Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

May 6, 2009


Sam Smith, Shadows of Hope, 1994 - Early in the [Clinton] administration, the new national economic advisor Robert E. Rubin wrote numerous clients of his former firm, Goldman Sachs, inviting them to stay in touch. Rubin, who had been one of Wall Street's "four horsemen" of leveraged takeover arbitrage, and who would shortly submit a financial disclosure form listing an estimated income in 1992 of $26.5 million from his GS partnership, wrote:

"I hope I can continue to rely on your interest and support as I move from Broad Street in New York to Pennsylvania Avenue in Washington, DC., and would be grateful for whatever suggestions you would offer. "

The story appeared on the front page of the New York Times. The Times quoted a federal lawyer who declared: "It doesn't strike me that there's anything there that would raise any kind of specter of a violation of law or regulation." A former Bush Administration ethics official, while insisting on anonymity, told the Times: "Assuming severance of all financial ties, there is no legal prohibition to dealing with former clients and employers, but we always tried to negotiate a grace period of a year or so" before resuming contact.

By Washington standards the exculpatory quotes of the anonymous federal and Bush administration officials had cleared Rubin and the story died.


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