- The Washington Times - Wednesday, July 24, 2002

Rubin and Enron

"Given the central role played by Citigroup in concealing Enron's debt from investors, the general public, and government regulators, why, then, hasn't former Clinton Treasury secretary, Robert Rubin, now the chairman of Citigroup's executive committee, been called to testify before Congress?" Mark Levin writes at National Review Online (www.nationalreview.com).

"In particular, why hasn't the chairman of the Senate Governmental Affairs Committee, Sen. Joseph Lieberman, sought Rubin's testimony? After all, Lieberman is heading up the Senate's investigation into Enron's bankruptcy and fraudulent dealings," Mr. Levin said.

"And there's ample reason to hear from Rubin. In addition to this week's disclosures about Citigroup's assistance in cooking Enron's books, during Enron's final days Rubin played a direct role in attempting to conceal Enron's financial condition from credit-rating agencies. Specifically, on November 8, 2001, Rubin made a telephone call to Peter Fisher, the Treasury Department's undersecretary for domestic finance, seeking Fisher's intervention with Wall Street credit-rating agencies on behalf of Enron when those agencies were about to downgrade Enron's ratings.

Mr. Levin added: "Lieberman's supposed concern for 'average stockholders' and 'their life's savings' clearly doesn't outweigh his political interests in covering up Rubin's central role in helping to prop up Enron and protect Citigroup's investments. If Lieberman were to force his fellow Democrat to testify about his conduct, the Democrats might lose their election-year issue. Meanwhile, Citigroup's stock value has declined by more than 10 percent, to the lowest level in nearly three years, on news of its deceptive activities."

Rubin and Enron II

"How do you write a piece about a shady deal with Enron at Citigroup without mentioning Robert Rubin? The same Rubin who placed calls to protect Enron to the Bush administration? The same Rubin who has the gall to demand a change of course in the current administration, while he presided over the bubble we're now recovering from?" Andrew Sullivan writes at his Web site (www.andrewsullivan.com).

"We all know the Times is tight with Rubin, but this lacuna screams for further investigation. Rubin joined Citigroup in the fall of 1999. The deal was cemented orally that year, before Rubin was ensconced. But it was controversial even within the bank throughout that year, and keeping the loan off the official books would surely have required a decision at some point after the fact. Was Rubin apprised of this? Did he know about it when he contacted Treasury to ask for even more kid-glove treatment of Enron the following year? Isn't this a no-brainer phone-call from a Times reporter?

"According to The Washington Post [yesterday], 'Enron would have increased its debt by $4 billion, a 40 percent hike, in 2000 alone had the company accounted for its prepaid debt, according to a congressional analysis released today.' So Rubin might have been instrumental in the Enron con? And the Times isn't interested? Figures. But if the Times won't tackle this, others might. Here's a great new test for the new editor at Slate, Jake Weisberg. Jake has a fat-cat book deal with Rubin detailing Rubin's allegedly glorious record as Treasury secretary. Let's see if Slate will take on the architect of the bubble. Why doesn't Jake commission a story pronto? I'm sure he can pass along the relevant phone numbers to an enterprising muck-raker."

Bad timing

Gloria Borger, the U.S. News & World Report political columnist and special correspondent for CBS News, chose the wrong week to cite former Treasury Secretary Robert Rubin as an authority in absolving the Clinton administration of any blame for the recent corporate accounting scandals.

Mr. Rubin left the Clinton administration in 1999 to become chairman of the Citigroup executive committee. Citigroup's role in hiding financial woes at Enron came to light this week.

The columnist, in the latest issue of the magazine, dismissed the idea that Bill Clinton had anything to do with the current "corporate mess," and quoted Mr. Rubin to make her point. "Blaming Clinton is absolutely ridiculous," Mr. Rubin told her. "We all have our faults. But money and greed are not among them. I never heard anybody in business extrapolate from Bill Clinton's problems."

Now Mr. Rubin's own conduct is in question.

Surprising support

Despite corporate scandals and the downturn in the stock market, 68 percent of Americans continue to support allowing workers to invest a portion of their Social Security taxes in personal retirement accounts, according to a Cato Institute poll of likely voters.

The poll, conducted for Cato by Zogby International, found that Americans would back changes to the Social Security system to permit investment in individual accounts by a margin of greater than 2-to-1. Further, the support cuts across all demographic and ideological lines.

The 10-question survey of 1,109 likely voters was conducted between July 8 and July 12 two weeks after the WorldCom accounting scandal broke and during the week when the Dow Jones Industrial Average tumbled 694.97 points.

"While people are clearly concerned about recent market turmoil," said pollster John Zogby, "there is a fundamental belief in controlling your own retirement that trumps any volatility."

When posed with the statement, "There are some in government who advocate changing the Social Security system to give younger workers the choice to invest a portion of their Social Security taxes through individual accounts similar to IRAs or 401(K) plans," 68 percent of voters indicated support, 29 percent opposed and 3 percent weren't sure.

Younger people (83 percent) overwhelmingly supported individual accounts, while a clear majority of union workers and Democrats (64 percent and 56 percent respectively) felt the same way. Perhaps most surprisingly, 64 percent of voters agreed that the recent accounting scandals meant that people needed more control over their retirement finances, making them more likely to support private accounts for Social Security.

Ratings dip

President Bush's job approval ratings dipped into the 60s this week, dragged down by worries about the stock market and the economy after nearly a year of sky-high post-September 11 ratings.

A bit of a fade was inevitable, analysts said. "One way to put it is that the law of gravity wasn't repealed," political scientist David Rohde of Michigan State University told the Associated Press.

Mr. Bush's ratings had hovered just above 70 percent in most polls for the past few months. Now a Newsweek poll shows his job approval at 65 percent. He's at 67 percent in an Ipsos-Reid poll done for the Cook Political Report and in an NBC-Wall Street Journal poll.

"There's been unrelieved bad news for the past several weeks," said Thomas Riehle, president of Ipsos-Reid Public Affairs, "so a lot of what's happened has occurred in the weeks from the end of June until today."

The timing of Mr. Bush's return to a more normal though still high rating was predicted months ago by Matthew Dowd, pollster for the Republican National Committee.

Carmona confirmed

The Senate confirmed Dr. Richard Carmona as surgeon general yesterday without opposition or debate, clearing the way for the Arizona trauma surgeon to take the post.

Dr. Carmona succeeds Dr. David Satcher, whose term expired in February.

At his confirmation hearing, Dr. Carmona promised to promote prevention of disease. As a part-time sheriff's deputy, he said he also is well-suited to help in the preparation to combat bioterrorism.

Sen. Edward M. Kennedy, Massachusetts Democrat and chairman of the Senate Health, Education, Labor and Pensions Committee, said Mr. Carmona satisfactorily answered the questions posed and deserved to be confirmed, the Associated Press reports.

A vote yesterday to limit debate over his nomination was approved 98-0. He was then confirmed on a voice vote.

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