Money and Power (26 page)

Rubin’s parents met at a benefit dinner-dance at the Waldorf-Astoria in 1933.
Alexander Rubin, who had graduated from Columbia Law School and was a property tax attorney, was at the benefit with a client who had made a large donation to a hospital and was being honored. During the course of the dinner, the client lamented that he had never married and urged Rubin not to make the same mistake. He suggested that his lawyer dance with one of the women seated nearby. After giving her the once-over, Rubin said he didn’t feel like dancing, but he thought another woman he saw in the balcony was more his type. Sam Seiderman overheard Rubin’s comment. “
You’d like to dance with that young lady?” he said. “That’s my daughter.” They would be married for some seventy years.

The Rubins lived in Neponsit, Queens. Bob Rubin was born in 1938. When he was three, the family moved from Queens to an apartment on West Eighty-first Street, in Manhattan, across from the American Museum of Natural History. He went to the Walden School, around the corner on Central Park West. During
World War II, Alexander Rubin offered to donate the family’s money-losing mica mine—which was a remnant of Morris Rubin’s business empire—to the U.S. government for the war effort. (Mica was used as a wire insulator for airplanes.) The government accepted the offer but then requested that Alexander run the mine. The family moved—briefly, it turned out—to Sylva, North Carolina, in the Great Smoky Mountains. “
The people in the town called my father ‘Jew man’ and ‘Mr. Jew,’ ” Rubin recalled. “It was a bit much for my mother, who felt as if she’d woken up in the wrong century.” Rubin,
his sister, Jane, and their mother moved back to New York, while Alexander stayed in Sylva and visited them every few weeks by train.

When Bob Rubin was nine, the family moved to Miami Beach to be closer to his grandfather and to allow his father to have a “calmer, more pleasant life.” Alexander Rubin built a shopping center, continued to practice some law, and played golf, as did his wife, who had a “shelf full of local club trophies.” On Bob Rubin’s first day in fourth grade at North Beach Elementary, his teacher announced to the class, “
Robbie Rubin has gone to a private school in New York and has never learned script. So let’s all be very nice to him.” That same day, over his protests, his classmates elected him class president. “I wasn’t the class president type, but in a funny way the designation stuck with me,” he wrote. “Though I was never a class leader, I held class positions intermittently throughout my school years.”

In his autobiography, Rubin described a typical, idyllic boyhood in post–World War II America. He rode his bike to school every day, had a paper route, read Hardy Boys mysteries, developed a lifelong love of fishing, and tried not to be too heavily influenced by Rabbi
Leon Kronish at the local temple. His parents had many friends, played golf and cards regularly, and hung out at the cabana club at the Roney Plaza Hotel. But, as he had briefly in North Carolina, Rubin again witnessed racial prejudice firsthand. He and his sister attended segregated schools, and the local Woolworth’s had white and “colored” drinking fountains.
Jane Rubin made a point of drinking from the “colored” drinking fountain and sitting in the back of the bus. Bob managed to thrive in that unsettling environment, partly by playing a fair amount of poker, at which he allowed he was “pretty good at.”

Rubin has described his admittance to Harvard as both a matter of luck and, in keeping with the established pattern, his election as president of his high-school senior class. “
My grades were good but not outstanding,” he observed, “and I came from a regular public high school.” But the critical factor, he maintained, was serendipity. At a Harvard Glee Club concert, Rubin’s father saw a lawyer he knew whose friend—the Harvard College dean of admissions—happened to passing through Miami at the same time. One thing led to another, and Bob Rubin had a fortuitous interview with the dean.

As a member of the Harvard class of 1960, Rubin was overcome by a feeling of inadequacy. Despite taking four years of French in high school, he failed the test to release him from the entry-level course. He couldn’t even get into the entry-level math course because he had not
taken calculus in high school. On the first day of freshman orientation,
in the fall of 1956, he took it to heart when the dean said that 2 percent of the class would flunk out.
“I looked around and thought that everyone else was lucky,” he later wrote, “because I was going to fill the entire quota by myself.”

