Tuesday, February 03, 2009

Why Didn't the Questionnaire Catch the Tax Issues?

Remember the extensive questionnaire that the Obama transition team asked job applicants to complete? Not to say "I told you so," but recall that shortly after it was leaked to the press, I argued (in a FindLaw column) that vetting would screen out and chill good applicants while failing to prevent attacks on nominees. I expected that even a virtuous nominee could always be "Swiftboated" if opposed on policy or other grounds. (For a hilarious, albeit preposterous and fictional example of how this might be done, see the first chapter of Christopher Buckley's terrific book Supreme Courtship.)

I did not expect Obama's nominees to be tripped up by tax delinquencies, mostly because so many of the questions on the questionnaire inquire about finances and, specifically, taxes. Thus we have the following possibilities:

1) Some potential nominees did not have to fill out the questionnaire at all because President Obama or his transition staff had already decided to give them the job.

2) Potential red flags on some potential nominees' questionnaires were ignored or discounted for the same reason, or because it was assumed that they would get confirmed anyway. This seems an especially good theory for Geithner (who might well have been a Treasury Secretary candidate in a Republican administration, and thus would get through in any event) and Daschle (whose Senate ties were likely counted as sufficient to get him through).

3) One or more nominees filled out the questionnaire inaccurately or incompletely.

4) Different people on the transition team looked at different questionnaires and concluded (perhaps reasonably) that none of the problems was by itself disqualifying. Separate vetters would have meant a failure of the transition team to consider the cumulative impact of these issues. I like this theory as a possible account of Killefer, whose unpaid tax liability ($946.69) was quite small. It's possible, however, that the fact that DC went so far as to place a tax lien on her property indicatess a level of wilfulness on her part that was more disqualifying. But not necessarily. As someone who paid the social security and unemployment insurance premia and withheld state and federal income tax on my children's nanny's salary, I had the experience of receiving erroneous assessments from New York State--perhaps because these taxes are so routinely not paid on household employees that the state, and I imagine the District too, doesn't quite know how to classify the employees for some purposes. It's also possible that Killefer has other, as yet undisclosed, tax problems. But that would bring us back to the question of why the Obama transition team didn't use those problems to screen her out.

Indeed, it would seem that of Geithner, Daschle and Killefer, it's Geithner who had the biggest problem---especially the failure to pay (until his nomination) the portion of his tax liability that was outside the period of the statute of limitations and especially given his responsibility for supervising the IRS. But Geithner had the good fortune to have his tax issue arise first, when a simple tut-tut/let's-get-on-with-the-business-of-governing was enough. By the time the problems with Daschle and Killefer surfaced, a pattern was emerging.

Posted by Mike Dorf