Congress and Citigroup

http://www.nytimes.com/2010/04/09/business/09panel.html?emc=eta1

http://online.wsj.com/article_email/SB10001424052702304198004575171712663412230-lMyQjAxMTAwMDAwOTEwNDkyWj.html

http://online.wsj.com/article_email/SB10001424052702304198004575172251738485686-lMyQjAxMTAwMDAwOTEwNDkyWj.html

The testimony this week by Charles O. Prince III, Citigroup's former chairman and chief executive, and Robert Rubin, Citigroup's former vice chairman and former Treasury secretary, sparked interest for those following the event.

While Prince apologized for his role in the crisis (taking the wind out of the outrage evident with some members of the Financial Industry Oversight Committee), Rubin repeatedly played down his role as chairman of the executive committee of Citigroup's board. This was met with anger and disbelief.

Phil Angelides, the committee's chairman, told Rubin that "You were either pulling the levers or asleep at the switch." He added, "You were not a garden-variety board member. I think to most people chairman of the executive committee of the board of directors implies leadership. Certainly $15 million a year guaranteed implies leadership and responsibility."

While we don't even think Prince was qualified to be CEO of Citigroup (he was, basically, Sanford Weill's lawyer over the years that led up to the creation of that monstrosity in 1999), his apology before the committee and the public was well intended. As for Rubin, there is no hope. He is a greedy, selfish putz who had no idea what the financial instruments were (by his own public admission) that were risking his company and the worldwide financial system.

Parenthetically, we're not sure that anyone was qualified to be CEO of Citigroup. Sanford Weill and John Reed "founded it" (and, of course, were co-CEOs and that never works). It was literally too big and to complex to run.

Basically, the big takeaway from the committee event this week was best expressed by Peggy Noonan who summarizes:

"Citigroup testifiers: We didn't do anything particularly wrong, and what we did was all so sad, isn't it? Sad, subprimed and tranched.

Commission: Yes, all so sad and tragic. Somebody's head should roll. I like your tie. Can't we do better than this?"

The real action will take place in the Senate when Senator Dodd's bill gets voted on. If that bill includes what Elizabeth Warren (and others) is looking for (some type of Consumer Protection Agency that supersedes all other regulators), there's a chance for better financial regulation.

We choose hope.