YES, WE WILL! PICKET CITIGROUP SHAREHOLDERS’ ANNUAL MEETING!
Outside the Hilton Hotel, Sixth Avenue between 53rd and 54th Streets.
Wednesday, April 24th at 8-10 am.
Some things take intolerably long to change. The following was written almost a year ago for “Occupy the Citi,” which was a “Day of Public Outrage and Education” held by Occupy Astoria LIC at the “other” Citigroup Tower, the one in Queens. The text needs only minor changes – we turn “four years” into five, switch the name of the suit at the top from Pandit to Corbat – and presto! It’s as timely as ever; a sad truth. This is why Occupy Wall Street is still protesting Citigroup next Wednesday morning. This time we’ll be at the annual shareholders’ meeting. (Note: Following views and opinions belong to Nicholas Levis. Blame him.)
Why Occupy the Citi? What Are Our Grievances?
Five years ago, Citigroup and other major Wall Street banks became insolvent as a result of their own predatory and reckless actions in the mortgage-backed security and derivatives markets. This caused the most dramatic financial crash since 1929.
The institutions responsible for the resulting global depression and worldwide misery constitute a public danger. They should have been liquidated. The executives should have been fired and subjected to criminal investigation. A banking system that causes such a disaster should have been reinvented.
Instead, a government corrupted by Wall Street money decided that the insolvent “zombie banks” were “Too Big To Fail” (TBTF). While smaller and often more solvent banks were allowed to go bankrupt, the TBTFs were rescued with trillions of dollars from taxpayers and the Federal Reserve.
Citigroup alone received $45 billion in direct cash bailouts from the Treasury – the taxpayers – and was privileged with an incredible total of $2.5 trillion in near-zero interest loans (GAO-11-696, p. 131) as well as additional guarantees from the Federal Reserve. Together, the TBTF banks received more than $13 trillion in bailouts from the Treasury and Federal Reserve, and ongoing potential taxpayer exposure on all government guarantees for banks to date exceeds $3.5 trillion. [Note: In the year since this was first written, much has been made of how banks have “paid off” TARP or other bailouts, without noting the continuing exposure in case of future failure, or asking: Why were criminal institutions entitled to a bailout in the first place?]
Since the crisis, while the Federal Reserve discount window has offered the TBTFs loans at almost zero percent interest, the big banks have also been able to buy Treasury bills paying 3 percentage points higher. In other words, the US government is providing free money and free profit to the TBTFs, helping to keep them afloat. Furthermore, in 2009 the government suspended “mark to market” accounting rules for banks, which means that banks can value their assets at ideal value, rather than at the prices actually available on the market. In short, banks are allowed to cook their books so that they can look solvent.
Because they were bailed out, the TBTFs were able to continue foreclosing on individual debtors, for whom no effective rescue has been offered.
Because We the People were forced to rescue banks like Citigroup, Goldman Sachs and Bank of America, today they continue to pay exorbitant bonuses to the executives who helped to crash the world.
Thanks to taxpayer money, Citigroup and its siblings can continue to pay for an army of lobbyists in Washington and influence legislators with campaign donations. Citigroup was #3 among the 10 biggest corporate campaign contributors in U.S. politics over a 20-year period, just behind Goldman Sachs. Its spending peaked during the crash year of 2008, in the run-up to receiving its bailouts. Citi’s biggest recipients in the 2010 election cycle included our New York senators, Charles Schumer and Kirsten Gillibrand, and Queens Congressman Joseph Crowley. This doesn’t count Citi’s spending on lobbyists in Washington, which totaled $62 million from 2001 to 2010.
Thanks to the TBTF doctrine, Citigroup can still buy favorable PR by purchasing endless ad time to tell us of its supposed charitable works, and, incidentally, by sponsoring our beloved New York Mets.
How does Citigroup show its gratitude for the federal rescue? In 2010, Citigroup declared $4 billion in profits and paid no federal income tax. In fact, it received a $1.9 billion tax refund. (Similar numbers apply in the cases of Bank of America and Goldman Sachs.)
During the final phase of the housing bubble, Citigroup was one of several institutions known to have conned investors into buying securities that were designed to fail, even as they bet against the same securities they were selling. When the government found evidence of one such multi-billion-dollar fraud, however, no one was prosecuted. Instead, the US Securities and Exchange Commission (SEC) asked Citi to pay a penalty worth only a fraction of the amount defrauded from the investors: a mere business expense. The SEC settlement – which for now has been blocked by a courageous judge – did not even require Citigroup to acknowledge wrongdoing.
