The New York Times reports that former Treasury Secretary Robert Rubin may take over as CEO of Citigroup on an interim basis following the departure of its current chairman, Charles O. Prince III. The article notes that Mr. Rubin's reputation may have been tarnished in recent years because he has been associated with the decisions of Mr. Prince, which have led to large loan write-offs for the bank. In this respect, it would have also been appropriate to note Mr. Rubin's involvement with Enron. As the NYT previously reported, when the collapse of Enron was imminent, Mr. Rubin phoned a former associate at the Treasury Department to see if he would ask the credit rating agencies to delay downgrading Enron's debt. Citigroup held hundreds of millions of dollars of Enron's debt at the time. Since there may be important ethical and legal questions surrounding Citigroup's dealings with structured investment vehicles and exotic financial instruments, this piece of Mr. Rubin's background would seem highly relevant at the moment.
--Dean Baker
