February 3, 2009 / 7:09 PM / 10 years ago

ANALYSIS-Obama's bumpy path to reforming Washington

By Steve Holland

WASHINGTON, Feb 3 (Reuters) - U.S. President Barack Obama is struggling to get a handle on a series of embarrassing disclosures involving top appointees who are testing the limits of his pledge to end business as usual in Washington.

The withdrawal on Tuesday of Tom Daschle as his choice for healthcare chief underscored the problem.

Four of Obama’s choices for powerful positions have had either tax problems or potential conflicts of interest. In a dramatic bloody Tuesday, Daschle and another Obama pick withdrew their names from consideration over tax problems.

The problems are a distraction for Obama as he seeks to fix the U.S. economy and provide an early test of his credibility. During his election campaign he promised to name the most ethically upright team ever.

Previous presidents tried and failed to change culture in Washington, a city where former politicians and ex-government officials can get rich by using their influence with the powerful on behalf of corporate clients and political causes.

An executive order signed by Obama shortly after his inauguration last month was meant to put up his own presidential roadblock to influence-peddling.

"When you set expectations too high, and I think Obama has set expectations too high, this culture will overwhelm any president," said Larry Sabato, a political science professor at the University of Virginia.

"It’s deeply ingrained and it involves tens of thousands of people making loads of money," Sabato said.


One top official survived the Senate confirmation process — Treasury Secretary Timothy Geithner — despite having tax problems that he later corrected.

Daschle pulled out after The New York Times called on him to withdraw from consideration because he had to pay $128,000 in back taxes and had earned $5 million from health industry groups in recent years that he would be required to regulate.

Nancy Killefer withdrew her name to be considered as White House chief performance officer, a budget watchdog job — also due to a personal tax issue.

The tax problems have provided fodder for late-night television comedians.

"There’s a huge scientific breakthrough today. Researchers say they’re very close to finding someone from Obama’s Cabinet who’s actually paid their taxes," joked Jay Leno, host of NBC’s "Tonight Show," on Monday.

Questions remain about William Lynn, picked by Obama for No. 2 at the Defense Department. He is a former lobbyist for a major defense contractor, Raytheon Co. (RTN.N).

Arizona Sen. John McCain, ranking Republican on the Senate Armed Services Committee that is considering Lynn’s nomination, says Lynn needs to explain what defense issues he would recuse himself from as a result of his Raytheon ties.

Watchdog groups thank Obama for making ethics a top priority but say he should be careful in how many exceptions he grants to the rules.

"You’re going to run into some bumps in the road," said Fred Wertheimer, president of the government accountability organization, Democracy 21.

"But if you run into too many bumps in the road, then it starts to challenge the very premise of one of his important positions that he laid out during his campaign," he said.

Bruce Buchanan, a political science professor at the University of Texas, said the ethical examples are proving to be a distraction for an administration that was supposed to insist on exemplary behavior.

"It’s a little short of felonious intent, but nonetheless it’s embarrassing," he said.

(Editing by Howard Goller)

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