Washington People

By Rehm, Barbara A. | American Banker, November 24, 2003 | Go to article overview

Washington People


Rehm, Barbara A., American Banker


No Regrets

In his new book, "In an Uncertain World -- Tough Choices from Wall Street to Washington," Robert E. Rubin, the darling of both, recounts the biggest misstep of his celebrated career: that November 2001 phone call to Treasury Under Secretary Peter Fisher.

Mr. Rubin, the former Treasury Secretary who by then was a member of Citigroup Inc.'s executive committee, asked Mr. Fisher what he thought of urging the rating agencies to hold off downgrading Enron Corp.'s debt while the energy trader's creditors weighed their next move.

"I can see why that call might be questioned, but I would make it again, under those circumstances and knowing what I knew at the time," Mr. Rubin wrote in a chapter titled "Greed, Fear, and Complacency."

"There was an important public policy concern about the energy markets -- not just a parochial concern about Citigroup's exposure -- and I felt that if a modest intervention by Treasury could potentially make the difference in avoiding a significant economic shock for the country it was worth raising the idea with an official there."

Mr. Rubin adds, "I would have wanted to hear suggestions of that kind when I was at Treasury."

Old Friends

Speaking of Citigroup, while its chief executive, Charles Prince, was joking last week about buying Canada, Sandy Weill, his predecessor, was raising a glass with German Chancellor Gerhard Schroder.

At a gala dinner Thursday, Mr. Schroder told a distinguished group of academics, businesspeople, and diplomats that Mr. Weill is "one of the truly great personalities of the American economy."

The two met years ago over a bottle of wine -- and Mr. Schroder dared to disclose it was French. Mr. Weill confirmed that detail later, adding that it was a magnum-size bottle, and said that Mr. Schroder is "a man I so deeply admire."

Each was raised by a family with modest economic means and made it to the top of his field, which adds glue to their bond, they said.

Mr. Schroder was in New York to schmooze with Wall Street executives, too, but on Thursday he honored Mr. Weill with the Global Leadership Award from the American Institute for Contemporary German Studies at Johns Hopkins University. The wine served with dinner at the Grand Hyatt Hotel was Italian, but it nevertheless put the two leaders in the mood to exchange more pleasantries.

Mr. Weill defended Mr. Schroder's deeply unpopular economic reform program, which sank his party's approval rating to depths like those of former California Gov. Gray Davis. Mr. Weill predicted that in the end everybody would be better off in Germany. That is something to look forward to, he said, because Citi is "the fastest growing financial firm in Germany."

He was the first American to receive the award, which in previous years was given to, among others, Rolf-E. Breuer, the chairman of the supervisory board and the former top executive of Deutsche Bank AG, and Jurgen Schrempp, the top executive at DaimlerChrysler AG.

On Friday, Mr. Schroder had lunch at Goldman Sachs Group Inc. but was invited to the Weills' private apartment on Manhattan's Upper West Side for dinner.

Should Mr. Weill decide that Germany is a better place than New York, at least the city's mayor would feel safer in his job. Addressing the audience on Thursday, Michael Bloomberg begged Mr. …

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