KADEN DEMOTED

The last member of Citigroup’s triumvirate that oversaw its disastrous foray into alternative investments clings to a reduced leadership role.

© by Mark Reutter
Posted 1/24/10

Citigroup sources have rather gleefully leaked to the Wall Street Journal and New York Times that Lewis B. Kaden has been stripped of two important duties as head of the legal and compliance staffs at the troubled bank.

This still leaves Kaden responsible for overseeing human resources, strategic planning, mergers and acquisitions, audit and risk review, global government affairs, international franchise management, and the Citi Foundation, according to Citi’s website. He retains his title of vice chairman.

No official confirmation of his demotion has been made by Citigroup. Kaden’s tenure at Citi – along with his role in the dismemberment and sale of Bethlehem Steel Corp. – was the subject of our May 4, 2009 profile, “The Talented Mr. Kaden.”

Kaden was once responsible for overseeing Citi Alternative Investments, which lost billions of dollars in the financial crisis. More recently, Kaden was involved in negotiations with the federal government, including Timothy Geithner, then president of the New York Federal Reserve Bank, to receive TARP aid.

Kaden is the last member of the triumvirate who ruled Citi prior to the financial crisis. The other members were then-CEO Charles Prince and then-Senior Advisor Robert Rubin.

Kaden remains on the board of ArcelorMittal, together with Wilbur Ross, the New York financier who bought bankrupt Beth Steel in 2003 and, in the process, stripped away the health-care benefits for 90,000 Beth retirees. At that time, Kaden was a Beth Steel board member and senior partner of the Wall Street law firm Davis Polk & Wardwell.

Kaden’s job performance at Citi was ranked as sub par last year by an independent consultant.