WASHINGTON — Revelations that Treasury Secretary-designate Tim Geithner employed an illegal immigrant and failed to pay self-employment taxes are likely to slow — but not stop — his nomination, according to lawmakers, ethics experts, and industry observers.
The Senate Finance Committee said Tuesday that Mr. Geithner failed to pay roughly $34,000 of taxes while employed at the International Monetary Fund from 2001 to 2005. Additionally, he employed a legal immigrant whose status lapsed for about three and a half months in 2005, the committee said.
Senate Finance Chairman Max Baucus characterized the errors as serious but said they were "honest mistakes" and should not sink Mr. Geithner's nomination.
"The country needs a Treasury Secretary quickly given the dire economic constraints we are in," the Montana Democrat told reporters. "In my judgment, these errors, although serious … do not rise to the level of disqualification."
It remained unclear whether Republicans would agree, but Sen. Baucus said other lawmakers on the committee appeared willing to support Mr. Geithner during a panel meeting on the issue Tuesday. "The mood in the room was very positive," the senator said.
Sen. Charles Schumer, D-N.Y., a member of the Senate Finance Committee, also voiced his support. "In my opinion, these mistakes were not at all disqualifying," he said.
Senate Majority Leader Harry Reid agreed Mr. Geithner's nomination was critical for the economy.
"During my meeting with Treasury Secretary-designee Geithner, it quickly became clear why President-elect Obama designated him to be a key player in our fight to turn around our deeply troubled economy and to help working families," he said. "He demonstrated a deep overall understanding of our economy and was particularly knowledgeable about our financial markets, including what led to the problems we face today and what we need to do to address them."
He said Mr. Geithner made "honest mistakes" and pledged to support his nomination.
"I continue to believe he has the skills the President will need to confront the challenges of our nation's economic crisis and I will support his nomination," Sen. Reid said.
Mr. Geithner has already moved to repair any damage done by the revelations. According to the committee, he paid the Internal Revenue Service $34,000 in back taxes as well as $8,679 in interest. The vast majority of the taxes owed were Social Security taxes, the committee said.
"The most significant tax concern identified is Mr. Geithner's failure to pay Social Security taxes during his entire tenure at the IMF, which began in 2001," the committee said in a report released on its Web site.
A spokesman for the Obama transition team said the revelations should not endanger Mr. Geithner's nomination.
The nominee made a "common mistake on his taxes and was unaware that his part-time housekeeper's work authorization expired for the last three months of her employment," the spokesman said. "We hope that the Senate will confirm him with strong bipartisan support."
Lawmakers expressed support for Mr. Geithner but said they wanted to look closer at the issue.
"We have to see whether there was any seriousness to the violations," said Rep. Paul Kanjorski of Pennsylvania, the No. 2 Democrat on the House Financial Services Committee. "If they are just very technical violations, then I'm not worried about it, but we're going to have to wait to hear."
Lawrence M. Noble, an ethics expert, said such disclosures have helped sink Cabinet nominations in the past, though each case is different.
"In all these situations, it really depends on how serious the issue is, how long it went on for, what it reflects, and the general political climate," said Mr. Noble, a counsel Skadden, Arps, Slate, Meagher & Flom LLP.
The severity of the allegations will depend on the details, he said. "It sounds like it may have been an honest mistake. On the other hand, these things can become political. We've seen small things get blown up before."
