RICHARD Siewert Jnr’s appointment as the new head of public relations at Goldman Sachs was only officially announced to staff on Tuesday.
But by yesterday morning the former press secretary to President Bill Clinton was thrown into his first fully-fledged firestorm.
In an unauthorised article for the New York Times, Greg Smith, a London-based employee who worked in derivatives and who had been at the firm for 12 years, said that the environment at the firm had become “toxic and destructive”.
Smith said that over the last 12 months he had seen five different managing directors refer to their own clients as “muppets” – sometimes over internal e-mail.
There was talk yesterday that Smith had felt bitter about the size of his most recent bonus and others at the bank pointed out that as a vice president, he wasn’t especially senior. But nobody could dismiss his observations entirely.
Smith said in his article that he was most disappointed by how the culture of the firm had become degraded under the leadership of Lloyd Blankfein.
He wrote: “The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long.”
Goldman Sachs, which later sent an email to all its employees (bottom right) in a bid to reassure them after the article was published, said: “We disagree with the views expressed....In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”
One recruiter warned that Smith’s bold parting shot could make it tricky for him to find a new employer.
“If Smith is looking for a new job, he’s playing a very dangerous game,” said Dave Way of Marks Sattin.
“Like most of the City’s major employers, Goldman Sachs have a strong network of alumni running companies across the world who could be bosses or clients for high-level professionals changing jobs. Those that didn’t leave for the same reasons as Mr Smith may not think his words about their former colleagues were particularly well chosen.”
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity.
And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.
Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
By now, many of you have read the submission in today’s New York Times by a former employee of the firm. Needless to say, we were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients…
… We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively.
Lloyd C. Blankfein
Gary D. Cohn