March 6, 2013--NYU, Citibank, & Jack Lew
I worked with, know, and respect Jack Lew; but if I had heard about his deals with NYU and Citibank, and if I were a Senator, I would have voted against his confirmation as Treasury Secretary.
I worked with him during the Clinton administration when he served as director of the Office of Management and Budget. He knew literally every line in the thousand-page federal budget and, from my perspective, had good values when it came to education funding--our area of mutual interest.
But then he went to NYU where he served as Executive Vice President for Operations and after that to Citibank before returning to Washington as Barack Obama's chief of staff and then Treasury nominee. Quite a resume for Jack, who is now 57 years old.
But during his confirmation hearings, the Jack I thought I knew was revealed to be just one of the boys who move in and out of government and in the process enrich themselves by cashing in on their Washington connections.
First he did very, very well at NYU where as vice president he was paid more than $800,000 a year (more at the time than the president of NYU) and was "loaned" at least $1.4 million to buy an apartment. The university paid the interest on the loan and as far as is known folded the $1.4 million together with an exit bonus of $685,000 when he left to go to Citibank after a scant four years at NYU.
And then after less than two years at Citibank, where he earned millions in salary and bonuses, he was given a very unusual golden parachute when he left to become chief of staff--at least $500,000 worth of stock options and deferred payments because his initial contract stipulated he would receive this if he secured "a high-level position in the federal government or regulatory agency."
One doesn't have to connect too many dots to know that exit agreement was not the result of Citibank wanting to compensate one of its employees who moved to government service at considerable personal sacrifice.
I guarantee you his position at Citi will be waiting for him when he steps down as Treasury Secretary just as it did for Robert Rubin (Jack's mentor) who, when he returned to Citibank from his tenure as Clinton's Treasury Secretary, made hundreds of millions while abnsolving himslef of any responsibility for the collapse of the U.S. economy in 2008 or the crushing consequences for his employer, Citibank.
Business as usual.
But, I had been hoping, not business as usual at NYU, my former employer. Maybe Jack was so generously overcompensated because NYU president John Sexton wanted to continue to do the same kind of favors he did for the Clintons and their senior people when he was dean of the law school.
True, Sexton's salary has by now risen to at least $1.3 million annually and he does get the free use of a glorious apartment overlooking Washington Square Park. But then I learned he is due to receive $800,000 a year for life after he retires, which may prove sooner than he plans since the faculty is about to approve a vote of "no confidence" in him, in part because he has been ignoring mounting problems at the main campus in New York City while jetting off virtually weekly to the university's satellite "campus" in Abu Dhabi. Yes, Abu Dhabi, where the prince donated $40 million to the university as a sweetener. I can only imagine the apartment his highness made available to the peripatetic president.
That's Sexton's self-defined deal. But he has been quite generous to other NYUers in addition to Jack Lew.
For example, according to the New York Times, he approved an exit bonus of $1.23 million for Harold Koplewicz, the founder of NYU's Child Study Center. Further, NYU bought a $6.5 million apartment on the Upper East Side for the head of the medical center; paid more than $4.0 million to "help" a law school professor remain in his apartment when he left Columbia for NYU; and gave the dean of the law faculty $5.7 million to buy an apartment.
All the while NYU's tuition has risen at a rate that outpaces inflation and more and more of its undergraduate courses are being taught by adjuncts, part-time faulty, who are paid a few thousand dollars per section.
While all this has been going on, I forgot to mention, John Sexton, when he is town, goes to Yankee Stadium for every home game, using seats in a field-level box paid for by . . . you guessed it, NYU.
I worked with him during the Clinton administration when he served as director of the Office of Management and Budget. He knew literally every line in the thousand-page federal budget and, from my perspective, had good values when it came to education funding--our area of mutual interest.
But then he went to NYU where he served as Executive Vice President for Operations and after that to Citibank before returning to Washington as Barack Obama's chief of staff and then Treasury nominee. Quite a resume for Jack, who is now 57 years old.
But during his confirmation hearings, the Jack I thought I knew was revealed to be just one of the boys who move in and out of government and in the process enrich themselves by cashing in on their Washington connections.
First he did very, very well at NYU where as vice president he was paid more than $800,000 a year (more at the time than the president of NYU) and was "loaned" at least $1.4 million to buy an apartment. The university paid the interest on the loan and as far as is known folded the $1.4 million together with an exit bonus of $685,000 when he left to go to Citibank after a scant four years at NYU.
And then after less than two years at Citibank, where he earned millions in salary and bonuses, he was given a very unusual golden parachute when he left to become chief of staff--at least $500,000 worth of stock options and deferred payments because his initial contract stipulated he would receive this if he secured "a high-level position in the federal government or regulatory agency."
One doesn't have to connect too many dots to know that exit agreement was not the result of Citibank wanting to compensate one of its employees who moved to government service at considerable personal sacrifice.
I guarantee you his position at Citi will be waiting for him when he steps down as Treasury Secretary just as it did for Robert Rubin (Jack's mentor) who, when he returned to Citibank from his tenure as Clinton's Treasury Secretary, made hundreds of millions while abnsolving himslef of any responsibility for the collapse of the U.S. economy in 2008 or the crushing consequences for his employer, Citibank.
Business as usual.
But, I had been hoping, not business as usual at NYU, my former employer. Maybe Jack was so generously overcompensated because NYU president John Sexton wanted to continue to do the same kind of favors he did for the Clintons and their senior people when he was dean of the law school.
True, Sexton's salary has by now risen to at least $1.3 million annually and he does get the free use of a glorious apartment overlooking Washington Square Park. But then I learned he is due to receive $800,000 a year for life after he retires, which may prove sooner than he plans since the faculty is about to approve a vote of "no confidence" in him, in part because he has been ignoring mounting problems at the main campus in New York City while jetting off virtually weekly to the university's satellite "campus" in Abu Dhabi. Yes, Abu Dhabi, where the prince donated $40 million to the university as a sweetener. I can only imagine the apartment his highness made available to the peripatetic president.
That's Sexton's self-defined deal. But he has been quite generous to other NYUers in addition to Jack Lew.
For example, according to the New York Times, he approved an exit bonus of $1.23 million for Harold Koplewicz, the founder of NYU's Child Study Center. Further, NYU bought a $6.5 million apartment on the Upper East Side for the head of the medical center; paid more than $4.0 million to "help" a law school professor remain in his apartment when he left Columbia for NYU; and gave the dean of the law faculty $5.7 million to buy an apartment.
All the while NYU's tuition has risen at a rate that outpaces inflation and more and more of its undergraduate courses are being taught by adjuncts, part-time faulty, who are paid a few thousand dollars per section.
While all this has been going on, I forgot to mention, John Sexton, when he is town, goes to Yankee Stadium for every home game, using seats in a field-level box paid for by . . . you guessed it, NYU.
posted by Steven Zwerling at
5:45 AM
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