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Rethinking Robert Rubin


Rethinking Robert Rubin

Photograph by Harry Hamburg/NY Daily News Archive/Getty Images

(Updates to identify Sandy Lewis as managing partner of S.B. Lewis & Company to avoid confusion about his relationship to Robert Rubin and Goldman Sachs.)

Bill Clinton has a favorite Robert Rubin story. It’s 1999, and the Cabinet has gathered to discuss the business of the American people. Except no one can focus because the impeachment crisis is raging, and even the most veteran Washington power players are, for lack of a better term, freaking out. “It was amazing what he did,” says Clinton of Rubin, his then-Treasury Secretary. “He often didn’t say much, and I was stunned when he wanted to speak. He just sat there and in about three minutes summed up the whole thing in a very calm way, and had an incredibly positive impact on the attitude of the Cabinet. He said, ‘What we’ve got to do is get up tomorrow and go back to work, just like we did today, make good things happen, and trust the system and trust the American people. It’s going to be fine.’ And oh my God, you would’ve thought that somebody had gone around and lifted a rock off everybody’s shoulders.”

Rubin’s knack for spreading wisdom and tranquility has been the defining trait of his professional life. Whether economies across Asia are contaminating each other like kids on a school bus or the Mexican government rises one morning and decides to devalue the peso, Rubin’s hooded eyes and perpetually mussed gray hair give him the air of an ancient Galapagos tortoise. Whatever nastiness politics or the global economy may throw at him, he abides.

Rubin in the 1960 Harvard yearbookPhotograph by Ed Quinn/CorbisRubin in the 1960 Harvard yearbook

This legendary stillness, combined with decades of economic and market expertise, keeps Rubin in constant demand. Since 2007 he’s been the co-chairman of the Council on Foreign Relations, where he maintains a disheveled office and employs his longtime assistant. He’s considered the intellectual father of the Hamilton Project at the Brookings Institution, which examines the relationship between government spending and unemployment. He’s a regular participant at the annual Bilderberg Meetings (so secretive they make Davos look like an American Idol taping) and a member of the Harvard Corporation, the discreet board that runs his alma mater. He also meets regularly with congressmen and foreign leaders and has access to the Obama administration through Timothy Geithner and other protégés. In 2010 he joined Centerview Partners, an advisory investment banking boutique, as a counselor to founders Blair Effron and Robert Pruzan.

It’s enough to keep a 74-year-old plenty busy. But not enough to shake questions about just how wise and thoughtful Robert Rubin really is, especially on the fourth anniversary of a financial crisis in which he played a pivotal, under-examined role. Rubinomics—his signature economic philosophy, in which the government balances the budget with a mix of tax increases and spending cuts, driving borrowing rates down—was the blueprint for an economy that scraped the sky. When it collapsed, due in part to bank-friendly policies that Rubin advocated, he made more than $100 million while others lost everything. “You have to view people in a fair light,” says Phil Angelides, co-chair of the Financial Crisis Inquiry Commission, who credits Rubin for much of the Clinton-era prosperity. “But on the other side of the ledger are key acts, such as the deregulation of derivatives, or stopping the Commodities Futures Trading Commission from regulating derivatives, that in the end weakened our financial system and exposed us to the risk of financial disaster.”

After he stepped away from Treasury in 1999, Rubin moved to Citigroup (C), and until 2009 he served as chairman of the executive committee and, briefly, chairman of the board of directors. On his watch, the federal government was forced to inject $45 billion of taxpayer money into the company and guarantee some $300 billion of illiquid assets. Taxpayers ended up with a 27 percent stake in Citigroup, which was sold in 2010 at a cumulative profit of $12 billion. Rubin gave up a portion of his contracted compensation—and was still paid around $126 million in cash and stock during a tenure in which his serenity has come to look a lot more like paralysis. “Nobody on this planet represents more vividly the scam of the banking industry,” says Nassim Nicholas Taleb, author of The Black Swan. “He made $120 million from Citibank, which was technically insolvent. And now we, the taxpayers, are paying for it.”

