The Justice Department's settlement with Citigroup requires the bank to hire, as a monitor, a former Justice Department lawyer, Thomas Perrelli, Overlawyered.com notes. There's something a bit odd about the regulator requiring the hiring of a former regulator as part of a settlement agreement, no? I understand it happens all the time, and Mr. Perrelli, who clerked for the estimable Royce Lamberth and was associate attorney general under Eric Holder, seems like a fine fellow. But who knows what his fees will be? Shouldn't Citi shareholders be able to shop around for compliance personnel rather than having a pick pressed upon them by the Justice Department? In any event, the presence of former high-ranking administration officials (that's you, Robert Rubin) didn't prevent Citi from getting into trouble the last time around, so there's little indication that having Mr. Perrelli will prevent another problem down the road.
Another problem with the settlement is that it funds or potentially funds a variety of organizations — foreclosure counselors, NeighborWorks America — without going through the Congressional appropriations process. If the Obama administration wants to spend money on this stuff, let it seek appropriations from Congress, rather than extract funding from the shareholders of Citigroup under threat of prosecution.