Lisa Simpson
Oct 21,2009
In: Real Estate

Citigroup Takes the Help of Insider

Citigroup like all the other important banks in USA have lobbyists to keep their raft afloat in Washington. For bankers continuously dealing with numbers, Washington seems too complex to handle single handedly. There is a network of rules and regulations, of regulators and agencies all resting on the sold harsh reality of politics. Washington confuses and confounds.

Politicians are all set to redraw rules about regulations to avoid a rerun of the financial crisis. At such a point a bank cannot survive and keep floating without an insider. Few banks are more adept at manipulating the federal government than Citigroup. The bank became so riddled with bullets from the crisis that it has to all practical purposes become a ward of Washington. It has been kept on life support – pouring in of dollars from the tax payer’s kitty through the goodness of Washington.

Even then, knowing this, many close to the bank from the outside and inside were shocked when the chairperson of Citigroup, Richard D. Parsons availed of the services of Richard F. Hohlt. Hohlt is an insider of Washington and has for long been an aggressive advocate of the banking group.

The name of Hohlt is connected with savings and loan crisis of the 1980’s when his activities cost the taxpayer $150 billion for cleaning up the mess. After the fading of the crisis he too slipped into anonymity but backstage he was not idle. He advised many clients, cemented his contacts with the media and then surfaced as one of the few insiders of Washington who had a hand in ousting of CIA agent Valerie Wilson.

Former regulators who had contact with Hohlt during the savings and loan mayhem were dismayed and surprised that he had been lured in by the chairperson of a bank that has the dubious distinction of having taken billions from the taxpayers in the form of assistance. Concerns were voiced as to what exactly Citigroup had hired him for.

William K. Black who had been a former regulator and one of the top investigators in the Savings and Loan crisis said, “Mr. Hohlt has a track record as a behind-the-scenes, Republican influence peddler who caused severe damage to U.S. citizens by helping to delay and weaken the crackdown on the S. & L. control frauds. 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.” Currently Black is a law professor at University of Missouri.

banner_bankownedproperties4