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ROBB AUSTIN'S TURN

Leona Helmsley is Back in Political Favor

February 2, 2009

New York City hotel and real estate mogul Leona Helmsley was convicted of federal income tax invasion in 1989 and served 18 months of a 16 year sentence as punishment for the crime.

The billionaire Helmsley is best known in pop culture as the "Queen of Mean" – a name given to her for her tyrannical behavior toward business associates and employees who worked at Helmsley-owned hotels.

But it was a off-hand remark that she made in front of a former housekeeper that resulted in her achieving icon status. During her tax evasion trial the former housekeeper testified about an exchange she had with Helmsley where the "Queen of Mean" reportedly said, "We don’t pay taxes. Only the little people pay taxes."

We are reminded of the Hemsley comment this week as it relates to the political atmospherics in Washington -- where two of President Barack Obama’s recent cabinet appointments may have taken the Helmsley comment too much to heart.

Both Secretary of Treasury Timothy Geithner and now former U.S. Senator Thomas Daschle (Obama’s choice for Secretary of Health and Human Services (HHS)) did not pay thousands of dollars owed to the federal government in federal income taxes - and yet they will both be confirmed (Geithner already is) to serve in President Obama’s cabinet.

Secretary Geithner, whose department oversees the Internal Revenue Service, failed to pay nearly $40,000 in taxes that were not withheld from him while he was at the International Monetary Fund -- while Daschle failed to pay $128,000 in taxes from income he received from a New York private equity firm.

While both claimed their tax situations were innocent mistakes and while they later paid the taxes and interest -- it’s troubling that these matters only came to light because of the nomination vetting process.

We all know that any average citizen would not have received the same gentle treatment from the IRS if the agency found they owed so much in back taxes. But Geithner and Daschle simply apologized; paid the back taxes; and not another question was asked of them.

It is now also revealed that Daschle cashed-in on his health-industry expertise to the tune of $220,000 during the past 12 months – money received for speeches and glad-handing from these special interest organizations. These are the same organizations Daschle will be expected to regulate as HHS Secretary.

None of this seems to trouble the Obama White House – even though the President came into office insisting that he would have higher standards than past administrations. We are now finding out that isn’t true. In fact, during the Bush and Clinton years appointees were forced to withdraw because they didn’t pay taxes for their nannies or housekeepers - let alone their personal income taxes.

These are troubling episodes and it says the powerful and elite live by a different set of rules -- a far cry from what candidate Obama promised. The fact is these appointments represent business as usual in Washington and it hasn’t taken President Obama long to understand how to play the game.

This just adds to an already rocky start for the Obama Administration. Support for his stimulus package is fading - not only among Republicans - but among the voters who see it as a huge spending bill - not an economic stimulus.

But it is the Daschle and Geitner tax revelations that have ignited real protest across the country from ordinary people - because they remember another elitist - Leon Helmsley – who had a doctrine many thought was just her own: "Only the little people pay taxes".

 Now two Obama cabinet members seem to agree.