(CNN) – The Obama administration pressed struggling Citigroup to reverse course after a Treasury Department official called the company Monday and "told them it was unacceptable" to accept delivery of a new $50 million corporate jet.
The move comes as new Treasury Secretary Timothy Geithner tries to quickly bring more accountability and oversight to the much-maligned TARP program he now oversees. Under that program, Citigroup has already received some $45 billion in government bailout funds, which is why a New York Post report about the new jet sparked outrage.
Related: Citi cancels jet plans
White House Press Secretary Robert Gibbs said Monday the President believes private jets aren’t “the best use of money at this point" with America facing a financial crisis.
@Daniel, Atlanta, GA –
Obama and cronies would have to first try themselves; I'd like to see a reasonable justification for the $170M inaug party....he should've toned it down by $100M...after all, the media crucified GW for a $42M inaug party....Obamnuts could've applied the money to the deficit; after all according to his "Uncle Joe," Biden, it's "patriotic," to pay taxes...hmmm.. on that note, I guess OBama's sentiment toward the country, that of unpatriotism (or was it Michelle?)...is really amplified by the "Tim the Treasurer," selection.....now, he wants to impose lobbyist rules? This Obama corruption "weed," is going to be one difficult plant to uproot in 2012.
And just why does Citigroup and all these uncontrolled financial institutions need a fleet of planes? Just as they spent our taxpayer dollars to put their name on a stadium they are again thumbing their noses at us abusing taxpayer dollars. It will take thousands of commerical flights to add up to the costs of maintaining, upgrading their aircrafts. They must get rid of their self serving, we deserve attitudes. And, it must thoroughly be disclosed as to how they spent
our taxpayer dollars.
In this world of technology the majority of business can be accomplished right from one's desk.
Okay, so they dumped thousands of hard-working tax paying citizens over for a JET? Good Job America!!!
Dear President Obama and Congress:
This continuation of the failed policies of Bush is not what we voted for. A top down economy works in theory, but does not always work in practice. As we have clearly seen during this recession, the richest people at the top will only do what is best for American people and businesses if it is also best for their own personal prosperity. However, if what will make them richer is bad for America, then they will do what is bad for America. We need a bottom up economy. I know people like to yell "socialism" when one discusses taxing the rich, but the only way they became multi billionaires is by overcharging for their products/services, and underpaying their employees...they certainly didn't get all that money from their own hard work. These people have already demonstrated that they will not invest in the American economy but will use the money for their own personal gain and lay Americans off. The only way to get them to invest their money into the American economy is to threaten that if they do not, then the government will tax them and invest the money in the economy for them!
We need to seriously get down on our knees and pray for ths country. I think Jesus had predicted that in the last days, people will become possessed by weatth.
Expense restrictions need to include a freeze on unecessary travel – and frankly, in this day and age of Webconferences, etc., most travel is unecessary. Yeah, I know face-to-face is great – especially with clients, etc., but most of their clients are probably cutting way back on those types of expenditures too.
Give up all the corporate jets, the private cars, and the cushy offices – get real!!
Obama needs to knock it off. He is not king.
Building planes and servicing plans creates jobs. Buying planes insures jobs.
I'm sure all the people who worked on that deal are thrilled.
It's almost as if Obama has no experience running a government.... Go figure.
pjartco well put, interesting... makes you see this from a much different angle
The people should be put in jail !
The woeful lack of Congressional oversight (thanks Nancy Pelosi) and the previous administration’s objection to any oversight (thanks Bush, Burnakke, Paulson) have bred this ‘playing with the house’s money’ mentality that the banks have employed. The banks have received no guidelines and requirements on how the money is to be spent; they were handed blank checks. Start sending the banking culprits to Leavenworth and you’ll see accountability quickly.
Why not post something that is a warning to others and a bit of good advice? CNN – what's the problem?
BB January 27th, 2009 10:25 am ET
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After a 25 year history with Citi Visa, and no late payments EVER, they were going to raise my interest rates. They told me it wasn't personal.
