Under Fire from Obama Administration, Citigroup Drops Plane Plan
EmailOn Monday an official of the Treasury Department called an official of Citigroup, recipient of $45 billion in TARP funds, and complained about the company’s new $50 million dollar,12-seater corporate jet from a French company.
The official "told them to fix it," a source with knowledge about the call tells ABC News.
Citigroup this morning released the following statement: "We have no intent to take delivery of any new aircraft."
Asked by ABC News about the appropriateness of Citigroup spending $50 million on a new luxury jet for corporate chieftains, White House press secretary Robert Gibbs on Monday said, "the president said this during the transition, as it related to the auto companies using private jets; doesn’t believe that’s the best use of money at this point. Instead, that money should be used to lend to consumers to get the economy moving again, to free up capital and credit, and help small businesses create jobs."
- jpt
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I’d be surprised if anyone doesn’t think this is a gooood move!
Posted by: EyesWideOpen | January 27, 2009, 9:09 am 9:09 am
That’s good I suppose.
But
There is a concern that our President is requiring behavior outside the scope of his office on a routine basis.
That’s not good.
Posted by: smith | January 27, 2009, 9:12 am 9:12 am
Yesterday Citigroup incresed their interest rate on credit card from 11% to 24%. When called they advised that it was due to economic conditionsbut they only increased the rates for 20% of their card holders they agreed that I was a good customer for 14 years. I only could get reduced if I let my card expire, so they would lose a good customer I advised them if they needed the money to pay for the new jet. When I told them to cancel my account they said to hold on and came back saying that they would only increase it 1% and I can keep my account open.
Posted by: Anthony Teti | January 27, 2009, 9:17 am 9:17 am
This is swatting flies. Canceling the plane won’t cause them to free up money for loans. They will never free up money for loans again; that’s what caused this whole mess. Free money for unqualified, bankruptcy-trigger happy customers. There’s one thing consistent throughout this ordeal; the people are blaming politicians, bush mostly, when the real fault lies with people living above their means.
Posted by: Ozarkess | January 27, 2009, 9:24 am 9:24 am
It’s about time that these insults to American taxpayers stopped. I wish we could take it one step further. Citibank ceos and other corporate fatcats who receive bailout money and buy corporate jets, resort junkets, lavishly renovate offices or homes should be canned on the spot. The American taxpayers have invested heavily in them and they are insulting us with their arrogance and waste. At a time when so many are losing jobs, they should be fired without hesitation.
Posted by: hopesprings52 | January 27, 2009, 9:35 am 9:35 am
Citi and the other banks should have been left to fail! These companies will fail again becaue they jut don’t understand that the companies needed to revamp ALL of their operations and spending. The plane purchase; AIG junkets; moving bonuses up to December and redecorating offices for a cool million indicates that the management does not get it. Let them fail so the bankruptcy judge can do the cutting that management will not or refuses to do.
Posted by: Mitch Bupp | January 27, 2009, 9:37 am 9:37 am
corporate culture needs changing. how executives, in this economy, can still decide on spending money on a corporate jet is difficult to comprehend. it has to be greed, corruption, devil may care attitude about anything but themselves. narcissism at its best. corporate culture needs to change with these times. this is the worst economic crisis since the Great Depression but corporate management culture sees it not, they continue to pary, make decisions as if Rome is not burning. stupid people. corporate executives, corporate culture needs to answer to some entity and it can’t be shareholders because they are powerless. if a corporation receives federal bailout money, as citigroup did, then the federal government needst to rein in their stupid management practices and decisions. the bailout money must be managed and accounted for down to the last dime.
Posted by: Lawrence | January 27, 2009, 9:39 am 9:39 am
Good… Now will COngress drop their limos and private planes also?
Al Gore cancels global warming interview on Capitol Hill.. Dems say its too cold and the people wouldn’t understand if we had a global warming hearing as cold as it is… LMAO I kid YOU NOT.. Idiots
Posted by: Obama/Biden, hug a terrorist today | January 27, 2009, 9:44 am 9:44 am
Hurray for a return to common sense and accountability in our presidential administration.
Citigroup’s receipt of 45 billion (!!!) of TARP funds should give us some rights to monitor and affect how they spend it. And buying a $50 million dollar private jet isn’t a good investment for taxpayers. (Especially when you add on the recurring costs of a private pilot, maintenance, hangar rent, insurance and depreciation it is a terrible idea.)
