Former Obama Treasury Secretary Jacob Lew has raked in at least $14.4 million from a private equity firm since leaving the administration after refusing to crack down on a loophole in the tax code that benefits Wall Street fat cats.
Lew, who is in line to be President Joe Biden’s next ambassador to Israel, left Obama’s cabinet in 2017 to join the private equity firm Lindsay Goldberg, where he was made managing partner.
Recent disclosures — made public as part of the vetting process for those nominated for ambassador — revealed that Lew has been paid at least $14.4 million over the last year by the firm, according to independent journalist Lee Fang.
The disclosure forms do not specify the exact income, though it does note that Lew was paid between $1 million to $5 million in capital gains or dividends.
The Post has sought comment from Lew and Lindsay Goldberg.
Barack Obama had campaigned to reform the tax code when he first ran for president in 2012, vowing to eliminate the so-called “carried interest loophole,” which is often employed by hedge funds and private equity investors so that they pay a lower capital gains rate.
Carried interest is the percentage of an investment’s gains that a manager at a hedge fund or private equity firm takes as salary.
By law, the money is taxed at a capital gains rate of 20% for top earners — or almost half the 37% rate at which top earners are taxed on their income.
While president, Obama denounced “carried interest loophole” as a means by which “folks who are doing very well [are] paying lower rates than their secretaries.”
Biden and his predecessor, Donald Trump, also pledged to abolish the tax break, but could not get the measure approved by lawmakers.
Private equity firms have fought attempts to do away with carried interest, saying it spurs entrepreneurship, risk-taking, and investment.
Lindsay Goldberg, which is headquartered in Midtown Manhattan, is a private equity firm focused on leveraged buyouts and growth capital investments in consumer products, energy, healthcare, and finance.
The firm has around $17 billion in total assets under management.
Lew, who had joined Obama’s cabinet in his second term, is one of several former Obama officials who have landed lucrative jobs on Wall Street after their stints in government.
Timothy Geithner, who served as Obama’s first Treasury Secretary, was named president and managing director of Warburg Pincus, a private equity firm.
Brian Deese, who served as a senior adviser to Obama and who is now a top economic aide to President Biden, was paid $2.3 million in 2020 as head of sustainable investing at BlackRock, according to Axios.
Earlier this year, Fang reported that Obama would also derive financial benefit from the carried interest loophole after he was named “strategic partner” with NBA Africa.
In June, the NBA announced that Obama “will have a minority equity stake in the new venture” while he “help[s] advance the league’s social responsibility efforts across the continent.”
Obama’s deal with NBA Africa has been structured as a “profit interest” share, which is similar to the “carried interest loophole” that the former president denounced as a gift to the wealthy, according to Fang.
This story originally appeared on NYPost
