[Congressional Record Volume 155, Number 176 (Tuesday, December 1, 2009)]
[House]
[Pages H13378-H13383]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE RULE OF LAW

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Texas (Mr. Carter) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. CARTER. Mr. Speaker, again tonight I rise here to talk about the 
rule of law and the fact that there are those in our society who seem 
to want to circumvent the rule of law and think because of their 
position either in Congress or in the government that the law shouldn't 
pertain to them the way it pertains to other Americans, that they 
should be treated specially. And even though our President stated that 
he didn't think that that's what the American people--that he was going 
to fight to make sure there was no special treatment for people other 
than everybody get treated equally, we've still got this issue going 
on. And I've been talking about this, and I've been talking about 
Chairman Rangel and his issues with the tax folks and about how the 
rule of law didn't seem to apply to him, and tonight I am going to talk 
about Secretary Geithner, the Secretary of the Treasury.
  Before I start talking about this, I was thinking, as I was sitting 
here listening to people talk--and everybody was very informative--that 
there may be people who really don't understand what I say when I talk 
about the rule of law.
  The rule of law is a very basic concept. It is a prevailing concept 
that holds our Republic together here in the United States. But in 
truth and fact, the whole world seeks a system where the rule of law 
prevails, because it is that system which gives recourse to the 
ordinary person. So let me just point out some of the things that we're 
talking about here tonight that the rule of law is part of.
  When I say ``recourse,'' the average American citizen, if someone is 
breaking into their house, if they hear a burglar prying open the back 
door of their home, they call 911 and ask them to send out a police 
officer or a sheriff's deputy or someone to protect their home. And 
they know that we have procedures whereby that officer has the 
authority to come in and make an arrest of that person, to protect the 
homestead of the person that is being violated. They know that there's 
someone they can call who will help and that there are rules that the 
society they live in has established so that they get treated fairly in 
being protected by the law. And the person who is accused of breaking 
the law is also treated fairly, because they know that we have rules 
that we have all agreed upon. These are the rules that our society will 
follow. That is the rule of law.
  When we talk about Afghanistan--which is an issue that probably, as I 
am speaking, the President is speaking on some other channel about 
this--the issue, when you're talking about counterinsurgency cut down 
to its finest point, is establishing the rule of law in a war zone, if 
you will. We did it in Iraq. And basically we did it with a civil 
principle which we've used in New York City to lower the crime rate. We 
used it in Philadelphia to lower the crime rate. Big cities have used 
it from time to time everywhere, and that is community policing. That 
is the idea that there is somebody in your neighborhood you can turn to 
and say, ``Help me. I need your help.''
  And really, counterinsurgency is using the military to train up the 
local folks in their police force and their army so that their citizens 
know that they can be protected by their police force and their army 
and their court system and their government from those who would do 
them harm. So they don't have to look to the strongest guy in the 
neighborhood--which may be the Taliban--to protect their interests; 
they can look to the government and the society that's been established 
by that government.
  And counterinsurgency is basically putting American forces and 
indigenous forces in place in neighborhoods all over Afghanistan so 
that the Afghan citizens realize there's someone there permanently to 
make sure that they are treated right and treated fairly. And so it's 
the beginning of the establishment of the rule of law.
  We in the United States have been blessed for our entire history with 
a rule of law. And, in fact, we don't salute a king. We don't salute a 
dictator. We don't salute an individual that sovereignty comes from 
that individual. We salute a document.
  When those of us who are fortunate enough to be elected to Congress 
and are able to serve our constituents back home here in Congress and 
we have the opportunity to be here in Congress, we stand up and we take 
an oath. And that oath is to the Constitution of the United States, 
that we will preserve, protect, and defend that Constitution from all 
enemies, foreign and domestic, because the Constitution is that set, 
beginning set of rules of law that we established this Republic under. 
So we are a very blessed Nation. We started with the rules of law.
  Today, in many nations around this world, there are still folks who 
don't have some rules that they can feel comfortable will be there to 
protect their society. And a lot of what happens when you create a 
counterinsurgency force like we're doing in Afghanistan, we're 
establishing that security for those people who live in that country. 
So that is a little bit off subject, but it gets you to the idea of how 
important it is that a people, whoever the people are, wherever they 
exist on this Earth, have some set of rules they can feel they will be 
treated just like their neighbor next door or the guy clear across the 
country. They're going to be treated fairly, they're going to be 
treated well, and they're going to have a source that they can get 
recourse for something that happens to them. It is a very simple 
concept, but it is the foundation concept of a civil society, of a 
society that functions properly.
  And one of the things that offends the rule of law and that has 
offended Americans at every stage of our history is when there are 
those who think, The law doesn't apply to me. It applies to you, but it 
doesn't apply to me. I am more important than you. I am a big shot or I 
am a powerful person or I am a rich person, so the law doesn't apply to 
me. It applies to you.

