There is a funny little ritual that senior Citigroup Inc.

executives go through these days when they introduce their colleague Robert

Rubin, the former U. S. Treasury Secretary. They’ll start with an insider’s

crack about his time at a “tiny little firm called Goldman.” They’ll finish

with hosannas.

So it went on Oct. 17, when Citigroup vice chairman Deryck Maughan stepped up to the

podium in the Salomon Smith Barney auditorium at 388

Greenwich Street, ready to introduce Citigroup’s

resident pop icon. A packed house of clients and Japanese investors (the event

was co-hosted by the Japan Society) sat rapt, waiting for the show to begin.

“Now, if I don’t do this right, I have to answer to the

chairman of Citigroup’s executive committee, so I’ve got a particularly

effusive introduction prepared,” said Mr. Maughan,

his British accent smoothed out by the 10-plus years he’s spent in Manhattan

boardrooms.

Soon came the Goldman dig: “As to Bob, he is best known for

his role at Citigroup, though there was a time that he was a managing partner

at a smaller firm called Goldman Sachs, where we first met.”

Then came the acclaim: “Bob has served

his country in an extraordinary fashion, a role that President Clinton

acknowledged when he awarded him the Medal of Freedom.”

As usual, Mr. Rubin responded with a wry crack: “That’s the

whole intro? I’d hardly call that effusive-more in the neighborhood of

adequate, I’d say.”

Lately, this ritual has begun to take on more meaning. Mr.

Rubin is in a position of great influence at Citigroup, sitting at the right

hand of Sandy Weill, the chairman and chief

executive. Insiders are saying, if he doesn’t take the job himself, he’ll be

instrumental in selecting the successor to the 68-year-old Mr. Weill when Mr. Weill chooses to

step down.

The circle of possible successors has been shrinking

rapidly, but  the

contenders are believed to include Mr. Maughan; Mike

Carpenter, chairman and chief executive of Salomon Smith Barney; and Victor Menezes, the Citibank chairman responsible for emerging

markets.

A number of Mr. Weill’s would-be

successors have already departed Citigroup, including Jamie Dimon,

his protégé, forced out in November 1998; Robert Lipp,

who headed consumer operations and remains a board member; and Joseph Plumeri, a 20-year friend and associate of Mr. Weill’s.

There was also Jay Fishman, Citigroup’s chief operating

officer and former chairman of the Travelers Group, the conglomerate’s

insurance subsidiary, who announced his departure to a Minnesota-based

insurance company on Oct. 11-removing another contender from the short list.

Citigroup’s official position on the topic of Mr. Weill’s succession is that he’s not ready to leave yet and,

when he does, it’s an issue for the board of directors to decide. A spokesman

declined comment and did not make Mr. Weill, Mr.

Rubin or Mr. Maughan available for interviews.

But according to others familiar with the internal workings

of Citigroup, the succession appears more and more to be an issue that Mr.

Rubin may help decide-either by tipping his hand toward a candidate, or by

pleasing the board of directors and Mr. Weill and

accepting the position himself.

Road Show

These days, Mr. Rubin can often be found on the stump for

Citigroup, the firm that gave him a home-won him, actually-after he departed

his cabinet position and Washington, D.C.

Mr. Rubin will usually speak for 30 minutes, being careful

to say very little of note. He’ll mention the federal surplus, urging that the

pot of money he helped build up under President Clinton be preserved. He’ll

admonish against excessive tax cuts, offering the opinion that this is not the

way to go.

As to the future-well, it looks cloudy. “Before Sept. 11,

our economy was faced with many economic imbalances: overinvestment by

businesses, high levels of consumer debt and, until recently, the high level of

the stock market,” Mr. Rubin noted on Oct. 17. “The events of Sept. 11 have

added to all this. In my view, the likelihood of a considerable period of

economic uncertainty has increased.”

He was the master, as usual, of self-deprecation, prefacing

many of his comments with “I’m no expert” or “There are others who know much

more than me.” In place of specifics-”If you could just tell us, Mr. Rubin,

what you are investing in these days,” cooed CNBC anchor Consuelo Mack, who was

moderating the session-Mr. Rubin merely offered that smile.

The low-key Rubin charm was, however, lapped up by the

audience of Japanese investors and clients. And they are not alone. Everyone,

it seems, from Republican Senators to Treasury Secretary Paul O’Neill to

Federal Reserve chairman Alan Greenspan-to say nothing of those on Mr. Weill’s short list-wants to bask in the warmth of his

still-very-considerable glow.

But around Citigroup, it’s more than his easy charm or even

his title: chairman of the executive committee of the Citigroup board. It’s Mr.

Rubin’s proximity to Mr. Weill in the power structure

(he is the second member of the office of the chairman, Citigroup co–chief

executive John Reed having been the third until he was forced out by Mr. Weill in February 2000), as well as his physical proximity

(his corner office abuts Mr. Weill’s at Citigroup’s

midtown headquarters).

