WASHINGTON — Jack Lew’s time as an executive at New York University — when the school was accused of steering students to pricey Citigroup loans — is triggering problems for his Treasury Secretary confirmation because he left the school to work for the bank, The Post has learned.
Lew served as executive vice president for operations at NYU from 2001 to 2006 — during which time the school was investigated for making Citigroup a preferred lender in exchange for “sweeteners,” cash and other incentives, according to the New York Attorney General’s office at the time.
NYU settled the probe by returning $1.4 million to students and did not admit or deny guilt.
Lew left NYU for a job at Citigroup.
Lew, who served as Obama’s chief of staff, mostly skated through his confirmation hearing this week — fending off questions about nearly $1 million in compensation he got as a top Citigroup exec in 2008, when the bank took a taxpayer bailout during the financial crisis.
But now Sen. Charles Grassley (R-Iowa), one of the Senate’s most aggressive investigators, is demanding Lew answer questions about the student loan program.
Citigroup, as one of NYU’s “preferred lenders,” could have led students to believe it offered the lowest rate — but it didn’t, the AG’s office said at the time of the settlement.
Among a series of questions Grassley is requiring Lew to answer before the Senate Finance Committee votes on his nomination: “While you were at NYU, did you have any conversations with Citigroup officials about these kickbacks? If so, please describe them.”
The inquiry could force Lew to disclose the existence of any emails on the topic, which could provide material for any further inquiry.
NYU, in a 2007 letter, around the time of the settlement, said it put monies received from Citigroup into a scholarship fund.
Lew earned more than $800,000 a year while at NYU — more than its president.
“There are some interesting eerie coincidences,” said one congressional aide. “What level of knowledge did he have? They took advantage of a revenue stream from unknowing students. A lot of other people did as well.”
The attorney general heading the probe, Andrew Cuomo, now governor, went after schools for the practice, which he called an “unholy alliance” involving “deceptive practices” that may have violated consumer protection laws.
A Treasury spokesman didn’t respond to a request for comment by press time.
At Lew’s Finance Committee confirmation hearing, Grassley raised another issue: asking Lew to explain investments from NYU’s endowment in funds based in the Cayman Islands. Lew said he wasn’t aware of whether his own investment in a Cayman-based partnership provided any tax benefit.
Lew, who is expected to win confirmation, is just the latest top Obama nominee to face pressure from minority Republicans eager to ferret out new documents and scuff up would-be cabinet members.
The Senate yesterday failed to overcome a Republican effort to stall former Sen. Chuck Hagel as Obama’s Defense Secretary.