After outcry from lawmakers and the public, Citigroup scrapped plans to purchase a $50 million corporate jet purchase earlier this year. But now the bank, which has taken billions in federal bailout money, is moving forward with construction of a new executive suite that will cost more than $10 million, reports Bloomberg.
The new space will include 17 private offices, conference rooms and open areas with soft seating, according to plans pulled from New York City's Department of Buildings. There are also specifications for Sub-Zero refrigerators. Citigroup says CEO Vikram Pandit needs the renovated space so he can keep his top executives in one place.
Back in February, Pandit, who took home $38 million as his company got $45 billion in taxpayer money, vowed to lawmakers that he would eliminate corporate excess, saying "I get the new reality and I'll make sure Citi gets it as well."
But on the second floor of 399 Park Avenue, Citigroup has already spent more than $3 million dollars on something as basic as wall removal, reports Bloomberg's Erik Schatzker.
"This is all in the eye of the beholder. From the standpoint of the observer, you might ask what were they thinking?" Schatzker told CBS' The Early Show. "$45 billion in bailout money and this is the only major bank to be bailed out or rescued - three times by the U.S. taxpayer. Add it together and why now?"
"The other side is Citigroup's argument in their defense, to say the project began before the TARP money was handed out. That said, the approvals did not come through until after the money was given. There was an opportunity for Citigroup to say maybe we shouldn't proceed right now. They do say it will cut down on space and they are consolidating offices and over the long-term will save the bank money."
And while $10 million is a relatively small sum compared to the $165 million in AIG bonuses that has sparked such outrage, Citigroup's project may still draw criticism from lawmakers and taxpayers, said Schatzker.
"That cuts to the issue that people are concerned about, which is are the bankers on Wall Street tone deaf to what's going on in Washington. ... $10 million is not $165 million, but in many people's minds down in D.C., where you have the public representative, it's not a matter of how much, but the principal."
Back in February, the U.S. announced the most recent element of Citigroup's rescue package - up to $25 billion in exchange for a 36 percent stake in the company.
Copyright 2009 CBS. All rights reserved.