Amidst grilling, Lew stresses cooperation

Feb. 13, 2013 at 12:25 PM
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WASHINGTON, Feb. 13 (UPI) -- White House Chief of Staff Jack Lew stressed across-the-aisle cooperation in remarks prepared for his U.S. treasury secretary confirmation hearing Wednesday.

After preliminary thank-yous, Lew told members of the Senate Finance Committee forging bipartisan consensus "is not an abstract idea for me."

He cut his teeth with across-the-aisle politics working with former House Speaker Thomas (Tip) O'Neill, Jr. during the Reagan administration to save Social Security.

"He allowed me to gain a deep understanding of what could be accomplished through bipartisan cooperation," Lew said.

Lew said cooperation was also critical in the private sector. He was an administrator at New York University and an executive at Citigroup.

"My experience in leadership positions outside government has proven that working collaboratively to solve problems is a universal necessity," he said.

"Finally, as the White House chief of staff, I have had the opportunity to work directly at the side of the president who has always believed, as I do, that neither party has a monopoly on good ideas," he added.

Republican senators vowed to quiz Lew about his Citigroup work during its bailout.

Senate Finance Committee Republicans said they were not convinced Lew provided adequate answers about his exact Citigroup responsibilities during the 2008 financial crisis.

Lew became chief operating officer of Citigroup Inc.'s $54.3 billion alternative-investments unit in 2008 after serving as COO of Citigroup's wealth-management unit starting in 2006.

What he exactly did in those positions, especially at the alternative-investments unit, is relevant, committee ranking Republican Orrin Hatch of Utah and other Republican senators said, because the treasury secretary has new responsibilities for overseeing Wall Street.

"If taxpayers are going to prop up failed banks, they have a right to know what a key executive like Mr. Lew did at that time," Hatch said in a statement. "The American people will want to know what his role was there and how that might have prepared him for this critical job after the most severe financial crisis and prolonged economic downturn in generations."

Lew has said he was a manager at the bank, not a financial expert.

Sen. Chuck Grassley, R-Iowa, has expressed concerns about a $940,000 bonus Lew received from Citigroup in early 2009, just before Washington agreed to give the bank a $301 billion guarantee to support its mortgage-backed securities.

The investment union Lew managed had invested in a hedge fund that bet the housing market would collapse, The Huffington Post reported in 2010.

Lew got the bonus shortly after he left Citigroup to join the Obama administration as deputy secretary of state for management and resources, responsible for the State Department's budget and internal management.

Grassley planned to ask Lew about the bonus Wednesday and whether it was appropriate to accept, given Citigroup's bailout, a Grassley aide told The Washington Post.

"The treasury secretary can't owe anyone on Wall Street any favors," Grassley said in a statement.

Grassley also planned to ask Lew about his investment in a Citigroup venture-capital fund with a Cayman Islands address Obama and other critics have assailed as a tax-dodging haven.

Lew invested $56,000 in the fund and sold it in 2010 for $54,418, the Senate Finance Committee says.

"Jack Lew paid all of his taxes and reported all of the income, gains and losses from the investment on his tax returns," White House spokesman Eric Schultz said in a statement.

Obama has called for a crackdown on tax-haven abuse. Lew would help shape U.S. tax policy as treasury secretary.

Lew, 57, was White House chief of staff from Jan. 27, 2012, until about three weeks ago. Before that he was director of the Office of Management and Budget under both Obama and President Bill Clinton.

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