There was a lot to digest from the 10-hour-plus grilling endured by Goldman Sachs Group executives Tuesday, and the media’s coverage was fairly encyclopedic.
But one line of questioning that doesn’t seem to capture much attention is Sen. Tom Coburn’s probing into why Goldman publicly released the emails of Goldman trader Fabrice “Fab” Tourre.
The Oklahoma Republican raised the issue early in the hearing, asking the Goldman executive how it made him feel that his employer had released his emails. Mr. Tourre refrained from any criticism of Goldman action, but he seemed rattled by the question.
The senator went on to point out that Goldman not only provided reporters with Mr. Tourre’s emails, but also with English-language translations of the documents. (Mr. Tourre’s first language is French.)
Mr. Coburn never accused Goldman of seeking to set up Mr. Tourre as a scapegoat, but the line of questioning seemed to suggest Mr. Coburn thought Goldman may have been looking to part ways legally with its employee. (Goldman Sachs has said Mr. Touree did nothing improper.)
Deal Journal spoke with a couple of legal experts on Monday, before the hearing, who said it was in Goldman’s interest to stick with Mr. Tourre. First, the investment bank has stated publicly that it stands behind Mr. Tourre and it would be awkward to reverse course. Second, Goldman may need Mr. Tourre as much as he needs Goldman. Left to defend himself, Mr. Tourre could turn on his former firm and, potentially, disclose embarrassing information about it, the lawyers said.
And of course, Mr. Coburn could simply have been trying to portray Goldman as heartless and unseemly in an effort to discredit the investment bank’s claims of having high ethical standards. Indeed, later in the hearing Mr. Coburn asked Goldman finance chief David Viniar whether he thought it was “unethical” to release Mr. Tourre’s emails. Mr. Viniar said he thought there was nothing unethical about it, but that he wasn’t involved in the decision to release them.
Mr. Coburn later asked CEO Lloyd Blankfein about the email release. Mr. Blankfein also said he wasn’t directly involved in releasing the emails.
Mr. Coburn pressed both executives, asking why Goldman didn’t release emails from other employees. Neither seemed to have a ready answer.
In a voicemail to Goldman employees shortly after the SEC charges were released, Mr. Blankfein distilled the case to its essentials: “The core of the SEC’s case is the allegation that one employee misled two professional investors by failing to disclose the role of another market participant in a transaction.”
Regardless, Mr. Coburn’s questioning seemed only to make Mr. Tourre more sympathetic in the court of public opinion.
As one commentator on the Deal Journal Web site wrote about the Tuesday hearings: “Free Fab.”