While Senate Democrats were Geithner’s main cheerleaders, Republican Sen. Orrin Hatch also spoke in favor of the nomination of an admitted tax cheat. “I am aware this nominee is not free of controversy,” he deadpanned. He also disclosed that his office had “received many calls from Utahns” upset over the nomination.
Hatch said, however, that he weighed his tax problems with his “impressive education, experience, and intelligence” and “outstanding record,” and concluded that he should be confirmed. He said that Geithner had a role in “crafting the Government’s response to the financial crisis,” as if this were a factor in his favor.
In a late-breaking development, media are now reporting that Mark Patterson, a registered lobbyist for Goldman Sachs until April 11, 2008, is in line to serve as chief of staff to Geithner. Patterson’s lobbying was first reported by the National Journal. Goldman Sachs has received $10 billion in bailout money.
As revealed in the AIM Report, "Wall Street and the Rise of Obama", the new President has been heavily backed by Wall Street interests, especially Goldman Sachs. More recently, Kenneth P. Vogel of Politico.com documented in a story headlined, “Wall Street Invested Heavily in Obama,” that the list of top donors to the political campaigns of Obama, Vice President Joe Biden and Obama chief of staff Rahm Emanuel “includes many firms at the heart of the financial meltdown — including taxpayer-funded bailout beneficiaries Citigroup, JPMorgan Chase and Bank of America…”
He explained, “The top three corporate employers of donors to the new White House came from the world of high finance: Goldman Sachs, Citigroup and JPMorgan. UBS AG, Lehman Brothers, Morgan Stanley, Bank of America, Merrill Lynch and Credit Suisse Group also were among the top 30.Those nine firms’ executives, employees and political action committees have given a combined $5.1 million to the campaigns of Obama, Biden and Emanuel since 1998, when campaign finance records became searchable electronically.”
Vogel noted that Geithner is “one of several appointees for administration economic posts who are protégés of former Clinton Treasury Secretary Robert Rubin, an Obama adviser and, until recently, a Citigroup director.” Another, he noted, is Gary Gensler, a “Rubin acolyte” and former top Goldman Sachs official who has been picked as chairman of the U.S. Commodity Futures Trading Commission.
As Geithner moves to the Treasury Department, William Dudley, another former Goldman Sachs official, has been selected as the new President of the Federal Reserve Bank of New York. Dudley, who has been head of markets at the New York Fed, is described by Bloomberg News as “an architect” of the Federal Reserve’s role in the Wall Street bailout. During some of his time at Goldman Sachs, he was “Bob Rubin’s senior economic adviser,” one bio says. However, his New York Fed bio makes no mention of the Rubin connection.
On the Senate floor, in speaking about Geithner and his history of tax cheating, Republican Sen. Jim Inhofe of Oklahoma said, “It is one of those things that makes people so angry about their government. The man who wants to be in charge of the IRS messed up with his taxes and got a pass from the Senate. Now, for as much as we talk about leveling the playing field, it sure looks as if we do not walk the walk.”
Republican Sen. Saxby Chambliss of Georgia said, “A week ago today, last Monday, I was coming through the Atlanta airport, and a gentleman walked up to me and introduced himself. He said: ‘I am a retired Internal Revenue Service employee who was going to send you an e-mail today, and you saved me from having to send you that e-mail. During my tenure at the Internal Revenue Service, I was called upon to fire three separate people who committed exactly the same offense as Mr. Geithner committed.’”
Rejecting Democratic claims that Geithner deserved confirmation because he had financial expertise, Republican Sen. John Thune of South Dakota said, “There are lots of smart, talented, and experienced people who got us into this economic mess.”
Democratic Sen. Robert Byrd of West Virginia said the tax cheating “seriously undermines Mr. Geithner’s credibility to be the nation’s top tax enforcement officer. It suggests serious negligence on his part and creates the impression of someone trying to game the system. Mr. Geithner showed poor judgment in waiting so long to pay these taxes, and then doing so only because it became a political necessity. Certainly most American taxpayers do not have that luxury.”
Sen. Charles Grassley, the top Republican on the Senate Finance Committee, said, “in the past, nominees who had tax issues as serious as this nominee’s, and some who have had less serious issues, have not attained Senate confirmation. I feel it is improper to judge this nominee by a different standard. I realize that economic times are tough right now, but, if anything, that should be an incentive for us to raise our standards and not lower them. Finally, I believe we also need to treat all people in a consistent manner. The same Internal Revenue Code applies to everyone regardless of whether someone is a well-known Wall Streeter or a student earning minimum wage.”
Grassley added, “Many people around the country who have not satisfied their tax obligations have been caught by the IRS, as this nominee was for tax years 2003 and 2004. Many people end up having their houses seized, bank accounts frozen, and other assets taken by the Government to pay their tax debts. Some people even go to jail.”
Sen. Jeff Sessions, Republican of Alabama, said, “I believe the American people want a Secretary of the Treasury who was not in the middle of the problem in New York as head of the Federal Reserve Bank when it occurred and who gave no warning to the American people whatsoever that this was about to happen.”
Sen. Tom Harkin, Democrat of Iowa, said, “As president of the Federal Reserve Bank of New York, Mr. Geithner was a key regulator of the large, mostly New York-based financial institutions that have been at the center of this meltdown. Their reckless practices—reckless practices—have brought America’s financial system to its knees, pitching our economy into what could be the longest, deepest recession since the Great Depression.”
Sen. Susan Collins, Republican of Maine, said, “How can we tell the taxpayers that they are expected to comply fully with our tax laws when these laws have been treated so cavalierly by the person who would lead the Treasury Department and, ultimately, the Internal Revenue Service, when he was applying them to himself?”
The vote on Geithner follows:
YEAS (60)
Akaka
Baucus
Bayh
Begich
Bennet
Bingaman
Boxer
Burris
Cantwell
Cardin
Carper
Casey
Conrad
Corker
Cornyn
Crapo
Dodd
Dorgan
Durbin
Ensign
Feinstein
Graham
Gregg
Hagan
Hatch
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Reid
Rockefeller
Schumer
Shaheen
Shelby
Snowe
Stabenow
Tester
Udall (CO)
Udall (NM)
Voinovich
Warner
Webb
Whitehouse
NAYS (34)
Alexander
Barrasso
Bennett
Brownback
Bunning
Burr
Byrd
Chambliss
Coburn
Cochran
Collins
DeMint
Enzi
Feingold
Grassley
Harkin
Hutchison
Inhofe
Isakson
Johanns
Kyl
Lugar
Martinez
McCain
McConnell
Murkowski
Risch
Roberts
Sanders
Sessions
Specter
Thune
Vitter
Wicker
NOT VOTING — 4
Bond
Brown
Kennedy
Wyden
Cliff Kincaid is Editor of Accuracy in Media, and can be contacted at cliff.kincaid@aim.org.