I told them "It's not personal, please cancel my account" and I cut up my card.
My money is very personal to me. Everyone else should do the same. DO NOT PAY THE HIGH RATES.
he's doing more than bush would have done people.
Thanks you Mr. President!....but how about some action?
He's doing more than Bush would have done.
Thank you Mr.President!....but how about some action?
This is some bad reporting you have on this article CNN. You did not include what you had stated in your other article:
"The bank said the new plane would cut its costs and it was financing the purchase by selling older jets... Citigroup had ordered the executive jet in 2005, and was scheduled to receive it later this year. The bank said on Monday that canceling the deal would force it to pay millions of dollars of penalties."
So basically they had ordered it four years ago. None of the bailout money was being used to pay for it. They were going to sell of their old jets to finance it, which would also save them a lot more money in the long run. But now that they have to cancel it they're just losing money out of their pockets, which just makes it worse.
Romney2012, sorry, you must be a foreigner. Obama is trying to save the country. You have to remember that the real crooks just left the W.H. Obama is not the problem; he's trying to be the solution. What have you done to solve the problems of the world?
One day a man in Vegas was walking around asking for money for his wife operation . Another man asked him , If I give you money for her operation how do I know you won't gamble with it ? The first man replied " Oh I already have gambling money "
@ pjartoo... who cares when the planes were ordered. They should not have ordered them in 2005. We bail out corporations and they spend unwisely. Citi is one of the companies that is not helping their morgtage holders to refinance and raising the rates on their good paying card members.
Hopefully, they can be held accountable. They should have to give the money back. Too bad the last administration put no restrictions on the money. Let's hope this one will.
Why won't the government take over these banks? The people who are currently running them cannot be trusted. Or congress should enact laws that would make it a crime to ask the government for a bailout and waste it they these backs are.
Sack those bad CEOs. Why are they still holding on to their positions?
Understand that financial institutions cannot be allowed to collapse but these people are taking advantages of bailout money.
I believe that bailout is a MUST though it is UNDESIRABLE. We do not have better options. See what Lehman Bro. has caused the economy.
At least, REMOVE those CEOs. They are lousy.
I have a solution crazy enough that it just might work. What if every one of the heads of these big corporations took a one year pay cut, and lived off their savings? Mayor Michael Bloomberg's salary is only $1 for being Mayor of New York, because he realizes he has enough money already. So if the heads of these companies followed Bloomberg's example, and realized they're ALREADY rich, the money that's going into their pockets could be used for more productive things for the companies, and for us.
"The needs of the many outweigh the needs of the few, or the one."
Okay, these fools just aren't getting it.
It may be time for the Fed to step in, take over for the time required to fire the idiots who still don't get it and replace them with the next ones in line with instructions not to screw up. Then turn the bank back over to them.
I'm not one for the government running the financial system but something has to be done to readjust the corporate mindset. And CEOs, COOs, and CFOs receiving a pink slip might just get those who remain thinking the right way.
This is change alright! Now these greedy execs are gobbling up taxpayer money instead of investor money, since the latter has dried up.
Dear Mr. President, care to explain how companies that have received public bailout funds are still paying dividends to investors? Isn't that just a legal Ponzi scheme?
All of the D.C. idiots need to get their heads out of our butts, and hands out of our wallets. If you want to cure the ecomomy with our money, then give it to the taxpayers instead of the corporations and let them spend their money on whatever companies provide the best services and products. Capitalism. Remember that? (vaguely)
The accountability starts IN CONGRESS – when they "throw money to the wolves" resulting from BAILOUTS! WHEN IS THIS GOING TO STOP? The crooks running Citigroup, not only should be fired, but they should go to jail for LIFE!!! This new administration better start
going after the "crybabies" who think they need a bailout!
Thank you for your post!
How stupid is the managment of Citi to even think of buying a plane for their luxury at this financially crippling time. Whoever made the decision to buy the plane when they are receiving taxpayers money to get them out of bankruptcy should be dismissed and not be hired ever again.