Citi should be held accountable: Obama aide Podesta

The US government should demand accountability and changes at Citigroup Inc, as well as from automakers, in exchange for any financial assistance, a top transition official for President-elect Barack Obama said.

“It seems to me that the government ought to demand accountability,” including on executive compensation, John Podesta said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” scheduled to air on Friday.

“If we’re going to have one rule, we ought to apply it to all of the financial institutions that we’re taking a look at,” Podesta said. “That’s my personal opinion.”

In the case of Detroit, lawmakers are demanding from auto industry executives a concrete plan on going forward while others are asking for management changes. The government hasn’t made those demands of Citigroup.

Podesta, a former chief of staff in the Clinton White House, also said Obama would complete “virtually the whole Cabinet” by Christmas, and the new president’s team will reach beyond the Democratic Party.

There will be “multiple Republicans” in the administration,” Podesta said. “You’ll see them spread throughout the administration.”

Obama, who is further along in making key appointments than any of his recent predecessors were at this point in the transition period, is expected to announce his national security team next week.

It will be led by Senator Hillary Clinton, his erstwhile rival for the Democratic presidential nomination, as secretary of state and Defense Secretary Robert Gates.

Podesta’s comments about seeking reforms from Citigroup echoed those made this week by Senate Banking Committee Chairman Christopher Dodd, who said Washington should have struck a better deal in its rescue of Citigroup, including management changes and a greater return for taxpayers.

The Federal Reserve, Treasury Department and the Federal Deposit Insurance Corp on November 23 announced a plan to insure Citigroup against losses on $306 billion of troubled assets and inject $20 billion of capital after the company’s shares plunged more than 60 per cent in a week. As part of the plan, Citigroup is required to submit an executive-compensation plan for government approval.

After Congress turned away the heads of the Big Three automakers, Obama and congressional Democratic leaders said financial assistance to General Motors Corp, Ford Motor Co, and Chrysler LLC should be conditioned on a commitment to make their industry more sustainable.

“We need a vital auto industry that’s producing the cars that are necessary for the future, particularly ones that are cleaner, greener and deal with our energy crisis,” Podesta said.

He deflected a suggestion made on NBC’s “Meet the Press” by former Secretary of State James Baker on November 23 that Obama, and President George W. Bush should collaborate on a major initiative to send a positive signal to the world.