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Robert Rubin, Raise Your Right Hand . . .

Posted by Larry Doyle on April 8, 2010 9:15 AM |

Robert Rubin

Perhaps no one single individual is more representative of the Wall Street-Washington incestuous relationship than Robert Rubin.

Today, Mr. Rubin will provide testimony to the Financial Crisis Inquiry Commission which is charged with investigating the root causes of the economic crisis which emanated on Wall Street. Will the FCIC allow Mr. Rubin to hide behind the veil of platitudes, unnamed consultants, unknown risks, and the like? Will the FCIC finally stand up for American citizens and drill Mr. Rubin to expose the deeply embedded, culturally corrosive nature of the incestuous relationship between Wall Street and Washington?

A cursory review of Mr. Rubin’s career highlights the following:

Goldman Sachs and Co.: 1966-1993; variety of roles, culminating as Co-Chairman of the firm.
Clinton Administration: 1993-1999; served as Assistant to President for Economic Policy from ’93-’95, Secretary of Treasury from Jan. ’95-July ’99
Citigroup: 1999-2008; served as Director, Chairman of the Executive Committee, and Member of the Office of the Chairman of Citigroup. Also served as an economic adviser to Barack Obama’s campaign.

I am not optimistic that America will learn much from Mr. Rubin today, but if I were on the FCIC I would demand that Mr. Rubin address the following:

1. What was the full extent of your involvement in derailing the initiative of Brooksley Born to mandate that the CFTC (Commodities Future Trading Commission) have oversight of over the counter derivatives? In hindsight, what do you think of allowing these derivatives to trade in an unregulated fashion? How do you reconcile your involvement on this front back in the late ’90s with the developments at AIG?

2. What was the full extent of your involvement in the repeal of Glass-Stegall which allowed for the merger of institutions forming Citigroup? Please address the topic of lobbying dollars and campaign contributions paid specifically by Citigroup to members of Congress to support this legislation. Be specific. Was there a prearranged agreement in place for you to join Citigroup upon your departure from the White House in return for your support of this repeal? That is, was there a quid pro quo? Be specific please. Please provide access to your books and records.

3. What was the full extent of your involvement and relationship with the executives at Freddie Mac and Fannie Mae, specifically Leland Brendsel at Freddie Mac and Franklin Raines and James Johnson at Fannie Mae? Please address how you might reconcile the fact that these aforementioned executives walked out with tens of millions of dollars in compensation while having effectively cooked their books.

4. Please address the justification for your compensation in excess of $100 million dollars while at Citigroup, while the firm’s stock sank over 70% during your tenure.

5. How do you respond to the exceptionally incriminating testimony provided to this FCIC yesterday by your former colleague Richard Bowen? If you missed it, Mr. Bowen, the former chief underwriter within the consumer lending at Citigroup, highlighted how he was sending warning signals inside of your organization about the very questionable nature of mortgages purchased, packaged, and distributed by your organization. Please be specific.

6. Please address the nature of your relationship with former FINRA head and current SEC chair Mary Schapiro. Are you supportive of a requirement mandating that FINRA open all its books and records for a comprehensive review of their investment activities? If not, why not? Are you aware that FINRA owned and liquidated an investment of $647 million of auction-rate securities in mid-2007, mere months before that market sector totally collapsed? Do you think there is a chance that FINRA may have engaged in front running the ARS market at that time? Are you aware that an outstanding complaint against FINRA (Amerivet Securities vs. FINRA) alleges that the FINRA internal investment portfolio had funds directly or indirectly with Bernie Madoff? Are you supportive of an independent investigation of FINRA as directed by Sense on Cents Calls for Independent Investigation of FINRA.

Thank you for your time, Mr. Rubin. Please make yourself available for follow-up questioning in the future.

To Phil Angelides and other members of the commission, do you have the stones to truly serve the public interest and demand comprehensive answers to these questions? The historical record will judge you accordingly.

America deserves full and complete answers to all of these questions. Will you, Robert Rubin, be a statesman and provide them? America is watching and listening.


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  • Fed Up

    At least Prince had the decency to largely apologize to the American public, Rubin seemed to be much more dismissive and unwilling to accept any measure of culpability.

    Great questions here. The FCIC touched on some of them but did not truly drill down.

    Too much deference…not enough detail. No blood.

  • Barry Marcus

    This commission did not accomplish what you wanted. Too many soft balls. Rubin earned his $100 million. He apparently succeeded in: (a) Insulating Citigroup from any meaningful regulation by the SEC, Fed. or Treasury Dept.; (b) Insulating the rating agencies from any meaningful regulation; (c) Buying AAA ratings for garbage, on the cheap; (d)Insulating the Wall St. firms and the rating agencies from any meaningful oversight by Congress; and (e)Raiding the national treasury to bailout the Wall St. sellers of fraudulent securities when the housing market collapsed. Like Bernie Madoff, Rubin was worth his weight in gold. Someone needs to follow the payoffs that undoubtedly went from the Wall St. firms to influential members of Congress and the Administration leading up to and during the financial meltdown.

  • Robert Rubin and his proteges Larry Summers and Alan Greenspan make Benedict Arnold look like a saint. These Harvard loan sharks took advantage of country bumpkin President Clinton, a clueless George Bush and a total neophyte Barack Obama and raped the USA behind their collective backs. Their part in pushing through the disasterous Gramm–Leach–Bliley Act of Nov. 12, 1999, opened the doors wide for Citigroup, BofA, Morgan Chase etal to become out of control corporate monsters by allowing them to merge with Wall Street brokers and insurance companies and use derivatives. Oh, we can include Sen. Phil Gramm, Congressman Leach and Congressman Bliley to stand with those other three cretins.

  • Michael Polidori

    What do we do?

    The biggest banking scandal in the world, I think, is the Federal Reserve. Printing money to buy treasuries then selling these treasuries to any corporation or country that will buy them.

    I haven’t read the Federal Reserve Act, but I find it hard to believe that it would have originally allowed the reserve to loan printed money to American government.

    I would think it allowed the Fed to say no to government spending by refusing to print all the money the government officials wanted. That sounds logical. But printing money to loan it to us? Insane stealing and directly leading to the collapse of everything… retirement plans, savings, equity, farming and transportation… this is going to be BAD.

    What do we do?

    Abolish the Federal Reserve and force it to be the payer of all outstanding treasuries that it bought with it’s “power of the mint”.
    Force the Fed banks to reimburse America for all of the treasuries we have paid that were purchased by the Fed with Federal Reserve Notes.
    Force the banks making up the Fed to reimburse America for all the interest we have paid on securities purchased in this fraudulent manner that was paid to third parties.

    I don’t know how much of our debt was generated by the thieving of the quantitative easing “technique” of printing money to buy treasuries, but it is all unconstitutional and illegal…

    Article 1, Section 8 of our Constitution charges the Congress with “the power to coin money and regulate the value thereof.” The Federal Reserve’s actions of printing money to buy interest bearing treasuries in it’s “quantitative easing” program are unconstitutional thereby not binding on the American people.

    We are owed all of that money back, all of the interest we have paid on those treasuries that were redeemed, all outstanding treasuries that were generated in this way by The Fed.

    Large powerful banks are as vulnerable to a cruise missile (or being raised) as any hovel in Afghanistan.

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