Vikram Pandit is the last man standing—and he can’t be enjoying the fact.

The surprise move by Bank of America to sell $19 billion of new equity in order to repay at least some of the $45 billion in TARP (Troubled Asset Relief Program) that giant bank owes the Treasury Department and taxpayers leaves Citigroup as the only one of the large Wall Street players to not yet make a dent in its TARP debt. But then, there doesn’t seem to be a single problem area worldwide to which Citigroup hasn’t managed to have some exposure, from subprime mortgage-backed CDOs to the shifting sands of Dubai’s real estate market.

In short, Citigroup can’t afford to turn off government life support by repaying TARP funds; if it did, odds are high that the institution would promptly flat-line. At the same time, Pandit faces a nasty catch-22. If he doesn’t start paying back TARP funds quickly, he’ll have a growing PR problem with his customers, who may well prefer to deal with a financial institution that doesn’t have to cling to the government to avoid collapse. And then there are Citigroup’s employees. Those who’ve avoided being “riffed” in one of several rounds of job cuts and who haven’t bolted for greener pastures are hanging on to collect whatever meager bonus payments the government will allow the bank to disgorge once the books are closed on 2009. Now that Citi’s rivals have shrugged off the hypervigilant scrutiny on compensation with the full or partial TARP repayments, there is little to stop the best and brightest of its bankers and traders from sticking around. “What have you done for me lately?” might as well be the motto of Wall Street’s bonus-conscious and decidedly non-altruistic workforce. (Certainly Pandit would have to say the answer was “not much.”) And if those players leave, how will Citigroup manage to build on its modest return to profitability in the third quarter?

The devil’s dilemma that Pandit faces is how the whole TARP issue is viewed by shareholders. So far, when other banks have sold stock to repay bailout money, diluting the value of stock held by their existing shareholders in the process, the latter have been able to draw some comfort from the fact that the whole exercise was in the interests of getting the government off their backs. Not with Citigroup. When it sold stock and diluted its shareholders, that new common stock went to the Treasury Department, adding insult to injury.

Still, it would be downright foolish for Pandit to pretend that he’s Jamie Dimon or Lloyd Blankfein. Both JPMorgan Chase and Goldman Sachs emerged from the debacle of the last two years as big winners, able to afford to repay TARP funds and even—to some extent—to snub their noses at Washington and pay out lavish bonuses. At the end of the day, maybe Pandit is to be admired. He’s having to face up to the reality that the world, post financial apocalypse, may not be such a rosy place as some at firms like Goldman Sachs would like to imagine. There may be, as Pandit acknowledged to Citigroup’s annual meeting last spring, “a great temptation to gloss over the bad news and exaggerate the good news,” but so far, he seems to be one of a small handful of Wall Streeters to try to avoid doing just that—even if the reason for it is that he simply doesn’t have that much good news to spin.

Above all, perhaps Pandit deserves our admiration for simply sticking it out. Ken Lewis is exiting, stage right, along with John Mack of Morgan Stanley. John Thain, former CEO of Merrill Lynch is gone, and Jimmy Cayne and Dick Fuld have been eating their hearts out offstage for more than a year now. It must be tempting to Pandit to just take the wealth he has already earned as a dealmaker and hedge fund investor and just walk away from the whole mess, leaving the irritable demands of employees, investors, clients, and government overseers to someone else to deal with. Instead, he’s doggedly forging ahead with the process of trying to keep all those cantankerous constituencies more or less appeased while transforming Citigroup from the glorious financial supermarket of Sandy Weill’s dreams into an altogether more prosaic and ordinary commercial bank. Now, as the last guy standing, he’s doing it with a target painted on his back.