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UPDATE 3-U.S. appoints Brainard top financial diplomat

* Brainard confirmed in bipartisan 78-19 vote

* Nomination stalled over a year on tax allegations

* Appointment coincides with China currency issue

(Adds Republican comment, context)

By Thomas Ferraro

WASHINGTON, April 20 (Reuters) - Lael Brainard won Senate confirmation on Tuesday as the Treasury Department’s top financial diplomat, giving her a key role in U.S. efforts to persuade China to adopt a more flexible currency.

The Senate approved President Barack Obama’s nominee in a bipartisan 78-19 vote that was stalled more than a year by Republican concerns over Brainard’s tax payments.

Nineteen Senate Republicans joined 57 Democrats and two independents in confirming Brainard Treasury Department under secretary for international affairs.

Brainard, who served in the Clinton White House, faced a probe into tax deductions she made for a home office, late payments of some property taxes and verification of legal status for household employees.

Treasury Secretary Timothy Geithner welcomed the confirmation, saying, “At this critical time for our global economic agenda, Lael’s leadership will help bolster our partnership abroad and increase economic opportunity for Americans here at home.”

The timing of the confirmation vote is significant as it occurs before meetings this week of the Group of 20, the smaller Group of Seven and the International Monetary Fund and World Bank.

Democrats say Republicans delayed appointment of a large number of administration officials to hold up Obama’s agenda. Republicans argue Brainard did not level with the Senate Finance Committee about her taxes and failed to mention she did not pay some on time.

“If we cannot trust Miss Brainard to be truthful and straightforward when she is a nominee, how can the American people trust her to be straightforward and honest when she is confirmed and serving in the Obama administration?” said Republican Senator Jim Bunning on the Senate floor shortly before the vote.

As well as holding a key position in talks with China, Brainard would help shepherd U.S. official positions through the global lending agencies that are being urged to take on a stronger role in monitoring global currency policies.

She will help Treasury prepare for the annual meeting in Beijing of the Strategic and Economic Dialogue, which occurs at a sensitive time as the Obama administration tries to keep momentum going for China to let its currency, the yuan, appreciate.

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