In this Dec. 11, 2008 file photo, President Obama stands with former Senate Majority Leader Tom Daschle at a news conference in Chicago. (AP Photo)

Tom Daschle has withdrawn his nomination for health and human services secretary, after fielding mounting criticism over his failure to pay more than $130,000 in taxes.

President Obama stood by Daschle Monday, telling reporters that he “absolutely” supports the former South Dakota senator. But the president accepted Daschle’s withdrawal with “sadness and regret” Tuesday morning, according to a White House statement.

“Tom made a mistake, which he has openly acknowledged. He has not excused it, nor do I,” Obama said. “But that mistake, and this decision, cannot diminish the many contributions Tom has made to this country, from his years in the military to his decades of public service.”

Obama said he had hoped Daschle could bring his expertise on health care to his drive to make health care more accessible and affordable.

But Daschle said in a statement that his presence would have complicated that effort.

“If 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction,” Daschle said. “Right now, I am not that leader, and will not be a distraction.”

“I will not be the architect of America’s health system reform, but I remain one of its more fervent supporters,” he said.

It was unclear whether Daschle, with his deep network of ties in the Senate stemming in part from his time as majority leader, would have been able to weather the criticism over his tax problems in confirmation.

Senators were reluctant to state publicly any opposition to Daschle’s nomination in recent days. But that started to crack Tuesday morning, as Republican Sen. Jim DeMint called for Obama to withdraw the nomination — becoming the first senator to say that the former majority leader’s tax problems are disqualifying.

DeMint told FOX News that Daschle’s failure to pay $134,000 in federal taxes reflects a “problem with integrity” that the government cannot afford to tolerate. DeMint spoke out against Daschle as a number of prominent newspapers, including The New York Times, called for the South Dakota Democrat to drop his bid.

DeMint said he came to that conclusion after it became “obvious” that Daschle knew about the tax problems long before his nomination and did nothing to make it right.

“The average American would likely face criminal charges with tax evasion of this size, yet he did not address the issue until he was nominated,” he said.

Daschle has since paid $146,000 in back payments and interest, and apologized on Monday for what he called income tax errors.

The New York Times, in its editorial, complained that Timothy Geithner was already confirmed as treasury secretary despite his tax problems.

“It would send a terrible message to the public if we ignore the failure of yet another high-level nominee to comply with the tax laws,” the Times wrote.

Several other newspapers, including the Chicago Tribune, Philadelphia Inquirer, Boston Globe, and Pittsburgh Post-Gazette, also have called for Daschle to withdraw.

But Democratic Sen. Chuck Schumer earlier said Daschle’s own admission that he had failed to pay the taxes was reason enough to forgive his sin.

“Clearly it was a bad mistake, and Daschle was the first to come up with this in June 2008,” Schumer said. “It wasn’t discovered by the administration’s vetting team but rather by Daschle himself much earlier and he brought it to the attention of the administration’s vetting team when he was chosen as a potential nominee for HHS.”

Obama’s pick to be the White House’s first performance officer, Nancy Killefer, also withdrew her nomination on Tuesday because of her own tax liabilities, namely a $946 tax lien imposed by the D.C. government for failure to pay $298 in unemployment compensation tax on household help.

Noting the importance of the post, Killefer wrote in her withdrawal letter to the president that “my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid.”

With Oprah Winfrey, the intersection of politics and education is making for strange bedfellows. Federal tax returns and other reports confirm that she’s accepted at least $5 million for her self-named South African girls’ school from perhaps Barack Obama’s single greatest political enemy.

Oprah was front and center in her support of Obama's presidential bid -- not so for her acceptance of $5M in contributions from one of his staunchest foes.

Oprah is probably the most well-known celebrity to back Senator Barack Obama’s bid for the presidency. She threw him a lavish launch party, endorsed him on her show, stumped for him in the early primaries, and cried — as captured by photographers — in a Chicago park when he won the election. Her loyalty seemed fierce.

But it turns out that Winfrey is very close friends with Dallas billionaire named Harold Simmons, a leading Republican donor and supporter of John McCain.

This past August it was revealed that Simmons was the single donor to a 527 committee called American Issues Project. Its only issue: to run ads linking Obama to William Ayers, the political activist who was once part of the Weather Underground. Simmons paid $2.9 million to try and make Ayers the Obama campaign’s “Swift Boat,” an issue that might have sidelined permanently the Illinois senator’s chances and advance John McCain — Simmons’s candidate — to the White House.

Nevertheless, Winfrey has cultivated her friendship with Simmons on many social fronts since 2001, resulting in his being second only to her in donating funds to her Leadership Academy in Johannesburg, South Africa.

According to the 2006 federal tax filing for the Oprah Winfrey Operating Fund, Winfrey accepted a $1 million donation to the school from Simmons. That amount, The Dallas Morning News reported in 2007, was only part of a $5 million pledge to the Academy. Simmons is considered Dallas’s leading philanthropist to worthy causes. In this case, though, it might have been unnecessary, since Winfrey herself has donated over $60 million to the school.

It’s not like Simmons is a new Republican donor. He gave over $100,000 in the 2007-2008 election cycle to Republican candidates, separate from his Ayers campaign. He has always been an active Republican. In 2004 he was a major donor to the Swift Boat Veterans, the group credited with destroying the campaign of John Kerry for president.

