By Pam Martens: November 14, 2013
Prior to her testimony before the U.S. Senate Banking Committee today, Janet Yellen, President Obama’s nominee to Chair the Federal Reserve Board of Governors, was asked to take an oath to tell the truth, the whole truth and nothing but the truth.
But nine months ago, when Jack Lew went before the U.S. Senate Finance Committee for his confirmation hearing for U.S. Treasury Secretary, no such hand went in the air and no oath to tell the truth was taken.
Why the disparity?
The Fed Chairman directs monetary policy for the country. The U.S. Treasury Secretary pays the nation’s bills, prints its currency, oversees the collection of its taxes, and since the passage of the Dodd-Frank financial reform legislation, chairs the Financial Stability Oversight Council (F-SOC). This is not some slouch job.
Lew came to his confirmation hearing with enough conflicts of interest to choke a horse – even an elephant, especially the Republican kind.
Perhaps anticipating a hostile reception, Lew’s debut before the Senate Committee felt stage-managed. First he produced a character witness from the Democratic side of the aisle, Senator Chuck Schumer who droned on and on about the marvelous Lew. Then another character witness was allowed to speak, former Republican Senator Pete Domenici, who also vouched for Lew’s character. But no oath from Lew occurred.
As the hearing wore on, the lack of that oath taking became ever more suspect. Lew had previously held an executive position with Citigroup during the time of its collapse. Senator Orrin Hatch inquired as follows:
“First, could you explain what you did in 2008 for Citi that warranted payment to you of close to $1 million, most of which was a bonus. Second, what was it about your performance that merited your bonus from a company that was being propped up by taxpayer money and are there any records of your performance assessment – or are there any assessments of your performance. Third, your employment agreement included a clause stating that ‘your guaranteed incentive and retention award’ would not be paid upon exit from Citigroup but there was an exception that you would receive that compensation ‘as a result of your acceptance of a full time high level position with the United States Government or a regulatory body.’ Now is this exception consistent with President Obama’s efforts to ‘close the revolving door’ that carries special interest influence in and out of the government?”
Without offering an apology or the return of the $940,000 bonus paid with taxpayer’s funds, Lew calmly responded:
“I do believe it was comparable to compensation for people in positions like mine in the industry.”
It is true that numerous bailed out Wall Street firms paid employees obscene bonuses with taxpayer money. However, it is yet to be shown that other executives of Wall Street were incentivized to get these bonuses by moving into a top post in the Federal government.
Despite a seemingly endless stream of conflicts of interests, red flags, and sleazy compensation deals to repulse anyone who looked closely, within a few weeks the U.S. Senate delivered a lopsided 71-26 vote to hand the keys to the U.S. Mint to Jack Lew.