Goldman Sachs’ villainous veep, Fabrice Tourre, has little left to lose. Neither does the American economy. But everyone wins if he would just tell the truth.
If you’re looking for tips on ethics, a carpenter/writer is probably not the first person you’d seek out. But not to worry; this isn’t an advice column. It’s a conversation about our choices—why we make them and how we justify them. My qualifications, in case you’re wondering, include: 1) an undergraduate degree in philosophy, 2) fifteen-sixteenths of a masters in journalism, and 3) more than two decades of experience finding fault with other people—while simultaneously applying a more open-minded and light-hearted set of criticisms to my own decisions.
We would all like to be happy, ethical, and well paid, but like any trifecta, it’s a long shot. We make compromises. We find ourselves doing things that require more rationalization than we’d like, or that we’d accept from other people. We love to apply our rules to the other guy’s game.
If, for example, your accumulated life savings are in a pint glass on your dresser, you’d probably like to empty that glass into a gym sock and use it to beat some ethics into one of these Wall Street fuckers. But if you’re, say, Fabrice Tourre, and you busted your ass through years of school and survived the twenty-something interviews they give you before joining Goldman Sachs, you probably have a different point of view. It takes some intellectual courage to put down the sock and step into the other guy’s shoes.
Watching Goldman Sachs CEO Lloyd Blankfein being grilled by Congress, grimacing as he tries to contain his contempt for his questioners, searching the interior of his glistening dome for new ways to say, “I’m not telling,” you get the sense that Business Ethics is not one of his favorite subjects. I imagine he’d prefer to discuss just about anything else—even Burning Dog Poo and the Human Response—a topic on which, if he keeps up the absurd “I’m a blue-collar guy,” humbly “doing God’s work” shtick, he may soon become an authority.
Working at Goldman Sachs isn’t inherently unethical; but when you’re in a position of almost unlimited power, you’re accused of rigging the system at the expense of everyone else, and you’re primary defense is “everybody’s doing it,” even your mom would tell you you’re on shaky moral footing. Of course, it’s hard to take members of Congress—the assemblage of virtuosic liars and cheaters that brought us John “I’ve never considered myself a maverick” McCain and Larry “wide stance” Craig—too seriously on the subject of ethics, either.
(And it’s worth noting that the SEC, the regulatory body that is bringing the fraud suit against Goldman Sachs, is only now getting around to cleaning up Wall Street after recently discovering that computers aren’t just sophisticated porn-delivery machines.)
With these buffoons making and enforcing the rules, it seems like ding-dung-ditch might be the only recourse the American people have left. Unless someone from Goldman Sachs steps up and tells us what Blankfein won’t. Taxpayers are still subsidizing Goldman’s success, and we deserve some answers.
The hearings were part of a larger congressional investigation into the causes of the financial crisis, but they gave the government the opportunity to introduce the country to the only named defendant in the SEC’s fraud case, Goldman Senior VP, Fabrice Tourre. At issue is whether Tourre, in his role as “market maker,” failed to disclose to institutional investors that Paulson & Co—the architect of the synthetic CDO they were buying—had designed it to fail, and was betting on its failure.
I’ll give the SEC this—it found what appears to be a great villain. On top of being French, and joking about selling toxic sludge to “widows and orphans,” he habitually refers to himself in the third person (“Jimmy doesn’t like misunderstandings“). Short of a waxed mustache for twirling, Tourre’s got it all.
Opinions vary regarding the strength of the government’s case, but Goldman is reportedly pursuing a settlement, in which case (if history is any judge) they’ll likely pay a disproportionately small fine (and yes, $621 million is a small fine) on the condition that they aren’t forced to admit any wrongdoing—leaving us right back where we started.
What the country, and the economy, desperately needs is for someone to man up and tell the truth, so we can be sure that the “Great American Bubble Machine” doesn’t go back to business as usual. I think Tourre is our guy. Don’t laugh—if you read his emails, you get the sense that, unlike Blankfein, Tourre has a conscience.
