by | February 14, 2013 7:26 pm
Treasury Secretary nominee and current White House chief of staff Jack Lew faced scrutiny today from Republican senators over past investment in a Cayman Islands-based fund.
Republicans on the Senate Finance Committee brought up an investment listed on 2009 financial disclosure paperwork by Lew. In it, Lew disclosed an investment in CVCI Growth Partnership, an employee investment fund. Other Citigroup (NYSE:C) employees — Lew’s employer at the time of the investment — had also paid into the fund.
Lew said that he was initially unaware that the fund was located in the Cayman Islands — all he knew was that it was an international fund. He invested $56,000 and sold his investment for $54,418 when he became the director of the Office of Management and Budget in 2010.
In addition to facing criticism over Cayman Island investments that President Barack Obama had previously condemned Mitt Romney for, Lew was also asked about his work with Citigroup. Sen. Orrin Hatch, R-Utah, asked him about his $900,000 bonus from the company in 2009. Lew said it was “fully transparent” and “comparable” with others in his line of work. It came on top of $350,000 in salary that year.
It was also noted that New York University, where he worked as a top financial officer from 2002-2006, had also invested in Cayman Island funds. Lew said he was unaware of those investments while he was there, which prompted Sen. Charles Grassley, R-Iowa, to say, “It’s certainly a poor reflection of your tenure there if you didn’t know about these investments.”
Despite some of the tough questions, Lew is expected to be easily confirmed for the Treasury Secretary post. Obama has staunchly defended the long-time Democratic administration figure in both his and Clinton’s administrations, and there is nothing to suggest that Lew’s investments in the Caymans were meant as a tax dodge, particularly since he lost money on them.
— Benjamin Nanamaker, InvestorPolitics Editor
The opinions contained in this column are solely those of the writer.
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