It’s not uncommon for a U.S. Treasury Secretary to have served on Wall Street, but what’s interesting about this next one is that his bank gave him a pretty significant financial incentive make the leap.The Senate Finance Committee will vote Tuesday on President Obama’s nomination of White House Chief of Staff and former Citi executive Jack Lew for the top job at the U.S. Treasury.
Lew left Citi in 2009 to become the Deputy Secretary of State.
At Lew’s recent confirmation hearing for Treasury Secretary, an interesting detail about his employment contract with Citi emerged: a bonus meant to keep him at Citi – meaning he wouldn’t get it if he quit – would still be granted on the condition that he left the bank for a “high level” position in the federal government.
Bloomberg News columnist Jonathan Weil, who tracked down a copy of Lew’s employment agreement, put it bluntly, writing, “The wording of the pay provisions made it seem, at least to me, as if Citigroup might have agreed to pay Lew some sort of a bounty to seek out, and be appointed to, such a position.”
At the hearing, Senator Orrin Hatch asked Lew, “Now is this exception consistent with President Obama’s efforts to ‘close the revolving door’ that carries special interest influence in and out of the government?”
Lew basically brushed the Hatch off without answering the question directly.
Weil, after seeing a few pages of the contract – which he has made available online – wrote in his column:
Lew was named a deputy secretary of State in 2009, Office of Management and Budget director again in 2010, and then became President Barack Obama’s chief of staff in 2012. Now he’s up for Treasury secretary, where he would play a critical role in overseeing the U.S.’s financial industry and rescuing it should another crisis ensue. Citigroup couldn’t have planned this better if it tried, which raises the natural question: Did it try?
For its part, the bank told Weil, “Citi routinely accommodates individuals who wish to leave the firm to pursue a position in government or nonprofit sector.”
Needless to say, this isn’t the type of thing that inspires confidence in the Wall Street-Washington D.C. nexus.