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.

I’m Linda, Fly Me
(Tom Daschle: Ambitions grounded by his wife’s baggage)
laweekly | 01/17/2003 | by Doug Ireland

The real reason Tom Daschle didn’t run for president.

The national press corps didn’t bother to tell you why Tom Daschle, the Democrats’
Senate leader, decided at the 11th hour not to run for president: In the end, he calculated
that he couldn’t survive scrutiny of his persistent service to the clients of his wife. Linda
Daschle has been one of the airline industry’s top lobbyists for two decades — when she
wasn’t busy running the Federal Aviation Administration (FAA), which explains why,
just 11 days after the 9/11 attacks, her husband rushed through the Democratic Senate,
which he controlled, the $15 billion bailout for the airline industry, a notorious taxpayer
rip-off.

Right after then-Congressman Tom Daschle dumped his first wife for a younger, prettier
one, the former Miss Kansas Linda Daschle went to work as chief lobbyist for the Air
Transport Association the airline industry’s main lobby; she then became the senior vice
president of the American Association of Airport Executives; and these days hangs her
hat at the pricey top Washington law/lobby shop Baker, Donelson, Bearman & Caldwell,
headed by former GOP Senate leader and ex–Reagan chief of staff Howard Baker —
where she peddles influence on behalf of a long list of lucrative aviation clients.

The clients for whom Linda lobbied brought more than $5.86 million into Baker,
Donelson in one three-year period, including Northwest Airlines ($870,000 from 1997
through 2001) and American Airlines ($1.26 million in fees). Northwest was already
teetering on the edge of bankruptcy even before 9/11. American, which has had six fatal
crashes since 1994 (not counting 9/11) and has been repeatedly fined by the FAA for a
skein of safety violations, had the reputation as the most unsafe major U.S. carrier.

Yet these two clients of Linda Daschle’s got nearly $1 billion from the airline bailout her
husband pushed into law — thanks to which Northwest (which was the second largest
contributor to Senator Daschle’s 1998 campaign, and which scooped up $404 million in
government cash) actually posted a $19 million profit in the third quarter after the
twin-towers attacks. And, as the lone senator to vote against the bailout, Illinois GOPer
Peter Fitzgerald, decried, “The only people who got bailed out were the shareholders.

The 1 million airline employees were left twisting in the wind.” So much for the populist
noises that occasionally come from Senator Daschle’s mouth. The Daschles also made
sure that the bailout exempted American (which has consistently lobbied against tougher
airline safety standards) and other carriers with lousy safety records from any real liability
to lawsuits from the families of 9/11 victims. Moreover, the General Accounting Office
found that the airline industry’s representations to Congress to secure the bailout
overstated its anticipated losses from 9/11 by as much as $5 billion.

Before 9/11, Senator Daschle pushed through the sleazy deal in the backrooms of Capitol
Hill that forced the FAA to buy defective baggage scanners from one of Linda’s other
clients, L-3 International (from which Linda’s firm raked in $440,000 in the ’97–’01
period). Under a provision Linda’s husband had slipped into the 2000 budget for the U.S.
Department of Transportation (DOT), the FAA was required to buy one of L-3’s scanners
for every one it purchased from the company’s competitors. The L-3 scanners were found
to be substandard by DOT’s inspector general; FAA tests of the scanners showed high
failure rates; and most have not yet been installed because of their defects (the one at the
Dallas–Fort Worth airport — another of Linda’s clients — leaked radiation), which is a
major reason DOT says it won’t be able to screen all luggage for explosives for years to
come.

In one of those corporate-coddling moves for which the Clinton administration became
infamous, President Bubba appointed Linda Daschle deputy administrator of the FAA,
putting her in charge of regulating her once-and-future clients; and she wound up running
the agency as acting administrator. This, of course, significantly boosted the Daschle
family income by hyping the amount Linda could charge her clients when she left
government service. She didn’t wait long to cash in. Example: While running the FAA,
she awarded Loral Space Technologies (a major Democratic contributor that figured in
the ’96 campaign-finance scandals) a nearly $1 billion contract from the federal
government; after Linda passed through the revolving door to Baker, Donelson, Loral
paid the lobby shop $740,000 in 2000-2001 for Linda’s services. When the FAA was
pondering making mandatory a criminal-background check for all airport employees,
Linda, who was then running the agency, vigorously opposed this common-sense move
— echoing the position of the airline-industry lobby that had previously employed her.

A particularly odiferous episode involved charges that the senator and his wife had tried
to sabotage safety inspections of an air-charter firm owned by Murl Bellew, a Daschle
family friend who taught Tom how to fly. The scandal erupted and triggered an official
investigation when a Bellew small plane chartered by the Indian Health Service crashed
in North Dakota, killing the pilot and three doctors en route to an Indian-reservation
clinic.

Forest Service inspectors had been arguing that Bellew’s firm should be banned from
getting government contracts because the operation had been unsafe for years. Senator
Daschle obligingly pushed legislation taking the Forest Service out of the business of
inspecting small-plane carriers, and senior FAA bureaucrats said Linda had also tried to
submarine a proposal to train Forest Service inspectors to conduct FAA investigations.
An FAA inspector reported a cover-up: Documents showing the Daschles’ assiduous
efforts to minimize inspections of Bellew’s planes were shredded by FAA officials under
Linda’s thumb. While an I.G. report failed to find Linda guilty of any lawbreaking,
there’s an old saying in Washington: The scandal isn’t what’s illegal, the real scandal is
what’s legal.

It’s a sign of how lazy, blinkered and source-coddling the Beltway’s national press corps
is when one considers that none of all this made the dissections of the senator’s
presidential withdrawal — even though a tough piece by the Washington Monthly’s
Stephanie Mencimer in the January 2002 issue laying out much of it was still on
newsstands. As she observed, “It doesn’t take Lee Atwater to see how Mrs. Daschle’s
professional life might play out in a nasty re-election or presidential campaign: ‘Sen.
Daschle’s wife lobbyist for nation’s most dangerous airline,’ or ‘majority leader’s wife
lobbied to make airlines less safe.’”

Linda Daschle has tried to pooh-pooh her obvious conflicts of interest as an influence
peddler, telling The New York Times last August that the staff members she lobbies “are
pretty junior and may or may not know who I am” — a mind-boggling, risible assertion.
But her senator/leader husband has always refused to make public his and his wife’s tax
returns, despite repeated press requests. As a presidential candidate, Tom Daschle could
not have avoided giving the press a look at those returns — which would have spelled out
just how much cash Linda brings in from her clients.

And that, children, was the ticking time bomb that would inevitably have exploded if the
senator had sought the White House — and is the bottom-line reason he chose not to run.

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