Train Wreck: Obama Nominates 4th Tax Cheat to Cabinet

Posted by Bill Dupray on Feb 5 2009 Filed under Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

This is turning into a farce. First we had Geithner, then Daschle, then Nancy Killefer, and now Labor Secretary nominee Hilda Solis also has a tax problem.

The husband of President Obama’s choice to head the Labor Department paid about $6,400 Wednesday to settle tax liens that had been outstanding for as long as 16 years against his business, the Obama administration said Thursday.

As Ed Morrissey notes.

That makes 25% of Obama’s original Hope and Change Cabinet picks comprised by tax evaders. Add that to the fourth scandal of Bill Richardson’s pay-for-play federal grand jury investigation, and we have a full-blown vetting disaster.

Remember that 9 page information sheet all the Obama nominees had to fill out before they would be considered for a job? The press made a huge deal about the new, ethical tone Obama was bringing to Washington. The One was not going to be blindsided like Clinton with a Zoe Baird problem.

And it specifically asked about tax problems.

A nine-page questionnaire requires applicants to list–and if possible, provide copies of–all “posts or comments on blogs or other Web sites” they have ever made. Also required are “aliases” or nicknames used on those sites. . . .

Clinton also was forced to withdraw the nominations of Zoe Baird and Judge Kimba Wood for attorney general because of questions about whether they paid employment taxes for their nannies. President George W. Bush had the same problem with former New York Police Commissioner Bernard Kerik, appointed to be Homeland Security secretary.

Obama’s questionnaire seeks to remedy that problem. It asks four questions about domestic help, including housekeepers, babysitters, nannies, and gardeners. It asks about child support payments, information about enemies that may “criticize” your nomination, tax returns, loans, jobs held abroad, and so on.

So it seems that all of these folks were not only tax cheats, they also lied when they filled out the questionnaires. If they didn’t lie, then Obama nominated them knowing they were unethical candidates. Either way, Obama’s incompetence in selecting these people is breathtaking.

Let’s not forget the weeks of MSM bleating about McCain’s supposed lack of vetting of Sarah Palin. Not only was she properly vetted, she paid all her taxes, like all patriotic Americans should (at least according to Joe Biden).

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HON file cabinets

I'll back again for sure, thanks for great article :D
Alex

I've worked for several nonprofits that engaged in significant lobbying. It would be highly unusual for the Treasurer to do it, rather than the nonprofit staff member(s) employed for that purpose and who are typically registered as lobbyists. For registration as a lobbyist to be required, you usually would have to spend at least 25% of your time planning and conducting meetings with government officials on ARW's agenda, which is a pretty tight requirement.

I do note above that it's perfectly possible that she engaged in other lobbying activity, but that being a Treasurer doesn't show that she did. It seems extremely unlikely that the ARW alone our of all nonprofits would make the office of Treasurer in their bylaws a lobbying role instead of an expenditure-oversight role.

As Treasurer, she would have approved expenditures on lobbying, or participated in a budget planning process that includes those expenditures, but that is not counted as lobbying under any regulation I know of. In that way, she could have "influenced use of money" for lobbying without doing it herself, and still complied fully with the law.

Minutes of, say, a quarterly board meeting are also highly unlikely to detail her day-to-day activities on behalf of ARW. I know that our minutes typically wouldn't. Assuming that ARW's bylaws provide the normal description of a Treasurer's duties, then there's really nothing she can disclose that would get to what you want.
Hythloday

At this point, the fact that she chose to disclose the directorship now is not an indictment of her ethics beyond those that you cited for not disclosing it in the first place. I would agree that that alone is not grounds for disqualification, but I disagree that it is not a big deal or at least potentially so.

And the issue is not whether her omission disqualifies her from the position. The issue is given that she omitted this disclosure until it was necessary, why did she wait to file and how does someone, who strongly supports the union labor movement so much so that she sponsored the 2007 card check legislation and moonlighted on the board of one of the most influential lobbying groups supporting card check, forget to alert Congress to such an important role.

