Special Report: Tax Cheat Daschle Favors ‘Federal Reserve for Health’

by CLIFF KINCAID February 3, 2009
Before his tax cheating came to light, former Sen. Tom Daschle was expected to sail through the Senate and be confirmed as Obama’s new Secretary of Health and Human Services and director of the White House Office of Health Reform.
 
But while President Obama was bashing greed on Wall Street, in terms of the big bonuses paid to executives, the details of the Daschle tax scandal were starting to emerge. The scandal not only threatens to derail Daschle but undermine Obama’s national socialist health care plan.
 
Wall Street operator and Democratic Party moneybags Leo Hindery, who hired and paid Daschle millions of dollars and gave him a limousine and chauffeur, wrote an article for the Huffington Post in 2008 saying that he was endorsing Obama for president because the candidate believes in every American “once again paying his or her fair share” of taxes. That didn’t happen in Daschle’s case.
 
The scandal has given critics an opportunity to examine not only Daschle’s tax cheating but his dangerous policy proposals, including the establishment of a Federal Reserve-like national health care board to supervise and influence the nation’s health care system. “I propose a Federal Health Board, modeled loosely on the Federal Reserve System,” Daschle says in his book, Critical: What We Can Do About the Health-Care Crisis.
 
Seen in the light of the current economic and financial crisis, brought about in part because of the easy credit and monetary policies of the Federal Reserve, Daschle’s proposal is obviously not only dumb but dangerous.
 
Michael F. Cannon of the Cato Institute reports that the Obama federal economic “stimulus” bill, which has passed the House, includes $400 million for the Daschle “health care rationing board,” as he describes it.
 
Media in the Tank for Daschle
 
Last November, in one of several laudatory articles about Obama preparing to pick Daschle, Karen Tumulty of Time said,It’s hard to imagine a more useful ally for Obama to help lead his bid for health-care reform…” Citing a road trip she went on with Daschle in South Dakota to examine poverty conditions, she explained, The former Senate Democratic leader has an understanding of the nation’s health-care problem that comes not just from Senate hearing rooms or staff briefings.”
 
But over the last two years, as noted by Kenneth P. Vogel of Politico.com, Daschle has made nearly $5.3 million, including more than $200,000 from the health care industry.
 
Daschle was introduced at his confirmation hearing on January 8th by former Republican Senator Bob Dole, who works with Daschle at the Alston & Bird law and lobbying firm. Dole spoke of Daschle’s “integrity.”
 
Politico.com now reports that Senate Republicans are waiting to see if Daschle’s tax problems “become a major media feeding frenzy” before deciding whether to support or oppose him for the position of Secretary of Health & Human Services. In other words, it’s not whether he is a tax cheat that is important. It’s whether the media accurately portray him as a tax cheat and question the propriety of having someone of questionable character planning a federal takeover of the health care system.
 
But if they put the heat on him now, it would constitute an admission that their previous favorable coverage of Daschle had been superficial and slanted. Another complicating factor is that Daschle patron Hindery is a member of the Board of Visitors of the Columbia School of Journalism. Other members include Suzanne Malveaux of CNN, Jill Abramson of the New York Times, James Kelly of Time Inc., and Richard Smith of Newsweek.
 
Daschle’s preference for federally-dictated and controlled health care is not a secret. According to the website of the law and lobbying firm where Daschle works, Daschle favors “the concept of a national board to oversee the U.S. health system, similarly to the way the Federal Reserve regulates the financial sector.”
 
In his book, Daschle says this would “create a public framework for a largely private health-care delivery system” and “develop the standards and structure” for health care in America. He explains, “If an independent board created a single set of standards for all of these [federal health care] programs, it would exert tremendous influence on every other provider and payer, even in the private sector.”
 
This is nothing less than a socialized health care system, in which the federal government dictates policies and decides on the rationing of care and treatments.
 
Ironically, the same website also says that one of Daschle’s areas of expertise is “taxes.”
 
Dubious Reviews
 
A favorable review of Daschle’s book declared that “Daschle’s solution lies in the Federal Reserve Board, which has overseen the equally complicated financial system with great success.”
 
Great success? Such a review must be a complete embarrassment to Daschle and his collaborators in the current circumstances.  
 
The review, which was on the website of the pro-Democrat and George Soros-funded Center for American Progress (CAP), was published on February 19, 2008, before the role of the Federal Reserve in the continuing economic crisis came in for serious examination and scrutiny. The Fed is now being sued by news organizations because it has covered up the nature of trillions of dollars in bank loans and has acted as if it is unaccountable to Congress or the American people. 
 
This prescription for a total federal government takeover of the health care system was described in a quotation on the book cover as an example of Daschle offering “fresh thinking.” The quote is from then-Senator and now President Barack Obama. Another favorable quote about the book comes from Sen. Harry Reid. 
 
Then-Sen. Obama’s entire statement of praise for the concept of a federal health board is that “Sen. Daschle brings fresh thinking to this problem, and his Federal Reserve for Health concept holds great promise for bridging this intellectual chasm and, at long last, giving this nation the health care it deserves.”
 
Great promise? Does Obama still hold to this discredited idea? This seems to be as newsworthy and significant as Daschle’s tax cheating. However, in the wake of the disclosure that the multi-millionaire former Democrat Senate Leader cheated on his taxes, Obama has said he will stand behind his nominee.  

“Democrats are seeking to prevent the controversy from growing into a full-fledged media firestorm that could seriously threaten Daschle’s nomination…” Politico reported.
 
