Timothy Geithner Enveloped In Controversy, Why Not?

Check it, y'all! The Most Efficient Cabinet Selection Process in Modern History could be poised to get scandaltastic, with the nomination of Tresaury Secretary Timothy Geithner hitting a snag over some spicy housekeeper stuff! This takes me back to the days of Linda Chavez, when the then-hopeful Bush appointee's dreams of running the Department of Labor were dashed because she gave money to an illegal immigrant. It was revealed today that Geithner employed a housekeeper whose citizenship status may have, at one point, been somewhat dubious. Also, he didn't pay some taxes on time. It's a rich tableau!

The whole chapter and verse on this new controversy is found in this story at the Wall Street Journal. Here's the housekeeper stuff, briefly:

According to people familiar with the matter, Mr. Geithner employed a housekeeper whose immigration papers expired during her tenure with Mr. Geithner, currently president of the Federal Reserve Bank of New York. The woman went on to get a green card to work legally in the country and federal immigration authorities didn't press charges against her, these people said.

So basically, he had a housekeeper who did, and then didn't have legal immigration papers, until the housekeeper did again. And no prevailing legal authority is mad at anyone. But that's not the point! For a brief time, that immigrant was stealing a job from hardworking Americans, who all dream of cleaning up after Tim Geithner, like our nation's forefathers.

Anyway, there's also some stuff about how Geithner didn't understand how to file his taxes properly, either, making what one expert called "a common mistake":

The second issue involved taxes due while Mr. Geithner worked for the International Monetary Fund between 2001 and 2004. As an employee, Mr. Geithner was technically considered self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and an employee.

He apparently failed to do so, resulting in Internal Revenue Service audits his last two years at the IMF. As soon as the IRS brought the issue to his attention, he paid the taxes with interest, these people said.

All of this is sourced to "people familiar with the matter," and "these people," who are just always bringing the press the best stories, you know?

Anyway, this all might or might not be a big deal. "Obama aides" -- who might also be "people familiar with the matter" -- say they don't "believe these issues would present a problem." Senator Max Baucus apparently agrees with that assessment, but is going to air it all out with the Senate Finance Committee, anyway. I'd suggest that none of this will likely impact Geithner's nomination, but, heck, there's nothing like a partisan witch hunt to get the Obama administration to reconsider their "forward-looking" approach to not investigating the outgoing administration.

Comments

[Karen123]

Three strikes you're out! Pres. Obama pick a different person!

[laylahb]

Who actually made the tax mistake--Geitner or his accountant? Please, don't try to tell me that Geitner actiually does his own returns every year..

As far as the housekeeper's immigrant status is concerned, there is something called being "out of status." There is often a gap between the time that a govenment-issued work visa expires and a Green Card is finally (and I mean finally) granted. I speak from experience.

[BarryS]

Admitted war criminals are safe from investigation, let alone legal action. He paid up after the audit. people make errors, especially since tou'd expect your employer to pay employer taxes. we should really indict Geithner's accountant, who appears to be incompetent.

[RossalGondamer]

I can always count on this author to place a fruit roll-up over spilled razor blades.

[larry278]

Check out Urban Dictionary for many ot the meanings of IMF. We may have a history of episodes of IMF spells for this dude.

[gfs5541]

I don't get it. So the housekeeper let her immigration papers expire before she got her green card again. Big Deal. Linda Chavez helped Marta Mercado, a known illegal immigrant who once lived in Chavez's home. And he didn't pay some taxes on time. Also, nothing newsworthy. This isn't exactly tax evasion. Yet another Republican attempt at making a small matter into a larger one.

[happykiddo]

it might be small but he can't be trusted. or he's just plain stupid and lazy. pick a different guy obama...your picks haven't been so great lately. i guess this is what inexperience brings.

[orianna]

Secretary of the Treasury needs to be ethical and clean... if he can't keep his house in order and above board.... let's have the sense about us to keep his hands off the American economy! This man is not right for the office..... he is too creepy and sinister.... one of the few Obama picks I've been adamantly against.

[Pharos]

This is really scraping the bottom of the barrel looking for dirt. It's a non-story, at least as reported so far. His housekeeper was legal, he checked. Her status changed and then changed again a few months later. How often are people supposed to check employee status. This is total nonsense.

It's is very easy to make mistakes on taxes. The laws are complicated. One often gets conflicting answers from different accountants and even from different employees at the IRS. I have a home equity loan. For years I thought it was a second mortgage. Nowhere on the paperwork did the phrase "home equity" show up so I didn't know and the lender had suggested a second mortgage and I assumed that's what had happened. Fortunately it made no difference to me for tax purposes but it easily could have. I could give example after example of honest mistakes I have made over the years, which in hindsight I see no way I could have prevented. Some were in my favor, some not. Again this is a non-story. He discovered his mistake and paid back taxes and penalties. I suspect he might even have been able to ask for a waiver of penalties since the mistake is so common but he probably chose not to.

