There’s a certain pattern to these wounded-nominee stories. Bad facts emerge; the administration releases the talking points; their Senate allies rush to assure us it is no big deal; the media issues the “hiccup” or “bump on the road” pronouncements; the new President defends the nominee; and then one more fact comes out, causing everyone to rethink the “innocent mistake” facade and wonder anew whether the nominee should just spare everyone from the grisly hearing that is sure to follow.

The last fact in the case of Tim Geithner is his receipt of an annual tax-allowance with the proviso that he pay the applicable taxes, which he didn’t. In short, he pocketed the money and stiffed the Treasury. Byron York explains:

The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.

At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row.

According to an analysis released by the Senate Finance Committee, Geithner “wrote contemporaneous checks to the IRS and the State of Maryland for estimated [income] tax payments” that jibed exactly with his IMF statements. But he didn’t write checks for the self-employment tax allowance. Then, according to the committee analysis, “he filled out, signed and submitted an annual tax allowance request worksheet with the IMF that states, ‘I wish to apply for tax allowance of U.S. Federal and State income taxes and the difference between the “self-employed” and “employed” obligation of the U.S. Social Security tax which I will pay on my Fund income.”

In a conversation today with sources on Capitol Hill who are familiar with the situation, I asked, “Was Geithner made whole for tax payments that he didn’t make?”

“Yes,” one source answered. “He was getting the money. He was being paid a tax allowance to pay him for tax payments that he should have made but had not.”

Not good. It suggests either sloppiness and inattention of the highest order or an intention to get away with a small but significant act of dishonesty. Even the New York Times is peeved:

As much as Mr. Obama and his team may wish it, however, the disclosures cannot be dismissed so easily, or papered over. The just-the-facts report of Mr. Geithner’s tax transgressions, compiled and released by the Senate Finance Committee, paints a picture of noncompliance that is considerably more disturbing than his supporters are acknowledging.

As the Times and others point out, the annual allowance and voluminous paperwork which Geithner received and signed sheds further light on his failure in the 2006 audit to go back to pay the outstanding tax delinquencies from 2001 and 2002. Surely the IRS audit must have reminded him that he’d been working at the IMF and taking these allowances ever since he started in 2001. But he chose not to clear the liability. After all, it wasn’t technically required. This from an official then working at the Federal Reserve.

I don’t know how this will go down once the detail is mulled over by the Senators. In these situations it is interesting to consider what  the President-elect owes such people, when the drip-drip-drip of questionable ethics comes back to bite his embryonic-stage administration. I would suggest he owes them very little. If the President-elect was not entirely aware of the disturbing details coming to light, he should dump the miscreants and move on. Even if these issues were revealed but didn’t make an impression in the vetting office, now that they’re turning out more cringe-inducing than expected, it is perfectly reasonable for the administration to cut its losses and move on to the next candidate.

Roger Simon of Politico suggests this is what happened:

The vetters discovered Geithner’s little tax error in November and told Geithner. Then Geithner paid up, with interest. The vetters also told Obama, of course.

According to an article by Politico’s Craig Gordon and Amie Parnes, Obama “decided to push ahead with the nomination anyway because he ‘still wanted him.’”

At the end of the day, a source said, “Barack decided that he was the best person for a really important job.”

OK, I get it. The economy is teetering on the brink, and we need to cut corners a little. We can’t be all that scrupulous and nitpicky when the future of the nation is at stake.

So in November, Team Obama announced that Geithner had this little problem and was paying his back taxes with interest and that it was all an honest mistake and no big deal, right?

Wrong. They decided to keep it a secret. But The Wall Street Journal discovered it and blew the whistle Tuesday.

The Senate Finance Committee has been looking into Geithner — it has to vote on his appointment — and discovered something else.

According to Gordon and Parnes: “In addition, Geithner included payments to overnight camps in calculating his dependent child care credit in 2001, 2004 and 2005. His accountant informed him in 2006 that the camps were not allowable expenses. The committee notes that Geithner did not file amended returns to fix the mistake.”

Can I get this deal? Can I ignore my accountant? He is always telling me that my trips to Vegas are not allowable under “necessary mental health expenses” and, fool that I am, I keep listening to him.

The Geithner foul-up is different than the Bill Richardson foul-up. The Obama vetters were unable to get Richardson to give them all the background information they needed, but Obama went ahead and appointed Richardson to the Cabinet anyway. Then that blew up, and Richardson withdrew his name.

With Geithner, the vetters found the bad stuff — yay! — but everybody thought they could sweep it under the rug. Boo.

Now Republicans are forcing a delay on the Geithner hearing until after Obama is inaugurated.

The details do matter. It is one thing to make a “mistake on taxes,” and quite another to have pocketed an allowance and repeatedly declined to pay up in full, even after an audit. It is one thing to have made a “mistake” in recommending a pardon for a fugitive financier, and quite another to have misled Congress about only a “passing familiarity” with the issue. The extent and seriousness of the ethical lapses come out slowly in these things, until all those concerned realize it just might not be worth it. None of these people are so talented as to be irreplaceable.

If the President-elect did dump some of these nominees, everyone in Washington would perk up. It would be a signal that he and those around him finally understand that you shouldn’t expect to work in government if the average American would find your behavior inexplicable. Now that would be a change from the last eight years. One we could believe in, if ever delivered.