Listen, I don’t mean to say there hasn’t been fine reporting on Citigroup, or that the subprime story is the only Citi story worth pursuing. Roger Lowenstein wrote a wonderfully intimate 8,000-word profile for The New York Times Magazine in 2000 [1], chronicling Weill’s rise from modest Brooklyn roots, his painful exit from American Express, a stormy relationship with protégé-turned-rival Jamie Dimon, and unlikely triumph in taking over and vastly expanding Citi, making it for a while the world’s most profitable company. Fortune’s Carol Loomis and the Journal’s Monica Langley have done much good work on Weill’s driven personality and why he is not the world’s nicest boss.[2], [3]

Much was written, albeit after the fact, about Weill’s central role in creating and taking advantage of conflicts of interest that led to a fraudulent stock-research scandal, his relationship to fallen star analyst Jack Grubman, as well as on Citigroup’s pivotal role in the crashes of Enron and other scandals.

The Wall Street Journal also did interesting work framing the Weill-Dimon rivalry as a battle over the consumer, as opposed to the commercial, market. [4] But the story merely waves at a serious accusation of predatory practices. That’s here:

The trend has big risks for banks and their customers. The banking behemoths have gained a reputation for ingenuity at generating growth by tinkering with consumer interest rates and tacking on myriad fees.

That “tinkering” with rates and “tacking on myriad fees” packs a lot of bad behavior into a very small space.

That’s not good enough. In that sense, it was typical of reporting on Citigroup as a whole.

Interestingly, there is one Weill story the entire New York financial press corps seems to have jumped on: whether Prince and others would be able to undo what is invariably described—after the fact, of course—the extensive reputational damage Weill caused the bank. [5], [6], [7], [8].

I’m not saying Hudson’s Citigroup piece was the perfect story. It was the just right one. That it took Southern Exposure to run it is troubling.

P.S. Last year, Ameriquest agreed to a $325 million settlement of a multi-state investigation into allegations that it gave borrowers inaccurate information about interest rates, discount points, and other mortgage loan terms, inflated property appraisals, and persuaded borrowers to refinance, even when refinancing didn’t offer any real advantage to the borrowers. Some borrowers also complained that Ameriquest pressured them to close loans on terms that were different from those originally proposed. The “Proud Sponsor of the American Dream” closed up shop last month and sold its assets and operations.

The buyer? Citigroup.

P.P.S. Ameriquest founder Arnall? He’s U.S. ambassador to the Netherlands, what else?

*The Audit corrects: Speaking of barely literate, an earlier version managed to misspell the names of both counties, Noxubee and Lowndes.

Coming soon: The Audit explores the even bigger debt story the business press has missed.


1. Alone At the Top

27 August 2000

2.Whatever It Takes ; Sandy Weill has always rolled with the punches. Now he wants Citigroup to be not only the richest financial company but also the purest in soul.
25 November 2002
Fortune

3. Wall Street’s Toughest Boss
The Wall Street Journal
18 February 2003

4. People Power: Two Financiers’ Careers Trace A Bank Strategy That’s Now Hot —- Weill and Dimon Built a Titan By Focusing on Consumers; Today They’re Arch-Rivals —- A Risk: Higher Interest Rates
The Wall Street
16 January 2004

5. Course Correction — Behind Citigroup Departures: A Culture Shift by CEO Prince —- His New Focus on Controls, More-Bureaucratic Style Spur Exits at Top Level —- Adding Lawyers in High Places
24 August 2005
The Wall Street Journal

When Mr. Prince took over in 2003, the world’s largest financial-services company was embroiled in a series of scrapes that hurt its reputation. It was penalized for blurring the line between analysts and investment banking. It lost its private-banking license in Japan and faced probes of an aggressive bond-trading strategy in London that participants dubbed “Dr. Evil.” The Federal Trade Commission accused a Citigroup consumer-lending unit of misleading customers. And Citigroup drew flak over its role in financing fraud-ridden companies including Enron Corp., WorldCom Inc., Adelphia Communications and Parmalat. In all, the firm faced billions of dollars in fines and settlements.

6. Rewiring Chuck Prince; Citi’s chief hasn’t just stepped out of Sandy Weill’s shadow — he’s stepped out of his own as he strives to make himself into a leader with vision
BusinessWeek
20 February 2006

7. CITI’S NEW ACT Chuck Prince, Sandy Weill’s top troubleshooter, is the unlikely choice for CEO. Does he have the right stuff?
BusinessWeek
28 July 2003

8. Can Sallie Save Citi, Restore Sandy’s Reputation, and Earn ; Her $30 Million Paycheck?
Fortune
9 June 2003

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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.