Spotlight On... Jack Lew; US Treasury Secretary elect
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 12 February 2013
He's the new Tim Geithner, is that correct?
Yes, a long standing Democratic operative who has served as budget director under Presidents Clinton and Obama, and the latter's chief of staff, he's the White House nominee to be the next US Treasury Secretary. But, first, he needs to be confirmed by the Senate, with hearings due on Wednesday.
That should be a breeze, shouldn't it?
He is expected to get the nod, yes, but he will face some tough questions.
The Republicans want to know more about his time at Citigroup. He joined the bank in 2006, and in January 2008, moved over to Citi's alternative investments arm, where he served as chief operating officer. According to reports, the unit was invested in John Paulson's fund, which famously bet against the housing market before the crash.
Oh. Good timing. Anything else?
His bonus. Shortly before Citi was shoved on to its knees seeking a government bailout, Mr Lew is said to have received a bonus of nearly $1m. He is also likely to face questions over a $56,000 investment he once had in a Citi venture capital fund.
What's the big deal about the venture fund?
It was registered in the Cayman Islands, which has be the subject of hundreds of headlines about tax evasion. There is no suggestion of impropriety on Mr Lew's part – he will no doubt point out that he lost around $1,500 when he had to abandon his investment to serve as Obama's budget director – but that doesn't matter. Expect him to be grilled about whether or not rich investors should be allowed to circumvent US taxes by investing with funds registered in tax havens, wink wink.
Didn't we already know about all this?
Yes. His interests have been disclosed before, as he's been through the Senate rodeo before. But none of his previous roles was quite as public as Treasury chief. Republican senators are going to make the most of their opportunity to embarrass him, so get some popcorn for the hearings.
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