The past couple of weeks cannot have been easy for Robert Rubin. Last week’s Times story, which blamed him for bringing down Citigroup and really the entire global economy, was bad enough. But then Citigroup made it worse, by going so far out of their way to defend him by distancing him from the decisions that led the bank to ruin that he ended up sounding, at best, like a lame duck, and at worst, even more negligent than we’d thought: “While Mr. Rubin is a member of the Board and plays an advisory and client service role at Citigroup, he was never an ‘architect’ nor was he a drafter of Citigroup’s risk-taking plans,” Citigroup vice-chairman Lewis Kaden wrote in a letter to the Times, while CEO Vikram Pandit told Charlie Rose: “In the eleven months that I’ve been in this job as I worked with him, it’s pretty clear that he doesn’t drive the execution decisions.”
One imagines this must have been difficult for Rubin, who has spent the past twenty-odd years basking in the glow of economic hero worship and has the ego to match, to take. And so, like a cocky serial killer on Law & Order: Criminal Intent, his determination to prove he was smarter than his investigators outweighed his common sense, and the former Treasury secretary decided to give two interviews, to The Wall Street Journal and Newsweek, to set things right. Naturally, this only served to make things worse.
In both interviews, Rubin refused to accept any responsibility for egging on the risk-taking that led to Citi’s travails, claiming that as an emeritus board member he really didn’t know about the day-to-day stuff that was going on. As he told the Journal:
“The board can’t run the risk book of a company,” he said. “The board as a whole is not going to have a granular knowledge” of operations.
“Actually, I’m probably close to 20 years beyond which I had a granular knowledge [of financial details].”
Sure, even though he “knew what a CDO was,” as he told the Journal, he wasn’t expecting that anyone would actually listen to him when he told the bank to grow their holdings of them or, furthermore, when he said “the only undervalued asset class in the world is risk.” After all, he was just a doddering old man! And:
“I wouldn’t run a financial institution based on someone’s view about what markets would do.”
Not even someone who had raked in $115 million (excluding stock options) from Citi in the past nine years, apparently. That’s not to say he wasn’t worth his salt.
Mr. Rubin said his pay was justified and that there were higher-paying opportunities available to him. “I bet there’s not a single year where I couldn’t have gone somewhere else and made more,” he said.
Because after all, he was making some important decisions in the exact year that that company lost half its value. Or so he says when the Journal asks what he thought he’d accomplished, over that time period.
“I think I’ve been a very constructive part of the Citigroup environment. That has become particularly manifest since August ‘07. I have been very involved.”
Oh God. This is so awkward, we actually closed our eyes. What was his strategy here? “I will begin by defending my salary, which I will later say was given to me for basically fly-fishing, then I will suddenly cop to being really involved during the worst possible moment in the bank’s history”? Did he learn nothing from the Clinton administration? A man can’t say he didn’t do something, when his DNA is all over it.