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The UJA-Federation Fetes Lloyd Blankfein and Judaismby George Salamon “GOLDMAN SACHS CEO Lloyd Blankfein should be hung by his thumbs in a public square.” So suggested Briton Ryle on February 20, 2013 in Wealth Daily, no hothead lefty rag, but a source of advice for money-making investments. Nevertheless, this past December 2nd, the crème de la crème of New York Jewry, 1,700 people in all, came to honor Mr. Blankfein at a fundraising dinner for the UJA-Federation. The dinner raised $26 million for the UJA’s aid to those in need and to Jewish communities — but it should also have raised the hackles of some Jews by making Blankfein and Judaism co-honorees. Instead of creating a stir in the Jewish community, however, the story in next day’s New York Times, headlined “Wall Street Toasts Blankfein and Judaism at UJA-Federation Dinner,” simply disappeared into the triple-A culture of our era: apathy, amnesia, and attention deficit disorder. The story said that Blankfein had been honored for “his professional track record and philanthropy.” (What Judaism itself was celebrated for was not reported.) Blankfein’s “track record,” however, does not suggest that he or Goldman should be singled out for honors. Business journalists and economists chronicle the achievements of a man who has made his firm enormously profitable and himself enormously wealthy — but he and his executives are regularly depicted as ethically challenged, tarnishing their success with the moral price they were willing to pay for it. Should such a track record be honored alongside the religion that prides itself for bringing law and serving as a light to others? A long list of Goldman Sachs missteps is easily put together:
- “You may remember Goldman Sachs as the bank accused of making billions of dollars while ordinary people were losing their homes during the financial crisis,” the New York Times reminded its readers on October 20, 2013. The firm, headed by Blankfein since 2006, is described in the same story as “a symbol of Wall Street greed and excess.”
- In July of 2010 Goldman paid the biggest SEC fine ever, $550 million, “for creating and selling a mortgage investment that had been secretly designed to fail.” An internal email described that investment as “junk that nobody was dumb enough to take the first time around.” While outsiders such as Columbia University economist Jeffrey Sachs points out that “every Wall Street firm has paid significant fines during the past decade for phony accounting, insider trading, securities fraud, Ponzi schemes, or outright embezzlement,” others see differences in Goldman’s behavior.
- The leadership inside Goldman Sachs during Blankfein’s reign was described by the former director of its equity derivatives business as being responsible for the “decline in the firm’s moral fiber.”
- “Bear Stearns (sold to JP MorganChase after it failed during the 2008 financial crisis) was hardly the paragon of ethical propriety,” according to Jake Zamansky, principal of a securities arbitration firm, “but it’s impressive that they chose to turn down a lucrative fee arrangement rather than engage in a transaction they perceived as morally wrong. Goldman and Deutsche Bank apparently had no such ethical compunctions.”
- Joan Lappin provided a pithy conclusion in Forbes to the Goldman Sachs story: “Goldman Sachs’ Ethics Reflect Its Ethos.”