Missing the Jack Lew connection: How a Citigroup exec becomes Treasury Secretary

Missing the Jack Lew connection: How a Citigroup exec becomes Treasury Secretary

The Lucie / January 29, 2013

Jack Lew, former COO of Citigroup Alternative Investments, current White House Chief of Staff–and future U.S. Treasury Secretary (Photo AP / J. Scott Applewhite)

by @rousseau_ist

Frontline’s most recent program entitled “The Untouchables,” which aired on January 22, outlined how Lanny Breuer, head of the DOJ’s criminal division, and his Deputy were unwilling to prosecute Wall Street bankers in spite of evidence of fraud. Breuer confessed to the New York Bar Association that he was up nights thinking about how his actions potentially may have had tragic ripple effects throughout the economy.

Frontline did a good job in calling out Breuer and the Justice Department. So good that DOJ called “The Untouchables” a “hit piece,” and Lanny Breuer has resigned his position. Still, Frontline failed to point out a vital connection with a key Obama cabinet appointment.

U.S. Treasury Secretary nominee Jack Lew, the current White House Chief of Staff, used to be in charge of the very Citigroup department that was the subject of a Senate hearing. Frontline documented the Citigroup policy of bank underwriters’ approving mortgages that would eventually go into failure, and even showed Senator Carl Levin questioning the chief underwriter of Citigroup. Levin asked him whether he believed the bank he worked for had been running a scam by intentionally granting housing loans destined to fail while at the same time betting heavily against the housing market.

Of course, it was a scam. It conned many people out of their paychecks, their life savings and their retirements. Ultimately, it crushed the economy. One merely needs to look at the jobs market to see how the economy is devastated beyond repair. And Jack Lew, soon to be Secretary of the U.S. Treasury, played a key role in the mismanagement of risk.

All too often the federal government chooses to address a problem with the very same individuals who played roles in creating the problem. This isn’t the “Hope” and “Change” that Obama voters were expecting when they pledged their support for the President in 2008.

According to an officer outside the Alfalfa Club dinner Saturday night, Metropolitan police have yet to negotiate a contract or receive a pay increase in 7 years. Teachers, healthcare workers or any individual who has a job remotely connected to the government stand to lose their jobs after March 27. Had individuals like Jack Lew not created the economic collapse of 2008, more than likely we would not be facing such harsh cuts.

Like Frontline, mainstream media outlets have dropped the ball as well. Few are making the connection between Jack Lew and his former role at Citigroup (contrast this article on Huffington Post), or pointing out the continuing relationship of the U.S. Treasury with firms which received bailout money, such as Lew’s former employer.

What’s more, the mainstream propaganda machine is hard at work validating President Obama’s choice for Treasury Secretary and whitewashing Jack Lew’s involvement in this fraud. Not only are big bankers going unpunished, in the Obama administration they are being rewarded with cabinet appointments. We need a watchdog media that has the courage to say so.