Citigroup

From SourceWatch
Revision as of 15:25, 21 October 2009 by Icanhazcoffee (talk | contribs) (SW: →‎Earnings and bonuses: added link to word "TARP")
Jump to navigation Jump to search

{{#badges:CoalSwarm}} Citigroup, based in New York City, is one of the largest financial services companies in the world. It has more than 5,000 bank branches and finance offices in the U.S., Canada, and 100 other countries. It is the first bank in the U.S. that had more than $1 trillion in assets. It has a large number of subsidiaries and offers services such as credit cards, investment banking, brokerage, and many other retail and corporate financial services. In 2006, it had sales of $146.5 billion and profits of $21.5 billion.[1] Major investor in Sindicatum Carbon Capital.

Citi has some 200 million customer accounts. Besides the Citi brand, it also has Primerica Financial Services and Diners Club credit cards.[2]

During the financial crisis Citigroup received bailout funds and guarantees totaling $356 billion from the U.S. government.

Financial crisis and the bailout

On October 13, 2008, Citigroup was one of a group of nine banks that were told by the government they had to accept "bailout" funds. Citigroup received an initial $25 billion from this meeting, with the government receiving preferred shares on which Citigroup must pay 5% interest for five years and then 9%[3].

Contribution to the crisis

In 1998 Citibank merged with Travelers Group. The merger violated the Bank Holding Company Act (BHCA), but Citibank was given a two-year forbearance that was based on an assumption that they would be able to force a change in the law. The Gramm-Leach-Bliley Act passed in November 1999, repealing the BHCA and portions of the Glass-Steagall Act, allowing banks, brokerages, and insurance companies to merge, thus making the Citigroup/Traveler Group merger legal.

Top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced.[4]

After resigning as Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill.[4]

Bailout amounts

In addition to an initial October, 2008 bailout of $25 billion[5], another $25 billion was given to the company along with guarantees to cover $306 billion of their assets on November 23, 2008 [6].

Coal issues

Coal investments

In May 2007, Citi announced a $50 billion initiative over the next 10 years to address global climate change, consisting of "investment and financing of alternative energy, clean technology, and other carbon-emission reduction activities." [7] In reality, this amount represents less than one percent of Citi's $2.2 trillion assets, and the bank continues to be the largest financier of the coal industry, one of the leading causes of climate change.[8]

Citi is the leading investor in the coal sector and has lent billions of dollars to companies seeking to build new coal-fired power plants. The company's clients include the major players in the power and utility industry: American Electric Power, CONSOL Energy, Dominion, Duke Energy, Dynegy, Florida Power & Light, Luminant, MidAmerican Energy, NRG Energy, Ohio Edison Electric (FirstEnergy), Peabody Energy, Southern Company, Xcel Energy, and many others. Citi is the top underwriter of American Electric Power, the country's largest electric generator and single largest producer of greenhouse gases in the U.S.; in 2006 alone, Citi financed $3 billion for AEP. Citi is also Dynegy's top underwriter and has helped finance over $5 billion for the company[9] New coal plants being funded by Citi include:

Citi has also financed billions of dollars to companies that practice mountaintop removal coal mining, a technique that blasts off the tops of mountains to reach the underlying coal deposits. The bank's clients include Alpha Natural Resources, which operates 27 surface mines in Kentucky, Pennsylvania, Virginia, and West Virginia; Arch Coal, which is the 2nd largest mining company in the nation and operates mines in Colorado, Kentucky, Virginia, West Virginia, and Wyoming; Massey Energy, which is being sued by the EPA for violating the Clean Water Act over 4500 times and faces up to $2.4 billion in fines; and Foundation Coal, the 4th largest coal mining company in the U.S.[9]

In 2007, Citi worked with Dow Chemical Co., The AES Corp., and Suncor Energy, Inc. to put together a $100 million investment for GreatPoint Energy, a coal gasification company based in Cambridge, MA. [10] The investment was used to create a pilot gasification plant called the Mayflower Clean Energy Center, located at Dominion's Brayton Point station in Somerset, Massachusetts. This was the largest "green tech" investment of 2007, and "one of the industry's biggest venture capital rounds ever."[11][12]

Protests against Citibank coal financing

Rainforest Action Network activists and allies blockade a Citibank branch in Washington, D.C., on Nov. 5, 2007.

