally accomplished, through corporate tax laws written by corporate lobbyists, through handshake agreements between those former lawmakers on one side of the revolving door and the others on the insude, and through a general sense of permissiveness and leniency. Practically everyone in Congress is a future recipient of such beneficence, so there's not a lot of effort put into caring. There are hundreds of billions of dollars in unpaid taxes floating around out there, maybe enough to put aside this "grand bargain" of fiscal reform and pay for virtually the entire current deficit. This is the poison that keeps the country from progress on significant issues.

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