If They'd Only Investigated Themselves as Much as They Investigate Blackwater. . .

If the new administration had investigated its own appointees as well as its partisans have been investigating Blackwater, perhaps our new president would have avoided some of the big tax-cheat scandals in his cabinet picks.

Amy Ridenour of the National Center for Public Policy Research in Washington takes note:

Remember the ultra-mini Blackwater tax scandal of 2007? In it, liberal Senators Barack Obama, John Kerry and Dick Durbin kicked up a fuss because Blackwater treated security guards it employed in Iraq as independent contractors (making them responsible for paying their own taxes) rather than as employees whose income and payroll taxes were deducted from their paychecks.

Obama and Durbin sent a letter to Bush Administration Treasury Secretary Henry Paulson complaining that misclassification of employees as independent contractors contributes to the 'tax gap' (that is, the difference between the amount of taxes legally owned to the federal government versus the amount collected), and seeking a full investigation into Blackwater.

Fast forward 15 months. After sticking behind a Treasury Secretary nominee with 'tax gap' problems of his own, Barack Obama is pushing for an HHS Secretary, Tom Daschle, who somehow managed to leave $83,333 in consulting income off his 2007 tax return, deducted $14,963 in non-existent charitable contributions from his 2007 tax return, and accepted $73,031 worth of car and driver services in 2005, $89,129 worth in 2006 and $93,096 worth in 2007 without it occurring to him over three solid years that these benefits are taxable income.

And then there's the unresolved question of possible tax liability for luxury travel paid for by others. Of the Daschle nomination, John Kerry is saying 'there is a completely understandable, absolutely acceptable and rational explanation for what happened here.' (Blackwater had a stronger case than does Daschle, but never mind.)

For his part, Dick Durbin is assuring the country, 'If all you knew about Tom Daschle was that he used to be a Senator, and he made a mistake and had to pay over $100,000 in back taxes, you have a right to be skeptical, even cynical. But if you know Tom Daschle, you know better.' Where is the concern for the 'tax gap' now?>

The bottom line, of course, is that our leaders should not tolerate tax cheats. At the same time, the public should no tolerate politicians who use the tax laws as political weapons against people and companies they don't like. Blackwater's practice of hiring contractors is entirely lawful and ethical, but certain politicians wanted to beat up the company anyway. Those same politicians' excuses for Daschle and other obvious tax cheats shows how insincere they are. They have destroyed any credibility they might have had in criticizing Blackwater, and hopefully we've heard the last of them on this subject.

Latest to condemn Blackwater: Senators who accused US troops of atrocities and compared them to Nazis

Senator Dick Durbin has compared our troops to Nazis. Senator John Kerry said American soldiers are "terrorizing" women and children in Iraq. Now they're trashing the people who guard our diplomats in Iraq.

Durbin joins fellow Illinois Democrat Barack Obama in a letter to Treasury Secretary Henry M. Paulson, echoing Congressman Henry Waxman's allegation that Blackwater has evaded federal taxes by paying its contractors as contractors, and not as employees.

A muckraking blog is running what is purported to be the text of the Durban-Obama letter on October 26. For Kerry's latest, see the post below.

"We are writing to ask for a full investigation and audit of Blackwater USA’s practice of classifying many of its personnel as independent contractors instead of employees. As House Oversight Committee Chairman Henry Waxman recently found, Blackwater may have enjoyed an unfair competitive advantage over other contractors if its classification were incorrect, and as a result, may owe the American taxpayer millions of dollars in Social Security, Medicare, and unemployment taxes," the letter says.

The most prominent critic of Blackwater in the Illinois congressional delegation, Rep. Jan Schakowsky, has been silent on the tax issue. Her husband is a convicted tax evader felon.

In a 2005 speech on the Senate floor (pictured), Durbin recanted his abuse of American military personnel, saying that "some may believe" he crossed the line (though not admitting so himself), wrapped himself in Abraham Lincoln and stressed how much he loves his country:

"Some may believe my remarks crossed the line. To them I extend my heartfelt apologies. There’s usually a quote by Abraham Lincoln that you can turn to in moments like this. Maybe this is the right one. Lincoln said “If the end brings me out right what is set against me won’t amount to anything. If the end brings me out wrong ten thousand angels swarming at his right won’t make any difference.” In the end I don’t want anything in my public career to detract from my love of this country, my respect for those who serve it, and this great Senate. I offer my apologies for those who were offended by my words, I promise you that I will continue to speak out on the issues I think are important to the people of Illinois and to the Nation. Mr.President I yield to the floor."

Why Rep. Schakowsky is so quiet about Waxman's Blackwater tax allegation

Congresswoman Jan Schakowsky (D-IL), a leader of the anti-Blackwater foil hat conspiracy set, is conspicuously quiet about Congressman Henry Waxman's allegation that our favorite company evaded taxes.

And that's unusual, because Schakowsky (pictured) seldom wastes an opportunity to rake Blackwater over the coals.

Why is Schakowsky so quiet? Could it be because her husband is a convicted felon who spent time in federal prison for bank fraud and tax evasion?

Mr. Schakowsky, known as Robert Creamer, was accused of swindling banks for $2.3 million, and for evading federal taxes. He pleaded guilty to bank fraud and tax evasion in 2005 and was sentenced to 5 months in federal prison and 11 months house arrest in 2006.

Jumping the gun on latest allegations

Here's California headline generator Henry Waxman's latest anti-Blackwater move: Take a preliminary letter from an IRS field office on a matter in which the IRS has made no final judgment, and accuse the security provider of evading taxes.

Waxman is using an IRS field office letter from March that says Blackwater should treat a contractor as an employee. Blackwater has appealed the IRS letter, saying that the individual was an independent contractor who was responsible for his own FICA and tax withholding. The letter says the ruling "may be applicable to any other individuals engaged by the firm under similar circumstances." Blackwater says another federal agency said it was operating safely under IRS guidelines.

Waxman released the IRS field office letter to the press on October 22, generating headlines that Blackwater stands accused of tax evasion. (The IRS never accused the company of tax evasion; only the congressman did.)

According to CNN, "Blackwater said the company appealed the ruling, and 'no final determination by the IRS has been made.'"