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For Immediate Release
February 27, 2013

Floor Statement of Sen. Chuck Grassley on Jack Lew, Treasury Secretary Nominee, Prior to Senate Vote

Mr. President, the problem we face with Mr. Lew’s nomination is that the Senate does not have answers to basic factual questions about Mr. Lew.

How can we make an informed choice on his nomination?

For example, when Mr. Lew worked at tax-exempt New York University, he was given a subsidized $1.4 million mortgage.  

Now, Mr. Lew claims that he cannot remember the interest rate he paid on his $1.4 million mortgage that tax-exempt New York University gave him.  

Does this pass the laugh test?

I asked Mr. Lew to provide details of the mortgage to Congress.  

He refused repeated requests for full details and documentation of this taxpayer-subsidized mortgage.  

The explanations he did provide were needlessly complex, making it almost impossible to understand the structure of his loan.

What is he hiding?

Why can’t Congress get a straight answer out of him?

When Mr. Lew was executive vice president of NYU, the school received kickbacks on student loans from Citigroup.  

Then, Mr. Lew went to work for Citigroup.  

When I asked Mr. Lew if he had any conversations with Citigroup about these kickbacks while he was at NYU, he once again “could not recall.”

I asked for any documents related to his involvement in the kickbacks.

He refused to search for them.

Did those conversations occur?

We don’t know.

On Monday, The New York Times uncovered a $685,000 payment NYU gave Jack Lew on his way out the door.  

The New York Times called the payment “unusual.”

It’s a shame that Mr. Lew failed to provide these details as part of his confirmation process, leaving us to rely on the press to dig out the details.

He told the Finance Committee that he received “severance pay” from NYU but did not disclose the amount.

The dictionary defines “severance pay” as, “A sum of money usually based on length of employment for which an employee is eligible upon termination.”

Was Mr. Lew terminated?

If so, why was he terminated?

If not, was the severance package really a parting gift from the university?

I don’t know the answers to those questions, because Mr. Lew was not forthcoming with answers.

When it comes to questions about investments in the Cayman Islands, things get even less transparent.

Mr. Lew claims he did not know that Ugland House was a notorious tax haven.  

He claims he did not know that he had his money in the Cayman Islands.

He claims he was not aware of any Citigroup Cayman Islands accounts.

Again, it doesn’t pass the laugh test.

President Obama and Chairman Baucus had highlighted Ugland House as a problem.

When Mr. Lew was at Citigroup, for years, he signed documents that disclosed the fact that he was investing money in the Cayman Islands.

His distinctive signature was just inches away from the words “Ugland House,” “Grand Cayman” and “Cayman Islands.”  

He claims now that he did not know where his money was going.  

We have so many more questions for Mr. Lew.

As the Wall Street Journal said last week in reference to Mr. Lew’s past:  

“Investor in a 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.”

Mr. Lew’s eagerness and skill in obtaining bonuses, severance payments, housing allowances and other perks raises concerns about whether he appreciates who pays the bills.

How will he approach the burden on taxpayers to pay the government’s bills?

Will he act as cavalierly toward the taxpayers as Treasury secretary as he did at Citigroup and New York University?

But despite all these questions, we are rushing to vote on his nomination.

Clearly, these questions don’t matter to Mr. Lew’s supporters because they’re confident they have the votes, unfortunately with assistance from our side.

But transparency and sunlight are essential for Congress and for the American people.

Those supporting Mr. Lew today better not expect any real answers out of him in the future.

If Mr. Lew will not answer our questions now, why should we expect him to answer any questions if he is confirmed?
            
The larger problem, though, may be that when Mr. Lew actually does try to answer a question he confirms our concerns.

For example, when Mr. Lew was caught with a Caymans Island bank account he said, well, “I didn’t make any money.”

Apparently there is now a new standard.  It’s okay to invest in "the largest tax scam in the world."  

Those are the President’s words, not mine.  

It’s okay, so long as you don’t make money.

When Mr. Lew was asked about NYU’s investments in the Cayman Islands investments, again, he could not recall them.

Mr. Lew received over $1.2 million in his final year at NYU.

He was hired specifically to run the business side of NYU.

And despite all this, he claims he had no specific knowledge of where NYU’s money was being invested.

When I asked Mr. Lew if he could explain, morally, his decision to take almost a million dollars from an insolvent company supported by taxpayers he could not answer.  

He said only, “I leave it for others to judge.”

Mr. Lew refused to explain why he thought the bonus was justified.  

Since Mr. Lew could not answer that question, today, we must answer it.  

It is important that we hold members of this Administration equal to the standard that they set for everyone else.

In the past, the President has railed again the “fat cats” on Wall Street.  

Today, the President nominates a man who took a bonus from a bailed-out financially insolvent bank.

The President has constantly complained about the high cost of college tuition.

While Mr. Lew was at NYU, the University increased tuition nearly 40 percent while he was getting paid more than NYU’s President.

In the not so distant past, President Obama called the Ugland House “the biggest tax scam in the world.”

Today he nominates a man who invested there.

In fact, the President has repeatedly railed against the Cayman Islands and Cayman Islands investments.

Mr. Lew is a serial Cayman Islands investor.

On his watch, Citigroup invested money there, NYU invested money there, and he invested his own money there.  

I believe it is essential to hold everyone to the same standard they set for others.  

For these reasons I will vote no on this nomination.