Daschle, who served as a “senior fellow” at CAP, seemed confident of the future when he wrote his book, having dedicated it to his grandchildren, who “will soon benefit from a new, high-value, and universal health-care system.”  
 
Daschle’s Associates
 
The co-authors of the Daschle book were Scott S. Greenburger, a former reporter for the Boston Globe now working for the Ricchetti lobbying firm, and Jeanne Lambrew, who also worked at CAP. Ricchetti’s clients include several in the health care field, while Lambrew has been chosen as Deputy Director of the Obama White House Office of Health Reform.
 
During the Obama-Biden Transition period, Daschle was head of the Health Care Policy Working Group and Lambrew was a member of the group.Other members of the group were Lauren Aronson, Jenny Backus, Jonathan Blum, Jennifer Cannistra, Mark Childress, David Cutler, Elizabeth Engel, Dora Hughes, Terrell McSweeny, and Rahul Rajkumar.
 
While some of these individuals are considered knowledgeable, the use of the Federal Reserve as a model for health care “reform” obviously raises doubts about the judgment of Daschle and his associates, and of Obama in picking him.  
 
It is not too late for the Senate to do its job and debate whether America wants a federal takeover of the health care system. The American people can weigh in on this controversy by calling their Senators at 202-224-3121.
 
The late-breaking “tax problems,” which Daschle concealed from President Obama and forced him to pay $128,203 in additional tax and $11,964 in interest, will definitely not become a feeding frenzy for the stable of news personalities at GE’s media properties MSNBC, CNBC, and NBC News. That’s because a GE subsidiary, GE Healthcare, paid Daschle big bucks – a reported $12,000 – for one speech.
 
GE Healthcare, one of several healthcare companies that paid Daschle tens of thousands of dollars to speak to their organizations, stands to profit if Daschle is confirmed and pursues Obama’s plan for more federal involvement in the health care field. Indeed, a part of the Obama plan, which is a specialty of GE Healthcare, is the electronic processing of medical records.
 
Cashing In
 
Since he left the Senate in 2004, after being defeated for re-election, Daschle has cashed in big time by making $83,333 per month and $1 million a year from InterMedia Advisors, the firm headed by Hindery. On August 26, 2008, Hindery was on CNBC making the case that the election of Democrats in November would be better for Wall Street than a victory by Republicans.
 
The Senate Finance Committee has released a report on Daschle finding that he has been “a limited partner in InterMedia Partners of Englewood, CO and Chairman of its Executive Advisory Board,” and “an independent consultant to InterMedia Advisors.”
 
The “tax problems” included Daschle using a limousine and chauffeur from the firm and not reporting the services on his income tax forms. This was a violation of the law. Daschle also took illegal charitable deductions and failed to report some consulting fees to the IRS.
 
As in the case of Treasury Secretary Timothy Geithner, who was also caught cheating on his taxes, these are being described as honest or unintentional mistakes by the Obama Administration. 
 
Hindery had been supporting John Edwards for president, the rich trial lawyer who campaigned against poverty and was later discovered to have been cheating on his cancer-stricken wife. Hindery had been Edwards’ senior economic adviser.
 
Federal Election Commission (FEC) records disclose tens of thousands of dollars of contributions from Hindery to the Democrat Party and its candidates. These include several Senate Democrats who will be voting on Daschle’s nomination, such as Democrat Leader Harry Reid. 
 
During the time that Daschle was a national co-chair of Obama’s presidential campaign, he was “a special public policy advisor” and “a member of the Legislative and Public Policy Group” at the Alston & Bird law and lobbying firm, in addition to his work at InterMedia Advisors.
 
Money for What?
 
But what exactly did he do for InterMedia, which invests in media companies? The firm’s website lists him as chairman of the firm’s “Advisory Board” but doesn’t explain precisely what this function entails. The same question occurred to Ed Duffy of the Denver News Examiner. He wrote, “The question I have is, why is a multi-media investment firm paying a man with zero experience running a multi-media company $1 million per year to give them advice on a part-time basis? The obvious answer is they expect to take advantage of his political connections.”
 
Another member of the InterMedia board is Bernard L. Schwartz, the controversial figure whose firm, Loral, a satellite communications company, was accused of helping Communist China’s rocket program. Loral paid a $20 million fine in the case.
 
Schwartz describes himself as “a life-long supporter of the Democratic Party” who “devotes time and resources to the development of policy and strategy at various partisan and non-partisan advocacy organizations.” He has contributed to such groups as the Council on Foreign Relations, the Brookings Institution, and the New America Foundation.
 
While the tax cheating is getting some attention from the media, the $220,000 in speaking fees that Daschle collected from special interests in the health care field seems to be getting more coverage because of the fact, as noted by Kenneth P. Vogel of Politico.com, that many of these firms “stand to gain or lose millions of dollars from the work he would do once confirmed as secretary of Health and Human Services.” A front-page headline in the Washington Post, “Health Sector Enriched Daschle,” captures the obvious conflict of interest problem for the nominee.
 
One of those firms is GE Healthcare, but chances are you won’t hear much about it from GE’s media properties.
 
Indeed, on NBC’s Meet the Press on Sunday, host David Gregory referred to Daschle’s tax cheating as merely “a back tax issue,” saying that he had “to amend his tax returns.” Gregory made no mention of GE Healthcare’s financial interest in having Daschle confirmed.
 
 Family Security Matters Contributing Editor Cliff Kincaid is the Editor of Accuracy in Media, and can be contacted at cliff.kincaid@aim.org.

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