Rubin-omics: Citi's Villain Walks Away

Robert Rubin, the Citigroup consiglierie and former Treasury secretary, is going to be remembered as one of the key culprits in creating the current financial catastrophe. He's out as a director and senior adviser at Citi now (just as the bank rethinks its own future) and the critics are just getting warmed up.

MarketWatch's David Weidner says his tenure will be remembered as "a nightmare." His damage assessment:

It ends after a humiliating 18 months that has seen Citi oust Weill successor Charles Prince, take $83 billion in write-downs, raise $36 billion in investor cash, take $40 billion from taxpayers, and get the government to backstop more than $250 billion in risky assets on its balance sheet.

The WSJ reminds us about his payday:

Mr. Rubin is senior counselor and a director at the New York company, which has suffered $20 billion in losses over the past year and got a government bailout of at least $45 billion. Citigroup's troubles cast an awkward spotlight on Mr. Rubin, who received $115 million in pay since 1999, excluding stock options.

If you're looking for a refresher on why Bob Rubin should go down as one of the architects and beneficiaries of the current crisis, look at the blow-by-blow from the NYT back in November:

The bank’s downfall was years in the making and involved many in its hierarchy, particularly [Chuck] Prince and Robert E. Rubin, an influential director and senior adviser.

Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.

When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.

And since joining Citigroup in 1999 as a trusted adviser to the bank’s senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another.

Comments

[morph366:]

Like many of his contemporaries who used to walk on water he faces the prospect of spending more time with his vast fortune.

Jan 11 06:03 AM

[investor88:]

Lady luck has smiled on Rubin, does not mean he has earned his keep.

Jan 11 07:51 AM

[tdillian:]

great article... another crook... and of course the MSM will not cover this b/c Rubin advises the messaih!!

I swear if there was no other outlet for the news and opinions like the internet, the messaih's MSM mouthpiece would ignore anything that could possibly taint the messaih.

Jan 11 09:36 AM

[howie1:]

Let me get this right:

We have a former Treasury secretary, Rubin, who is the current (soon to be former) senior adviser to Citi.

And we have a current Treasury secretary, Paulson, who is the former CEO of Goldman Sachs, who hands over billions of taxpayer dollars to his Wall Street buddies.

Are these examples of politician-Wall Street crooks inbreeding or what?

Jan 11 11:04 AM

[johnboy:]

About time Robert Rubin left Citi. His councel has been worthless. Citi has only gone down hill since his arrival. Along with 3-4 CEO's. He and Alan Greenspan have brought this country to it's knees with high risk loans that anyone can have with little quaifications. He should have been fired long ago. He typifies all CEO's and Board of Director's who only look after them selves, with high paying salaries and bonus's for poor performance, instead of the company and it's employees.

Jan 11 10:20 PM

[monday1929:]

Robert Rubin needs to be tried for Treason. He must be made to return his ill-gotten gains.

Jan 14 02:14 PM