                              {time}  2000

  And there are always going to be those misdirected people in any 
society who feel that way. But it is our duty when we see people who 
are taking that position or where a group of people is taking that 
position on behalf of a individual, that they are above the law, they 
are above being treated the same as you might be treated or that I 
might be treated, they are special, they should have special treatment.
  Let me show you what the President said about that. President Barack 
Obama on February 3, 2008 said, ``I campaign on changing Washington and 
bottom-up politics. I don't want to send a message to the American 
people that there are two sets of standards: one for powerful people 
and one for ordinary folks who are working every day and paying their 
taxes.''
  That is what the President of the United States said about the rule 
of law as it pertains to what he wanted in his Presidency.
  There are lots of laws in the United States that pertain to all of 
us. Most of us don't feel pressure about most laws. The vast majority 
of Americans citizens are very law abiding. They do what they are 
supposed to do. They may speed once in a while, and occasionally they 
get caught and they expect to be treated like everyone else. And they 
may do some other minor things that they shouldn't do. But the truth is 
the American people, we are very law-abiding people.
  But there is one area that we are all affected by every day, and I 
would argue that many of us in this country fear, and that is the area 
of the Internal Revenue and our taxes. Quite

[[Page H13379]]

frankly, our Tax Code would just about fill this giant room, and we all 
wonder if anybody could possibly know what is in the Tax Code; and yet 
we are all supposed to fill out a form and pay our taxes every year. 
That is why people go to CPAs to help them with their taxes, because 
they are worried that they might not get it right and they might be 
punished for not getting it right. Some of them even worry that they 
might go to jail for not getting it right.
  So Americans very diligently spend large amounts of their income 
every year to make sure that they get their taxes right. That goes for 
the ordinary guy and for the Ph.D. at the major university, the 
smartest guy in town. They all have to deal with the IRS and make sure 
that they do things right.
  Well, everybody makes mistakes and sometimes somebody is going to 
make a mistake. Some people make those mistakes unintentionally; some, 
they intentionally do something wrong. The Tax Code has punishments to 
fit those individuals.
  But what I want to talk about tonight is the fact that the man who is 
the Secretary of the Treasury of the United States, he is the man who 
is in charge of our money and in charge of our tax system. The IRS 
reports to Secretary Geithner. Secretary Geithner did not pay some 
taxes that he was supposed to pay. So let me talk to you a little bit 
about that.
  First, let me explain to you what happened with Mr. Geithner. Mr. 
Geithner has a master's in international economics from Johns Hopkins 
University. He is a director of policy development and review for the 
International Monetary Fund, a senior fellow on the Council of Foreign 
Relations. He is the U.S. Treasury Secretary, the head of the Internal 
Revenue Service. The specific tax violation he had was he failed to pay 
Social Security and Medicare taxes on the IMF earnings for tax years 
2001, 2002, 2003, and 2004. The total liability that he owed was 
approximately $43,200.
  Now so you understand what this is, the International Monetary Fund 
was paying him separate and apart from what he is doing, and he has to 
be treated like self-employed. A self-employed person has to pay not 
only his share of payroll taxes, but he has to pay the employer's share 
of payroll taxes because you are self-employed. Self-employed people 
pay the employer's share of payroll taxes, which is basically Social 
Security and Medicare, and they pay their own share. If you look at 
your check, you will see your payroll taxes and how much you pay every 
month to the government.
  Well, when you are paid by the International Monetary Fund, they give 
you a check every month or every year, I don't know which it is. It 
tells you how much you make and how much income taxes they paid on your 
behalf, and they tell you on that document you are responsible for 
paying your payroll taxes. It is not like someone didn't tell you. You 
read it when you get your check, when you get your statement about your 
income. You read it and it tells you, you have to pay this. We didn't 
take this out. You have to pay it.
  Quite frankly, Mr. Geithner signed off on that document every year 
that told him that. And that part of the money he was being paid was 
for the purpose of paying these things. He has admitted that he made a 
shortfall in doing this. He said it was a mistake. He made a mistake. 
He had a signed statement. He signed a statement acknowledging that he 
owed the tax. He paid the taxes. His position with the IMF and his 
education specifically dealt with the issues of Social Security and 
Medicare, system integration in the world economy. He paid his taxes, 
but he didn't pay any--I think he paid his interest on the taxes--but 
he didn't pay any penalties on the taxes. But if you and I had done the 
same thing that Mr. Geithner did, we would have paid penalties.
  The United States 14th Amendment is the equal protection clause of 
the United States Constitution. It states, among other things: nor 
shall any State deprive any person of life, liberty or property without 
due process of law, or deny any person within its jurisdiction the 
equal protection of the laws. Equal protection of the laws.
  When we are talking about property, money is property just like land 
is property. Now, the IRS has lately decided to establish certain back 
tax penalties that you have to pay for failing to pay your taxes. And 
in fact they have got a program going on right now where they are 
saying to people who have made money offshore, if you come in and give 
yourself up because you earned some money offshore that you should have 
paid taxes on and pay those taxes, we will make you a deal and we will 
set out in black and white what your interest and penalties are going 
to be.
  This is about penalties. Offshore depositors amnesty offer, what they 
promised to give them if you turn yourself in, only 20 percent of the 
amount will be for penalties. Offshore depositors without amnesty would 
pay 50 percent penalty. The standard taxpayers' negligent disregard, 
that means he was negligent and disregarded what he should owe, is 20 
percent. A standard taxpayer that defrauds the government, the 
penalties are 75 percent. So that's the rules that are supposed to 
apply to every American and every American entity, including 
corporations, partnerships, and so forth.
  Secretary Tim Geithner paid zero on $43,200 in taxes that he didn't 
paid. Chairman Rangel paid zero. It seems that some taxpayers appear to 
be more equal than other taxpayers. That's what President Obama told us 
this administration is all about. No two sets of standards, one for 
powerful people and one for ordinary folks. That is what we are talking 
about in the rule of law. That is why I come down here and talk about 
the rule of law because quite frankly it is supposed to pertain to 
every one of us. Every one of us is supposed to be treated equally. 
And, quite frankly, there may be individual citizens that can negotiate 
this out, but we have asked the questions and we don't have the answers 
as to why they haven't paid this.