Nov. 5, 2007: Rainforest Action Network blockade of D.C. Citibank branch

On November 5, 2007, activists from Rainforest Action Network, Coal River Mountain Watch, and the Student Environmental Action Coalition joined hundreds of student activists in blockading Citibank branch in Washington, D.C., in protest of Citibank's ongoing funding of new coal power plant development. RAN activists performed a "die-in" and delivered a wheelbarrow full of coal to the bank's managers. Police shut the branch down for the day, and no arrests were made.[13]

Rainforest Action Network activists stage a "cough-in" at a Citibank branch in San Francisco, CA, on Nov. 15, 2007.

Nov. 15, 2007: Rainforest Action Network day of action against coal finance

On November 15, 2007, Rainforest Action Network activists - acting together with allies from Coal River Mountain Watch, Appalachian Voices, Rising Tide North America, Mountain Justice Summer, Student Environmental Action Coalition, and Energy Justice Network - staged dozens of actions against Citibank and Bank of America branches in cities across the county, in protest of those two companies' refusal to stop funding new coal power plant development and coal mountaintop removal mining. In San Francisco, RAN activists attached caution tape - reading "Global Warming Crime Scene" - to dozens of Bank of America and Citibank ATMs, and held "cough-ins" in several branches. Similar ATM closure actions were held in New York City, Davis (CA), Los Angeles, Portland (OR), and St. Petersburg (FL), while protests against the two companies were held in numerous other cities.[14]

One of the blockaders of a Citibank NYC headquarters is arrested.
Rising Tide Boston hands out samples of "green coal" at Citibank and Bank of America.

April 1, 2008: Rainforest Action Network blockade of NYC Citibank office

On April 1, 2008, as part of the Fossil Fools International Day of Action, 25 "billionaires for coal" blockaded Citibank's Upper West Side headquarters in New York City. Two people chained themselves to the door, while others - dressed in tuxedos and top hats - drew attention to Citi's funding of new coal power plant development and mountaintop removal mining. Police cut through the chains locking the two billionaires to Citibank's door, and arrested them.[15]

November 14, 2008: Rising Tide Boston helps banks market “Green Coal”

Rising Tide Boston set up “Green Coal” marketing tables outside branches of Bank of America and Citibank to highlight these banks high-risk investments in coal power and mining. Emulating the coal industry’s marketing pitch of “clean coal”, activists handed out samples of “green coal” while informing fellow citizens not to expect “green coal” to be clean, safe, or affordable. Rising Tide Boston held this event as part of the Day of Action Against Coal Finance, joining over 50 cities across the country to protest Citi and Bank of America’s investments in the coal industry.[16]

Political contributions

Decade-long campaign contribution total (1998-2008): $19,778,382 [17]

2008 Campaign Contribution (Top 20) Total: $4,270,678 [17]

2008 Top Recipients:[17]
1. Barack Obama (D) $543,430
2. Hillary Clinton (D) $423,417
3. John McCain (R) $301,301
4. Mitt Romney (R) $168,550
5. Chris Dodd (D) $157,244

Citigroup gave $594,100 to federal candidates in the 2006 election through its political action committee - 31% to Democrats and 68% to Republicans. [18]

Lobbying

Decade-long lobbying expenditure total (1998-2008): $88,460,000[17]

2008 Lobbying Expenditure (Top 12) Total: $7,875,000[17]

2008 Top Lobbying Expenditure Recipients:[17]
1. Citigroup Management Corp $5,520,000
2. Avenue Solutions $100,000
3. Barnett, Sivon & Natter $260,000
4. Capitol Hill Strategies $240,000
5. Capitol Tax Partners $200,000

The company spent $6,960,000 for lobbying in 2006. In-house lobbyists along with 11 lobbying firms were used including Ernst & Young, Federalist Group, Capitol Tax Partners, and Angus & Nickerson. [19]

Personnel and political appointees

Key executives and 2008 pay

[20]

Board of Directors

[21]

Earnings and bonuses

According to a report by the Attorney General of New York State Citigroup paid $5.33 billion in bonuses to executives and employees[22] while losing $27.7 billion after being a recipient of TARP bailout funds of $45 billion.

Breakdown of Citigroup 2008 bonuses from the Attorney General's report[23];

  • Top four recipients received a combined $43.66 million.
  • The next four received: $37.47 million.
  • The next six received: $49.81 million.
  • Number of individuals that received more than $10 million: 3
  • Number that received more than $8 million: 13
  • Number that received more than $5 million: 44
  • Number that received more than $4 million: 69
  • Number that received more than $3 million: 124
  • Number that received more than $2 million: 176
  • Number that received at least $1 million: 738

Former CEO Charles Prince wins worst "Scrooge" of 2008 award

In December 2008, Co-Op America announced its list of the worst corporate "Scrooges" of 2008, awarded to "the CEOs who exhibited the worst kinds of unbridled greed and a lack of compassion or concern for others over the last year." Charles Prince, former CEO of Citigroup, was on the list because of his role in the U.S.'s recent financial crisis. Analysts have cited Prince's mistakes in pursuing risky business strategies and lobbying for looser regulations of the banking industry as contributing to the economic downturn. The Scrooge award also mentions that is one of the top financers of coal mining and coal-fired power plants.[24]

Plutonomy memos

The word "plutonomy" was coined by Ajay Kapur, a global strategist at Citigroup, in 2005. The memos discussed a new era of economic growth that is powered and consumed by the wealthy[25][26].

