By JENNIFER GOULD KEIL and CHUCK BENNETT
New York Post
January 27, 2009
High-flying Citigroup executives, trying desperately to hang on to their new, $50 million luxury jet, took heavy flak yesterday from the White House and Congress after The Post revealed how the beleaguerred bank is blowing taxpayers' rescue funds.
The Financial behemoth, being kept afloat by $45 billion in public life support, should not be spending its precious greenbacks on frivolous luxuries, said President Obama's spokesman, Robert Gibbs.
Obama "doesn't believe" business jets are the "best use of money," said Gibbs. "He said that as it relates to the auto industry, and he believes that as it relates to banks, as well."
Sen. Carl Levin (D-Mich.) fumed after reading The Post's exclusive account of the jet deal.
"The notion of Citigroup spending $50 million on a new corporate jet, even as it is depending on billions of taxpayer dollars to survive, does not fly," he said.
"To permit Citigroup to purchase a plush plane - foreign-built, no less - while domestic auto companies are being required to sell off their jets is a ridiculous double standard."
General Motors and Chrysler lost their corporate jets as part of their $17.4 billion bailout deal.
"I have urged [Treasury Secretary] Tim Geithner . . . to do what he can to stop this absurdity," Levin added.
New York Rep. John Hall (D-Dutchess) said he'd introduce legislation today calling on Geithner to use the power of his department to force Citi to cancel the purchase or reimburse taxpayers for the cost of the jet. "This is an absolute outrage and Congress is not going to let Citigroup get away with this," he said.
Other political leaders also demanded the bank abandon its plan to buy the French-made Dassault Falcon 7X, which comes with a leather interior, gourmet galley and entertainment center.
"This sounds far plusher than called for in their circumstances," said Rep. Barney Frank (D-Mass.), chairman of the Financial Services Committee, which oversees the bank rescue.
Other committee members were equally outraged.
"These guys at Citigroup are tone deaf. This is why the administration and Congress have to set very strict standards before any more taxpayer dollars are released," said Rep. Peter King (R-LI).
In a sudden reversal, Citigroup, which fired 52,000 employees over the past year, said it is "exploring all of its options," including "the potential sale or lease of the aircraft," said spokeswoman Shannon Bell.
But she defended the purchase as sound business, pointing out that the company is planning to sell two of its four current planes. It also owns a helicopter.
"This was done as part of our plan to reduce the number of aircraft Citi owned," she said.
"We expect proceeds from the sale of our existing aircraft will exceed the cost of the replacement aircraft, and refusing delivery now would result in millions of dollars in penalties."