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FOIA Confidential Treatment Requested by Citigroup Inc.

John C.
Gerspach

Chief
Financial Officer

Citigroup
Inc.

399 Park
Avenue

New York,
NY 10022

November 24, 2010

VIA EDGAR CORRESPONDENCE

Kevin W. Vaughn

Securities and Exchange Commission

100 F Street, NE

Mail Stop 4561

Washington, DC 20549-7553

Re:                             Re:
Citigroup Inc.

Form
10-K for Fiscal Year Ended December 31, 2009

Form
10-Q for the Period Ended June 30, 2010

     Filed February 26, 2010 and August 6,
2010, respectively

Form
8-K filed October 18, 2010

File
No. 001-09924

Dear Mr. Vaughn:

Enhancement of Citigroup Inc.’s (“Citigroup”
or the “Company”) disclosures is an objective that we share with the staff (the
“Staff”) of the Securities and Exchange Commission (the “SEC”) and one that we
consider in all our filings.  This letter
sets forth the responses of Citigroup to the comments of the Staff contained in
the Staff’s letter dated November 4, 2010.

For your convenience, the text of
the Staff’s comments is set forth in bold below, followed in each case by our
response.  Please note that all
references in this letter to our prior responses or

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our responses to the Staff’s prior
comments refer to Citigroup’s responses to the SEC Staff’s comment letters
dated July 16 and July 20, 2010, which were provided in our response letter
dated August 9, 2010 (“Prior Response Letter”).

To the extent the Staff
continues to have comments or questions on the issues or disclosures included
below and relating to Citigroup’s 2009 Form 10-K, second quarter 2010 Form
10-Q, Form 8-K filed October 18, 2010 or otherwise, Citigroup would greatly
appreciate the opportunity to discuss these matters with the Staff in advance
of its filing of the Annual Report on Form 10-K for the fiscal year ending
December 31, 2010 (“2010 Form 10-K”), which Citigroup currently anticipates
filing on or about February 25, 2011.  We
also note for the Staff that, consistent with Citigroup’s corporate governance
policies, a draft of the 2010 Form 10-K will be provided to Citigroup’s Board
of Directors, Audit Committee and Disclosure Committee in mid-February 2011.

Form 10-K for the year ended
December 31, 2009

Securitizations - Elimination of
QSPEs and Changes in the Consolidation Model for Variable Interest Entities,
page 107

1.              We note
your response to prior comment 1 from our letter dated July 20, 2010.  We continue to have questions related to your
collateralized debt and loan obligation (CDO) structures.  Please address the following:

a.               Tell us
whether the independent asset manager, referred to in your response to bullet
point (e), constitutes a related party for purposes of the consolidation
analysis.  If so, please revise future
filings to disclose this fact as required by ASC 850-10-10.

The
independent asset managers that we referred to in our Prior Response Letter
(the Staff’s July 20, 2010 letter, comment 1, bullet point (e)) are not related
parties for purposes of the consolidation analysis but rather unrelated,
independent third parties.  Specifically,
we have concluded that the independent asset managers are not acting as de
facto agents of Citigroup.  As discussed
further under our response to comment 1.b. below, independent asset managers
hired Citigroup to structure the CDOs; thus, Citigroup did not hire the
independent asset managers to provide asset management services to the CDO
vehicles.  None of the CDO

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vehicles
that Citigroup deconsolidated upon adoption of SFAS 167 were managed by
Citigroup or one of its related parties.

b.               Tell us
whether you take into account activities in connection with designing and establishing each entity when determining who has the power
over activities that most significantly impact the entity’s economic
performance.  For example, do you take
into account the activity at inception of
designing asset eligibility requirements, purchase and sale triggers (e.g.
market value and credit-related triggers), etc.?  If you do consider these factors, please tell
us how you are still able to conclude that the asset manager’s activities are
those which most significantly impact
the economic performance of the entity.

Citigroup
does take into account activities in connection with designing and establishing
each CDO entity when determining who has the power over activities that most
significantly impact the entity’s economic performance.  These considerations, among others, lead to
the conclusion that the independent asset manager’s activities are those which
most significantly impact the economic performance of the entity.  Specifically, the independent asset manager
had the sole responsibility to select the initial assets of the CDO and has the
responsibility to select the specific assets for purchase and sale subsequent
to inception, pursuant to established criteria.

