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Lloyd Blankfein (Jin Lee / Getty Images) Wall Street's newest "public enemy No. 1" is actually a funny working-class guy from the Bronx, according to friends and associates. Is Goldman's CEO in real life anything like his current image?
“The financial system failed the American people…,” Goldman Sachs CEO Lloyd Blankfein told Charlie Rose on Friday. "How could you not blame the people [on Wall Street] that had awfully nice lives while things were going well? How could you not blame them when things turned badly?”
How right he was. Perhaps more surprising is that the man who said that with such eloquence and awareness is the one currently in the national hotseat. First, the SEC’s April 16 fraud charges for allegedly not disclosing the provenance of the doomed-to-fail CDOs they were peddling, then, hours before the Charlie Rose interview aired, news that the U.S. Attorney’s office in New York has begun a criminal investigation.
Even among Goldman’s bitterest competitors, a groundswell of concern has emerged on Wall Street about what is happening to the firm, and specifically how Blankfein has emerged as a Gekko-like figure.
“If he had a Bentley, I’d throw up. That’s not the kind of guy he is.”
“Lloyd Blankfein, public enemy No. 1?” the thinking goes. “Give everyone a break.”
While Blankfein, 55, has been one of the most handsomely paid executives on Wall Street –compensation of $54 million in 2006 and $70 million the following year–he’s hardly proved one of its flashier players. Compared with the hedge-fund titans he serviced, his haul was relatively small. And in terms of excesses, his behavior had nothing on former colleague John Thain (who reportedly spent $1.2 million having his Merrill Lynch office renovated) or private-equity honcho Steve Schwarzman (whose 60th birthday party is now considered a benchmark for the excesses of the last decade). “For Wall Street, he’s a pretty cerebral guy,” says one financial player who’s done business with Blankfein and asked to remain anonymous because he will likely have to do business with him again, “and I say that as someone who hates Goldman Sachs.”
• Tunku Varadarajan: Lloyd Blankfein’s PR Coup• Big Fat Story: Goldman’s Troubles DeepenSure, there’s a big apartment on Park Avenue and a house in Sagaponack in the Hamptons, but nothing about his wealth or his behavior could truly be described as overly conspicuous. “The house is totally tasteful,” says a person who’s been inside of it. “It’s not showy.” Says another person who knows him well, “If he had a Bentley, I’d throw up. That’s not the kind of guy he is.”
Throughout his career, Blankfein has given primarily (and generously) to Democratic politicians like Hillary Clinton and Chris Dodd, putting him somewhat more in line with the sorts of people who now support financial reform than the financial wizards who have historically resisted it. He’s been on the boards of prominent New York organizations like the New York Historical Society and the Robin Hood Foundation. His wife Laura, a former lawyer to whom he’s been married since 1983, is extremely active in charity work, but not in the conspicuous socialite-y way that’s typical of many Park Avenue wives.
Says Blankfein’s good friend Liz Robbins, a Washington lobbyist who got to know Laura through their children at Fieldston and has since become a good friend of her husband’s as well, “She volunteers every Saturday for the Association to Benefit Children. She and Lloyd don’t just say, ‘Here’s some money to try and fix something.’ They get in there.”
Shortish and baldish, Blankfein is known for being witty and self-deprecating, which has served both to disarm people who might find him intimidating and to obscure the fact that behind the smile are shark’s teeth. “He is very quick,” says the Wall Street player. “He has that outer borough, sassy, funny Jewish presentation, like if Woody Allen hadn’t gone into the arts and played the clarinet but instead went into finance. You could imagine him doing that because of his looks and because he likes being funny and because he is funny.” At the same time, says a former partner: “You don’t get to where he’s gotten by being a wuss.”
In some way, his humor was a defense mechanism. Born in the South Bronx and raised in a housing project in Brooklyn, his father was a postal worker and his mother was a receptionist. He attended public school, earned pocket money selling concessions at Yankee Stadium (he still goes to games), graduated early, and headed to Harvard at 16, putting himself through with student loans and a scholarship. (Blankfein’s now the co-chair of Harvard’s financial task force and is said by Robbins to go back regularly to actually meet with and mentor students.)
