Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (8 page)

Vanity Fair
editorial associate Julian Sancton squealed: “Together, the images in this collection document the dawn of an era. Hold on to this issue. Posterity will thank you.”
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Annie Liebowitz’s first group photo showcased Obama’s seven A-list cabinet members and nominees. Secretary-designate of Labor Hilda Solis stood with arms akimbo in a hot tomato power suit. Secretary of Homeland Security Janet Napolitano donned a Garanimals’s red turtleneck and beaming smile. Secretary of Transportation Ray LaHood and Secretary of Veteran Affairs Eric Shinseki both looked relaxed in solid ties and dark suits. Secretary of Agriculture Tom Vilsack struck an oddly pensive pose with downcast eyes amid his jubilant peers. Perhaps he has clairvoyant powers.

In the far-right corner of the class picture, Secretary-designate of the Treasury Timothy Geithner wore shirtsleeves and a furrowed expression of bewilderment (which would soon become his trademark image). And on the far-left end of the set, Secretary-designate of Health and Human Services Tom Daschle looked straight into the camera with the toothiest, most self-satisfied grin.

“This is our opportunity to change the health-care system in this country for the first time in a comprehensive way,”
Vanity Fair
quoted Daschle in the lead caption on the power portrait. “Expectations are very high. We are ready to go.” He wasn’t kidding. On January 25, 2009, word had already leaked that Daschle had “scored a ground floor office in the West Wing.”
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Maureen Orth’s accompanying piece (obsequiously titled “Can Obama’s New Team Make Government Cool Again?”) reiterated the ready-to-go theme: “Former Democratic leader in the Senate Tom Daschle, now secretary of health and human services, vowed to transform health care, the thorniest issue of all. ‘There is a tremendous opportunity to launch this new era in a much more positive tone,’ he said.”
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Orth’s anointing of Daschle, alas, was premature. The super-model-style photo spread and drool-drenched Cabinet profiles were published on the
Vanity Fair
website at the beginning of February. Daschle was not yet secretary of health and human services. Nor would he, notwithstanding
Vanity Fair
’s unilateral coronation and official portraiture, ever be.

On February 3, 2009, Daschle withdrew from the HHS nomination as furious funnel clouds of ethical scandal, conflicts of interest, and tax avoidance darkened White House skies. “Old ways doomed new job for Daschle,” the
Washington Post
intoned.
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“Daschle Out as Health Nominee Due to Tax Problems,” the Associated Press reported.
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“Daschle ends bid for post; Obama concedes mistake,” the
New York Times
announced.
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Public expectations may have been very high, to borrow Daschle’s words. But the Obama vetters’ standards were trapped in a ditch. The Daschle disaster came on the heels of former New Mexico Governor Bill Richardson’s withdrawal from the Commerce Secretary nomination over a long-running pay-for-play probe in New Mexico—which was followed by disclosure of Treasury Secretary Geithner’s “tax goofs” involving his failure to pay $43,000 in federal self-employment taxes for four separate years (until, that is, he was tapped for his Obama post).

And these were just the first three of a hapless series of botched nominations involving Obama’s “policy aces, whiz kids, and veteran advisers.” By the end of his first 100 days, Obama had set a turnover record for an incoming cabinet with four major withdrawals (including Republican Senator Judd Gregg’s withdrawal as Richardson’s replacement at Commerce over fiscal policy disagreements) and a spate of lower posts (such as CNN medical journalist Sanjay Gupta’s decision to forego the Surgeon General’s post for family and timing reasons). By comparison, former President Bill Clinton had six major nominee dropouts during the course of his eight-year presidency; George W. Bush had two; George H. W. Bush, Ronald Reagan, and Jimmy Carter had one each, according to
National Journal
.
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By the hallowed 100-day mark, Obama had announced fewer than half of the Senate-confirmed Cabinet department positions he needed to fill, and only 10 percent had been confirmed. Given the fact that Democrats had an overwhelming majority in the Senate, delayed confirmations couldn’t be blamed on partisan opposition. Perhaps the new president figured that a disastrously bungled appointment process is the way to Make Government Cool Again.

