Daschle's Delay: The Backstory Behind EduCap
By Elana Schor - January 15, 2009, 9:31AM
Following on its scoop on Tim Geithner's taxes, the Journal reports today on a new vetting problem with Health & Human Services nominee Tom Daschle, a former Senate Democratic leader. It seems that Daschle accepted corporate jet flights from a non-profit student-loan company called EduCap, which is already the subject of inquiries into its tax status.
Okay ... the next question might be, so what? If every prominent Washington figure was hassled for using the private planes of companies under scrutiny, the government would stop running altogether. (Sometimes it feels like that already happened.) So why is EduCap a potential headache for Daschle?
The answer is Catherine Reynolds, the CEO of EduCap and a Washington society doyenne whose private foundation has doled out more than $100 million to cultural causes since 2001. The Washington Post reported in 2007 (story linked to above) that EduCap was in the hot seat with the IRS for, among other things, paying for Reynolds and her friends to take in lobster and private concerts in the Caribbean.
The Journal notes that Daschle traveled "to vacation spots" on EduCap's $30 million corporate jet, though it isn't clear whether those trips were the same ones that attracted IRS attention. Most importantly, it also isn't clear when Daschle took the trips, whether during his senatorial term (which ended in 2004) or after he left public life.
At issue is EduCap's tax status -- namely, whether the company could rightfully claim a tax exemption given Reynolds' lavish use of company funds. Of course, when Reynolds was quoted in the Post inviting any skeptics to "take it up with Congress," it was basically a given that Congress would take her up on the offer.
And it was Chuck Grassley (IA), the senior Republican on the Senate Finance Committee, who started looking into EduCap's tax status. Grassley's committee is the one now holding up Daschle's confirmation hearing as it looks into his EduCap ties.
But what was Daschle doing palling around on EduCap's jet while the company was in some trouble? Put simply, it seems that the Daschles and Reynoldses are sort of BFFs. As a sore Buffy Cafritz explained to Vanity Fair (hopefully the last time a "Buffy" will be attributed here):
MORE ...over at Josh Marshall's "Talking Points Memo" with links..........
http://tpmelectioncentral.talkingpointsmemo.com/2009/01/daschles_delay_the_backstory_behind_educap.php
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