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Poor Old Vikram

26 | By Shah Gilani

The only big deal about Vikram Pandit “stepping down” as Citigroup Inc. (NYSE:C) CEO and his removal from the board is that it didn’t happen sooner.

On Tuesday, the morning news flow was all clogged up with revelations that Pandit had stepped down. Rather abruptly, in fact.

The truth is he didn’t leave voluntarily. He was given an ultimatum by the “new” board of directors: resign or be fired.

Poor old Vikram. This was a setup from the start.

He ended up at Citigroup when the mega-bank bought his Old Lane hedge fund for more than $800 million. Poor old Vik pocketed about $165 million in the sale and continued to run the fund, some say into the ground, until Citi shut it down.

In 2007, my favorite Goldman Sachs (NYSE:GS) ex-CEO Robert Rubin (who after pandering to all the big banks in the country as Secretary of the Treasury in Bill Clinton’s administration, then pimped himself to Citigroup after allowing Citibank to merge with Sandy Weill’s Travelers insurance conglomerate (that owned Salomon Smith Barney) in an illegal deal that required Congress to kill prudent banking laws (Glass-Steagall) to make it legal) actually handpicked Vikram to run the bank.

Super richboy Bob Rubin, of course, had nothing to do with running Citibank after making it the mega-bank it became as a result of the merger; he was merely a special consultant to the board, or some B.S. like that.

But here’s what really happened.

As a member of the Executive Committee that picked Pandit in 2007, Rubin was the power behind the throne. And the throne at that time, I mean the chairman of the board, was Richard Parsons, a useless fool and a proven tool in his own right.

Why do I say that? Because Parsons, as Chairman of Time-Warner, oversaw the demise of that great company. And then he becomes the chairman of Citigroup? Are you kidding me? Why? Oh, that would be because he is a tool who can be manipulated.

But, I digress.

Pandit was made CEO right about the time that Bob Rubin needed some good cover. The bank was in gigantic trouble, which he directly steered it into, because he’s a greedy you-know-what. Putting up a guy with no real commercial banking experience not only gave Rubin a tool to manipulate, but gave him cover as an insider if the bank blew up.

Pandit never had the experience to run Citigroup. He should never have had the chance.

Granted, Pandit held on as best he could. But because he was Rubin’s tool, and because Rubin is who he is, Citigroup became a “protected” institution with the deepest political ties of any bank in the U.S.

Because Pandit was in charge at the time of the financial crisis, regulators who didn’t care for his lack of banking experience (former FDIC chair Sheila Bair being his biggest detractor, if not an outright bashing critic), he was unlikely to be removed for fear of panicking financial markets any more than they were already panicking.

He was used. He did whatever he could. He’s not a bad guy. He tried and eventually got Citigroup to post some impressive numbers on Monday.

Then on Tuesday, it was time to go. It had all been planned behind his back.

It shouldn’t have been a surprise. It was only a matter of time that the “new” board, and especially the new Chairman (thank God Parsons is out and hopefully he’ll fade to infinity via retirement so as not to ruin any more American institutions) would look to ease poor old rich boy Vikram Pandit down the road.

It’s just another story of how the powers behind the banks in America manipulate who they have to in order to enrich themselves at the expense of taxpayers, and the poor old rich tools they sharpen and blunt at will.

26 Responses to Poor Old Vikram

  1. John Parken says:

    Shah, what would we do without you? We certainly wouldn’t be reading anything like this in the “mainstream press”. You give us all insight into what goes on behind the scenes on Wall Street, and indirectly, what goes on in Washington as well. The two are tied together with steel rope! I’ll say it again — the money flow to our politicians has to be STOPPED before we are all sold down the river.

    • Roger Pooley says:

      I live in Indonesia, a country famous for corruption. Here; its bureaucratic corruption. But Iif the numbers were added up I am fairly sure that indonesia would pale into insignificance compared to good old USA.What you have there is Political corruption Corporations (or actually their executives) just get the law twisted to benefit themselves -legally.The bureaucracy is half honest-but helpless. Only when Americans see that their government is the world’s most corrupt will they wind back the appalling mess that its got the whole world into.How it happened I dont know ,but an honest hardworking people just believed that their politicians would govern for them.Disaster. The 99% are waking up but the 1% make all the rules.

  2. M A Dougherty says:

    Thanks Shah..once again I am reminded this subscriptions is the best money ever spent. Someone needs to snap you up and put you where you can do some damage (politically that is).

  3. James says:

    According to what I viewed yesterday on television, Michael O’Neil is the current chairman of the board of Citigroup, Inc.

    If I am right, he is the CEO who successfully brought Bank of Hawaii back from the brink of bankruptcy to good health when it ventured into markets in Asia, renamed itself Bank of the Pacific, misplaced its priorities and lost millions of dollars in the process.

