Wall Street Pays Bankers to Work in Government and It Doesn't Want Anyone to Know

[Octafish]

43. Citigroup’s Man Goes to the Treasury Department

By Jonathan Weil
Feb. 21, 2013

Jack Lew is the nominee for Treasury secretary whose own bonus as an investment banker was bailed out by the Treasury Department when it rescued Citigroup Inc. in 2008. He owes much to America’s taxpayers. He should also be grateful to Citigroup for agreeing to let him rejoin the government without suffering much for it financially.

An intriguing revelation from Lew’s Senate confirmation hearing last week was that he stood to be paid handsomely by Citigroup if he left the company for a top U.S. government job, under his 2006 employment agreement with the bank. 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.

Lew didn’t shed much light on the subject after Senator Orrin Hatch, a Utah Republican, asked him about it at the hearing. “I’m not familiar with records that were kept, so I don’t have access to things that I don’t know about,” Lew said. It wasn’t clear which records (or even which question) Lew was referring to, and Hatch didn’t press the matter.

So I did some digging. I wasn’t able to find someone who would show me an entire copy of Lew’s employment agreement with Citigroup. But I did get a look at the first three pages of it, as well as a related addendum from January 2008. Here goes.

RUBIN CONNECTION

SNIP...

Lew stood to receive $250,001 to $500,000 worth of accelerated restricted Citigroup stock when he left the company, according to a disclosure report he filed in January 2009. The same document listed $1.1 million of “salary and discretionary cash comp” from Citigroup. Lew said at last week’s hearing that his salary for 2008 was $350,000.

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?

CONTINUED...

http://www.bloombergview.com/articles/2013-02-21/citigroup-s-man-goes-to-the-treasury-department

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