Reed said the landmark merger that created Citigroup hasn't benefited stockholders or employees "and I don't think the customers have benefited because our franchises are weaker than they have been," the Financial Times reported Friday.
Citigroup shares have lost half their value during a subprime mortgage crisis that began last summer. But Reed also said, "There has been a general weakening of the management fabric" at Citigroup.
Reed left the company in 2007 and Sandy Weill, who headed Travelers insurance, remained.
Weill rebuffed Reed's assertions that the merger was a mistake, telling the Financial Times the business model "worked very well for customers, employees and shareholders."
"What didn't work was that we had very poor management … over the past couple of years," Weill said.
Weill pointed to the good years, noting share price increases of 160 percent from 1998-2003, Financial Times reported.