Under fire, Goldman finds friend in New York's mayor
NEW YORK (Reuters) - Goldman Sachs (GS.N) has no shortage of friends in high places - including New York's City Hall.
Mayor Michael Bloomberg, who made his early millions on Wall Street before turning them into billions at his own financial data and news company, threw his support behind the investment bank, still licking its wounds from a withering resignation letter by a Goldman Sachs employee in the New York Times.(NYT.N)
Calling Goldman Sachs "a great firm," Bloomberg used a morning radio talk show on Friday to accuse critics of unfairly "piling on" the bank and said the former staffer, Greg Smith, was wrong to air his views in the op-ed piece. His firm, Bloomberg LP, competes with Thomson Reuters.
"I thought (it was) a nasty letter from an employee," said Bloomberg, who regards loyalty as non-negotiable.
It was the second successive day Bloomberg stood behind Goldman Sachs. He visited bank's headquarters on Thursday to personally express his support to staffers.
"You know, you go to work for a company, it seems to me they have an obligation to never diss you. They can part company with you. But they should never do that," said the mayor on The John Gambling Show radio show on WOR.
Smith, who worked in equity derivatives, said in the op-ed that Goldman had become "as toxic and destructive as I have ever seen it" and was a place he no longer wished to work.
"It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets,'" Smith wrote, using a term that is British slang for a stupid person.
The New York Times defended its decision to run the letter, which for days has been the subject of chatter around the water-cooler and across the web.
"It's an op-ed piece," said spokeswoman Eileen Murphy. "It's someone's opinion. The purpose of an op-ed page is it's a forum for people to write their opinion on something."
She also said the letter went through "the same process as any unsolicited op-ed would go through," although she declined to give details of the vetting procedure.
A person familiar with the matter who declined to be identified said the decision to run the letter was made by Andrew Rosenthal, the editor of the paper's editorial page, and Trish Hall, the op-ed editor.
Smith made contact with the newspaper about a week before the letter was published, according to another source familiar with the matter. While it is not clear if Smith reached out to other media outlets, he told the New York Times he was in contact with another news organization.
The New York Times then began a checking process that included seeing one of Smith's performance reviews and his employee ID. The paper also called Smith's office before he had resigned, the second source said, noting that no one has challenged the facts in the piece.
Still, it wasn't only Bloomberg who slammed the Times. Morgan Stanley (MS.N) Chief Executive James Gorman said it should never have published the letter, and it lacked balance and was unfair to Goldman Sachs.
"Firstly, I was surprised that anybody would run an op-ed piece based upon the view of a single employee," he said at an event Friday in New York's Times Square. "The point of an op-ed piece is to find someone who's respected."
New York City's mayor also used his radio show to take a swipe at the follow-up coverage by the press, calling it "ridiculous."
Goldman - dubbed a "great vampire squid" in a 2009 article in Rolling Stone magazine - has been embroiled in the biggest insider trading scandal on Wall Street. And just weeks ago, a top judge criticized Goldman for big conflicts of interest in an energy deal.
"Look, I've never worked at Goldman," Bloomberg said. "But there's an awful lot of people there. They work very hard. They live in this city and we want to have more companies come and locate here," Bloomberg said on the radio show.
One news organization that Bloomberg praised for its coverage was his own, Bloomberg LP, saying an opinion piece it ran about Goldman and Smith was right on target.
"I thought the guy who wrote it had it exactly right," the mayor said. "He said, 'Surprise, surprise it's not the Make-a-Wish Foundation.' They're a company that's here to make money. That's what they do."