Citi `timeline’ of its 200-year history has “launches mobile phone banking service” as the key 2008 event
I guess they forgot about that $45 billion taxpayer bailout to stave off the catastrophic bankruptcy of a $2 trillion colossus.
So I thought I’d dust off a few highlights from over the years that didn’t make it into Citi’s official history (which I should say, includes helping fund The Audit a few years ago). Heck, you can’t blame ‘em. The press neglected some of these too.
Email me if I’ve left something out and I’ll update this list.
— 1905: Scandal erupts over Standard Oil-dominated National City Bank’s sweetheart deal with Secretary of the Treasury. Congressman: “This is the old, bewhiskered, longstanding steal of the National City Bank.”
— October 1929: National City Bank chairman “Sunshine Charlie” Mitchell: “I know of nothing fundamentally wrong with the stock market or with the underlying business and credit structure.”
— 1933: Glass-Steagall Act is passed in large part due to National City Bank and Mitchell, who offloaded toxic securities onto unsuspecting investors. Senator Carter Glass said “Mitchell more than any 50 men is responsible for this stock crash.” Mitchell later forks over more than a million dollars to the government for tax evasion. Citi in 2012: “Charlie Mitchell is remembered by some as a controversial figure for his involvement in the securities market. However, his role in the creation of the consumer banking business cannot be overlooked. ‘In terms of what Mitchell did for the bank… it was really a tremendous contribution.’”
— 1961: To evade limits on interest rates, First National City CEO Walter Wriston begins selling CDs that can be cashed in early, which Paul Krugman and Robin Wells say “marked the first major crack in the system of bank regulation created in the 1930s, and hence arguably the first step on the road to the crisis of 2008.”
— 1970s: Wriston leads the banking industry’s charge into lending Latin American governments more than they could repay
— 1982: Wriston writes in The New York Times that a “country does not go bankrupt.”
— 1982: Citi and other banks get a backdoor bailout via aid to defaulting Latin American countries
—1986: Sandy Weill (and Jamie Dimon, Robin to Weill’s Batman) buys predatory lender Commercial Credit Corporation, beginning an empire that will later become Citigroup
—1988: Weill buys Primerica, a sketchy multilevel-marketing (pyramid style) firm that sells term life insurance
— 1991: Salomon Brothers, which Weill bought in 1998, pays a $290 million settlement in a Treasury bond scandal *
— 1998: In what was then the biggest merger in history, Citicorp combines with Weill’s Traveler’s Group to create Citigroup, despite it violating the Glass-Steagall Act
—1998-2001: Citi and its analyst Jack Grubman help inflate the tech bubble
— 1998-99: Treasury Secretary Robert Rubin pushes for the repeal of Glass-Steagall
— October 1999: Rubin leaves the Clinton Administration for a Citigroup job that will pay him $15 million a year to have no responsibilities
— November 1999: Congress repeals Glass-Steagall
— November 1999: CEO Sandy Weill urges telecom analyst Jack Grubman to take a “fresh look” at the stock of AT&T, whose CEO is on Citi’s board and controls a vote Weill needs in a power struggle with his co-CEO. Grubman sends the CEO a memo about wanting to get his twins into the prestigious 92nd Street Y. Citigroup donates $1 million to the Y, Grubman’s twins get two coveted spots, and Grubman upgrades AT&T to a “buy.”
— 2000 Citigroup buys predatory lender Associates First Capital for $31 billion
— 2000: Studies find that three-quarters of Citi’s mortgages are now made by a subprime unit