January 21, 2009

AP Geithner Hearing Report: No Mention of IMF ‘Reimbursements’ for Taxes Not Paid, Related False Statements

GeithnerIdunnoLOL0109.jpgThe Associated Press’s 1:12 p.m. coverage (saved here, as the dynamic link changed during the drafting of this post) of the Senate Finance Committee’s hearing on Barack Obama’s nomination of Timothy Giethner as Treasury Secretary has plenty of discussion of Geithner’s tax “mistakes” (the picture, but not its heading, is from a November 21 New York Times article).

But as has been the case with every AP report I’ve seen, there is no mention of the fact that the International Monetary Fund, Geithner’s 2001-2004 employer, partially reimbursed him for his Social Security and Medicare “self-employment tax” liabilities.

Here are the first eight paragraphs of AP Economics Writer Martin Crutsinger’s report:

Geithner apologizes for not paying taxes

Treasury Secretary-designate Timothy Geithner said Wednesday he was careless in failing to pay $34,000 in Social Security and Medicare taxes earlier this decade but declared “I have paid what I owed” and apologized to Congress.

He told the Senate Finance Committee he was sorry that his past transgressions were now an issue in his confirmation at a time of deepening economic distress. He urged Congress to act quickly and forcibly to deal with the crisis. A top administration priority is to foster economic recovery and “get credit flowing again,” Geithner testified.

As to his failure to pay payroll taxes from 2001 to 2004 while he worked for the International Monetary Fund, Geithner said: “These were careless mistakes. They were avoidable mistakes.”

“But they were unintentional,” he said. “I should have been more careful.”

Geithner told the panel that, for the 2001 and 2002 tax years, he had prepared his tax returns himself with a popular tax-preparation computer program.

He said that he hired an accountant to do his 2003 and 2004 taxes who also “did not catch my error.”

He acknowledged signing an IMF statement saying he was aware that it was his responsibility to fully pay U.S. Social Security and Medicare taxes.

“I absolutely should have read it more carefully,” he said. “I signed it in the mistaken belief I was complying with my obligations.”

To refresh, here is what AP has, as far as I know, failed to report thus far in any of its Geithner coverage. Byron York wrote it up at National Review a week ago on January 14 (bolds are mine):

Geithner Accepted IMF Reimbursement for Taxes He Didn’t Pay

The IMF did not withhold state and federal income taxes or self-employment taxes — Social Security and Medicare — from its employees’ paychecks. But the IMF took great care to explain to those employees, in detail and frequently, what their tax responsibilities were. First, each employee was given the IMF Employee Tax Manual. Then, employees were given quarterly wage statements for the specific purpose of calculating taxes. Then, they were given year-end wage statements. And then, each IMF employee was required to file what was known as an Annual Tax Allowance Request. Geithner received all those documents.

The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.

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.

On Monday, blogger Steve Hull made an important additional point (bold is mine):

….. when our soon-to-be Messiah President says “it was an honest mistake that could happen to anybody”,  I must strongly disagree.   For 20 years, I was in a position where I had to make just those kind of filings and payments.  I too had to sign a quarterly statement, under penalty of perjury, certifying that I had indeed made such payments.  I also knew darn well that if I didn’t make said payments, it would eventually catch up with me and I would end up in jail… instead of nominated for, and likely to be confirmed as, the person with the most power over the entire US economy in history.

I believe that the reimbursement and false attestation aspects of Geithner’s situation, if known by most Americans, would cause a tidal wave of public outrage well beyond what has been seen thus far.

In the rest of Crutsinger’s report, you’ll see evidence that some Republicans, including Iowa’s Charles Grassley and Kentucky’s Jim Bunning, are raising objections to Geithner’s nomination. However, despite stating that his phones are “‘ringing off the hook’ from people in Kansas complaining about the prospects of having a Treasury secretary who was careless in tending to his own tax liabilities,” Pat Roberts said, “You will be confirmed.”

A concise rundown of the troubling aspects of Geithner’s nomination, which are by no means limited to his tax problems, is here.

I should also note that at least one of Crutsinger’s earlier dispatches from the hearing  — dispatches that I would expect many AP subscribers will run without updating during the rest of the day — did not mention the existence of Geithner’s tax problems, even though they have hung over the nominee for at least a week. Does anyone think that an AP reporter would have granted a GOP presidential nominee such deference?

Cross-posted at NewsBusters.org.

Latest Pajamas Media Column (‘Top Ten Disturbing Aspects of Obama’s Choice of Treasury Secretary’) Is Up

Filed under: Economy,News from Other Sites,Taxes & Government — Tom @ 8:23 am

It’s here.

The subheadline says it all:

Obama campaigned on his alleged “judgment to lead.” The Geithner nomination makes a mockery of that claim.

