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Posted by on Jan 27, 2009 in Economy, Politics | 1 comment

Political Pressure Crashes Bailed Out Citicorp’s Plan For $50 Million Jet

Citicorp is now like the kid who went into a toy store, picked out the most expensive toy and his parents sternly told him to put it back. In the latest public relations fiasco to hit a troubled bailed-out American corporation that still throws around big bucks, the bank is caving into pressure from President Barack Obama and dropping plans to buy a $50 million corporate jet from France.

During his presidential campaign, Obama had insisted that accountability for bailed-out companies would be part of his administration’s game plan. News that Citicorp was getting a nice, big, shiny jet immediately conjured up images of the jet’s photos being plastered all over the new and old media with a common headline such as “Your tax dollars at work.” ABC reports:

The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.

The decision came 24 hours after the banking giant, which was rescued by a $45 billion taxpayer lifeline, defended buying the state-of-the-art Dassault Falcon 7X — one of nine to be flying in U.S. skies — as a smart business deal.

The jet, the epitome of corporate prestige and privilege, can carry 12 passengers in elegant comfort.

ABC News has learned that on Monday officials of the Obama administration called Citigroup about the company’s new $50 million corporate jet and told execs to “fix it.”

“The president said this during the transition, as it related to the auto companies using private jets: [He] doesn’t believe that’s the best use of money at this point,” Gibbs said.

The company today issued a statement saying, “We have no intent to take delivery of any new aircraft.”

ABC has more on how the company justified it. But, as ABC also points out, news of this was as well received and would have been as helpfuul to the general drive to consolidate support for a stimulus plan as much as the story about Detroit automakers going to Congress to plead for funds flying there in their private jets helped that process (at first Congress refused).

If the deal had gone through, it would have undermined the idea of a stimulus plan — making it seem as if companies getting the money were using it on perks to make life easier for well-fed executives and their corporate buddies at a time when workers were being laid off. By making Citicorp a suggestion they couldn’t refuse (“fix it”), the Obama administration has short-circuited a corporate-sparked public relations disaster that could have made garnering support for its plan — or even any plan — that much more difficult to achieve quickly.

It’s clear some corporate bigwigs are getting the money — but don’t get the message. ABC again:

And this week, ousted Merrill Lynch CEO John Thain said he would personally cough up the $1 million he spent on remodeling his office after his brokerage was rescued with billions in taxpayer cash.

The corporate types don’t seem to understand that the money they get does not mean they can continue to live (in that awful phrase) in the lifestyle to which they are accustomed.