  I have written letters to Chairman Rangel asking him to pay the 
penalties and interest. I got no reply. A good explanation would 
probably have prevented all of this, I don't know.
  The same thing for Mr. Geithner. He has been asked in committee about 
this, and he said they didn't assess any penalties. That is kind of 
like saying the boss didn't punish himself for his malfeasance. I'm 
sorry, that's like the judge shouldn't punish himself if he did 
something wrong, and that is not how we operate in this country. People 
in authority should not be able to give themselves a break because they 
have authority over the agency that regulates and should regulate their 
behavior when they have violated the rules.
  That is not what the rule of law is all about. That is not what we 
are trying to teach people in Iraq and Afghanistan with our military 
forces risking their lives to establish for them the safety and the 
assurance that the individual citizen in those countries will be 
treated fairly and will have somebody they can turn to to make sure 
that they are treated fairly.
  This body, this Congress of the United States, should be about making 
sure that everybody is treated fairly. We should be about maintaining 
the oath that we took; and that oath said we will preserve, protect, 
and defend the Constitution of the United States. The oath we take in 
Texas is not only for the Constitution of the United States, but it is 
also for the State of Texas and the laws pertaining thereto. And that 
is our job. When we see things like this, we should be upset about it. 
We should be concerned about it.
  We have introduced, or are going to introduce, a bill in the Congress 
that we are going to call the Geithner Penalty Waiver Act. This bill is 
to provide the same penalty rate for taxpayers who voluntarily disclose 
unreported income from offshore accounts as was afforded Timothy 
Geithner with respect to his failure to pay self-employment taxes with 
respect to his compensation from the Monetary Fund. The law pertaining 
to section 1401 of the Internal Revenue Code of 1986, the key word 
``same penalty.''
  This formally recognizes the legal precedent already established by 
the IRS's treatment of U.S. Treasury Secretary Tim Geithner. So what I 
am saying in this bill that we are going to offer is basically, to all 
of these tax cheats that they seem to be talking about in the IRS right 
now that are offshore, if they come in and voluntarily do what they 
said they should

[[Page H13380]]

do, let's treat them like we treated the chief tax man of the United 
States, the top tax guy, treat them like him.

