LOWRY/The talented Mr. Too-Big-to-Fail
Wednesday, February 27, 2013 12:00 AM
Some guys have it, and some don't. I'm referring to that special quality that makes powerful institutions want to throw fistfuls of dollars at them in senseless acts of high-priced beneficence.
Jack Lew has it like nobody's business. You might think the bespectacled treasury secretary nominee is just another brainy budget wonk and miss the animal magnetism that makes his employers lose all sense of financial proportion around him, paying him astronomical sums, forgiving his loans and granting him generous golden parachutes.
Yes, Jack Lew is a rare talent - at the art of getting paid.
He left the Clinton administration, where he served as director of the Office of Management and Budget, for what turned out to be the extremely lucrative field of nonprofit education. At New York University, he made more than $800,000 in 2002. According to his W-2, examined by staff on Capitol Hill, he made $1.2 million in total compensation in 2006.
Lest you discount these figures as a reflection of the racket that is higher education rather than of an indication of Jack Lew's knack for getting paid, consider that Lew made more than the president of the university, John Sexton. One imagines a sheepish Sexton asking the school's board why he was making less than the university's executive vice president for operations and getting back the pained explanation, "Surely, John, you must understand ... it's because he's Jack Lew."
Even for Jack Lew, housing in New York City can be expensive. Not to worry. New York University provided him a loan for housing. The universally recognized trouble with loans is that they have to be paid back. Not to worry. All is forgiven if you are Jack Lew, especially your loans. According to Lew, the university forgave the loan of some $1.4 million "in equal installments over five years."
Upon leaving NYU, Lew received what he describes as "a one-time severance payment upon my departure." He wasn't fired, usually the occasion for severances. He simply left and got paid for the act of leaving. Hey, that's Jack Lew - he gets paid when he stays and gets paid when he goes.
He went to Citigroup, which NYU had made its primary private lender for student loans in exchange for a cut of those loans. (Coincidences happen to everyone, including Jack Lew.) At Citi, Lew established beyond a doubt his expertise at getting paid. In 2008, as the bank nearly blew up and laid off one-seventh of its employees, Lew ran its disastrous Alternative Investments unit - and got paid $1.1 million.
The bank had to be bailed out by the federal government, but it couldn't stop paying Jack Lew. The journalist Jonathan Weil of Bloomberg has unearthed Lew's contract at Citi. It said, reasonably enough, that he wouldn't get his "guaranteed incentive and retention award" if he left the company. It made an exception, though, if Lew left to get "a full-time high level position with the United States government or regulatory body."
Jack Lew being Jack Lew, he didn't leave Citi for a midlevel government position, or a low-level government position, or even a part-time high-level government position. No, he landed the aforementioned full-time high-level position. He became deputy secretary of state, on his way to resuming his duties at OMB, then becoming the chief of staff to the president, and now secretary of the treasury. And, of course, he got paid.
The cynics talk of crony capitalism. The scoffers hint of special favors for the politically connected. The good-government types worry about the unseemliness of a too-big-to-fail Wall Street bank giving one of its executives an incentive to become a high-ranking government official. Maybe they should give it a rest and simply stand back and marvel at the moneymaking machine that is Jack Lew. Lesser mortals criticize and cavil. He gets paid.
Rich Lowry, editor of National Review, can be reached by e-mail at firstname.lastname@example.org.