Time to tear down the wall around Goldman?

The new Goldman Sachs Group, Inc. headquarters, also known by its address as 200 West Street, is seen in New York's lower Manhattan, April 16, 2010.

NEW YORK (Reuters) - On a day when Goldman Sachs Group Inc should have been celebrating another quarter of blockbuster profits, executives were instead fielding dozens of questions about the civil fraud charges the company faces.

Since Goldman began its stunning rebound from the financial crisis, its outsized gains have been overshadowed by one controversy after another.

Traditionally, the firm has been a fortress barricaded behind a wall of silence. It says little about what its bankers do or what happens on its trading floors and it ignores its critics.

That has worked throughout its history but no longer, experts say.

"They can't play that game anymore," said Michael Robinson, a financial and crisis public relations consultant with Levick Strategic Communications. "The world has changed too much."

On Friday, the U.S. Securities and Exchange Commission charged Goldman was charged with fraud in the structuring and marketing of a debt product tied to subprime mortgages.

SHOULDN'T HAVE BEEN SURPRISED

Goldman has vowed to fight the SEC case, saying it did nothing wrong.

In a call with reporters, Goldman's Chief Financial Officer David Viniar was uncomfortable with the public scrutiny.

"We never like anything negative written about us," Viniar said.

Goldman became the poster child for Wall Street pay and excesses after it began setting asides billions of dollars for its bonus pool soon after U.S. taxpayers committed hundreds of billions to rescue the banking industry.

In a nod to the fury, Goldman in 2009 cut off compensation after three quarters and decided to pay its top executives all-stock bonuses. But the move was too little and too late to change perceptions.

The way Goldman handled the SEC probe left the impression that the firm was being less than forthright. In August, the SEC notified Goldman that there was a likelihood that it would face charges stemming from the transaction, but it did not disclose that information.

And the firm's financial statements often leave investors with as many questions as answers about how the company makes its money. Where rivals release clear, detailed, supplemental information about their finances, Goldman's are opaque.

In recent months, Goldman has attempted a public relations campaign of sorts.

Earlier this month, Blankfein wrote a lengthy note to investors defending the firm's positions during the financial crisis. The firm also made executives available to Bloomberg BusinessWeek for a story under the headline: "Goldman Sachs: Don't Blame Us."

Asked if its most recent string of negative publicity would cause Goldman to rethink its public relations strategy, Viniar said the firm is already making efforts by speaking with reporters.

MORE THAN A PR PROBLEM

Eric Dezenhall, the CEO of Dezenhall Resources, a crisis management firm in Washington, said Goldman's problem is "much broader than a PR problem.

"You are dealing with some very fundamental things," Dezenhall said. "I don't think that better PR is the antidote for what Goldman Sachs is facing.

"They are facing certain institutional, cultural realities that are colliding with a time in history that's put them at ground zero of a witch hunt," he said.

The SEC charge that Goldman failed to tell clients information about a subprime mortgage securities product that it sold them in 2007 and that then blew up during the financial crisis, is its latest problem.

Goldman had cultivated an image as being a cut above its Wall Street rivals by always putting clients first. The SEC case has led investors to question whether that regard for the customer has changed.

Dezenhall said he would advise clients facing Goldman's predicament to take a close look at their own corporate culture -- and even consider opening up.

"It has never been in the company's self-interest to openly communicate," Dezenhall said. "It has been in the company's self interest not to communicate."

Guy Chipparoni, a public relations specialist with the Res Publica Group, said organizations that often face crises end up with a "bunker mentality" that is not conducive to repairing an image.

"The media hates a vacuum," Chipparoni said. "If you don't put something in there, they are going to fill it for you. You have got to feed that beast in a manner that's conducive to your long-term strategy."

Goldman should be able to figure that out, Chipparoni added. "They are pretty smart." (Reporting by Steve Eder)