Writing the official history of the financial crisis is no small task.
But the leaders of the Financial Crisis Inquiry Commission took on an even more thankless job Monday: Trying to shame Goldman Sachs, Wall Street’s most shameless firm, into acting like a responsible citizen.
The leaders of the FCIC, the congressionally appointed panel charged with reporting to Washington on the roots of the crisis by Dec. 15, called out Goldman Monday for being uncooperative.
Chairman Phil Angelides, a Democrat, and Vice Chairman Bill Thomas, a Republican, said the firm wasn’t doing God’s work when it came to providing information promptly and in usable form.
Instead, they suggested, it has been going out of its way to impede their efforts and run out the clock on their inquiries — all the while striking the familiar “who me?” Pose.
Angelides, who made a fortune in real estate before serving as California’s treasurer, called Goldman’s performance “abysmal” and “unacceptable.” Unlike other big investment banks questioned by the commission, he said, Goldman produced reams of incomplete data in an apparent effort to bury commissioners in meaningless detail.
“We did not ask them to pull up a dump truck and dump a bunch of rubbish on us,” Angelides said on a conference call with reporters. “We shouldn’t be forced to play Where’s Waldo on behalf of the American people.”
Thomas, who spent nearly three decades in Congress, said Goldman’s actions suggest to investigators that “maybe there’s more to cover up than we thought.”
Goldman said in response to news of Friday’s subpoena that it its cooperating with the commission – a claim that served to further enrage the commissioners. Thomas said it “disturbs me to hear Goldman say they are cooperating.”
We have seen Goldman run out the clock before, most notably in the April hearings in the Senate (pictured above) at which one former Goldman executive was so evasive that he prompted Sen. Susan Collins, R-Maine, to say, “I cannot help but feel a strategy of the witnesses is to burn through the time of the questioner.”
Thomas said the commission made the subpoena public because it hoped bad publicity will inflict damage on the firm’s reputation and cause it to behave better.
The FCIC has issued a dozen subpoenas, though Goldman’s is only the third to become public. Numerous others are “friendly” subpoenas issued to allow witnesses to break confidentiality agreements, Thomas said.
The commissioners said they are so outraged by Goldman’s intransigence that they won’t compel Goldman chief Lloyd Blankfein to testify again. He was the panel’s first witness when it began hearing testimony in January.
But Thomas said the commission was trying to get data rather than “platitudes” and therefore wasn’t interested in giving Goldman’s act any more airtime.
“We are not interested in providing him with a public forum to sound reasonable when his behavior has not been,” said Thomas.
The commission’s broadside comes at a time when Goldman is facing a Securities and Exchange Commission fraud case and an overhaul of bank rules that could curb some of its most profitable businesses.
Though execs are surely eager to defend Goldman’s eroding reputation, they have their hands full with other problems.
“Goldman right now is focused on thinking tactically,” said Eleanor Bloxham, who runs the Value Alliance governance firm in Westerville, Ohio. “I have a feeling they aren’t thinking that much about shame or guilt.”
Maybe it’s about time they did.