Network Evening Shows Downplay Geithner Tax Evasion as a 'Speed Bump'

The network evening shows didn’t have much of an appetite for Democratic hypocrisy among the team they hailed as a "superstar Cabinet" on Tuesday night. Timothy Geithner, Barack Obama’s nominee for Treasury Secretary, a man who would oversee the IRS, failed to pay $42,000 in Social Security and Medicare taxes -- and waited to pay more than half of that amount – $26,000 – only after Obama decided to nominate him. On top of that, one of Geithner’s household employees failed to renew her green card. Only ABC mentioned Geithner in their introductions, and featured no report, just an interview with George Stephanopoulos, who said it was a mere "speed bump" and "fairly common." CBS and NBC spent little more than a minute on Geithner, and NBC’s screen featured the Obama team’s claim in quotes. Under Geithner’s picture were the words "Honest Mistakes."

ABC’s World News at least put the Geithner scandal in its opening seconds. Anchor Charles Gibson declared: "Tax trouble. Questions are raised about Barack Obama's choice for Treasury Secretary, and his failure to pay some taxes." About four minutes into the show, the story was aired:

CHARLES GIBSON: Next, we turn to the transition, and questions being raised today about Tim Geithner, Barack Obama's choice to be Treasury Secretary. The man who will have supervision over the IRS and hundreds of billions of dollars in funds to invigorate the economy failed to pay some of his taxes. Didn’t pay them for years. So George Stephanopoulos, host of This Week, is joining us. So, George, what do we know about this?

GEORGE STEPHANOPOULOS: We know that Tim Geithner worked at the International Monetary Fund from 2001 to 2004 and failed to pay about $34,000 in self-employment payroll taxes. In 2006, he was audited and told to pay two years of those taxes, but didn't have to pay the two other years. After he was chosen by Barack Obama, tax accountants went through his returns again and said, ‘you know what, you better pay the first two years, as well.’ That was all given to the Senate Finance Committee, Geithner met with the Senate Finance Committee today and this is a speed bump on his road to the confirmation.

GIBSON: Does it imperil his confirmation?

STEPHANOPOULOS: I don't think so, Charlie. Democrats are standing behind Tim Geithner right now. They say this was just an honest mistake, fairly common at non-governmental organizations. Some Republicans are more troubled, including the ranking Republican on the Finance Committee, Charles Grassley. But Geithner has the support of key Republicans, like Orrin Hatch, who says ‘I still stand behind him. He’s a very, very competent guy.’

To his credit, Gibson pressed a bit harder on the subject:

GIBSON: But George, as I said in the introduction, this is not somebody who was nominated to be veterans affairs secretary or at interior or whatever, this is the guy that will handle the Internal Revenue Service and hundreds of billions of dollars in financial rescue funds. Don't they expect some sort of public reaction about this, if he doesn’t pay his taxes?

STEPHANOPOULOS: That's very possible, Charlie. And some are waiting to see what the public, how the public does react. Geithner himself is embarrassed about this. He told the committee he should have known. He should have paid the taxes. He's embarrassed by it and he’s sorry.

GIBSON: All right, George Stephanopoulos reporting from down in Washington.

The CBS Evening News devoted the least time to the story, 63 seconds sandwiched on both sides of a Chip Reid story on Hillary Clinton’s confirmation hearings:

KATIE COURIC: It’s a bit warmer in Washington, especially for Hillary Clinton, who faced few tough questions today at her Senate confirmation hearing. But Chip Reid reports another cabinet nominee may be in trouble.

CHIP REID: Treasury Secretary nominee Timothy Geithner, the man who would be in charge of the Obama administration's economic recovery plan, failed to pay about $34,000 in taxes between 2001 and 2004, and briefly employed a housekeeper whose immigration papers had expired. President-elect Obama is standing by him, a spokesman describing the errors as honest mistakes that were quickly addressed. Senate Democratic leader Harry Reid agrees.

HARRY REID: There's a few little hiccups but that's basically what they are. I am not concerned at all.

CHIP REID: Some Senate Republicans say it's too early to say if Geithner's errors are nothing to worry about, and intend to question him at his confirmation hearing.

Later, after a few minutes on the Hillary Clinton hearing, Couric returned briefly to Geithner:

COURIC: And Chip, in talking to people up there, how much trouble do you think Geithner faces?

REID: Well, senators really like him. He's very popular, he's highly respected. Most of them would really like to have him in the job, Republicans and Democrats. But some republicans say they're a little worried. This is the man who will be overseeing the IRS, after all, and if this is a sign of sloppiness, that's not a quality you want in somebody who’s going to be overseeing a trillion dollars in spending. At this point, though, it doesn't look like it’s going to block his confirmation.

NBC Nightly News offered 77 seconds with reporter Kelly O’Donnell and the words "Honest Mistakes" on screen.

BRIAN WILLIAMS: The man Barack Obama wants to be his next Treasury Secretary may have, of all things, a tax problem. He is Tim Geithner, head of the New York Federal Reserve. This has to do with money he once owed, and it’s a problem the Obama transition team brought to the attention of senators who must now take on Geithner's nomination. NBC’s Kelly O’Donnell's on Capitol Hill tonight with more on this still-developing story. Kelly, good evening.

O’DONNELL: Good evening, Brian. Tim Geithner could soon become the country’s top money man, and today he was here to explain to senators why he failed to pay some of his own taxes and had a household worker whose green card once expired on the job. Now, officials say Geithner paid no Social Security taxes when he was working for the International Monetary Fund. And the IMF didn't take that out of his paycheck automatically. The mistake was caught in November, before he was officially nominated. And Geithner paid the back taxes and interest of more than $42,000. Now, the Obama team says this was just an honest mistake. Republicans aren’t saying much at all. And Brian, Senate Democrats say this is serious, but probably not enough to disqualify Geithner from becoming the next Treasury Secretary.

WILLIAMS: Okay, Kelly O’Donnell on the Hill tonight. We'll keep an eye on it.

The networks all avoided casting this scandal in a more skeptical light. Take this report in Politico (headlined "Can Obama Save Geithner?") by Craig Gordon and Amie Parnes:

Geithner’s tax problems surfaced publicly Tuesday – but Obama’s team has known about them for at least six weeks, waging a behind-the-scenes campaign to push him through the Senate Finance Committee, despite the blemishes on his record, according to documents from the committee.

The episode raises questions about whether Geithner’s nomination will survive, despite early soundings of support from Democrats, and perhaps, more importantly, a larger question:

What was Obama thinking?

Obama's choice of Geithner flirts with an issue that has deep-sixed Cabinet picks before –his former housekeeper’s immigration status lapsed briefly while she was in his employ.

Also, Obama’s choice to oversee the IRS flubbed his own tax returns – some of which he had personally prepared – to the tune of $42,700 in back taxes and penalties.

And Geithner decided to pay more than half that amount — $26,000 — only after Obama decided to nominate him, according to finance committee documents.

Obama’s team calls them "honest mistakes." And in the end, Geithner had the only supporter that mattered – Obama himself. One source familiar with Geithner’s vetting says Obama knew about Geithner’s tax problems and decided to push ahead with the nomination anyway because he "still wanted him."

"At the end of the day, Barack decided that he was the best person for a really important job," the source said.

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