Evaluating Rubin’s role in the financial crisis is a tough task made tougher by the fact that the tortoise has retreated into his shell. Once famously adept at working the press—the author of a 2007 American Prospect profile noted that he “literally could not find a single feature piece that was, on balance, unflattering”—Rubin has turned down countless interview requests over the past four years, including several for this piece.

Which is not to say he dismissed the idea lightly. After an April event at the Council on Foreign Relations, Rubin appeared in the building’s Park Avenue lobby. His white Brooks Brothers shirt was fraying, and his gray suit looked rumpled enough that he might well have slept in it the night before. He was carrying an old-fashioned Redweld legal folder, filled with papers, when he pulled me aside. “I have been working hard to try to balance my work-life issues,” he said, explaining why he’d deliberated for months about whether to talk on the record. “I have been really busy, and I am not sure I have the right balance.” A few weeks later a representative conveyed that it was a close call, but Rubin would be heeding advisers who urged him not to speak. Instead, he dispatched his friends to speak for him.

During his 26 years at Goldman Sachs (GS), Rubin rose from trader to the corner office, and along with his partner, Stephen Friedman, helped transform Goldman from an investment bank into shorthand for financial dominance. Goldman has made thousands of people, including Rubin, very rich. But the firm’s reputation for avarice has also created a cloud that follows its all-star alumni into civic life. The case against Rubin’s performance as a public servant is mainly about that cloud. As Treasury Secretary, was he motivated by a desire to serve the people, or an opportunity to serve himself and his friends?

Rubin and Clinton worked closely together managing the nation’s economyPhotograph by Andrew Savulich/NY Daily News Archive/Getty ImagesRubin and Clinton worked closely together managing the nation’s economy

“Most people see him as your sort of archetypical buttoned-down Wall Street guy,” says President Clinton, acknowledging the perception that Rubin favored the financial sector. Clinton, for one, doesn’t buy it, and cites numerous examples of Rubin advocating for policies that ran counter to his own economic interest. “When we had to give up the broad-based middle-class tax cut to reach our deficit reduction targets, he was one of the strongest supporters I had in not giving up the proposal to double the Earned Income Tax Credit. He said, ‘We can’t do that. It’ll move millions of poor people who are working out of poverty.’ You wouldn’t expect somebody who had spent a career on Wall Street, making and helping other people make millions and millions of dollars, to be in there arguing. But he was just as strong as [Secretary of Labor Robert] Reich was. He said, ‘We’ve got to keep that.’ And we took a lot of heat for it.”

Rubin’s selflessness, whether in economic policy or the day-to-day management of the Treasury, is a frequent theme of his admirers. Sheryl Sandberg, the chief operating officer of Facebook (FB), worked at Treasury after she graduated from Harvard Business School in 1995. In her first meeting with Rubin and a dozen senior staffers, she hid in the back of the room, hoping to turn invisible. “I’m young and brand new at Treasury, and I did not know much,” says Sandberg, now 43. Rubin called on her anyway. “He said, ‘You’re new. You may see things we’re missing.’ And it was a really powerful lesson, because he was showing everyone that you take opinions and you get feedback from everyone. He wasn’t going to be curtailed by hierarchy or titles.”

She says Rubin was spectacularly self-aware, and taught her that people will “overreact to things you do when you are senior,” especially in places like Goldman Sachs and the U.S. Department of Treasury. “He’d start, ‘I’m going to say this really carefully. Here’s what I mean. Here’s what I don’t mean,’ ” recalls Sandberg. “More importantly, he encouraged everyone to ask questions. He said, ‘If you have questions, come to me.’ ”

Peter Orszag, another Rubin protégé who later became President Obama’s director of the Office of Management and Budget (and is now a managing director at Citigroup and a contributor to Bloomberg View), had a similar experience as a junior White House staffer. In a meeting with Rubin, the Secretary bungled a calculation, transposing a billion dollars for a trillion. Orszag scribbled a correction on a note in an attempt to help Rubin save face. A week later, Orszag’s phone rang. “[Rubin] was abroad, like in Italy or somewhere,” Orszag says. “He called to tell me he was going through his briefcase and he came upon my note, and I was right. He just wanted to tell me that I was right. Most Treasury Secretaries would not do that.”