At the end of his first year, Rubin was doing fine at Harvard. Since law school seemed to be his ultimate destination, he started off as a government major. But then Rubin switched to economics, which was largely taught as a conceptual course of study, rather than with the mathematical rigor of subsequent decades. “I found it difficult but engrossing,” he wrote. He worked with the Nobel Prize–winning economist Thomas Schelling on his—basically incomprehensible—125-page senior honors thesis, “Inflation and Its Relationship to Economic Development in Brazil.” Schelling had just moved from Yale to Harvard, and Rubin was his only advisee. The subject appealed to him, Rubin later wrote, because it
“seemed a potentially fruitful area for entrepreneurial involvement,” whatever that means.

Atypically, Rubin spent the summer between his junior and senior years hanging around Cambridge
“with no job, sleeping on a broken couch in the living room of a shared apartment, and working on my thesis to get a head start.” Researching and writing the thesis “in the stacks of the Widener Library every day” turned out to be one of his best memories of Harvard, along with occasionally hanging out in coffeehouses in Harvard Square contemplating existentialism and the meaning of life.

Rubin didn’t find his “sense of belonging” at Harvard until his senior year. He admitted that his early anxiety about whether he should be at the school was unrealistic but concluded that the paranoia spurred him on and was a “powerful driver” for him. “After thinking I wasn’t going to cross the finish line,” he wrote later, he managed to graduate from Harvard “with the unexpected distinctions” of Phi Beta Kappa, summa cum laude, and a “summa minus” on his Brazil thesis. He had applied—and was accepted—to Harvard Law School and the Harvard PhD program in economics. Apparently as a joke, after graduating from Harvard, Rubin sent a letter to the dean of admissions at Princeton, where he had been rejected four years earlier.
“I imagine you track the people you graduate,” he wrote. “I thought you might be interested to know what happened to one of the people you rejected. I just wanted to tell you that I graduated from Harvard summa cum laude and Phi Beta Kappa.” He received a letter back. “Thank you for your note,” the dean wrote. “Every year, we at Princeton feel it is our duty to reject a certain number of highly qualified people so that Harvard can have some good students too.”

In the fall of 1960, Rubin showed up again in Cambridge but with little enthusiasm for gearing up anew for the rigors of law school. After three days, he went to see the assistant dean to tell him he was dropping out. The dean was unsympathetic. “You’ve taken a place somebody else could have had,” he told Rubin.

“I told him that I was
dropping out anyway,” Rubin explained.

The dean told him that unless there were “extenuating circumstances,” Rubin would not be readmitted to Harvard Law. They kept talking, though, and the dean said that if Rubin would go to a psychiatrist, get examined, and it was determined that he was making a reasonable decision, he would be readmitted the following year. The psychiatrist told Rubin that when he was about to start medical school, he took a year off instead. Rubin was fine, the psychiatrist told him, but “
perhaps the dean ought to come see him if he found what I wanted to do so troubling.” With a free option on Harvard Law School in hand, Rubin wondered how to spend his next year.

After realizing it was too late to apply to academic programs at Cambridge and Oxford, he ended up applying by cable to the London School of Economics, “emphasizing my Harvard credentials.” The school cabled him back with an acceptance. Only then did Rubin tell his parents he was dropping out of Harvard Law School for the London School of Economics. Before he could head to London, though, Rubin had to return to Miami and get the approval of the local draft board to be deferred from the draft while studying abroad in graduate school, an acceptable option as long as the school was properly accredited. The Miami draft board rep had never heard of the London School of Economics. “
The trouble with boys of your race is they don’t want to go to war,” he told Rubin. To get the draft board’s approval, Rubin asked
Arthur Smithies, the chairman of Harvard’s economics department, to write a letter stating that the London School of Economics was the real deal. It worked.

Aside from a school trip to Cuba—when that was still possible—and a family trip to Mexico, Rubin had never been abroad before. His account of the year seems particularly self-indulgent. He was “an occasional student” at the school, “working toward a certificate rather than a real degree,” allowing him to do what he pleased, which was pretty much what he did. “
I spent most of my time talking to people,” he wrote. “The sense of freedom was marvelous. In my lodgings on Earls Court Road, I could make dinner at midnight, sleep late, and then wake up and read all day if I felt like it.”

