TaxProf summarizes the Nancy Killefer matter thus (linking to various news stories):
Nancy Killefer, President Obama's selection to be the federal government's inaugural Chief Performance Officer, withdrew her candidacy after press reports surfaced that the D.C. government had slapped a $946.69 lien on her home for nonpayment of $298 of employment taxes (plus $48.49 of interest and $600 in penalties) on her two nannies and personal assistant over an 18-month period.
What next — people being pressured to withdraw from possible government appointments because of overdue parking tickets? It sounds like Ms. Killefer erred in the way lots of people err. I very much doubt that she was deliberately trying to cheat the government out of $298. Rather, she screwed up in having to deal with one of the many small tax and regulatory matters with which the government has burdened the public.
The legal system has a means of dealing with these errors, much as it has a means of dealing with overdue parking tickets: Modest financial penalties. The modest size of the penalty, coupled with its only being a financial penalty, reflects the modest magnitude of the misbehavior — it's a simple error that has to be remedied, not a deliberate fraud that merits serious punishment or deep moral condemnation.
Is this really the way we can get the best people for government jobs? Is it even the way that we can best insist on ethical behavior?
(Disclosure: I've screwed up things like filing my estimated tax payments, and have been assessed penalties that are slightly higher than Ms. Killefer's, though that were still quite modest. It has never gotten to liens, but maybe D.C. is just more lien-happy than the IRS.)