It’s not his personality that riles critics of Rubin’s four-and-a-half-year tenure at Treasury. It’s his failure to tame the 1999 repeal of Glass-Steagall and the wild expansion of over-the-counter derivatives, which were traded between banks, out of the public eye. “The changes that Robert Rubin drove through in the 1990s certainly helped plant the seed for [the] collapse,” says Angelides.

Rubin’s legion of defenders stir at any mention of Glass-Steagall, the 1933 law that separated the activities of commercial and investment banks. “There is an assumption that Bob was pushing hard for the repeal,” says Michael Schlein, a former chief of staff at the Securities and Exchange Commission and a former Citigroup executive. “I was there. That’s not the way it happened.”

In testimony before the Financial Crisis Inquiry Commission in March 2010, Rubin conceded that he “was an advocate of rescinding Glass-Steagall.” But: “By the time we rescinded it, there were no restrictions left in it at all except for the insurance underwriting, which had no relevance to anything that has happened since then.” What Rubin meant was that commercial banks had long been able to underwrite debt and equity and advise on mergers and acquisitions, and they had been buying investment banks through much of the 1990s. Rubin told the FCIC that ditching Glass-Steagall removed the “cumbersomeness” experienced by banks already in those businesses. In other words, he argued, he pushed for the removal of a law that was a phantom.

“Of course, it would have been better if we’d had the foresight and political strength to put in place the protections that were put in place in 2010 after the financial crisis occurred,” says Larry Summers, Rubin’s friend and successor as Treasury Secretary. “But this does not relate to the repeal of Glass-Steagall. There were virtually no restrictions on the investment banking activities of the major banks after the Federal Reserve’s undertakings during the decade before Glass-Steagall was repealed.” Speaking at a CNBC forum on July 18, Rubin said simply, “It is a myth that the repeal of Glass-Steagall contributed to the financial crisis.”

This is no longer the consensus. Aside from Paul Volcker, several of Rubin’s ex-Citigroup colleagues have recently revised their opinions. In an October 2009 letter to the New York Times, John Reed, the co-chief executive officer of Citigroup from 1998 to 2000, wrote: “As another older banker and one who has experienced both the pre- and post-Glass-Steagall world, I would agree with Paul A. Volcker (and also Mervyn King, governor of the Bank of England) that some kind of separation between institutions that deal primarily in the capital markets and those involved in more traditional deposit-taking and working-capital finance makes sense.” Richard Parsons, the former Citigroup board chairman, told a Washington audience this past spring that “to some extent, what we saw in the 2007-2008 crash was the result of the throwing off of Glass-Steagall.” Most famously, Sandy Weill told CNBC in July 2012 that the law’s reinstatement in some form is necessary to restore confidence in the financial system. “Have banks be deposit takers, have banks make commercial and real estate loans,” Weill said. “And have banks do something that will not risk taxpayer dollars.”

Summers dismisses this as revisionism, warped by hindsight and political convenience. Instead, he offers a syllogism: If permitting the combination of commercial and investment banks caused the financial crisis, why was fixing it so dependent on commercial banks buying investment banks? True enough, many companies that took advantage of Glass-Steagall’s repeal (Citigroup, JPMorgan Chase (JPM), Bank of America (BAC)) still exist. Souvenirs from the standalone investment banks (Bear Stearns, Lehman Brothers, Merrill Lynch) are available on EBay (EBAY).

