Grassley: Sebelius tax error not like Daschle’s

Senate Finance Committee ranking member Chuck Grassley (R-Iowa) doesn’t seem as peeved about Health and Human Services (HHS) Secretary-designate Kathleen Sebelius’s income tax screw-up as he was about the mistakes made by President Obama’s first HHS nominee, former Sen. Tom Daschle (D-S.D.)

Daschle, for anyone who forgot, withdrew himself from consideration for the HHS gig in February after it came to light that he’d neglected to pay about $140,000 in taxes on a limousine service he’d been enjoying free-of-charge for a couple of years.

Kansas Gov. Sebelius (D), we learned yesterday, found some problems with deductions she took on charitable contributions and her home mortgage and paid more than $7,000 in back taxes while being vetted by the Obama administration. (Read her letter explaining all of this to Grassley and Finance Committee Chairman Max Baucus (D-Mont.) and their response here. Baucus also issued a statement reaffirming his support for Sebelius.)

Grassley, the top Republican on the committee authorized with recommending whether the Senate should confirm Sebelius, told Iowa reporters on a conference call Wednesday morning that Sebelius’s errors are more like those made by U.S. Trade Representative Ron Kirk and less egregious than those made by Daschle or Treasury Secretary Timothy Geithner.

Here’s the exchange between Grassley and Des Moines Register reporter Tom Beaumont:

QUESTION: Senator, you’ve been critical of Obama’s vetting in considering Sebelius as the latest nominee with tax violations. Are we talking about, in your opinion, a question of competence on the part of the administration?

GRASSLEY: No. I think — well, you know, I suppose there’s four or five different answers to your question because we’re talking about four or five different people. I think it was overpromising back in November, and the vetting process didn’t square with the — with the promising. So, from that standpoint then, I would fault the vetting process. But I think since Daschle, they’ve got that vetting process in a little better shape. Now, that’s what my and Senator Baucus’ staff are telling Senator Baucus and me; that we feel that it’s a lot better. Now, you’ve still got a case — I know what you’re talking about — the one we’re taking up tomorrow owed $7,000. Now, in the case of — in the case of Sebelius and before that Kirk for special trade representative, we actually feel that between their tax accountant and the taxpayer that, in both of those instances, there was good-faith effort on the part of the accountant or the lawyer that the tax that wasn’t paid didn’t need to be paid. But, obviously, you have a third party look at it and look at it differently and said, yes, you should have paid taxes on that. Whereas, we have a feeling in the case of Geithner and in the case of Daschle that it was just — just not very good — maybe the way to say it would be not very good legal advice. And so I think you’d see a difference between the last two and previous ones. Maybe in the last two, I don’t think that we found them. I think the vetting process found them. Now, the vetting process found some in the case of Geithner and Daschle, but our staff also found some problems that had to go over. All that said, I still reserve judgment on her until hearings occur because that’s why we have hearings. But let me say that I voted for Kirk, as you probably know. And I think the tax policy would have less with how I’m going to vote on her than the other things that might come out in the hearing. Although, who knows? There still may be some tax things come out. But I think we wouldn’t be having this hearing if we didn’t think the tax things were pretty well taken care of.

You can listen the entire conference call here.

– Jeffrey Young