Citigroup’s “Cash for Clunkers” Contract Worth $7.7 Million

The U.S. DOT never responded to Streetsblog Capitol Hill’s request for a copy of the contract that Citigroup — which remains one-third-owned by the government after taking a $45 billion bailout — received to process car dealer claims under the "cash for clunkers" program. But Dow Jones did pry loose one key detail on Friday, reporting that the deal is worth "an estimated" $7.7 million.

Given that $2 billion in extra "clunkers" money has been approved since Citigroup began its work, however, it’s reasonable to suspect that the bank is now getting more money to administer the delay-plagued car-purchase rebates.

A DOT spokeswoman "declined to comment on whether the size of the contract has grown" when asked by Dow Jones and declined to produce additional information about the deal, such as any ceiling on contractor hours or total value.

Oracle is also a contractor on the program, snagging a $1.6 million deal to run the website for aspiring auto buyers.

In other "clunkers" news, the advertising bonanza sparked by the taxpayer-funded auto rebates is calming nerves in the media industry, while keeping  Andrew Cuomo busy. The New York attorney general sent cease-and-desist letters today to 40 auto dealers whom he says are misleading car owners on the limitations of the government rebates or marketing separate promotions under the "clunkers" name.

One thing the "clunkers" money is still not doing: providing significant environmental benefits, as a team of analysts from the World Resources Institute, Stanford University, and the University of California – Berkeley outlined in an op-ed presentation for the Washington Post.

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Grassley Looking Into Citibank’s Million-Dollar ‘Clunkers’ Deal

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Chuck Grassley (IA), the senior Republican on the Senate Finance Committee, today asked the U.S. DOT to answer a question Streetsblog Capitol Hill first wondered about months ago: How did Citibank, the beleaguered recipient of a $45 billion government bailout, snag a contract to administer the Obama administration’s "cash for clunkers" program? Sen. Chuck Grassley […]

Today’s Headlines

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LaHood: Gas tax hike and VMT tax are still on the table … but only once the economy improves (Dow Jones) D.C. Metro contends with a tragic bus accident (WaPo) U.S. DOT has approved just 20 percent of "clunkers" payments — thanks, Citigroup! (Det News) Federal highway chief celebrates sprawl-inducing MN road project (Fast Lane) […]

Separating Myth from Fact on “Cash for Clunkers”

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As debate rages on in the capital over whether to keep assisting the auto industry by giving out more "cash for clunkers" rebates, two assertions are becoming commonplace: the program is helping diminish U.S. oil consumption, and the program is not paid for with new money. (Photo: AP) The first argument was reiterated on Friday […]