Subpoenas vs. CSR Plaudits: A Tale of Two Goldmans

by Aman Singh Das | June 02, 2011

Today, Goldman Sachs received yet another subpoena -- this one from the Manhattan District Attorney’s Office, which is investigating causes of the recent financial crisis and has asked Goldman to turn over information related to its mortgage and derivatives business prior to the crisis.

But yesterday evening, at a glittering reception in New York City, Goldman was the star of the show.

It accepted an award for its 10,000 Women initiative from the Committee Encouraging Corporate Philanthropy's (CECP). The award, given to companies with revenues equal to or greater than $20 billion, recognizes exemplary corporate philanthropic initiative(s).

On hand to receive the award was none other than Goldman's chairman and CEO, Lloyd Blankfein.

Goldman Sachs CEO Lloyd Blankfein

After taking the stage to thank his hosts, Blankfein participated in a panel with fellow awardees Bristol Myers-Squibb Chairman James M. Cornelius and Founder and CEO of DonorsChoose.org Charles Best.A

Casually leaning back in his chair and sporting a permanent smirk, Blankfein avoided answering every question directly, choosing instead to use a generous amount of jargon and generic platitudes.

Here are a few, classic statements uttered yesterday by Wall Street's favorite CEO:

On firm culture:

God's Work: "We have the money to drive impact and scale it. It has never been a problem to get people involved in our initiatives. Service has always been a core component of Goldman Sach's firm culture. I'm proud that the people of Goldman Sachs are engaged in these programs. They’ve served as mentors to scholars, helped select participants, and shown that our commitment to service goes beyond rhetoric. It is critical to our firm culture exemplified by the involvement and passion of our people."

Reality Check: But what about the internal work culture at the bank? Here's a snippet from a blog I wrote in fall 2010:

"A day after industry insiders named Goldman Sachs the most prestigious bank in North America in Vault's 2010 rankings, the bank's prestige is under attack by three former female employees who charge, according to The Wall Street Journal, that "The investment bank practices a system in which women are paid less, promoted less and 'systematically circumvented and excluded.'"
What's astounding about the allegation is the repeated emphasis on intent, i.e., that the bank has a system that almost formulaically excludes women from getting promoted and compensated on par with their male counterparts. While the bank has called the suit without merit, stating that, "People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals," it seems it is yet again in the red with the public." Complete post

Seems like Goldman is happy to help women progress—10,000 of them—as long as they aren't employees.

On the role of business & the inherent inequality of the market:

God's Work:"We have always believed that the business community has a responsibility to go beyond the traditional bottom line. Markets don’t always distribute the benefits of growth equally and additional investments are required by governments, nonprofits, and of course, the private sector."

Wait, what happened during the financial crisis of 2008 with millions unemployed across the country? Another snippet, this one from the summer of 2010:

"Lately it feels like Goldman Sachs just cannot get enough of the front page.
The bank that CEO Lloyd Blankfein describes as doing "God's work" added yet another subpoena to their burgeoning file yesterday. This time, the Financial Crisis Inquiry Commission (FCIC) subpoenaed the bank alleging that they failed to provide key documentation and witnesses in several cases, despite repeated requests since January. Add the SEC's recent—and ongoing—case accusing them of fraud related to the subprime mortgage market and you have a bank that is flailing in a marketplace and a profession that operates on trust." Complete post

Reality Check: Anyone else see a radical misalignment between public speeches and internal practice?

On Goldman Sachs Being Targeted for "Making Money":

"Why do people keep harassing us for making money and being profitable? Profits mean we are sustainable in the long term."

Do I need to expand on this bit?

On the motivations behind investing in women – and 10,000 Women:

God's Work: "People like this stuff. It gives them more pride than simply writing a check."

"Since [launching the initiative] I've seen the data, met many of these outstanding women and can say that 10,000 women is one of the smartest investments Goldman Sachs has ever made."

Reality Check: Of course, another one of the smartest investments Goldman ever made was betting against the housing market -- and against many of its own clients.

Related:
GoldmanSachs/Citizenship
Goldman Sachs Unveils New Titles for Investment Banking Staff
Holy Gospel of CSR: Businesses Exist to Make Money, Not Further World Peace

Filed Under: CSR


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