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Citigroup reversed course on Tuesday, a day after a Treasury Department official called the struggling company and “told them it was unacceptable” to accept delivery of a new $42 million corporate jet, a senior administration official said.

The move comes as new Treasury Secretary Timothy Geithner tries to quickly bring more accountability and oversight to the much-maligned TARP program he now oversees.

Under that program, Citigroup has already received some $45 billion in government bailout funds, which is why a New York Post report about the scheduled delivery of the new jet sparked outrage.

White House Press Secretary Robert Gibbs said Monday the president believes private jets aren’t “the best use of money at this point” with America facing a financial crisis.

Citibank spokesman Michael Hanretta told CNN Tuesday the company has “no intent to take delivery of any new aircraft.”

This came after the company initially said on Monday it could not comment on whether it was purchasing the jet, citing security reasons. Hours later it reversed course, issuing a statement saying it signed a contract in 2005 for a replacement aircraft as part of a plan to reduce the number of planes it owns and cut operating costs. “Refusing delivery now would result in millions of dollars in penalties,” it said. “Citi is exploring all its options for these assets, including the potential sale or lease of the aircraft.”

Citigroup  paid $42 million for the corporate jet, according to a source familiar with the situation. The company will get most of that money back, but is likely to have to pay a penalty in the range of $3 million to $4 million, the source told CNN. The exact amount and terms were still being negotiated.

The luxury jet that was to be purchased is a Dassault Falcon 7X, which seats 12. It is so exclusive that Dassault says only 21 are operating around the world. It said the price is listed at $45 million.

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Malaysian current government should take heed of the news below:

Iceland’s coalition government has collapsed after an unprecedented wave of public dissent, plunging the island nation into political turmoil as it seeks to rebuild an economy shattered by the global financial crisis.

Prime Minister Geir Haarde resigned and disbanded the government he’s led since 2006. Haarde was unwilling to meet the demands of his coalition partner, the Social Democratic Alliance Party, which insisted on choosing a new prime minister in exchange for keeping the coalition intact.

Iceland has been mired in crisis since October, when the country’s banks collapsed under the weight of debts amassed during years of rapid expansion.

Thousands of angry citizens have joined noisy protests against the government’s handling of the economy, clattering pots and kitchen utensils in what some commentators called the “Saucepan Revolution.”

The value of the country’s krona currency has plummeted, hitting many Icelanders who took out special loans denoted in foreign currencies for new homes and cars during the boom years. In addition, Iceland must repay billions of dollars to Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

Haarde’s government has nationalized banks and negotiated about US$10 billion in bailout loans from the International Monetary Fund and individual countries.

Haarde – a fiscal conservative with degrees from the University of Minnesota, Brandeis and Johns Hopkins in the U.S. – is suffering from cancer and has announced he would not seek another term. He called early elections last week, following the mass protests by Icelanders upset at soaring unemployment and rising prices.

Though largely peaceful, the protests have seen Reykjavik’s tiny parliament building doused in paint and eggs hurled at Haarde’s limousine. Last Thursday, police used tear gas to quell a protest for the first time since 1949. Haarde said last week that he wouldn’t lead his Independence Party into the new elections because he plans to seek treatment in the Netherlands for his cancer.

Following discussions with Haarde, Iceland’s figurehead President Olafur Ragnar Grimsson said he would hold talks with Iceland’s four other main political parties late Monday before asking one of them to form an interim government.

On Tuesday, he’s likely to ask Foreign Minister Ingibjorg Gisladottir, head of the Social Democratic Alliance, to govern with smaller opposition parties until new elections are held. Gisladottir said she wouldn’t agree to take part in a national government composed of all five major political parties.

Pro Trade Shares only wish for a stable government to ensure prosperity and economic growth in Malaysia for the benefit of all citizens.

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Pro Trade Shares found out how on of the  troubled banks in US is using their federal rescue fund:

Citigroup Inc, which has received $45 billion of capital from the government, is going through with plans to buy a $50 million corporate jet, a person familiar with the matter said.

The bank put in an order for the Dassault Falcon 7X two years ago and plans to accept delivery on the plane later this year, the source said.

Canceling the deal would have forced the bank to pay a multimillion-dollar fee, the person said.

Citigroup is selling two older Dassault jets, worth an estimated $27 million each, according to the New York Post, which was first to report that the bank was still buying the new plane.

Citigroup declined to comment on whether it was buying a new aircraft, but it said in a statement that it has strict policies regarding use of its aircraft, including encouraging executives to fly commercial whenever possible to reduce expenses. The bank said it has reduced its number of aircraft by two-thirds over the last eight years.

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