Citi's two-faced talk on TARP

Citigroup (C) CEO Vikram Pandit is a case study in failing upward. He sold his hedge fund to Citi for $800 million and it promptly shut its doors -- but not before paying him $165 million. Under Pandit, Citi has lost $28 billion -- $90,615 per employee -- and been bailed out to the tune of $351 billion, including $45 billion in TARP money.

Did Citi use TARP money to reward Pandit with $10.8 million -- $9.8 million more than he testified in front of Congress to having gotten in 2008 -- for that boffo performance? Pandit isn't saying -- but he sure was happy to criticize the idea of taxing 90 percent of bonuses paid to banks that got TARP money.

Is Citi now using that TARP money to make more loans? Pandit claims that Citi authorized $8.2 billion in new loans to consumers and businesses with TARP money so far this year. Unfortunately, its track record between October 2008 and February 2009 is that its lending shrank 24.2 percent from $19.4 billion to $14.7 billion.

Guess what Vikram? You know as well as anyone should that money is money -- whether you get it from TARP or profit on a loan, you are going to use it however you see fit. Whether you choose to use that TARP money to pay bonuses to the people who lost Citi money or to issue fewer loans and claim a great TARP victory for America, that money is fungible.

Stop talking out of two sides of your mouth and figure out how to make Citi profitable. If you can't, please let someone else run Citi who will.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He owns Citi shares.

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