/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."
Showing posts with label citigroup. Show all posts
Showing posts with label citigroup. Show all posts
Thursday, January 29, 2009
Thursday, January 15, 2009
TARP Inspector General Asked to Investigate Citigroup and Bank of America Donations to Rainbow/PUSH; Bailout Recipients Headline Jackson Fundraiser
/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 Bank of America and Citigroup of the Rainbow/PUSH Wall Street Conference currently taking place in New York City. The January 13-16 event is one of two of Jesse Jackson's annual fundraisers.
According to official conference materials, Citigroup is a "Gold Sponsor," a designation costing $50,000. Bank of America is identified as a "Silver Sponsor," a designation costing $30,000.
Both Citigroup and Bank of America are major recipients of TARP funds. Taxpayers are now Citigroup's largest shareholder after infusions of $45 billion. Bank of America has already received $25 billion. According to today's Wall Street Journal, it is seeking billions more in order to make possible its acquisition of Merrill Lynch.
NLPC's Complaint reads, in part:
"When the TARP was presented to Congress, Secretary Henry Paulson and others 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 make donations to organizations founded by a controversial figure like Jesse Jackson.
It should be noted that shareholders have made objections to corporate donations to Rainbow/PUSH and the so-called Citizenship Education Fund (CEF) even before the onset of the financial crisis. CEF is a 501(c)(3) organization founded by Jesse Jackson that co-sponsors the Wall Street Conference. In recognition of these objections, the New York Stock Exchange itself ended its financial sponsorship of the event in 2005.
Citigroup's management and board of directors cannot claim that it is unaware of the donations to Jesse Jackson's groups, or that they have not sparked controversy. Indeed, in remarks at the company's annual meetings in 2006 and 2007, I vigorously raised the issue in connection to our shareholder proposals asking for disclosure of Citigroup's charitable contributions, a resolution management opposed.
It should be further noted that Citigroup's relationship with Jesse Jackson began under questionable circumstances that have contributed in part to Citigroup's present problems and its need to seek taxpayer support. When Travelers and Citicorp sought to merge in 1998, Jesse Jackson said he would oppose the merger. Citigroup initiated financial support to his organizations. Jesse Jackson changed his position and supported the merger. It was speculated in the media that Citigroup's 'charitable' giving to Jesse Jackson's groups did have a business purpose.
As shareholders, we have protested corporate support for Jesse Jackson's organizations. Now that all taxpayers are shareholders in both Citigroup and Bank of America, these donations are completely objectionable, and should not be allowed. Unless you undertake a swift review of this matter, and take appropriate action, public cynicism about the use of TARP funds for their intended purpose will only increase."
According to official conference materials, Citigroup is a "Gold Sponsor," a designation costing $50,000. Bank of America is identified as a "Silver Sponsor," a designation costing $30,000.
Both Citigroup and Bank of America are major recipients of TARP funds. Taxpayers are now Citigroup's largest shareholder after infusions of $45 billion. Bank of America has already received $25 billion. According to today's Wall Street Journal, it is seeking billions more in order to make possible its acquisition of Merrill Lynch.
NLPC's Complaint reads, in part:
"When the TARP was presented to Congress, Secretary Henry Paulson and others 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 make donations to organizations founded by a controversial figure like Jesse Jackson.
It should be noted that shareholders have made objections to corporate donations to Rainbow/PUSH and the so-called Citizenship Education Fund (CEF) even before the onset of the financial crisis. CEF is a 501(c)(3) organization founded by Jesse Jackson that co-sponsors the Wall Street Conference. In recognition of these objections, the New York Stock Exchange itself ended its financial sponsorship of the event in 2005.
Citigroup's management and board of directors cannot claim that it is unaware of the donations to Jesse Jackson's groups, or that they have not sparked controversy. Indeed, in remarks at the company's annual meetings in 2006 and 2007, I vigorously raised the issue in connection to our shareholder proposals asking for disclosure of Citigroup's charitable contributions, a resolution management opposed.
It should be further noted that Citigroup's relationship with Jesse Jackson began under questionable circumstances that have contributed in part to Citigroup's present problems and its need to seek taxpayer support. When Travelers and Citicorp sought to merge in 1998, Jesse Jackson said he would oppose the merger. Citigroup initiated financial support to his organizations. Jesse Jackson changed his position and supported the merger. It was speculated in the media that Citigroup's 'charitable' giving to Jesse Jackson's groups did have a business purpose.
As shareholders, we have protested corporate support for Jesse Jackson's organizations. Now that all taxpayers are shareholders in both Citigroup and Bank of America, these donations are completely objectionable, and should not be allowed. Unless you undertake a swift review of this matter, and take appropriate action, public cynicism about the use of TARP funds for their intended purpose will only increase."
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