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Lew defends $1M Citi bonus

OMB nominee held up over Louisiana drill moratorium

- The Washington Times - Thursday, September 23, 2010

Jacob "Jack" Lew, President Obama's nominee to oversee the federal budget, is defending his nearly $1 million bonus from Citigroup last year even as his former employer took a massive taxpayer bailout.

Asked about how his bonus served the public's interest, given Citigroup's taxpayer-funded bailout, Mr. Lew told a Republican senator in a recent written statement obtained by The Washington Times that he wasn't an investment adviser at Citigroup.

"My position at Citi was a management position. I was not an investment advisor," he wrote.

"My compensation was in line with other management executives at the firm and in similarly complex operations," Mr. Lew wrote in his reply to Senator Charles E. Grassley of Iowa, ranking member on the Senate Finance Committee.

Mr. Lew's ties to Citigroup received scant attention during his recent public confirmation hearings in the Senate. Senators largely praised his previous stint heading the Office of Management and Budget (OMB) during the Clinton White House.

Indeed, it's not Mr. Lew's ties to Citigroup that are holding up his nomination.

Sen. Mary L. Landrieu, Louisiana Democrat, said Thursday she will block Mr. Lew's nomination as the administrations chief budget officer until the moratorium on deepwater oil and natural-gas drilling is lifted or significantly modified.

"Although Mr. Lew clearly possesses the expertise necessary to serve as one of the presidents most important economic advisers, I found that he lacked sufficient concern for the host of economic challenges confronting the Gulf Coast," she wrote in a letter to Senate Majority Leader Harry Reid.

She said she can't support Mr. Lews nomination to lead the OMB until she is convinced the administration understands the ban's "detrimental impacts" on Louisiana's fragile coastal economy.

"The fact that the most acute of these economic challenges, the moratorium, results from a direct (and reversible) federal action only serves to harden my stance on Mr. Lews nomination," she said.

Ms. Landrieu cited estimates from some economists that more than 46,000 jobs could be lost as a result of a six-month stoppage of offshore drilling. The administration itself has estimated that as many as 12,000 workers could be laid off as a result of the ban on oil and gas production in the Gulf of Mexico.

Mr. Obama nominated Mr. Lew in July to replace Peter Orszag as OMB director, subject to Senate confirmation. Mr. Lew worked at Citigroup before joining the Obama administration in January 2009 as deputy secretary of state.

Days before joining the federal government, Mr. Lew received a bonus from Citigroup for more than $940,000 after the company had taken a federal bailout, The Washington Times reported in July. The payment was in addition to a previously disclosed $1.1 million compensation package that Mr. Lew reported when first joining the State Department.

Mr. Grassley also questioned Mr. Lew on whether the top 100 executives at bailed-out banks should be scrutinized, given the taxpayer subsidies. Mr. Lew said he didn't know if he was among Citigroup's top 100 executives.

"Congress and the administration have taken action to limit excessive executive compensation at firms that received exceptional taxpayer assistance, including the creation of the Office of Special Master and the appointment of Kenneth Feinberg," Mr. Lew wrote in response.

"I did not have any personal role in those efforts, however, so I cannot comment on the various policy and legal decisions made by the Treasury Department or by Mr. Feinberg."

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