Goldman’s Washington relations hit a new low

By Felix Salmon
June 7, 2010
lashes out at its "you want documents? We'll give you documents" approach to cooperating with the government:

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Goldman Sachs has lost another $2 billion in market capitalization today, as the Financial Crisis Inquiry Commission lashes out at its “you want documents? We’ll give you documents” approach to cooperating with the government:

“We did not ask them to pull up a dump truck to our offices to dump a bunch of rubbish,” Angelides said during a conference call following the announcement that the FCIC had sent Goldman a subpoena Friday.

The tone of both Angelides and FCIC Vice Chairman Bill Thomas was notably angry…

Thomas said Goldman was deliberately delaying because it knows the FCIC must wrap up its investigation and deliver a report on the crisis at the end of the year. Angelides agreed, describing Goldman as making a “very deliberate effort to run out the clock.”

It’s hard not to be reminded, here, of the way in which the SEC came out swinging at Goldman Sachs with its Abacus complaint, without giving the bank the opportunity to respond or settle privately: it seems that Goldman is making a habit of rubbing Washington types the wrong way.

This comes as some surprise, from the bank often referred to as “Government Sachs” – whatever happened to the days in which one could barely tell the difference between government technocrats and Goldman executives? Goldman seems happy to jettison decades of goodwill in DC just out of spite: either that, or it really does have something to hide.

There is one other possibility, of course: that Goldman is being whiter than white here, and fully cooperative, and that Washington types are grandstanding and picking on Goldman because it’s the easiest target. I don’t believe it. Angelides and Thomas aren’t running for elective office: they’re just trying to get to the bottom of things. And Goldman is obstructing them. Which can’t be in its best interests. The echoes here of the Pecora hearings are very strong indeed; Charles Mitchell, the head of the supercilious and obstructive City Bank, didn’t survive those. Will Blankfein survive these?

Update: The FCIC has released more details (PDF). Essentially, Goldman stonewalled, and delayed, and produced incomplete data — until eventually they dumped five terabytes of data onto the commission. OK, now they have no benefit of the doubt whatsoever.

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