Geithner sworn in as new Treasury Secretary
In a decisive vote of 60 to 34, members of the U.S. Senate chose to ignore disclosures that Timothy Geithner might have been guilty of cheating on his taxes for four years, and gave him the nod as the next Secretary of the Treasury.
From 2001 to 2004, Geithner worked at the International Monetary Fund (IMF) and received fees for services on which no Social Security and Medicare tax were withheld. As part of the working arrangement, IMF paid a sum in addition to the fees for services in an amount designed to cover the Social Security and Medicare taxes that were to be paid on Geithner's individual income tax return. Geithner signed a statement indicating that he understood he was responsible for reporting the taxes on his individual income tax returns and that he understood that the additional money he received was to cover these taxes. Nevertheless, Geithner did not report the taxes on his tax return and instead pocketed the extra money.
In 2006, Geithner was audited by the Internal Revenue Service for his 2003 and 2004 income tax returns and was required to pay the back taxes for those years, with interest but without penalty. It wasn't until Geithner was about to be nominated to the post of Treasury Secretary that he decided to come clean and pay the amounts due from 2001 and 2002.
In spite of this history, 60 percent of our elected Senators feel that Geithner is the man for the job of heading up the Treasury and, in turn, the IRS. In addition to his stint at the IMF, Geithner has served as undersecretary of the treasury for international affairs, and president of the new York Federal Reserve Bank.
Senator Mike Enzi (R-WY) voted against the appointment. The Associated Press reported that Enzi said, "Nominees for positions that do not oversee tax reporting and collection have been forced to withdraw their nomination for more minor offenses. They have been ridden out of town on a verbal rail. The fact that we're in a global economic crisis is not a reason to overlook these errors."
Senator Tom Harkin (D-IA) also voted against the appointment, saying "I cannot vote to promote Mr. Geithner," and listing mistakes he believes Geithner made while at the Federal Reserve Bank. Harkin indicated his decision was not based on Geithner's personal tax problems.
Senator Orrin hatch (R-UT) lauded the pick. "You're not going to get a better person for this job," he was quoted as saying by CNNMoney.com.
Geithner was sworn in shortly after the voting was completed.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.