Robert Rubin spent 26 years at Goldman Sachs, then as Treasury Secretary helped repeal the Glass-Steagall Act that separated commercial and investment banking since the Great Depression, making the creation of mega-banks like Citigroup possible. He then immediately joined Citigroup's board, earning $126 million. When Citigroup collapsed in 2008, it received $45 billion in taxpayer bailouts. The bailout was negotiated by his proteges: Treasury Secretary Hank Paulson (ex-Goldman) and NY Fed President Tim Geithner.
“The revolving door between Wall Street and the Treasury Department creates a system where former bankers deregulate their own industry, profit from it, and then get bailed out by their proteges when it collapses.”
From “crazy” to confirmed
The Claim Is Made
This is the moment they called it crazy.
When Robert Rubin left the Treasury Department in 1999, he didn't exactly disappear from public life. Within months, he joined Citigroup's board, eventually earning $126 million from the financial giant. A decade later, when Citigroup collapsed and required a $45 billion taxpayer bailout, few people questioned whether the architect of the bank's deregulation had played a role in making such a collapse possible.
The claim that Rubin orchestrated banking deregulation specifically to benefit himself and his future employer has circulated for years among financial reform advocates. Critics pointed to his role as Treasury Secretary in repealing the Glass-Steagall Act of 1933, the Depression-era law that had kept commercial and investment banking separate for nearly 70 years. By eliminating this firewall, they argued, Rubin made it legal to create the very mega-banks that later brought down the financial system.
Defenders of Rubin's record countered that Glass-Steagall was an outdated relic and that deregulation was necessary for American competitiveness. They also noted that many economists, not just Rubin, supported repealing the act. The financial industry itself maintained that deregulation didn't cause the 2008 crisis, blaming instead a broader housing bubble and risky mortgage practices.
But the documentary record tells a more complicated story. Rubin spent 26 years at Goldman Sachs before entering government in 1993. His Treasury tenure from 1995 to 1999 coincided directly with the push to repeal Glass-Steagall, legislation he actively supported. The Sunlight Foundation's investigation documented his pivotal role in the repeal effort. Immediately upon leaving Treasury in July 1999, Rubin joined Citigroup's board.
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The timeline matters because Citigroup itself was the product of deregulation. The 1998 merger of Citicorp and Travelers Group—which created a financial behemoth that technically violated Glass-Steagall—required emergency legislative action. The following year, Rubin helped deliver. Glass-Steagall was formally repealed in November 1999, and Rubin was already on Citigroup's board.
When Citigroup needed rescuing in 2008, the irony became impossible to ignore. Treasury Secretary Hank Paulson—another Goldman Sachs veteran—and Federal Reserve President Tim Geithner, both proteges of Rubin, negotiated the bailout. The Washington Post documented these connections, showing how the same network that had deregulated banking was now salvaging it with taxpayer money.
The bailout wasn't Rubin's personal windfall; his Citigroup earnings had already been secured. But it raised a fundamental question about revolving-door capitalism: Had Rubin regulated banking in the public interest, or had he simply cleared the path for the industry that would later employ him?
The significance lies not in proving Rubin acted with intentional malice, but in recognizing how institutional incentives can align without requiring explicit coordination. When Treasury officials routinely move to lucrative private sector positions, and when those officials shape regulations affecting their future employers, the system itself becomes corrupted—regardless of individual intent.
This is why the claim matters. It's not about one man's choices, but about whether democratic institutions can function when the people making crucial financial decisions stand to profit from deregulation. The 2008 crisis suggests they cannot.
