Jeffrey Goldstein, the Obama administration’s nominee to be the Treasury Department’s Undersecretary for Domestic Finance, worked for a private equity fund that set up offshore shell corporations which allowed investors to avoid U.S. income tax, according to Senate Republican sources. The Senate Finance Committee is set to hold a hearing on Goldstein’s nomination Tuesday.

The firm for which Goldstein worked was Hellman & Friedman, and the shell corporations were located in the Cayman Islands. Goldstein, who was at Hellman & Friedman from 2004 to 2008, received income from the offshore investments — money he was able to enjoy while paying a lower tax rate than most Americans pay on regular income. Goldstein earned what is called “carried interest,” which is taxed at the lower capital gains rate rather than be taxed as regular income. It is unclear how much Goldstein made during his time with Hellman & Friedman.