Bill Richardson, you see, didn’t make it to Confirmation Wonderland, that special U.S. Senate place  intended to certify a President’s choices for certain high level administration jobs are of sufficient ability and character to serve in those jobs. Confirmation Wonderland:  The Developing Saga of Timothy Geithner

Poor Bill Richardson.  He isn’t Tim Geithner.

Bill Richardson, you see, didn’t make it to Confirmation Wonderland, that special U.S. Senate place  intended to certify a President’s choices for certain high level administration jobs are of sufficient ability and character to serve in those jobs.

Bill Richardson, lifelong political hack and current Governor of New Mexico, ran for President in the long-forgotten 2008 Democratic Party primaries.  After a while, he withdrew and endorsed Barack Obama over his longtime patrons, the Clintons.  In the legal version of pay-to-play politics, Obama then nominated Richardson to be Secretary of Commerce.

On the way to confirmation, Richardson forgot to tell the Obama transition folks that his administration is being investigated for pay-to-play politics of the illegal kind, with a federal grand jury looking into no-bid contracts awarded to a significant campaign contributor.  Richardson withdrew his nomination.  Editorials bemoaning the loss were scarce.

Tim Geithner, who has been nominated by Obama to save the country, perhaps even the world, from financial ruin as Secretary of the Treasury, is a different story.

Geithner is a lifelong numbers nerd who is currently President of the New York Federal Reserve.  As such, he has been one of the principal figures in the billions of dollars of Wall Street bailouts, mostly secret, that have succeeded in embarrassing the wives of financial institution executives into now shopping in secret, and not much else.

As Treasury Secretary-designate, Mr. Geithner has been one of the principal figures in arguing for more bailout money and a new “economic stimulus” package, both to give and spend ever so many more hundreds of billions of taxpayer money that the treasury does not have and will not soon get.

Those would be taxpayers, current and decades into the future, who have or will actually pay all their taxes on time and as required by law.  Until quite recently, Mr. Geithner was not in that group.

As is now being widely reported, with new details emerging daily, from 2001 through 2004 Mr. Geithner was employed by the International Monetary Fund (IMF).  The IMF does not withhold taxes from paychecks, but they are expected to be paid nonetheless, as if the employees are self-employed.  Further, the IMF goes to some lengths to make sure employees understand their tax obligation and, in fact, sign forms that acknowledge their tax obligation.  In addition, the IMF provides employees with an allowance above salary to cover tax payments, a fairly standard practice for international organizations and corporations with employees subject to the differing tax regimes of their home countries.

Mr. Geithner took the money and signed the forms, but did not pay the required taxes for the years that he was employed by IMF.

In 2006, Mr. Geithner was audited by the IRS for tax years 2003 and 2004.  The audit discovered the tax delinquency for those two years, and Geithner paid $16,732 in back taxes and interest.  But what of 2001 and 2002, when Geithner was employed by IMF under the same circumstances?  Did he immediately pay what he then had to have known he owed, even though the IRS didn’t audit those two years?

He did not.  In fact, Mr. Geithner did not pay an additional $25, 970 in delinquent taxes and interest until after Obama had selected him as Treasury Secretary.

But wait.  There’s more.  For several years, Mr. Geithner listed expenses for overnight camps for his children in determining his dependent care tax credit.  Even after an accountant subsequently told him that such expenses are not deductible, he did not immediately file amended returns for the years in which the expenses were claimed, adding thousands more to his tax delinquency.

All of this (plus the retention of a housekeeper whose work visa expired during her employment with Geithner) is being portrayed as a series of embarrassing, unfortunate mistakes that should not disqualify Geithner or deprive Obama of the superhuman Treasury Secretary he needs at this time of dire national economic crisis.

As Jackie Calmes wrote in a New York Times article on the issue, “If Timothy F. Geithner were a bank, he might well be considered ‘too big to fail.’”

Geithner’s confirmation hearing has now been postponed until January 21, the day after Inauguration, and even that delay is being bemoaned as a great imposition on the new administration.

Unless there is great and abiding public outrage over an acknowledged tax delinquent being given authority over Treasury, the IRS and hundreds of billions of dollars in taxpayer money, Confirmation Wonderland will undoubtedly proceed apace, with “change you can believe in” changing before your eyes into political business as usual.

January 15, 2009
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