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February 14, 2013

Treasury Pick Jack Lew Questioned on Citigroup Bonus, Cayman Islands Investment 
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President Obama’s pick for treasury secretary faced questions over his
Wall Street past at a Senate confirmation hearing Wednesday. Jack Lew
defended the bonus of nearly a million dollars he received while working
at Citigroup just a few months after the bank got a taxpayer bailout
worth billions. He was also questioned about his investment of tens of
thousands of dollars in a Citigroup fund listed at a building in the
Cayman Islands that Obama himself has referred to as "the largest tax
scam in the world." While at Citigroup, Jack Lew oversaw a unit that
reportedly profited off the housing crisis by investing in a hedge fund
which bet in favor of the collapse. Among those to question Jack Lew was
Republican Senator Orrin Hatch of Utah.

Orrin Hatch: "You have stated that you support the Volcker Rule, yet you
were the chief operating officer over two units that engaged in the sort
of activities the Volcker Rule is meant to prevent. Therefore, if you
were to be confirmed, it could lead to an awkward situation in which
your role as chair of the FSOC (Financial Stability Oversight Council)
— as chair of the FSOC, you would effectively be saying to
financial firms, 'Do as I say, not as I did.'"

Jack Lew: "I was not in the business of making investment decisions. I
was certainly aware of things that were going on. I was working in a
financial institution. I learned a great deal about the financial
products, but I wasn't designing them and I wasn't opining on them."

Lew served as Obama's chief of staff before being nominated for the post
of treasury secretary.

 

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