“It wasn’t like he didn’t eat, but it was a pretty impoverished background,” says another former partner who’s known him for the better part of two decades. As Blankfein once told his former colleague Robert Steel, who recently served as undersecretary of the Treasury, about his tough upbringing: “You were either a great athlete or funny and entertaining, and I decided to go with funny and entertaining.”
After receiving his bachelor's degree, Blankfein returned to Harvard for law school, then practiced as a tax lawyer. He also had a Las Vegas habit. “Gambling is about probabilities and so is trading,” says one of the former partners. “There’s a certain constant with risk management but with Lloyd I don’t think there’s a need to take personal risks the way there was with Clinton [and sex]. I don’t think Lloyd is like that.”
Around 1981, Blankfein applied unsuccessfully for jobs at different banks. Eventually, he got hired as a gold trader at J Aron, a little known company recently acquired by Goldman Sachs. Among those who knew it, J Aron maintained a certain renegade reputation, and Blankfein, who smoked heavily and wore a beard, was in some way more of a fit there than at the parent company.
But as profits at Goldman began shifting from investment banking to trading, Blankfein’s rise continued apace. “In the end, Goldman’s culture is about making money for the firm. That’s what comes first,” says the Wall Street player. “It’s a puritan work ethic on steroids and to some extent that description fits Lloyd.”
In 2006, when Goldman’s CEO Hank Paulson was hired to go take over the treasury under George W. Bush, Blankfein became the company’s 11th leader in 140 years. (He’s since quit smoking and no longer has a beard.)
To those who do not like Blankfein—and there are many—his rise is seen as proof that in the transition from being a trusted investment bank with a long-term outlook to a trading outfit looking for short-term profits and rosy quarterly earnings, Goldman lost its way. (Of course, those profits and earnings reports have been pretty damn good, lately.)
In the course of reporting this story, nearly half a dozen former partners told The Daily Beast that Blankfein is as good as it gets where it comes to trading (“the smartest guy in the room,” says one) but diminishes, sidelines and pushes out people who come from investment banking and are not “yes” men. “He’s a kiss up kind of guy,” as another partner puts it .
Blankfein’s closest ally within the company, Gary D. Cohn, the firm’s chief operating officer, worked with him for many years on the trading side. And as one of these sources points out, Cohn has a house in Bridgehampton just minutes away from where his boss and his boss’ wife spend their spare time. Other top allies in the company include CFO David Viniar, who comes from credit risk management, Vice Chairmen J. Michael Evans and Michael Sherwood, who both came from Goldman’s securities divisions.
All of this has contributed to a sense within the financial services industries that Goldman has become so insular that it mimics a crazy John Grisham novel come to life. “It’s like that book, The Firm,” says the Wall Street player. “They can’t shake hands with you, they can’t let you in. They have to cut their hands and smoosh their blood together to gain entrance to the club.” (Indeed, besides Blankfein, not a single person currently working at Goldman agreed to speak for this story.)
Still, even among his financial world detractors, not a single one that I spoke to believed Goldman was guilty of anything illegal. Rather, says the Wall Street player who’s done business with the firm, the problem is that they screwed too many people for far too long–and that with the government now looking for a scapegoat, the firm sits in a precarious position.
“Why do people hate Goldman?” the source says. “They hate them because they’ve operated with enormous success and arrogance. If there’s a nickel on the ground that your grandmother dropped, they’ll dive down and take it before she can pick it up. There is just this relentless drive for success.”
Some believe that argument extends to Blankfein as well.
“Lloyd is a very smart guy,” says yet another former partner. “He’s a commercial animal, but his battle has been to balance those instincts with the long-term best interests of the firm and the client. And the question is, did he allow his commerciality to overtake everything else?”
Jacob Bernstein is a senior reporter at The Daily Beast. Previously, he was a features writer at WWD and W Magazine. He has also written for New York magazine, Paper, and The Huffington Post.
