Cayman Islands Investment Becomes Obstacle For Treasury Secretary Nominee
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Jack Lew’s nomination for Treasury Secretary was already proving to be contentious but now questions are being raised on Lew’s personal financial activities. Lew reportedly made an offshore investment in the Cayman Islands that may have been an attempt to avoid taxes.
Treasury secretary nominee Jack Lew will face questions at his confirmation hearing next week about an investment fund registered in a Cayman Islands building that has been called a notorious site for tax haven abuse.
Lew invested $56,000 in the fund, which was run by his former employer Citigroup, and sold his investment in 2010 for $54,418, according to the Senate Finance Committee….
The investment fund could become an issue during the upcoming hearing because Lew’s job as Treasury secretary would give him a major role in shaping the administration’s tax policy.
The president has targeted tax haven abuse as a major problem in the country’s tax system.
Lew’s relationship with Citigroup was already a flashpoint for conflict with progressives as concerns were raised about possible favoritism towards the Too Big To Fail bank and Wall Street generally. Lew had played a leading role in a Citigroup unit that profited by shorting the housing market.
The Caymans Island investment also opens the door for charges of hypocrisy against President Obama. Obama made Mitt Romney’s offshore investments – including those in the Cayman Islands – a major issue in his 2012 campaign. One of Obama’s most prominent ads referred suspiciously to Romney keeping “millions in Bermuda and the Cayman Islands” the implication clearly being that such activity’s purpose is to avoid paying taxes.
While the nomination is still likely to go through Lew will now be facing another set of tough questions at his confirmation hearing.
Photo by Department of State under Public Domain