The memos were highlighted in Michael Moore's documentary movie, "Capitalism: A Love Story."

Contact details

399 Park Avenue
New York, NY 10043
Phone: 212-559-1000
Fax: 212-793-3946
Web: http://www.citigroup.com

Articles & resources

Related SourceWatch articles

References

  1. ↑ Citigroup Profile, Hoovers, accessed August 2007.
  2. ↑ About page, Citigroup, accessed August 2007.
  3. ↑ Five Questions (and Answers) About Citi's Bailout, Time, November 25, 2008, retrieved Oct 1, 2009.
  4. ↑ Jump up to: 4.0 4.1 Sold Out - How Wall Street and Washington Betrayed America , Consumer Education Foundation, March, 2009. Retrieved October 10, 2009.
  5. ↑ Five Questions (and Answers) About Citi's Bailout, Time, November 25, 2008, retrieved Oct 1, 2009.
  6. ↑ David Enrich, Carrick Mollenkamp, Matthias Rieker, Damian Paletta and Jon Hilsenrath, U.S. Agrees to Rescue Struggling Citigroup, Wall Street Journal, November 24, 2008, retrieved October 1, 2009.
  7. ↑ "Citi Targets $50 Billion Over 10 Years to Address Global Climate Change", press release, May 8, 2007.
  8. ↑ Global Finance: Citi, Rainforest Action Network, accessed July 2008.
  9. ↑ Jump up to: 9.0 9.1 "Banks, Climate Change, and the New Coal Rush", Rainforest Action Network, 2007.
  10. ↑ “GreatPoint Energy closes $100 million capital raise co-led by Citi Alternative Investments and Dow Chemical”, GreatPoint Energy press release, September 24, 2007.
  11. ↑ Martin LaMonica, "Where coal and clean tech meet", Cnet, April 13, 2009.
  12. ↑ Robert Gavin, “Mass. plant will make natural gas from coal”, Boston Globe, October 25, 2007]
  13. ↑ Coalfield Residents, Activists and Students Close Down D.C. Citi Branch, Rainforest Action Network press release, November 5, 2007. For photos, see RAN's Flickr page.
  14. ↑ Thousands Take to the Streets to Protest Citi and Bank of America’s Coal Investments, Rainforest Action Network press release, November 16, 2007. For photos, see RAN's Flickr page.
  15. ↑ "Billionaires for Dirty Energy Blockade Citibank in New York, Two Arrested", Fossil Fools Day blog, April 1, 2008.
  16. ↑ “Rising Tide helps banks market “Green Coal”, Rising Tide Boston website, November 14, 2008.
  17. ↑ Jump up to: 17.0 17.1 17.2 17.3 17.4 17.5 "Sold Out: How Wall Street and Washington Betrayed America", accessed October 2009.
  18. ↑ 2006 PAC Summary Data, Open Secrets, accessed August 2007.
  19. ↑ Citigroup lobbying expenses, Open Secrets.
  20. ↑ Citigroup Key Executives, Yahoo Finance, accessed October 2009.
  21. ↑ Board of Directors, Citigroup, accessed October 2009.
  22. ↑ Andrew M. Cuomo, No Rhyme or Reason, report by the Attorney General of New York, retreived Oct 4, 2009.
  23. ↑ Michael Corkery, Citigroup: The Cuomo Report’s Bonus Breakdown, Deal Journal, Wall Street Journal, July 30, 2009. Retrieved Oct 6, 2009.
  24. ↑ "Worst CEOs of the Dismal Year of 2008: 'Corporate Scrooges' Named by Co-Op America," The Earth Times, December 11, 2008.
  25. ↑ Citigroup Plutonomy Report, Part 1, Oct 16, 2005.
  26. ↑ Citigroup Plutonomy Report, Part 2, March 5, 2006.

External resources

External articles

Retrieved from "https://dev.sourcewatch.org/index.php?title=Citigroup&oldid=446994"