In part because of its complexity, less attention has been paid to Rubin’s role in the unleashing of the over-the-counter derivatives market. In March 1998, Brooksley Born, chairman of the CFTC, wanted to release a “concept paper” that would raise a series of questions about the possible regulation of derivatives. “I was very concerned about the dark nature of these markets,” Born told the Washington Post in 2009. “I didn’t think we knew enough about them.”

With Greenspan and Summers on the cover of ‘Time’ in February 1999With Greenspan and Summers on the cover of ‘Time’ in February 1999

Born’s plan was to have the CFTC oversee these new, often inexplicable financial products. Rubin, Summers, Federal Reserve Chairman Alan Greenspan, and Securities and Exchange Commission Chairman Arthur Levitt countered that Born was out of her depth. (Levitt is a board member of Bloomberg LP, which owns Bloomberg Businessweek.) They argued that the CFTC, created in the 1970s to regulate futures contracts bought by farmers, didn’t have the authority or expertise to regulate complex derivatives in a fast-expanding market. Born was no match for their firepower. They persuaded Congress to ignore her.

In his 2003 memoir, In an Uncertain World, Rubin wrote that he favored making derivatives “subject to comprehensive and higher margin limits.” He just didn’t support doing it Born’s way, which he called “strident.” But if Rubin and others had an alternative plan, they didn’t offer it up quickly enough. In September 1998 the Long Term Capital Management hedge fund melted down, thanks in part to $1.6 billion in losses on interest rate swaps. The Federal Reserve Bank of New York had to organize a $3.6 billion bailout by its major creditors to avoid infecting the rest of the market. Then-House Banking Chairman Jim Leach (R-Iowa), who opposed giving the CFTC regulatory authority, introduced Born at a hearing by saying, “You’re welcome to claim some vindication if you want.”

Even now, Summers thinks he and Rubin were right to fight Born’s power grab. “Our concerns were not with respect to the desirability of derivatives regulation,” Summers says. “Career lawyers at the Fed, the SEC, and the Treasury insisted that the CFTC’s proposed approach would raise potentially grave questions about the enforceability of existing contracts.” Born, Summers adds, didn’t know what she was attempting to regulate, making it as much of a reach to credit her with prophesizing the financial crisis as it is to hold Rubin or Summers responsible for failing to prevent it. “It should be noted,” adds Summers, “that the credit-default swaps and the collateralized-debt obligations that were central to the crisis barely existed at the end of the Clinton administration.” Born declined to comment for this story.

Greenspan, Levitt, and others have conceded errors in judgment that, upon reflection, may have created conditions that led to the crisis. Clinton, too, wishes he had a few mulligans. The president says he raised concerns about derivatives and their lack of regulation to Greenspan, though not to Rubin. “I should have aired the debate we had in private in public,” Clinton says, “and at least raised the red flag.”

Rubin hasn’t looked back, at least not publicly. Those close to him say that he dealt with the facts of the financial markets as they presented themselves and was without outside influences. If Rubin failed to focus on the future ramifications of a few key policy decisions, it might be because he was fighting global crises in the present. He was also persuading a president under constant political attack to implement Rubinomics. Having your name attached to the policy that led to the largest postwar expansion in American history is a pretty effective way to obscure other controversies. “Bob has been acclaimed as the most effective Treasury Secretary since Alexander Hamilton,” said Clinton on July 2, 1999, the day Rubin departed as Treasury Secretary. “And I believe that acclaim is well deserved.”

In September 1999, after stepping down from Treasury, Rubin and his wife, Judith Oxenberg, threw a return-to-New-York party for themselves at the Metropolitan Museum of Art. Already, Rubin was being pursued by Sandy Weill to join Citigroup. Weill couldn’t stand the thought of the ex-Treasury Secretary landing with a competitor. “He had the best reputation of anybody in the financial industry,” Weill says. “Here we were putting together a company that was the biggest, most important financial company in the world, and he [could] really be helpful if he accepted.”

