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The budget director from CitiBank

August 10, 2010 - Mike Maneval

The Obama administration has selected Deputy Secretary of State Jacob "Jack" Lew to replace Peter Orszag as budget director.

Lew, as The New Republic's Jonathan Cohn notes, worked for a division of CitiBank, Citi Alternative Investments. Cohn acknowledges the CitiBank post, in assessing chances the Republican caucus in the Senate may oppose Lew's nomination, could "give (Republicans) such an opportunity."

But Cohn focuses on contemplating how Lew's associates praise his "smarts, work ethic and selflessness," without examining why a position with CitiBank's Citi Alternative Investment might give legislators pause.

Shahien Nasiripour, writing for Huffington Post, takes a closer look at what Lew did for CitiBank: Lew "oversaw a Citigroup unit that profited off the housing collapse and financial crisis by investing in a hedge fund king who correctly predicted the eventual subprime meltdown and now finds himself involved in the center of the U.S. government's fraud case against Goldman Sachs." Nasiripour questions whether Lew's management practices at CitiBank would, during his tenure at the Office of Management and Budget, even remain legal under the financial reform package's "Volcker rule."

To be fair to Cohn, he wrote about Lew on July 11, when Cohn was a dark horse for the spot and Laura Tyson and Gene Sperling, whose backgrounds and qualifications he spent words examining as well, were considered stronger contenders. I raise the point not only in due consideration for Cohn but to observe that other qualified economists - ones not connected to practices the administration selecting the nominee has labelled dubious by law - were available.


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