                              {time}  2015

  That's only fair. If he doesn't have to pay the penalties and 
interest, if he gets off from those penalties, I don't think any other 
people should have to pay penalties. Because the truth is, we want to 
do what the President said. We don't want there to be one set of laws 
for important people in Washington and another set of laws for the rest 
of the people in America and those who earn income that are Americans.
  It's only fair. It's like the Rangel rule. If you haven't paid your 
taxes, you can write ``Rangel rule'' on your tax form and won't have to 
pay any penalty and interest--until Mr. Rangel does anyway. This is the 
same concept, it's the same indicator, that there are those, and they 
are in positions of very high power related to our tax structure, that 
are being treated differently from the ordinary American, the ordinary 
Texan that works in the oil fields or works in the computer industry 
and he fails to pay taxes or he is late on his taxes. He gets penalties 
and interest. And he pays them, just like any other taxpayer in the 
country.
  When the IRS says you owe penalty and interest, you might question 
them. When they show you that you owe them and show you the law that 
pertains to you, we pay them, even if we have to work out a payment 
schedule, but we pay them. We don't get, Oh, well, I forgot who you 
were. Oh, I'm sorry. You don't have to pay penalties because I didn't 
realize you were the Secretary of the Treasury. I didn't realize you 
were the chairman of the Ways and Means Committee, so just don't worry 
about it.
  We don't get treated that way. I don't get treated that way. And I 
would argue that no Member of this House gets treated that way, with 
certain exceptions, and those exceptions are not right. And this 
political correctness we got going in this country, there are things 
that are right and there are things that are wrong. And you have to 
stand up and say, That's not right. That's what we're supposed to be. 
That's what we're supposed to do here. That's why we're here.
  And I'm sure somewhere in this country today, as I'm speaking, 
there's some family that is almost sweating blood in their relationship 
with the Internal Revenue Service trying to figure out how they're 
going to meet the obligations. In some instances, people have messed up 
so bad in neglecting to pay their taxes that the penalties and interest 
are as much or more than the taxes that are owed. And sometimes this 
can be so onerous on a family, it can literally destroy that family 
because everything they have, or just about, is subject to a tax lien 
to be seized by the government and to be sold to force the payment of 
these things. This is serious stuff that happens to American citizens 
when they don't pay their taxes. And they all know that. Everybody here 
knows that. And everybody that might be watching this, they understand 
that failing to pay your taxes is serious business. It can be horrible 
for you and your family.
  I don't want anything horrible to happen to Mr. Geithner, and I don't 
want anything horrible to happen to Mr. Rangel. But I want them to be 
treated like everybody else in the United States that's out there 
today. I want them to have to meet their obligations to our country 
just like every American citizen has to meet their obligations. And I 
will promise you that there are probably thousands of Americans out 
there today that are worrying where and how they are going to keep 
their family under the roof with the tax burden and the penalties and 
interest that have fallen upon them as a result of their failure to pay 
taxes. It's just not fair. It's just not fair.
  More importantly, if you waive the rule for somebody because they're 
important, they have a title, they are special because you elected them 
or because somebody you elected appointed them to a job, this law 
affects every American in the country, the tax law. And so do all the 
other criminal laws and the other rules in this society. Are you going 
to let them get away with waiving those other rules, too?
  We have talked some about this. We have had issues right here in this 
Congress about the President of the United States and the White House 
interfering in the rule of contract, and that's making sure that 
certain laws don't count for certain people. And that's not right.
  When we had the takeover of the automobile industry, when they said 
the unions get their deal but the bondholders don't get their deal, 
they circumvented the law. Special privileges were given to special 
groups. That's wrong. We can't let this continue in this country. We 
can't continue to let the powerful dictate outside the law. Because 
where does it stop?
  I see that my friend from Georgia (Mr. Westmoreland) is here to join 
me, and I'm proud to have him here, so I will yield to him for comments 
he may have on this subject.
  Mr. WESTMORELAND. I want to thank the gentleman for yielding and for 
having this special hour. I did want to comment that we are all 
supposed to be treated equally in this country. It doesn't matter if 
you're a mayor, a city councilman, a State representative, a State 
senator, whatever, whatever you're elected to or appointed to, you 
should be treated the same as every citizen in this country.
  I guess it was back in February of 2009 that President Obama made a 
statement, and I don't know if the gentleman from Texas has talked 
about this yet or not, but I think this is what the American people 
were looking for when they elected President Obama because of what he 
had said on the campaign trail and what I believe people believed to be 
the truth. I think he was sincere in saying that there would be hope 
and change. And I think some of the change that people were counting on 
was to change politics as usual or how they had perceived politics in 
Washington. Because as the gentleman from Texas knows, in politics, it 
doesn't matter what the truth is, it's what the perception is. And 
right now, as I travel around the country, and I'm sure as the 
gentleman travels through his State and across the country and even 
into other lands, we hear that, What's wrong with Washington? Why is it 
that you've got all these different people being accused of these 
different things of getting special treatment?
  The President said, ``I campaigned on changing Washington and bottom-
up politics. I don't want to send a message to the American people that 
there are two sets of standards, one for the powerful people and one 
for ordinary folks who are working every day and paying their taxes.''
  Now that was a quote from President Obama on February 3, 2009. I'm 
sure as the gentleman mentioned I think in his previous slide about the 
IRS employees, these are the employees that are under Secretary 
Geithner, and what it says is ``willful failure to file any return of 
tax required under the Internal Revenue Code of 1986 on or before the 
date prescribed therefor (including any extensions) unless such failure 
is due to reasonable cause and not to willful neglect.''
  And we know, from at least the testimony that we've heard, that this 
was willful neglect, that he had actually been reimbursed this money by 
the company that he was working for. And so I think it was neglect, and 
I think this needs to be looked at. I'm not sure what committee or 
jurisdiction or whatever that this would come through, maybe the 
gentleman from Texas knows, but this should be something that we demand 
of somebody that holds an office like Secretary of the Treasury. I 
have filed for extensions, as I'm sure many people have filed for 
extensions, and I have never yet had the same treatment or had any 
constituents that's had the same treatment as the Secretary of the 
Treasury and while his dealings have been with the Internal Revenue.

