UPDATE 1-Summers: Goldman emails show need for transparency

Sun Apr 25, 2010 11:34am EDT

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WASHINGTON, April 25 (Reuters) - Emails sent by Goldman Sachs Group Inc's (GS.N) executives on money the firm made by betting against risky mortgage securities highlight the need for transparency in financial markets, senior White House adviser Lawrence Summers said on Sunday.

Summers, on CBS's "Face the Nation," said he would not comment on specifics of a fraud suit against Goldman brought by the Securities and Exchange Commission.

"But I will say this," Summers said. "This underscores what is at the center of the president's vision here: the importance of transparency, the importance of things being in the open, the importance of it being known who is in a position to benefit from what."

The release of the emails came as the company is battling SEC charges that Goldman hid vital information from investors about a subprime mortgage-linked security.

One email from Goldman Chief Executive Lloyd Blankfein dating from November 2007, said: "Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts."

The emails were released by a Senate Permanent Subcommittee on Investigations ahead of a hearing on Tuesday on the origins of the financial crisis.

Summers, director of the White House National Economic Council, urged passage of a sweeping bill to overhaul U.S. financial regulations.

He was also asked about the prospect that climate legislation might get sidelined with Democrats now signaling they want to move ahead on comprehensive immigration legislation.

"They are both important there's no either/or between energy and immigration reform," Summers said.

He criticized what he saw as unwillingness among many Republicans to engage in bipartisan efforts on the two issues.

But Summers added, "We are prepared to go ahead vigorously with any partner who wants to join us on energy reform and immigration legislation because we believe the gridlock needs to end."

(Reporting by Caren Bohan and Tim Gardner, editing by Vicki Allen)

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