A post this morning from StreetInsider.com says Citigroup has decided to follow through with the purchase of a $50 million luxury jet–even in the midst of its intensifying financial woes:
Fresh off receiving $50 billion in rescue funds from the Government, Citigroup (NYSE: C) decides to go ahead with the purchase of a $50 million luxury jet, the NY Post reported. Even though Citi is burning through a $45 billion taxpayer-funded rescue, Citi executives thought it was prudent to still purchase a new Dassault Falcon 7X, according to a NY Post source. The Dassault Falcon 7X seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center. It can cruise 5,950 miles before refueling and has a top speed of 559 mph. There are just nine of these top-of-the-line models in the United States. Citigroup decided to make this new purchase two years ago, when things were different, but the surprising thing is it is still going to take possession of the jet despite its current woes. The NY Post column, said it’s not uncommon for large companies to pay a deposit on a new plane then cancel the order before delivery. Hmm. So will Citi changes its mind after this article makes its way around the media? Last week, President Obama did say he plans to crack down on companies who are in receipt of federal funds and spend their money wastefully.
While companies have every right to use their money as they see fit, the fact that taxpayer dollars have been used to fund this purchase makes it an outrage. Even if Citi has justifiable reasons for purchasing the jet, the public relations perception alone should have given them pause. However, as Citigroup has yet to comment, we can reserve some judgment and give them the benefit of the doubt that they were contractually obligated to complete the sale and are already planning to sell the jet. Right Citi?