  I will yield back to the gentleman.
  Mr. CARTER. This IRS Restructuring and Reform Act of 1998, section 
1203, termination of employment for misconduct, IRS employees can and 
are terminated for just what my friend from Georgia just read to you, 
willful failure to file a return or willful neglect.
  Mr. Geithner is arguably the head of the IRS. All those beneath him, 
from the director of the IRS all the way down to the guy who answers 
the phone and helps you work on your tax return, if any of those 
employees do what Secretary Geithner does, by law, it says

[[Page H13381]]

they can be and are terminated for this action.
  Should the Secretary of the Treasury have to comply with the same law 
as the regular IRS workers? Some employees appear to be more equal than 
others. That is, if you're the boss, you don't have to comply, and this 
mandatory fine doesn't pertain to you.
  Recently, Kevin Brady of Texas called upon the Secretary of the 
Treasury to resign. And on this issue, I think if there was someone 
besides the President, I guess the President is above the Secretary of 
the Treasury, but based on following the same rules that his employees 
follow, he would be terminated under the law, the IRS Restructuring and 
Reform Act of 1998.
  So you want to know where that rule of law is, there's the rule. And 
there's what happens--terminated. Except for Mr. Geithner.
  Mr. WESTMORELAND. If anybody was watching us tonight, they might 
think that this is some type of partisan thing that we have. It's not. 
In fact, it goes well beyond that. In a posting of November 17, 2009, 
the Huffington Post, which is no conservative posting, had a comment. 
It said:
  ``But for his personal tax problems, Tim Geithner would have been a 
consensus choice of Wall Street for Treasury Secretary last fall. Yet 
from the outset, Mr. Geithner's appointment compromised the Obama 
administration-to-be's credibility on ethics. The Treasury Secretary 
has become a continuing liability for this President.''
  So even the most liberal of the blogs and the Web pages understand 
that this goes against the credibility of what this administration has 
said about it was going to change Washington. And as the gentleman 
knows, it's not just this appointment, it was other appointments to 
where he had to issue waivers of what some of his administration rules 
or promises were to allow other lobbyists or people to be not only in 
his Cabinet but appointments of his. I think that it's not just the 
conservative world or does it have anything to do with partisan 
politics, I think that everybody, and it seems like especially those 
that voted for him, are calling Mr. Geithner's credibility into account 
with the administration.
  I think the ultimate bearer of responsibility on this is the 
President and the administration and I would like to know if he is 
getting any advice as to why this Secretary is getting special 
treatment. I just don't think that that's what the American people felt 
like we were going to get after this last election.
  Mr. CARTER. I'm an old history buff. I believe that you learn from 
history. And in recent history, in the Clinton administration and in 
the George W. Bush administration, there were prospective Cabinet 
members who it was discovered had a domestic working for them that was 
possibly without papers to be in the United States and it caused them 
not to get confirmed for that position, because why? They were 
violating the laws as pertaining to illegal aliens. The rule of law. 
The Labor Secretary under the Bush administration had a domestic that 
was from another country that didn't have appropriate papers and 
withdrew the name because the rule of law wasn't being followed in her 
household. Inadvertently. I'm not saying he did this to be mean, 
vindictive or cheat the American public. That's kind of between him and 
the IRS, but I'm saying it happened and he admits it happened. And yet, 
for some reason, the rule of law is not an interference for him being 
Secretary of the Treasury. And yet in two previous administrations, 
violating a rule of law has prevented people from becoming a Cabinet 
member.
  I think we should be concerned as we look at the Obama administration 
that gave us such glowing promises about nobody is going to be treated 
differently for their position, to start off and now have a whole year 
of people in positions where they violated the rule of law and they 
don't think it applies to them.

