Staff Trouble At Treasury Department?

By Jennifer Parker

Mar 6, 2009 1:23pm

Obama administration officials are pushing back hard at critics who argue that failure to fill key Treasury Department positions is hampering their response to the economic
crisis. The Obama administration has argued that they have more appointees in place than previous administrations and have done big things: housing, stimulus, and the beginning of their bank plans. But in the wake of last night’s news that the top two candidates for key posts have withdrawn, White House and Treasury aides are promising to "expedite" the nomination process and have a slate of candidates before the Senate "very soon." As I reported last night, Annette Nazareth was forced to withdraw from consideration for the deputy treasury slot because senators made it clear she would face tough questioning over her time at the Securities and Exchange Commission — tenure that overlapped with the agency’s failure to catch Bernie Madoff.    The candidate for Undersecretary for International Affairs, Caroline Atkinson, was told she had to withdraw after a "tax problem" was revealed early in the vetting process, according to officials. Now the man in line for Deputy Secretary — Sullivan & Cromwell Chairman H. Rodgin Cohen — has his nomination complicated by his work for blue-chip Wall Street clients.  The experience that enhances his ability to do the job is also making it harder for him to get it. Like the new Deputy Secretary of Defense, Bill Lynn, he is likely to need a waiver from the strict conflict of interest standards set by President Barack Obama.  "That’s what you get when you run as a good government type," said one Senate source.  "No one can meet the standard they set for themselves," added another. An administration official concedes that "it’s not easy to find qualified people who don’t have conflicts"
adding that "dozens of candidates" across the government have been forced to pull out because they
couldn’t meet the Obama standard or overcome "nanny tax" and other vetting issues.  But even though more waivers will be necessary, there are no plans now for a broader reconsideration of the ethics regulations.  "How do they do it in a face-saving way?" asked one Obama ally.  One official in the financial services industry suggested they should find a way, comparing it to a life-and-death situation. The official told my colleague ABC’s Matt Jaffe, "If a patient was having a heart attack, then even if the best cardiologist available is a jerk, you would still want that doctor operating on the patient." –George Stephanopoulos

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