Open­ing iffy cup­boards

Finweek English Edition - - Economic Trends & Analysis - HOWARD PREECE

PRES­I­DENT BARACK OBAMA has got off to a dis­mal start – to say the least – with some first-choice picks for his ad­min­is­tra­tion. The first ma­jor ca­su­alty was Bill Richardson, Gov­er­nor of New Mex­ico. He was nom­i­nated as Com­merce Sec­re­tary but quit even be­fore Obama had been for­mally in­stalled in the White House.

Richardson was by then fac­ing a ma­jor graft in­ves­ti­ga­tion into the award of state con­tracts, with al­le­ga­tions of per­sonal gain. He said those charges would be “a dis­trac­tion” to work as a mem­ber of Obama’s top team.

Then came Ti­mothy Gei­th­ner, who has be­come Trea­sury Sec­re­tary. Gei­th­ner had to be­lat­edly ad­mit to a Se­nate hear­ing on his ap­point­ment on what he called “care­less mis­takes” in his in­come tax re­turns when work­ing at the In­ter­na­tional Mon­e­tary Fund. In other words, he had sub­mit­ted false, un­der­stated re­turns. How­ever, Gei­th­ner paid his back taxes and got the job.

Now we have Tom Daschle, for­mer leader of the Democrats in the Se­nate, who has been nom­i­nated by Obama as Health Sec­re­tary. Daschle has just ad­mit­ted he failed to pay more than US$128 000 in taxes that should prop­erly have been con­trib­uted by him. He’s told the US Se­nate he’s “deeply em­bar­rassed and dis­ap­pointed by the er­rors that re­quired me to amend my tax re­turns”.

Also, high-rank­ing Demo­cratic Rep­re­sen­ta­tive Charles Ran­gel, head of the im­por­tant way and means com­mit­tee in the House, dis­cov­ered he’s also made er­rors in his tax sub­mis­sions. Cru­cially, he ne­glected to in­clude $75 000 in rental in­come from a prop­erty he owns in the Caribbean. A Repub­li­can se­na­tor ob­served: “No won­der the Democrats favour high taxes. They don’t pay them.”

But both par­ties have plenty of tax and other scan­dals in their cup­boards.

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