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- GTP_seckcimike
NEW YORK (AP) Pressured by the Obama administration, Citigroup Inc. reversed course and said it will not take delivery of a corporate jet it previously planned to purchase.
The canceled deal comes amid a chorus of concerns from politicians who are worried about how banks that have received federal funds are spending the money. Citigroup has received $45 billion in capital from the government in recent months amid the ongoing credit crisis.
"Citi has no intent to take delivery of any new aircraft," the New York-based bank said in a statement Tuesday.
An official in President Barack Obama's administration reached out to Citigroup on Monday to reiterate Obama's position that such jets aren't "the best use of money at this point," and are "an outrageous use of funds" for a company getting taxpayer dollars, said a White House official who spoke on condition of anonymity to more freely describe private conversations.
In a statement late Monday, Citi said it had placed a deposit in 2005 to acquire a new corporate jet, and said it didn't plan to use government funds for the purchase. The New York-based bank noted that any cancellation of the deal would likely lead to millions of dollars in penalties.
On Monday, the New York Post reported that Citi was set to take possession of a new corporate jet, and was still planning to receive it even after it received the government funding.
With the cancellation of the deal, a deposit on the jet will be lost, but is recoverable once the jet is sold, according to a person familiar with situation. Citi was in the process of purchasing a Dassault Falcon 7X for $50 million, the person said.
lOL THESE PEOPLE JUST DONT GET IT.
The canceled deal comes amid a chorus of concerns from politicians who are worried about how banks that have received federal funds are spending the money. Citigroup has received $45 billion in capital from the government in recent months amid the ongoing credit crisis.
"Citi has no intent to take delivery of any new aircraft," the New York-based bank said in a statement Tuesday.
An official in President Barack Obama's administration reached out to Citigroup on Monday to reiterate Obama's position that such jets aren't "the best use of money at this point," and are "an outrageous use of funds" for a company getting taxpayer dollars, said a White House official who spoke on condition of anonymity to more freely describe private conversations.
In a statement late Monday, Citi said it had placed a deposit in 2005 to acquire a new corporate jet, and said it didn't plan to use government funds for the purchase. The New York-based bank noted that any cancellation of the deal would likely lead to millions of dollars in penalties.
On Monday, the New York Post reported that Citi was set to take possession of a new corporate jet, and was still planning to receive it even after it received the government funding.
With the cancellation of the deal, a deposit on the jet will be lost, but is recoverable once the jet is sold, according to a person familiar with situation. Citi was in the process of purchasing a Dassault Falcon 7X for $50 million, the person said.
lOL THESE PEOPLE JUST DONT GET IT.
