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American Indian Leaders Question Delays On Tax Nominee

Posted By Andrew Ramonas On November 3, 2021 @ 6:55 pm In News | Comments Disabled

Democrats and American Indian leaders are pushing the Senate to move on the nomination of Mary L. Smith to head the Justice Department’s Tax Division, despite lingering questions about her qualifications.

Mary L. Smith (Schoeman, Updike & Kaufman)

Mary L. Smith (Schoeman, Updike & Kaufman)

Smith, a member of the Cherokee Nation, was reported out of the Senate Judiciary Committee June 11 without the support of the panel’s Republican members. The Republicans complained that the partner at the Schoeman, Updike & Kaufman [1] law firm in Chicago had virtually no tax experience.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) has blamed Republicans for blocking her nomination. If confirmed, Smith would be the first American Indian to serve as an Assistant Attorney General.

“It is widely known among tribal leaders that her nomination has been pending for an overly long period and the frustration is growing,” Jefferson Keel, president of the National Congress of American Indian, wrote [2] in a letter to Senate Majority Leader Harry Reid (D-Nev.) last Thursday.

Jamestown S’Klallam Tribe chairman and CEO W. Ron Allen and National Native American Bar Association president Lael Echohawk also recently wrote letters here [3] and here [4] in support of Smith. ”[The National Native American Bar Association is] very concerned with the lack of progress on Mary’s nomination,” Echohawk wrote last week to the Senate Judiciary Committee.

Lael Echohawk [5]

Lael Echohawk

Leahy spoke on the Senate floor last week about the need to move on Smith and three other DOJ nominees who have been stalled for months. Bush Tax Division chief Eileen O’Connor and her successor, Nathan Hochman, were confirmed within a day of being reported out of committee, Leahy said.

“The Republican minority has irresponsibly stalled nominations to critical posts in the Department of Justice, depriving the president, the Attorney General and the country of the leaders needed to head important divisions at the Justice Department,” Leahy said Oct. 27. “These are important leaders of our federal law enforcement efforts. Presidents of both parties, especially newly elected ones, are normally accorded greater deference to put in place appointees for their administrations.”

Stephen Miller, a spokesman for Senate Judiciary Committee Ranking Member Jeff Sessions (R-Ala.), said the Senate is confirming nominees at a “smooth, responsible pace.”

“The Democrats have 60 votes and could bring [Smith's] nomination to the floor if they want to,” Miller said, referring to the number of votes needed to end debate on a nominee and move to final consideration. Miller declined to comment on whether a Republican senator has a hold on the Tax Division nominee.

Smith has also struggled to win support in the tax law community.

We reported [6] in June that tax bloggers, including attorney Peter Pappas, said Smith did not have the right background to lead the Tax Division.

Nathan Hochman (Bingham) [7]

Nathan Hochman (Bingham)

Smith said [8] during her May nomination hearing that she had experience with tax work when she was in-house counsel to Tyco International Ltd., the international security products and services conglomerate. Smith managed complex financial litigation against the company stemming from the 2005 convictions [9] of Tyco executives Dennis Kozlowski and Mark Schwatz for stealing $134 million.

“That case involved many different allegations of security fraud, there were many complex accounting issues,” Smith said in May. “I have to say … that I delved in deeply to that and often times knew the facts of the accounting issues better than most of the people involved in the case.”

But Tyco was also a pioneer in tax-avoidance strategies on which the government is now cracking down, including moving its corporate headquarters off shore.

M. Carr Ferguson, who was President Jimmy Carter’s Tax Division chief, said he was

“troubled” by Smith’s nomination. He said Tax Division chiefs appointed by Presidents Bill Clinton and George W. Bush had at least some tax law experience. ”This isn’t a position where you come to learn a new field of law,” Ferguson said. “It is a position where you are dealing with a bunch of lawyers who need direction.”

The Justice Department has defended [10] Smith, who served on the Obama DOJ transition team overseeing the Tax Division. “It is true that she is not a traditional tax lawyer or a tax specialist. However, Smith has extensive experience in financial litigation, both for and against the government,” a DOJ statement said, adding that Smith would be a “significant asset to the Tax Division.”

Hochman, one of the Bush Tax Division chiefs, and several other former DOJ officials have also said she is qualified for the position because of her experience with complex litigation and her time in the Clinton administration as a Civil Division trial attorney and White House associate counsel. ”I am confident that Mary will provide strong leadership for the Division and is a good choice for the position,” Hochman wrote in a recommendation letter [11].

It is unclear, however, why Smith ended up as the Tax Division nominee in the first place, given her lack of experience. Smith headed the Obama and was not tapped for another Justice Department position that may have better catered to her areas of expertise.

Ferguson said her nomination was likely the result of a political game of musical chairs that left Smith with the Tax Division and not another position. ”I don’t think she was chosen because she fits the job,” he said.

Smith, a former Obama presidential campaign staffer in Chicago, would bring an Indian American voice to a high ranking position in the Obama administration. President Barack Obama and Attorney General Eric Holder are elevating American Indian affairs with a DOJ listening tour through Indian country that wrapped up last month and a White House tribal nations conference Thursday.

“We think quick movement on her nomination is particularly urgent considering that President Obama is hosting a historic meeting with tribal leaders,” Echohawk wrote the Senate Judiciary Committee last week.

American Indians are an important voting bloc for Democrats. University of New Mexico professor Gabriel Sanchez, who studies racial and ethnic politics, said it is a “definite possibility” that Obama nominated Smith for political reasons as much as policy ones. American Indian voters are potentially crucial in swing states like New Mexico, where they make up 10 percent of the population, according to census data.

“On the margins, 5 or 10 percent here or there could have an impact,” Sanchez said.

Although Obama won New Mexico by 15 percent, 2008 Republican presidential nominee John McCain edged out Obama by less than 10 percent in his home state of Arizona, which has an American Indian population. McCain also won in Montana, North Dakota and South Dakota — other states with concentrations of American Indians.

American Indians have a high voter turnout and typically vote for Democrats, except in Oklahoma, according to Laura Harris, executive director of Americans for Indian Opportunity, a non-profit American Indian advocacy group.

“Even though we make up a small amount of the population, our vote can be very important,” Harris said. But she said the Smith nomination didn’t seem to be an attempt to win over American Indian votes because of Obama’s other efforts to court tribal members.


But Ferguson warned that Obama’s decision to nominate Smith for the Tax Division could have significant consequences for the Justice Department. “I think just bringing in a nice, bright person unaware of the recurrent issues and role of the division is jeopardizing what the Tax Division is about,” he said.

Stephanie Woodrow contributed to this report.


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