An irreverent Wall Street Blog
by Bill Singer
 
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Geithner: A Devil's Bargain
Written: January 15, 2009

By Bill Singer

http://rrbdlaw.com

http://BrokeAndBroker.com

An anonymous reader (Ednomore) of my last blog entry: Geithner and Mathis: Troubling Double Standard , wrote to me the following:

Bill, You make very good points. I would like to make only one point about the possible treasury secretary. I think the fact that he did not know or ignored current tax law by not paying taxes due may indicate that he may not be qualified to head up the treasury department which includes the IRS. I would speculate that he did know the law because he ignored earlier failure to pay taxes after being audited on 2006 taxes. He obviously knew or should have known that he did not pay taxes due in those earlier years.

My reply back to him follows:

Ednomore:

I want to be very clear up front -- I have absolutely no dispute with anything you say; in fact, we are basically in agreement.

Now, for some of the nuance. I am willing to give Geithner the benefit of the doubt about the non-payment of his self-employment taxes while at IMF but only up to 2006 when the IRS audit put him on actual notice of the non-payment issue. We both agree on that bright line. Virtually everyone I know of has had some IRS issue -- be it lost filing, late filing, underpayment, missed payment, disputed payment, mistaken deduction, etc. All of which may explain why I am in favor of a flat tax.

Okay, so, in 2006 Geithner realizes there was an omission on his part and he pays the 2003 and 2004 taxes cited by the IRS. What troubles me at that point is 1. why the IRS apparently didn't bother to look at all tax returns relevant to Geithner's employment at IMF (including the 2001 and 2002); 2. why Geithner didn't have the apparent commonsense to voluntarily pay the owed 2001 and 2002 taxes in 2006; 3. whether Geithner was reimbursed by the IMF for self-employment taxes from 2001 through 2004 and if he merely pocketed those payments; and 4. why it took until Obama's vetting team allegedly uncovered the unpaid 2001 and 2002 taxes for Geithner to write the checks. Again, I think we both concur on the above concerns.

You are on the mark when you question the propriety of Geithner's oversight at Treasury of the IRS. While I wish I could fabricate some convincing argument on his behalf, I cannot and will not try. Similarly, the reason I raised the Mathis issue is because it clearly supports your concerns and notes that under somewhat similar circumstances of the non-payment of taxes over a period of years (and the subsequent payment of the disputed taxes), some folks get fined and lose their careers whereas others get nominated to Treasury Secretary.

Ultimately, these are the difficult and thorny challenges of our day. While I suspect that Joe Kennedy was not pure as the driven snow when he was appointed by FDR to set up the nascent Securities and Exchange Commission and become its first Chair, nonetheless, he got the task assigned done and with remarkable results. Similarly, for all his prickly quirks and insubordination, what general would you have sent to rescue Bastogne but Patton?

The world is not always run by angels and saints. The former live in Heaven and the latter are often martyred. Worse, sometimes angels fall from heaven and become devils. In this day and age I fear that we must place more weight on competency and less weight on purity of heart and soul. There may well be some folks who I would not let use the towels in my bathroom but I would welcome them into government if they can clean this mess up and set us back on a righted course. It is the consummate devil's bargain -- but that I wish it were otherwise.

Tim Geithner has fallen in my esteem but I see no one else more qualified for the job.

Bill Singer

 


 
[^top^]

Previous Entries
September 17, 2014
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or de... Read On
September 17, 2014
Ah yes, here we go again with another one of Bill Singer's infamous "Yes but . . ." columns. We start off with a somewhat oddball fact pattern in whic... Read On
September 16, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
September 15, 2014
Sometime in February 2014, Jeffrey S. Conover sent a written complaint to the Financial Industry Regulatory Authority (“FINRA”) in which he asserted t... Read On
September 13, 2014
BrokeAndBroker Offers A Weekend Musical ExtravaganzaSeptember 12, 2014What's this column about?  Not sure but I thought that I'd just go with it.... Read On
September 12, 2014
What's this column about?  Not sure but I thought that I'd just go with it. It's a Friday afternoon and the Labor Day holiday is behind us and su... Read On
September 12, 2014
Some fights are quick. A quick upper-cut in the first round and, wham, the loser is on the canvass being counted out. Other fights are knock-down-drag... Read On
September 11, 2014
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or de... Read On
September 11, 2014
This is an update of "In Vino No Veritas Says Kurniawan Jury" (BrokeAndBroker.com, December 20, 2013).Before I became a lawyer, I was the third genera... Read On
September 10, 2014
Anti-Money Laundering or AML is a hot button issue for Wall Street's compliance professionals. Given the world of terrorism and organized crime that w... Read On
BrokeAndBroker.com Job Search
Related Topics
    Tag Cloud
    Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Brokeandbroker.com Morgan Keegan Arbitration Counterclaim BrokeAndBroker.com Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC RRBDLAW.com Ponzi Affinity Fraud Wachovia Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax RRBDlaw.com Email Netschi Moore Whistleblower Street Sweeper Tran Bharara Facebook Online Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 RRBDlaw Appeal Fowler LPL Johnson US Airways Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank God HSBC Private Placements Eric Stein Wire Fraud CCO Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Outside Account Options Telephone Wine Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Judgment Bank Fraud Deceased TSSB Mary Jo White Trustee Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Short Sale Compromise Website TRO Supervision Vacatur SDNY BrokeAndBroker Bill Singer Piwowar Rule 1122 Article V signature VA Regulation SP Rule 3270 OWB Stockbrokers
     
    Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+