Image: Vikram Pandit
Lauren Victoria Burke  /  AP
"I am pleased to say we are in a far different and much healthier position," Citigroup Chief Executive Vikram Pandit told the Congressional Oversight Panel.
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updated 3/4/2010 2:21:18 PM ET 2010-03-04T19:21:18

Facing sharp questions from bailout overseers, Citigroup Inc. CEO Vikram Pandit said Thursday the bank is "fundamentally different" than the tangled behemoth that took more than $45 billion in government aid during the recent financial crisis.

"I am pleased to say we are in a far different and much healthier position," Pandit said in testimony before the Congressional Oversight Panel. The independent watchdog group oversees the $700 billion financial bailout.

Pandit said Citi's experience during the crisis showed the need for a clearer process to deal with large, failing financial firms — a key priority of the Obama administration.

That echoed earlier testimony from Treasury's top official handling the cleanup of the crisis. Assistant Treasury Secretary Herbert Allison said Citi's bailouts were part of "difficult but necessary action to confront a financial system on the verge of collapse."

He said taxpayers will likely end up with a profit on the entire set of Citi rescues. Among them: a $20 billion infusion that has been repaid, and $25 billion that was converted into common stock and has since gained value.

But Allison frustrated panelists by refusing to answer many of their questions. He would not discuss events that preceded his arrival at Treasury, provide any analysis of the company's situation or describe conversations between Citi and Treasury officials.

Allison described Treasury as a "passive investor" that is barely involved in overseeing Citi.

His reticence led panel chairman Elizabeth Warren to ask, "Are you saying today that no one in Treasury monitors the financial condition of Citi, and no one in Treasury is paying attention to the systemic risk that Citi poses?"

"We do look at public information," Allison replied.

Citi's bailouts left Treasury owning 27 percent of Citi's common stock. Taxpayers risked shouldering losses on a financial portfolio worth $301 billion.

The bailouts put Citi in a small club of banks and other companies that required extraordinary assistance to weather the worst of the crisis.

Warren said the great danger is that Citi will always enjoy government support in tough times because of its sheer size.

"The United States government will bear any burden and pay any price to ensure Citigroup does not fail," she said in opening remarks.

Pandit faced his harshest criticism came from Damon Silvers, policy director for the AFL-CIO federation of labor unions.

He said he found it difficult to believe Pandit had no memory of conversations between Citi and Treasury officials at the peak of the financial crisis.

Pandit would not discuss those conversations. Panelists had to ask the question several times before Pandit even acknowledged that they took place.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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