Does Geithner Deserve A Pass?

There always seems to be one incoming President’s cabinet nominee that turns into a fiasco. For awhile it looked like President-elect Obama’s oops would be Bill Richardson. Now Timothy Geithner, the nominee for Treasury Secretary looks to be the one to take the prize.

It seems Mr. Geithner, who as Treasury Secretary will have the IRS reporting to him, wasn’t as scrupulous as one might hope in preparing his personal taxes and also may have run afoul of the laws surrounding employment of aliens. Here are the reported facts this evening:

  1. Mr. Geithner employed a housekeeper who was legally in the country and authorized to work in 2004. Apparently, her work visa expired three months before she quit her job with Mr. Geithner. He was unaware of the situation until it was pointed out to him by the Obama transition team.
  2. Mr. Geithner was employed by the IMF from 2001to early in 2004. The IMF does not withhold social security or medicare contributions from its employees paychecks though it does pay them half of the roughly 15% liability which equates to the employers’ contribution and furnishes them with income statements that show their liability. Mr. Geithner failed to pay to the IRS the contributions that were due based on his income from the IMF. This omission was discovered in an audit by the IRS in 2006 and he paid back taxes for 2003 and 2004. The payment included the amount due plus interest but the IRS waived the penalties. He had also not paid the social security and medicare contributions due for 2001 and 2002 but this was not discovered by the IRS as they were precluded by the statute of limitations from auditing his returns for those years.
  3. The Obama vetting team discovered the failure to pay the 2001 and 2002 tax liability, advised him of his ommission, and Mr. Geithner paid them in December.

Forget number 1, we’ve roasted enough good people over that one.

As for number 2, you have to wonder if we want a Treasury Secretary who can’t figure out a simple IRS Form 1040. I’m self-employed and that part about social security and medicare hurts big time every time I get to it. The spin is that it’s confusing for employees of the IMF and the State Department and blah, blah, blah. If someone is giving you money to cover their half of the liability and you put that in your pocket and then gloss over the fact you owe it, I have trouble buying the confusion argument. But give him a pass on that one. He tried to pull a slick one, got caught and paid up (how did he avoid the penalties?). It’s kind of an American tradition. Yeah, you got me here’s the money.

But number 3 gets a bit sleazy. You get caught, you’re the President of the Federal Reserve Bank of New York and if you play your cards right the world is your oyster. So you still try and scam the system when you get audited. Kind of in the best tradition of Wall Street isn’t it. I still wouldn’t kick him out for this one except now the guy is starting to appear to be maybe not the brightest bulb on the porch.

OK, let it pass. We all know that Bernanke is the guy that we have to count on in this mess and Congress needs to spend less time on this trivia and more on saving the Republic. Besides, if they continue to muck it up sacking Geithner will placate the mob and the press will say good riddance to the tax cheat.

more: here

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