While the article does not prove she was lobbying as treasurer, your assumption, based on your experiences in non-profit work and the roles of treasurers in those organizations, does not mean that her role was the same or that the role of all non-profit treasurers is as passive as you characterize it. In other words, we cannot assume without knowledge of the interworkings of how ARW operates that simply because her title was treasurer that it is not a lobbying role, and thus does not require any kind of registration as a lobbyist.

Finally, Von Spakovsky's focus may be on the jucier argument that as you put it "there is something inherently corrupt about being a treasurer of an organization that advocates for stronger labor laws and being a nominee for Secretary of Labor," but the point is her failure to report her board position as a congressional member warrants a minimum further investigation. ARW spent over $100,000 lobbying congress over the last two years. She should describe her role as treasurer, how money was paid, how it was decided to be spent to see if there is evidence of her influencing use of the money, under either of her hats. The easiest way to clear the air, is to disclose meeting minutes. If she has nothing to hide, there should be no problem.
Alex

This is the language from the House of Representatives Committee on Standards of Professional Conduct:

Positions
Individuals must disclose any nongovernmental positions, whether or not compensated, that they currently hold [...] Included are such positions as officer, director, [...] of any corporation, [...] any nonprofit organization, any labor organization, or any educational or other institution. Positions held in a religious, social, fraternal, or political entity, and positions solely of an honorary nature need not be disclosed.

American Rights at Work is both a political entity and a nonprofit organization, which means that she ought to have disclosed somewhere on her congressional forms that she was an officer there. Whether it belonged on her financial disclosure forms, as an uncompensated directorship, I don't know. But she has violated this House ethics rule by not having disclosed it.

Is that enough to disqualify her from the position? I wouldn't say so. It doesn't seem that big a deal.

Von Spakovsky doesn't really talk about it, perhaps because he prefers to focus on the juicier idea that there is something inherently corrupt about being a treasurer of an organization that advocates for stronger labor laws and being a nominee for Secretary of Labor. That doesn't violate any ethics rules I know of, though naturally it would be appropriate for her to step down as treasurer once she received the consent of the Senate.
Hythloday

Setting aside the issue of whether her work constituted lobbying, the fact that she never reported the work but then reported it just last week and cited the omission as an "incorrect answer" suggests that she was more than just watching over the money. In other words, if her duties as treasurer did not involve lobbying, why did she feel the need to report it on a financial dislosure statement, late, and with the explanation that the omission was incorrect? -This business of Obama cabinet appointees admitting mistakes to mask potential culpability is becoming weary very quickly.

As an aside, I know government ethics coordinators (not political appointees but career employees) who specialize in disclosure and financial statement forms who have said that she should have reported this when she became a director and a lack of reporting is a very serious breach of the government ethics rules.
Alex

Hmm. I note that this is an article written by the exceptionally untrustworthy Hans von Spakovsky, who has no business lecturing anybody about ethics. But I'll let that slide a moment.

If you read his article, there is no evidence presented in it that Solis participated in lobbying activity. Having worked extensively in the nonprofit field - I currently run one - Board Treasurers provide oversight of the nonprofit's receipts and expenditures. They would typically approve the budget that in this case would include funds for lobbying, but their approval of the nonprofit spending funds on lobbying does not make them lobbyists themselves. Being a Treasurer is not a lobbying role, and does not require any kind of registration as a lobbyist.

Solis may in fact have participated in lobbying in addition to her role as Treasurer, but if she did, von Spakovsky does not mention it. He takes her role as Treasurer as evidence of lobbying activity, which it is not.
Hythloday

She has more than a tax problem. She has a s very serious ethics problem. President is bleeding political capital with all of these unqualified, unethical appointees.
Alex

A wife is not the same person as her husband. That was true for Geraldine Ferraro and it's the same for Hilda Solis. If she submitted her own tax returns, then what information was there for Obama to find?

Also - Kerik was never "appointed" as Homeland Security Secretary. He was nominated but never appointed, and this was part of the reason why.

Train Wreck: Obama Nominates 4th Tax Cheat to Cabinet

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