Bailout Banks Will Keep Using Your Money For Private Jets

Under government pressure — and by “pressure” we mean asking meekly in a very soft voice — companies that have received funding from the taxpayer-funded TARP program have outlined the controls they plan to put in place to limit “luxury expenditures.” And — surprise! — the definition of “luxury” is very different for the corporate titans spending your money. While most big banks have put at least some limits on personal use of corporate jets, many seem to echo Bank of America‘s policies on official use, which state that that execs can use private planes for “safety and efficiency reasons,” no advance approval required.

Most of the bailed out banks, as well as auto manufacturers Chrysler and GM, will still allow top execs to use private planes for at least some business trips, and some, like Bank of America, seem to encourage it, with policies that authorize “reasonable usage of the aircraft and other upgraded transportation services for conducting the business of Bank of America.” Private use of company planes is now mostly off limits, and Citigroup CEO Vikram Pandit, who had an exemption from that company’s no-private-use policy, has said he’ll honor it regardless.

Other companies seem to have only now realized that unfettered personal use of private jets might be a bad thing. As New York Magazine points out:

PNC just changed their rules to stipulate that senior executives get permission before using company aircraft for personal use, and repay the company from now on, which only serves to give us a horrible picture of what things might’ve looked like there before.

At least Bank of America is working to exorcise the memory of John Thain’s excesses. The bank’s new policies ban “antique furniture, customized finishes, and construction of non-standard office sizes or private restrooms.” That policy should cover any future exec with ideas about picking up a $35,000 antique commode — whether it’s considered housing for a chamberpot, or just a really fancy side table.

TARP-Supported Companies Outline Conditions Under Which They Can Still Use Private Jets [NY Mag]
Pandit Shuns Corporate Jet as TARP Recipients Address Luxuries [Bloomberg]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.