Posted by: Lydia | January 27, 2009, 9:44 am 9:44 am
Awesome! I voted for McCain but I give BO props on this one…good job!…”There’s a new sheriff in town…and his name is Reggie Hammond…ya’ll be cool now…right on!”
Posted by: MBNA Joe | January 27, 2009, 9:44 am 9:44 am
As long as Greed and its accomplice,corruption, are the norm for any society, there is no form of governing that will survive. Whether it be Communisim, Facism, Capitalism, Socialism, – no “ism” can survive if greed and corruption rule. Our society if saturated with greed and corruption – what does that tell you?
Posted by: eyeonyou | January 27, 2009, 9:50 am 9:50 am
Obama admin. is in to work for people. Unfortunately there are some people who are pulling them back. Please let them play their role and the results will be enormous.
Posted by: Rosie | January 27, 2009, 10:06 am 10:06 am
It is NOT outside the “scope of the president’s office” to advise a corporation that we gave $45 mil in taxpayer dollars to spend that money wisely. You’re right, it’s not good—it’s AWESOME. It’s what the do-nothing, give-money-away-without-restrictions bushies should have done in the first place when they cut the check. President Obama, I am so proud of you!
Posted by: Susan | January 27, 2009, 10:11 am 10:11 am
Quote:
There is a concern that our President is requiring behavior outside the scope of his office on a routine basis.
That’s not good.
Like The PATRIOT ACT??
Please, What’s the tally now on the bailout? How much good money can you throw at the problem? Pretty soon it will have to be measured in exponential equivalents; but until the bailoutees correct their own culture, this will never work.
Posted by: gerpierro | January 27, 2009, 10:17 am 10:17 am
“When I told them to cancel my account they said to hold on and came back saying that they would only increase it 1% and I can keep my account open”.
Good for you Anthony. It’s time customers and consumers fight back.
Posted by: Clint | January 27, 2009, 10:23 am 10:23 am
Video conferencing is a lot cheaper than a corp. jet! These old school should get with the “Green” program and use technology to the fullest. Flying 12 people around at a cost of thousands per trip is extremely wasteful!
Posted by: Gerald | January 27, 2009, 10:32 am 10:32 am
Robert Gibbs on Monday said “the president said this during the transition, as it related to the auto companies using private jets; doesn’t believe that’s the best use of money at this point.” jpt, January 27, 2009
++++++++++++++++++++++++++++++++++++
He should have said give it some time and do it while they (meaning us)
are not watching.
ACORN 4BILLION from the stimulus..hummmm
Posted by: Mildred | January 27, 2009, 10:42 am 10:42 am
Please let them play their role and the results will be enormous.
Posted by: Rosie | Jan 27, 2009 10:06:43 AM
++++++++++++++++++++++++++++++++++++
Rosie, 4BILION to ACORN from the stimulus package “will be enormous” results. And, that is just what we are hearing about now…..wait. Hummmmm
Posted by: Mildred | January 27, 2009, 10:48 am 10:48 am
It is indeed a great action from our new president. They must be very careful in spending money wisely because our economy is in deep crisis right now. This applies to everyone.
Posted by: long island girl | January 27, 2009, 10:48 am 10:48 am
Some time will go buy and people will have other problems to worry about. Then these will go ahead and buy that jet, with OUR MONEY of course. Obama is not going to change anything when it comes to Wall Street. The bankers control the government and we’re just peons that are forced to pay for it all. The bail out plan is sort of like trying to put a band-aid on a gun shot wound.
Posted by: Mike | January 27, 2009, 11:01 am 11:01 am
Mildred – The money to ACORN is for what exactly? I know, but based on your post – I’m guessing you don’t.
Posted by: Paige | January 27, 2009, 11:19 am 11:19 am
What size car are these executives allowed to buy,can they fix their bathrooms, or are outhouses going to be mandatory at citigroup. Maybe they can borrow the private jets from some of the 67 celebrities who flew to Dear Leaders inaugaration.
Posted by: Lynne Lindeman | January 27, 2009, 11:28 am 11:28 am
If the CEO’s of Citibank are arranging to buy a corporate jet after receiving 45 billion in tax payers money, you have to wonder what other poor decisions they are making on other matters that we don’t hear about. Let Citibank fall, do not give this company one more penny, better yet have them repay the 45 billion dollars now, and let the company sink like the Titanic. Send a message to these corporate scumbags, and maybe this lavish spending will stop.
