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State Dept. official: Jack Lew answers to a higher authority

Jack Lew, the deputy secretary of state who is President Obama’s nominee to head the White House Office of Management and Budget, is coming under fire today because of a $944,578 bonus he took from Citigroup just before he joined the administration last year. But those who know him in the State Department defended him ...

Congressional Quarterly
Congressional Quarterly

Jack Lew, the deputy secretary of state who is President Obama’s nominee to head the White House Office of Management and Budget, is coming under fire today because of a $944,578 bonus he took from Citigroup just before he joined the administration last year. But those who know him in the State Department defended him Thursday as a man who is above reproach and argued that his actions were completely on the level.

Citigroup paid the hefty bonus to Lew about two weeks before he joined the State Department as deputy secretary of state, the Washington Times reported. Lew had already disclosed a $1.1 million compensation package covering his Citigroup work in 2007, but the amount of the newly disclosed bonus, which covers his work for the banking conglomerate in 2008, wasn’t known until today.

A State Department official close to Lew told The Cable that Lew had fulfilled all his obligations regarding the Citigroup bonuses. When he was nominated, Lew disclosed the figures to everyone inside the system who needed to know, the official said, including the White House, the State Department, and the Senate Foreign Relations Committee.

In answers submitted to the committee and in his 2009 ethics filing, Lew said that the bonus was coming, he just didn’t know the amount at that time, the official said.

Moreover, those who know Lew, an observant Orthodox Jew, say he’s even more kosher in his professional dealings than he is when separating milk and meat at dinner time.

“If this city and government were filled with Jack Lews, we wouldn’t need ethics rules,” the official said, “because, like Hebrew National, Jack holds himself accountable to a higher authority.”

The official also thought it important to note that Lew was a manager and did not make investment decisions, much less those that led Citigroup and several other Wall Street firms to seek billions of dollars in taxpayer bailouts during the Great Recession. Lew also took a significant pay cut when he came over to Foggy Bottom. He now makes $177,000 per year.

When Lew was undergoing his vetting and confirmation process last spring, the State Department acknowledged that Citigroup had given Lew another bonus but declined to release the figure. Congress at that time was seething with anger at Citigroup and other firms for paying exorbitant bonuses to executives while receiving bailout funds, and was even considering a 90 percent tax on such rewards.

From the Washington Times report:

Formerly a chief operating officer at Citi Alternative Investments, a unit of Citigroup, Mr. Lew disclosed in an ethics filing that the money was “discretionary cash compensation” from 2008 that he received on Jan. 15, 2009.

The records show that Mr. Lew received the $944,578 payment four days after he filed his 2008 ethics disclosure.

That filing did note that he was eligible to collect additional discretionary compensation for 2008 prior to joining the State Department. It also disclosed that he had received $1.1 million in salary and discretionary cash compensation from Citigroup for 2008.

Jack Lew, the deputy secretary of state who is President Obama’s nominee to head the White House Office of Management and Budget, is coming under fire today because of a $944,578 bonus he took from Citigroup just before he joined the administration last year. But those who know him in the State Department defended him Thursday as a man who is above reproach and argued that his actions were completely on the level.

Citigroup paid the hefty bonus to Lew about two weeks before he joined the State Department as deputy secretary of state, the Washington Times reported. Lew had already disclosed a $1.1 million compensation package covering his Citigroup work in 2007, but the amount of the newly disclosed bonus, which covers his work for the banking conglomerate in 2008, wasn’t known until today.

A State Department official close to Lew told The Cable that Lew had fulfilled all his obligations regarding the Citigroup bonuses. When he was nominated, Lew disclosed the figures to everyone inside the system who needed to know, the official said, including the White House, the State Department, and the Senate Foreign Relations Committee.

In answers submitted to the committee and in his 2009 ethics filing, Lew said that the bonus was coming, he just didn’t know the amount at that time, the official said.

Moreover, those who know Lew, an observant Orthodox Jew, say he’s even more kosher in his professional dealings than he is when separating milk and meat at dinner time.

“If this city and government were filled with Jack Lews, we wouldn’t need ethics rules,” the official said, “because, like Hebrew National, Jack holds himself accountable to a higher authority.”

The official also thought it important to note that Lew was a manager and did not make investment decisions, much less those that led Citigroup and several other Wall Street firms to seek billions of dollars in taxpayer bailouts during the Great Recession. Lew also took a significant pay cut when he came over to Foggy Bottom. He now makes $177,000 per year.

When Lew was undergoing his vetting and confirmation process last spring, the State Department acknowledged that Citigroup had given Lew another bonus but declined to release the figure. Congress at that time was seething with anger at Citigroup and other firms for paying exorbitant bonuses to executives while receiving bailout funds, and was even considering a 90 percent tax on such rewards.

From the Washington Times report:

Formerly a chief operating officer at Citi Alternative Investments, a unit of Citigroup, Mr. Lew disclosed in an ethics filing that the money was “discretionary cash compensation” from 2008 that he received on Jan. 15, 2009.

The records show that Mr. Lew received the $944,578 payment four days after he filed his 2008 ethics disclosure.

That filing did note that he was eligible to collect additional discretionary compensation for 2008 prior to joining the State Department. It also disclosed that he had received $1.1 million in salary and discretionary cash compensation from Citigroup for 2008.

Josh Rogin covers national security and foreign policy and writes the daily Web column The Cable. His column appears bi-weekly in the print edition of The Washington Post. He can be reached for comments or tips at josh.rogin@foreignpolicy.com.

Previously, Josh covered defense and foreign policy as a staff writer for Congressional Quarterly, writing extensively on Iraq, Afghanistan, Guantánamo Bay, U.S.-Asia relations, defense budgeting and appropriations, and the defense lobbying and contracting industries. Prior to that, he covered military modernization, cyber warfare, space, and missile defense for Federal Computer Week Magazine. He has also served as Pentagon Staff Reporter for the Asahi Shimbun, Japan's leading daily newspaper, in its Washington, D.C., bureau, where he reported on U.S.-Japan relations, Chinese military modernization, the North Korean nuclear crisis, and more.

A graduate of George Washington University's Elliott School of International Affairs, Josh lived in Yokohama, Japan, and studied at Tokyo's Sophia University. He speaks conversational Japanese and has reported from the region. He has also worked at the House International Relations Committee, the Embassy of Japan, and the Brookings Institution.

Josh's reporting has been featured on CNN, MSNBC, C-Span, CBS, ABC, NPR, WTOP, and several other outlets. He was a 2008-2009 National Press Foundation's Paul Miller Washington Reporting Fellow, 2009 military reporting fellow with the Knight Center for Specialized Journalism and the 2011 recipient of the InterAction Award for Excellence in International Reporting. He hails from Philadelphia and lives in Washington, D.C. Twitter: @joshrogin

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