Barack Obama’s nomination of Timothy Geithner for Treasury Secretary, and the circumstances surrounding it, have raised many issues and questions — not only about the nominee himself, but also about senators and others reviewing it, the media’s coverage, and ultimately his presumptive boss’s leadership.
Here are the top ten disturbing aspects of the Geithner nomination, not in order of importance until number one.
10. His performance in his previous job
Geithner became president of the Federal Reserve Bank of New York in 2004. The New York Fed’s “about” page says that one of its duties is “to ensure a safe and sound banking system,” and that it “conducts onsite and offsite examinations of banks in New York, New Jersey, and Fairfield County in Connecticut.” Since so many major financial institutions are under the New York Fed’s jurisdiction, Geithner’s New York Fed has an outsized role in ensuring the soundness of the banking system nationwide.
But in the same November 24 New York Times article that describes him as “a 47-year-old wonder boy,” reporter Andrew Ross Sorkin quotes several anonymous Wall Street CEOs who “question whether he’s up to the challenge.” His roles in managing the unravelings at Bear Stearns, AIG, and Merrill Lynch, the bankruptcy at Lehman, and the ongoing implosion at Citigroup deserve scrutiny. They appear to be getting none.
Beyond that, the suddenness of these collapses should lead nomination-vetting senators to question the quality of and follow-up relating to “examinations” done on Geithner’s watch. Can the money center blowups be traced to years of inadequate oversight?
9. His role in the Troubled Asset Relief Program (TARP)
Within days of its enactment by Congress, TARP, now fully funded by Congress to the tune of $700 billion, morphed from the asset-buying program originally advertised to one of direct, “(figurative) gun to the head” investments in banks. Geithner was a key behind-the-scenes player in all of this — Sorkin called him “the point person for weeks of sleep-deprived bailout weekends.”
To what extent is Geithner responsible for the schizophrenic, misleading, and confidence-shaking mishandling of what I have been calling the SUCKUP (Seemingly Unlimited Cash Kitty Under Paulson)?
8. Likely tax evasion, not “mere” avoidance
“Wonder boy” Geithner failed to pay $34,000 in self-employment taxes on his earnings at the International Monetary Fund from 2001 through 2004, even though the IMF partially reimbursed him for these taxes each year.
The IRS caught his (cough, cough) “honest mistake” in 2006 and made Geithner pay up for 2003 and 2004. But he didn’t do so for 2001 and 2002 until just before Barack Obama nominated him. Why? Because the three-year statute of limitations, based on when a return is filed, had expired for those two years.
But the statute of limitations does not apply “in the case of a false or fraudulent return with intent to evade any tax.” Given that he had tax problems going back to 1993 over paying taxes on wages paid to domestic help, it should be obvious that Geithner knew full well when he filed his 2001 and 2002 returns that Uncle Sam demands his 15.3% for Social Security and Medicare no matter where and for whom you work inside the U.S. Thus, I believe that he knowingly filed false returns, engaging in tax evasion, not avoidance.
7. False attestations
Further supporting my evasion assertion, Geithner told the IMF in writing year after year that he would pay the tax, but didn’t. As Byron York reported at National Review on January 14:
At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row.
6. Senate reaction
Democrats like Max Baucus insist that Geithner’s confirmation is “a given.” Republicans? Orrin Hatch says, “He’s a very competent guy.” Lindsey Graham doesn’t want “to play gotcha on this.” Ohio’s George Voinovich is among the few who get it: “People who work here — who are big shots — should pay their taxes. I think he’s got a real problem with me and my constituents.”
5. Pundit reaction
Charles Krauthammer apparently believes these things are trivial mistakes. Hugh Hewitt cops out, saying that “a president deserves his cabinet choices because he has won the election and been charged with executing the laws.” How about somebody who obeys them, Hugh?
4. Press coverage
The Associated Press and other media outlets relentlessly drone on about tax “discrepancies,” “tax goofs,” and the nomination’s supposed inevitability. Geithner’s partial reimbursements for taxes he didn’t pay and the related false attestations, which York obtained from Senate sources, are being ignored. There is no chance that a GOP president could nominate someone with Geithner’s tax problems for any cabinet position, let alone Treasury secretary, and get such a pass from the press.
3. Possible press conflicts of interest
Cliff Kincaid at Accuracy in Media points out that some press outlets are parts of larger firms with financial stakes in the financial bailout. Example: General Electric, which owns NBC, also owns bailout recipient GE Capital. GE CEO Jeffrey Inmelt is also on the New York Fed’s board.
2. Disparate treatment of previously pulled nominees
Zoe Baird (Clinton, 1993), Kimba Wood (Clinton, 1993), and Linda Chavez (Bush, 2001) all had relatively minor or potential issues with self-employment taxes on household help. Geithner’s unpaid amounts were exponentially larger. Is there a whiff of male chauvinism in the air?
1. Barack Obama’s reaction
No president in my lifetime would have dared to nominate Geithner. But “44” Obama calls Geithner’s problems a mere “embarrassment.”
It leaves you wondering if anyone in Washington knows or cares about the difference between right and wrong. We’re expected to overlook Geithner’s problems because he is supposedly the only person in a nation of 200 million adults who can do the job. Give me a break.
If he really knows the pertinent facts, Barack Obama’s ringing defense of Geithner should cause the American people to question his fundamental “judgment to lead.”
Or were those “just words“?