Tuesday, April 27, 2010
After two years of hemming and hawing in Washington about the real culprits on Wall Street, Sen. Carl Levin’s Permanent Subcommittee on Investigations finally got to the heart of the matter this morning. Drawing on a voluminous collection of internal Goldman e-mails and other exhibits, Levin and the ranking acting co-chair, Sen. Susan Collins of Maine, tore into an array of current and former Goldman mortgage traders, including the recently indicted Fabrice “Fabulous Fab” Tourre, over the one fundamental question hanging over the whole financial catastrophe. Was Goldman honest with its clients about what was happening in the markets?
The answer to come this morning is obviously no. The internal communications at Goldman about the various deals they were peddling—including one called Timberlake, described by a Goldman e-mail as “one s–tty deal”—show that what they were telling themselves and what they were telling clients were two completely different things.
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Daniel Sparks, the former head of Goldman’s mortgage department, repeatedly declined to utter the simple statement that he had acted in the clients’ best interests, as did two other Goldman witnesses including Tourre (who took the opportunity to deny all the SEC charges against him). “You knew it was a s–tty deal,” Levin told Sparks, repeating again and again a word seldom heard on the record from high public officials. “How much of that s–tty deal did you sell to your clients?”
Sparks refused to say. When Collins asked him whether he felt an obligation to “act in the best interest of your clients,” Sparks couldn’t answer that directly either. “I had a duty to act in a very straightforward way and very open way with my clients,” he responded, prompting gasps of incredulity in the room.
This article was posted: Tuesday, April 27, 2010 at 9:15 am