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Citi's Bob Rubin Is Back In The Game;

Politics, that is. He has Kerry's ear, and
that improves the candidate's credibility

By Marcia Vickers
Business Week
October 25, 2004

On Oct. 12, the eve of the presidential debate
focusing on the economy and other domestic
issues, Robert E. Rubin, who serves as John
Kerry's top economic adviser, says most folks
have no clue who he is. "They don't remember
me. Do you think they do?" he ponders in his
self-effacing way.

Financial types certainly know who Rubin is.
And given the number of TV appearances he
has made lately -- four in the last two weeks
-- the average guy on the street may now
recognize him, too. Rubin, a Citigroup director
and former Treasury Secretary under Bill
Clinton, has been out promoting the paperback
debut of his book, "In an Uncertain World." But
he's using the opportunity to talk up the
Democratic presidential nominee.

Rubin's name is continually invoked on the
campaign trail. During the Oct. 8 debate, even
President George W. Bush mentioned Rubin
when he pooh-poohed Kerry's plan to keep jobs
from going overseas: "Robert Rubin looked at
his plan and said it won't work." Says Rubin:
"Bush misunderstood me. Kerry has his head
on very straight in terms of economic policies."

Whatever the case, having Rubin at Kerry's side
is a good strategy, say experts. Says Greg
Valliere, chief strategist at Charles Schwab
Corp.'s nonpartisan Washington Research Group,
"Rubin absolutely helps the Kerry ticket. He
reminds people of the mid-to-late 1990s, when
investors did well." Indeed, the "Bring back Bob"
chants seem to be getting louder, even from some
Republicans. Says Peter G. Peterson, co-founder
of the Blackstone Group and a longtime Republican:
"He engineered one of the most responsible fiscal
periods in recent American history."

Rubin, 66, is not officially part of the Kerry campaign.
But that doesn't mean he's averse to Kerry-related
close-ups. At the Democratic National Convention
in July he sat next to Teresa Heinz Kerry during her
husband's speech. On Sept. 15, he was with Kerry
at the Detroit Economic Club while the candidate
slammed Bush's policies and spelled out his own.
Says Gene B. Sperling, director of the National
Economic Council under Clinton and part of Kerry's
election team: "When Kerry has to make major
speeches or policy decisions, the senator almost
always asks that Bob be in the room or on the
phone." Rubin says he was holed up with Kerry for
two days this summer and has had countless phone
chats with him since. "He just called me this
weekend," says Rubin.

Kerry and Rubin work well together, but don't agree
on everything. "Kerry is more committed to
middle-class tax cuts than Bob," says a campaign
source. "Bob would rather take the deficit reduction."

No doubt, Rubin is in his element when talking about
reducing the annual budget deficit, now at around
$415 billion. He argues that it will lead to high interest
rates, which will curb investor enthusiasm and put the
brakes on the recovery. And to put it bluntly, Rubin
thinks Bush's tax cuts, especially those for the
wealthiest Americans, stink.

Rubin has his critics. "You need tax cuts to stimulate
investment and jobs," says Stephen Moore, head of the
Washington-based antitax Club for Growth. He adds
that "getting rid of deficits doesn't make interest rates
go down." Others say Rubin closed the budget gap
mainly because of the tech boom, when high
productivity and a bull market powered the economy.

If he helps Kerry win the election, Rubin is likely to
go to Washington as well. "I think he's bored with
what he's doing at Citigroup," says a close business
associate involved in the Kerry campaign. "My sense
is that he really wants to be the next Fed chairman."
Rubin denies this: "My mind isn't there right now."

What about Rubin's record at Citigroup, which has
seen its share of scandals? Critics are dismayed that
he emerged unscathed. A year after he joined in '99,
Rubin made a call to the Treasury Department to
intervene on behalf of Enron Corp. Soon after, Citi
was hit hard by the analyst scandal and had to split
its investment banking and research arms. And
Japanese regulators recently ordered the bank to
shut its private-banking operation because of legal
violations. Says Rubin: "Citigroup has a great
management team. It will work these things out."

Rubin says he has always had a hankering for public
life. If Kerry is elected, folks will likely once again
be reminded just who Bob Rubin is.


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