Daschle-Hindery Connection Probed

Thomas A. Daschle, nominated to be secretary of the Department of Health and Human Services, did not pay more than $128,000 in taxes over three years, a revelation that poses a potential obstacle to his Senate confirmation. The back taxes, along with $12,000 in interest and penalties, involved unreported consulting fees, questionable charitable contributions, and a car and driver provided by a private equity firm run by entrepreneur and longtime Democratic Party donor Leo J. Hindery Jr. Daschle paid the back taxes six days before his first Senate confirmation hearing with the Senate Health, Education, Labor and Pensions Committee. The Finance Committee, however, has jurisdiction over his nomination. The central issue for Daschle hinges on what has been an obscure -- but financially rewarding -- aspect of his post-Senate life: his role as chairman of the advisory board of Hindery's InterMedia Advisors. Daschle and two other former senators -- Bob Kerrey (D-Neb.) and Slade Gorton (R-Wash.) -- headed the board and were rewarded handsomely for the investments InterMedia made in small niche media corporations. Founded as InterMedia Partners, the New York-based firm was recast in March 2005 when Daschle was brought in as an investor and head of the advisory board. That group consists of other major Democratic figures, including Cappy R. McGarr, who runs a Dallas investment firm and served as Daschle's political treasurer, and Bernard L. Schwartz, a former chief executive of Loral Corp. and a major Democratic donor.