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OMB nominee got $900,000 after Citigroup bailout
Bonus issued after 2008 report
President Obama’s choice to be the government’s chief budget officer received a bonus of more than $900,000 from Citigroup Inc. last year — after the Wall Street firm for which he worked received a massive taxpayer bailout.
The money was paid to Jacob Lew in January 2009, about two weeks before he joined the State Department as deputy secretary of state, according to a newly filed ethics form. The payout came on top of the already hefty $1.1 million Citigroup compensation package for 2008 that he reported last year.
Administration officials and members of Congress last year expressed outrage that executives at other bailed-out firms, such as American International Group Inc., awarded bonuses to top executives. State Department officials at the time steadfastly refused to say if Mr. Lew received a post-bailout bonus from Citigroup in response to inquiries from The Washington Times.
“Jack Lew has dedicated two decades to public service,” White House spokeswoman Moira Mack wrote in an e-mail to The Times. “He has served with distinction in two Administrations and in Congress, and has precisely the kind of experience we need at OMB at this critical juncture.”
Formerly a chief operating officer at Citi Alternative Investments, a unit of Citigroup, Mr. Lew disclosed in an ethics filing that the money was “discretionary cash compensation” from 2008 that he received on Jan. 15, 2009.
The records show that Mr. Lew received the $944,578 payment four days after he filed his 2008 ethics disclosure.
That filing did note that he was eligible to collect additional discretionary compensation for 2008 prior to joining the State Department. It also disclosed that he had received $1.1 million in salary and discretionary cash compensation from Citigroup for 2008.
In response to questions from The Times last year about Mr. Lew’s compensation, a State Department spokesman declined to say whether he took a bonus in January before entering the government and, if so, how much.
“Like so many, Deputy Secretary Lew returned to government to serve the public. A review of his public financial disclosure report and his federal salary speaks to that commitment,” a spokesman said at the time. The State Department job paid $177,000 per year.
In nominating Mr. Lew as director at the OMB, Mr. Obama earlier this month praised Mr. Lew for his work as deputy director at the OMB during the Clinton administration, as a principal domestic policy adviser to House Speaker Thomas P. “Tip” O’Neill, and as an executive vice president at New York University.
Although the White House made clear mention of Mr. Lew’s work at Citigroup in an official announcement about the OMB nomination, Mr. Obama passed over that portion of the nominee’s resume in public remarks.
“Jack has been through a vetting process before,” he told reporters at a briefing.
“They ranged from private equity investments to real estate investments and various forms of fixed-income investments,” he answered. He also said that as chief budget officer he wouldn’t participate in any matters “that have particular impact on Citigroup.”
Under Mr. Obama’s ethics rules, political appointees are barred from participating in any “particular matter involving specific parties that is directly and substantially related” to former employers or clients.
The payout of bonuses to executives at Wall Street firms that accepted federal bailout money has been getting renewed attention in Washington lately.
Kenneth Feinberg, the Obama administration’s special master for executive compensation, issued a report last week 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 report questioned the bonuses to executives at Citigroup, Goldman Sachs Group Inc., Bank of America Corp. and other big firms. The report did not mention any executives by name.
“We basically examined each of the banks, each of these firms, and concluded that it was ill advised to give this much money with so little guidance,” Mr. Feinberg told Bloomberg News last week. “People receiving top money and then exiting the company as they walk out the door, getting large severance payments. This is what we focused on.”
Still, Mr. Feinberg said that at the time the payments were made they did not violate any statutes or regulations.
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