- The Washington Times - Tuesday, August 3, 2010

President Obama’s nominee to oversee the federal budget is amending his latest government ethics filing after misreporting the date he left his job at Citigroup Inc. - addressing questions about his eligibility for a nearly $1 million bonus weeks after the company was bailed out by taxpayers.

The timing of Jacob Lews departure from the Wall Street heavyweight last year and whether his bonus falls under the $1.6 billion of ill-advised payouts uncovered by former federal pay czar Kenneth Feinberg is likely to be a topic of his pending confirmation hearing by the Senate Budget Committee. Lawmakers from both parties have called for unsavory bonuses to be returned to federal coffers.

Mr. Lew, a deputy secretary at the Department of State, reported leaving his job as managing director at Citigroup on Jan. 5, 2009, according to a recent ethics filing. Ten days later, Citigroup, propped up by a massive federal bailout, paid Mr. Lew a bonus of $940,000.

Such a timeline, with Mr. Lew getting a bonus after he left the company, could have posed troublesome questions for Citigroup and Mr. Lew, who is Mr. Obama’s nominee to replace Peter Orszag atop the White House Office of Management and Budget. Under Citigroup policy, only current employees are entitled to bonuses.

When questioned by The Washington Times about whether Mr. Lew received an exemption from the company’s policy, administration officials said Mr. Lew left Citigroup on Jan. 16, 2009 - not 11 days earlier as he recently reported on his ethics form.

Kenneth Baer, a spokesman for the OMB, called the mistake a typographical error and said it is being corrected. He said Mr. Lew has fully disclosed his income to the Senate and to the public. He also said administration officials, while aware of his bonus, are focused on Mr. Lew’s two decades of public service, including his work as OMB director for President Clinton.

Citigroup announced Mr. Lew’s departure from the company on Jan. 15 in an internal e-mail sent to his colleagues at Citi Alternative Investments, a Citigroup subsidiary where Mr. Lew was chief operating officer before joining the Obama administration.

Mr. Lew’s $940,000 bonus came on top of the $1.1 million in Citigroup compensation for 2008 that Mr. Lew first previously disclosed last year.

The public, administration officials and members of Congress last year expressed outrage that executives at bailed-out firms were receiving big bonuses.

“Senator Grassley intends to ask questions about this,” said Jill Gerber, a spokeswoman for Sen. Charles E. Grassley, Iowa Republican, ranking member of the Senate Finance Committee and a member of the budget committee.

Last week, Mr. Grassley sent a letter to the Treasury Department raising questions about whether former federal pay czar Mr. Feinberg did enough to investigate excessive salaries and bonuses at Wall Street firms receiving federal bailouts.

Mr. Feinberg, the Obama administration’s special master for executive compensation, issued a report last month that found about $1.6 billion in bonuses paid out to executives by companies that took bailout money. Though calling the payments ill-advised, he didn’t request a refund.

The Grassley letter also cited concern about Mr. Lew’s bonus: “Regardless whether the payment to Mr. Lew, and others like him, was ‘grandfathered’ or ‘permitted by the rules in place at the time,’ were they contrary to the public interest?” Mr. Grassley wrote.

“If Treasury and the Special Master say no, then the American public at least deserves a complete explanation of the basis for that conclusion.”

Mr. Feinberg’s report didn’t cite any executives by name, but dozens of members of Congress noted his findings in calling on several Wall Street firms, including Citigroup, to return questionable bonuses to taxpayers.

Rep. Peter Welch, Vermont Democrat, led 40 lawmakers who wrote to six companies asking them to “return to the taxpayer the questionable bonuses identified by Mr. Feinberg that were made possible through taxpayer lifelines.”

Mr. Grassley’s letter to the Treasury Department said Mr. Lew’s payment was presumably part of Mr. Feinberg’s study because the company received more than $49 billion in federal assistance.

Asked whether Mr. Lew’s bonus should be returned, too, a spokesman for Mr. Welch said the money should be given back if Mr. Lew’s payment is one of the questionable bonuses cited in the Feinberg report.

“As he and 40 other members of Congress said in their letter, Congressman Welch believes the questionable bonuses identified by the Feinberg report - regardless of to whom they were awarded - should be returned to the taxpayer,” said Paul H. Heintz, a spokesman for Mr. Welch.

The campaign for Rep. Joe Sestak, a Pennsylvania Democrat running for the Senate, last week issued a press release calling on bankers to return their bonuses in the wake of the Feinberg report.

“Joe has called on recipients of ‘unmerited’ bonuses to return them,” said Sestak spokesman Jonathon Dworkin.

“We have no knowledge of the specifics of Mr. Lew’s compensation. So while we can’t speak to that, Joe does not believe we should make special exceptions for anyone.”

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