Citigroup Told They Can’t Have A New Jet, Stop Being So Silly

Citigroup may be too big to fail, but they’re not so big that they can splash $50m on a private jet and get away with it. While most corporate indiscretions (trips to the spa, mink-lined office chairs, etc) are usually enough to start spitting feathers over but not enough to actually make a dent in the company or the state, $50m is starting to get towards a sum that actually impinges upon Citi’s funds from the taxpayer in a big way. Everyone’s seethed over it, from Levin to Leno.

Hence that lovely smooth Tim Geithner getting involved, pausing from applying some anti-dark circle eye moisturiser to tell Citigroup to put down the new toy, they’re not allowed it. A couple of days ago Citi insisted they were going to have it, saying they’d ordered it two years ago, and that to cancel would mean a multi-million dollar penalty. Yes, but taking it would cost even more, and as they’ve had $45bn off the US government, Geithner doesn’t want to see it being spent on magpie-eyed frivolities at a time when he’s desperately trying to get some confidence back into the banking system. Weird, as the plane’s manufacturers describe it as having “unprecedented value”!

So Citi will be flying coach (or maybe just their two existing jets), but the boardroom they get to at the other end is going to look pretty different. The megabank announced a reshuffle of positions, with Rick Stuckey getting the bum post of Special Assets Pool management, sorting out assets which are “special” in a special school “special” sort of way these days.

CEO Vikram Pandit is talking up Citi big time, saying that Citi Holdings, the bit with all the troubled assets, “has positive value”, and that “many of the [Citi holdings] businesses are profitable and healthy”. The ones that lost over $8bn last quarter? Those ones? Just checking.

Posted by Ben Beaumont-Thomas in Hot Money | January 28, 2009 10:43AM |