If Obama Treasury Secretary nominee Timothy Geithner is so smart, why was he so dumb in handling his own taxes? Or perhaps he wasn’t so dumb. Perhaps he thought he could get away with not paying his taxes. Either way, how is he fit to be Treasury Secretary, with jurisdiction over the IRS?
These are among the questions that still beg for answers after Geithner, President of the New York Federal Reserve Bank, spent a few hours on Wednesday at a confirmation hearing before the Senate Finance Committee.
But don’t expect the media to try to get any definitive answers by demanding that Geithner return for more grilling.
As for the Congress, the same liberal politicians who have admittedly not exercised proper oversight over the Wall Street financial bailout are rushing Geithner’s nomination through the Senate and a committee vote is scheduled for Thursday morning.
A Google search of stories about the hearing reveals headlines to the effect that merely questioning Geithner somehow undermines economic health and a market rebound. “Geithner Gets Grilled as Financial Sector Wobbles” is one of them.
Such coverage is designed to panic Senators into approving Geithner, who supposedly knows so much about so many important financial things that his confirmation alone will inspire market confidence and possibly turn the economic situation around. Some of this coverage comes from some of the same media outlets tied to firms getting some of the Wall Street bailout money.
The wildcard is the people. Several Senators on hand at Geithner’s hearing said they had been contacted by their constituents, many of them upset at the thought that somebody with a tax history like Geithner’s could even be considered for such a post.
At the hearing, Geithner repeated ad nauseam that he took responsibility for his mistakes. It was like a mantra. But he went beyond tax evasion to evading answers and doubletalk. It’s too bad that the hearing, broadcast on C-SPAN, could not be seen by the American taxpayers on the other cable and broadcast networks. They would be totally shocked to learn that he is being seriously considered for any government position and hasn’t yet been forced to withdraw his nomination.
Senator Jim Bunning, the outspoken conservative from Kentucky, didn’t even get to the serious matter of Geithner’s taxes before telling the committee that the nominee “has been involved in just about every flawed bailout action of the previous administration.” Bunning also noted that Geithner in his official capacity had failed to cite China for the manipulation of its currency, which is one means by which the communist regime has gained a financial advantage over the United States.
As Accuracy in Media has argued in several columns, Geithner’s main but unspoken “qualification” for the job is being a Wall Street insider with political connections to those who have brought the United States to the point of financial ruin and subservience to Communist China.
The hapless Senator Max Baucus, the committee chairman, accidentally wandered into this delicate subject of economic warfare, offering an opinion about America’s “addiction” to buying Chinese goods and China’s “addiction” to lending us money. All of this became a discussion about the U.S.-China “strategic dialogue,” which was launched by Bush Treasury Secretary Henry Paulson and a Geithner associate, but neither Baucus nor Geithner wanted to address the fact that China is under no obligation to buy any more of our debt.
Clearly, Geithner’s job as Treasury Secretary will be to make sure that the Chinese money keeps flowing into the U.S. economy and that the communist regime keeps buying U.S. debt. It is the same policy that helped get the U.S. into this financial mess.
Geithner, who speaks Chinese and lived in China, is a protégé and former employee of former Secretary of State Henry Kissinger, now an adviser to companies doing business in China and a prominent board member of the National Committee on U.S.-China Relations. This is the group that recently rang the bell at the New York Stock Exchange in celebration over China’s economic ascent. All of this was done out in the open, but few in the media noticed or commented upon its significance.
Geithner’s father, former Ford Foundation official Peter F. Geithner, sits on the board with Kissinger of the National Committee on U.S.-China Relations. He sat behind his son at the Senate confirmation hearing. He supervised the work of Ann Dunham, Obama’s mother, when she worked for the foundation in Indonesia.
Geithner’s taxes are a distraction not only to the Obama Administration and congressional liberals but to a foreign policy establishment with extensive connections in the major media. It’s no accident that the Council on Foreign Relations, which operates in part on the basis of major funding from news media organizations and their parent companies, has many media members.
But taxes do matter to millions of Americans who are forced to pay them on time. And this is why so many people are calling Senate offices in protest of the Geithner nomination. It is a classic case of the elites versus the people.
The people can still act. The Senate switchboard is 202-224-3121.
The nub of the issue is that Geithner did not pay certain taxes for the years 2001, 2002, 2003 and 2004, when he worked for the International Monetary Fund. In 2006, after an IRS audit identified his failure to pay these taxes in 2003 and 2004, he paid the taxes for those two years. But he didn’t pay the taxes for 2001 and 2002 until he was approached for the job as Treasury Secretary. This is about two months ago and eight or nine years late.
Wouldn’t it have occurred to him after the IRS audit in 2006 had identified the problem for 2003 and 2004 that he also owed taxes for the preceding two years? After all, he had to know that he had made the same “mistake” on those taxes for all four of those years.
He had to know because he had signed IMF forms for all of those years acknowledging his obligation to pay those taxes. He didn’t pay those taxes but pocketed the extra money that the IMF had given him to make up for the tax payments. This has made the case of tax avoidance into one of tax cheating.
Senator Jon Kyl tried repeatedly to get a direct answer as to whether Geithner had evaded paying taxes for the 2001-2002 period, after the 2006 audit, because he believed that the statute of limitations had expired and the IRS couldn’t go after him for the money. Kyl asked the question, time after time, until he got completely exasperated and accused Geithner of “dancing” around the issue.
Finally, Geithner replied that “I did not think about that until I was going through the vetting process….I had no occasion to think about it and I might not have thought about it had I not gone through the vetting process.”
But this is beyond belief. How could he not have known that he had made the same “mistake” for the previous years that the IRS had nailed him for in 2003-2004? Anybody making the same “mistake” four years in a row had to know that he still had to pay up for two additional years. The obvious conclusion is that Geithner thought he could get away with not paying. He didn’t think the IRS would catch him.
But when Obama tapped him for Treasury, he realized the issue would come out and so he paid up. As Bunning put it, the tax cheating “reflects a degree of negligence toward the law he will be in charge of enforcing.” This may be a charitable interpretation of what he did.
Our media were too busy to report Bunning’s stinging charge. Reporters had to cover the Obama Administration’s announcement of a “New Era of Openness” in government.