This morning, former Citigroup CEO Charles Prince, who was pushed out the door with an $82 million, perk-laden retirement package in 2007, a short time after the company was forced to write down billions of dollars on bad subprime loans (and a short time before the government was forced to bail it out to the tune of $45 billion), and Citi’s former chairman Robert Rubin are testifying in front of the Financial Crisis Commission. In their prepared statements, both men offered apologies for their role in leading Citigroup to the brink of collapse. Kind of.
Former Treasury Secretary Rubin is sticking with his story, which is that despite his fancy title, he had no idea what was actually going on at the bank. He reiterates that his $30 million-a-year position was essentially “Figurehead.”
My role at Citi, defined at the outset, was to engage with clients across the bank’s businesses here and abroad, to meet with foreign public officials for a bank present in 102 countries, and to serve as a resource to the bank’s senior executives on strategy and managerial issues.
It was not — repeat, not — to know anything about said bank’s operations.
Having spent my career in positions with significant operational responsibility—at the Treasury and at Goldman Sachs—I no longer wanted such a role at this stage in my life, and my agreement with Citi provided that I would have no management of personnel or operations.
But he’ll give you this:
We all bear responsibility for not recognizing this, and I deeply regret that.
That’s right. Bob is sorry that everyone screwed up.
Meanwhile Prince, who infamously remarked to the Financial Times that “as long as the music is playing, you’ve got to get up and dance … and we’re still dancing” in July 2007, a month or so before the company began its quick descent, apologizes for the fact that he did not have the supernatural abilities that would allow him to see that the crap on Citi’s books was in fact crap:
I am deeply sorry that our management — starting with me — was not more prescient and did not see what was coming before us.
He also would like to remind the commission that this was everyone’s fault, including theirs.
It bears emphasis that Citi was by no means alone in this view and that everyone, including risk managers, government regulators, other banks and CDO structurers, all believed that these securities held absolutely no risk — a perception strongly reinforced by the above AA-rating bestowed by ratings agencies.
So, that should go over well. We hope these guys brought their dancing shoes! We can’t wait to see their fancy footwork.
Hearings and Testimony [FCIC]