Citigroup ’ s Social Worthiness 1. A few months ago, I came across an announcement that Citigroup, the parent company of Citibank, was to be honored, along with its chief executive, Vikram Pandit, for"Advancing the Field of Asset Building in America." This seemed akin to, say, saluting BP for services to the environment or praising Facebook for its commitment to privacy. During the past decade, Citi has become synonymous with financial misjudgment, reckless lending, and gargantuan losses: what might be termed asset denuding rather than asset building. In late 2008, the sprawling firm might well have collapsed but for a government bailout. Even today the U.S.taxpayer is Citigroup's largest shareholder. 2. The award ceremony took place on September 23rd in Washington, D. C., where the Corporation for Enterprise Development, a not-for-profit organization dedicated to expanding economic opportunities for low-income families and communities, was holding its biennial conference. A ballroom at the Marriott Wardman Park was full of government officials, lawyers, tax experts, and community workers, two of whom were busy at my table lamenting the impact of budget cuts on financial-education programs in Vermont. 3. Pandit, a slight, bespectacled fifty-three-year-old native of Nagpur, in western India, was seated near the front of the room. Fred Goldberg, a former commissioner of the Internal Revenue Service who is now a partner at Skadden, Arps, introduced him to the crowd, pointing out that over the years, Citi has taken many initiatives designed to encourage entrepreneurship and thrift in impoverished areas, setting up lending programs for mom-and-pop stores, for instance, and establishing savings accounts for the children of low-income families. "When the history is written, Citi will be singled out as one of the pioneers of the asset movement," Goldberg said. "They have demonstrated the capacity, the vision, and the will." 4. Pandit, who moved to the United States at sixteen, is rarely described as a communitarian. A former investment banker and hedge-fund manager, he sold his investment firm to Citigroup in 2007 for eight hundred million dollars, earning about a hundred and sixty-five million dollars for himself. Eight months later, after Citi announced billions of dollars in writeoffs, Pandit became the company's new C.E.O. He oversaw the company's near collapse in 2008 and its moderate recovery since. 5. Clearly, this wasn't the occasion for Pandit to dwell on his career, or on the role that Citi's irresponsible actions played in bringing on the subprime-mortgage crisis. Instead, Pandit talked about how well-functioning banks are essential to any modern society, adding, "As President Obama has said, ultimately there is no dividing line between Wall Street and Main Street. We will rise or we will fall together as one nation." In the past couple of years, he went on, Citi had rededicated itself to "responsible finance." Before he and his colleagues approved any transaction, they now asked themselves three questions: Is it in the best interests of the customer? Is it systemically responsible? And does it create economic value? Pandit indicated that other financial firms were doing the same thing." Banks have learned how to be banks again." he said. 6. About an hour later, I spoke with Pandit in a sparsely furnished hotel room. Citi's leaders — from Walter Wriston, in the nineteen-seventies, to John Reed, in the nineteen-eighties, and Sanford Weill, in the late nineteen-nineties — have tended to be formidable and forbidding. Pandit affects a down-to-earth demeanor. He offered me a cup of coffee and insisted that I sit on a comfortable upholstered chair while he perched on a cheap plastic one. I asked him if he saw any irony in Citi being commended for asset building. His eyes widened slightly. "Well," he said. "the award we are receiving is for fifteen years of work. It was work that was pioneered by Citi to get more financial inclusion. And it's part of a broader reform effort we are involved in under the heading of responsible banking." 7. Since Pandit took over, this effort has involved selling or closing down some of Citi's riskier trading businesses, including the hedge fund that he used to run; splitting off the company's most foul-smelling assets into a separate entity. Citi Holdings: and cutting the pay of some senior executives. For 2009 and 2010, Pandit took an annual salary of one dollar and no bonus. (He didn't, however, give back any of the money from the sale of his hedge fund.) "This is an apprenticeship industry," he said to me. "People learn from the people above them, and they copy the actions of the people above them. If you start from the top by acting responsibly, people will see and learn."