The story notes, for instance, that while Citi officials emphasized how different the two companies were, Associates’s CEO (and future Citi vice chairman) stressed the opposite.

Last month, in an investor conference call, Keith W. Hughes, the chief executive of Associates, who will join Citigroup as a vice chairman after the merger, cited the strong cultural similarities between the companies. But in an interview last week, Marge Magner, a Citigroup executive who previously oversaw Citigroup’s consumer finance business, stressed what she said were big differences, particularly in how the sales staff is paid.

So, the similarities are, um, different.

It also noted that the Clinton Treasury Department, which Robert Rubin headed before becoming Citi’s executive committee chairman, called a product known as lump-sum credit life insurance, “unfair, abusive and deceptive.”

Associates called the product “bread” and “butter,” as Oppel and McGeehan write:

One interoffice memo, written to group managers in 1988, instructed Associates employees to ‘insist that the insurance offer is written on every application, NO EXCEPTIONS.’

What does Citi think?

CITIGROUP officials say the problem is not with the product, but in the way that it is sold.

All right, then. Apparently Rubin thought one thing at Treasury and another at Citi. What happens when he becomes the chairman of the executive committee of Rent-a-Center?

Bottom line, Audit to Schachter: Good story. Thanks for pointing that and others [3] out.

Corrigan, from the L.A. Times writes:

In a series of stories by staff writer E. Scott Reckard and contributor Mike Hudson beginning in Feb. 2005, the L.A. Times shone a light on the ‘boiler room’ culture in some Ameriquest loan offices, the use of fraudulent appraisals to win loan approvals, and the fact that Ameriquest’s ads rarely mentioned that it was a ‘subprime’ lender — even though at the time it was the nation’s largest. We subsequently learned that our coverage was closely followed by regulators who ultimately negotiated a $325 million settlement from Ameriquest. You can find those stories at

That was indeed a remarkable story.
(I happened to have seen that one, but missed the other 29 that Reckard did on the defunct Ameriquest and its founder, Ambassador Arnall.

Since the topic today is Citigroup, I’ll limit myself to quoting only two paragraphs describing a typical day around an Ameriquest office in suburban Minneapolis:

Slugging down Red Bull caffeine drinks, sales agents would work the phones hour after hour, he said, trying to turn cold calls into lucrative ‘subprime’ mortgages — high-cost loans made to people with spotty credit.

The demands were relentless: One manager prowled the aisles between desks like ‘a little Hitler,’ Bomchill (an ex-Ameriquest staffer) said, hounding agents to make more calls and push more loans, bragging that he hired and fired people so fast that one worker would be cleaning out his desk as his replacement came through the door.

The “Proud Sponsor of the American Dream,” ladies and gentlemen. A David Mamet-meets-Hunter Thompson dream, but a dream.

Someone else wrote to point me to the remarkable work by the Times’s Diana B. Henriques, whose byline I will not fail to notice in the future, including on this 6,200-word jackhammer written with the great Lowell Bergman on the crooked, Wall Street-abetted practices of First Alliance Mortgage Co., also now defunct.

MORTGAGED LIVES: A special report.
Profiting From Fine Print With Wall Street’s Help [4]

A couple of points here:

First, the people who wrote me are proud of their colleagues’ work, and that’s a good thing. Obviously, I don’t mean to slight that work; quite the opposite. I also understand the feeling of doing the hard work that others avoid, and then having it ignored.

Second, the two Timeses did hit hard at the subprime issue in general.

Schachter says:

I think that our paper’s coverage on this issue since then — by Gretchen Morgenson and many others — has lived up to the traditional standard of afflicting the comfortable and comforting the afflicted.

Of course, I already agree on that. (Gotcha! Boo-yah!)

L.A., you’re right. You were wrongfully ignored. On the other hand, this isn’t the Pomona Journalism Review, so lay off.

But third, and let’s face it, Hudson’s piece in Southern Exposure was groundbreaking in that it really did reveal not only that Citi bought a bad company in 2000, but that its roots—a significant part of it earnings, a case could be made, its very essence—lay in the subprime sector.

I suspect that’s why the story won a Polk Award.

That it was left to Southern Exposure to do that story, given the volume of Citi coverage, is, I’m sorry, troubling.

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.