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January 27, 2009

White House Pushes Citi to Give Up $45M Jet

Change and accountability has come to the White House.  Can I get a collective “YEAH”!

The Obama administration pushed struggling Citigroup to reverse their decision after a Treasury Department official called the company on Monday and “told them it was unacceptable to accept delivery of a new $45 million corporate jet.

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

Citigroup 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 said on Tuesday that 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 after the Obama administration contacted them Citi 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”. “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.

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