Tom Daschle, US President Barack Obama’s choice for Health and Human Services (HHS) Secretary, has apologised for “errors” which have required him to pay around $140,000 in back taxes and interest.

In a letter to leaders of the Senate Finance Committee, Mr Daschle said he was “deeply embarrassed and disappointed by the errors that required me to amend my tax returns.”

The back taxes relate to the use of a car service offered by “a close friend” - Democrat supporter Leo Hindery Jr, owner of InterMedia Partners, a private equity firm for which Mr Daschle had worked as a consultant for a reported $1 million a year plus profit-sharing arrangements since he left the Senate in early 2005. On January 2, Mr Daschle paid $140,000 worth of back taxes on the service, and says he also plans to pay the US Treasury a further $6,000 for Medicare taxes for the driver.

In his letter to the Finance Committee leaders, which was released ahead of his appearance before the panel in closed session at 5pm yesterday (February 2), he writes: “I would like to briefly review three issues.”

The first relates to the vetting of his records during third-quarter 2008 by the Presidential Transition Team when he was being considered for HHS Secretary. The review flagged $15,000 in charitable contributions (out of the $276,000 claimed by Mr Daschle and his wife Linda over three years) which, the Team felt, were deducted in error.

“When my accountant realized I would need to file amended returns, he suggested addressing another matter I had raised with him earlier in the year: whether the use of a car service offered to me by a close friend might be a tax issue. In December, my accountant advised me that it should be reported as imputed income in the amended returns,” Mr Daschle goes on.
_At about the same time, he adds, the friend’s company had told his accountant of a clerical error it had made on the Form 1099 it provided to him and reported to the Internal Revenue Service (IRS) for 2007; InterMedia had neglected to report a monthly payment to Mr Daschle of $83,000.

“In an effort to ensure full compliance and the most complete disclosure possible of my personal finances, we remedied these issues by filing amended tax returns with full payments, including interest,” he writes, adding: “I disclosed this information to the Committee voluntarily, and paid the taxes and any interest owed promptly. My mistakes were unintentional.”

$5 million in two years
Meantime, the financial statement submitted by Mr Daschle to the Office of Government Ethics has also been released, showing that he earned over $5 million in the past two years, $2 million of which he received from the law and lobby firm Alston & Bird, where he has held the post of special public policy advisor. Mr Daschle is not a registered lobbyist.

According to Alston & Bird’s web site, the former Senate majority leader has focused on “advising the firm’s clients on issues related to all aspects of public policy, with a particular emphasis on issues related to financial services, health care, energy, telecommunications and taxes.”

The advocacy group Public Citizen reports that Alston & Bird lobbied the Department of Health and Human Services or the Centers for Medicare & Medicaid Services (CMS) last year on behalf of 27 pharmaceutical or health care-related clients, including Abbott Laboratories, Bayer Health Care, the Generic pharmaceutical Association (GPhA), Mylan Laboratories, Prostrakan and Roche Diagnostics.

The statement also shows that in the last two years, Mr Daschle has served as a board member of the Mayo Clinic and received speaking fees from 12 organizations or firms, plus directors’ fees from five companies or organizations and a $21,000 advance for Critical: What We Can Do About the Health-Care Crisis, the book he published last year.

- On January 8, Mr Daschle underwent a friendly preliminary confirmation hearing before the Senate Health, Education, Labour and Pensions (HELP) Committee, but this panel did not vote on whether to send his nomination to the full Senate. This will be decided at a Finance Committee hearing, which was expected to be held in late January but has been stalled by the investigation into his tax matters.

However, ahead of yesterday’s closed-session meeting, the Finance Committee’s chairman, Senator Max Baucus, said in a written statement that he supported Mr Daschle’s nomination.