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During their very, very short times at the helm of the nation’s most boring bank, Robert Rubin and Vikram Pandit apparently devised and implemented a brilliant and nefarious plan to seize the levers of power in Washington.
Several alumni of the bank, which was bailed out by U.S. taxpayers during the financial crisis, hold top jobs in government and at the Federal Reserve—a sign that Citigroup’s reputation is on the mend after the lows touched during the 2008 turmoil. But some lawmakers and advocacy groups are raising concerns that Citi’s newfound favor with government gives it inordinate sway within the Obama administration….
At least five former Citigroup officials now hold top jobs in Washington, including Treasury Secretary Jacob Lew, U. S. Trade Representative Michael Froman and the Treasury’s Nathan Sheets, who is awaiting confirmation as undersecretary for international affairs.
Stanley Fischer, who was previously a vice chairman at Citigroup, was nominated in February to be the Federal Reserve’s next vice chairman, while Marisa Lago is now Treasury’s assistant secretary for international markets and development….
The recent round of appointees were originally recruited to Citigroup from top government and economic posts, part of a push by former executives, including ex-Chairman Robert Rubin, himself a former Treasury secretary, and former Chief Executive Vikram Pandit to hire government officials who could raise the bank’s international profile, said people involved in the effort.
Citigroup sought out economic, regulatory and business leaders who could work easily with overseas CEOs, the people said.
Those less prone to the wearing of tin-foil hats may scoff. They may point out that before moving to Citi, Bob Rubin was Treasury secretary, and probably knew a whole lot of government officials whom he might like to work with again. Or that Vikram Pandit was way too busy landscaping and being tossed out of a job to be planning a coup d’etat of his own. But what about this:
Another person said it was “absurd” to suggest that the bank knew that those high-profile hires would later go back into government and help boost Citigroup’s image.
But the bank did offer pay packages to some officials that rewarded a return to high-profile government jobs, in some cases giving big payouts upon leaving.
In any event, like much else masterminded by Vikram Pandit, things might not be working out as planned.
There is little evidence the connections have helped so far, in part because Wall Street remains under stiff scrutiny and toughened rules in the wake of the 2010 Dodd-Frank law. Citigroup, along with all big banks, is subject to higher capital requirements and the Volcker rule ban on proprietary trading.