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Treasury pick Geithner owed IRS $35,000

By Stephen Dinan (Contact) | Wednesday, January 14, 2009

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President-elect Barack Obama's Treasury Secretary nominee, who would oversee the Internal Revenue Service, failed to pay nearly $35,000 in federal taxes from 2001 to 2004 and has a history of mistakes and late-filing, senators preparing to vote on the pick said Tuesday.

In addition to the tax problems, the senators said the nominee, Timothy Geithner, also failed to fill out immigration forms for three housekeepers who worked for him since 2004, and he employed one of the housekeepers for more than three months after she was no longer legally allowed to work in the U.S.

Democrats said the delinquent taxes, some of which Mr. Geithner paid only after he learned that Mr. Obama was considering him for the post, were an "honest mistake." Republican senators said they will have to see what details emerge before deciding whether to support Mr. Geithner's confirmation.

It's the latest Cabinet-level foul-up for Mr. Obama. He has already had to withdraw his commerce secretary nominee, Bill Richardson, who is facing a federal corruption investigation, and his attorney general nominee, Eric H. Holder Jr., faces harsh Republican-led questioning this week over his role in President Clinton's end-of-term pardons.

"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," said incoming White House press secretary Robert Gibbs. "We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country."

The Obama transition team reported the tax and housekeeper issues to the Senate Finance Committee, which is reviewing Mr. Geithner's nomination.

Committee Chairman Max Baucus, Montana Democrat, and Senate Majority Leader Harry Reid, Nevada Democrat, both said they still support his nomination. Late Tuesday, Mr. Baucus said he wants to schedule a hearing on Mr. Geithner for Friday and wants someone to be in the post by the time Mr. Obama is inaugurated.

Sen. Charles E. Grassley of Iowa, the committee's top Republican, will reserve judgment until later in the process, a spokeswoman said. Mr. Grassley did release a joint statement with Mr. Baucus explaining they released the information so the full Senate could review the errors.

Other Republicans were trying to decide how much of an issue to make of the revelations.

"It's serious," said a senior Republican aide who requested anonymity because the senator for whom he works had not concluded how far to push the issues. "This is the guy who would run the IRS."