Obama's Pick of Daschle May Test Conflict-of-Interest Pledge

Tom Daschle, who advises health care clients, is President-elect Barack Obama's choice for health and human services secretary.

The choice poses new questions about how broadly the new administration would apply Mr. Obama's campaign promises to limit potential conflicts of interest among his appointees.

At issue is Mr. Daschle's work since leaving the Senate four years ago as a board member of the Mayo Clinic and a highly paid adviser to health care clients at the law and lobbying firm Alston & Bird.

In a detailed list of campaign promises, Mr. Obama pledged that "no political appointees in an Obama administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years."

Although Mr. Daschle's work might not preclude his appointment, it could raise the possibility that the administration could require him to recuse himself from any matter related to either the Mayo Clinic or some of the clients he advised at Alston & Bird - a potentially broad swath of the health secretary's portfolio.

No presidential administration has sought to extend its conflict-of-interest policies to previous employers as Mr. Obama has pledged to do, earning high marks from government ethics groups. Mr. Daschle's selection reflects a clash, widely predicted by Washington lawyers and lobbyists, between Mr. Obama's unusually sweeping self-imposed ethics rules and his desire to recruit experienced policy hands.

It is standard practice in Washington for seasoned officials like Mr. Daschle to spend their years out of power making money for private influence-seekers, returning to office with a potentially complicated set of loyalties. But eliminating anyone who has done that could decimate the pool of potential appointees.

"If you are not on the inside, you are on the outside trying to influence what you used to do on the inside," said Peter Metzger, vice chairman of the executive search firm CT Partners in Washington. "That is the game - you are doing it one way or the other."

Stephanie Cutter, a spokeswoman for the Obama presidential transition office, said the nascent administration was still working out a way to structure its ethics rules, adding, "They will meet every commitment made during the campaign."

Noting that Mr. Daschle's appointment had not yet been announced, Ms. Cutter said, "If he is asked to serve in the Obama administration, he will represent the interests of the president-elect and not his former clients."

As for Mr. Daschle's role in the transition, she said he would recuse himself from any conflicts of interest.

A spokeswoman for Alston & Bird declined to disclose which of the firm's health care industry clients Mr. Daschle had advised; the firm represents dozens of such concerns including pharmaceutical companies, health care providers, and trade groups for nurses and nursing homes. Although not a registered lobbyist, Mr. Daschle, a South Dakota Democrat who was party leader in the Senate, provides strategic advice to the firm's clients about how to influence government policy or actions. The firm's Web site declares, "Our health care legislative and policy team has the significant advantage of including two former U.S. Senate majority leaders - Senators Bob Dole and Tom Daschle - both resident in our Washington office and champions of many health care issues in their Senate Finance Committee and leadership roles."

As examples of the firm's achievements the Web site lists matters involving Medicare and Medicaid reimbursements, approvals of federally regulated drugs and medical products, fraud investigations, medical waste disposal, privacy and other compliance issues. The Mayo Clinic, where Mr. Daschle is on the board, is itself a major health care provider, research institution, and recipient of grants from the National Institutes of Health.

Mr. Daschle's wife, Linda Daschle, is a prominent lobbyist for aerospace and military concerns. She does not, however, represent any health care clients. Nor did Mr. Obama make specific campaign promises related to the occupation of a spouse.

If Mr. Daschle is required to recuse himself from certain areas involving his former clients or corporate affiliations, other Obama campaign pledges might require the administration to disclose the areas of recusal.

Mr. Obama promised a Web site "including records of waivers from conflicts-of-interest that are requested and granted, personal financial statements of appointees and the career histories of senior executive branch staff who enter and leave public service."

This is definitely worth watching to see how well this is whitewashed.

Walter