Today is Day 2 of the Congress grilling CitiGroup execs over the subprime mortgage crisis. Robert Rubin, the consummate ‘Insider’ of both Wall Street and Washington Beltway power brokers, is claiming he knew nothing at all about CitiGroup’s holdings of some $43 Billion dollars worth a ‘toxic’ assets prior to November, 2007. Yesterday, however, Citigroup’s chief underwriter, Richard Bowen, told the Financial Crisis Inquiry Commission that he warned the company’s top execs in 2006 on the problems facing subprime securities. Bowen went on to say that he continued to report to management on the looming disaster, which eventually led to CitiGroup writing off some $100 Billion dollars worth of toxic assets, and seek bailouts from U.S. taxpayers.

Robert Rubin is not singing the “Subprime Blues”. After all, he was largely responsible for this whole mess! Rubin worked his way up the ladder of Goldman Sachs (GS) from 1966 till 1992. His specialty was statistical arbitrage and made GS oodles of cash. He became a general partner in 1971, Co-Chairman of Operations in 1987, and Co-Chairman of GS in 1990. In 1992, Rubin threw a quiet dinner to introduce Wall Street’s top execs to presidential candidate, Bill Clinton. Once elected, Clinton first appointed Rubin in 1993 to head the White House National Economic Council (NEC) and then as Treasury Secretary in 1995.

Rubin helped usher in every aspect of the variety of causes that ultimately led to the financial meltdown of 2008. He helped push NAFTA through, supported the Community Reinvestment Act (CRA) changes, opposed regulation of the derivatives market, and paved the way for loosening the mortgage industry, allowing subprime lending to flourish. Rubin, along with his assistant, Larry Summers and Fed Chairman Alan Greenspan dealt with the early rumblings of the global economy: the Mexican bailout and the ‘Asian Contagion’. Rubin, along with Summers, also supported the repeal of Glass-Steagal, which prohibited banks from selling investment securities.

Leaving ‘public’ life, Rubin was hailed by Bill Clinton as “the greatest secretary of the Treasury since Alexander Hamilton.” Despite warnings from others, like Brooklyn Born, head of the Commodities Futures Trading Commission (CFTC), Rubin, along with Greenspan, prevented meaningful regulation and oversight to the rapidly growing, exotic world of derivatives trading. One could make the argument that since his tenure at Goldman Sachs, Rubin was very responsible for the creation of this market.

In 1999, Rubin joined CitiGroup as a board member. In 2001, Rubin received much criticism when he attempted to convince officials at the Treasury Department to influence bond rating firms not to downgrade Enron. Remember them? Enron was in deep with CitiGroup and wanted to restructure it’s debts. But the Treasury refused to intervene. A Congressional hearing cleared Rubin of any criminal wrong doing.

In 2007, Rubin stepped in as CEO of CitiGroup when Charles Prince was forced to resign. Prince, who apologized today in his opening statements for his role in the subprime fiasco, left on Nove,ber 4th after CitiGroup announced that it had to write off some $8-11 Billion dollars worth of subprime assets that were toxic. In 2008, Rubin, along with other CitiGroup execs, began selling off much of their personal stock holdings in the company. Good timing I guess! In December of 2008, a class-action lawsuit was filed against Rubin and other execs for selling stocks at “inflated prices” while hiding the true value of the firm from the public. Rubin resigned from CitiGroup in January, 2009. Since then, he has become a regular advisor to the Obama administration. Current Treasury Secretary, Timothy Geithner, had worked under Rubin and has often consulted with him. Nice!

And so it goes on. Rubin, as did Greenspan yesterday, denies knowing anything at all about what was going. Whatever warnings were quickly dismissed as statistical anomalies. Congress will continue to grill bank execs and government officials. In the end, it will lead to nowhere and Wall Street will return to Business As Usual.