[zull2]

This stuff is really nothing more than the Republicans shotgunning back after losing big. Elections are the only things Republicans know...the country doesn't matter at all to them. It's all about winning elections and making lots of money, and after that nothing matters. When they lose an election, they lose the avenues to making money, so they lash out. They did it in 1992 and it's obvious they're doing it again. Sandbagging the new administration is pretty much all they have left, and if it prolongs the recession, they really don't care.

There's a difference between holding people accountable for their background and taking shots for the sake of taking shots. If you're evaluating an oil industry lobbyist that a president is attempting to appoint to run the EPA, obviously contesting that makes sense. If you're evaluating a financial adviser who goofed up his taxes and/or employed someone who lost their citizenship for a little while, followed the rules and legitimately got it back, you are taking shots for the sake of taking shots.

[sunny555]

I don't think most republicans had a problem with this particular cabinet pick, so I'm not sure if they are really looking to sandbag, as you say.

[duy26]

I'm all for Obama and was excited about Geithner, but this does worry me. How can we expect a future treasury secretary to guide us out of this economic crisis, when he can't even get his own affairs in order. I do hope this blows over and this was an honest mistake on Geithner's part. Also, let us all ask ourselves, if this were a Republican administration, would we be making the same excuses for McCain's or any other Republican President's Treasury Sec nominee? I assume all the bloggers on the Huff Post wouldn't be as forgiving. I do lean left, but I also recognize blatant bias when I see it. Lets try to have some balance on the Post.

[pancakelover]

Agreed. I am not, and never have been, a Republican; I'm 100 percent for Obama and have read all about Geithner and he seems to be a swell guy. Still, if he's a professional money expert--head of New York Federal Reserve, future Treasury Secretary of the United States--isn't it reasonable to expect correct tax filings from him? Disappointing, to say the least.

[JustMyWords]

Well, as has been pointed out ad nauseum, being a banking expert is not the same as being a tax expert. And it's highly unlikely that he does his own taxes, which means that the error is with his accountant - it would certainly be unrealistic to expect that someone would be walking around behind the professional hired to do the job and double-check it. That, after all, is why you hire the expert.

[burndtdan]

Being a banker does not impart on someone an expertise on tax law or tax accounting anymore than being a field goal kicker for a football teams makes someone an expert soccer player.

He has no more expertise on taxes than you or I. Tax accounting is wholly unrelated to his expertise in finance.

[ipayattention]

As the great Yogi Berra said, "It's Deja Vu all over again."

What a mess.

[sunny555]

Hey, let's all NOT pay our taxes for four years, and hope the government is JUST AS UNDERSTANDING for us!

[rock2casbah]

Evidently you have never been audited. They actually do take into consideration the liklihood that something was simply an oversite. or was a blatent fraud. They are experienced enough to know the
difference.

They actually audited my brother who is a professional musician and showed him how to better document his expenses and payments since he has to freelance so often. Even gave him a checklist and booklet.

The IRS is not all about I gotcha". as I found out first hand.

[Pharos]

I agree completely.

[sunny555]

Thanks for the info -- that is good to know.

[radicalcentrist44]

This is all enjoyable, hearing the spin from the Obama P.R. Department, which is this entire website.

[LABC]

Anytime you want to depart the PR department, bozo, there's the door...

btw, is it Hannity or Limbaugh this hour in your house?

[Pearlman]

Didn't pay some taxes on time? He wants to head the Treasury and didn't pay his payroll taxes over 4 years. Every self-employed person or contract laborer in this country knows that stuff is due and owing.. shouldn't a head of Treasury know this fact. This is 2008. How late is late?

[JustMyWords]

So when your taxes get done and the accountant says, "This is what you owe," do you go behind him and re-do your taxes to see if you get the same number? Or do you go through line-by-line and ask the accountant if he screwed up line 47?

The article quoted at one point says that he worked for the International Monetary Fund, and referred to him as an employee. In the next sentence, it says he was self-employed. Hmm, if the article trying to zing him can't decide which he was, any chance that it might be an honest mistake that his accountant filed with him as an employee and not self-employed?

I've been an employee and I've been self-employed, and trust me, sometimes the line is blurry. And sometimes the IRS moves the line.

[Karen123]

Actually, when my taxes are complete I do look at them line by line, I'm not saying I'd catch a mistake, and so far I haven't but I do look before I sign and I have come up with questions so it is a productive task. I verify that the info I gave matches the form and trust my CPA knows the legitimate deductions. I don't labor over it, reviewing it for less than an hour. I bet Geitherner could do it in half the time and understand more of it than me.

IMO pick a different guy.

[ErinBerin84]

I wondered what this was about. Of course, Charles Gibson just said "Turns out he hasn't been paying certain taxes, hasn't been paying them for YEARS!" I thought it was fishy when George Stephy said that it wouldn't effect the confirmation. Cracker jack elaboration, ABC.