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Nothing is more important to you than to be made aware of this vital information that makes even what the President of the United States of America has to say about anything or any matter concerning Americans, totally redundant. Take a look see and listen for yourselves. I urge you to visit, http://maxkeiser.com/ and listen and watch 'On The Edge' with Max Keiser and David DeGraw. You will be astonished by what you find and you will be incensed by what you hear. One things for sure, you will end up knowing more than this phony fabled President knows. You will be enlightened by it.
Go post your propaganda somewhere else.
I find it hilarious that you think I would believe Max Keiser and David DeGraw over the President that I voted for....I don't know these guys, but why would I trust these guys more than I trust my own knowledge and instinct!
Puff, puff, puff...Goldman is hiring a bunch of hacks no one ever heard of to brighten its public image. Sorry, no sale. BTW, I'm a working class guy originally from upstate NY, but no one ever thought I was very funny. If guys like me were in charge, Goldman would be out of business right now--Do not pass Go, do not collect 4200.
And Wall Street gives money to both parties, usually on a 60-40 or 55-45% basis, and has for many years.
So anotherwords, this is a bloodthirsty bunch of Jews (primarily) who do what they do best . . . suck the blood out of everything for their own gain. At least THIS type of Jew . . . he's a despicable wormy criminal that should be in jail. No matter what happens, Blankfein will never have to give up the bulk of the money he's stolen.
What has any of what you said have to do with Blankfein being a Jew except unless of course you are anti semitic...in which case, everything you say is full of manure!
Looks like Goldman's PR machine is churning out the feel good about the perps backgrounder. Took them long enough to get started.
Seriously. It seems like some of TDB contributors are just lining up to give this a-hole a verbal BJ. Are the folks at Goldman's giving away free vacations get-aways or something?
I saw this sneak thief on Charlie Rose and Charlie asked him about the legislation to reign in the likes of Goldman Sachs and Mr. Blankfein, the crook that he is, says there are some things that are good and some that are bad, in the bill, but what he would really like is a bi-partisan bill .....hahahahahaha...bi-partisan bill...meaning I want all those Republicans who are saying the things we like to hear...in on this discussion. The man is a tool and he found it difficult trying to look honest while being pressed to actually be honest...hard work isn't Blankfein...
So is Lloyd on a personal image rehabilitation tour? Nice leaks about the 'real' man, meant to make him look like just an average Joe who worked hard and made it on the Street and is now misunderstood by a bitter public. No qualms about it all. Just noticing. I guess they decided to ditch the Lucas van Praag middle-finger in-your-face PR strategy for this feely-good style.
A bright, talented guy with a drive for success and a willingness to work long hours for it. Yep, let's lynch him.
a lot of bright talented guys on Wall Street ate up their fellow American's life savings, jobs, houses and self-esteem...and just how much is a willingess to work long hours in order to succeed at the drive for success. worth when you lose all personal honor? Shoshido...what about the guy working on the line at GM with a drive for success and a willingness to work long hours for it?.. that guy couldn't touch Blankfein's salary in three lifetimes?Yet Blanfein or guy's like him could bury that guy's life savings. He is a slimy Btard and his interview on Charlie Rose put the nail in his casket for me. SumB couldn't/ wouldn't tell the truth to save his life or his honor.
Hey, Daily Beast folks, thank you SO much for moderating this feed and keeping hateful, racist comments off your page. Glad to see you take such pride in curating what's allowed on your site. :-P
Capitalism is destroying the USA.Capitalism is the worst kind of government in the world.Blankfein and Goldman Sachs are a product of capitalism. The other Goldman Sachs ' yes men ' employees are probably completely afraid to talk against their boss.Who knows what will happen to them if one of them becomes a whistle blower. Usually companies like this and others like AT&T,Wal Mart and many other banks have peasant life insurance policies on their employees,without the knowledge of their employees, the beneficiary being the greedy large companies.So when their employees die.The only ones cashing a million or two dollars are the greedy companies.The family of the deceased do not get any money from the insurance companies.In other words the large companies and the insurance companies are profiting on the death of the death employee.Who knows how many persons are these crooks killing just to get the benefits of insurance claims.No wonder nobody except Blankfeign are the ones talking to reporters. Unless we implement a national investment bank.These crooks will keep having a field day selling shit sandwiches with Kool-Aid.Just copy the system of the North Dakota Bank. If we are going to improve our politicians ethics and morals. We need to pass a political contribution reform bill. Goodman Sachs and Blankfeign's motto: Screw them, before they screw you. Blankfeign was not doing God's work.He was doing capitalistic work. Capitalism = Psychopathic achievements.
