(Updates with further detail, quotes, background) By Corey Boles Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. Sen. Carl Levin, D-Mich., said Sunday he will issue a subpoena to the Treasury this week for the contract it signed with Citigroup Inc. (C) when it first lent money to the bank under the Troubled Asset Relief Program.
Levin said Treasury officials promised to release the contract to him, but so far have failed to do so.
"They have not given the actual contract although they promised it," said Levin. "Well, I'm going to subpoena it. I'm going to subpoena a document that I shouldn't have to."
He said he wants to see what conditions, if any, Citigroup agreed to in exchange for the cash infusion. In particular, Levin said he wanted to see if the bank made any commitments to providing assistance to mortgage customers struggling to keep up with their payments, or to increase lending to customers.
Before he decided whether to support releasing the second tranche of $350 billion to the Treasury under the TARP program, Levin said he wanted to see what conditions have already been agreed to by banks participating in the program that haven't been met.
The Bush administration hasn't yet asked for the second tranche of funding to be released.
Levin is the chairman of the Permanent Senate Subcommittee on Investigations, a body that has a wide-ranging brief to investigate federal government activities.
Citigroup received an additional $25 billion under the TARP, alongside several other large banks when the program was implemented in October.
It then received an additional $20 billion in late November. At the same time, federal agencies including the Treasury, Federal Reserve and Federal Deposit Insurance Corporation agreed to backstop approximately $300 billion in toxic assets Citigroup had on its books.
Levin said he is interested in the contract that Citigroup would have had to sign in order to receive the initial infusion.
He said legislation in the House sponsored by Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, was very good, but questioned whether it could pass in the Senate.
Frank introduced a bill last week which would attach a series of conditions both to the Treasury and to any banks receiving money through the TARP program.
Instead, Levin said, some other form of commitment might be required. He spoke about a document being worked on by Tim Geithner, President-elect Barack Obama's nominee for Treasury Secretary, and Sen. Christopher Dodd, D-Ct., the chairman of the Senate Banking Committee, which could serve as that commitment.
Both Democratic and Republican lawmakers are clearly uneasy with the notion of releasing the second $350 billion to the Treasury without substantial commitments being made by the Obama administration as to precisely how that money would be used.
Sen. Bob Corker, R-Tenn., a member of the Senate Banking Committee, said he wanted the incoming administration to provide very "prescriptive" information about how it would utilize the second round of funding.
"Otherwise it is a $350 billion slush fund which the administration can use to solve any problem it may wish to solve," said Corker.
-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
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Publié le 11 janvier 2009 Copyright © 2009 Dowjones