                              {time}  2030

  Now I'm sure that somebody sitting out there is saying, Oh, come on, 
this isn't a big deal. My question is: Where do you draw the line? You 
back out there at home and most of the Members of Congress and their 
wives and children here in Washington, we know how scary the IRS can be 
if they're calling you and sending you letters and talking about tax 
liability and talking about tax liens and things like that, how scary 
they can be. And maybe that law doesn't scare everybody, but it sure 
scares me and a whole lot of people I know.
  Now there's other laws that are even more serious, and you would say, 
Well, they can never be waived. They can never not pertain. How do you 
know? Once you decide that there are people that are above the law in a 
country, how far above the law do they have to go? Can they commit 
embezzlement? Maybe. If they're smart, swindle somebody a little bit. I 
don't know. How about murder? Are you going to waive the law as to 
murder? Just pick a bad one--that's a pretty bad one--and say, Does 
this pertain to everybody in the country equally? It certainly should.
  But if you're willing to excuse one law at whatever level, then where 
do you stop excusing? Does somebody get so powerful and so important in 
this country when you set this kind of precedent--that somebody gets so 
powerful and important that we waive those other laws on their behalf? 
They can break our established laws, and we will waive it because 
they're so important to our country. We've got to have them, no matter 
what? I don't think so. I really don't think so.
  I really think that's the kind of precedent that you saw starting in 
one of the most law-and-order places on Earth, Germany in the 1920s. 
And look what happened when they excused one law and then another and 
then another and then another. And then if you were a certain party 
member, it didn't pertain to you. And if you were a certain official, 
it didn't pertain to you. Then, they made the laws. That's not America.
  We have to preserve the rule of law. I think my friend understands 
this seems to be going way off, but it's not way off. Once you start 
saying it's okay to do something that's breaking the law, then where do 
you draw the line at the next thing? Is not paying your taxes and not 
having the law apply to you here, does that mean the next step is you 
might take stimulus money and stick it in your pocket? Or you might do 
something else and we will excuse that because they're really important 
and they're trying do a good thing for the country, and keep going and 
going--and what do you have? Lawless society.
  I yield back to my friend from Georgia for a comment.
  Mr. WESTMORELAND. I thank my friend for yielding. Let me just say 
this; that there were several appointees that the President made after 
his election and it was discovered that they had tax problems. One 
former Senator that was looked at for the Health and Human Services 
Secretary excused himself because he had tax problems. There were other 
people that had been appointed that had tax problems that excused 
themselves.
  We need to point out, I think, to my friend from Texas that Mr. 
Geithner's problems were pointed out prior to his approval or 
confirmation by the Senate.
  Mr. CARTER. That's right.
  Mr. WESTMORELAND. And so this brings in another whole new question. 
Is this something that we're going to accept? Is this something that's 
supposed to be accepted? I just don't think so. I think of our 
brethren--I think it was a mistake on their part when they knew exactly 
what had gone on, and they still went ahead with the confirmation 
process, whereas they should have just continued to ask questions and 
got more information on this.
  But I think it talks about character when the people that were under 
nomination--I mean, let's face it. It's quite an honor to be nominated 
to serve in the Cabinet of any President in this country. What an 
honor. But with that comes some personal responsibility. I think some 
of these nominees realize that what they were going to be doing was 
going to be a reflection on the administration. And not just the 
administration, but the rule of law, as you talked about, and how it 
affects and applies to everybody.
  And so it's with that that I think the gentleman from Texas has done 
a great job. And I've signed, I think, both of the pieces of 
legislation, the Rangel rule and the Geithner penalty waiver act. I 
think that's something that we can do to show the American people

[[Page H13382]]

