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Citi Says No to $45 Million Jet!!!!!!!!!!!!

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Citi says no to $45 million jet

Obama administration disapproves of Citigroup's plan to spend $45 million on a corporate jet after receiving TARP funds.

By Ed Henry, CNN White House Correspondent

Last Updated: January 27, 2009: 11:46 AM ET

 

WASHINGTON (CNN) -- The Obama administration pressed struggling Citigroup to reverse course after a Treasury Department official called the company Monday and "told them it was unacceptable" to accept delivery of a new $45 million corporate jet, a senior administration official said.

 

The move comes as new Treasury Secretary Timothy Geithner tries to quickly bring more accountability and oversight to the much-maligned TARP program he now oversees.

 

Under that program, Citigroup (C, Fortune 500) has already received some $45 billion in government bailout funds, which is why a New York Post report about the scheduled delivery of the new jet sparked outrage.

 

White House Press Secretary Robert Gibbs said Monday the president believes private jets aren't "the best use of money at this point" with America facing a financial crisis.

 

Citibank spokesman Michael Hanretta told CNN Tuesday the company has "no intent to take delivery of any new aircraft." This came after the company initially said on Monday it could not comment on whether it was purchasing the jet, citing security reasons.

 

Hours later it reversed course, issuing a statement saying it signed a contract in 2005 for a replacement aircraft as part of a plan to reduce the number of planes it owns and cut operating costs. "Refusing delivery now would result in millions of dollars in penalties," it said. "Citi is exploring all its options for these assets, including the potential sale or lease of the aircraft."

 

The luxury jet that was to be purchased is a Dessault Falcon 7X, which seats 12. It is so exclusive that Dessault says only 21 are operating around the world, and that the price is listed at $45 million.

 

-- CNN's Mary Snow and Emily Anderson contributed to this report.

 

Talkback: Get your economic questions answered. E-mail realstories@cnnmoney.com with questions about jobs, housing, energy, student loans, credit cards, Americans' spending and savings habits, etc., and they could be answered on air as part of the first CNN Money Summit. To top of page

First Published: January 27, 2009: 10:40 AM ET

 

 

 

Find this article at:

http://money.cnn.com/2009/01/27/news/compa...p_jet/index.htm

 

 

Ron.

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this stuff really pisses me off.

 

There are jet from the 70's that stil fly just fine...

 

50 million on a plane while others are starving and losing a roofs over their heads...

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this stuff really pisses me off.

 

There are jet from the 70's that stil fly just fine...

 

50 million on a plane while others are starving and losing a roofs over their heads...

Well I agree with you here.

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I agree.

 

If they weren't 'caught' CITI certainly would have purchased this aircraft. No doubt about it.

 

It's so amazing how out of touch with reality these corporations and their exec's are.

 

There are still no plans to reverse or change the agreement with the NY Mets new baseball stadium known as CitiField.

 

It's disgusting.

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well, in their defense....how much are the penalties going to cost.....

 

 

and what will they gain from those penalties?

 

 

 

now...if they HAD gotten the jet....how much could they have made from it potentially?

 

 

 

 

not saying they WOULD....but at least they'd have a 45 million dollar asset....rather than a (guessing here) 5 million dollar liability....that was incurred BEFORE TARP

 

 

 

not justifying them getting a plane in the first place mind you.....

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well, in their defense....how much are the penalties going to cost.....

 

and what will they gain from those penalties?

 

now...if they HAD gotten the jet....how much could they have made from it potentially?

 

not saying they WOULD....but at least they'd have a 45 million dollar asset....rather than a (guessing here) 5 million dollar liability....that was incurred BEFORE TARP

 

not justifying them getting a plane in the first place mind you.....

 

At this level I doubt the difference would be enough to make it work out in their favor.

 

Plus, I'm sure jets aren't exactly like used cars, but I'd imagine they're still depreciating assets.

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well, in their defense....how much are the penalties going to cost.....

 

and what will they gain from those penalties?

 

now...if they HAD gotten the jet....how much could they have made from it potentially?

 

not saying they WOULD....but at least they'd have a 45 million dollar asset....rather than a (guessing here) 5 million dollar liability....that was incurred BEFORE TARP

 

not justifying them getting a plane in the first place mind you.....

 

At this level I doubt the difference would be enough to make it work out in their favor.

 

Plus, I'm sure jets aren't exactly like used cars, but I'd imagine they're still depreciating assets.

 

not sure what you mean about the difference being enough to work in their favor....do you mean what they could (for example) lease it to someone for not covering the cost of the jet?

 

If so...you're probably right (actually, you're probably right regardless of what you meant *LOL* I'm just playing devil's advocate)

 

 

but...in some cases it IS "worthwhile" to own a jet...at the corporate level at least....

 

but still, remember that this was ordered 4 years ago...according to the story at least...

 

which is before TARP....

 

it's similar in a way to the salaries being bandied about for the execs....those are from LAST year...before this crisis....so it (IMHO) shouldn't even be brought up....

 

now, the next set of contracts...certainly....but the past is the past...

 

once again...I'm playing devil's advocate here....

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?

 

They allready do.

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Actually, I think the last thing we wanted was for taxpayers to bail out private industry! Now that it has happened, doesn' t the government have a say in how the money is spent when we are hemorrhaging thousands of jobs a week?

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?
i don't see whats wrong with that. if they don't want to be told what to do they shouldn't take money from the government.

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?
i don't see whats wrong with that. if they don't want to be told what to do they shouldn't take money from the government.

Bingo!

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?

 

 

That’s the way it is regardless if you’re a government entity or not. Board of Directors tells a company what to do. I have no problem with them buying a 50 million dollar jet, but not when they have their hand out for some cash. It's like a person on unemployment taking the funds and paying their new Lamborghini payment... the money has an intended purpose.

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?

The government owns preferred stock in the companies that got tarp funds, so that gives them to right to tell them what to do. If citi doesn't like it, they can give the money back.

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?

The government owns preferred stock in the companies that got tarp funds, so that gives them to right to tell them what to do. If citi doesn't like it, they can give the money back.

 

+1000

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The last thing you want is the government telling private industry what they can and can't do. That's where everything is heading. You think it's bad now?

 

While I would certainly prefer exercising my own vote, I'm okay with the government acting as my proxy and telling private industry how to spend the tax dollars that I am being forced to "invest" to keep them solvent.

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That $45 million went into the pockets of HUNDREDS of employees (not just the manufacturer but all the parts suppliers) and supported thousands of people in total counting all the people in the employees families. It bought food, paid the mortgage, car payments, etc.

 

That did more to stimulate the economy than to give someone 'credit'.

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That $45 million went into the pockets of HUNDREDS of employees (not just the manufacturer but all the parts suppliers) and supported thousands of people in total counting all the people in the employees families. It bought food, paid the mortgage, car payments, etc.

 

That did more to stimulate the economy than to give someone 'credit'.

 

YOU MUST BE KIDDING!

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