Hypothetical ethical quandary of the day

By Felix Salmon
June 12, 2009

Let’s say you’re empty-walleted Tim Geithner, and a senior Citigroup executive offers to buy your home — currently being rented out for rather less than its monthly cost — for the full asking price of $1.575 million. Naturally, you suspect that your identity is responsible for the fact that the buyer isn’t looking to haggle over the price. What do you do?

(Thanks to Jon Weil for the inspiration)

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Comments
10 comments so far

You tell said Citigroup executive that to accept such an offer would create the appearance of impropriety, and that the only way you could complete the transaction was if a third party that was apparently unconnected with Citigroup (wink, wink) made the offer.

You refuse, and then Citi would suggest having an intermediary arrange the purchase, which you would then tacitly accept.

Posted by greg | Report as abusive

I commented on several blogs when this story broke that we should look closely at who agreed to rent that place for $7500/mo. It looks like a perfectly lovely place, but there are tons of similar houses on the rental market for less.

And let’s face it, Timmy is pretty much screwed since anyone who could afford the place is likely to work on Wall Street or in a related industry (law firm, consultancy, etc.). His place should be put into a blind trust until he leaves office, and the government should cover his mortgage. As a taxpayer I’d rather pick up this expense than have him “grateful” to someone he has power over.

Posted by Kelli K | Report as abusive

You refuse. It would present the appearance of impropriety. And because he could never be sure that it was a geniune offer, assuming it was, he still has to pass for the same reason. Anyone trying to find a technicality to get the deal done is missing the point.

Why you mail the keys to the bank of course.

An honest man in this situation would insist that the property be rented at fair market value. It is really a very easy question to answer.

Posted by benjamin k. | Report as abusive

You refuse. You tell the senior Citibank executive that in renting the house out for less than its monthly cost, you have found out that Turbotax allows a sizeable tax deduction. Just before the Citibank executive leaves, you tell him to go to the kitchen, get himself some liquid refreshment, and empty the money in the briefcase into the empty freezer compartment.

Posted by Rick | Report as abusive

You keep renting it at $90k/year and make sure you make an honest error in reporting the income at TurboTax time. After a refi at 3% with Citi of course.

Posted by Thomas Pindelski | Report as abusive

You have a couple of Japanese nationals smuggle $135 billion in untraceable Treasury bearer bonds in the false bottom of a suitcase to your Citibank contact in Italy. A mysterious Italian who is rumored to be dating Anne Hathaway then purchases your home and remodels it to the hilt.

If that fails go to Plan B.

Posted by Ken | Report as abusive

Turn the property over to a blind trust with instructions to disburse to Mr. Geithner no more than $7,500 per month and disclose no details of any transactions or potential transactions until one year after any potential conflict of interest is removed.

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