The tension mounted as the senator tried to get the investment banker on the hot seat to acknowledge that the best interests of his clients did not come first.
Senator Susan Collins (R-ME): Could you give me a yes or no to whether you consider yourself to have a duty to act in the best interests of your clients?
Daniel Sparks of Goldman Sachs: I believe that we have a duty to serve our clients well:
Collins: I guess, Mr. Chairman, that I’m not going to get an answer to my question any more than we did with yours.
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The exchange was more direct when Senator Carl Levin (D-MI), chairman of this Senate Permanent Subcommittee on Investigations, said in an interview in Fortune Magazine:
But I pointed out point blank to Blankfein (Chairman and CEO of Goldman Sachs): “Your motto is that you need the trust of your clients, that your clients come first.” Well that’s not true. That is simply not true.
So members of Congress are shocked that Goldman Sachs would be motivated by its own self-interest. Clearly Goldman Sachs has crossed a line; this is not news. Why should anyone be surprised that a private corporation would place its own self interest above that of the public?
Are the members of Congress aware of what a poor job of acting they do at being shocked? They want us to believe that Goldman Sachs’ priorities are foreign to them. The reality is that legislators’ jobs and priorities are very similar to those of executives in corporations such as Goldman Sachs. They both want:
- To win almost at all costs; to get as large a share of the market as possible.
- To convince the public to support them whether or not there is solid evidence to do so.
- To receive money from the public, presumably for “services rendered.”
- To minimize or even cover up their own mistakes.
- To present themselves in the most positive light regardless of whether or not that is an accurate reflection of reality.
While I derived a certain amount of pleasure seeing Senator Collins corner Daniel Sparks, head of the Mortgage Department at Goldman Sachs from late 2006 until mid-2008, I couldn’t help but thinking, “What if the roles were reversed?” Suppose that Mr. Sparks was given the high chair and the gavel and could grill Senator Collins. What might he have asked her about the more than eight million dollars she raised (and has spent) in the past six years? Might it have been about the $409,883 that she received from the securities and investment industry? Or would he have asked her about the $373,246 she received from something called Leadership PACS? (sources: www.opensecrets.org)
And if Goldman CEO Blankfein had been able to switch places with Senator Levin, might he have asked the senator from Michigan about the $2,063,585 he received from lawyers and law firms since 1989? Or would it have been about the $954,999 he received from the real estate industry?
The senators act shocked that Goldman Sachs does not put the client first, but are we to believe that the senators put their clients (the public) first when they are recipients of such corporate largesse?
It is important that Congress play an oversight role with “capitalists gone wild.” But do members of Congress have the credibility to act as fair arbiters of what is proper and what is not? After all, their own behavior is often unchecked and subject to limited oversight.
So as Messrs. Blankfein and Sparks squirmed at the senators’ questions, the legislators seated so as to be elevated above the captains of Wall Street might have toned down their self-righteousness and outrage. Once again, we quote the great philosopher Michael Jackson because there may be a time when they have to “look at the man (or woman) in the mirror.” It won’t necessarily be a prettier sight than what they were seeing across the room.