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February 26, 2013

Treasury Nominee's NYU Payout Raises Senate Scrutiny

Jacob Lew, President Obama's choice for treasury secretary, received a $685,000 severance payment from New York University in 2006 when he left a high-ranking administrative position to take a job at Citigroup, The New York Times reports.

Sen. Charles Grassley said the payment from the nonprofit, taxpayer-supported university "raises questions about [Mr. Lew's] regard for who pays the bills" and that NYU "should explain how its generous treatment of Mr. Lew and other executives is necessary to its educational mission." The Iowa Republican sits on the Senate Finance Committee, which is considering the Lew nomination.

A university spokesman said Mr. Lew was instrumental in resolving the university's budget and deficit issues during his tenure as executive vice president and that it "is not uncommon for large organizations to make payments to senior officials on their departure."

But experts on employee benefits said the payout was unusual in that Mr. Lew left the school voluntarily and amicably. Such exit bonuses are usually associated with executives who are ushered out, they said.