that we want to see some equal treatment. But I just wanted to bring 
into account this personal responsibility that people have to 
recognize; that if they have done something wrong or gotten treatment 
that was unfair, if they just recuse themselves from the nomination.
  Mr. CARTER. And let me just be clear on this from what I previously 
said. By doing the Rangel rule, which basically says everybody else 
gets treated the same, it's to give you that equal protection under the 
law that we promise in our Constitution. I'm not saying it's the right 
thing to do. I'm saying the right thing to do is for Mr. Geithner to 
pay the penalties that everybody else pays. I'm saying the right thing 
to do is for Mr. Rangel to pay the interest and penalties that 
everybody else pays. But if that's a precedent being established by 
this administration at this time, then everybody ought to be treated 
equally. It's only fair.
  I will tell you it's probably a bad precedent. And I would argue 
that. I'll tell you that I don't expect this to pass. But I do expect 
us to raise the issue. And that's a way to raise the issue; to say to 
the American people just what the President said: There's no two sets 
of standards, one for the powerful and one for the ordinary guy who 
pays his taxes. It's exactly what this is all about. This is just as 
simple as those words from our President of the United States. There's 
no two sets of standards. If we are going to reinforce and continue to 
reinforce and not call into account the Secretary of the Treasury and 
the Chairman of the Ways and Means Committee, if we're going to 
continue to do that, then at some point in time these two bills that 
I've offered and that my friend has joined me in, that should become 
the law of the United States, because now we have decided that this 
particular offense is no longer a violation of the rule of law.
  So, from now on, we pay our taxes when we get around to it, and 
there's no punishment attached to it. Maybe that is fair. Maybe we'd 
all be happy with that. Probably would. But I'm not advocating that as 
good policy. I'm advocating good policy is everybody be treated 
equally. That's what I'm advocating.
  Mr. WESTMORELAND. Isn't it ironic that the chairman of the committee 
that writes the tax laws and the Secretary who is head of the Treasury, 
that is really the boss of the IRS, are the two with the tax problems. 
Mr. Rangel being chairman of the Ways and Means Committee, I felt it 
was interesting when he admitted that he didn't realize what the law 
was. I can't remember his exact quote, but basically he didn't realize 
that he was breaking the law. But from the constituents that have 
called me, and I don't know about the gentleman, what your calls have 
been like, they have told me that the Internal Revenue Service tells 
them that ignorance is no excuse.
  Mr. CARTER. That's right.
  Mr. WESTMORELAND. That ignorance is no excuse. It doesn't matter if 
you know that that was a tax law or not. If you don't pay, and if you 
don't file correctly, you're going to pay penalty and interest.
  Now the chairman also made a comment that he got his accountant to 
figure up what he felt like he owed and send the Internal Revenue a 
check for that. Now here, again, I have had my constituents tell me 
that they have never had the IRS tell them, Look, you just figure up 
what you think you owe us and send us a check and we're all square. 
They typically send a bill and tell you what you owe them, plus what 
the penalty is, plus what the interest is.
  Now it's up to the taxpayer to prove that they don't owe that. It's 
not the responsibility of the Internal Revenue to show you why you do 
owe that tax or why you do owe that penalty or interest. It's up to the 
taxpayers. It's the taxpayer's responsibility to tell you why you 
don't. So talking about the double standards. When you find yourself in 
that situation and you say, Well, I'll get my accountant to figure up 
what I think that I owe you, and I'll send you a check, and we'll all 
be square--that doesn't square with the typical taxpayer and how 
they're treated by the Internal Revenue Service.
  So we've got the gentleman that actually writes the laws and the 
rules that govern the IRS and what our tax code is that said, I don't 
understand it. But, according to IRS and every other citizen, ignorance 
is no excuse.
  Mr. CARTER. Reclaiming my time for a moment, that's exactly right, 
and I agree with my friend from Georgia. I will say this. This all 
started when Chairman Rangel stood at that podium right there and told 
us about his problems. And, actually, I took it as a very courageous--
if I had been his lawyer, it would have made me a little nervous--
statement by Mr. Rangel, that he was laying it all out in front of us. 
And nothing about what he said really concerned me. I thought he was 
trying to work through the issues and let somebody determine whether or 
not what he had done had been a violation of our ethic rules or the 
law. But he paid the taxes and he would pay penalties and interest, if 
assessed, and it popped into my head, There's no option. I have never 
ever known anybody to have an option. They're going to be assessed.
  You might bargain your way out of something, depending on the 
numbers. You might make a little bit of a deal of with them. I've never 
known anybody that didn't get the letter that my friend from Georgia 
just described that told you what the penalties are and what the 
interest is for what you have to pay. In fact, I think most CPAs that 
are doing your work for you are going to tell you, You should have paid 
on the 15th. You're going to owe some penalty, and you're going to owe 
some interest. Bottom line. When I heard that, I waited to see if that 
was going to occur. And when it didn't, that's how this all started.
  This also has an easy solution. It really does. That easy solution 
is: Pay the money. These are not poor people. Pay the money. Or at 
least show the world that due process had something to do with this and 
everybody has this opportunity to have this due process. I certainly 
think, at the minimum, when you're talking to that IRS agent who's 
talking to you about some taxes you failed to pay, you should very 
politely say, Can you explain to me how I go about getting treated the 
same way as Mr. Geithner and Mr. Rangel got treated by the IRS? Don't 
be insulting. Don't make those people mad at you. No telling what 
they'll do to you. Might audit you.
  Mr. WESTMORELAND. If you would yield for just a minute.
  Mr. CARTER. I yield back.
  Mr. WESTMORELAND. I was going to say that at least Mr. Rangel said 
that he had forgotten that he owned this property or that this rental 
income had come in. And so that was his explanation. Mr. Geithner, I 
don't think, had that same explanation, because if I understand the 
information correctly and the evidence correctly, he was actually told 
by that company that he was being paid this additional money to pay 
those taxes that was due from the money he had received. I'm not sure 
what the gentleman has got up there.
  Mr. CARTER. This is exactly what you're talking about. At the bottom 
it said--this is something that Mr. Geithner signed when he got his 
money from--his statements and all this stuff from the International 
Monetary Fund. In accordance with General Administrative Order No. 5, 
revision so and so and so and so, I wish to apply for a tax allowance 
from the U.S. Federal and State income taxes and the differences 
between the self-employed and employed obligation of the United States 
Social Security, and I will pay on my Fund income. I authorize the Fund 
or any of the staff members designated by it for the purpose of 
ascertaining from the appropriate tax authorities whether tax returns 
were received. And he certifies that he will pay those taxes.
  Mr. WESTMORELAND. Is that false swearing?
  Mr. CARTER. Well, that is false swearing.