Posted by: Craig | January 27, 2009, 11:35 am 11:35 am
It is time for these CEOs to lose their jobs and stand in the unemployment line. I wonder how many girlfriends they would have on the side then. And it is time for the spoiled little wives and bratty kids to feel the pain as well. Stop the shopping at expensive stores and shop at Walmart and Target and the private schools. Let those spoiled brats have a taste of public schools for a while. I am tired of my tax money being used to finance the rich while everyone else is struggling. Pull the plug on these executives already and stop the unnecessary spending and give back to the taxpayer to stimulate the economy. I would like to see a fat stimulus check to me in the mail for a change. And not no sorry $600 either. $500,000 would work just fine. The banks are just wasting it. Give me a chance to waste my own money, I don’t need the banks to waste it for me. I can do it all by myself. I want my stimulus check now please.
Posted by: cdd | January 27, 2009, 11:46 am 11:46 am
Mildred – The money to ACORN is for what exactly? I know, but based on your post – I’m guessing you don’t.
Posted by: Paige | Jan 27, 2009 11:19:43 AM
++++++++++++++++++++++++++++++++
This money is to pay off ACORN for buying an election. Now I know your reason is much much different, so let’s hear it.
Posted by: Mildred | January 27, 2009, 11:47 am 11:47 am
Mildred – Living in the land of conspiracy. The folks at area 51 are looking for you.
Posted by: Paige | January 27, 2009, 12:02 pm 12:02 pm
Mildred – Living in the land of conspiracy. The folks at area 51 are looking for you.
Posted by: Paige | Jan 27, 2009 12:02:27 PM
+++++++++++++++++++++++++
Guess my answer was right since you
don’t have one. You can only criticize and demean what I have to say, that is your only defense of my comment. A fellow that registered 72 times to vote doesn’t that say just what ACORN stands for; he finally woke up and decided something was wrong and vowed to vote only one time, but how many others were too stupid and only wanted obaba to be elected and didn’t care how this was done. ACORN was the answer.
Don’t think this qualifies as conspiracy. But 4BILLION dollars to this organization is total lunacy.
Posted by: Mildred | January 27, 2009, 12:26 pm 12:26 pm
So….I post a comment asking Jake to check his facts on the whole story and it is taken down?!?!? These are the beginnings of socialism and ABC News is leading the way.
Posted by: chris | January 27, 2009, 12:32 pm 12:32 pm
Obama is not going to change anything when it comes to Wall Street.
____________________
Mike, I disagree. Obama JUST did something to change something on Washington. The main reason WS was spinning out of control was because the admin was looking the other way on just about everything. I am beyond ecstatic that Obama didn’t think this was too small to do something about. He is clearly showing that he will deal with just about anything that comes to his attention. Its a great thing!
Posted by: Question | January 27, 2009, 1:05 pm 1:05 pm
Where is ACORN?????????????????
Highlights of Economic Recovery Plan
Spending
Energy
$32 billion Funding for “smart electricity grid” to reduce waste
$20 billion + Renewable energy tax cuts and a tax credit for research and development on energy-related work, and a multiyear extension of renewable energy production tax credit
$6 billion Funding to weatherize modest-income homes
Science and Technology
$10 billion Science facilities
$6 billion High-speed Internet access for rural and underserved areas
Infrastructure
$32 billion Transportation projects
$31 billion Construction and repair of federal buildings and other public infrastructure
$19 billion Water projects
$10 billion Rail and mass transit projects
Education
$41 billion Grants to local school districts
$79 billion State fiscal relief to prevent cuts in state aid
$21 billion School modernization
Health Care
$39 billion Subsidies to health insurance for unemployed; providing coverage through Medicaid
$90 billion Help to states with Medicaid
$20 billion Modernization of health-information technology systems
$4 billion Preventative care
Taxes
Individuals:
$500 per worker, $1,000 per couple tax cut for two years, costing about $140 billionGreater access to the $1,000-per-child tax credit for the working poorExpansion of the earned-income tax credit to include families with three childrenA $2,500 college tuition tax creditRepeal of a requirement that a $7,500 first-time homebuyer tax credit be paid back over timeBusinesses:
An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of twoBonus depreciation for businesses investing in new plants and equipmentDoubling of the amount small businesses can write off for capital investments and new equipment purchasesAllowing businesses to claim a tax credit for hiring disconnected youth and veterans
Posted by: USCITIZEN_04 | January 27, 2009, 2:56 pm 2:56 pm
Its funny how we keep hearing about ACORN, but what about the two group that were signing up people for the republican party with out thier knowledge, and in this case arrest were made, but none with ACORN. Matter of fact ACORN personal were the ones that notified officials about phony ballots, not some whistleblower.
