Senate Republicans Question Tax Division Nominee’s Experience
By Mary Jacoby | June 1, 2009 8:10 pm

The nomination of Chicago lawyer Mary L. Smith to head the Tax Division hasn’t gotten a lot of attention. But it is a bit of a puzzler. 

Mary L. Smith (Schoeman, Updike & Kaufman)

Mary L. Smith (Schoeman, Updike & Kaufman)

Tax enforcement right now is hot. The Obama administration is pursuing an explosive case against Swiss bank UBS AG seeking names of 52,000 Americans who used offshore accounts to evade billions of dollars in taxes. And yet, the president has nominated someone with virtually no experience in tax law. Read her bio here. After the election, Obama also put Smith in charge of the DOJ Tax Division transition efforts.

Senate Judiciary Committee ranking member Sen. Jeff Sessions of Alabama pummeled Smith, a former Clinton White House associate counsel, at her May 19 confirmation hearing. Click here to read our previous report.

Since then, Smith has submitted written responses to follow-up questions from four Judiciary members – all Republicans. No Democrat asked follow-up questions.

It’s traditional for nominees before the Senate to answer these “questions for the record” after their initial confirmation hearings. The responses are always carefully worded and vetted by the administration.

But given the legitimate questions Sessions raised about her experience, Smith might have used the opportunity to show more engagement with the issues. Instead, she literally cut-and-paste responses to Sens. Chuck Grassley (R-Iowa) and Orrin Hatch (R-Utah) that were word-for-word identical.

Grassley’s first question was simple: “Why do you want to head the Tax Division of the Justice Department?”

Smith could have taken the opportunity to expound on the rampant abuse of tax havens — a major factor in the Bernie Madoff scandal — and the corrosive effect this secretive, shadow banking system has had on the world financial system.

Instead, she said she would be “thrilled to make a contribution” to the “important mission” of the Tax Division.  She wrote of her “strong sense of public service,” adding that she is “honored” and “excited” to be nominated. Read her full response here.

Hatch wrote:

“Ms. Smith, I believe that the Senate owes some deference to a President’s nominees, so long as they are qualified. … But what I do not see in your background is any tax experience. That concerns me because the division which you have been nominated to head is a specific rather than a general one. That suggests the need for specific rather than general expertise … You do not have that expertise and experience … in contrast to the men and women who have headed the tax division in the past in both Republican and Democratic administrations.”

Smith cut and paste for Hatch the same answers she gave to Grassely. She referred to her work as in-house counsel to manufacturing conglomerate Tyco International, when she helped clean up after the 2005 convictions of ex-CEO Dennis Kozlowski and another Tyco official for looting the company of $600 million.

And Smith, a registered member of the Cherokee Nation, mentioned her work in the Clinton White House making Native American tribes equal to state and local governments under the Federal Unemployment Tax Act.

Smith directed senators to a letter in support of her confirmation from former prosecutor Nathan Hochman, the Assistant Attorney General for the Tax Division at the end of the Bush administration. Other letter-writers testified to her management skills and collegiality, including former Bush administration Solicitor General Ted Olson.

But it was Smith’s series of one-sentence answers to written questions from Sesssions and Sen. Tom Coburn (R-Okla.) that seared:

  • She has no advanced degree in tax law.
  • She has never taken any Continuing Legal Education courses in tax law.
  • She has never given a speech or written an article about tax law.
  • She spent only 5% of her time at Tyco on tax issues.
  • She has tried only three cases to judgment, none involving tax issues.
  • She never worked as a prosecutor
  • She has never appeared before a jury.

Read her response to Sessions here and her response to Coburn here.

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