Business as usual

by Russ Roberts on January 28, 2009

in Business as usual

I guess when you get away with your loose habits in filing taxes, you come to think you don't have to play by the same rules as everyone else. USA Today reports:

Treasury Secretary Timothy Geithner picked a
former Goldman Sachs lobbyist as a top aide Tuesday, the same day he
announced rules aimed at reducing the role of lobbyists in agency
decisions.

Mark Patterson will serve as Geithner's chief of
staff at Treasury, which oversees the government's $700 billion
financial bailout program. Goldman Sachs received $10 billion of that
money.

Treasury spokeswoman Stephanie Cutter said
Patterson "brings significant expertise to the job." Patterson, who
left the investment bank in April, signed the administration's ethics
pledge, which requires him to recuse himself from issues "directly and
substantially related to my former employer."

Melanie Sloan, executive director of the
Citizens for Responsibility and Ethics in Washington, said President
Obama was retreating from his own ethics rules barring lobbyists from
working on the issues they lobbied about during the previous two years.
"It makes it appear that they are saying one thing and doing another,"
she said.

It does make it appear that way, doesn't it? But Patterson isn't the only one:

The White House waived the rules Friday for
William Lynn, who lobbied for a defense contractor last year, to serve
as deputy Defense secretary.

Geithner issued rules Tuesday to restrict lobbyists from contacting Treasury about bailout issues.

Now a word from our sponsor, designed to please the ghost of George Orwell:

White House spokeswoman Jennifer Psaki said
Obama is following through on his commitment to operate under strict
ethical standards.

And finally, let's hear from an unbiased source who really goes out on a limb:

Dave Wenhold, of the American League of
Lobbyists, said lobbyists bring expertise to the job. "Just because you
are registered to lobby doesn't mean that you are evil, " he said.

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{ 23 comments }

tw January 28, 2009 at 3:53 pm

Isn't this just one of the Ten Commandments of Politicians: "Do as I say, not as I do"???

Ike January 28, 2009 at 4:04 pm

You're only "evil" if you lobbied the other administration.

Kevin January 28, 2009 at 4:08 pm

I don't think this is much of a story. All that stuff about hope and change was just to get Obamatomatons lined up. The administration's behavior so far has been cynical and ruthless without exception, which is what you'd expect from a former aspirant to the presidency. This is really dog bites man stuff.

MnM January 28, 2009 at 4:37 pm

I'm with Kevin. Government hypocrisy is nothing new.

However, if the Secretary of the Treasury doesn't have to pay taxes, I shouldn't have to either.

Brian January 28, 2009 at 4:45 pm

"'Just because you are registered to lobby doesn't mean that you are evil,' he said"

Actually, it does. By registering as lobbyist, you have made it clear that you want to wield the power of the state for your own ends. It's no different from voluntarily registering to be a thief or a murderer.

Ike January 28, 2009 at 4:47 pm

I don't mind having the IRS run by a guy who can't do his own taxes.

That bolsters my bid to run NASA.

DAVE January 28, 2009 at 5:22 pm

Feels like the wrong side of the screen of a bad movie.

Conflict of interest anybody? Hello? Where am I?

Billy January 28, 2009 at 5:29 pm

It's a shame that Obama can't step back and say "You know, this no-lobbying rule set looked great on paper, and was well-intentioned, but due to the unintended consequences we've seen since putting it into place, we now realize it's actually a bad idea and are rescinding it."

Of course, I'd probably be disappointed even if he did, at least if I expected anyone to learn deeper lessons from the episode.

Superheater January 28, 2009 at 5:44 pm

The (un)funny thing about the tax issue (speaking as an industry CPA, with a small tax practice) is that Geinther said he used Turbotax. I was willing to accept the explanation of "innocent mistake" until I heard that.

I've seen all the packages and the main advantage is that it asks you what kind of form you are using as a source document. If you report income from the version of 1099 used for self-employment-it will automatically complete and print the supporting schedule.

As for the people (especially the R's) who voted for him, assume they have on a past 1040 that might require "understanding".

Dr. T January 28, 2009 at 7:51 pm

Geithner (IRS head, not Treasury Secretary) gets a slight break on the 1099 issue because his employer used a bastardized W2 form to report the consulting income. Geithner ignorantly entered the info as an incomplete W2. (TurboTax ignored the W2 income because the W2 was incomplete.) I'm sure that TurboTax warned him about the error of an incomplete W2, but he just ignored the warning and thereby under-reported his income. (Question: Was it carelessness or a deliberate slip to save money?)

The error, careless or not, shows he is a dolt. I had exactly the same experience of consultant income reported on a W2, and I used MacInTax. However, I knew enough to put the consulting income into the 1099 form, not the W2 form; and I am a physician, not a future IRS head. When you add in the other filing errors in different years (including the ridiculous claim that overnight summer camp costs could be counted as daycare expenses), it shows he is not qualified to run a small branch of H & R Block, much less the IRS.

TrUmPiT January 28, 2009 at 8:43 pm

Most agree that Paulson is unintelligent, so why is he so rich and why was he appointed by Bush to be Sec. of the Treasury? I object to his riches and I want him to object to it too by giving most of his fortune to the Rainforest Action Network. He can do some good, and redeem himself, by making contributions to the "lungs of the planet" instead of sitting on toilets made of gold. The values of rich people are frequently dubious. They'd rather spend their wealth on status symbols like Ferraris and Rolexes. The fact that the Amazon jungle is being clearcut and turned into a pile of crap is of no concern to them. I have a big problem with that kind of selfish indifference. Rome burned while Nero fiddled. What the rich are doing to this planet is no different.

