Portrait: Robert E. Rubin ’60

Amidst turmoil of Wall Street financial crisis, Rubin returns to his experience at Harvard

In the fall of 1957, the dean of freshmen told the incoming class to relax—only three percent of them would fail out.

Robert E. Rubin ’60, who had just arrived at Harvard from a Florida public school, said this week that he worried that he would be among that three percent.

But Rubin did not fail—he graduated Phi Beta Kappa and summa cum laude from the College.

“He was absolutely delighted when he found out that he did well at the end of the first semester,” said Charles Toder ’60, Rubin’s four-year roommate. “And he proved to be a very capable, very good student.”

But that old feeling of nervousness may have returned in the past months as Rubin’s financial firm, Citigroup, posted billions of dollars in losses and had its CEO resign amid the Wall Street financial crisis.

Rubin, who serves as chairman of Citigroup’s executive committee, said in an interview that his undergraduate experience engrained him with a sense of “restless intellectual inquiry” and trained him to handle the stressful situations he would face later in life—both this year and during his time at Goldman Sachs, which he led in the early 1990s.

“For me at least, Harvard was a stressful time and I think I did develop some internal devices, if you will, for dealing with that stress,” Rubin said by telephone. “I developed an existential view of life.”

Rubin, who now enjoys fly fishing in his time off, found little time for relaxation as an undergraduate.

“His main hobby was studying, as was mine,” Toder said, “but during junior and senior years, we would play games of low-stakes poker, and Bob was very good.”

TO SUMMERS’ DEFENSE

Rubin succeeded Robert G. Stone, Jr. ’45 as a member of the Harvard Corporation, the University’s top governing board, in April 2002, following closely on the heels of Lawrence H. Summers’ selection as the 27th university president.

Summers had served as a deputy Treasury secretary when Rubin headed the department during the Clinton administration and the two had become close allies in Washington. When Rubin left his post as Treasury secretary, he helped secure Summers as his successor.

“I think they had a very close and deep intellectual bond,” said Michael B. G. Froman, Rubin’s former chief of staff at the Treasury. “Oftentimes it was sort of like a constant seminar back and forth...It was a rich intellectual partnership—I say partnership on purpose, because Bob very much treated Larry like a very important partner in everything he did.”

A few years later, Rubin came to the aid of his Washington friend again as he lobbied the presidential search committee to choose Summers to lead Harvard and soon became Summers’ biggest supporter on the Corporation.

As Faculty criticism of Summers’ leadership increased in 2005, Rubin defended him publicly.

“I think he is an outstanding president and he has a chance to be one of Harvard’s greatest presidents,” Rubin told The New York Times that January.

Following Summers’ resignation that year, many expected Rubin to follow suit and step down from the position that he had used to support the embattled president.

“I think that many people thought that perhaps he would make room for a new administration by stepping aside since he was so much an advocate for president Summers,” history of science professor Everett I. Mendelsohn, a former member of the Faculty Council, said last week, “but he didn’t step aside.”

Rubin said that his commitment to Harvard remains strong, describing University President Drew G. Faust as “terrific” and “thoughtful,” and praising her for following in the footsteps of her predecessor.

“Larry pursued an array of very important strategic changes at Harvard,” said Rubin. “Harvard remains very much on those tracks.”

Rubin added that as private universities come under increasing government scrutiny for their ballooning endowmnents, he can use his Washington ties and his role on the Corporation to help Harvard “make its case.”

“The great research universities of America are a tremendous economic resource for the country,” he said. “I can be helpful to Drew.”

Rumors that Rubin would resign from the Corporation emerged again this fall when he was named as chairman of Citigroup, but the 69-year-old continues to emphasize his commitment to Harvard.

“I certainly feel very deeply committed to Harvard,” Rubin said, adding that he has no plans to leave the Corporation.

As the longest serving member on the Corporation after Senior Fellow James R. Houghton ’58, Rubin is next in line for the board’s leadership role, which falls to the fellow who has been on the board the longest.

“My hope is that Jamie stays for a long time,” Rubin said when asked if he intends to become senior fellow. “I haven’t thought beyond that.”

CITI SLICKER

Rubin’s lack of visibility at Harvard—he has missed some of the few public appearances of the Corporation, including last year’s Commencement—contrasts with his prominence in the financial sector.

He rose to fame at Goldman Sachs over a 26-year career, leading Goldman’s risk arbitrage desk and eventually serving for two years as co-chairman of the investment bank.

In 1999, he joined Citigroup as a member of the board of directors and as chairman of the executive committee.

Following the departure of chief executive Charles O. “Chuck” Prince III in November 2007 and billions of dollars in losses from exposure to the subprime mortgage markets, Citigroup named Rubin chairman of the board of directors.

But Rubin’s new role was short-lived, as Citigroup replaced him less than a month later with Sir Win Bischoff, who had taken on the role of acting CEO following Prince’s departure. Bischoff was soon succeeded as chief executive, though he is still chairman.

Rubin remains a member of Citi’s board and has been criticized in the media for not doing enough in the lead-up to the Wall Street financial crisis that hit this fall.

But Rubin insists that he was not in a position to prevent the turmoil and that Citi has responded well in its aftermath.

“You’re not going to know what’s going on in a trading room unless you have direct responsibility for the trading operations or the risk management,” Rubin said.

Joseph Condon, a former regional manager for Citigroup in New York City and a current Citi shareholder, challenged Rubin and other members of Citi’s Board of Directors at the annual shareholders meeting in late April over Rubin’s involvement with Citi in the prelude to the firm’s disastrous losses.

“What prompted me to go to the meeting,” Condon said in a telephone interview, “was the fact that quite a significant number of people who worked under me, exceptional people who have families to take care of, are losing their jobs while Mr. Rubin collects a very significant income from Citigroup.”

Condon noted that he has tremendous respect for what Rubin achieved during his prior years on Wall Street and his time as Treasury secretary. “But in his eight years at Citi, he’s done nothing, so why is he collecting a salary?” Condon asked.

Members of Citi’s leadership also disagreed with this criticism.

“He did not come in to be CEO,” said Froman, who is now a managing director at the firm. “He was not in a position to prevent the things that came up or to make decisions that would have avoided it.”

Lewis B. Kaden ’63, vice chairman of Citigroup, also defended Rubin. He said that although Rubin doesn’t have operational responsibility at Citigroup, he engages in a variety of activities, such as “participating in strategic discussions with senior management, frequently meeting with clients and government officials with whom Citi has a relationship, and serving as a mentor to managers, executives, and employees.”

In his defense of his colleague, Kaden echoed the view of many in Cambridge who try to evaluate the secretive Corporation.

“Only a limited number of people have enough visibility or knowledge to understand Mr. Rubin’s role and what he does,” Kaden said. “I would say that anyone who [criticizes Rubin] doesn’t know what they’re talking about.”

—Laurence H. M. Holland contributed to the reporting of this story.
—Staff writer Prateek Kumar can be reached at kumar@fas.harvard.edu.
—Staff writer Claire M. Guehenno can be reached at kumar@fas.harvard.edu.