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Citi Sleaze with Bail-Out, of Junkets and Spanish
Highways, PNC and Ocwen Need Hearings
Byline: Matthew R. Lee of Inner
City Press on Wall Street: News Analysis
NEW YORK, December
2 -- How has Citigroup used its fresh billions in government bail-out
funds? On November 30, it was exposed as
sponsoring a Congressional junket to the Caribbean. On December 1, it
announced
it is spending over seven billion Euros to buy the highway
business of Spanish
construction firm Sacyr Vallehermoso.
Meanwhile, Robert Rubin who
pulled in over $100 million from Citigroup began a counter-offensive,
saying
none of the collapse was his fault. He had no operational
responsibilities, he
said. Call him the Stephon Marbury of high finance, motoring down a
Spanish
highway without a care in the world. More seriously, the public record
shows
Rubin's role in Citigroup's deal with the predatory lender Ameriquest.
Still he
keeps on trucking.
Meanwhile
the subprime bottom-feeder Ocwen is trying to line up for the Troubled
Asset Relief
Program bail-out funds. Ocwen has applied to buy Kent County State Bank
in Jayton,
Texas. One should expect comments from
consumer protection groups, who have seen the wreckage left by Ocwen's
practices.
At
deadline, consumer group Fair Finance Watch has put in comments
requesting
public hearings on PNC's application to buy National City, in a deal
the
regulators cooked up and now must be the judge of. National City asked
for TARP
funds but was denied. PNC was given the funds, to buy National City;
the
regulators will then buy the troubled assets from PNC. It's called
unexplained
favoritism: save Citigroup and AIG but let Lehman Brother go under.
Turn down
National City, then buy its bad loans from PNC. Maybe Tim Geithner will
explain.
The road to $45 billion in TARP funds began
with a handshake
Royal Bank
of Scotland, following its bail-out by the UK government, has suddenly
announced a six month moratorium on foreclosures. It applies only in
the UK. In
the U.S., where RBS owns Cleveland-based Charter One and Citizens Banks
in the
Northeast, the government has imposed very few requirements for its
funds.
There's now a proposal in the Senate, sponsored by Senator Durbin,
which would
tell TARP-recipients that they cannot pay out more in dividends than in
the
previous year. Since one would expect
dividends to be decreasing, even keeping them at last year's level
implies
using the bail-out funds to keep dividends up, to the previous year's
level.
Reportedly, Suntrust and Regions Bank, along with
Morgan Stanley, are
eying RBS' Charter One and Citizens, to buy them with TARP funds.
Morgan
Stanley, which the Fed declared to be a financial holding company with
no
public notice or comment or Community Reinvestment Act review, has now
applied
to buy up to 9.9% of something called Heritage Bank. On this one, Fair
Finance
Watch has commented, requesting public hearing on Morgan Stanley's
subprime
Saxon and the other issues swept under the carpet so that Morgan
Stanley could
get TARP. What double-standards and
sleaze are being swept under this TARP? Public hearings are needed.
Click here for Inner
City Press' November 25 debate on Somalia, politics
Click here for Inner City
Press Nov. 7 debate on the war in Congo
Watch this site, and this Oct. 2 debate, on
UN, bailout, MDGs
and this October 17 debate, on
Security Council and Obama and the UN.
* * *
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AlertNet piece by this correspondent
about Uganda's Lord's Resistance Army. Click
here
for an earlier Reuters AlertNet piece about the Somali
National
Reconciliation Congress, and the UN's $200,000 contribution from an
undefined trust fund. Video
Analysis here
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