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FDIC FOIA Discloses Pandit Future Could Promptly Converge With That Of Ken Lewis

Tyler Durden's picture


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:



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Thu, 10/01/2009 - 16:12 | 85621 Daedal
Thu, 10/01/2009 - 16:19 | 85634 Anonymous
Anonymous's picture

Vikram Bandit, heading to a slammer near you!

Thu, 10/01/2009 - 20:56 | 86002 Tesla
Tesla's picture

Why? He came in after Prince made the big mess.

Thu, 10/01/2009 - 16:20 | 85636 Anonymous
Anonymous's picture

hmmmmm why a meeting with Meredith Whitney? This kind of nonsense should not be allowed.

Thu, 10/01/2009 - 16:41 | 85678 Cognitive Dissonance
Cognitive Dissonance's picture

Maybe Sheila can't trust her own in-house assessment of the banking industry and she wanted to get an outside view from a non biased analysis?

Or maybe she wanted a little girl on girl action?

Either explanation sounds OK to me.

Thu, 10/01/2009 - 17:05 | 85719 I am a Man I am...
I am a Man I am Forty's picture


Thu, 10/01/2009 - 17:07 | 85725 Mos
Mos's picture

Your second scenario is not ok with me considering, how shall I put this, the "characteristics," of the two parties.

Thu, 10/01/2009 - 16:50 | 85695 Screwball
Screwball's picture

Whitney upgraded GS on July 13th.  I had to look it up.  Don't know why, just did.

Thu, 10/01/2009 - 18:00 | 85804 Anonymous
Anonymous's picture

How goddamn convenient - meet w/ Bair on Thursday, July 9 - upgrade Goldman Sachs the following Monday, July 13th. Coincidence?

Thu, 10/01/2009 - 20:36 | 85980 MinnesotaNice
MinnesotaNice's picture

My thoughts exactly...

Thu, 10/01/2009 - 20:17 | 85959 Cursive
Cursive's picture

I noticed this as well.  Posted far below before I read comments.  Good catch.  I'm sure they were only discussing the newest swim suits, how to hide cellulite in the summertime, which Hampton cottage is the most coveted, etc.

Thu, 10/01/2009 - 16:21 | 85639 Rama V
Rama V's picture

Re: "secondary source monologues (we prefer the British spelling)"


The reference to UK spelling explains why Marla was earlier working her figures on a napkin.  Ideally she used a pencil so that she could simply whip out a rubber to correct her mistakes.

Thu, 10/01/2009 - 16:45 | 85686 Cognitive Dissonance
Cognitive Dissonance's picture

Jolly good show old chap. Rubbers it is then!

Thu, 10/01/2009 - 20:40 | 85983 deadhead
deadhead's picture

i am glad to hear that Marla practices safe sex and all that.

Thu, 10/01/2009 - 16:24 | 85644 Anonymous
Anonymous's picture

VP sold his hedge fund to citi for 800,000,000 usd which promptly crashed and as a reward for this great trade somehow became CEO of a massive global retail banking empire...guess reading "banking for dummies" cover to cover 5 times was not a substitute for the 20 years of experience that were actually needed.

Thu, 10/01/2009 - 16:25 | 85647 Anonymous
Anonymous's picture

Outside consultants never bring good news for management. It's a cue to clean out your desk.

Thu, 10/01/2009 - 16:27 | 85650 ghostfaceinvestah
ghostfaceinvestah's picture

Pandit has no business running a commercial bank.  No wonder Bair doesn't meet with him, what would they talk about?  Like he has any clue how their FDIC-insured entity actually runs?

Thu, 10/01/2009 - 16:29 | 85655 buzzsaw99
buzzsaw99's picture

Apologies if this Daily Show link has already been posted:

Thu, 10/01/2009 - 16:31 | 85661 Anonymous
Anonymous's picture

Matt Golstein always does excellent work. Lucky for you he's avaiable to link to

Thu, 10/01/2009 - 16:33 | 85664 Anonymous
Anonymous's picture

Hey, wait a minute. Am I the only one that can read the text that's been blacked out under b8 rules?

For example:

June 2, 2009 3:00pm
Meeting with Dick Parsons, Citi

June 22, 2009 4:00pm
Meeting with Dick Parsons, Mr. Grundhofer, and Mr. O'Neill

I didn't look any further, but I've seen this stuff happen before - someone thinks that running a black marker over some text on a printout will hide that text from a scanner. News flash: it won't!