Today, the Wall Street banks bailed out by the public continue to profit from predatory actions. In a system where money controls politics, Wall Street is above the law… (continued)
The Citi That Always Cheats:
201 Years Are Enough
In the wake of its 200-year anniversary in 2012, the time remains ripe for Citigroup to be put to sleep. Citigroup is a model for the Wall Street greed, fraud and failure that have devastated the lives of millions of people.
In the late 1990s, Citigroup chief Sanford Weill spearheaded the lobbying campaign to repeal the 1933 Glass-Steagal Act, which barred banks from speculating with depositors’ accounts. As a souvenir, Sandy Weill received the White House pen with which the repeal was signed into law.
As a result, depositor banks like Citi were able to participate in the enormous housing market and other speculations of the 2000s. Citigroup was and remains the largest single holder of the subprime mortgages used in creating and selling the toxic securities that triggered the 2007-2009 crash.
During this time, Citigroup economists found a new name for the philosophy that has always guided the company’s policies. They called it “plutonomy” – an economy built to meet the demands and whims of the richest 1 percent. A 2005 memo by a Citigroup global strategist reads: “We project that the plutonomies (the U.S., UK, and Canada) will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization… Since we think the plutonomy is here, is going to get stronger… It is a good time to switch out of stocks that sell to the masses and back to the plutonomy basket.”
Citigroup is no stranger to bailouts. In the 1970s, Citi led the banking industry’s charge into knowingly lending US-backed Latin American dictatorships more than they could repay. When major Latin American countries defaulted in 1982, Citi received a backdoor bailout from the IMF and wealthy countries like the US.
Wherever there is misery and crisis, Citi and its Wall Street siblings see the opportunity to profit. Citi subsidiary Banamex in Mexico is best-known for its massive involvement in laundering money for the illegal drug industry.
Damn You, OWS, What Are Your Demands?!
We’d like to imagine we could make demands of such an organization.
We’d like to appeal to the consciences of Wall Street executives who receive million-dollar bonuses for failure, while they foreclose on underwater mortgages and throw families out on the street.
We’d like to imagine Citigroup would put an immediate moratorium on foreclosures, and help the people it has made homeless.
We’d like to imagine Citigroup would throw open the books on any and all of its wrongdoing in recent decades, just because it would be the right thing to do.
We’d like to imagine Citigroup will pay full restitutions to the investors it defrauded, and deliver a refund to the taxpayers who rescued it, along with a giant-size Thank-You card.
We’d like to imagine that former Citigroup CEO Vikram Pandit will finally make good on his promise to meet with Occupy Wall Street members..
We’d like to imagine that former Citigroup CEO Sandy Weill will apologize for spearheading the deregulations of 1999 that helped cause the crash of 2008, and that he will return the White House pen with which the repeal of Glass-Steagal was signed into law. We want to put it in a future Museum of Corporate Crime.
We love our Mets, so we’d love it if Citi would take its disreputable name and logo away from the new Shea Stadium, since they’re not actually paying for any of it. The taxpayers gave Citigroup $45 billion in the same year that Citi Field opened.
(Incidentally, the Mets and Yankees between them received more than $1.1 billion in public subsidies to build their new stadiums. Therefore the new Mets ballpark is properly called Taxpayer Field, not “Citi Field.”)
We apologize if some of our imagined demands seem to be in a humorous vein, or academic. Given the human suffering, a moratorium on foreclosures and debt relief for individuals would certainly be the most important, life-or-death issues. But we also think the history is essential to remember.
We can always submit our appeals to the Citigroup executives and call these our “demands.” We can stand outside the building and chant, “Stop your bad bets – Free the New York Mets – Citi must markdown – all housing debts!”
But we’ve learned enough from 201 years of Citigroup history to know how its executives will respond to our demands.
We have seen that the banks who caused the 2007-2008 crash – like Citigroup and Goldman Sachs and Bank of America – were rewarded for it. With help from our captured government, today they are bigger, and more powerful, and more dangerous than ever.
As long as it’s profitable, Wall Street won’t stop committing fraud. Like his predecessor Vikram Pandit, Mike Corbat won’t do the right thing just because we ask nicely. Citigroup, the Wall Street megabanks and the other plunder-happy institutions of the financial sector won’t surrender to reason without a peaceful and powerful, political struggle of the people – a struggle that aims to end the concept of “too big to fail,” to break up the megabanks and end the risk they pose and to restore meaningful regulation of the financial sector. Financial markets must be unseated as the driver of all things, and redefined and restructured into a utility to the productive economy and to the actual needs of the people.