Journal Remains Citi Scoop Central

Ryan Chittum has now left the undisclosed location in the D.C. area (Langley) where he works to go on vacation. Audit readers are stuck with me for a while.

UPDATED 11:40 a.m.: Actually, here’s why we appreciate Chittum: While it remains true that the Journal has led on Citi and banking scoops generally, my pals at the Financial Times point out that the Salmon One actually had word of the FDIC’s growing dissatisfaction with Pandit back in April.


Everybody loves a scoop, and we’re no different. The Journal has a nice one this morning on Sheila Bair’s FDIC pushing for a “purge” at Sandy Weill’s amazing subprime machine, putting current CEO Vikram Pandit’s job in danger.

Bair, the story says, is “frustrated at the company’s pace of change” and doesn’t like its lack of top-level experience in consumer lending.

There are some nice new naughty news bits, particularly the one about Pandit’s obscenity-laced 2 a.m. tirade after Wells Fargo last fall broke up Citi’s deal to buy Wachovia, a move endorsed by the FDIC.

On a 2 a.m. conference call at that time, the usually mild-mannered Mr. Pandit launched into an obscenity-laced tirade about the FDIC chairman, according to people familiar with the call.

That’s nice.

It is interesting to note that the support for the “purge” notion, including Pandit’s peril, comes entirely from the Citi side, at least from evidence presented in the story. The reasoning is a bit convoluted: the FDIC believes Citi should be listed as a “problem” bank; the rival OCC doesn’t. Citi was eventually kept off the list, but:

Still, Citigroup officials believe that the FDIC will push them onto the “problem” list if they don’t remove Mr. Pandit and his team. They fear being on the list could limit Citigroup’s access to federal programs and prompt trading partners and clients to yank business.

Nothing wrong with that attribution. It’s just interesting. Readers should also keep in mind that Bair has been on PR tear for quite a while, as this NYT archive indicates. It takes a lot of self-promotion and puffery for a top Bush-era banking regulator to survive the Obama regime change. It’s not a knock on the Journal to say that this is part of that. Still, she has played the press skillfully, and her record as dissident against Bush-era financial deregulation could stand more scrutiny.

We’ve noted several WSJ Citi scoops in the past, including one this week that Citi was refusing to pay huge bonuses to five ex-execs.

For that matter, the WSJ has had the best sources inside the Bank of America/Merrill Lynch imbroglio.

But a word of caution: Nobody can argue against scoops, but they aren’t everything and don’t come for free. A great paper needs to break news and go deep.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.