Source: L.A. Daily News
Goldman Sachs Group Inc. is using good-old fashioned PR to clear its name as it facing harsh allegations of civil fraud.
Goldman has hit back hard against civil fraud charges with a public relations blitz aimed at poking holes in the Securities and Exchange Commission’s case and repairing the bank’s reputation. Every time the SEC has punched, Goldman has quickly counterpunched.
Public relations consultants say it’s too early to know if the strategy is working for Wall Street’s most powerful bank. Some big Goldman clients are publicly backing the firm, yet its stock has yet to recover from the double-digit nosedive that followed the SEC lawsuit on April 16.
To help its cause, Goldman has hired Mark Fabiani, a big player in the PR world with strong ties to top Democrats. Fabiani earned the nickname “Master of Disaster” for his handling of crises during the Clinton administration. He now works as a media consultant specializing in corporate crisis management. Goldman has also brought in top corporate attorneys. And its executives, including CEO Lloyd Blankfein, have been out in public, not hunkering down.
Crisis adversion
The damage control efforts will be on display Tuesday when Blankfein and Fabrice Tourre, the employee named in the SEC fraud charges, are questioned by a Senate subcommittee probing the bank’s role in the financial crisis.
Goldman’s PR campaign, which runs counter to its long history of secrecy, is a bold yet risky move. Some analysts say a poor performance on Capitol Hill could worsen the bank’s image problems and make it harder for it to attract and retain lucrative clients. If the strategy fails, analysts say, it could cost Blankfein and other Goldman executives their jobs.
But the company got a boost last week when several big clients including the investment firm Blackstone Group and Ford Motor Co. said they’re sticking by the bank. More support came from Warren Buffett, whose company, Berkshire Hathaway, has a big Goldman stake. Berkshire Hathaway has said Buffett isn’t concerned about his investment in the bank.
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My Take: Goldman Sachs is getting exactly what it deserves in having to defend itself. The sad news is, it has the money to create a campaign effective enough to probably dissuade lawmakers from pursuing penalties or arrests.
The fallout from the mortgage lending sector is still prevalent in many corners of the country, from the top Seo company providers and bakeries, to the mom and pops out there who provide childcare, tutoring, and everything from donuts to car repair. Big companies like Goldman don’t have to worry too much about how to pay their bills. They’ve got more going for than the up-and-coming SEO company provider, or the Italian bakery owner, or the teachers out there who are getting pink-slipped each day and wondering how they will feed their kids.
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