Treasury Pick Jack Lew Faces Senate Grilling on Caymans, Bonus

Confirmation Looks Certain Despite Big CItigroup Payout

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By Reuters

Published February 13, 2013.
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Jack Lew, President Barack Obama’s nominee to lead the U.S. Treasury Department, faces a grilling about a big bonus he received from Citigroup and his plans for the government’s finances when he testifies before a Senate panel on Wednesday.

Lew, a 57-year-old New Yorker who is White House chief of staff, is a budget wonk who would rather avoid television cameras, Obama has said.

But he will be in the spotlight on Wednesday over his own finances, namely a $940,000 bonus he received in January 2009 after a brief stint at Citigroup, just before the bank received a taxpayer-funded bailout.

Republicans on the Senate Finance Committee, which will vet Lew for Treasury secretary, also plan to ask him about his role at the Wall Street bank, especially as chief operating officer of Citi Alternative Investments.

“If taxpayers are going to prop up failed banks, they have a right to know what a key executive like Mr. Lew did at that time,” Senator Orrin Hatch, the ranking Republican on the Finance Committee, said in a statement.

Lew and others familiar with his work at Citi have said his role was largely administrative and was separate from any financial portfolio decisions. In remarks prepared for delivery to the Senate panel and obtained by Reuters, Lew said his work at Citi focused on “trying to drive organizational change.”

Nonetheless, Lew’s confirmation hearing will serve as a battlefield in the budget wars that have divided Washington. The senior Republican on the Senate Budget Committee, Senator Jeff Sessions of Alabama, has already said Lew is unfit to serve.

However, there is no widespread opposition to the nomination and with Democrats controlling the Senate 53-45, Lew is widely expected to win confirmation later this month.

At the hearing, Republicans also plan to focus on a $56,000 investment Lew once had in a Citigroup venture capital fund registered in the Cayman Islands.

Obama criticized such offshore accounts when he campaigned for re-election last year. But the White House said the investment should not get in the way of Lew’s confirmation given that it was already known when he was confirmed for two other government positions, including White House budget chief.


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