Weill courted Rubin relentlessly for five weeks and promised that Rubin would join him and Reed in a three-person office of the chairman. Rubin’s responsibilities would be to craft Citigroup’s management and strategic decisions. He would have no direct reports. “Bob has the best job in the company: no line responsibility, but he will be a full partner,” Reed said in announcing Rubin’s role. Rubin would also receive $15 million a year and unlimited use of the company’s fleet of corporate jets.

When he began at Citigroup, Rubin made it clear that he wasn’t looking for a quiet and remunerative third act. In various contemporaneous interviews he expressed his intent to be a bank officer and a public intellectual, someone perched at the intersection of markets and government who would serve the best interests of both. “One reason I wanted to come to Citibank,” Rubin told the New York Times in 2002, “is that being immersed in what is going on—the financial issues, the economic issues—would keep me current in a way that would make me better equipped to be useful in public policy. It puts me more at the center of things.”

In October 1999, Rubin joined Citigroup, with co-CEOs John Reed and Sandy WeillPhotograph by Richard Drew/AP PhotoIn October 1999, Rubin joined Citigroup, with co-CEOs John Reed and Sandy Weill

For a while he was just where he said he wanted to be, advising Senate Majority Leader Tom Daschle (D-S.D.) on economics and debating Chinese Prime Minister Zhu Rongji on bank reforms, while running the company with Weill and Reed and attending to Citi’s clients and prospective clients around the world. There was an early and foreboding misstep, though. During the Enron scandal in 2001, Rubin called Peter Fisher, under secretary of the Treasury for domestic finance, and asked if the Bush administration might find a way to intervene and avoid a downgrade of Enron’s credit rating. Later, Rubin said that even though Citigroup faced huge losses—the bank ultimately paid $3.66 billion to settle legal claims against it and lost billions more when Enron cratered—he had placed the call as both a bank executive protecting a financial position and a concerned former Treasury official. “I’d do it again,” he told the New York Times, brushing off even the perception of a conflict of interest.

The idea that a bank official can serve shareholders and the interests of the American public simultaneously might have been naive. It might have been monomaniacal. Either way, it would prove impossible.

In the runup to the financial crisis, Citigroup was a leader in packaging risky mortgages by the billions and selling them to investors in the form of mortgage-backed securities and collateralized-debt obligations, as well as leveraged-buyout loans, and tried to hide much of what it was doing by packaging the securities into off-balance-sheet investment partnerships. In a November 2008 story, Eric Dash of the New York Times reported that, starting in late 2002, Rubin and Chuck Prince, then the head of Citi’s investment bank (and later its CEO), advocated ratcheting up the risk-taking at Citigroup, using strategies from Rubin’s days as head of risk arbitrage and co-head of fixed income at Goldman Sachs. In the end, bank losses totaled more than $65 billion—at least half of which came from mortgage-related securities.

Michael Schlein, whose office at Citigroup was next to Rubin’s, says he attended a 2005 meeting in which Tom Maheras, then head of Citigroup’s fixed-income division, along with consultants from the firm Oliver Wyman, recommended that the division should be taking more risk, given the size of its balance sheet. Schlein recalls that after the presentation, Rubin concurred, but was unequivocal about the need for proper risk management and compliance if the firm was going to take on more risk. “That’s what Eric Dash got wrong, and now it has taken on a life of its own,” Schlein says. “Eric paints a picture of Bob banging on the table, demanding that Citi take more risk. It’s not even close to who Bob is. It’s just wrong.” Dash, now a senior adviser for policy and communications at Treasury, stands by his story.

Rubin has said that Citigroup’s losses were the result of a financial force majeure. “I don’t feel responsible, in light of the facts as I knew them in my role,” he told the New York Times in April 2008. “Clearly, there were things wrong. But I don’t know of anyone who foresaw a perfect storm, and that’s what we’ve had here.”

