Tax, housekeeper issues trip up Geithner

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By S.A. Miller

President-elect Barack Obama's pick for U.S. Treasury Secretary came under fire Tuesday on Capitol Hill for employing a housekeeper with expired immigration papers and for failing to pay his full taxes.

The Obama team moved quickly to defend Timothy Geithner from the attacks, saying his years of distinguished public service should not be tarnished by a few "honest mistakes" he quickly corrected.

"He made a common mistake on his taxes, and was unaware that his part-time housekeeper's work authorization expired for the last three months of her employment," Robert Gibbs, the incoming White House press secretary, said in a written statement. "We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country."

Senate Finance Committee Chairman Max Baucus said he was satisfied with the explanations and would move forward with confirmation hearings.

"We have to roll up our sleeves and get this economy moving again for the American people, and Tim Geithner has the right combination of experience and skill for these difficult economic times," Mr. Baucus said. "For these reasons, I continue to support his nomination to be the next Secretary of the Treasury."

Sen. Charles Grassley of Iowa, the committee's ranking Republican, raised the questions about the legal status of Mr. Geithner's one-time housekeeper and about his delinquent taxes, which was first reported in the Wall Street Journal.

The report said Mr. Geithner hired a housekeeper whose immigration papers expired while she worked for him. The housekeeper eventually obtained a work permit and neither Mr. Geithner nor the housekeeper were charged with immigration crimes

Mr. Grassley reportedly also questioned Mr. Geithner's failure to pay Social Security and Medicare taxes when he worked at the International Monetary Fund between 2001 and 2004. He was technically considered self-employed at the time and should have paid taxes as both an employer and employee.

Mr. Geithner paid the back taxes when made aware of the error, the newspaper said.

However, employing illegal immigrants or undocumented workers for domestic help, usually nannies, has cost several cabinet nominees the job.

So-called nanny problems sunk President Bush's pick of former New York Police Department Commissioner Bernard Kerik for Homeland Security chief and President Clinton's choice of Zoe Baird for attorney general.

Civil rights scholar Lani Guinier withdrew her name as Mr. Clinton's nominee to head the Justice Department's civil rights division after accusations she had not paid taxes for a housekeeper.

The Clinton nomination of U.S. District Court Judge Kimba Woods stalled permanently after disclosures she hired an illegal immigrant as a baby sitter, though she paid the required Social Security taxes and her actions were entirely legal.