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Taxing questions for another Obama nominee

February 5, 2009 3:15:35 PM PST
Labor Secretary nominee Hilda Solis became the latest Cabinet nominee to face questions about unpaid taxes Thursday as a Senate panel abruptly postponed a scheduled vote on her confirmation. The postponement came after revelations that Solis' husband settled tax liens on his California auto repair business this week that had been outstanding for as long as 16 years.

The discovery posed another political headache for a White House already chafing after tax problems and other controversies derailed some administration appointments, including former Sen. Tom Daschle's nomination as health secretary. President Barack Obama pledged in TV interviews this week that he would "make sure that we're not screwing up again" in the vetting process.

White House spokesman Robert Gibbs insisted that Solis' own tax returns "are in order."

"She's not a partner in that business," Gibbs said. "So we're not going to penalize her for her husband's business mistakes."

Asked if the Solis nomination was in trouble, Gibbs said, "I don't believe it is at all."

USA Today first reported Thursday that Los Angeles County records showed 15 outstanding state and county tax liens totaling $7,630 against Sam Sayyad and his business.

White House spokesman Tommy Vietor said Solis and Sayyad were unaware of the liens until asked about them this week. He said Sayyad paid about $6,400 to Los Angeles County on Wednesday to settle the liens, but he plans to appeal.

Vietor said Solis - a Los Angles-area congresswoman - and her husband file personal income taxes jointly, but that Sayyad is the sole proprietor of the business and all tax communications about it go only to him at a separate business address.

"Sayyad does not believe the penalties were accurately assessed, but he's paid them out of an abundance of caution and is planning to appeal," Vietor said.

The Democratic and Republican leaders of the Senate Health, Education, Labor and Pensions Committee issued a joint statement minutes before the committee was to have met to vote on Solis' nomination to say that lawmakers need more time to review documentation about Solis.

Anthony Coley, a spokesman for the committee's chairman, Sen. Edward M. Kennedy, D-Mass., said the panel asked the Obama administration to look into the tax issue and report back.

"We are optimistic that the committee will be able to move forward with her nomination soon," Coley said.

Solis's confirmation was already stalled amid complaints from some Republican lawmakers about her role as a board member and treasurer of American Rights at Work, or ARW, a group pushing for passage of a bill to make it easier for workers to form unions.

Wyoming Sen. Mike Enzi, the committee's top Republican, has suggested that Solis should recuse herself for two years from debate over the Employee Free Choice Act because of her position with the group. He cites new ethics guidelines put in place by Obama that limit appointees who previously lobbied on an issue from being involved in the issue during their first two years in office.

Solis said last week in written responses to Enzi that her role with the group did not involve lobbying.

With the process becoming drawn out, Obama on Monday appointed Edward Hugler, a career Labor Department official, as acting labor secretary.

Another concern from Republicans is that Solis did not mention her positions with the group on her financial disclosure statements to the House for the years 2004 through 2007.

Vietor called it the result of "an unintentional oversight."

"As soon as she became aware of this oversight, she moved to correct it and has filed a letter with the clerk of the House correcting the omission," Vietor said.

Vietor said Solis would agree only to recuse herself for two years "from any particular matter involving specific parties which is directly and substantially related to ARW. The Employee Free Choice Act is not a particular matter involving specific parties."

The legislation, which is the top priority for labor groups, is vehemently opposed by business groups and most Republicans in Congress.

Vietor cited the House Ethics Manual, which says that a lawmaker can serve on the board of a nonprofit group without compensation regardless of whether it engages in lobbying. He said her position as treasurer does not make a difference because she never supervised any lobbying activities.


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