GS harshly accused of trying to delay and disrupt inquiry

[Cees Binkhorst]

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5TB data van alleen GS al en $8miljoen van het Congress om orde in de
chaotische informatie te brengen binnen één jaar.
Aardige klus ;)

Groet / Cees

June 7, 2010
Financial Panel Issues a Subpoena to Goldman Sachs
http://www.nytimes.com/2010/06/08/business/08goldman.html
By SEWELL CHAN and GRETCHEN MORGENSON

WASHINGTON — The commission investigating the causes of the financial
crisis said on Monday that it had subpoenaed Goldman Sachs and harshly
accused the investment bank of trying to delay and disrupt its inquiry.

“Goldman Sachs has not, in our view, been cooperative with our requests
for information, or forthcoming with respect to documents, information
or interviews,” Phil Angelides, the chairman of the Financial Crisis
Inquiry Commission, told reporters on a conference call.

The deputy chairman, Bill Thomas, accused Goldman of stonewalling, and
said, “They may have more to cover up than either we thought or than
they told us.”

But even as Goldman appeared to be uncooperative, it tried over the last
month to set up personal meetings with members of the commission, two
people briefed on the discussions said.

Lobbyists representing Goldman in Washington tried to arrange one-on-one
meetings with a handful of commissioners, including Mr. Angelides, but
he declined to meet with them, according to the people, who spoke on the
condition of anonymity because they were not authorized to discuss the
commission’s inner workings.

Mr. Angelides and Mr. Thomas both said that Goldman had inundated the
panel with data — about five terabytes, equivalent to several billion
printed pages — and dragged its feet on answering detailed questions
about derivatives, securitization and other business activities.

In particular, the commission sought records on collateralized debt
obligations based on mortgage-backed securities, and the names of
Goldman’s customers in transactions of derivatives. In a chronology it
provided, the commission also indicated that it was interested in
Goldman’s dealings with the American International Group, the insurance
giant that collapsed in 2008, and in the bank’s so-called Abacus
transactions, which are at the heart of a civil fraud suit brought by
the Securities and Exchange Commission.

The commission’s unusual public criticism — it has issued 12 subpoenas,
none accompanied by stinging accusations of obstruction — underscored
the anger in Washington at the outsize profits and influence of Goldman,
which had emerged nearly unscathed from the financial crisis. It also
reflected the fallout from Goldman’s unyielding strategy of standing its
ground in the face of inquiries and attacks.

A spokesman for Goldman, Michael DuVally, said, “We have been and
continue to be committed to providing the F.C.I.C. with the information
they have requested.”

The lashing by the commission further complicated Goldman’s public
image. In April, the bank was accused of securities fraud in a civil
suit filed by the S.E.C., which contended that it created and sold a
mortgage investment that was secretly devised to fail.

That investment and others like it were the subject of a Senate
investigation that also exposed Goldman to withering criticism. And
federal prosecutors in Manhattan have begun looking into the mortgage
practices of banks, including Goldman.

The commission, created by Congress, is required to deliver a report by
December, but with only $8 million and some 50 employees to draw on, it
has at times seemed outmatched by the targets of its inquiries.

“I suspect they’re spending more on their lawyers than our whole
budget,” Mr. Thomas conceded.

Lloyd C. Blankfein, Goldman’s chairman and chief executive, testified at
the commission’s first public hearing in January, with the top bankers
Jamie Dimon of JPMorgan Chase, John J. Mack of Morgan Stanley and Brian
T. Moynihan of Bank of America.

After the hearing, the commission sent written questions for Mr.
Blankfein and made requests for records in April and May.

Mr. Thomas, a California Republican who served 28 years in the House,
said the requests to Goldman were “not inordinate” compared with similar
queries sent to a half-dozen other banks. All of the other institutions
complied, he said.

In contrast, Mr. Thomas said, Goldman gave a “basically incomplete”
response, even as it deluged the commission with so much irrelevant
information that it amounted to “mischief-making” that was both
“deliberate and disruptive.”

Mr. Angelides, a former California treasurer and candidate for governor,
said, “We did not ask them to pull up a dump truck to our offices and
dump a bunch of rubbish.” He added, “This has been a very deliberate
effort over time to run out the clock.”

The two men also seemed to acknowledge that the sheer volume of data was
beyond the commission’s capacity to analyze. “We should not be forced to
play Where’s Waldo? on behalf of the American people,” Mr. Angelides
said. “This is not right.”

Mr. Thomas, turning to the proverb about looking for a needle in a
haystack, said, “We expect them to provide us with the needle.”

The two men said that after the subpoena was issued on Friday, Goldman
had moved to schedule interviews with several executives, including Mr.
Blankfein; David A. Viniar, the chief financial officer; Gary D. Cohn,
the president and chief operating officer; and Craig W. Broderick, the
chief risk officer.

The 10-member commission was slow to get started. It recently replaced
its executive director, B. Thomas Greene, with Wendy M. Edelberg, an
economist on loan from the Federal Reserve, who had been the research
director. Mr. Greene, a former chief assistant attorney general for
California, remains on the commission’s staff as senior counsel.

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