The
asset eligibility criteria and the purchase and sale criteria for the CDO
vehicles were developed through negotiations among the asset manager, the
structurer, and investors prior to the closing of each transaction.  While the independent asset manager is
typically the party who decides to initiate a CDO transaction, the independent
asset manager will generally select and hire another party, such as Citigroup,
to structure the CDO.  Thus, the
independent asset managers hired Citigroup to structure CDOs and, as
structurer, Citigroup was required to balance the general preference of
independent asset managers to have little or no restrictions on asset selection
against the priorities of other parties, namely rating agencies and their
requirements and the demands of potential investors, in order to ensure that
the CDO was saleable in the market.
However, despite Citigroup’s role as structurer (as hired by the asset
manager), the independent asset manager is the party that, when considering the
design and ongoing activities of the entity, has power over the activities that
most significantly impact the economic performance of the vehicle, namely the
purchase and sale of the specific assets.

CITI B-3

2.              You
state in your response to bullet point (e) that in an event of default, the
power may no longer be held by the asset manager. Tell us whether there are any
unconsolidated entities where the default trigger was reached, and you do not
own all of the super senior tranches, that you believe the asset manager does
not have the power over the entity.

a.               Tell us
the nature and the form of the compensation provided to the independent asset
manager.

b.               Tell us
the nature and the form of investment interest held by the independent asset
manager.

At January 1, 2010, there
was one unconsolidated CDO entity where the default trigger was reached,
Citigroup did not own all of the super-senior tranche and where we believe the
independent asset manager may not have had power over the entity.  Citigroup owns less than half of the
super-senior tranche of this CDO entity, whereas vehicle liquidation requires a
consensus vote of greater than 66 2/3% of the super-senior tranche.  Thus, Citigroup does not control the decision
to liquidate this CDO entity.  In this
particular transaction, once the default trigger has been reached, the
independent asset manager can no longer make any decisions regarding the
purchase or sale of assets (including credit impaired or defaulted assets) and,
as such, we believe the independent asset manager no longer has power over the
CDO vehicle.  Further, in this
transaction, the independent asset manager earns a senior 10 basis points fee,
a junior 15 basis points fee, and an incentive fee of 20% of the equity return
after certain internal rates of return thresholds are met.  The asset manager was not required to hold
any cash positions in this CDO entity.
Citigroup has no knowledge as to whether the asset manager currently
holds any cash positions in this CDO.

c.               We note
in your response to bullet point (d) that in the event the CP was able to roll,
it was put to the liquidity provider.  We
also note in your response to bullet point (h) that for all CDO transactions
that you structured and held all senior interests (i.e. super senior
positions), and for which you had the right to liquidate upon default, that you
exercised your “liquidity put” option.
Tell us whether you consolidate the structures for which you have a
written put option (liquidity put).
Further, tell us whether there are liquidity put contracts relating to
non-super senior positions.

CITI B-4

For
purposes of our response, we are assuming the Staff meant to say “unable” to
roll in the first sentence of its comment above.

We
believe there may be some confusion regarding the nature and terms of the
liquidity put options discussed in our response to the Staff’s comment 1,
bullet points (d), (g) and (h) in the Staff’s comment letter dated July 20,
2010.  For certain of Citigroup’s CDOs,
the super-senior positions were structured in the form of short-term commercial
paper (CP) held by third-party investors, where Citigroup wrote put options (“liquidity
puts”) to those CDO vehicles.  Under the
terms of the liquidity puts, if the CDO was unable to issue CP at a rate below
a specified maximum, Citigroup was obligated to fund the super-senior tranche
of the CDO (in the legal form of CP) at a specified interest rate.  Since 2007, Citigroup has purchased all of
the CP subject to the liquidity puts related to these CDO vehicles.  There are no liquidity put contracts relating
to non-super-senior positions.

Citigroup’s
ability to liquidate certain CDOs if specific
conditions are met (as discussed in our response to the Staff’s comment in
bullet point (g) of comment 1 in the July 20, 2010 letter) is an entirely
different matter than holding the liquidity puts described above.  That is, Citigroup does not hold liquidity
put contracts that contractually provide us with the ability to liquidate
certain CDO vehicles.  Instead, Citigroup’s
ability to liquidate certain CDO vehicles exists once the default trigger has
been reached and if Citigroup holds a majority (as defined with respect to the
particular CDO entity) of the controlling class of the CDO vehicle.

