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Obama Taps Third Ex-Wall Streeter as Chief of Staff (Update 1)

Jacob Lew story updated to include comment from friend and former colleague Robert Litan.

NEW YORK ( TheStreet) -- President Obama has named budget director Jacob "Jack" Lew as his third straight chief of staff who has spent time on Wall Street.

Like his two predecessors, William Daley, who spent several years at JPMorgan Chase (JPM) and Rahm Emmanuel, who worked as an investment banker at Wasserstein Perella, Lew has dedicated more of his career to government service than he has to Wall Street. Still, a brief stint at Citigroup (C - Get Report) drew criticism since Lew received $900,000 after the 2008 bailout of the giant bank.

Incoming White House Chief of Staff Jacob Lew

President Obama "couldn't pick anybody in my view that has got more respect from both sides of the aisle, even in this very fractured political environment," says economist Robert Litan, a friend of Lew's and former colleague at the Office of Management and Budget during the Clinton Administration.

"It's hard to put him in the same category as Emmanuel or Daley, who were hired by Wall Street for their connections," Litan says. "Jack's role at Citigroup was operational."

Still, Litan conceded he was unaware of the $900,000 Litan earned in the wake of the Citigroup bailout.

"If that's true that's political fodder," Litan said, "but I still stick by my overall story, regardless of whatever the number is. He was there as an operational guy."

Lew received the Citigroup payment just two weeks before joining the U.S. State Department as Deputy Secretary of State, according to a report in The Washington Times in 2010, published after it was announced Lew would leave that post to become the White House Budget Director. Lew's replacement at the State Department, Tom Nides , is a former high-ranking executive at Morgan Stanley (MS) and Credit Suisse (CS) where he was a close confidant of Wall Street kingpin John Mack.

The resignation of Daley, handed in to the President last week, according to The Los Angeles Times, came after his role was cut back as Obama shelved plans to reach out to business leaders and Republicans in an effort to recast himself in more of a populist mold.

-- Written by Dan Freed in New York. Follow this writer on Twitter.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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