Ah, the classic nominee scandal. Sen Chuck Grassley of Iowa has raised concerns about an undocumented housekeeper who worked for Treasury nominee Timothy Geithner. It’s a stupid mistake for a public official to make, if true, though we also think it’s ridiculous how often nominees get held back by this.
This isn’t necessarily a dealbreaker, but it will be a test of whether Obama wants to spend some political capital on what was thought to have been a breeze nominee. If Geithner really is Obama’s man, he might be ready for a fight.
Off the top of our head, past nominees that have been felled (in part) by this issue include Zoe Baird and Kimba Wood (Clinton noms for Attorney General), Linda Chavez (Bush labour nom) and Bernard Kerik (sort of, though ultimately he went down for a lot more).
According to people familiar with the matter, Mr. Geithner employed a housekeeper whose immigration papers expired during her tenure with Mr. Geithner, currently president of the Federal Reserve Bank of New York. The woman went on to get a green card to work legally in the country and federal immigration authorities didn’t press charges against her, these people said.
The second issue involved taxes due while Mr. Geithner worked for the International Monetary Fund between 2001 and 2004. As an employee, Mr. Geithner was technically considered self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and an employee.
He apparently failed to do so, resulting in Internal Revenue Service audits his last two years at the IMF. As soon as the IRS brought the issue to his attention, he paid the taxes with interest, these people said.
Update: According to CNBC, the Dem leadership is meeting now and believes the issue is manageable. Obama, too, thinks it’s all manageable. For now, we’re thinking Geithner remains the nominee.