Daschle Claims Questionable Tax Credit for DC Home

WASHINGTON (Talon News) -- Sen. Tom Daschle's (D-SD) new Washington home has been giving the Senate minority leader headaches of late. Last week, Club for Growth, the Washington-based, anti-tax group, began airing ads in South Dakota that imply the senator's "very, very, very big house" purchased in April for $1.9 million betrays his down-home image.

Now another controversy surrounding the palatial French colonial on Washington's exclusive Foxhall Road has emerged. A Talon News search of DC property records revealed that Daschle is receiving the homestead tax credit.

The District of Columbia allows a $30,000 deduction against a property's tax assessment for the calculation of taxes. Even though every owner-occupied property is eligible for the tax credit, it was enacted to protect lower income homeowners from sharp increases in property taxes due to skyrocketing property values in Washington.

The District of Columbia Office of Tax and Revenue confirmed that the house is in the senator's name and that the property is receiving the homestead deduction. The deduction does not carry over from the previous owner, as any change in ownership requires a new application for the credit.

But Daschle may not even qualify for the tax credit, since one of the requirements is that the property must be the owner's primary residence. South Dakota law requires that its elected officials be residents of the state. Therefore, Daschle would be precluded from claiming his Washington home as his primary residence. The senator's tax savings is less than $1,000 a year.

Stephen Moore, President of the Club For Growth, told Talon News, "We have continued to make the case that he is a Washington resident and not the average man of Aberdeen."

Moore added, "The fact that he is claiming the District of Columbia homestead deduction further supports the idea that Daschle has become a creature of Washington, out of touch with the people of South Dakota."

Sioux Falls, South Dakota businessman and potential senate candidate Neal Tapio told Talon News, "It turns out Senator Daschle's blushing bride is blushing because of the sheer hypocrisy of her public and private husband."

Tapio continued, "Publicly, Tom criticizes Republicans for giving tax cuts to the rich and privately he uses Enron-like tax loopholes to save every penny he can."

Tapio was struck by the irony of the tax credit controversy, noting that the senator and his wife are in the upper 5% of income earners. He said, "Claiming a tax credit designed for low-income wage earners while railing on the Republicans for tax cuts for the rich is brazen hypocrisy."

Tapio also commented on Daschle's traditional car tour of South Dakota during the August recess saying, "Trading a 1978 Oldsmobile in South Dakota for a $2 million French colonial in Washington, DC tells us Tom has lost touch with his SD roots."

Tapio noted another irony in the tax issue. He pointed out that it was just last week that Daschle's Senate colleague Max Baucus (D-MT) requested an IRS investigation of a South Dakota non-profit organization that had run ads focusing on Daschle's voting record.

The District of Columbia Office of Tax and Revenue told Talon News that the matter would be investigated.

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At a May 14 press briefing, Daschle told a reporter it would be "a very serious ethical violation" if the Republican Party used a White House photographer or government property in offering contributors a photo of President Bush taken on September 11. Immediately after Daschle gave this answer, Human Events Assistant Editor David Freddoso asked him if it was a conflict of interest for his wife to lobby for major government contractors and whether he would release the joint tax return he and his wife file detailing the income she receives from that lobbying. Here is a transcript of the exchange:

Reporter: Sir, do you think it’s appropriate that Republicans are selling photographs of President Bush fielding calls on September 11 in—as a fundraising technique?

Senate Majority Leader Tom Daschle (D.-S.D.): Well, I don’t have all the information yet. As you know this story just broke this morning. But I think that, clearly, there would be a very serious ethical violation were White House photographers or any government property involved in this affair. We’ll have to get more information before we comment more publicly on that.

Human Events: Sir, Sen. McCain [R.-Ariz.] has criticized a proposal for the Air Force to lease Boeing 767s. Isn’t it a conflict of interest for Mrs. Daschle, the wife of the man who sets up every vote in the Senate, to lobby for major government contractors like Boeing?

Daschle: Well, my wife doesn’t lobby in the Senate at all. So—she has limited her activities to the House, and I think that’s appropriate.

Human Events: Senator, did you and your wife file a joint tax return this year? And if so, will you release it?

Daschle: Yes, we did. We always do.

