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Jack Lew Faces $1M Caymans Snag on Path to Treasury Confirmation

GOP Eyes Big Bonus While Working in Offshore Investments

By Reuters

(Page 2 of 3)

Washington — “We need a better understanding … of what kind of plan the Obama administration has to confront our skyrocketing debt and our broken entitlement programs,” said Senator Orrin Hatch, the top Republican on the finance panel.

Realistically, it does not appear Lew could win confirmation earlier than Feb. 25. After the hearing, the former budget chief will need time to respond to any additional questions senators may have and Congress begins a one week break on Friday.

That means the Senate would not be able to confirm Lew in time for him to attend a meeting of finance chiefs from the Group of 20 nations in Moscow on Friday and Saturday.

CITIGROUP AND THE CAYMAN ISLANDS

At the hearing, Republicans plan to zero in on Lew’s short stint at Citigroup. Lew, who has publicly said that he has scant expertise in financial markets, spent two years at the bank during Wall Street’s meltdown, earning a combined $2.65 million in 2007 and 2008, according to a transcript of his confirmation hearing in 2009 for a State Department post.

Hired with a recommendation from then-Citi executive and former Treasury Secretary Robert Rubin, Lew became chief operating officer of Citigroup’s global wealth management division in July 2006. He later became COO for Citi Alternative Investments, a largely administrative role that was apart from investment decisions that hurt the bank.

Republican Senator Charles Grassley said he will ask Lew about a $940,000 bonus he was given just before the bank received a taxpayer-funded bailout. The bonus came as Lew was getting ready to serve as a State Department deputy for the Obama administration.

“The Treasury secretary can’t owe anyone on Wall Street any favors,” Grassley, a member of the Finance Committee, said in an emailed statement. “He has to be independent from special interests and put taxpayers first.”