Posted by: USCITIZEN_04 | January 27, 2009, 3:00 pm 3:00 pm
lynne–while i dislike seeing waste and obscene luxury anywhere, those celebrities were spending their own money on their own planes. it’s not like they declared bankruptcy, took out a federal “starving artist” loan and then bought the plane with the money. waste is waste but i’d much rather people flaunt their earned wealth than taxpayer-funded “wealth”.
i’m still reeling about the fact that they let those banks get in SUCH a bad state that we HAD to bail them out or we’d all suffer for their sins–then they go and buy jets and new office furniture? NOT RIGHT.
ps–i’d venture a guess that there were a proportional number of bush inaugural attendees who came to dc via their own planes as well–just wealthy private individuals and corporate types, not celebrities.
Posted by: cate | January 27, 2009, 3:42 pm 3:42 pm
Get ‘em big dog! Woof!
Posted by: SpaceCat | January 27, 2009, 3:43 pm 3:43 pm
Mildred —– SACRAMENTO — Dozens of newly minted Republican voters say they were duped into joining the party by a GOP contractor with a trail of fraud complaints stretching across the country.
Voters contacted by The Times said they were tricked into switching parties while signing what they believed were petitions for tougher penalties against child molesters. Some said they were told that they had to become Republicans to sign the petition, contrary to California initiative law. Others had no idea their registration was being changed.
Posted by: USCITIZEN_04 | January 27, 2009, 3:57 pm 3:57 pm
At least, it is good to hear that CitiGroup cancelled the plane, although I am not sure whether the company took a lesson and /or they will use the $50 million more wisely. Certainly, we cannot monitor and control every single penny they are spending. I hope the company will take the Obama’s words seriously. Make the best use of OUR money….
Posted by: Hyegyu | January 27, 2009, 5:12 pm 5:12 pm
I’m so proud of Obama! I hope he continues to keep an eye on these worthless swine. The Citibank “leadership” needs to be downsized. It’s a wonder these fools ever turned a profit.
Posted by: susan | January 27, 2009, 7:40 pm 7:40 pm
… so citigroup wont take delivery of the plane big deal. you people realize for them to have even ordered the plane 2 years ago that they have most likely spent at least half of the $50M final price tag already.
you cannot just place an order without putting $$ down, signing a large contract and then right before taking delivery say “oh sorry we dont want it now, can i have my $$ back?”
whatever they have already paid is gone and Citi will never see it again.
i would assume its much like when the company i work for buys a machine. you pay X% when you sign the contract and for them to design the machine. X% when the design phase is done. X% when its halfway built. X% whenthe machine ships and a final % when you sign off on the machine fulfilling the contractual agreement.
Posted by: me | January 27, 2009, 8:54 pm 8:54 pm
Another example of the Republican idea of deregulation of business and the trickle down theory. As always it trickles into comfort of those at the top at the expense of those at the bottom.
Posted by: Mike | January 28, 2009, 11:15 am 11:15 am
good going Obama..now if you will take back the 40 milion you just gave Acron and the 450 million you gave overseas for abortion,,,,give it to small business and really stir the USA economy.
Posted by: stanley | January 28, 2009, 12:55 pm 12:55 pm
When are these executives going to be FIRED? They have no reason to expect to keep their jobs while they squander money and toss workers out on the street? Why are they allowed to stay and possibly keep making the same mistakes?
Posted by: Pam | January 28, 2009, 1:00 pm 1:00 pm
What a joke, the government telling private business to give up it’s executive jets! Yeah, GM, Citi Group, etc. are losing money. Guess what, so is the US government with trillions of dollars in deficits, waste, fraud, and abuse. Is the US Government going to give up Air Force One?
Posted by: Todd | January 28, 2009, 1:01 pm 1:01 pm
stanley show us where you get this information from? I have researched and have yet to find this information. The only Referance to 40 million was this Washington, D.C. — On Tuesday, July 8, 2008, ACORN, in partnership with Health Care for America Now, launched a new $40 million campaign to push for quality, affordable healthcare for every American.