The administration’s handling of the U.S. ambassadorship to Iraq is in a category all by itself. After being told by Vice President Joe Biden, Secretary of State Hillary Clinton, and national security adviser James L. Jones that he had the job, four-star Marine General Anthony Zinni told the
Washington Times
in early February 2009 that the appointment had been withdrawn without explanation in favor of a veteran diplomat, Christopher Hill.
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Hill was confirmed in April 2009. Zinni recounted the disastrous treatment of the situation to
Foreign Policy’s
Laura Rozen:

“To make a long story short, I kept getting blown off all week,” Zinni said. “Meantime, I was rushing to put my personal things in order,” to get ready to go.

“Finally, nobody was telling me anything,” Zinni said. “I called [national security adviser James L.] Jones Monday several times. I finally got through late in evening. I asked Jones, ‘What’s going on?’ And Jones said, ‘We decided on Chris Hill.’”

“I said, ‘Really,’” Zinni recalled. “That was news to me.”

Jones asked him if he would like to be ambassador to Saudi Arabia, Zinni said. “I said, ‘You can stick that with whatever other offers,’” Zinni recalled, saying he had used more colorful language with Jones. Asked Jones’s response and if he was apologetic, Zinni said, “Jones was not too concerned. He laughed about it.”

Zinni said particularly galling is that had he not managed to get through to Jones on Monday night after repeated calls, he would have found out about the Chris Hill appointment in the
Washington Post
the next day with everybody else.

“You know, I would have appreciated if someone called me and said, ‘Minds were changed,’” Zinni said. “But not even to get a call. That’s what’s really embarrassing.”
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Zinni told the
New York Times
that he was offered the ambassadorship to Saudi Arabia as a consolation prize. “I told them to stick it where the sun don’t shine.”
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Two months into the Hope and Change presidency, a popular joke made its way around the Internet:

What is the difference between Obama and Jesus?
Jesus could actually build a cabinet.
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You never get a second chance to make a first post-inaugural impression. Less than three weeks into his first 100 days, Barack Obama left indelible marks on his nascent presidency: the marks of incompetence and hubris. Despite the administration’s much-touted wealth of sharp minds and seasoned strategists, the transition was an abject disaster. The myth of “no-drama” Obama quickly gave way to constant-trauma Obama as nominee withdrawal syndrome bogged down what was allegedly the best and brightest administration in history.

Annie Liebowitz didn’t stick around to take “HISTORIC PORTRAITS” of the unraveling of “WASHINGTON’S NEW ESTABLISHMENT.” There’s no room in her perfectly airbrushed portfolio to commemorate the unglamorous reality of Team Obama’s meltdown. But posterity demands that the discards be framed and memorialized. Call it
Calamity Fair
.

THE RISE AND FALL OF “ DOLLAR BILL” RICHARDSON

He denied it was a “consolation prize.” They both did. But the odd couple of New Mexico Democrat Governor Bill Richardson and Barack Obama fooled no one. On December 3, 2008, the former rivals for the White House appeared at a news conference in Chicago to announce Richardson’s nomination to head the Commerce Department. “Governor Richardson is uniquely suited for this role as a leading economic diplomat for America,” Obama asserted. “As governor of New Mexico, Bill showed how government can act as a partner to support our businesses,” said Obama, adding that Richardson would “bring a leadership style all his own.”
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“In the end, Bill Richardson is a leader who shares my values,” the President-Elect concluded. More to the point: Richardson was owed. After abandoning his own presidential bid in January 2008, Richardson ditched the Clintons, his old friends and former bosses, to offer a timely endorsement of Obama in March 2008.
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Richardson happily accepted the nomination with a boilerplate speech about the importance of commerce, spiced up with a bit of Spanish (“
Al resto de la comunidad Latina, gracias por su apoyo y su confianza
”) to show off his identity-politics contribution of vibrant “diversity.” Challenged by a Latino reporter on whether the nomination was meant to appease Hispanics, Obama bristled: “Well, Commerce secretary is a pretty good job, you know. It’s a member of my key economic team that is going to be dealing with the most significant issue that America faces right now—and that is, how do we put people back to work and rejuvenate the economy? Bill Richardson has been selected because he is the best person for that job . . . . I think the notion that somehow the Commerce secretary is not going to be central to everything we do is fundamentally mistaken.”

