Two Obambites face some confirmation trouble. One has been bitten in the ass by his résumé:
Tim Geithner’s new nominee for number two at the Treasury Department, Neal Wolin, played a key role in drafting legislation in the late 1990s deregulating the banking system, a former Treasury Department official confirms to us.
The law that Wolin helped draft has been blamed by some critics for easing up regulatory pressure on huge financial institutions, tangentially helping create today’s mess — and his role drafting it could come under questioning at his upcoming confirmation hearings.
Our reporter, Ryan Derousseau, came across Wolin’s role in researching our big profile of Wolin at WhoRunsGov.com. Stuart Eizenstat, a deputy Treasury secretary under Bill Clinton, confirmed that as Treasury’s general council at the time, Wolin “provided the technical and legal drafting” for the Gramm-Leach-Bliley Act.
As Ryan writes, the Act hasn’t been directly blamed for today’s meltdown. But it did pave the way for the birth of huge financial companies like Citigroup that were deemed “too big to fail” when their mortgage bets went belly-up and the credit market evaporated. The government, of course, had to bail out these institutions with billions in taxpayer dollars.
Meanwhile, a Cabinet-level nominee faces—you guessed it!—tax questions:
Health and Human Services nominee Kathleen Sebelius has corrected three years of tax returns and paid more than $7,000 in back taxes after finding “unintentional errors”—the latest tax troubles for an Obama administration nominee.
“Unintentional.” Of course.
