Bloomberg News

Lew to Be Pressed on Cayman Islands Investment at Hearing

February 09, 2013

Jack Lew, nominated to be U.S. Treasury secretary, had an investment in a Cayman Islands fund located in a building known as home for offshore tax havens that President Barack Obama criticized during his 2008 campaign.

Lew will be asked about his investment in a Citigroup Inc. fund during his confirmation hearing before the Senate Finance Committee on Feb. 13, Senator Charles Grassley, an Iowa Republican, said yesterday in a statement.

Lew had between $50,001 and $100,000 in the fund, according to a 2009 financial disclosure form. The fund was located in a building known as Ugland House, according to Securities and Exchange Commission filings released by Grassley.

Lew, Obama’s former chief of staff and head of the Office of Management and Budget, was a Citigroup executive before joining the Obama administration in 2009.

White House spokesman Eric Schultz said that Lew’s investment in the Cayman Islands fund is “not news to the Senate,” as it had been disclosed in previous confirmation proceedings for other administration positions.

“Jack Lew paid all of his taxes and reported all of the income, gains and losses from the investment on his tax returns,” Schultz said in a statement. “He played no role in creating, managing or operating the fund and he sold his investment in 2010 at a net loss.”

Ugland House, a five-story office building on South Church Street in the Caymans, served as the official address for 18,857 corporations as of March 2008, according to a U.S. Government Accountability Office study published that year. About half those Cayman companies had billing addresses in the U.S., according to the study.

Obama Remarks

In January 2008, then-candidate Obama referred to a building in the Cayman Islands that is “either the biggest building or the biggest tax scam on record.”

During the 2012 presidential race, Obama’s campaign released an ad in July accusing Republican challenger Mitt Romney of outsourcing jobs and stashing his money in overseas accounts. Romney, a former Massachusetts governor who made his fortune as a private-equity executive, last year reported holdings that included investments in the Cayman Islands.

To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net


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