Skip to Content

How troubling is Jacob Lew's $1 million bonus from Citigroup?

President Barack Obama has nominated Jacob "Jack" Lew
REUTERS/Jason Reed
President Barack Obama has nominated Jacob "Jack" Lew as secretary of the Treasury.

Jacob Lew, President Obama's nominee to succeed Timothy Geithner as secretary of the Treasury, has spent most of his working life in government service. As a young man, he served under Democrats (including Tip O'Neill) in the U.S. House. He held several posts under President Bill Clinton.

But in between his years with the Clinton administration and his return to government work under Obama (in the State Department, as budget director, and recently as White House chief of staff), he worked briefly for Citigroup and was there when Citi received one of the largest of the bailout packages. Shortly before the bailout, Lew received a bonus of $940,000.

Sen. Charles Grassley, Republican from Iowa, has indicated that he will ask Lew about the bonus during the confirmation hearings. Jia Lynn Yang of the Washington Post reviewed Lew's Citi tenure here.

I suppose it's necessry to acknowledge that in the top reaches of banking, $940,000 isn't even a very big number. Still, it's difficult for those of us -- which I mean 99.9 percent of us -- who would never be in a position to receive a million-dollar bonus to think clearly or realistically about either what we could do that would be worth that to our employer, what such a windfall would do to our ability to retain contact with the economic struggles of ordinary working families, or what kind of loyalty such a bonus might buy into the future toward the employer or the industry or the class from which it was bestowed.

Get MinnPost's top stories in your inbox

Related Tags:

About the Author:

Comments (12)

It is a deliberate strategy

It is a deliberate strategy for the the big financial players to take up the penurious potential public servants.

A guarantee of at least an extended hearing for old buddies when the need arises.

It is disgraceful behavior

By wall street, made even more disgusting by the reporting on the PBS show Untouchables. Worse yet both political parties join in.

The smell of corruption

This sort of money just reeks of payola. When are we going to see our "leadership" actually assume the moral and ethical positions they lip flap about all the time?

Yes, it's troubling

Eric’s questions rhetorical questions/issues in the last paragraph are all exquisitely relevant, as is Mark Wallek’s first sentence. It’s difficult (isn’t that a nice euphemism?) to have much faith in government leaders who supposedly look after the interests of the entire society when they seem – at least plausibly – on the payroll of only a few “citizens” in the form of especially wealthy and demonstrably unscrupulous corporations.

“What difference does it

“What difference does it make???”

I agree that

It was more 'business as usual'
and that this sort of business is not good for the rest of us.
A key phrase, though: "Shortly before the bailout, Lew received a bonus of $940,000."
So he would have received this bonus whether or not the bailout took place; it was not paid for, at least directly, out of bailout money.

This

Mr. Brandon is right. While I won't be singing praises for the action, making a mountain out of it is a bit silly. Besides, this "news" is more than 2 years old. This wasn't missed when Lew was vetted (and approved) by Congress for the position of Budget Director of the OMB. Nor did it stop him from being appointed as Obama's Chief of Staff over a year ago (though the issue was necromanced at that time, too). And, having done a reasonably good job in both capacities, this becomes an issue as he's nominated for Treasury Secretary? C'mon--beat a dead horse much? It's not like he hasn't held a high position in finances before this point. And, as a rule of this administration, financial conflicts are forbidden (whether or not that ACTUALLY happens is a different matter--but if you've got evidence to the contrary, put up or shut up). Nor, as Eric pointed out, is LESS than a million dollars even significant in the finance world.

Yeah

No reason to demand change - just take it gratefully.

Down payment

Think of it as a down payment. Mr. Lew now knows a bit about the vast riches that await him once he leaves office, assuming that he does what the financial institutions want him to do.

Why does the treasury secretary

always have to come from Wall Street? It's like they get their own government department that just happens to affect all of us. Still, could Lew be worse than Geithner?

Lew

Just about the time I start thinking Obama seems to be moving in the right direction, he picks that Wall street guy Lew. Another guy embedded in wall street. We already know where his sympathy lies.
How about Sheila Bair? Never get approved. Robert Reich (yay!). He makes too much sense. Republicans would never approve him. Elizabeth Warren. No chance.
None of the smart ones would ever get approved by the Senate.

Ginny

Let's get an economist who isn't a wallstreeter. Robert Reich is one and he's already served in that job so he understands it. Or maybe Sheila Bair. Or Elizabeth Warren. Or Arthur Rolnick. He was head of Minneapolis federal reserve, but he's the one who has been promoting early childhood education for years. He must know something.
But a smart, Keynesian economist would never get senate approval. "Smart" would do him/her in.