The Wall Street Journal has a noble if not quite jaw-dropping piece today on the personal use of corporate jets by executives (and former executives) at bailed-out banks. The gist: A lot of execs continued to indulge in this perk long after their companies went on the government dole. To wit:
At Citigroup, two days after the bank canceled the jet order Mr. Obama criticized, former Chief Executive Sanford Weill boarded a Citigroup-owned plane for a flight to a small airport at Saranac Lake in New York state's woodsy Adirondack region. Flight records show it was the seventh trip a Citigroup plane had made to Saranac Lake, near where Mr. Weill has a vacation home, since the bank first received federal aid last fall.
The flight returned to its point of origin, in Westchester County north of New York City, on Sunday, Feb. 1. That same day, Mr. Weill announced he was waiving his contractual right to use Citigroup aircraft. His spokesman said Mr. Weill "cares deeply about the future of Citi and recognizes the extraordinary commitment by the American taxpayer." The statement came on the same day that a much longer Weill flight on a Citigroup jet -- taking family members to the Mexican resort town of San Jose del Cabo in Baja California over New Year's -- was disclosed in the New York Post.
That plane, a Bombardier Global Express, sat on the ground at Cabo for eight days, FAA records obtained by the Journal show. The cost to Citigroup of the round-trip flight was about $33,500, according to Conklin & de Decker, a consulting firm based in Orleans, Mass., that was asked to make an estimate.
Again, not exactly mind-blowing, but definitely a little tacky.
Anyway, what struck me about the piece is the way the administration's political interests have changed when it comes to these revelations. Back in February and March, they were the last thing the administration wanted to see. That's because a lot of banks looked certain to need more taxpayer money, and these sorts of details hardened public opposition to that, to say the least.
But now that calculus has changed pretty dramatically. For one thing, it looks like the banks have most of the capital they need for the moment, and they could raise more privately in a pinch if they wanted to. For another, the administration is about to square off with the banking industry in a potentially bruising battle over regulatory reform. In that context, the occasional lurid revelation has to be pretty helpful. Especially since, as discussed earlier this week, the average voter has trouble mustering passion for most of the regulatory issues themselves. If I were the administration, I'd be leaking all the lurid details I had to the likes of the Journal (and, of course, The Stash--e-mail address is at the top of this page...).
--Noam Scheiber