Statement of Senator Levin on Citigroup's Initiatives Addressing Honest Accounting

WASHINGTON – Senator Carl Levin, D-Mich., made the following statement today on Citigroup's announcement yesterday regarding its new initiatives addressing honest accounting.

"Citigroup's structured finance announcement represents a significant reform in response to the Subcommittee's ongoing Enron investigation, provided that Citigroup requires meaningful client disclosures. Any client company that chooses not to treat a Citigroup financing as debt must be required by Citigroup to disclose the transaction immediately to investors and provide meaningful information about the transaction details and why the company is not booking it as debt. For example, Enron claimed it publicly disclosed the billions of dollars involved in its prepays when it buried the figures in its energy trading liabilities, but hopefully that wouldn't meet Citigroup's new standard for adequate disclosure. Citigroup and JP Morgan Chase also still need to address their control and use of secretive offshore shell corporations as special purpose vehicles in structured finance transactions in order to prevent deceptive accounting.

"I welcome Citigroup's decision to join a growing list of companies in the energy, manufacturing, publishing, real estate, financial and high tech industries in expensing stock options. The next step is to level the playing field so that all corporations finally recognize options as compensation and include them as an expense on their books. I will continue to fight to make that happen, along with Senator John McCain and others who care about this issue."