Dear Mr. Henry
Thank you for contacting me regarding President Obama’s nomination of Timothy Geithner to be Treasury Secretary. As you may know, the Senate voted to confirm Mr. Geithner as Treasury Secretary on January 26, 2009, by a vote of 60-34.
Although I had some concerns about Mr. Geithner’s nomination, I supported his confirmation because I believe he has the expertise to meet the enormous challenges posed by our current financial crisis and years of regulatory neglect. Mr. Geithner’s responses to detailed questions I submitted to him as a part of the confirmation process reflect some important new priorities and policy advances. He is committed to placing a priority on ending offshore tax abuses that leave ordinary taxpayers holding the bag and put the good citizens that pay their fair share at a competitive disadvantage. His answers made it clear to me that he will work to preserve strong U.S. accounting rules that protect investors; reinvigorate international anti-money laundering efforts; strengthen capital and liquidity requirements for financial institutions; and crack down on conflicts of interest by imposing a one-year moratorium before financial regulators can take a job with a company they regulated. He also indicated his belief that we need to overhaul our financial regulatory structure, including strengthening the regulation of hedge funds, derivative traders, and the over-the-counter derivatives markets.
While I voted to confirm Mr. Geithner, I did so with some reservations. He has been a key decision maker in the flawed financial rescue effort, which has failed to track the use of government funds and to mandate lending of those funds to creditworthy businesses. He has also failed to require that banks receiving federal funds take actions to address the severe mortgage foreclosure flood. Furthermore, Mr. Geithner has been reluctant to support the effort to require financial institutions that receive more than $1 billion in taxpayer assistance to provide written viability plans on how they intend to regain financial stability and repay those funds. I am encouraged, however, that Mr. Geithner has demonstrated a willingness to listen to and work with Congress, and his openness to compromise is promising for future progress in these and other areas.
Mr. Geithner’s failure to meet all of his tax liabilities in past years is also troubling. His judgment was called into question, and some asked whether this mistake was egregious enough to preclude him from the top job at the Treasury Department. During his testimony to the Senate Finance Committee, Mr. Geithner acknowledged his error and accepted full responsibility for this oversight, explaining that he misunderstood his requirement to pay self-employment taxes while employed at the International Monetary Fund. He provided documentation showing that he has subsequently fulfilled these tax obligations and gave assurance that this mistake did not reflect an intentional disregard of the law.
The job that awaits Mr. Geithner is an extremely tough one. I continue to be deeply concerned by our nation’s current economic crisis and believe that our next Treasury Secretary needs to possess broad financial expertise to meet the enormous challenges that await him. Years of regulatory neglect and corporate excess have both damaged the foundation of our financial system and destroyed consumer confidence in our markets. It is my hope that Mr. Geithner will use his cabinet position to take immediate positive steps to address our country’s economic problems by restoring and enhancing the integrity that our financial system has lost.
Thank you again for writing.