TrUmPiT January 28, 2009 at 8:45 pm

"Former Treasury Secretary Henry Paulson, a 32-year veteran of investment firm Goldman Sachs, had an estimated net worth of more than $700 million when he joined the Bush administration in 2006.

To obey conflict of interest rules, Paulson agreed to sell more than 3.2 million shares of stock in Goldman Sachs that were valued at more than $480 million in the summer of 2006."

thedaddy January 28, 2009 at 10:54 pm

Rainforest Action Network.

Let those toads get their own money.
BTW what the hell is a rain forest, is that where rain trees grow?
And further what is a "rain forest" "action network"?

Just askin' is all.

thedaddy

TrUmPiT January 29, 2009 at 1:13 am

What's a "Henry Paulson"? Is he related to the late comedian Pat Paulson? And what's a "Goldman Sachs"? Do they really have Sacks of gold men there? Just askin' is all.

Andrew_M_Garland January 29, 2009 at 1:18 am


Venial versus mortal sins in a Treasury Secretary

01/22/09 – This was reported at PowerLineBlog by Paul Mirengoff and John Hinderaker

Geithner failed to pay his self-employment taxes for four years (about $35,000). I find it remarkable that the Senate is willing to overlook that fact, even though:

The IMF, his employer, told him that he needed to pay these taxes.
The IMF gave him additional compensation specifically earmarked for paying those taxes.
He signed a form stating that he would use this compensation to pay those taxes.
He paid those taxes for 2003 and 2004 after he was audited by the IRS.
He still did not pay those taxes for 2001 and 2002 because the statute of limitations had run out for those years, so he couldn't be prosecuted.
He paid the tax for 2001 and 2002 when Obama's transition team discovered the facts.

Geithner is also reported to have improperly deducted the cost of summer camp for his children, claiming this as child-care expenses.

I conclude from this that Geithner intentionally paid less than the tax owed. A person of his sophistication certainly knew what he was doing. My understanding is that the IRS routinely prosecutes this type of action as criminal.

The 3-year statute of limitations applies to clerical errors, not fraud. Why did Geithner get a pass on similar infractions in past years?

It seems that Geithner gets a pass on punishment, and further, receives elevation to high office.

TrUmPiT January 29, 2009 at 1:19 am

What Red Ink? Wall Street Paid Hefty Bonuses – NY Times

The stealing continues unabated on Wall St.
in the midst of a depression.

http://www.nytimes.com/2009/01/29/business/29bonus.html?hp

Business as usual.

Oil Shock January 29, 2009 at 2:09 am

Yes Armpit, whole world is guilty until proven innocent.

brotio January 29, 2009 at 3:15 am

I'm going to go out on a limb here and bet a nickel that even Mierduck can figure out a 1099. I know it's risky, but I think he can do it if he really puts his, er… mind… to it.

vidyohs January 29, 2009 at 6:20 am

Some one mentioned upthread that "government hypocrisy is nothing new".

Unfortunately that is not quite precise.

It is nothing new to people who have gone through some of life's experience, but it is totally new to the airhead youth that follow and who figured heavily in Obama's election.

Four years from now it will not be new to them, but to the ones four years younger…..well we know how they'll react.

"Ohmigod! Did you hear what the Messiah said? We must put him in charge!"

Even political correctness can not over rule Nature's laws. Nature says one must be burned to truly understand fire. Until burned, heat is just a theory.

I'd love to be optimistic, but I can't muster it anymore.

geoih January 29, 2009 at 9:13 am

Quote from Trumpit: "Most agree that Paulson is unintelligent, so why is he so rich and why was he appointed by Bush to be Sec. of the Treasury? I object to his riches and I want him to object to it too by giving most of his fortune to the Rainforest Action Network."

Do you ever actually listen to yourself?

First off, what does Paulson have to do with this thread? Perhaps you could rail about somebody in the Reagon or Nixon administration next. Do you understand that the Bush administration ended last week?

Second, while it's obvious that you resent anybody who has more wealth than yourself, do you really have to put your pathological hatred on display for everybody to see? What do you think will happen? That maybe we'll all suddenly see the genius of your hatred and start cheering?

Honestly, what do you hope to accomplish?

To the rest of the community, I apologize if my comments are beyond the acceptable.

Hammer January 29, 2009 at 9:52 am

I would also like to point out that Nero didn't fiddle while Rome burned. The fiddle would not even be invented for a hundreds of years after Nero was dead and gone.
Now, he might have plucked a lyre or something similar, but he certainly didn't fiddle.

More to the point though, if you own a tv or a computer, you really have no business telling other people to give money to any cause. If your ability to surf the web and troll is more important than the rainforest to you, then you have no place telling others that whatever they spend money on is less important than the rainforest.

TrUmPiT January 29, 2009 at 1:27 pm

"… you really have no business telling other people to give money to any cause."

"… you have no place telling others that whatever they spend money on is less important than the rainforest."

You can say that if you want until you are blue in the face, but it doesn't make it true or sensible. I could tell you that you have no business or place in telling me what to say, but I don't feel the need, because I slough off your muzzling admonitions like so much dandruff.

Michael Smith January 29, 2009 at 2:56 pm

What an entity like "TrUmPiT" needs and deserves is a one-way ticket to a place where the economic system prevents people from getting rich. I have in mind Cuba, North Korea or any other hell-hole that consistently practices socialism/statism.

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