Ze Cacetudo | The Daily Hype

Thu, 10/01/2009 - 16:51 | 85684 ZerOhead
ZerOhead's picture

You're the only one who bothered to zoom in...

Christ...  these FOIA requests hold nothing back... can't wait to see if the Fed uses the same shitty chinese marker...

Someone is going to loose their job over this one.

Thu, 10/01/2009 - 16:58 | 85706 Anonymous
Anonymous's picture

Yes, I believe someone will be (and should be) fired for this. I think the same sort of thing has happened before, so they should have known better.

But still - they screwed up, we get a little more sunlight! I share your sentiment about the inevitable b8 redactions on the Fed's FOIA requests, assuming those see the light of day.

Ze Cacetudo | The Daily Hype

Thu, 10/01/2009 - 17:01 | 85711 deadhead
deadhead's picture

that marker thing is beautiful...

i can hear the "oh shit-o-meter" going off.

sheila, why the hell you blocking out the meetings with citi and wells????


Thu, 10/01/2009 - 17:13 | 85735 ZerOhead
ZerOhead's picture

Personally my favorite was the Aug 11th three o'clocker with Gregory Curl the Cheif Risk Officer down at B.O.A.

Wonder what that was all about....

Thu, 10/01/2009 - 17:30 | 85754 deadhead
deadhead's picture

Bair: "Nice to meet you Mr. Curl. Please do exactly the opposite of your predecessors because my agency cannot afford you not to"

Thu, 10/01/2009 - 17:44 | 85783 ZerOhead
ZerOhead's picture

Better that than...

"Houston... we have a problem..."

Thu, 10/01/2009 - 19:22 | 85902 Miles Kendig
Miles Kendig's picture



I imagine they are still on the adolescent should we or shouldn't we action. If they ever grow up we had better take notice.

BTW, the black marker has been the joy of Archives diggers for a while now. 

Thu, 10/01/2009 - 20:12 | 85954 Careless Whisper
Careless Whisper's picture

They can't even black-out something properly. Gives incompetence a new meaning. Maybe ZH should have a bake sale and donate a paper shredder for Sheila.

Thu, 10/01/2009 - 22:07 | 86048 Miles Kendig
Miles Kendig's picture


Or just a dime store exacto knife.

Fri, 10/02/2009 - 20:17 | 87260 Hephasteus
Hephasteus's picture

Hiding things is all fun and games until the scanners show up.

Thu, 10/01/2009 - 16:34 | 85667 J.D. Swampfox
J.D. Swampfox's picture

Chairbair has little influence over the big banks...that's all Bernanke's sphere.

Thu, 10/01/2009 - 18:46 | 85862 Hephasteus
Hephasteus's picture

She's a vital rule bending consultant. Assessing risk of rule bending. She has enormous influence. LOL

Thu, 10/01/2009 - 16:36 | 85668 Anonymous
Anonymous's picture

Actually check out Reggie Middleton and you will see that JPM is the one most likely to take down the country in one swoop:
Go to this link, click accept and enjoy!!

Thu, 10/01/2009 - 16:38 | 85671 jm
jm's picture

Pandit didn't make the mess.  But Pandit is basically a quant, and he put his head down and tried to patch up risk management.  Even now, it doesn't seem a viable task.   

He will never fit as CEO: he has no vision like a typical CEO.   But he deserves better than to get thrown out like trash because he rubbed Sheila Bair wrong.

Thu, 10/01/2009 - 17:22 | 85745 Anonymous
Anonymous's picture

when through reckless behavior you are at the
mercies of the government one's wishes of
fate are as meaningful as fairies and flying

Thu, 10/01/2009 - 22:26 | 86063 Anonymous
Anonymous's picture

jm ...i think you spelt quant wrong. he is certainly a total quant. leverage made possible by too many cpu's and lots of complete and utter quants like v.p. who should have stuck to electrical engineering caused this mess.

Fri, 10/02/2009 - 06:50 | 86187 jm
jm's picture

I admit that "deserves better" was a stupid thing to say.  Deserves is nothing in this world.  I saw a comment about him going to the slammer, and it pissed me off a little.

Personally he may have been a cock. Traders down on him, bankers very down on him--not saying they are wrong to be. 

But he took $1 this year and no bonus (he may sneak one in yet) to untie a gordian knot. 

