Senior Fellow Kevin A. Hassett

On November 23, the New York Times published an article, now disputed by Citigroup, that suggested Rubin was "the architect" of the bank's risky strategies that led the company to the brink of catastrophe.

For Rubin, the story could hardly have come at a worse time, coinciding as it did, with the announcement of extraordinary government measures to bail out the troubled bank. Taxpayers have now infused a whopping $45 billion into Citigroup, and agreed to insure an additional $306 billion of the company's mortgage-backed securities. People are angry and looking for a scapegoat, and Rubin seems to have acquired the unfortunate role.

It is impossible for an outsider to know to what extent Rubin was the architect of failed policies. What is far more interesting is that this public conversation about his culpability emerged now. The Rubin episode provides a telling glimpse of everything that is wrong with the American media.

The story begins with a mystery. For years, Citigroup has been a company that has engaged in highly questionable actions.

How bad has it been?

Try this. Professors Bruce Mizrach and Susan Zhang Weerts of Rutgers University recently published a scholarly paper titled, "Does the stock market punish corporate malfeasance? A case study of Citigroup."

Catalogue of Misdeeds

In the paper, the authors catalogue a long series of corporate misdeeds. Using the news source LexisNexis, the authors found 79 separate events from 2001 to 2004 that involved the word "probe" or the word "subpoena." The events ranged from trivial episodes to big headline-grabbing stories, such as Citigroup's links to Enron Corp. and WorldCom Inc.

The links weren't just loose associations. With regard to Enron, Citi was accused by the Securities and Exchange Commission of, among other things, helping Enron inflate reported cash flows and understate debt. The cumulative cost to shareholders of this wrongdoing was significant.

Mizrach and Weerts report that in 2004 alone, Citi paid $4.95 billion to settle litigation issues.

So here is the puzzle: Why has Citi's public image been so little tarnished amid all of these problems? After all, there are many U.S. companies that have had image problems over the same time. It has been open season on oil companies, drugmakers, Wal-Mart Stores Inc. and Halliburton Co., just to name a few. What explains Citi's magic?

Immune to Criticism

The best answer is that Citi has existed in a place that is uniquely immune to criticism because of the biases of the mainstream media. It isn't liberal-media bias that has protected it. It isn't conservative-media bias, either. It's both.

Assume, for the sake of argument, that all of our main media outlets are either conservative or liberal. In this world, the news isn't the product of left-wing bias, but rather, the outcome of a complex war for the truth between outlets that are biased in opposite directions. In such a world, there is nobody to criticize Citi.

Conservative outlets are loathe to demonize companies in general because their ideology insists that corporate malfeasance tends to be the trumped-up accusations of ambitious, intrusive regulators such as Eliot Spitzer. But if Citi gets a free pass for its behavior from the right, then Rubin can't be demonized.

Truce Ends

Liberal outlets, which will run former Senator Phil Gramm out of town for speculating that the economy might not be so bad, will be equally loathe to criticize Citi because Rubin, the leading face of Democratic economics and top adviser of President-elect Barack Obama and Senator Hillary Clinton, is also the most-visible figure at the company.

All of that has worked just fine. That is until now, with the election over with and out of the way.

Now that Obama has been elected president, Rubin, a sensible economic centrist, has a new set of enemies: the liberals in his own party. The left is waking up to the fact that Obama's economic team, an army of Rubin proteges, will doubtlessly work to thwart, as Rubin did in the 1990s, a good bit of the agenda of the far left.

Attempts to undermine Rubin and his team have no political cost to the left. But there might be political gain if Rubin is discredited. For the liberal side of the media, the hunting season is open.

And after the left side of the media has engaged, the right side won't be able to help itself, and will pile on. The chance to damage the new president will be too alluring.

In an ideal world, politics wouldn't influence the dispersal of public news about companies. It is an indictment of everyone in the media that Citigroup avoided the public stain of its misdeeds for so long. Only now is it gaining the scrutiny it has so long deserved.

Kevin A. Hassett is a senior fellow and the director of economic policy studies at AEI.