Congressman Dennis Kucinich
Washington, Apr 29, 2009
Congressman Dennis Kucinich (D-OH) today sent the following letter to Treasury Secretary Timothy Geithner asking him to deny a request by Citigroup to pay bonuses to “key employees.”
April 29, 2009
The Honorable Timothy Geithner
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner:
The Wall Street Journal today reports that Citigroup CEO Vikram Pandit has requested permission from the Treasury Department to pay out an untold sum of money in bonuses, possibly in the form of stock, to various “key employees,” including those at Phibro, their energy trading unit. I urge you to deny Citigroup’s request.
As you are aware, Citigroup has been the recipient of $45 billion in taxpayer aid through the Capital Purchase Program and Target Investment Program, authorized by the Emergency Economic Stabilization Act. Additionally, the Federal Reserve has guaranteed another $301 billion of Citigroup’s assets. As you finalize the conversion of preferred shares to common equity, Treasury will become the largest shareholder of Citigroup stock, possessing up to 36% percent of common equity in the company.
I do not need to remind you that the country remains in a sustained economic downturn. The Bureau of Economic Analysis reports today that gross domestic product decreased at an annualized rate of 6.1% through the first quarter of 2009; this follows a 6.3% percent decline through the final quarter of 2008. The unemployment rate stands at 8.5%; more worrisome is that the pace of job losses has accelerated in recent months.
In this light, Citigroup cannot possibly justify the payment of bonuses, regardless of form. Indeed, the only person specifically mentioned as a potential recipient of a bonus, Andrew Hall, was compensated over $250 million through a five-year period ending in 2008. He even owns a castle.
So long as Citigroup subsists on the assistance of the American taxpayer, the American taxpayer should not be forced to subsidize the employment of people who are already compensated quite comfortably. As the economy continues to founder, Citigroup ought to recognize its role in our current recession and use the capital that has been provided to them to stabilize the economy and ease the financial burden of American families.
Thank you for your prompt attention to this matter.
Dennis J. Kucinich
Member of Congress
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