                              {time}  2045

  Mr. WESTMORELAND. Isn't that against the law? I think it is in 
Georgia.
  Mr. CARTER. In Texas, that's against the law.
  I will stop. We're talking on top of each other. I'm sorry. I have 
learned a long time ago from court reporters that talking on top of 
each other is a cardinal sin for court reporters. I have

[[Page H13383]]

worked with them now going on 30 years of my life.
  Seriously, that is exactly right. There is another crime in false 
swearing on a Federal form. And you know what, it may be a mistake. I'm 
not saying Mr. Geithner wasn't so busy--he is a busy man--that he 
forgot. He forgot? Well, it's convenient. If you read the newspaper 
report, when they caught him on '03, '04, he took care of it.
  Now he should have had a memory jolt when he got caught on '03 and 
'04 that he really didn't do it on '01 and '02, but he didn't have that 
memory jolt. He paid that and then got ready to be Secretary of the 
Treasury. Somebody said, Oops. Wait a minute. What about '01 and '02? 
Well, he went back and paid that. So I don't know. It looks like 
special privileges to me.
  Once again, just like I started off saying, this is about the rule of 
law. It keeps our society together. And if we start waiving it for 
individuals or groups or whatever, once we start down that path, who 
makes that decision, and what does it do to the rest of us? Do we ever 
want to get into a situation like that which was gotten into in Nazi 
Germany and in Communist Russia where, for certain people, the laws 
didn't apply to them at all. For certain organizations, the law didn't 
apply to them. Do we want to go there?
  You say, That's crazy. It's like that leak in that dike over there in 
Holland that we got that story about. Once that little trickle past the 
rule of law starts, where does it stop? If you don't plug that hole, 
what happens next? It's what happens next that Americans seem to be 
worried about.
  I will yield back to my friend from Georgia.
  Mr. WESTMORELAND. Well, I just want to say this to my friend from 
Texas, in closing, I appreciate you taking the leadership on this. I 
know this is not an easy subject for you to broach every week when you 
come down here, but we have to be serious about this. We are a country 
of laws, and regardless of whether some people think they can disregard 
them or not, that's not the way we operate. We all fall victim to this, 
but I think it's our responsibility to continually point it out and to 
point the way that we need to be going on this. I just want to tell you 
how much I appreciate you doing this week in and week out. I feel 
honored to be able to join you tonight.
  Mr. CARTER. I thank you for joining me and being always loyal to come 
up here and help me out. I do appreciate that, and I appreciate the 
others that do too.
  I think it's time to wrap up our time here today by saying that 
you're right. There is nothing easy about talking about your 
colleagues. I'm the first to say that people make mistakes. I have made 
mistakes, and every human being that's ever been around, I think, has 
made some kind of mistake, with possibly one exception. I won't go into 
that.
  But the facts are that the rule of law is such an important part of 
keeping America what we are. You know, we brag about the land of the 
free and the home of the brave. We're only free and we only have the 
freedom to do the things we want to do because we establish rules that 
we're all willing to live by. So when you go out and you try to work on 
something, you know there are rules that pertain, and if you follow 
those rules, you can go forward. The only restriction that you have on 
your freedom to go forward in your life is that you've agreed to 
certain rules under the law. And you who abide by those rules should be 
horribly offended when some big shot, some politician gets special 
treatment.
  I don't want to be a part of a group where somebody is accused of 
getting special treatment. I don't think any Member of this House 
really wants to be in that position. It's difficult to talk about these 
things, but somebody's got to do it.

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