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.