FCIC Subpoenas Goldman (Update: Details on Firm’s Intransigence)

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Bloomberg reports that the FCIC subpoenaed documents from Goldman:

The U.S. panel investigating the causes of the financial crisis issued a subpoena to Goldman Sachs Group Inc. after the Wall Street firm failed to hand over documents in a “timely manner.”

The Financial Crisis Inquiry Commission “has made it clear that it is committed to using its subpoena power” if firms under review don’t comply with information requests, the panel said in a statement today. Moody’s Corp. and Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett were previously subpoenaed by the commission.

Yves here. It’s surprising, to say the least, that Goldman would risk precisely what took place: having a subpoena issued and the resulting media commentary, which again would focus attention on the continuing investigations against the firm (the stock traded down on the news when the market is flattish so far today). The fact is that the FCIC is thinly staffed relative to its mandate, has only limited industry expertise among its commissioners, and is required to complete its work this year. Any one of those shortcomings could be compensated for, but the three in combination are likely to blunt its impact considerably. Perhaps Goldman thought that by dragging its feet, it could guarantee that the commission had insufficient time to deal effectively with whatever the documents contained. If so, that would suggest the documents requested contain material that is embarrassing or damaging. Or it could simply be that the firm is used to getting its way and overplayed its hand.

Update 6:00 PM (hat tip reader Tim S). The BusinessWeek report makes clear that Goldman engaged in deliberate obstruction:

Goldman Sachs sent more than a billion pages of documents, FCIC Vice Chairman Bill Thomas said on a conference call with reporters today. Not all of the information is what the panel requested, and Goldman Sachs didn’t cooperate with requests to interview Chief Executive Officer Lloyd Blankfein, Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar, FCIC Chairman Phil Angelides said.

“We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish,” said Angelides, 56, who previously served as California’s treasurer. “This has been a very deliberate effort over time to run out the clock.”

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  1. sgt_doom

    “..has only limited industry expertise among its commissioners..”

    Huh, they’ve got plenty of brain power there with Phil Angelides, an honorable man who definitely understands the financialization of the American economy.

    They’ve got one of the most experienced derivatives attorneys in the biz, the honorable Brooksley Born.

    True, they have to watch out for those rubes from the American Enterprise Institute (lobbyists for the hedge funds) and the Peterson Institute (we will privatize ze world!!), but if those two are successful, some actual investigation may actually occur.

    Here’s hoping, because hope is all we have now (not Obama-hope, but honest hope!!!).

  2. charles

    Just to remind that GSI, the GS subsidiary headquartered
    in London, is also undergoing an investigation by the FSA
    run by Adair Turner.It fined JP Morgan Securities £33.3m last week for breaches in the way it held clients’ money…

  3. NOTaREALmerican

    Joey Naylor: Dad, why is the American government the best government?

    Nick Naylor: Because of our endless appeals system.

  4. so

    “If so, that would suggest the documents requested contain material that is embarrassing or damaging.”

    apparently this time it wasn’t lack of information, but too much information. GS never learns.

  5. Sechel

    Sounds sophmoric. The Traders are making reference to Goldman’s dump truck delivering the documents. Phil Agelides comment that Goldman was asking them to play, “where’s Waldo” makes them appear puerile.

    This is a public relations disaster and makes them appear like college sophmores. J.P. Morgan would never have made this faux paus, assuming they made the original faux paus

  6. Tom Hickey

    Pretty much the same strategy as the GOP — obstruct and delay. Standard lawyer behavior when you case is weak. Kind of like an outclassed boxer hugging the ropes and covering up, hoping to run out the time until the bell.

  7. Francois T

    “It’s surprising, to say the least, that Goldman would risk precisely what took place”

    Hmmm! How about this probable strategy for GS? Thinking could have been something along the lines of:

    1) Commission is short of time, budget and staff.

    2) Fortunately for us, the fuckheads in Congress couldn’t help themselves establishing a bipartisan (mbwahahahahahaha!) Commission, sure to bring divisiveness that we can exploit to the max. We already fostered controversy with the SEC decision, (the bastards!) so we sure can do it again.

    3) If push come to shove, we’ll shove! Shove them so much paper to the point of Stalingrad them alright.

    4) Let’s just make sure the content of said papers does not contain anything critical.

    5) We can even throw them some juicy, yet legally meaningless stuff. That’ll give’em something to satisfy their Masters (little do they know WE control their masters…*evil grin*)

    GS will find a way to blunt any too big to handle problem with the FCIC.

  8. The Internet

    If Goldman is going to dump a billion pages of documents on the FCIC, then the FCIC should put them all up online for us to go through. There must be something interesting in there.

  9. emca

    The meat of the story is not cascade of irrelevant information by Goldman,reminiscent of former AG Gonzales Justice Dept’s Friday night document dump (funny how that works – the critics the realists, their detractors the perpetrators of creative fiction), but this quote:

    “The Financial Crisis Inquiry Commission issued a subpoena to Goldman, demanding that the firm provide a key for identifying customer names and a way of matching up specific documents to the commission’s requests for information”

    The key is the key to review the 5 tetrabytes (with more to come?) of information to understand what was going on; the Waldo in Where’s Waldo?

    In the words of vice chairman, Republican Bill Thomas:

    “They may have more to cover up than maybe we thought.”

    Yes indeed.

  10. Tim S

    I’m sticking with my theory “following” the FCIC social feeds and demanding, in a nice way, the data they are collecting is made public so it will help people who give a shit leverage the FCIC’s info that it can collect so we the people force real reform, real action, real prosecution.

  11. brian

    Next step a citation for contempt of court
    I want to see the US Marshall show and cuff a few of the perps and walk them out the front door

  12. Doc Holiday

    Wake up Phil, you don’t tell Goldman what to do! Go back to milking cows or whatever you think you had been doing, and get lost chump. Goldman will get back to you after they take Warren to lunch and then over to DQ…. Gads, the nerve of little pip-squeaks, it makes yah sick!

    Re: “We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish,”

  13. attempter

    If this is real subpoena power, and this commission is at all serious, then I assume they’ll consider that unresponsive and declare Goldman in contempt.

    (I’m not holding my breath, of course.)

    I once read about a deadbeat dad who, paying child support under direct threat of jail, tried to pay in jars of pennies out of spite. The judge found him in contempt.

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