Wednesday, January 24, 2007

The people who most need tax cuts

Juicy bits from today's Wall Street Journal (subs. req'd) on the firing of Citigroup executive Todd Thomson, chief of its wealth-management unit --

[he] had used more than $5 million from his division's marketing budget to sponsor a new television program for the Sundance Channel, people familiar with the matter say. The program's hosts were slated to include CNBC anchor Maria Bartiromo and actor Robert Redford ...

One costly installation: a working fireplace. Mr. Thomson justified the expense by telling associates it provided a dramatic spot for Mr. [Sandy] Weill -- who was then chairman and is now a consultant to Citigroup -- to hold occasional "fireside chats" with the firm's high-powered clients. Mr. Thomson's office on the 50th floor overlooked Central Park and sported a fish tank. It was known internally as the "Todd Mahal."

Inside the bank, Mr. Thomson's friendship with Ms. Bartiromo became an issue. When Mr. Druskin, then Citigroup's investment-banking chief, took his management team to a holiday dinner in 2005 at the ritzy Daniel restaurant, he spotted Mr. Thomson having dinner with the CNBC anchor, according to people familiar with the situation ...

In recent months, some Citigroup executives advised Mr. Thomson to reduce his contact with Ms. Bartiromo, a person familiar with the matter says. But he justified the outings as good for business because clients enjoyed access to the CNBC anchor, according to another person with knowledge of the matter.

Tension between Messrs. Prince [CEO] and Thomson grew late last year. One flash point was a business trip in November. Mr. Thomson arranged for Ms. Bartiromo to speak to Citigroup's private-banking clients at luncheons in Hong Kong and Shanghai. Mr. Thomson flew with a group of Citigroup employees to Asia, but flew back to the U.S. on the corporate jet with Ms. Bartiromo, a person familiar with the matter says. Kevin Goldman, a CNBC spokesman, says: "She asked permission from CNBC. She received it. And payment was arranged."

After the airplane incident, Mr. Prince ordered Mr. Thomson not to spend Citigroup money on anything involving Ms. Bartiromo, says a person familiar with the situation. Six weeks later, Mr. Thomson informed Mr. Prince he had signed up Citigroup to sponsor the Sundance Channel show featuring the CNBC anchor. That was the last straw to Mr. Prince, this person says ....

Mr. Thomson tapped his marketing money to make Citigroup's Smith Barney unit a charter sponsor, with Lexus, of Sundance's new environmental program, to be presented by Mr. Redford, a person familiar with the matter says. Ms. Bartiromo was scheduled to host a segment exploring the "financial aspects of environmental innovation in business."

Incidentally, one background issue is that Rupert Murdoch wants to set up a Fox financial news channel that would compete with CNBC. Since he and Fox News supremo Roger Ailes are unlikely to want to rely on the motley crew that appear on Fox News' abysmal financial shows now, Bartiromo could well be a hiring target.

UPDATE 26 JANUARY: A few more bits and pieces. This New York Times story, mostly about how CNBC is standing by their woman, notes that Citigroup executives got bumped off the corporate jet to make room for her -- which may explain some of the gleeful leaking that is going on. But the Wall Street Journal again has the better inside sources, adding this new anecdcote in Friday's paper --

Citigroup records show that Ms. Bartiromo flew on its corporate jets a few times, but Mr. Thomson tried but failed to get her on the jet on at least one occasion. More than a year ago, Mr. Thomson was entertaining some private-banking clients on a ski vacation at his home in the members-only Yellowstone Club resort near Bozeman, Mont. While there, he requested a Citigroup plane to fly Ms. Bartiromo to his house, according to a person familiar with the situation. The Citigroup official who was asked to approve the requisition rejected it. Ms. Bartiromo ultimately didn't make the trip, the person said. Ms. Bartiromo and Mr. Thomson declined to comment, according to the spokesman for both, Charles McLean.

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