    John Mack, former CEO of Morgan Stanley, who was interviewed on television yesterday said that Vikram Pandit left because he does not have the support of Citigroup’s board.

    I can see why.

    Michael O’Neil is a commercial banker. Vikram Pandit is an investment banker whose roots go back to investment bank Morgan Stanley.

    Their banking philosophies must be diametrically opposite.

    It is a good start.

    I think Citigroup, Inc. is on the mend. The commercial bankers are taking control of the big banks. The big banks are going through a self-cleansing process to right themselves.

  4. ASHLEY GOODMAN says:

    So that us why Clinton buried Glass Steagal. and Congress helped. Talk about criminality and nobody goes to jail. Start a war and kill hundreds of thousands to get re elected. Betray, the Tax Payer and the nation. Get a pension as an expresident and no penalty. We are evidently on our way to a totally decayed society as we watch or currency debased by the federal reserve. You can’t wiln for losing big time. Where do you go to feel safe? I need the illusion if only for my sanity. I cannot vote for BS. I’ll lose whatever self respect I have and it ain’t much.

    • Susie Austin says:

      We need to do something to bring to light that things that Presidents and Congress pass may not have full effect until years later…think of Nixon depegging the USD from gold, the Glass-Steagall repeal, and a little known one: in 1996, the US Congress passed a Balance Budget Amendment in the House, but failed in the Senate —- BY ONE VOTE! One voting against it — John Kerry! But we never heard about this when he ran for president! Our press is also bought and paid for and therefore, the rest of us have to pick up the slack, just like Shah does. Read this transcript about what John Kerry said against the BBA:

      CONGRESSIONAL RECORD — Senate
      Thursday, June 6, 1996
      104th Congress 2nd Session
      142 Cong Rec S 5873

      (Kerry Calls a Balanced Budget Amendment a “partisan gimmick”)

      Mr. Kerry. Mr. President, this amendment goes further than balancing the budget-it goes to the heart of our democratic process.

      It carries with it a fundamental shift in the exercise of decisionmaking in America.

      Those who are using this amendment as a weapon in an ideological war do not want the votes of those who think differently to count as much as theirs. It’s that simple.

      If there is a possibility you may ever reach a different conclusion than they have, they want to make certain that your vote will not count equally by requiring that you must find a super-majority to fight back.

      This is wrong, Mr. President, it is undemocratic, and fundamentally revolutionary in the worst sense of the word. [*S5888]

      But, Mr. President, that is not all that is wrong with this amendment as drafted-though it would certainly seem to be enough.

      This amendment as drafted will encourage budget gimmickry. It invites the worst type of cynicism. The experience of States with balanced budget requirements only bears this out. The proponents of this amendment have argued that the experience of States with balanced budget requirements makes a constitutional amendment obvious-but realities in budgeting demonstrate the exact opposite to be true.

      I take to heart the testimony of the former comptroller of one State: Edward Regan of New York told the Congress that many States with balanced budget requirements achieve compliance only with ”dubious practices and financial gimmicks.” These gimmicks include shifting expenditures to off-budget accounts or the financing of certain functions to so-called independent agencies. These States have been creative with tricks and ploys to mask their deficits.

      My distinguished colleague from Vermont, Senator Leahy, has illustrated some of the shenanigans in his lucid critique of this amendment-he talks of States using ”accelerated revenue receipts such as tax payments, postponing payments to localities and school district suppliers, delaying refunds to taxpayers and salary and expense payments to employees until the next fiscal year, deferring contributions to pension funds or forcing changes in actuarial assumptions, and selling States’ assets.” And this amendment does nothing to stop the Federal Government from employing the same tactics and dozens of others.

      Mr. President, consider the effects of these gimmicks on the people in this country. Postponing payments? Withholding funding for schools? Delaying refunds to taxpayers? Deferring pension contributions? Selling our national assets?

      That will be the result of this amendment, Mr. President.

      I oppose this gimmick. And I do so principally because I have come to believe this is an ill-advised attempt to memorialize, in the fundamental governing document of this democracy, budget gimmicks and one political party’s fiscal agenda.

      This amendment as drafted, Mr. President, is political dogma disguised as economic policy. It is the continuation of an ongoing effort to demonize national interests by demonizing those who promote any kind of national programs to protect the American concept of community.

      The gimmicks engendered by this amendment will assist the victory of stagnant partisan politics over sound public policy, doing what’s smart politically rather than what’s good for the American people.
      (Sorry for the length of this and that it’s several days since you wrote this Shah, but just got to this email)
      We need to get in pols that care more for the country and its individuals than they do for their political career or their political party.
      We need to institute a BBA, reinstate Glass-Steagall for starters. And the banks need to be banks. period.

