Newly confirmed Treasury Secretary Jack Lew faced weak opposition to his appointment this February, even though questions were raised about a $1.4 million home loan he received from NYU while he served as the University’s Executive Vice President of Operations from 2001-2006. Two weeks ago, NYU Local released an email sent to faculty from Martin Dorph, NYU’s executive vice president for finance and information, that revealed NYU and its law school currently have outstanding loans to 168 people, for a total of $72 million in loans.
We previously reported that seven of these 168 loans were given to top administrators. These seven loans average over $1 million dollars each and make up 10% of the total funds.
This fact has now been highlighted by Iowa Senator Chuck Grassley in a letter to John Sexton (embedded below) that questions the validity of NYU’s tax-exempt status and the University’s methods of providing loans to members of its faculty. But at the heart of the matter is Lew, of course.
Grassley wants to know more about the terms of Lew’s big loan, much of which was forgiven by NYU, and what Lew’s involvement was with NYU’s preferential loan treatment to Citigroup. During Lew’s tenure, NYU made Citigroup a preferred lender to students, even though the bank did not give the best rates to students. NYU was later exposed to be moving Citigroup loans for cash and other encouragements. Jack Lew became the COO of Citigroup after leaving NYU in 2006 with a severance bonus of $685,000.
Grassley was a fierce opponent of Lew throughout the Senate’s confirmation hearing. When Grassley pressed him on his involvement in the Citigroup scandal, Lew was ambigous at best:
“I do not recall having any conversations with Citigroup officials regarding Citigroup’s selection or actions as a preferred lender for N.Y.U. students. Also, I do not believe that I approved the selection of Citigroup as a preferred lender for N.Y.U. students.”
In Grassley’s statement on the Senate floor before Lew’s confirmation, he warned his fellow members of Congress that they do “not have answers to basic factual questions about Mr. Lew.” A portion of Grassley’s speech was spent discussing Lew’s questionable offshore investments in the Cayman Islands. During his testimony, Lew said that at the time, he didn’t know that the fund he invested in was based in the Cayman Islands and that he lost money in that investment, so he didn’t owe any taxes on it.
Even with Grassley’s objections, Lew was confirmed 71-26, with all 26 “no” votes coming from Republicans.
Grassley has now penned this letter to NYU President John Sexton (below), less than a month after the Senate’s vote. Grassley calls out NYU’s lack of transparency on these secretive loans and ends the letter with a mix of 17 pointed questions and demands. They include requests for “all loan documents for loans made to individuals from 2000 to the present,” a “list of all of loans that have a 0% interest rate,” and “details of all severance payments of $100,000 or more made from 2000 to the present.”
NYU’s Vice President of Public Affairs John Beckman told the New York Post that “We will be reviewing Sen. Grassley’s letter and will respond to it.”