POLITICS
03/12/2009 05:12 am ET Updated May 25, 2011

Inside Obama's Vetting Process: What Went Wrong?

Only a few weeks had passed since the election when Tom Daschle's name was leaked as the nominee for Health and Human Services Secretary. A well-respected and known quantity in Washington, the Obama transition team felt it had a firm grasp on the types of confirmation problems that the former Senate Majority Leader would confront. They knew about the post-Senate work, including clients he had advised while with the firm Alston & Bird, and the payments Daschle had received from health care companies for speeches and consulting work.

Transition staff informed Daschle that a payment he had made to a wounded Iraq War veteran could not, as he had done, be filed as a charitable contribution - a problem that was corrected. Ultimately, they believed that he might take some bumps and bruises but would find his way to the HHS post.

Only later, with news of his nomination already public, did a deeper level of vetting begin, and it became clear that Daschle's nomination was, in fact, in serious trouble. His accountant discovered roughly $140,000 in unpaid taxes for use of a personal driver. In one sense, the vetting process had worked -- the information was uncovered. But it was unearthed too late in the process, leaving the Obama team searching for explanations as to why its HHS nominee should be excused for fault that had torpedoed past nominees.

"The name got floated early. Everybody wanted Daschle and so they went ahead... and then they started doing the review and they found it," said a source with knowledge of the proceedings. "They told the [Senate] Finance Committee that they liked him and warned them about the issue. [The Finance Committee] went through it and realized it was a big problem... You have got to do more due diligence before you ever get the name out in the public."

The problems that ultimately felled Daschle's nomination were undoubtedly the exception rather than the norm. During the first weeks and months in office, the Obama administration will make thousands of appointments, only a handful of which will cause problems. In addition, the president has set ethical standards for his staff that surpass anything previously implemented in an executive branch.

But the process has also produced some high-profile stumbles, from Commerce Secretary nominee Bill Richardson, to Treasury Secretary Timothy Geithner, Daschle, and Chief Performance Officer designee Nancy Killefer. Critics and even former staffers now say those setbacks were unnecessary, the result of a poorly run process that has ended up distracting the administration from pushing its agenda.

"I think that the personnel operation, in the transition especially, was sloppy, and that they were not focused on the ball," a former Obama transition official told the Huffington Post. "When it came to the politically connected people, I didn't get the sense that they were doing any sort of real vetting. I think once they filled out the forms, if they were known quantities, if they were friends of Obama or had the political juice, I think their forms were filed away and not looked at again."

Such an account of the transition falls at the far end of critical interpretations. It's also one that the White House vigorously disputes. "The President has confidence in the system," spokesman Robert Gibbs told reporters the day Daschle's dropped his nomination. "The President has confidence in the nominees that serve his administration."

Indeed, what is known about the vetting process is that it was comprehensive. Christine Varney, a Washington D.C. lawyer who was personnel counsel for the transition, coordinated the operation, assembling the lawyers and teams to vet specific candidates. Groups of ten to fifteen lawyers were assigned to high-profile candidates, running background research, interviewing staff and associates, and pulling everything on public record for review. Applicants, meanwhile, were asked to fill out 60-page forms demanding large swaths of personal information, all the way down to unpaid parking tickets. For some nominees, the personal documents alone filled up multiple boxes, and that was before the relevant Senate committees reviewed their candidacies.

But, like in every transition, the process had its holes and shortcomings. While the Obama squads tried to be fully aware of the dark spots on a nominee's resume, on several occasions the Senate committees would turn up something new. With Geithner, the transition team knew about the major self-employment tax problems. But Senate Finance Committee investigators found more accounting issues on top of that, according to an Obama official (another official disputed this claim).

With Daschle, the major problems were already known. It was the rollout and subsequent defense that proved problematic. To paraphrase one Democratic strategist: They needed a different PR strategy. Instead of just apologizing for the miscue, they should have stuck to what likely really happened: Daschle simply wasn't clear about this aspect of tax law.

And what explains the problems with the other botched nominations -- why were Bill Richardson and Nancy Killefer picked when the issues that eventually sunk their chances were known well before?

The former transition official who spoke to the Huffington Post diagnosed the problem as one of a staff whose focus had already shifted to inauguration day and beyond: the officials in charge of vetting, the source said, were attempting to balance that job with the task of prepping themselves for the White House.

"There are upside and downsides to naming your White House staff early," said the source. "The upside is they can get to work early. The downside is, they knew what their next job was going to be. And [the vetters] had already started looking at their other jobs."

Others describe the problem as a lack of necessary skepticism. While the Obama White House was right in anticipating that the Daschle nomination could survive - he had the votes, Finance Committee Chairman Max Baucus confided -- no one properly predicted the public backlash.

"What it was, was a Geithner hangover," said one Democrat involved in the process. "It was like TARP two. You already did TARP one. People hated it but stomached it. And now, you can't do the same thing again."

Others simply suggest that the president and his team had too many time constraints and competing demands. The Obama transition was conducted under far more pressurized circumstances than Bill Clinton's, says a former high-ranking aide to the 42nd president. And they still managed to have a "more rigorous process than we did."

Considered in a historical context, that aide added, the Daschle stumble may have been politically dramatic but it was hardly unusual. Certainly, the Obama administration is already moving on. On Friday, the Washington Post reported that president's chief counsel Greg Craig would be taking over the reins of the vetting process. His task will be to ensure that the next HHS nominee and other appointees -- including Labor Secretary Designee Hilda Solis, who has also been befuddled by tax problems (in this case, her husbands) -- do not stumble off the road to confirmation.