- The Washington Times - Tuesday, September 10, 2002

In July, Senate Governmental Affairs Committee Chairman Joe Lieberman asserted that he would subpoena the Enron-related testimony of former Treasury Secretary Robert Rubin "in a minute" if the senator believed that Mr. Rubin could "add something." Since then, there have been important developments on several fronts. In that context, Mr. Rubin's testimony would undoubtedly prove to be more illuminating than ever.

Last month, the Justice Department's Enron Task Force secured guilty pleas from a senior Enron financial executive, who admitted to laundering money and engaging in a conspiracy to commit wire fraud. In addition, the House Financial Services Committee has released eye-opening information relating to the preferential distribution of red-hot, extremely profitable initial public offerings (IPO) shares by Salomon Smith Barney, Citigroup's investment-banking firm. The IPO information which Citigroup refused to supply until after the committee issued a subpoena strongly suggests that Salomon used the IPOs as an inducement to gain future underwriting fees or as a quid pro quo for banking services previously rendered.

New York Attorney General Eliot Spitzer recently broadened his ongoing Salomon probe to include an investigation of Citigroup CEO Sandy Weill. Mr. Spitzer wants to know if AT&T board member Mr. Weill pressured Salomon telecom analyst Jack Grubman into upgrading his rating of AT&T to "buy" in order for Salomon to lucratively participate in a huge underwriting for AT&T. Meanwhile, the powers-that-be at Citigroup forced Mr. Grubman to resign last month amid seemingly countless federal, state and regulatory investigations into his activities. Mr. Grubman, who relentlessly praised the stocks of numerous telecoms until moments before they declared bankruptcy, walked away with a $30 million platinum parachute. Finally, in July it was revealed that Citigroup had designed complex financing arrangements in recent years that had the effect of hiding billions of dollars of Enron's debt from investors who purchased now-worthless Enron debt securities underwritten and marketed by Salomon.

Long before the recent spate of Citigroup's self-inflicted adverse developments, Mr. Lieberman should have invited Mr. Rubin to testify about his strong-arm, influence-peddling telephone calls last fall. As Enron was hurtling toward bankruptcy in November, Mr. Rubin called an undersecretary of treasury who had previously worked for him in the Clinton administration. Mr. Rubin sought the undersecretary's highly improper intervention with a credit-rating firm that was poised to downgrade Enron. Having failed to obtain the Treasury Department's intervention on behalf of Enron, who owed Citigroup billions of dollars in bank loans, Mr. Rubin later attempted to call a rating firm himself.

Apart from demonstrating questionable ethical judgment in the Treasury Department contact, these calls represent extensive "hands-on" involvement with Enron by Mr. Rubin, who seemed to have his hands in numerous Citigroup pots. He joined Citigroup in 1999 as a director on the board, the chairman of Citigroup's executive committee, a member of the three-person Office of the Chairman and a member of the Citigroup Management Committee. Before joining the Clinton administration, Mr. Rubin served as co-chairman and co-senior partner at Goldman Sachs & Co. So, it's safe to assume he has an intense interest in investment banking.

Given the spate of scandals, why wouldn't Mr. Lieberman be interested?

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