Obama further rejected the suggestion that he was engaging in ethnic tokenism. “I think that when people look back and see the entire slate, what they will say is, not only in terms of my Cabinet but in terms of, but in terms of my White House staff, I think, people are going to say, this is one of the most diverse Cabinets and White House staffs of all time. But more importantly they’re going to say, these are all people of outstanding qualifications and excellence.” Protesting too much, Obama argued “that there’s no contradiction between diversity and excellence. I’m looking for the best people, first and foremost, to serve the American people. It just so happens that Bill Richardson is one of those people.”
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“Best people?” Richardson’s business experience consisted of serving on several corporate boards after leaving a lifetime of government employment in Washington. Oh, and he was the son of a Citibank executive. His claim to fame during his years as UN ambassador under Bill Clinton? Going out of his way to extend a job offer to presidential plaything, Monica Lewinsky.
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His claim to fame during his years as Energy Secretary under Clinton? Botching the espionage case against nuclear scientist Wen Ho Lee.
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“Shared values?” Richardson was infamous for inflating and fudging his personal and political biographies. For almost forty years, he stoked the myth that he had been drafted as a young pitcher for the Kansas City Athletics. His hometown newspaper, the
Albuquerque Journal
, reported in 2005 that it never happened.
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In another disturbing glimpse at his flawed character, Richardson repeatedly exploited the tale of a fallen Marine for self-aggrandizement while on the campaign trail. He told a stump anecdote about a young American Marine from New Mexico, Lance Corporal Aaron Austin, who was killed in Iraq. His mother, Richardson claimed, personally thanked him for obtaining federal death benefits. However, Richardson got the fallen Marine’s name and age wrong and completely fabricated the conversation, according to Austin’s mother. She demanded an apology. Instead, on
Meet the Press
, Richardson stood by his story and patted himself on the back again for standing up for veterans.
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“Excellence?” Richardson’s heavy-handed cronyism had been documented for years by both the Right and the Left in his home state. His political horse-trading with private businesses—campaign donations for infrastructure projects, patronage jobs, and board appointments—was so notorious it earned him the moniker “Dollar Bill.” And as the New Mexico GOP documented in March 2007, Richardson’s role in the bankruptcy and securities fraud scandal of fraud-ridden software company, Peregrine Systems, had been widely publicized:

Richardson served on the board of directors of Peregrine Systems from February 2001 to June of 2002, during a period when the company was covering up accounting fraud to the tune of $509 million in overstated profits and $2.6 billion in understated losses. Gov. Richardson resigned two months after the fraud conspiracy was uncovered by the Securities and Exchange Commission. Gov. Richardson is a close family member of former Peregrine president and CEO, Stephen P. Gardner, who pleaded guilty on March 13, 2007, to three felony charges of defrauding the company and shareholders out of millions of dollars.

The company bankruptcy cost thousands of employees their jobs.

Gardner is married to [the governor’s wife] Barbara Richardson’s sister, Dorothy Flavin Gardner.

. . . Richardson, who in the past has tried to minimize his role in the implosion of Peregrine, has said he was “unaware of the accounting irregularities” and only attended “about five” board meetings during his 16 months on the board. Yet according to [
San Diego Reader
veteran financial reporter] Don Bauder, Richardson was briefed several times on the accounting meltdown inside the company.

According to Bauder, Richardson attended 15 board meetings either in person or by telephone. Bauder has nicknamed Gov. Richardson “Dollar Bill.”

“In those meetings, directors were hearing that the company might get caught cooking the books. For example, Richardson attended the meeting of July 18, 2001. The company’s chief executive, Stephen Gardner (the brother-in-law of Richardson’s wife), informed board members of a barter transaction that had occurred with Critical Path, a Bay Area company headed by a Rancho Santa Fe executive known around Peregrine as a FOJ (Friend of John Moores).”