THIS WAS IN 2008
Posted by: USCITIZEN_04 | January 28, 2009, 2:35 pm 2:35 pm
OMG the Catholics are at it two, those crazy catholics are giving money to ACORN shame on them………LOL
Catholic Campaign for Human Development Has Given ACORN $7 Million
Posted by: USCITIZEN_04 | January 28, 2009, 2:39 pm 2:39 pm
The Citigroup statement says that they have no intent “to take delivery of any new aircraft,” not that they don’t intend to or haven’t already procured the aircraft.
Maybe I’m a bit suspicious — but aren’t luxury jets fairly customized and purchase contracts binding? I’d like more details, please.
Posted by: Parser | January 28, 2009, 3:34 pm 3:34 pm
I can not believe this, after all the money this company has gotten from us hard working tax payers they have now DOUBLED our interest rate!!!
Not because we have not paid our monthly statements, we have always paid above and beyond the min payments! Citi Bank customer service response to WHY is because the economy is bad and they had to!!! WHAT!!! As if doubeling everyones interest rate will make things better? For who? I can understand if it was a couple of points but to DOUBLE is WRONG!!….
call your congress people call the media let them know what this company is doing to the general public and those of us who are consumers!!
Posted by: kesomenom | January 28, 2009, 7:39 pm 7:39 pm
You can’t blame 100% of the issues that have occured in the financial market on the finance company’s alone. You have to consider the Millions of people who borrow money and never pay it back, and the government who didn’t regulate what many of the company’s were doing.
Now saying this I’m not agreeing that CitiGroup has the best idea in purchasing the jet because they don’t. The money needs to be spent on the current customers with good history with this company and getting their financial domination back on track.
As a side note to consumers… you will complain about what these large companies are buying, consider how you are spending your money and take a lesson from all of this.
Posted by: JS | January 29, 2009, 12:20 am 12:20 am
I completely oppose everything Obama stands for in his little socialist world. All of his ideas are wrong and he is going to lead our country into its worst crises in history. Mark my words…this guy is incompetent and in a year from now, when we’ve all lost our jobs, we’ll be regretting ever having elected this Bozo.
Posted by: antiobama | January 29, 2009, 11:16 pm 11:16 pm
This train wreck of an economy was brought to us by fiscal and foreign policies of the last 40 years.
National debt as a percentage of GDP grew at an astonishing rate under Reagan, Bush 41 and Bush 43.
Now with a National Debt at almost $11 trillion, total unfunded obligations at $53 trillion, and state, local and personal debt at all-time highs – it’s no wonder that the current credit crunch and meltdown of unregulated markets under Bush 43 are causing this catastrophic collapse.
President W will be the one to thank for all jobs lost in the next 2 years.
Posted by: rationaltexan | January 30, 2009, 11:34 am 11:34 am
I’m from Toronto, Ontario, Canada and I feel very angered by the way Citibank is handling thier customers business.
I just received a statement from them telling me that not only are they taking my limit lower, but they’re also taking my interest rate from 12.5% to 17.5%. I’m a very good standing customer, who pays on time. I have no problems them taking my limit down but I have a very big problem when they tell me they can’t do anything about the rates.
I spoke to a representative who was speechless because if he wasn’t an employee of Citibank, he’d would have been more than happy to agree with me.
I remember Vicram Pandit going in front of congress promising that the money that was given to them was to HELP people not KILL them. I guess the profit that they are claiming in todays news is from the increase in interest rate they are charging their clients.
I also remember Citibank telling CNN News that if a customer calls and requests for a lower rate, they will honor it.
Once again, another lie.
Logic would say to keep the rates lower so that people can afford to pay back thier debts instead of filing for bankrupcy.
Oh wait! Thats the “new in” word or should I say threat in Wall Street? KILL the little guy by letting the big guy pocket the bonuses.
The person that I spoke to at Citiank who is based somewhere in India probably getting paid pennies in comparison to Mr. Pandit, said that a manager would be more than happy to call me and discuss my account, but at a later date.
Hmmm. Should I be holding my breath for this response?
I look forward to someone response.
Posted by: Yasmin A. Samji | March 10, 2009, 11:34 am 11:34 am
Business Jets are business tools that allow business to grow and enter new markets. They provide cost effective transportation for many corporate employees and are not just for CEO’s. The business jet industry provides millions of jobs for american workers bashing them hurts a lot of little guys.
Get the facts before you bash them.
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