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Citi's Jet Gets Downed

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White House, public outcry nixes plane purchase.

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Citigroup (C) says it won't take delivery of a new $50 million corporate jet as previously announced.

"We have no intent to take delivery of any new aircraft," Citigroup's spokesman Michael J. Hanretta said.

Citigroup plans to cut its fleet to 2 planes from 5. The company stressed that no TARP funds would have been used to purchase the French-made Dassault Falcon 7X.

"Citi continually explores ways to reduce all its assets, including aircraft," Hanretta said in a prepared statement. "Citi is exploring all its options for these assets, including the potential sale or lease of the aircraft. It is important to note that TARP funds will not be used for these purchases."

The New York Post, which first reported the story, said today: "Airhead Citigroup execs took their heads out of the clouds today to say they are grounding plans to purchase a new $50 million corporate jet in the wake of a national public outcry."

The Post also quotes White House spokesman Robert Gibbs as saying President Obama "doesn't believe" corporate jets are the "best use of [TARP] money."

The company claims to have been blissfully unaware of the PR pushback from the story about the new $50 million jet, suggesting that someone in the corner office isn't quite of this world.

Citigroup says no TARP funds were involved, but it's easy enough to slop money around.

US Senator Carl Levin, a Michigan Democrat, uncorked one: "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."

CNN reports, "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."

Such carping looks like the price for accepting TARP funds. Citigroup needed the money and, politicians assured us, we needed Citigroup.

There's plenty of blame to go around on this one. The only thing certain is that many US companies will remain tone-deaf - and the level of discourse from the press and politicians won't improve much.
No positions in stocks mentioned.
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