Human Events: Would you release it, sir?

Daschle: No, we don’t.

Human Events: Will you?

Daschle: No.

Human Events: Thank you.

On Thursday, May 16, Human Events Editor Terence P. Jeffrey and Assistant Editor David Freddoso left a set of questions on the voicemail of Linda Hall Daschle, wife of Senate Majority Leader Tom Daschle (D.-S.D.). The questions pertained to her lobbying activities. (See cover story.) Jeffrey and Freddoso also sent the questions to her directly via e-mail. Later that day, Human Events received an e-mail response made on Mrs. Daschle’s behalf by Bob Bauer.

Here is the e-mail exchange between Human Events and Mrs. Daschle and her representative:

Dear Mrs. Daschle,

We just left a message on your voice mail asking questions relevant to stories we are working on (deadline this afternoon) about your lobbying activities. For your convenience here are our questions in writing:

1) Isn’t it a conflict of interest for you to represent and derive income from government contractors when your husband is responsible for scheduling votes relevant to their government business?

2) Do you consider it a conflict of interest for you to represent companies who received contracts from the FAA under your watch as Deputy and Acting Administrator?

3) How did you secure Intelli-Check as a client? Did you approach them? Or vice versa?

4) What did you do for Intelli-Check? Did you set up meetings on their behalf with any government agency or official in the Administration or the legislature? Did you make any contacts with such people on their behalf? If so, whom did you meet with, or contact?

5) Would it be a conflict of interest for First Lady Laura Bush or for the Vice President’s wife, Lynne Cheney, to lobby for government contractors?

6) Would it have been appropriate for Laura Bush or Lynne Cheney to lobby the federal government, after September 11, on behalf of a company marketing an "anti-terrorism" device?

Our deadline is this afternoon. Thank you for your consideration.

—David Freddoso and Terry Jeffrey

I am replying on behalf of Linda Hall Daschle to your questions.

Your questions assume generally that Linda Hall Daschle’s independent professional life has generated some ongoing "conflict of interest," because her husband is a member of the United States Senate and its Majority Leader.

Mrs. Daschle does not accept any suggestion that she cannot pursue this independent career, which preceded her marriage to Senator Daschle.

Mrs. Daschle has, however, addressed any potential conflict by adopting a policy, which exceeds the requirements of conflict-of-interest rules or requirements, of not representing clients in the United States Senate. In other words, rather than avoiding any lobbying of her husband and his office, she will also not lobby any other Senator, their staffs or Committees. This policy is noted on each of the reports she files pursuant to the Lobbying Disclosure Act. Moreover, you should be aware that unlike other Republican spouses of high-level office holders, such as Rebecca Cox [wife of Rep. Chris Cox], Ms. Daschle signed a pledge not to lobby for [sic] her former agency for four years. [Editor’s note: The Clinton Administration had a five-year ban on lobbying one’s former agency. Then-Rebecca Range left the Department of Transportation in 1987, not to lobby but to join the Reagan White House.]

Spouses and even children of both Democratic and Republican elected officials have been recognized to have the right to pursue independent professional careers, as Lynne Cheney has. We note, for example, Mrs. Phil Graham’s [sic] service on the board of Enron following her tenure on the CFTC, which had regulated the company, and while her husband served as Chair and Ranking Member of the Senate Banking Committee. Elizabeth Dole directed the Red Cross, which receives substantial federal assistance, while her husband served in the Senate as Majority Leader, and Elaine Chao headed the United Way while her husband [Sen. Mitch McConnell] served as Chair of the Rules Committee.

In some cases, spouses have seen fit to adopt some limitations to avoid actual or perceived conflicts, as Linda Hall Daschle has done in declining to represent clients before the United States Senate and pledging to avoid any lobbying of her former agency, the FAA, for four years. Other spouses have not addressed the issue at all or have declined to adopt such measures.

These facts do not appear to have informed or influenced your questions. Perhaps your reporting will now take on this broader perspective. If it does not, then the suggestion of partisan bias—rather than objective "newsgathering"—will be inescapable.

As for Intellicheck [sic], Ms. Daschle was approached by the company and pleased to assist in their desire to demonstrate their identity verification technology to the aviation industry and the federal government.

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