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Unpaid taxes return to haunt Obama cabinet

The high ethical standards which Barack Obama set for his administration have hit a bump on the road, after revelations that his choice for Health Secretary, Thomas Daschle, waited nearly a month after being nominated before revealing to the President that he was a tax delinquent.

Mr Daschle, one of Mr Obama's earliest backers, only paid the back taxes totalling $140,000 (£97,000) on 2 January and told the White House about it two days later. The money covered tax owed on additional income from consulting work, undertaken for a wealthy New York investor, as well as the exclusive use of a Cadillac limousine complete with driver.

The Senate finance committee meets today to discuss Mr Daschle's nomination. He is the second of Mr Obama's cabinet picks to have found themselves scrambling to smooth out their financial records. Tim Geithner's confirmation as Treasury Secretary was delayed after it was discovered he had failed to pay $34,000 in taxes.

Mr Obama's spokesman, Robert Gibbs, brushed away the Daschle controversy saying that the President would stand by his friend and confidant. "The President believes nobody's perfect, but that nobody's hiding anything," Mr Gibbs said.

But the episode is deeply embarrassing for Mr Obama, who campaigned vigorously against lobbyists and said that Washington needed to change its ways. Without even becoming a registered lobbyist, Mr Daschle managed to earn millions of dollars giving public speeches and advising insurers, hospitals and estate agent associations.