At Citi, Lew was an executive in two divisions from 2006 to 2008. He enjoyed the very perks often criticized by lawmakers and the president, including a nearly $1 million bonus in 2008 granted a day before the taxpayer rescue of Citi.
Lew, who had a base salary at Citi of $350,000, did not face the same kind of grilling over Wall Street ties during his three previous administration posts, which included a top job at the State Department in 2009, White House budget director in 2010 and White House chief of staff in 2012. In those jobs he didn’t have oversight of Wall Street activities. As treasury secretary, he’d head an interagency panel whose mission is to determine if big banks such as Citi pose a threat to the financial system.
During his Feb. 13 confirmation hearing before the Senate Finance Committee, Lew fended off questions about a personal investment in a fund based in the very building President Barack Obama had slammed as a “tax sham” in 2009. Lew defended his bonus as in line with how others in the financial sector were compensated, and he said he’d leave it to others to judge whether it was merited. He also stressed he was an administrator who did not make decisions on the financial bets in his own division that almost brought down the global financial system.
The watchdog group Public Citizen on Friday questioned the legality of Lew’s bonus. During the confirmation hearing, Lew was asked by Sen. Orrin Hatch, R-Utah, how he was able to keep the $940,000 bonus, since many such payments have “claw back” provisions if an executive leaves. Lew’s contract, parts of which were obtained and put online Friday by Bloomberg columnist Jonathan Weil, allowed him to keep the bonus if he left for a high-level government job.
“It’s troubling that they would put such phrasing in there. If you get a part-time or low-level job, you don’t get your million dollars,” said Naylor. He said a more “malignant” reading of the contract is “that they are buying the loyalty of an exiting employee because of the high-level United States government job.”
In response to other questions from Grassley, Lew did not challenge that he earned more as executive vice president of NYU than the president of the university or its dean. He received about $440,000 in housing assistance over the five-year period and also received a $1.4 million shared appreciation mortgage, where the school and Lew split any profits.
“I do not recall the interest rate or other specific terms,” Lew wrote about that loan, adding that he declared all assistance on tax forms and that “I paid all taxes that were due.”
“So far, Mr. Lew has said he can’t recall almost all the details of the mortgage, including the rate,” Grassley said in a statement to McClatchy. “For the Senate to make an informed judgment, we need these materials.”