LLoyd (who gave him that name) may be the Jack Armstrong of our time. There was another one born and raised in a poor household in Brooklyn. His name is Al Capone.
A "Las Vegas habit"? Yeah -- you never ever get over that grim pathology -- you just change venues. Those who've lived with a compulsive gambler know exactly what I mean. Fraud is the hybrid of hubris and hypocrisy. Legality is the second question. Evil is the first. If you root around in the blessed OED, you'll see all the way back to 1430 that there is a taint of 'doubleness' to fraud. "Fle doubilnesse, fraud, and collusioun." (Lydgate.) 'Flee doubleness, fraud, and collusion." In Gulliver it says, "They look upon fraud as a greater crime than theft ..." Because "honesty has no fence against superior cunning." Perhaps you could say that Fraud (with two faces) is the stepson of the Devil. In fraud there is always this ghastly sense of injury and an "unjust advantage." Gulliver continues, ".. the honest dealer is always undone, and the knave gets the advantage." Wharton in 1848 speaks of fraud as "contrary to the plain rule of common honesty." In 1374 Chaucer speaks of 'treacheryes and fraudes." In 1725, Alexander Pope speaks of "scaly frauds." We are the Tookees. We got took. In the Rose & Zakaria interviews, Lloyd the Ripper in Sheep's Clothing didn't realize just how clearly he shone an Infernal Light on the Hell he and his ilk have wrought upon the ordinary people whose fate is hidden in the Funds of these Gigantic Fromage 'Sophisticated 'Players.' The massive Global Racket serves up the adrenal-testostero cocktail that the traders get addicted to. But the idea that this post-human high-speed casino rush is necessary or useful is fatuous, Lloyd. If all you scambags were cRaptured Up one happy afternoon, no one would miss your putative 'God's Work' faux function in society, and we could get back to nice plodding Vanilla Banks which give an occasional damn. The supposedly knowledgeable players stood in for their pensioners, the simple folk who believed these scaly hotshots had their best interests, not "action," foremost in mind. I suppose Mr. Blankfein, Mr. Dimon, and Mr. Buffett have sufficient zillions to bet their own money in these grotesque transactions. *They* can afford to lose a lot. The plain people in the funds were injured hideously. Let Lloyd, Jamie, and Warren spend a month in those ruined lives and see if they sounds so contemptuous or crocodile-tears concerned. Banking is not a game. It is a sacred trust. Lloyd the Ripper and Jamie the Ripper Jr are unctuous thugs. On Charlie Rose, Blankfein says as an excuse We may buy and sell and rebuy the same *product* in 2 seconds -- how can we know what side we're on? Cheez whiz, Lloyd, *that's* the point -- there is no there there -- only action. (Those of you who have known a compulsive gambler personally know that it's *all* about action, no matter the palliative words.) I mean, who wants to do staid, serious, useful Vanilla Banks? Mr. Blankfein is pinguid --smooth-- but he does not get it. 68 million or 9 million is a lot of miles away from Brooklyn.
What vile creature grins like a moneyed, Cheshire cat in the newsworthy face of his crimes against humanity? Like some wickedly perverse caricature from inside a horror story, he dares to smile at those he robbed without looking into the lens. We daily see the face of this beast, but do we recognize its stench for the corpse-like odor of death? He believes himself resurrected, simply because he breathes the same air and squats to do his business. Whether you are a believer, nonbeliever, atheist, agnostic, or none of these things, the collective will supersedes the spiritless shell of deceit. If we remain united to the truth, our life is sustained, despite having to shovel mound after mound of the excrement left in his wake. Don't let him steal your hope.
This blog should be presented to the judge prior to this felons sentencing.
I understand Hitler liked dogs and small children also
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