Courtesy of Pam Martens.
Senator Chuck Grassley set off a media uproar on Friday when he reported that President Obama’s nominee for Treasury Secretary, Jack Lew, had owned a Citigroup investment housed at a Cayman Islands building that President Obama has previously suggested was a tax scam due to almost 19,000 corporations being registered at that address. Lew had worked as a Deputy Secretary in the State Department for almost two years before he sold the investment in 2010 after returning to government service from Citigroup.
The response from the White House has been that Lew made this disclosure known to the Senate for his confirmation hearing in 2010 and the Senators didn’t raise any issues with it.
We first reported Lew’s investment in the Citigroup Venture Capital International (CVCI) private equity fund on January 14 of this year. In that report, we attached the financial disclosure report that Lew had provided to the U.S. Senate for vetting his nomination for Director of the Office of Management and Budget on September 16, 2010. Our finding:
“A review of documents submitted to the U.S. Senate Budget Committee for Lew’s confirmation hearing on September 16, 2010 to become Director of the Office of Management and Budget indicates Lew’s financial ties to Citigroup continued long after he joined the Obama administration. The public is being kept in the dark about the extent of Lew’s winnings at the Citigroup casino and its heads we win, tails you lose dealer tables.
“One section of the documents refers to ‘Business Relationships’ and indicates that Lew had been a limited partner from 2007 through the date of the hearing on September 16, 2010 in the CVCI Private Equity Fund. There is nothing in these documents to enlighten either the Senators or the public that CVCI is an acronym for Citi Venture Capital International, a unit of Citigroup investing billions in foreign companies in hopes of making its limited partners very wealthy. (A limited partner in a private equity fund is synonymous with being an investor in the fund.)”
Lew is still not coming clean on this investment. According to the Washington Post, Lew is currently telling the U.S. Senate Finance Committee which will vet his nomination for U.S. Treasury Secretary this Wednesday, that his investment in the Cayman Islands fund amounted to $56,000. But in Citigroup’s proxy filings, the company says “Citi matches each dollar invested by an employee with an additional two-dollar commitment to each fund, or feeder fund, in which an employee has invested, up to a maximum of $1 million.” The matching funds are a loan which the employee repays when he sells his position, keeping the return minus any interest on the low cost loan.
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