It will go up Friday morning at BizzyBlog (link won’t work until then) after the blackout expires. Hopefully it won’t be an after-nomination post.

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UPDATE: From an early PJM commenter “eon” (#3) -  –

I have a very serious problem with a well-connected gent who repeatedly flaunts laws that I would long ago have been in jail for violating. I have an even bigger problem with the new administration handing the keys to the treasury to someone who is noted for playing fast and loose with the country’s financial laws. …..

The fact that Geithner is even being considered for Treasury Secretary tells me all I need to know about the new administration’s attitude toward the law. Namely, that like Leona Helmsley, they believe that “laws are only for little people”. And to them, we are all little people.

Things I’d Like to Post About Today ….. (012109, Morning)

Filed under: TILTpatBIDHAT — Tom @ 6:03 am

….. But I Don’t Have Any Time For:

  • Anyone know if the incoming Obama team came in to find a bunch of computers with the Os missing or rooms trashed? Didn’t think so. Seems doubtful, based on thisHere’s a related 2002 story about what happened eight years ago. The article’s claim that there was significant vandalism in transitions prior to Clinton-Bush 43 is news to me. I don’t believe it, and I challenge anyone to find a contemporaneous story from 1993, or for that matter 1981, 1977, 1969, or 1961 proving that it happened.
  • Nix makes a great point about Nancy Pelosi’s controversy on prosecuting Bush for (non-existent) crimes vs. not impeaching Bill Clinton in 1998 for real ones.
  • Key mortgage meltdown point at IBDeditorials.com — “Yes, Bush was “eager,” as the Washington Post described it, to put more Hispanic (and other) families into their own homes, even setting a goal of higher minority homeownership soon after taking office. But Bush didn’t pressure lenders to adopt sloppy underwriting standards. Nor did he encourage Fannie and Freddie to underwrite subprime loans to meet quotas for minority lending.” Nor did he have any control whatsoever over Ben Bernanke and Timothy Geithner.
  • Bill Frist — “Bush Saved 10 Million Lives.” Frist doesn’t pick up the lives not lost because Saddam Hussein was deposed and killed. Based on his track record before he was deposed, it would have exceeded the worst believable estimates of civilian war deaths in Iraq.
  • Walter Williams — “One-third of the $15 trillion of mortgages in existence in 2008 are owned, or securitized by Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing and the Veterans Administration. Wall Street buyers of repackaged loans didn’t mind buying risky paper because they assumed that they would be guaranteed by the federal government: read bailout from the taxpayers. Today’s housing mess can be laid directly at the feet of Congress and the White House.”
  • I said back in September that “Whether or not Ohio Representative John ‘Hugs‘ Husted does or does not spend enough time in the district he represents is not an unimportant matter, as anyone who has followed this blog knows, and what that percentage is would be useful to know.” It would appear, based on this January 15 Kettering-Oakwood Times report, that the percentage is very low. Based on a number of factors, Husted may not be a legal resident of the Senate District he currently represents. At this point it’s up to him to prove that he is. If he can’t, and even though I know that the residency issue will not pertain to his desired higher office, I will oppose his candidacy for Secretary of State, even if no other acceptable candidate is on the ballot. If I have to abstain from voting for that position, I will. The GOP, if it has any brains, will insist that Husted clear this matter up immediately, or abandon his candidacy.

Positivity: Hero plunges into icy river to save drowning woman – and holds her afloat for 30 MINUTES

Filed under: Positivity — Tom @ 5:58 am

From Hereford, England, UK:

Last updated at 1:59 AM on 19th January 2009

A man has been hailed a hero after he leapt into an icy river and saved a drowning woman by clinging to a branch for 30 minutes until firefighters hauled the freezing pair to safety.

Quick-thinking Jason Pardoe jumped into the rain-swollen river in pitch darkness after he spotted a screaming young woman being carried away by the powerful current.

Jason, 34, was walking home along the banks of the River Wye in Hereford after a night shift when he heard the woman’s frantic calls for help at 3am.

He followed the noise and spotted the woman, who was struggling to stay afloat in water temperatures estimated at just 2 degrees C.

Jason called the police on his mobile phone and leapt in fully-clothed but was immediately swept downstream by the ferocious current.

Luckily the brave printer managed to grab a passing tree branch and clung on for 30 minutes until firefighters arrived in a rescue boat.

Jason, from Hereford, said: ‘I heard a lot of loud screaming and a cry for help. I realised the current was taking her so I jumped in.

‘We were clinging to each other and were both very cold and we were literally praying for the boat to turn up.

‘It was a pretty strong current and felt like a long time, but at the end of the day we made it.’

The dramatic rescue happened in the early hours of Friday morning as Jason walked home early from a night shift because he was feeling unwell.

After being rescued by firefighters the pair were rushed to hospital suffering from mild hyperthermia but were released later that morning. …..

Go here for the rest of the story.