The Obama administration knows how to use the bully pulpit.
A Treasury Department official on Monday called Citigroup, which has received $45 billion in bailout capital from the government, to protest plans to accept delivery on a luxurious $50 million corporate jet made in France.
The New York Post reported on the plan under the headline, “JUST PLANE DESPICABLE.”
President Obama has said he will demand more accountability from recipients of bailout funds, and Citigroup now is finding out what that means.
The Treasury official called the bank to complain and told the executive to find a solution. Among the possibilities would be selling or leasing the fancy flier, since there are penalties associated with killing the contract outright.
In any case, the administration does not want the plane put in service under the Citigroup banner.
The call was made by an official other than Timothy Geithner, shortly before he was sworn in by the president on Monday night after winning confirmation from the Senate.
White House Press Secretary Robert Gibbs, asked about the plane at his televised briefing, said the president believes that for banks receiving U.S. capital “so that they can lend money,” private jets aren’t “the best use of money at this point.”
“Instead, that money should be used to lend to consumers to get the economy moving again, to free up capital and credit, and help small businesses create jobs,” Gibbs said. “He said that as it relates to the auto industry, and he believes that as it relates to banks as well.”
The plane – a Dassault Falcon 7X — quickly became a new poster child for excess by companies being kept afloat by taxpayers.
The N.Y. Post story says: “The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center, according to Dassault's sales literature. It can cruise 5,950 miles before refueling and has a top speed of 559 mph. There are just nine of these top-of-the-line models in the United States, with Dassault's European factory churning out three to four 7Xs a month.”
Sen. Carl Levin (D-Mich.) called the purchase an “absurdity.”
“To permit Citigroup to purchase a plush plane – foreign-built no less – while domestic auto companies are being required to sell off their jets is a ridiculous double standard,” Levin said in a statement. “I have urged Tim Geithner … to do what he can to stop this absurdity from occurring, and I am assured he will look into the matter promptly.”