Robert Rubin's 'New Capacity'

February 11, 1993

Robert E. Rubin, who gave up his job as co-chairman of the investment giant Goldman Sachs to be aide to President Clinton, sent the firm's clients a letter assuring them that though he was leaving, they would be just as well served by the firm in the future. Clearly nothing wrong with that. But he also wrote, "I also look forward to continuing to work with you in my new capacity." There's a lot wrong with that.

In his new capacity there will be many occasions when Mr. Rubin should not "continue to work" with former clients. That is to avoid both the appearance and reality of a conflict of interest. Some entities that are clients of other investment firms will also have an an interest in decisions made by Mr. Rubin in the White House. And, of course, the national interest must always take precedence over that of his old clients and his friends at Goldman Sachs.

Mr. Rubin's "new capacity" is not exactly minor. He is chairman RTC of the National Economic Council. This is the new entity the president created to coordinate economic policy the way the National Security Council coordinates policy in that field. There are already signs the NEC chairman will be as influential as anyone in the field of economic policy-making -- including the secretary of the Treasury and the director of the Office of Management and Budget. Unlike both those men, Mr. Rubin meets with the president on a daily basis.

Congress has an oversight -- a watchdog -- role when it comes to ethical lapses and conflicts of interests in the White House. It finds it easier and more enjoyable to perform that function when the party in the White House is different than the party that controls Congress. In fact, it is much more important that oversight be diligent in times of partisan harmony. That is because of the human temptation to cut corners or take advantages when no one is looking.

The letter Mr. Rubin wrote Goldman Sachs clients shows he is human to a fault in this regard. The appropriate members of Congress, even if they assume this was an innocent mistake, should take it as a reminder that they have a duty to keep an eye on Mr. Rubin and the NEC.

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