Will Citigroup’s heavyweight lobbying team soon go the way of its counterparts at Freddie Mac, Fannie Mae and American International Group?
Not according to the banking giant’s chief lobbyist, Nicholas Calio, who says despite the recent cash infusions of government money, it’s business as usual for his lobby team.
The government does not have a controlling interest in Citigroup — not yet anyway — but it does own up to 36 percent of the company’s common shares, according to the latest agreement. This comes after the Treasury Department has already invested $45 billion in the firm.
“As far as the company and New York is concerned, the answer is ‘yes,’” Calio said of Citigroup’s determination to maintain its Washington presence. “We still have a lot of issues at the state and local level not related to” the Troubled Assets Relief Program.
“At the end of the day for all parties involved, for all of our shareholders and the taxpayers, Citi needs to become profitable again,” he added.
Whether Citigroup will be able to keep its lobbying team in place is still unclear, especially if the government continues to increase its stake in the company. And with some members of the House and Senate leadership signaling that they will no longer take political action committee money from companies that received federal bailout funds, there is another tool taken away from Citi lobbyists as well.
During the 2008 cycle, Citigroup’s PAC doled out $688,000 to federal candidates, according to the Center for Responsive Politics.
So far, nearly all of Calio’s team has remained at the embattled company. But that could soon change.
Members of Calio’s public affairs team, particularly on the Democratic side, have been contacted and are in the process of negotiating with lobbying firms and companies, according to lobbyists familiar with the Citigroup team.
Other banking lobbyists suggest that with such a large chunk of public money, it will become more and more difficult for Citigroup to differentiate itself from the government in the future.
“It’s also hard to say in the current environment how to measure one’s assessment in a GR situation,” said one banking lobbyist, using the abbreviation for “government relations.” “There has not really been a lot to lobby as the company has deteriorated around them.”
Citigroup’s Citibank, which traces its roots to City Bank of New York, a merchant bank chartered in 1812, has long had close ties with the government.
It picked former Clinton Treasury Secretary Robert Rubin as a board member and senior counselor.
More recently, Citi executive Jacob Lew, who served until late 2008 as chief financial officer of Citigroup Alternative Investments, was named deputy secretary of State. Michael Froman, another former chief financial officer at Citigroup, joined the White House as deputy assistant to the president and deputy national security adviser for international economic affairs.
The rise of Citigroup’s mammoth lobbying presence dates back to 2002 when then-Chief Executive Officer Sandy Weill was looking to increase the company’s Washington footprint.
For years, the office had relied on an in-house federal lobbying team of about half a dozen, then-headed by Roger Levy.
But Weill, who helped engineer the 1998 merger of Citi and Travelers Insurance, wanted the company to become more proactive in Washington and take a more aggressive approach.
House Democratic Caucus Chairman Xavier Becerra and Rep. Joseph Crowley, vice chairman of the House Democratic Caucus, address a news conference immediately after the closed caucus meeting.
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