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Citi going through with $50 mln plane order: source
January 26, 2009 / 10:01 PM / in 9 years

Citi going through with $50 mln plane order: source

NEW YORK (Reuters) - Citigroup Inc (C.N), which has received $45 billion of capital from the U.S. government, is going through with plans to buy a $50 million jet but a U.S. senator called the deal absurd and wants the Obama administration to block it.

The bank ordered a Dassault Falcon 7X two years ago and plans to accept delivery later this year, according to a person familiar with the matter.

Canceling the jet would have forced the bank to pay a multimillion-dollar fee, the person said.

Citigroup is selling two older Dassault jets, worth an estimated $27 million each, according to the New York Post, which was first to report that the bank was still buying the new plane.

Citigroup declined to comment on whether it was buying a new aircraft, but it said in a statement that it has strict policies regarding use of its aircraft, including encouraging executives to fly commercial whenever possible to reduce expenses.

The bank said it has reduced its number of aircraft by two-thirds over the last eight years.

In Washington, the White House frowned on the sale with a spokesman saying President Barack Obama does not believe “that’s the best use of money” by companies that are receiving taxpayer assistance.

Sen. Carl Levin, a Michigan Democrat, wants the Treasury Department to block the sale.

“To permit Citigroup to purchase a plush plane -- foreign-built no less -- while domestic auto companies are being required to sell off their jets is a ridiculous double standard,” Levin said.

Additional reporting by John Crawley, Kevin Drawbaugh, and Karey Wutkowski in Washington; editing by Carol Bishopric

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