Thu, 10/01/2009 - 16:39 | 85674 Anonymous
Anonymous's picture

Goldstein is one of the best financial muckrakers out there these days. Kudos Matt

Thu, 10/01/2009 - 16:40 | 85679 Sqworl
Sqworl's picture


Thu, 10/01/2009 - 16:46 | 85688 Careless Whisper
Careless Whisper's picture

"...since Ken Lewis became the fall guy for Wall Street a month ago compliments of Jed Rakoff and everyone else, that jumped on that bandwagon."

Kenny boy isn't taking the fall for anyone but himself and his lies and his bad business judgement. Judge Rakoff didn't start any bandwagon, he just wants individuals to be accountable.

And WTF did you do with Tyler?

Thu, 10/01/2009 - 16:50 | 85694 Tyler Durden
Tyler Durden's picture

"diversion" is probably a better word in retrospect. with his charade no longer key, other CEOs can take their turn in line.

Thu, 10/01/2009 - 19:33 | 85911 Miles Kendig
Miles Kendig's picture

Which is a key to a noteworthy unwinding Tyler as I am sure you appreciate.  Once the C-Suite realizes that they elicit all the care & consideration of Bernanke that a Ukrainian foot soldier did to Zhukov, most likely even less, then you had better have some enhanced means of keeping up with the rapid increase in flow.

Thu, 10/01/2009 - 17:01 | 85710 Anonymous
Anonymous's picture

Pandit is a joke, along with most the lords of finance. He set up an interest rate arbitrage hedge fund to borrow short to pay for higher yeilding long term assets. In effect a ponzi scheme. The guy was considered the smartest guy in the room for doing this. It blew up and cost citi about a billion. This isn't finance, it is bull shit. Like most of the masters of the universe, he's smart, but the real way you get ahead is being a confirmed member of the Ponzi scheme. "don't tell on us and we won't tell on you and we will all the rich even when this crap you are pushing blows up, nod, nod, wink, wink"

Thu, 10/01/2009 - 17:36 | 85764 Anonymous
Anonymous's picture

bullshit does as bullshit is...

he was too clever by half....the smart ones
are always so full of themselves that they
blow up like a constipated sausage...

Thu, 10/01/2009 - 18:05 | 85810 Problem Is
Problem Is's picture

Wow. Here are some ANONYMOUS blasts you can believe in.

You ANONYMOUS guys are on fire... or is it you the ANONYMOUS guy is on fire?

Thu, 10/01/2009 - 17:03 | 85717 Anonymous
Anonymous's picture

Has this Pandit guy ever did anything right except for stuffing his pockets? His hedge fund (Old Lane Partners) was a complete failure which had to be bailed out by Citi. His MS career was less than stellar. He is completely clueless about what's going on and hasn't done anything to split up this monstrosity. Wtf is he doing here?

Thu, 10/01/2009 - 18:02 | 85808 Problem Is
Problem Is's picture

Are you nominating Pandit for the:

Robert "What Me Worry?" Rubin, 2009 Cheese Dick of the Year Award?

An excellent candidate you put forward, sir, if I do say so myself...

Thu, 10/01/2009 - 17:12 | 85732 Anonymous
Anonymous's picture

bandit rose according to the peter that bair is about ready to bite his off, we can watch citi get dismembered as it so richly deserves....

citi was an accident waiting to happen - too big too abstruse and too poorly managed.....good riddance to both of them....and i hope someone doesn't forget to put a torch to his head on the way out....these asswipes are a blight on humanity.....

Thu, 10/01/2009 - 19:34 | 85915 Miles Kendig
Miles Kendig's picture

All part of the squids plans.

Thu, 10/01/2009 - 18:19 | 85827 Stevm30
Stevm30's picture

Christopher Flowers August 11th?  What's that all about?

Thu, 10/01/2009 - 18:58 | 85871 Anonymous
Anonymous's picture

You mean Chris " the Grave Dancer " Flowers.... or some other type of flower ??

Whatever could he be up to ?? Hmmmm......a bagman for the banksters meeting with FDIC. Hmmmmm .

Thu, 10/01/2009 - 19:30 | 85909 Anonymous
Anonymous's picture

Sheila Bair, chairman of the FDIC, was miffed by Flowers' braggadocio. And another of Flowers' moves may only irk her more. Flowers personally bought a tiny bank in Missouri last year, sight unseen. The sole purpose, some believe, was to circumvent rules that the regulator has been considering for how private equity firms will be permitted to invest in failed banks. So today Flowers is chairman of the former First National Bank of Cainesville, with $17 million in assets, which he not so humbly renamed Flowers National Bank. ("Grow with us" is the new slogan.) "He bought that bank for just one reason: If you have a bank charter, you can apply to get on the FDIC failed-bank distribution list," says someone who knows him.

