Trust Me

Tim Geithner, Obama's choice for Treasury secretary -- yea, the one who couldn't figure out he owed income taxes until he was nominated -- lobbied in Congress today, asking a House committee to trust him with unprecedented new regulatory powers to seize financial institutions whose failure would pose serious risks to the U.S. financial system.

There was some media coverage of this, but it quickly got drowned out by Obama's appeal to the masses tonight to support his massive budget. But here's what you probably didn't hear about Geithner:

Companies that had their hands out for the first go-round of taxpayer handouts had to sign a contract certifying that they didn't owe any back taxes. Geithner and the gang at Treasury were supposed to check out those statements, but they just took them at face value. Even though the IRS is part of Treasury, no one thought to check out the records.

As it would turn out, according to an Associated Press story, several of those companies lied. In a small sampling of the companies receiving the most money, at least 13 companies owe a total of more than $220 million in unpaid federal taxes. Rep. John Lewis, D-Ga., chairman of a House subcommittee overseeing the bailout, said two companies owe more than $100 million apiece.

The House Ways and Means subcommittee on oversight discovered the unpaid taxes in a review of tax records from 23 companies receiving the most money -- nearly 500 companies have received bailout funds. One company had almost $113 million in unpaid federal income taxes from 2005 and 2006. A second one owed almost $102 million dating to before 2004 -- before the bubble burst. And a third was behind $1.1 million in federal income taxes and $223,000 in employment taxes.

The committee asked someone from Treasury to testify on the matter in a private hearing last week, but the committee was told that no one was available.

Yet here we are today with Geithner saying "trust me." I don't think so.