Consider this email to Marine Serres (girlfriend #1):
Anyway, not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient and ultimately provide the U.S. consumer with more efficient ways to leverage and finance himself, so there is a humble, noble and ethical reason for my job ; ) amazing how good I am in convincing myself!!!
Correct me if I’m wrong, but if you’re “not too guilty,” you’re still, by definition, partially guilty. It’s easy to take this at face value, and use it as a reason to hate the guy, but you would have to ignore the obvious sarcasm—and the winking emoticon. The bit about “making capital markets more efficient,” is Wall Street’s go-to saw for justifying the unjustifiable, and Tourre sees it for what it is—mostly bullshit. Even the “widows and orphans” comment is clearly coming from a man who is conflicted about his role, and recognizes that Goldman’s actions may have very real, catastrophic consequences.
Not convinced? How about this one, to Fatiha Bouktouche (girlfriend #2):
When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: ‘Well, what if we created a “thing”, which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?’) it sickens the heart to see it shot down in mid-flight…
Something tells me that nothing could sicken Lloyd Blankfein’s heart, apart from maybe losing all his dough. Even in that case, I’m guessing he’d choose different words to express the feeling. In another email, Tourre writes, I feel like I’m losing my mind and I’m only 28!!! OK, I’ve decided two more years of work and I’m retiring.
That was in 2007. He’s overdue. His statement to congress (with all its ass-covering language) notwithstanding, I can’t help but like the guy. You can’t blame him for wanting to be successful, or for choosing Goldman over say, non-profit work. I don’t know anyone who wouldn’t like to make $1.5 million in a year. I know I would—and I might even make some ethical compromises and rationalizations to make it happen.
According to Goldman, Tourre is still an employee in good standing. But Blankfein has already thrown him under the bus, leaving a voicemail for Goldman employees that described the SEC’s suit as an “allegation that one employee misled two professional investors.” He’s already been de-registered as a London trader, and given the content of his emails, I wouldn’t bet on his speedy return—these days, he’s on “paid leave with no end date.”
But Tourre’s infamy will live on, even after the dust settles and some hedge fund without much concern for its public image hires him. In the minds of ordinary Americans, he’ll be remembered as a detestable mash-up of Pepe Le Pew and the Monopoly guy—unless he takes a shot at redemption, and tells the world what really goes on at Goldman Sachs.
Ordinarily, I wouldn’t advise someone to rat out his co-workers, but as we all know, Goldman Sachs makes the rules. And the first rule of Goldman Sachs is: Self-Interest Rules. The second rule of Goldman, You Do Not Talk About Goldman, complicates things, but I’m sure he could work something out with the feds. Anyway, what’s a non-disclosure agreement when you can go from goat to superhero in a nanosecond, simply by telling the truth?
Tourre could single-handedly make the world a better place—an opportunity few men have, and fewer take. And he’d be America’s most beloved Frenchman since… uh… give me a second… Louis Pasteur?
—Henry Belanger
I cannot see how anyone can defend Goldman Sachs for their reckless behavior. What makes Goldman Sachs scary is their morphing of business and politics. Almost every Goldman Sachs executive have gone to government once they retire from Goldman Sachs. Though Goldman Sachs and the Federal government are two different entities, because of this morphing, there is an inherent conflict of interest when the regulator is regulating themselves in a way.
David, the moral defensibility of working at Goldman Sachs ain’t as cut and dried as you think.
Dear Mr. Balanger, This entire item is just so wrong in so many ways. 1. Working at Goldman Sachs isn’t anymore any more unethical than what you do. The because entire journalists’ writers’ bloggers’ craft isn’t so pure and simple either. 2. You site as “proof” that the person Goldman Sachs knew he was peddling something that had no value (namely derivatives and securized mortgages) … because he has high IQ enough to actually wonder about his (quoting him) “having had some input into the creation of this product (which by the way is a product of pure intellectual masturbation,… Read more »