News broke this morning that Senator Max Baucus had recommended his girlfriend for a US attorney job. Earlier this year, Baucus nominated Melodee Hanes, his state director and girlfriend, for the post, along with two others. He later withdrew her name.

During her time in Baucus’s office, Hanes collected plenty of taxpayer money at the Senator’s discretion.

But that wasn’t the only benefit Hanes received at public expense: Baucus and his staffer-girlfriend took a taxpayer-funded trip to Dubai and Vietnam in December 2008, according to Congressional disclosure reports.

Read more…

While the American economy sank, Citigroup put US taxpayer money to work helping to sustain the Dubai bubble.  In December 2008, just weeks after Citigroup needed a second government bailout on top of the $25 billion it received through TARP, the bank made an $8 billion loan to Dubai.  It is believed to have $1.9 billion in exposure currently.

One year before the bank’s loan to Dubai, in November 2007, Citi and Robert Rubin were being congratulated by Wall Street for securing a 4.9% investment from Abu Dhabi (the capital of the UAE). Some saw through the buzz:

Investors seem delighted that Abu Dhabi is injecting $7.5 billion into Citigroup, bidding up stocks in general on new confidence that the mortgage solvency crisis might ease. We hate to spoil the party, but it strikes us as unfortunate, if not a tragedy, that America’s largest bank had to go hat in hand to Arab sheiks because of bad management and blundering U.S. monetary policy.

The Citi play is being spun as a master-stroke by Robert Rubin, the chairman of the bank’s executive committee.

Abu Dhabi stepped in at a crucial moment for Citi, then saw much of its investment vanish. Though their stake was carefully designed to avoid regulatory scrutiny (coming in at just below 5%), they clearly had no small amount of leverage over Citi.

Was Citigroup returning the favor to the UAE by lending to Dubai last year?

Read more…