  5. Kevin Beck says:

    I fully concur…Pandit the Bandit should never have been put in charge of Citigroup. And Rubin Hood should be sharing a prison cell with such scum of the earth as Dick Fuld and Hanky-Panky Paulson. And I almost forgot Jon “Fuzzy” Corzine.

    I’m still perplexed that the Obama administration, after all their yammering about the crimes of Wall Street, has not succeeded in any prosecutions of those they claim are at fault (even though they never name names).

    Could it be that they all share the same political party affiliation?

    But that’s a story for another day.

  6. Frank B. says:

    Shah,

    Of course, I agree that you help keep us informed about the shady underbelly of the govt. and the financial sectors! Without this information we are at the mercy (none) of these crooks and criminals. Money is their god and they won’t let us peons (pee-ons) see behind the curtains of their shenanigans! Keep on enlightening us and help us to figure out how to beat them!

    FB

  7. Joseph p bell says:

    There is only one way to say : Shah (Giuliani ) i mean Gilani for President . Why else would we be reading this type of news .

    • FWC111 says:

      I believe there are very few out there who are fully cognizant of the scope of the insult that has been hefted upon the American people,and certainly Mr Gilani is one of those.More importantly he seems unafraid to bring these breachs to light,and at this point, in our nations plight, nothing would be more refreshing than to have him continue to enlighten all, as to what has taken place,and who the perpetrators are.

      • Susie Austin says:

        Shah, you’ve done it again.
        I agree with many here – we need a book and a movie, perhaps?
        Have you read Douglas Brunt’s new book “Ghosts of Manhattan” about the high rolling Wall Streeters?
        Let’s think…what would be a good title for Shah’s book/movie?” How about “In Bed Together”, “How Wall Street (and Government) Screwed Main Street”,or how about “The Under Belly of the Beast” or “Money is Their God”? Thanks Frank B. for the ideas….

  8. H. Craig Bradley says:

    CONFLICTS OF INTEREST ARE WIDESPREAD

    Here is a innoculous incident with some relevent implications. The WSJ.com reported that a one Jean Carlo Pena committed felony theft, counterfitting, and money laundering ( according to a recent Federal Criminal Complaint filed by the assistant U.S. Attorney Joshua Naftalis- Southern District of New York in Manhattan).

    The accused was servicing ATM’s owned by JP Morgan Chase Bank and stole $78,000 between two ATM’s earlier this month. He then substituted fake $20 bills for the real ones which he purloined. Upon doing some internet searches, I discoved the likely armored car carrier involved was Garda Ltd. of Montreal, Quebec. They appear to have the ATM servicing contract with JP Morgan Chase Banks. Factual omissions speak louder than words. I smell cover-up.

    So, what might be the possible connection between the U.S. Attorney’s Office in Manhattan in Southern New York and Garda, Ltd. , a national armored car carrier ( Cash and Logistics Management). We live in a very complex society where conflicts of interest are potentially everywhere.

    Here is the catch: Banks do not do their own ATM servicing. Instead they contract it out to an armored car carrier. Nowhere in the Federal Criminal Complaint or the WSJ.com Blog was Jean Pena’s employer mentioned. It was omitted. Why?
    http://www.scribd.com/doc/110236364/Pena-Jean-Carlo-Complaint

  9. eric taylor says:

    Why can’t we simply go back to Glass-Steagall instead of all this blithering around? if you can’t go back after making a mistake, the deficits just add up!

    • robert w. says:

      We can’t because the banks now own congress as a result of the supreme court decision to let them buy congress.

    • Susie Austin says:

      I think the general purpose of Glass-Steagall was to separate out the banks from the investment houses, right? Since interest rates are so low, the big banks saw the writing on the wall and started acting like “investment” houses so they could make more money (with your money at risk, whether you knew it or not). Some of them changed their definition in ’09 so that they could get bailout money. Others will go back to being a traditional bank when interest rates skyrocket. They are too big to fail, too powerful to convict and too corrupt to clean up. They must be broken up.
      Shah, your insider stories are fabulous!

  10. FC Rosenberg says:

    You should take another look at the record of Richard Parsons. He took over Time Warner when its balance sheet was a horror story. The major task in turning that company around was to clean this up, and he did so, thereby laying the groundwork for a most impressive corporate recovery. He also repelled an assault by raider Carl Icahn– largely by convincing Icahn– no pushover– that he was doing the right things.

  11. bmc123 says:

    Sometimes it’s nearly too much to comprehend. I always need to read and re-read your material, which hopefully is a sign I’m learning something useful. Keep fighting the good fight Shah.

  12. Joe w says:

    NIIICE ! thanks Shah for educating what use to be a naive person that trusted the ELECTED (used Loosely) RepRESENTative’s to watch our backs of us hard working (middle class ) people.

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