Treasury did not vote all our Citigroup shares in support of greater transparency of derivatives

http://corpgov.net/wordpress/?p=1476

Of the 30% support achieved for faith-based investors resolution urging greater derivatives disclosure at Citigroup, ICCR Executive Director Laura Berry said:

“We are delighted with the clear support for the principles reflected in the apparent high level of shareholder support for this resolution. Given the history of ICCR attempts to bring these issues to the attention of our fellow shareholders, long before the crisis and bailouts began, the administration’s decision to vote with management is mystifying and inconsistent. The SEC’s recent ruling, allowing these resolutions to move forward, and the administration’s oft-stated commitment to financial reform and transparency led us to imagine the full support of our government in their stewardship of the shares they hold on behalf of U.S. taxpayers.” (Religious Shareholders See Big Boost for Derivatives Disclosure in Proxy Resolution Vote at Citigroup, but Criticize U.S. for Failing to Fully Vote its Shares in Support, 4/20/10)

The United States government, which controls 27% of Citigroup as a result of the bank bailouts, failed to fully support the resolution. “At the time of the exchange (acquisition), Treasury agreed with Citigroup that it would vote on all other matters proportionately–that is, in the same proportion (for, against or abstain) as all other shares of the company’s stock are voted with respect to each such matter.” (Treasury Announces Voting of Its Shares at Citigroup Annual Meeting, US Department of Treasury press release, 4/20/10)

Treasury copped out. There were plenty of issues at Citigroup worthy of support (see How I Voted at Citigroup) but they had “agreed with Citigroup” to vote most matters proportionately. Apparently the Obama administration thinks Citigroup is managers but the owners are in charge of the managers. Why would the owner defer to the employee?

By voting proportionally, the people who own citigroup (shareholders) have the ultimate and unfettered say in company policy. I feel that citigroup, being a fincial/banking institution, has too many working ties with the Treasury and given the conflicts of interest it would be fairly objectionable for the Treasury to be voting with such self interest. Also, the treasury is taking a purely nonpartisan stand on the matter. I would only expect the Treasury to use this big voting block to sway votes or issues that have hte potential for disaster.

I simply can't get too upset when governemnt gives more power to the people. :)

Uh...some of those people are the people of the United States of America. The government is a shareholder too.

The people who pay the most taxes or the people who scream the loudest?
Should the treasury poll taxpayers to see how they would vote?

It's a politically sticky situation. The best move for the Treasury is to simply act in a nonpartisan manner.
I would only expect them to make a partisan move if the vote was for something particualry risky.

And in theory, the treasury then represents the will of the people.

"It's a politically sticky situation"

Only if you pretend that state ownership of the means of production is some novel, new, foreign, and alien concept on earth. But its not. Maybe in America.

but rather to let the shareholders determine direction. Im not concerned.