When evaluating whether
Citigroup should consolidate the CDO vehicles under SFAS 167 where we hold CP
that represents the super-senior tranche previously obtained in 2007 pursuant
to the liquidity puts, our analysis is the same as described in our response to
the Staff’s comment 1 in the Staff’s comment letter dated July 20, 2010.  In circumstances where certain default
triggers are met and Citigroup has the power to liquidate the vehicle,
Citigroup consolidates the CDO.  If those
conditions are not met, Citigroup does not believe it has the power to direct
the activities that most significantly impact the entity’s economic performance.  As we disclosed in our Second Quarter Form
10-Q, as of the end of the second quarter of 2010, all such super-senior “liquidity
put” transactions had been liquidated.

d.               We note
in your response to bullet point (h) you conclude that you have potentially
significant exposure to benefits in situations where you retain significant
portions of the “super-senior” positions issued by certain CDOs, or where you
are the liquidity

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put counterparty.  Tell us whether you meet the power
characteristic and consolidate in those transactions.

In
situations where Citigroup holds significant portions of the super-senior
positions (including CP that represents the super-senior tranche obtained
pursuant to the liquidity puts) issued by certain CDOs, we meet the power
characteristic and consolidate the CDO vehicle only when certain default
triggers are met and Citigroup has the power to liquidate the vehicle.

3.              We note
your response to prior comment 2 from our letter dated July 20, 2010.  We continue to have questions related to your
equity and credit-linked note structures.
Please address the following:

a.               We note
in your response to bullet point (b) that you do not have power, even in
situations in which you hold more than 50% of the equity-linked notes
(ELN).  Tell us whether you believe that
investors have the power in these situations.
Tell us who you believe holds power in situations where the investors
hold more than 50% of the ELN.  Or tell
us whether you believe power is shared between you and the investors in either
situation.  Tell us whether you consider
the fact that you helped design the entity contributes to the determination as
to whether you have power over the entity.

We
consider all of Citigroup’s involvement in the design and ongoing operations of
the ELN VIEs, as well as Citigroup’s role as prepaid equity derivative
counterparty and holder of ELNs after inception where investors sell ELNs to
Citigroup at fair value, to determine if Citigroup has power.  We believe Citigroup does not have power for
the following reasons:

·                  ASC 810-10-25, paragraph 25-38F (paragraph
14F of SFAS 167) states “although a reporting entity may be significantly
involved with the design of a VIE, that involvement, does not, in isolation,
establish that reporting entity as the entity with the power to direct the
activities that most significantly impact the economic performance of the VIE.”

·                  Citigroup sets up the transaction with the
input and approval of third parties.  No
transactions are executed without willing investors, and the key economic terms
of

CITI B-6

each transaction are separately negotiated between Citigroup and the
investors.  The terms of the prepaid
equity derivative and the fact that the assets held by the VIE will be “static”
is a joint agreement.

·                  The sponsorship or set-up of the VIE is
necessary to arrange a framework/ mechanism for the transaction.  The VIE is merely set up as a way to allocate
cash flows legally, but is in no way designed to provide any one party with
power over ongoing activities that significantly impact the VIE’s economic
performance.  Citigroup’s role does not
change depending on the level of its economic involvement (that is, depending
on the percentage of ELNs purchased from investors at fair value).

In
our view, no party has power to direct the ongoing activities that most
significantly impact the economic performance of the VIE, because there are no
ongoing decisions that significantly impact the performance of the
transaction.  As such, in our view the
level of economic involvement at inception
(percentage holding of ELNs at inception) is a factor to consider:

·                  In certain ELN transactions, one investor
approaches Citigroup with specific desired transaction terms and that investor
holds all of the ELNs issued by the VIE at inception.  In our view, that investor would need to
determine whether its economic interests may be indicative of power.  However, we note that were the investor to
consolidate the relevant VIE, consolidation would have no net impact on its
balance sheet or income statement because the only asset of the VIE is a
prepaid equity derivative with Citigroup.

·                  In other ELN transactions, multiple investors
hold the ELNs issued by the VIE at inception.
We would expect that, in those situations, no single investor would be
deemed to have power through its economic interests.

For
the reasons set forth above, we do not believe there is a sharing of power
between Citigroup and the investors, regardless of percentage ownership in the
ELNs in periods subsequent to inception.

CITI B-7

b.               We note
your response to bullet point (c) which states, in part, that Citigroup and the
Investors initiate the transaction.
Please provide us more information about the initiation of transactions.

i.                 Specifically,
how active are investors