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.