My Advice for Goldman

by Lurita Doan

Welcome, Goldman Sachs, to the growing list of people and companies that have been attacked and demonized by the fickle, Obama Administration to score political points.   You certainly did not want to land in the position (no one does), but, nevertheless, here you are, excoriated in the press and at the center of a political feeding frenzy.

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Time to take a deep breath, calmly assess the situation, and plan your next moves.  Your cause is not lost, and you have enormous resources, that could be used as effective weapons should you choose to use them.

First, you have to be honest with yourself and understand that you made some huge mistakes over the past few months.  For whatever reason, the Obama Administration singled you out to be the political piñata and now hopes that, by repeated whacks in public, you will produce the political candy that will get Dems re-elected.

Here, too, you should understand that the Democratic leadership carefully picks its victims.  There are many potential villains, but only the most vulnerable are ever singled out for destruction.   The political hyenas took your full measure and singled you out from the pack of other financial institutions because you looked least likely to put up a strong defense.

Maybe you went to one too many silly photo ops at the White House; maybe you attended too many mindless campaign events; maybe your statements were too timid.  But, you made one, or more, of these particular mistakes, and, as a result, the predators are circling, hoping to skin you alive and mount your hide atop the Capitol.

Second, you should understand that you are now playing the Washington Game, where the stakes are much higher than you are used to seeing.  Your competitors on Wall Street, with whom you have much more experience, are far less formidable as opponents.

Wall Street is focused on making money, and the goal is to find the edge of ever-new development to maximize wealth.  How quaint!  In Washington, the games are a fight to the death.   Nor is anyone inside the beltway interested in a short-term trade (at your expense).  No, the goal now is thel destruction of your autonomy.  In order to create dependence on the government, your reputations are to be ruined, your good names lost, your futures destroyed, and your children shamed.

However, you are not defenseless.  You are in a brutal, death match, but you have the weapons needed to win this battle.  Above all else, you must change the perception that you are a willing victim going gentle towards your own demise.  You must change the existing perception in Washington that attacks can be made without any risk to those spearheading the campaign against you.

Remember that Washington, like most Mutual Fund Advisors, is inherently risk adverse.  Right now, the politicans think it is easy and pain free to pile on Goldman, and you need to change that perception.   If you can convince the pack in Washington that you are not a willing victim, that you have teeth and can bite, you will win your freedom.  Here is what you need to do:

1.  Announce an immediate halt to any future campaign donations by Goldman and all Goldman employees. Mule drivers all knew that to get a reluctant donkey moving you had to first hit him in the head with a 2×4.  The purpose of the blow: mule drivers realized is that it was impossible to get a donkey moving in the right direction until you had his complete attention.  Choking off all campaign money  will certainly get their attention far more quickly than some legal brief, op-ed, or impassioned speech ever could.   In effect, you will be stepping on the windpipe of Washington, limiting the oxygen it desperately requires. Better yet, take the moral high ground and announce that the cessation of all campaign funds is consistent with Goldman’s desire to operate above any suspicion of political interference.    What you will soon discover is a new urgency within Congress, and the White House, to get this issued resolved as quickly as possible so that you might be induced to turn the flow back on.

2.Start your own investigation into improper politicization at Goldman.  In particular, you should immediately announce a full scale review of all activities, email, notes, and memorandum from and to Rahm Emanuel while he served at Goldman during a short 18 month stint when he earned a reported $16 million in bonus and salary.  All you have to do is announce that in the interest of fairness and transparency, you are now making a complete review of all correspondence from and to Rahm Emanuel out of concern that undue pressure or influence might have occurred to get the ball really rolling.   Rahm, of course, will understand that Washington investigations are rarely aimed at proving or disproving some claim.  Instead, Investigations are most often launched as fishing expeditions to find something embarrassing or damning that can be used for political gain, or even better, to get the potential victim to panic and engage in a cover up.   Rahm, having played this game with great results in the past, is all too aware of how effective such an open-ended investigation can be.

3.  Be careful of your lawyer.  Goldman made a shrewd move in hiring former White House Lawyer, Greg Craig, but be careful.  Keep in mind that this is a political battle and not a legal struggle.  Skirmishes will not be fought in the courtroom but on the front pages of newspapers, cable news and blogs of all sorts, on a 24 by 7 basis.  Never allow the lawyer to control your strategy.  In fact, the best thing you could hope for is for your new counselor to join President Obama on his next round of golf.  You want pictures and an image of smoking and joking between your lawyer and the President.  Nothing could be more effective in sending a message to members of the SEC that they risk the President’s displeasure and future promotions should they make procedural mistakes.   Know, too, that SEC Chairperson,Mary Shapiro, is, like all Washingtonians, very ambitious and anxious to climb up the greased pole of Washington political hierarchy.  She is going to get nervous seeing your lawyer playing ball with Obama.  Good.

4.  Announce a Strategic Review to examine Goldman Operations.  In particular, you want to look at your office locations in states and congressional districts that are home to your most fierce attackers.  I would suggest you start by pulling the plug on all Goldman operations in the state of Illinois, home of Senator Dick Durbin.  Don’t go soft here.  You simply cannot do business or operate in an environment where your enemies seek your destruction.  Don’t try.  Instead, announce that the operational environment in Illinois, thanks largely to Senator Dick Durbin, is not conducive to further Goldman operations in that state.  I understand that Goldman probably has several thousands of employees in Illinois, and does many good deeds at a variety of Colleges and Universities in Illinois.  But those need to be closed down.  This is war, and you cannot provide comfort or indirect support to a guy that wants you dead.

Good luck, Goldman.  These four moves should at least ensure that Washington politicians won’t think of Goldman as a convenient victim.  I know that these steps might seem draconian to you just now, for, like many others before you, you are probably still clinging to the false assumption that if Goldman Sachs could only tell its side of the story, and get all the facts out, the issues and accusations will go away.  Wrong.  This is Washington and the game doesn’t work like that.


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Posted Apr 23rd 2010 at 9:51 am in Congress, Federal Spending, Financial Services, Obama, Politics, Regulation | 93 Comments