Along with his traveling companion,
David Scott, Rubin also indulged his wanderlust. He hitchhiked in England, albeit wearing a suit
and a hand-lettered sandwich board with the plea “two Harvard students need ride” on it. He went skiing—for the first time—in Austria and spent six weeks in Paris, during Christmas vacation, living in a cheap hotel on the Left Bank reading
Jack Kerouac and
Arthur Miller. He spent Easter in Italy, and that summer drove around Denmark, Norway, and Sweden with Scott.

By then he could choose between either Harvard Law School or Yale Law School, where he had applied, and been accepted, in the interim. “
I didn’t necessarily want to be a lawyer,” he wrote, “but law school seemed to keep a lot of options open.” In the end, he chose Yale over Harvard because, he concluded, at Harvard “you sit around and discuss contracts,” and at Yale “you sit around and discuss the meaning of good and evil.” Rubin also, apparently, spent time debating the meaning of life, and he nurtured a skepticism that had initially been encouraged in him by his rabbi in Miami,
Leon Kronish, and then again by a Harvard philosophy professor,
Raphael Demos, who “burned into Rubin the necessity of challenging assumptions and beliefs.”

——

W
HILE AT THE
London School of Economics, Rubin met
Judy Oxenberg, who was a friend of a woman he had dated at Harvard. She was a junior at Wellesley College and Judy and his old girlfriend were passing through London on their way to spending the summer in France. He remembered being struck by Oxenberg’s beauty when he saw her that night. During Rubin’s second year at Yale Law School, the two started dating after Oxenberg showed up at Yale to study graduate-level French. She was also interested in classical music, theater, and dance. They shared, Rubin wrote, “
a sense of curiosity about everything around us, from the people we knew to world affairs to the books the other person had read.” By November of his final year at law school, the couple was engaged, and they were married the following March at the Branford Chapel at Yale.

Even though Rubin had some vague notion of returning to Miami and joining his father in the real-estate business, ultimately one does not spend three years at Yale Law School without some expectation of becoming a lawyer, even if it turns out to be for just a short period of time. After graduating from Yale Law, Rubin sought a job at a number of prominent New York City corporate law firms. In the end, he chose
Cleary Gottlieb because “
it had a more comfortable environment” and was smaller than other firms but equally “establishment.” He and Judy lived in a basement apartment on Henry Street in Brooklyn Heights, with the rent subsidized by his parents. They commuted by subway to Manhattan:
Rubin to offices on the southern tip of the island and Oxenberg to occasional acting gigs in and around the Broadway theaters.

Rubin liked the “cachet” of Cleary Gottlieb and “being part of an establishment organization” but doing research for major litigations or corporate matters or tax analysis on personal estates was not for him. Like many lawyers who work on Wall Street deals, Rubin marveled that the investment bankers seemed to be making the interesting business decisions and getting paid grand sums while the lawyers dutifully recorded the proceedings for (hefty) by-the-hour billings. “When I’m forty,” Rubin thought, “I want to be doing what those guys are doing, not what we’re doing.”

But Rubin had no intention of waiting until he was forty to make the switch. After a couple of years at Cleary, he sent out a bunch of résumés to Wall Street firms, hoping to get into the deal business. “By sheer coincidence, two firms offered me jobs doing something I’d never heard of,” he said. He chose Goldman over Lazard, he said, because it was “considered the top firm in the arbitrage field,” thanks to Levy’s skill and cunning and because “
the pay was slightly higher.” He joined Goldman in October 1966. But he worried he could not do what an arbitrageur was required to do: “
get on the phone and interview executives at companies about transactions”—make the calls. “I wasn’t sure I could be so audacious.” His annual pay increased to $14,400 a year, from $13,000. He had heard from a variety of people that working at Goldman, as opposed to Cleary, “was a step down on the social scale.”

One of Rubin’s earliest deals, from September 1967, involved medical equipment manufacturer
Becton, Dickinson’s announced $35 million stock deal for
Univis Lens Co., a maker of eyeglass lenses. Rubin set about making his calls. “
The first order of business was rapid, intensive research,” Rubin observed. “I had to examine all the publicly available information I could obtain. I had to talk to proxy lawyers and antitrust lawyers. Then I had to speak to officers at both companies, much as a securities analyst does. I almost never had all the information I would have liked. Seldom did I have enough time to think anything through.” Unfortunately for Rubin, the merger fell apart.