In March 2010, Rubin elaborated in testimony before the Financial Crisis Inquiry Commission. “In the world of trading, the world I have lived in my whole adult life, there is always a very important distinction between what you could have reasonably known in light of the facts at the time and what you know with the benefit of hindsight,” he said. Pressed by FCIC Executive Director Thomas Greene about warnings he had received regarding the risk in Citigroup’s mortgage portfolio, Rubin was opaque: “There is always a tendency to overstate—or over-extrapolate—what you should have extrapolated from or inferred from various events that have yielded warnings.”

Richard Bowen, a former senior banker at Citigroup, says that in 2006 he repeatedly warned senior management, including Rubin, that he believed 60 percent of the mortgages the firm was buying and stuffing into mortgage-backed securities were defective. “Obviously it’s very tragic that my warnings were ignored,” says Bowen, who was relieved of his duties in January 2009 and now is a senior lecturer at the University of Texas, Dallas. “Rubin was the primary contact as well as the other executive officers. He was on the board of directors. He was chairman of the executive committee. He was about to be named chairman of the board. Who better to alert about the situation?”

Angelides, the FCIC’s co-chair, was “disappointed” by Rubin’s testimony. “I didn’t see him stepping forward and accepting the responsibility of the disaster that Citigroup was,” he says, “and for the impact it had on the taxpayers and our financial system. Citigroup required massive federal assistance to save it—$45 billion of Troubled Asset Relief Program funds, $300 billion in ring-fencing of its assets. I just don’t think you can be in that kind of leadership position, get paid more than $115 million, and ultimately disclaim any responsibility for the fate of the ship you helped captain.” If Rubin disavowed any role in enfeebling Citigroup, he was nearly invisible in the frantic year between November 2007, when Chuck Prince resigned in the wake of billions of dollars in Citigroup losses, and November 2008, when the federal government bailed out Citigroup.

Between Prince’s departure and the appointment of Win Bischoff, Rubin served five weeks as chairman of the board. He accompanied investment banker Michael Klein to Abu Dhabi to raise a $7.5 billion investment in Citigroup from the Abu Dhabi Development Authority, but wasn’t involved in the fund’s due diligence for the investment or in the negotiation of the deal. In testifying to the FCIC about those five weeks, he made it sound as if he was as ceremonial as the groom atop a wedding cake.

Rubin and Chuck Prince arrive at hearings for the Financial Crisis Inquiry Commission, 2010Photograph by Jim Young/ReutersRubin and Chuck Prince arrive at hearings for the Financial Crisis Inquiry Commission, 2010

Even though he remained a senior executive and sat on the board of directors after stepping down as chairman, Rubin did not attend meetings at Bear Stearns during the firm’s collapse in March 2008, nor was he at any of the infamous September New York Federal Reserve sessions when Merrill Lynch, Lehman Brothers, and AIG (AIG) each went down the tubes, or nearly did. Rubin is mentioned only in passing in the 624 pages of Andrew Ross Sorkin’s Too Big to Fail, a 2009 narrative of the crisis. “He was a sounding board for Vikram [Pandit] and a voice of calm for employees and clients,” explains Steven Lipin, Rubin’s spokesman at the public-relations company Brunswick Group. “He played a stabilizing role within Citigroup. Clients and internal executives looked to Bob for guidance and to broadly help stabilize the bank during this very scary period.”

Citigroup’s new CEO, Pandit, may have wanted to assert control over the company’s perilous future, but there was one errand Rubin was asked to handle. On Nov. 19, 2008, as Citigroup’s prospects were deteriorating rapidly, Rubin called Treasury Secretary Hank Paulson. According to Paulson’s memoir, On the Brink, Rubin “put the public interest ahead of everything else” and “rarely called me,” so the “urgency in his voice that afternoon left me with no doubt that Citi was in grave danger.” Rubin told Paulson that “short sellers were attacking” Citigroup’s stock, which had closed the day before at $8.36 per share and was “sinking deeper into the single digits.”

In his testimony to the FCIC, Rubin disputed Paulson’s recollection. “I don’t think that mine was a Citi-specific call,” Rubin said. He claimed his intent was to represent all the bank stocks being pecked to death by short sellers, and to alert Paulson to the severity of the problem. “I think mine was a general call.”

