NYT: Citigroup Hires Former S&L Crisis Lobbyist

The New York Times takes a look at Citigroup's hiring of Richard F. Hohlt -- a former lobbyist with a controversial past who will now advise the volatile bank on policy issues.

The Times reports that the decision has taken many industry insiders by surprise. Hohlt, who served as a high-powered lobbyist for the savings and loan industry in the 1980's, helped stymie attempts at government oversight leading to that decade's S&L crisis, which cost taxpayers $150 billion.

Now he has been hired as a "political adviser" by Citigroup chairman Richard D. Parsons.

Few banks can use advice about navigating the federal government more than Citigroup, a company so hobbled by the crisis that it has essentially become a ward of the state, kept alive through multiple infusions of taxpayer funds.

The Times reports that several former regulators expressed shock that Hohlt had been hired by a bank that has received tens of billions of dollars from the federal government.

"It is singularly obscene that any recipient of taxpayer assistance through the TARP program during the current financial crisis would hire one of the most infamous lobbyists in the world to represent them," says William K. Black, a former regulator and top investigator for the definitive Congressional report on the S & L crisis.

Citigroup received $45 billion bail out from the federal government last year and is said to be considering shrinking its North American retail banking focus, according to Bloomberg.

In an interview last week, Hohlt said he was "simply the messenger" for the savings and loan banks decades ago.

"Yeah, mistakes were made," he said.

Comments

[BernankeMadoff]

The government has put the same punch bowl out that got us into the mess in the first place. More debt and consumption and don't worry about paying it back. (Berbnanke= Greenspan II)

Good articles: http://pie.im/af30

If this is change we can believe in, count me out in 2012. Obama should not have reappointed bernanke.

[balancedsolution]

It's almost over for Citibank.

If i worked there I would get my resume ready!

Time is a tickin

[lazercat2008]

“It is singularly obscene that any recipient of taxpayer assistance through the TARP program during the current financial crisis would hire one of the most infamous lobbyists in the world to represent them,” says Mr. Black, who now is a professor of law at the University of Missouri at Kansas City.

http://dealbook.blogs.nytimes.com/2009/10/12/all-of-the-nations-major-ba/

Why don't any of these people ever go to jail?

[lazercat2008]

"Hohlt undoubtedly has enemies within the Washington establishment, whether for his S&L lobbying or the wide assortment of other behind-the-scenes activities he’s involved with. (He is a founding member of the Off-the-Record Club, a group of influential Republicans who feed stories to journalists on background, and played a minor role in the outing C.I.A. agent Valerie Plame a few years back.) But he also undoubtedly knows what he’s talking about. That knowledge could end up being indispensable to Citigroup, which is up against major pressure from at least one regulator, Federal Deposit Insurance Corp. Chairwoman Sheila Bair".

http://galtgonewild.com/

[Gernuser]

Congratulations to to Obama for winning the Nobel Peace Prize and inspiring billions of people around the world.

If you like finance & econ news you'll like: http://pie.im/af30

Now that you have everyone's trust it's time to carry out actual heath care & financial reform. Time to get things done instead of just talking and planning.

[jws2346]

Brings up the ole' sayin' "fox guarding the chick house". Whatsa' matter with these people at Citibank. First they screwed up by making bad financial decisions, then they became wards of the state through TARP and now they're back to bad decisions. They definitely need to change their game plan before it's really too late.

[lazercat2008]

Don't buy anything on credit.

[MayorQuimby]

This includes housing.

[lazercat2008]

I was thinking credit cards, but yeah, you really should not buy one of those either.

[CanadianBeef]

This is a positive development. It reminds people of the similarity of the S&L failures of the 1980s and the bank failures of today. Then, as now, bankers who were deregulated then ran amok and mortgaged everything in sight with no thought to the consequences. Then, as now, those institutions issued complicated derivatives that turned out to be worthless. Then, as now, the federal government had to step in with billions of dollars to clean up the mess.

[TXfemmom]

The government should just take over the banks, break them up into manageable size with all these multiple divisions which were added during deregulation spun off, and then they need to go after the CEO's, the Boards, the CFO's and many of the execs, the way many of them within the S & L fiasco went to prison, so should these.