Winfrey has long been close friends with Simmons and his wife Annette. She’s their neighbor in Montecito, California, having bought the estate next to them in 2001. As recently as two weeks ago, Oprah mentioned the couple on her show during a telephone discussion of the Montecito fires with another neighbor, actor Rob Lowe.

(Winfrey was not available for comment, according to her representative. Simmons, who doesn’t have a press representative, did not return our call.)

The Dallas Morning News—thanks to the dogged byline of Alan Peppard — is full of stories over the years documenting Oprah’s friendship with the Simmonses. They are often at each others’ homes and parties. When Oprah’s significant other, Steadman Graham, spoke to a group in Dallas, it was noted that he dined with the Simmonses. In April, 2006 — two years after the Swift Boat scandal was revealed — Oprah sent a camera crew to a Dallas luncheon hosted by Annette Simmons showcasing the thousands of tulip bulbs surrounding the lake on her property.

It’s unlikely though that the Simmonses were at Oprah’s house next door on September 9, 2007. That’s when she hosted an all-star fundraiser for Obama with Stevie Wonder and guests like Halle Berry, Will Smith, and other A-list Hollywood names. One can only imagine what Simmons thought as the sound of “Ain’t No Stoppin’ Us Now” blared over the loudspeaker system.

Interestingly, that was the last time either Oprah or Graham, for that matter, contributed any money either to the Obama campaign or to the Democratic Party. While they could have each made donations to Obama’s presidential bid, they gave just for the primary. And neither of them showed any interest in the Party itself, which funneled money to Obama.

Simmons, on the other hand, is a regular and constant Republican donor. And it’s not like the Obama campaign hasn’t taken notice of him. On August 21st and 25th, Robert Bauer, general counsel for Obama for America, wrote letters to John C. Keeney, Deputy Assistant Attorney General, Criminal Division, concerning the American Issues Project.

On the 25th Bauer wrote: “New facts have come to light that underscore the patently illegal nature of AIP’s formation and operation, and also demonstrate a knowing and willful violation of law on the part of its contributor, Howard Simmons [sic].” Bauer then attaches the Federal Election Committee filing by AIP that states its sole purpose: to defeat Barack Obama. Contran Corporation, owned by Simmons, is listed as AIP’s owner.

Bauer finishes his letter demanding Simmons’s prosecution: “We reiterate our request that the Department of Justice fulfill its commitment to take prompt action to investigate and to prosecute the American Issues Project, and we further request that the Department of Justice investigate and prosecute Howard [sic] Simmons for a knowing and willful violation of the individual aggregate contribution limits.”

Simmons, Bauer complained, had exceeded his personal donation limit because he’d given $2.88 million — roughly $2.7 million more than was allowed by FEC guidelines that state only $42,700 may be given to organizations other than candidate committees or party committees.

It wasn’t the first time Simmons had had trouble with political donations. In 1993, the FEC fined him just under $20,000 for exceeding limits in donations from 1988 and 1989. According to the New York Times, Simmons’s Swift Boat group was fined almost $300,000 for illegally spending $20 million to influence the election. Another Simmons-backed anti-Kerry group, Progress for America, was fined $750,000. They’d spent $31 million.

Simmons’ contentiousness is not limited to the backing of the Swift Boat Vets and the Ayers campaign to smear Obama. In December 1997, according to reports in the New York Times and elsewhere, Simmons was sued by two of his four daughters for abusing his powers in controlling millions of dollars he placed in trust funds for them. A jury agreed that he’d breached his financial duty as guardian of their inheritance, but were undecided on other issues. The case ended in a mistrial. Unusually, the case had been catalyzed when Simmons served her legal papers on one of the daughters by dropping them in her baby’s crib. The child had been born premature and was susceptible to infection, according to the New York Times and other reports.

Read more at http://www.foxnews.com/story/0,2933,460109,00.html

A source close to Barack Obama’s transition team is feeling out Senate Republicans to see if former Clinton Assistant Attorney General Eric Holder would pass confirmation after his role in the 2001 Marc Rich pardon.

WASHINGTON — President-elect Barack Obama’s aides have privately asked senators whether Washington attorney Eric Holder would be confirmed as the next attorney general, according to a person involved in the talks.

The talks suggest that Obama is deeply interested in Holder, who served as the No. 2 official in the Justice Department under President Clinton.

In the past week, Obama aides have asked Senate Republicans whether they would support Holder. In particular, the aides questioned whether Holder’s confirmation would be delayed because of his involvement in the 2001 pardon of fugitive Marc Rich by President Bill Clinton.

Newsweek, quoting unidentified legal sources close to the presidential transition team, reported Tuesday that Obama offered Holder the job and he accepted. Newsweek said Holder still has to undergo a formal “vetting” review by the Obama transition team before the selection is final.

One person involved in the talks told The Associated Press that the Obama team has received some assurances that, while the Rich pardon would certainly come up during hearings, the nomination likely wouldn’t be held up over that. The person spoke on condition of anonymity to describe the private conversations.

On the last day of Clinton’s term, Holder was asked whether the president should pardon Rich, a wealthy commodities dealer who had been spent years running from tax charges. Holder said he was “neutral, leaning towards favorable” on the pardon. Clinton later cited that as among the factors that persuaded him to issue the pardon.

Holder has publicly apologized for what he said was a snap decision that he should have paid more attention to. Had he taken more time to review the case, he would have advised against a pardon, he said.

A former U.S. attorney, Holder is among Washington’s most prominent defense attorneys. He would be the first black attorney general in U.S. history.

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