By Pam Martens: June 20, 2013 

For the past two days, some of the priciest media real estate in America has been obsessing over the new signature that Jack Lew, the U.S. Treasury Secretary, is sporting on the nation’s currency. No less than the Washington Post, Los Angeles Times, New York Daily News, CBS News and numerous other media outlets devoted space to this trivia about Lew’s squiggly signature getting a makeover. 

While this non-story was playing out, AlterNet and Wall Street On Parade co-published an investigation of New York University, where Lew served as Executive Vice President and Chief Operating Officer from 2001 to June of 2006. The New York Times printed a similar investigation on its front page yesterday. 

Both investigations showed that in addition to questionable mortgage financing of primary residences for faculty, NYU was financing lavish vacation homes for both administrators and faculty. In some cases, it was forgiving those loans as well as repaying the recipient for interest charged on the loans. 

A mortgage that is forgiven is not a loan – it’s income. Interest recompensed on a loan is not interest – it’s income. A below-market interest rate on a mortgage loan is also income. Whether all of this income was reported to the IRS is an open question. Having Jack Lew sitting at the helm of the U.S. Treasury, which oversees the IRS, does not instill confidence among the citizenry because Jack Lew, himself, got one such mortgage loan while employed at NYU for a primary residence in Riverdale, New York. 

A question of equally great moment is what did Jack Lew know about the vacation homes being lavished on administrators and faculty at the time he was Chief Operating Officer of NYU. John Sexton, the President of NYU, signed off on Jack Lew’s loan – was it hush money to keep Lew from questioning all those other mortgage deals? As Chief Operating Officer, how could Lew not have known about the funny money mortgages? 

The U.S. Treasury Department is the federal agency that collects the nation’s taxes, pays the nation’s bills, prints our currency and oversees the stability of the financial system, in addition to overseeing the IRS. What the signature of the Treasury chief looks like on the $5 bill is to this current mortgage-gate what the color of the President’s tie is to the NSA spying on Americans. Hard questions must be asked and the Democrats must forcefully engage – including the issuance of subpoenas. 

Two Senators had the temerity to stand up on the Senate floor during the confirmation debate on Lew and tell the public this man was not qualified for service as U.S. Treasury Secretary. The majority of the Senate caved to pressure from the Obama administration and confirmed Lew. Bernie Sanders, an Independent from Vermont, who frequently votes with the Democrats, told the chambers that “we need a Treasury secretary who will stand with the working families of this country and is prepared to take on an oligarchy which now controls the economic and political life of this great nation. Is Jack Lew that person? No, he is not.”

The oligarchy now appears to have infiltrated nonprofit, taxpayer-subsidized institutions of higher education where students are being crushed by rising tuition and debt in order to foot the tab for the oligarchs to sip champagne with their toes in the sands of Fire Island.  

The remarks of Senator Grassley, Republican of Iowa, were even more damning: 

“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?” 

As we reported Tuesday evening, NYU is still stonewalling Grassley, refusing to turn over documents on these loans, forcing Grassley’s aides to simply view some of the documents, take notes, but not make copies. Grassley can’t subpoena the records because the Democrats control the Senate. 

The remedy to this stonewalling is for the Democrats to get serious about the integrity of the U.S. Treasury, the integrity of the IRS, and the integrity of an educational institution that receives tens of millions of dollars each year in property tax relief, income tax relief and millions more in federal grants. It’s time for subpoenas.