In the wake of criticism ranging from President Obama to Sen. Carl Levin (D-Mich) to New York Post columnist Chuck Bennett, Citigroup says it now has “no intent to take delivery of any new aircraft.” Earlier, the troubled banking giant had said it planned to sell two Falcon 900EXs and “upgrade” to a more efficient Falcon 7X that it had ordered two years ago, when it was flying high.
In a Jan. 26 column, New York Post writer Bennett reported: “Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet – only this time, it’s the taxpayers who are getting screwed.” The President wasted no time jumping into the fray. White House press secretary Robert Gibbs said at a press briefing the same day that Obama “doesn’t believe” using private jets “is the best use of money” if that money is from a taxpayer-financed bailout package.
Said Gibbs, “The president believes that great care should be used anytime the taxpayers’ money is being used … that money should be used to lend to consumers to get the economy moving again, to free up capital and credit, and help small businesses create jobs.” Citigroup has received $45 billion from the TARP, or Troubled Asset Relief Program.
A later Bloomberg News report said that an official from the Treasury Department had called Citigroup this week to “express concern” about the company’s planned purchase of the jet. Citigroup spokesman Stephen Cohen told Bloomberg that it “planned to buy new, fuel-efficient aircraft and sell older ones to lower operating costs,” adding that “funds from the Troubled Asset Relief Program, or TARP, wouldn’t be used to buy the aircraft.” According to Dassault, manufacturer of Falcon jets, the 7X offers up to 40 percent better fuel efficiency than other aircraft in its class.
That didn’t mollify Sen. Levin, a Michigan Democrat. “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,” Levin stated on his Web site. “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. I have urged Tim Geithner, who will presumably be Treasury Secretary by the end of the day, to do what he can to stop this absurdity from occurring, and I am assured he will look into the matter promptly.”
Reporter Bennett used contemptuous phrases such as “still high on the hog” and “airhead execs” in describing the bank’s bizjet buy. “The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center,” he wrote. He didn’t get much help from Bill McNamee, head of CitiFlight Inc., the subsidiary that manages Citigroup’s corporate fleet. “Why should I help you when what you write will be used to the detriment of our company?” McNamee understandably replied when asked to comment about the new 7X. “What relevance does it have but to hurt my company?”
A woman answering the telephone at CitiFlight’s private hangar in White Plains, NY, told GeneralAviationNews.com that she was “not authorized to release information” about the new jet.
