Citigroup, Inc. has filed its 10-K for 2008, giving us a chance to ask again, what did it do with all the TARP and other money Treasury and the Fed have given them. So far, government groups have entered into transactions benefiting Citigroup by

(i) raising an aggregate of $45 billion through the sale of Citigroup non-voting perpetual, cumulative preferred stock and warrants to purchase common stock to the U.S. Department of the Treasury, (ii) entering into a loss-sharing agreement with various U.S. government entities covering $301 billion of Company assets, and (iii) issuing $5.75 billion of senior unsecured debt guaranteed by the Federal Deposit Insurance Corporation (FDIC) (in addition to $26.0 billion of commercial paper and interbank deposits of Citigroup’s subsidiaries guaranteed by the FDIC outstanding at the end of 2008).

A good bit of it, including some part of the $301bn, went to deal with the toxic waste problem, including the gigantic portfolio of asset-backed securities built by these Jim Cramers of the banking world. No doubt some went to cope with the derivative portfolio. That portfolio, built by people so smart they need giant bonuses just to retain their services, comes in at $32.1 trillion. But not to worry, they calculate their net mark to market exposure at single digit billions. From their lips to reality’s ear.

Nobody will say where the money went. That’s what we mean when we say there isn’t any transparency in the bailout. The 10-K includes an exhibit listing 2,230 subsidiaries of Citigroup, down from 4,000 in 2007. The list includes a bunch of banks, but there are all sorts of other places where Citigroup might have put the TARP money. Let’s look at some examples.

There are a bunch of entities that apparently hold real property, although it isn’t clear for whose benefit the property. As an example, 111 Boylston Street LLC holds a piece of property in Boston, apparently held for development. 4000 South Redwood Road Member, LLC, apparently holds an interest in an apartment complex in Utah. Bluffview Towers LP apparently holds an office building in Dallas. There are 25 companies with the word “aircraft” in the name. There are 13 insurance or reinsurance companies, and 37 insurance agencies.

There are five companies related to satellites, like Asia Broadcast Satellite (HK) Limited, incorporated in Hong Kong. There are several brokerage and trading companies. How about Shaanxi Ginwa Auto Trade Company Limited, Ginwa BMW Auto Service Company Limited and Urumqi Yanbao Auto Sales and Service Company Limited, and Northern China German Auto Company Limited of Hong Kong? There are 153 companies with the word “funding” in the name, like this one: Rangers CBNA Loan Funding LLC. There are several odd balls, like Socie Beauty Academy Co., Ltd. and Yugen Sekinin Chukan Houjin Amusement Holdings of Japan.

The following is a list of several tax havens where Citigroup has identified subsidiaries.

Country No. of Subs
Bahamas 15
Barbados 3
Bermuda 18
British Virgin Islands 45
Cayman Islands 113
Channel Islands 40
Luxembourg 91
Mauritius 17
Switzerland 9

That isn’t all of them. According to a recent study by the GAO, in 2007, Citigroup had 427 units in 23 countries, including 91 subsidiaries in Luxembourg and 90 in the Cayman Islands. At least one organization thinks Citigroup is using tax havens for the benefit of its 25,000 High Net Worth Individuals. The Tax Justice Network has a report on the history of Citigroup’s efforts in the tax field.

Banks make a higher than normal return on the funds deposited in private banks, 20-25 percent a year. Monies deposited with the Citigroup Private Bank are either invested into a specific product (like a CD or stock) or held as available cash balances which are put in interest-bearing accounts. The interest is recouped through the fees and/or commissions that are assessed on the invested funds as well as fees for establishing and maintaining trust accounts, a characteristic of virtually all private bank clients. Individuals often set up limited liability companies or investment partnerships domiciled offshore, and the trusts become part of the offshore network of bank accounts and shell companies used to hide their money from taxes.

The report provides a detailed description of various ways Citigroup helped rich people avoid taxes. Ginwa BMW, maybe? Carl Levin has been asking about Citigroup’s complicity in tax matters for years; he requested the recent GAO report. Now that we own a big chunk of Citigroup, maybe he can force an explanation of the purpose of these subsidiaries.

Maybe he could even find out whether any money has been transferred to any of these subsidiaries in the last six months. That would be an good example of transparency.

It’s well past time Congress demanded some answers. Please sign the petition: No More Dough Till We Know Where It Goes.