Given the FDIC's current power in selling off bankrupt banks, alienating its chairman is not a wise move. "He's a pariah in D.C.," says one private equity investor. (Through a spokesman, Bair declined to be interviewed.)

Flowers knows he has rankled the FDIC. And while contrition is not an emotion he wears well, he is feeling it. He says he has opened a diplomatic front with Bair and is trying to make amends. "It is in our interest to have low-key, smooth relationships with government and regulators," he says. "Our aim is to be understated and low key and noncontroversial."

Thu, 10/01/2009 - 20:42 | 85988 deadhead
deadhead's picture

hell, Bair has such a pile of shit on her hands that she probably invited him down to beg him to buy some of the crap she has in the pipeline.

Thu, 10/01/2009 - 18:19 | 85828 buzzsaw99
buzzsaw99's picture

Pandit the bandit was/is one of the worst ever.

Thu, 10/01/2009 - 20:01 | 85939 Cursive
Cursive's picture

TD, You may have overlooked this little tidbit:

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.

Hmm.  Now, what was Meredith Whitney so famous for in July 2009?

Financials got a big boost this morning as investors are anticipating solid numbers from 3 of the major banks (BAC, CITI, JPM) that report earnings later this week. Meredith Whitney was interviewed this morning on CNBC and gave a rather favorable report on banks for investing in the short term.

Thu, 10/01/2009 - 20:48 | 85994 deadhead
deadhead's picture

I wonder if TD and company (and any insiders out there) can pressure Ms. Whitney on this matter???

If you are reading this Meredith (we know you are) your credibility is going to be questioned by some unless you make some sort of statement.  I have always found you to be top notch (was reminded so again as I just finished "House of Cards" that detailed your prescient prognostications) and I am very concerned about the meeting with Bair and your actions a few days later.

Please consider this a challenge.  Thank you in advance if you choose to respond. I'm confident that ZH would allot space for you to clear the air.

Thu, 10/01/2009 - 20:58 | 86006 Screwball
Screwball's picture

Look at the chart pattern from July 13.  Anyone remember the head and shoulders pattern?

Rocket shot off the right shoulder after MW went on the cheerleading channel that morning.

Thu, 10/01/2009 - 21:46 | 86035 Sqworl
Sqworl's picture

Roubini has changed his story on the end of recession for year end...He is back to Doom!

Thu, 10/01/2009 - 22:10 | 86050 Miles Kendig
Miles Kendig's picture

With some actual analysis to go with that assessment.  Damned if they do or don't being actualized.

Thu, 10/01/2009 - 23:28 | 86116 nhsadika
nhsadika's picture

And for all of the scare tactics about bank-runs from a Fed Audit, I wonder if Citi and BAC might be "the dangerous duo" we're not suppose to see tip toeing around with fresh Fed funds. Aug 10 Meet with Chairman Parsons, O'Neill Chair Citi Holdings Oversight Committee Taylor - member of Citi Holdings Oversigth Committee [Committee which will oversee management's strategy and execution for the disposition of Citi Holdings' assets and businesses.] Aug 11 Meet with Gregory Curl, Chief of Risk, Bank of America

Fri, 10/02/2009 - 04:40 | 86161 Anonymous
Anonymous's picture

Notice all the black-out pages are scanned in colour and the others are in b&w?

It's like someone WANTED the blackout attempt to be EPIC FAIL.

Fri, 10/02/2009 - 04:40 | 86162 Anonymous
Anonymous's picture

Notice all the black-out pages are scanned in colour and the others are in b&w?

It's like someone WANTED the blackout attempt to be EPIC FAIL.

Fri, 10/02/2009 - 12:16 | 86578 ZerOhead
ZerOhead's picture

Probably just Matt 'economizing' the smoking gun. If not he's got himself a new friend. Or had.

Fri, 10/02/2009 - 10:43 | 86451 Anonymous
Anonymous's picture

Chris Flowers? He's plowing Bair for information to help ply his investment banking/merchant banking scam: meet with companies and prime industry actors as if you're an earnest investor. Take the information you gather under the "principal investor" ruse, use that to generate investment banking business.

He did it to perfection when he gave the worthless "fairness opinion" for the BofA/Merrill deal, splitting a $20 million fee with another firm.

Nice work if you can get it

Fri, 10/02/2009 - 12:18 | 86580 ZerOhead
ZerOhead's picture

Good observation.

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