Paulson’s call log from those months is filled with bank CEOs asking for help, and it wouldn’t have been strange for Rubin to do so, too. Rubin’s insistence that his was “a general call” seems a last attempt to reinforce his role as the ethical colossus linking banking and the public, or a final statement of detachment from Citi. Whatever the case, he didn’t appear to be willing to put his credibility as a wise man on the line at a moment of reckoning.

It’s a mystery why Rubin vanished at such a crucial moment in the nation’s financial history, but there were distractions. In October 2007, as Citigroup was imploding, Rubin went to South Beach to visit his father, who died a year later at 101. In line at an upscale grocery, he met Iris Mack. One of the first African American women to get a Harvard Ph.D. in applied mathematics, Mack also worked at Enron and the Harvard Management Co. Over the next 14 months, Rubin pursued her romantically. They would meet, according to Mack, in his Ritz-Carlton Hotel suite, where he would stay after flying in on the Citigroup corporate jet. “It’s one of the perks,” Mack says Rubin told her.

This is not news, but it does call into question how hard Rubin was working for his $15 million annual salary. Mack, who is single and 46, wrote about her relationship with Rubin in an April 2010 Huffington Post article. She decided to go public after watching Rubin testify before the FCIC. “I really think he was in a vacuum, a little bubble,” Mack says now. “I don’t think all these people start out as evil creatures, but you get in this environment, like we were in Wall Street and Enron, and it’s so much stuff thrown at you. … If you don’t have your head on straight, you can get totally screwed.”

Mack enjoyed Rubin’s company. “But the more I talked to him, I realized he was a good liar,” she says. “I point-blank asked the guy if he was married. He never did answer a simple damn question. He would say stuff like, ‘Well, are you married? Have you ever been married?’ So it got to the point where I would still talk to him, but eventually I started ignoring him, or he would come down [and] I would lie and tell him I was out of town. I just felt like the guy had a double personality.”

“Listen, nobody’s perfect,” says Sandy Weill. “I’m sure you’ve heard all sides.” Weill says that Rubin was “extremely” helpful to him during his years at Citi, but that he can’t account for what happened after his departure in October 2003. (Weill remained non-executive chairman of the Citigroup board until April 2006.) “Unfortunately, something happened that was not very pleasant for a lot of people and not very pleasant for a lot of people that worked for the company. It was very sad.”

Like many Rubin defenders, Sheryl Sandberg suspects that her mentor has become a scapegoat for events beyond comprehension. “My own view is that, look, these have been hard times, and people need people to blame,” she says. “It doesn’t mean they blame the right people.”

Nassim Nicholas Taleb doesn’t know Rubin personally. He admits that his antipathy, like that of so many Rubin critics, is fueled by symbolism. “He represents everything that’s bad in America,” he says. “The evil in one person represented. When we write the history, he will be seen as the John Gotti of our era. He’s the Teflon Don of Wall Street.” Taleb wants systemic change to prevent what he terms the “Bob Rubin Problem”—the commingling of Wall Street interests and the public trust—“so people like him don’t exist.”

People like Rubin—brilliant, powerful, and fueled by certainty—will always exist. They’ll act selfishly and selflessly. They’ll advance whole societies and their own interests, and their paradoxes will be endlessly debated. “This is a guy who is as controlled as any human being I know,” says Sandy Lewis, who as managing partner of S.B. Lewis & Company worked with Rubin on deals while Rubin was at Goldman Sachs. “He’s pleasant company. He’s compulsively dishonest in a certain way, and compulsively honest in other ways.” Nobody’s perfect. But for $126 million, they ought to show up.

William D. Cohan, a Bloomberg Television contributing editor, is the author of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street and The Last Tycoons: The Secret History of Lazard Frères & Co. His most recent book is Money and Power: How Goldman Sachs Came to Rule the World. The opinions expressed are his own.

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