Assistant Treasury Secretary Herbert Allison: Mum's the word on Citi / Treasury relationship

[Amerigo Vespucci]

Citigroup CEO Backs Obama's Financial Reform Agenda

Vikram Pandit, Citigroup CEO: We're 'Fundamentally Different' Now

WASHINGTON — Facing sharp questions from bailout overseers, Citigroup Inc. CEO Vikram Pandit said Thursday the bank is "fundamentally different" than the tangled behemoth that took more than $45 billion in government aid during the recent financial crisis.

"I am pleased to say we are in a far different and much healthier position," Pandit said in testimony before the Congressional Oversight Panel. The independent watchdog group oversees the $700 billion financial bailout.

Pandit said Citi's experience during the crisis showed the need for a clearer process to deal with large, failing financial firms – a key priority of the Obama administration.

That echoed earlier testimony from Treasury's top official handling the cleanup of the crisis. Assistant Treasury Secretary Herbert Allison said Citi's bailouts were part of "difficult but necessary action to confront a financial system on the verge of collapse."

He said taxpayers will likely end up with a profit on the entire set of Citi rescues. Among them: a $20 billion infusion that has been repaid, and $25 billion that was converted into common stock and has since gained value.

But Allison frustrated panelists by refusing to answer many of their questions. He would not discuss events that preceded his arrival at Treasury, provide any analysis of the company's situation or describe conversations between Citi and Treasury officials.

Allison described Treasury as a "passive investor" that is barely involved in overseeing Citi.

[cutlassmama]

1. Passive investor my ass