Labor & Employment Law

Would you hire Timothy Geithner?

Dear readers, I have done a complete about face on the appointment of Timothy Geithner as Secretary of the Treasury.

My view now: His offer of employment should be withdrawn.

Back when President-Elect Obama was making his decision on who would be the best candidate to fill this job, I thought it was a no-brainer. Of all the potential candidates, Timothy Geithner stood out as the obvious best choice. I rooted for him, and predicted that Obama would select him.

Timothy Geithner is the President of the Federal Reserve Bank of New York. This is a unique position within the Federal Reserve System. There's nothing else like it in the whole world. He is the Fed's front-line implementer of decisions made by the Federal Reserve Board and by the Federal Open Market Committee. In that position, Geithner has performed brilliantly, non-politically, ethically, firmly, and quietly. Exactly the kind of employee I want for my business.

We now know that Mr. Geithner only recently made financial amends with the Internal Revenue Service regarding some of his taxes - more than $30,000 worth. OK, we all make mistakes.

What was Geithner's fatal error?

The IRS notified him that he had failed to pay self-employment taxes for two years: 2003 and 2004. All right, let's assume this was an innocent error on Geithner's part.

The problem is that his tax situation in 2001 and 2002 were exactly the same as in 2003 and 2004. So he should have said to himself, "Wow, I better go back and fix my taxes for those prior years." Yet he did nothing until it became clear that Mr. Obama intended to nominate him as Secretary of the Treasury. That was a profound error of judgment.

My view: Timothy Geithner lacks the minimum qualifications to be hired as Secretary of the Treasury, the department that includes the Internal Revenue Service. Part of the genius of the American system of taxation is that it depends upon voluntary compliance by all taxpayers. The person at the very top must set the example.

Full post as published by Ross' Employment Law Blog on January 17, 2009 (boomark / email).