And it’s also his apparent closeness to Mr. Weill. Mr. Rubin has emerged as the Citigroup C.E.O.’s

alter ego, his embodiment of the perfect Wall Street man-a throwback, perhaps,

to an old-line, clubbier type of banker that Mr. Weill

seems to admire. Unlike Mr. Weill, Mr. Rubin

conquered the Street from inside the boardroom-relying on his suavity, his

trader’s acumen and those perfect grace notes. And he’s here to stay, searching

now for an apartment, as he mentioned in his speech.

Handing over the reins of Citigroup to him would be the

perfect capstone to Mr. Weill’s career. But the

beauty of Bob Rubin is that he professes no interest in the position. It’s why

he’s climbed to such heights: He has mastered the art, rare in banking and

politics, of hiding the rawness of one’s ambition. He became Treasury Secretary

by seeming not to want it; now his almost blasé disregard for the Citigroup

post makes Mr. Weill and his board all the more

desperate to give it to him. Meanwhile, those who really want it seem

positively shrink-wrapped as they fight for it.

So far, Mr. Weill has yet to show

his hand, and he seems in no hurry to do so-indeed, he announced that no one

would replace Mr. Fishman in his Citigroup corporate position. And while Mr. Weill has said that he hopes to appoint a successor by

2002, nothing has been formalized. The board itself-stacked with friends and

supporters of Mr. Weill, and more than happy with the

stock’s performance under his leadership-seems ready to defer to him on the

issue.

Meanwhile, it’s anybody’s race-and for the moment, at least,

Mr. Maughan, 53, is putting his best foot forward. In

appearance, he’s as smooth as a banker comes: tall and strapping, his suit

always the darkest of blues, his silvery coif always very well maintained.

His rise to the top has been an unorthodox one. Ten years

ago, he was an obscure managing director for Salomon Brothers, working out of

the firm’s Tokyo offices. He hit

the ground at Salomon in 1983 as a bond salesman, having worked for 10 years

before that in London at the

British Treasury.

When Salomon chairman and chief executive John Gutfreund was forced out in 1991 because of the

Treasury-note auction scandal, then-shareholder Warren Buffet needed a fresh

new face, one free of the old take-no-prisoners Salomon taint. After a

10-minute interview, he selected the British-born Mr. Maughan

to reinvent the disgraced firm.

It was a difficult task, and Mr. Maughan

made enemies in the process as he steered Salomon away from its ballsy, bond-trading

roots to the more disciplined, broad-based and less controversial firm that Mr.

Buffet wanted it to be. In 1997, Mr. Maughan smartly

got Mr. Weill, then the chairman of Travelers-whom he

knew from their directorships for Carnegie Hall-to buy his firm for $9 billion.

At the time, the deal was hailed as another Sandy Weill stroke of genius: 1.7 times book for Salomon Brothers

and its swank offices in London and

Japan. Mr. Weill had always wanted to go global; now he’d be doing it

on the cheap.

Then came the Asian crisis and $395

million worth of global bond-trading losses. Ooops. In November 1998, the

long knives came out. Mr. Dimon-who together with Mr.

Maughan had been co-chief of Citigroup’s

investment-banking operations under the Salomon Smith Barney rubric-was ousted,

and Mr. Maughan was bumped upstairs and given the

vaguest of briefs: advising Citigroup on strategy.

Mr. Maughan is, however, a

notorious cultivator of powerful friendships. Charming Mr. Buffet had firmly

installed him at the top at Salomon, and Mr. Maughan

seemed bent upon doing the same with Mr. Weill. He

took over responsibility for Citigroup’s Internet strategy after Mr. Reed was

forced out in 2000 and was given mergers and acquisitions as well-a nice charge

to have when working for the acquisitive Mr. Weill.

He is also a man about town, still serving on the Carnegie board with Mr. Weill, as well as in directorships at the Lincoln Center

Theater and Mt. Sinai

Hospital.

Now, with Citigroup on the prowl for more acquisitions and

increasing emphasis being placed on its international operations, could it be

that Mr. Maughan’s ship is finally docking?

International Links

“There is no question he is on the short list,” says Michael

Holland, a money manager and former Salomon Brothers colleague of Mr. Maughan’s. “The stars surrounding Sandy Weill

always wax and wane. Whenever he decides to exit stage right, whomever’s most

luminescent will be the next C.E.O. In Deryck’s case, it is his international background that is

very big in his favor. And I would not underestimate the importance of the Deryck Maughan schmooze factor.

His ability to forge the important corporate relationships has always been

nonpareil. He identifies them, homes in on them and makes them.”

So Mr. Maughan was surely beaming

when Mr. Rubin, during his Q&A with the audience on Oct. 17, talked a bit

about Citi-group and its mergers-and-acquisitions

activities. “We need to take the long view. There is no question that we would

be receptive to acquisitions in strategic emerging markets at prices deemed

appropriate to Citigroup,” Mr. Rubin said. Then he added, with a nod of his

head to Mr. Maughan, sitting in the front row: “But

you should ask Deryck. He is in charge of M&A,

amongst other things at Citigroup.”