Thursday, January 29, 2009

TARP Inspector General Asked to Investigate Citigroup-Funded Caribbean Junket by Members of Congress

/PRNewswire-USNewswire/ -- Today the National Legal and Policy Center (NLPC) asked Neil M. Barofsky, the Special Inspector General for the Troubled Asset Relief Program (TARP), for a formal review of the sponsorship by Citigroup of a junket to the Caribbean by House Ways and Means Committee Chairman Charles Rangel (D-NY) and five other members of Congress, a trip that violated House Rules.

The request comes in the wake of Citigroup's decision to scrap the purchase of a $50 million executive jet, and continuing questions about Citigroup's management.

The purported purpose of the Congressional trip was to attend the Caribbean Multi-Cultural Business Conference. The event took place November 6-9, 2008 on the sunny Caribbean island of St. Maarten at the Sonesta Maho Bay Resort & Casino, after Congress had approved the $700 billion bailout package in October.

The "lead sponsor" was Citigroup which contributed $100,000. Citigroup was certainly aware that it would be a major recipient of bailout funds. It was also aware that its fortunes had become increasingly reliant on Congressional actions. Citigroup should have also been aware that corporate sponsorship of such an event was banned by House Rules adopted on March 1, 2007, in response to the Abramoff scandal and the infamous golf trip to Scotland.

Taxpayers are now Citigroup's largest shareholder after infusions of $45 billion.

NLPC President Peter Flaherty attended the St. Maarten's event in order to document potential violations of law and House Rules. The sessions were lightly attended. The primary purpose of attending for most participants appeared to be to take a vacation.

In addition to Rangel, the other members of Congress who attended were Donald Payne (D-NJ), Sheila Jackson-Lee (D-TX), Carolyn Cheeks Kilpatrick (D-MI), Bennie Thompson (D-MS) and Donna Christensen (D-VI).

The apparent violations of House Rules have already generated media attention. See "Shady Island 'House' Party: Pols's Trip to Caribbean Skirted Rules," New York Post, November 30, 2008, and "Caribbean Trip May Have Broken Rules," The Hill, January 28, 2009.

NLPC's Complaint reads, in part:

"When the TARP was presented to Congress, it was argued that the situation was dire, and that the failure of major financial institutions posed a systemic risk to our economy. The stated goal was to unfreeze credit so that banks can make loans to businesses and individuals. It was never contemplated that banks use their capital to buy influence on Capitol Hill by funding vacations for members of Congress."

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