Nancy Killefer, tapped for the new role of chief performance officer in the Obama White House, has withdrawn her name from nomination due to news that she failed to pay unemployment taxes for household help.


In a brief letter released by the White House today, Killefer said tax-related issues “could be used to create exactly the kind of distraction and delay” that could derail the work of the new CPO, whose role she called “urgent.” In early January, The Associated Press disclosed that a $946 lien had been placed on Killefer’s  Washington, D.C. home in 2005 for non-payment of employment taxes over an 18-month period. AP reports the lien was paid and the issue resolved five months later.


In the wake of the Killefer announcement, former senate majority leader Tom Daschle also withdrew his nomination as secretary of health and human services due to an unpaid tax issue that was later resolved.


Killefer’s nomination had been closely followed by performance management experts and advocates who were anxious to see how a rigorous program might help the federal government work its way through a number of budget challenges amid the financial crisis.


Tony Politano, author of the book Chief Performance Officer, says the position remains a priority if the government is to become accountable for its overall performance. “It’s not just about spending, it’s about the overall performance of the organization. And it’s not just about reporting what’s wrong, it’s about fixing what wrong.”While the CPO is responsible for collecting and consolidating information, the bigger challenge for the next nominee and future CPO lies in communication and control, Politano says.


On January 7, President Obama called the CPO selection “one of the most important appointments” in his administration for its oversight and budget reform role.


Killefer, who heads the government client practice at the Washington, D.C. office of McKinsey & Company, had also served as assistant treasury secretary for management in the Clinton administration, where she led an overhaul of the Internal Revenue Service.


The White House offered no immediate word of replacement nominees for Killefer or Daschle.

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