Charity Begins at Blankfein's Goldman

Goldman Sachs (GS) seems addicted to excess, whether in the form of executive compensation, leverage, bonuses, or charitable giving. On Tuesday, Chief Executive Lloyd Blankfein continued his practice of doing "God’s work” and announced that the company was planning on making a charitable contribution of $500 million.

In case you have forgotten, in the turmoil of this economic crisis, that’s a lot of money. Mr. Blankfein, also, offered an apology. He said that the very smart people at Goldman had made some mistakes and that they were sorry. The act of contrition, itself, has become punishment enough in our culture. Sports figures, politicians, celebrities make mistakes and, if they are big enough to admit them, society rushes to forgive. No one ever pays a penalty; no bonuses will be returned.

The only shareholder consulted about this large capital gains deduction was the biggest. Warren Buffett, very rich and very generous with his own money, will join an advisory council that will disperse this “Goldman stimulus package” to small-business owners. There is no doubt that the engaging smile of Mr. Buffett will be seen in the financial media putting his simple spin on this maneuver and, at the same time, protecting the Berkshire investment.

The regulatory agencies are, again, decidedly out of the picture. In November of 1997 the Securities and Exchange Commission requested comments from the public on issues regarding charitable giving by corporations. This was done at the behest of Congress in connection with pending bills that would require corporations to give shareholders a say in the disbursement of charitable funds. In 1995 the Senate Finance Committee had held hearings involving similar issues. There is little more to report.

It is a familiar scenario: shareholders abandoned by the Board of Directors, the CEO, Congress and the regulatory agencies. The citizens of "bailout nation" suffering another bout of heartburn from a "too big to fail" taco. They'll be tasting that apology for decades to come.

The way to make this right is for Goldman to donate $500 million to the American taxpayer, who is fast becoming a charity case.

Disclosure: Author holds no position in GS

Comments

[prairiedog555]

A feeble attempt at PR damage control by the worlds largest crime syndicate. They make the mafia, the tong triads and Al-Qaeda pale in comparison. The tendrils of their manipulation go back 100yrs.
They are the symbol of US corporate destruction. They exist solely for the benefit of the management and board of directors at the shareholders expense.

2009 Nov 19 07:55 AM

[Donald Ingram]

Insincere in the extreme - apology rejected.
Its reported that their Christmas bonus this year totals some $23 billion! The $500 million to them is 'chump change' - throw a bone to the yard dogs to shut them up! Hubristic Charlatans!

2009 Nov 19 01:28 PM

[Gary A]

He admitted guilt. It is time for the Wimpy Obama Administration (following the equally wimpy and even more corrupt Bush fiasco) to go after these guys with the full force of the law.

I dare you Obama, I dare you.

2009 Nov 19 01:28 PM

[MarketGuy]

$500M...that's about there net revenue from trading with monies from their access to the 0% Fed funding window. So tell me, where's the contrition?

Again, I'll say, "sorry" is in actions not words. Stop HFT, ICE, Dark Pools, secret hedges on public ratings, calling yourself a "bank". Now THAT would be a "sorry".

2009 Nov 19 02:02 PM

[charlesrkiss]

This entity is freakish and needs institutionalization... like, uh, mental institution....

2009 Nov 19 06:43 PM

[Tim McPartland]

If you have ever worked on Wall Street (I mean really Wall Street---New York) you know the attitude---bravado--gr... those that work so hard to figure out how to extract your money from your account and get it in theirs. I don't really care about these greedy jerks (I protect my $$$)---but I do care about the bonuses being paid for earnings that became possible as a result of zero interest rates. These rates never would have happened if Goldman and others like them weren't trying to fleece all of us.

2009 Nov 19 07:11 PM

[yellowhoard]

I've heard that Goldman, in an effort to improve their image, is no longer using live puppies for traction control in the executive parking garage when the concrete gets icy.

2009 Nov 20 08:24 AM