Robert Rubin, former Goldman Sachs (GS) chief, Treasury chief, and lead director at Citigroup (C) should have been flying to Washington once a week last year. He could have thundered about bank accounting in front of all the Congressional committees that now want to recast and re-regulate the industry.

One of the whipping boys favored by bank boards and CEOs when they defends themselves from accusations that they ruined the industry by making bad investments is the "mark-to-market" accounting rules.

According to Bloomberg, Robert Rubin, who quit his post as senior counselor at Citigroup Inc. this month, said an accounting rule forcing companies to mark down assets every quarter to reflect market value has "done a great deal of damage."

Rubin’s complaints are a dodge, and not a very artful one. He may want to move the spotlight away from the critical issue, which is that the investments that banks made in mortgage-backed securities were reckless.

He could not take his current position on accounting treatment two years ago. It would have looked like he was setting up the auditing system to make Citigroup’s results look better by using reporting practices that would have concealed poor risk management.

Douglas A. McIntyre

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