It was immensely refreshing to find an actual probing piece of investigative journalism coming out of Reuters, instead of the traditional regurgitated, opinion-based, fluff-filled, secondary source monologues (we prefer the British spelling) we have become accustomed to seeing out of the Thomson Reuters behemoth. In a rare example of how even the MSM gets it right sometimes, Matt Goldstein has done an admirable job of connecting the dots based on a FOIA request he had submitted to the FDIC, in which the insolvent (as of Be today) Deposit Insurer has provided Goldstein with a unique glimpse into the daily travails and activities of its boss, Sheila Bair, and how they may have a direct bearing on the future of none other, than a very troubled Chief Executive Officer.
From Goldstein's "Bair's summer in the Citi"
The FDIC provided Reuters with a copy of Bair’s datebook from June through August in response to a Freedom of Information Act request. The 92-page document offers a window into the FDIC chairman’s world, providing a brief listing of who Bair met with during that three-month period.
There is no record of what was discussed during those meetings, so it forces one to become a bit of a detective to piece together what may have been on the agenda. One can only guess what Bair and Alan Greenspan talked about over lunch on July 1, or what she and bank analyst Meredith Whitney may have chatted about on July 9.
But it is Bair’s frequent consultations with Parsons and other Citi board members that really jump out from the pages of the datebook. In June alone, Bair met with Parsons three times.
Matt follows up with some interesting observations:
It’s been clear that Parsons has taken the lead in handling Citi’s often tense relationship with the FDIC and other federal agencies. But it’s still surprising that neither Pandit nor anyone from his team met with Bair, even after Citi did as the FDIC requested and installed a new chief financial officer on July 9 along with other management changes.
These days the storyline coming from those close to Citi and its 17-member board is that Parsons has managed to smooth out any lingering bad feelings between Bair and Citi’s top management.
Some of that bad blood stems from the FDIC throwing up a road block to Citi’s unsuccessful bid for Wachovia. The former Time Warner chairman and chief executive supposedly convinced Bair not to push for Pandit’s ouster and put the FDIC chairman more at ease with the direction Pandit is taking the bank.
And what all this means for the future of Vikram, who has been practically incognito since Ken Lewis became the fall guy for Wall Street a month ago compliments of Jed Rakoff and everyone else, who jumped on that bandwagon.
Pandit may not want to rest too comfortably. The apparent absence of any one-on-one between Bair and Pandit may speak volumes about her true feelings.
That’s because Bair managed to make time to meet with executives from other big banks that have received assistance from the federal government. On June 30, for instance, she met
with Wells Fargo CEO John Stumpf and Howard Atkins, the bank’s chief financial officer. And on August 11, she met with Bank of America’s new chief risk officer, Gregory Curl.
And now that Lewis is gone (although his trail is still very much warm: his departure in no way has changed the presumed imminent filing of charges against him by the SEC, and various AGs), the public's eye may turn to the other deathly wounded CEO, who even after practically ceded control of his company to the taxpayers, is still shockingly in his throne.
Parsons’ last get-together with Bair during this three-month stretch occurred on August 10. Three days later, the Financial Times ran a story that Citi, at the request of regulators, had hired an outside consultant to conduct a top-to-bottom management review and recommend additional managerial changes.
The outside consultant’s management review is supposed to be presented to Citi’s board and regulators sometime in October — around the time the bank reports third-quarter earnings.
So should Bair have reason again this fall to talk to Parsons, the result may be less comforting to Pandit and his management team.
Only naive idealists may think that Pandit has more than 6 months left in his CEO tenure. The fact that he has managed to last this long alone is amazing. And Zero Hedge will be closely following the strategic moves undertaken by the CEO of the company which, alongside BofA, has the most toxic combination of assets on its balance sheet. In the meantime, thanks Matt, not only for bringing us this highly informative FOIA, but showing to your Reuters colleagues that it is really not all that difficult, and it "can be done" if one were just willing to put in that little extra effort.
Goldstein FOIA response presented in its entirety: