Citi to Pay $7B Fine Shaped by ... Benghazi Arrest?
Justice Department delayed lawsuit for publicity reasons
By Kevin Spak, Newser User
Posted Jul 14, 2014 7:25 AM CDT
This Tuesday, Oct. 16, 2012, file photo shows the Citibank building in New York.   (AP Photo/Mark Lennihan, File)

(Newser) – Citigroup today agreed to shell out $7 billion to settle allegations stemming from its role in the mortgage crisis. The deal will consist of $4.5 billion in cash and $2.5 billion in consumer relief, the Wall Street Journal reports. The penalty is notably lower than the $13 billion JPMorgan paid and the $9.5 billion Bank of America paid in similar settlements, CNNMoney points out. But there's an interesting coda to the deal.

Citigroup can in part thank the commandos who caught Ahmed Abu Khattala for the settlement. The New York Times yesterday took an in-depth look at how the settlement came together, revealing that the Justice Department was about to go forward with a lawsuit against Citi, even flying a prosecutor to Washington for a press conference announcing it, when Khattala was captured. Afraid their big lawsuit would be overshadowed, DOJ delayed the announcement—and it was during that delay that Citi negotiated the settlement and avoided the lawsuit. Before those frantic negotiations the sides were miles apart; Citi initially offered to pay $363 million, while Justice was demanding $12 billion.

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Showing 3 of 13 comments
dan6807
Jul 15, 2014 12:27 PM CDT
Banks have the right to charge anything in interest to consumers but payout 1 % on any money you save. That says everything about them. The IRS gives better terms.
Lefty_Libby
Jul 14, 2014 7:51 PM CDT
My magic TV box today said that the quarterly profit at Citi is over $9 billion. Once again, the corporate person with the rights of U.S. citizenship, has the right to break the law without facing a real person's punishment -- prison. The Roberts Court has left us with a very special privileged citizen. This citizen has plenty of rights, but no responsibilities.
Chris Farley
Jul 14, 2014 9:18 AM CDT
Thats like robbing a bank of a million, and your punishment is paying 50 bucks. It wont end as it looks like wall street hacks will be our choice in 2016.