Senators Orin Hatch (R-UT) and Chuck Grassley (R-IA) burned both Jacob Lew, Obama's choice as Treasury Secretary to replace Tim Geithner, and Obama, himself, on their hypocracy regarding speculators and tax dodgers. Hatch asked Lew, regarding his period as Citigroup's Chief Operating Officer for Growth Management and Alternative Investments from 2006-08 (i.e., running the proprietary trading at Citigroup before and during the crash), whether he knew that the investments he was making were about to bankrupt the bank and require a bailout from taxpayers. Lew incredibly argued that he only ran the business side and didn't have anything to do with making the investments, or even "opining" about them! Hatch also asked if he felt justified in taking a nearly $1 billion bonus just as the taxpayers were handing over $45 billion in bailout money:
HATCH: On January 29, 2009, President Obama remarked on Wall Street bonuses at the time and said, quote, "that is the height of irresponsibility. It is shameful," unquote. He went on to say that, quote, "there will be a time for them to get bonuses, now is not the time," unquote. Elsewhere he referred to Wall Street bonuses as quote, "obscene," unquote.
Now Mr. Lew, you wrote in a 2010 letter to Senator Grassley that, quote, "my compensation was in line with other management executives at the firm and in similarly complex operations," unquote. Now that seems a little bit to me like saying, gee dad, everyone was doing it. Unfortunately, that type of reasoning is exactly what I think led to this financial crisis."
Sen. Grassley then went after Lew's personal investments in the Cayman Islands during his stint at Citigrooup.
GRASSLEY: Now to something that President Obama has made a big deal. On May 4, 2009, President Obama said about Ugland House, which is where you invested your money overseas, "On the campaign, I used to talk about the outrage of a building in Cayman Islands that had over 12,000 business. And I've said before, either this is the largest building in the world or the largest tax scam in the world." You invested more money there than the average American makes in an entire year. Do you believe the president was accurate in referring to the building which housed your investment as, "The largest tax scam in the world?"
Lew dodged by saying he paid all his taxes. Grassley responded that "there's a certain hypocrisy in what the president says about other taxpayers and, then, your appointment."
Grassley then moved on:
GRASSLEY: A case filed in the New York State Supreme Court in which NYU, New York University, is the plaintiff, states that at the same time you were executive vice president, New York University invested in the Ariel Fund, a Cayman Islands, open-ended investment company, "created to be used for United States tax-exempt investors and foreign investors."... So, question, while you were the executive vice president, did NYU have investments in the Cayman Islands to avoid taxes on unrelated business expense and if so, how many millions of dollars did NYU have invested in the Caymans?
Lew incredilbly answered that he didn't know anything about that, despite being "involved in discussions about making sure that the endowment was invested to have as good as a return as impossible."
Perhaps most revealing of all at the confirmation hearing, Committee Chairman Max Baucus opened the meeting by noting that the statue in front of the Treasury building in D.C., which one might have expected would be of Alexander Hamilton, was in fact of Albert Gallatin, the Swiss aristocrat and slaveowner chosen by Thomas Jefferson as his Treasury Secretary. Baucus and others went on to praise Gallatin for his fiscal discipline, as the true source of America's greatness.