Geithner nomination reduces Obama’s trust account

by Kurt Schulzke on January 15, 2009

Timothy Geithner’s tax pecadillos should disqualify him for the nation’s top tax post.  Secretary of the Treasury is too high an office for a brilliant lawyer who repeatedly and apparently knowingly underpaid his taxes by thousands of dollars.  But to be fair, neither should Barack Obama be sworn in as President of the United States next Tuesday unless he first produces a valid birth certificate proving that he meets the constitutional prereqs for the nation’s highest office.

The disparity in the level of scrutiny applied to Geithner and Obama is remarkable.  On balance, a President’s qualifications for office should be viewed as more essential than those of the Treasury Secretary.  Yet, in this case, Geithner’s integrity and transparency are being examined far more closely than Obama’s.

Getting back to Geithner, after reviewing the Geitner materials published to this point by the Senate Finance Committee, it seems apparent that Geithner’s tax misconduct went beyond simple negligence.  He was put on notice by his IMF employer and his professional tax preparer that his tax returns understated his taxes by thousands of dollars.  He even applied for and received reimbursement from the IMF for social security self-employment taxes that he did not pay.

Despite the notice and the reimbursement, Geithner waited until after he was nominated to amend his tax returns.  The notice plus the delay could get an ordinary American jail time.  Surely, for Geithner, it should at least doom his bid for a cabinet post.  Let’s not forget that the recent or ongoing liquidity crisis — which is it? — is a product, primarily, of a trust deficit.

In this especially sensitive time for U.S. banks and markets, the United States doesn’t need the smartest guys in the room.  It needs honest ones.  It needs a Treasury Secretary of unimpeachable ethics, one whom we can trust implicitly to obey the law and stay focused on the nation’s business.  Wealthy lawyers who connive and cheat to shave a few grand off their tax bills do not meet this test.

If Barack Obama, now trying to emerge from the ethical swamp of Chicago — think Tony Rezko, Rod Blagojevich — wants Americans to trust him and his administration, he should share his birth certificate and find cabinet nominees who — unlike Tim Geithner and Eric Holder — have records free of ethical taint, especially tax-law related taint.  Holder, as you may recall, in 2000, gave then President Clinton the green light to pardon international tax fraud fugitive, Marc Rich.  If President Obama really means to change Washington, he needs to give us more reason to trust.