Monday, January 26, 2009

Senator Collins to Oppose Treasury Secretary Nominee's Confirmation

/PRNewswire-USNewswire/ -- U.S. Senator Susan Collins today announced that she will oppose the confirmation of Timothy Geithner, who was nominated to be U.S. Secretary of the Treasury. The Senate is expected to vote on the confirmation tonight circa 6:00 p.m.

Senator Collins placed this statement in the Senate Record:

Mr. President, I rise today to state my opposition to the confirmation of Timothy Geithner to be Treasury Secretary.

Our current economic crisis is, in part, a crisis of confidence. If we are to return to prosperity, the American people must have confidence in those who would chart our course. Mr. Gauthier's professional background and experience should inspire that confidence. They are overshadowed, however, by the personal issues regarding his own tax returns.

When these issues first arose, they were cited as examples of the baffling complexity of our tax code and of the need for reform. They were described by the nominee himself as "careless mistakes." As more details have emerged, it has become clear to me that this is not merely a matter of complexity leading to mistakes, but of inexcusable negligence.

Mr. Geithner failed to pay self-employment taxes while working for the International Monetary Fund. He failed to make these tax payments despite the fact that the IMF repeatedly reminded him of this obligation. He signed paperwork acknowledging this obligation. He received extra compensation that he acknowledged at the time was for the purpose of paying this obligation. Yet when he filed tax returns for the years he was employed at the IMF, he did not pay self-employment taxes.

After working for the IMF for three years, Mr. Geithner was audited by the Internal Revenue Service in 2006, which discovered that he had failed to pay his self employment taxes. Mr. Geithner was ordered to correct his tax returns for 2003 and 2004, and he paid the amount that he owed for those years.

But Mr. Geithner had made the same omission in 2001 and 2002, years that were outside the scope of the audit. Yet having been informed by the IRS of his omission for 2003 and 2004, Mr. Geithner took no action to correct the deficiency from 2001 and 2002 -- years for which the statute of limitations had already run. In fact, Mr. Geithner chose not to make the payments until he was being considered for this position at the end of 2008.

A similar failure to correct omissions when informed of them occurred when the accountant who prepared Mr. Geithner's tax returns in 2006 informed him that certain deductions Mr. Geithner had taken for three earlier years were not allowed. These deductions involved writing-off overnight camps as child care expenses. Mr. Geithner did not attempt to claim the deduction for 2006, but did not correct his returns for the previous years. And again, this deficiency was not addressed until late last year, when Mr. Geithner was being considered for this Cabinet position.

Mr. President, throughout the State of Maine and indeed throughout the nation, millions of hard-working Americans pay their taxes on time and in full. Our taxation system is essentially an honor system that depends on self-assessment and honesty. When taxpayers make mistakes, they are expected to correct them promptly and completely. 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?

Therefore, Mr. President, I must oppose this nomination.

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