Is Jack Lew the Forrest Gump of Obama’s second-term Cabinet?
posted at 2:41 pm on February 22, 2013 by Ed Morrissey
Funny, I thought that might have been Chuck Hagel, but the Wall Street Journal isn’t talking about candlepower. Their editorial today notes that Jack Lew, the nominee to replace Tim Geithner at Treasury, has almost literally been involved in everything that Democrats demonized in the 2012 election cycle. And where financial drama has occurred, Lew manages to pop up like an unwanted nut crunch in a box of chocolates:
Senate Democrats are in a hurry to confirm Jack Lew as Secretary of the Treasury before anyone notices his biography. Otherwise, liberal lawmakers might be embarrassed voting for a man who represents everything they’ve been campaigning against.
Investor in Cayman Islands tax haven? Check. Recipient of a bonus and corporate jet rides underwritten by taxpayers at a bailed-out bank? Check. Executive at a university that accepted student-loan “kickbacks” for steering kids toward a favored bank? Check. Excessive compensation with minimal disclosure? Check.
Like a financial Forrest Gump, Mr. Lew keeps walking into the frame of the business-political dramas of the last decade. But unlike the lovable movie character, Mr. Lew is playing the villain of liberal financial lore. One very compelling role, highlighted by Sen. Chuck Grassley (R., Iowa), was Mr. Lew’s star turn as an administrator at a university that encouraged students to borrow from his future employers at Citibank.
The New York Post has more on that chummy arrangement that helped enrich Lew:
As The Post first reported this week, Lew is under scrutiny for the $1.4 million loan he got from NYU. Lew told the Senate on Wednesday that he got a housing-assistance loan that was “forgiven” over a period of five years, plus another loan.
“That was probably calculated in order to minimize his income tax over that period,” a charity tax expert told The Post.
Lew and his wife used the loan to buy a home in the leafy Riverdale section of The Bronx. Lew has kept the home, which has increased in value from $1.3 million at the time of purchase to $1.8 million now.
Lew revealed the school provided an “annual payment” equal to the interest paid, which seems to indicate the school shouldered almost his entire monthly mortgage expense.
The administration has refused to say whether the school entirely forgave the loan when Lew left in 2006 to join Citigroup, although Lew has revealed that he got a “one-time severance payment.”
“They’re way off the charts,” Jeff Goodwin, a sociology professor at NYU, said of Lew’s cushy perks. “It’s in another world from where we live.”
At the time, Lew earned a salary of more than twice that of Barack Obama as NYU’s executive vice president — more than NYU’s president did, according to the Post. With a salary of $840K per year, why did Lew need another $1.4 million in loans, which apparently weren’t repaid? Perhaps the non-profit university might wonder about that as well.
The WSJ notes that Citibank became the school’s preferred lender during Lew’s tenure as EVP of operations. Lew says he didn’t personally approve that decision, but it seems a little coincidental that Lew left NYU for Citibank shortly after that arrangement. Citibank also paid NYU a fee of 0.25% on all student loans originating at the school in exchange for that relationship. What happened next?
Anyway, after Mr. Lew had left NYU to work at Citi, New York Attorney General Andrew Cuomo charged in 2007 that the school’s payments from Citi had not been adequately disclosed to students and that the school’s policy toward Citi created a conflict of interest and violated state laws. NYU settled without admitting any wrongdoing and agreed to a new code of conduct.
I seem to recall that the Obama administration used episodes like this to claim that students were being exploited by banks in the student-loan industry, as part of their effort to eliminate federal subsidies for the private student-loan market entirely. The White House succeeded in that effort, and now wants a man who may have contributed to that exploitation to run Treasury.
Will this embarrass Obama enough to withdraw Lew’s nomination? Probably not, since the media seems oddly disinterested in Democrats’ 2012 cycle bêtes noires now that the election is over:
We’d have thought this story would offend principled liberals, but then they’re also giving a pass to Mr. Lew’s fabulous compensation from the tax-exempt school. NYU students shoulder one of the highest collective debt burdens in the country as they struggle to afford one of the nation’s most expensive universities. For those who claim after watching Mr. Lew’s confirmation hearing that he doesn’t understand finance, we say: Check out his NYU compensation package. He sure knows how to get paid. …
The Grassley inquiry is unlikely to derail Mr. Lew’s nomination, because Senate Democrats, the White House and most of the media really don’t care. But Mr. Grassley is doing a public service in revealing how liberals redistribute income to themselves. And Mr. Lew is finally delivering educational value to youngsters by providing a lesson for the Obama era: If you want the big bucks, go into the world of taxpayer-backed enterprises.
But don’t forget — media bias is a myth.