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Goldman's PR efforts undermined by promotions

Activists protest outside Goldman Sachs's Washington, D.C., office.

Alex Wong/Getty Images

Jay Richardson isn't among those railing against Goldman Sachs Group Inc. these days, but he is perplexed by the investment firm's latest effort to rehabilitate its image.

Earlier this week, Goldman's beleaguered chief executive officer Lloyd Blankfein announced the firm would donate $500-million (U.S.) over five years to help 10,000 small businesses across the United States. Mr. Richardson, who runs a small manufacturer in Tennessee, called the firm's headquarters to get details. He was directed to a recorded message.

"They haven't gotten back with me and I'm still sitting by the phone waiting," Mr. Richardson said Thursday from his office at Master Model Craft Inc., which has been battered by the recession. Mr. Richardson doubts he'll get a response, especially now that he has learned the $500-million is for investor education and community development. "I thought it was going to actually go to small businesses and help them," he said.

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For weeks Mr. Blankfein has been trying to stem a rising public backlash against the New York investment firm, which reported a record $3-billion profit in the third quarter.

It didn't help when reports surfaced yesterday indicating the company has promoted 272 executives to the ranks of managing directors, making them eligible for even bigger bonuses next year.

The same day he unveiled the small business program, Mr. Blankfein apologized for Goldman's role in the financial meltdown, telling a New York conference that Goldman "participated in things that were clearly wrong and we have reason to regret and we apologize for them."

He has also cancelled Goldman's Christmas party and travelled to Washington yesterday with other business leaders to meet lawmakers working on issues affecting New York. "We're here as representatives of New York City," Mr. Blankfein told reporters after the meeting, adding that the group "discussed important issues related to New York and its economy, and what we as New York CEOs can [do to]help with the country."

The gestures have done little so far to stem criticism from those who say Goldman has learned nothing from the financial crisis.

"Goldman Sachs seems to salute no flag but their own corporate logo," Andy Stern, president of the Service Employees International Union, told a rally in front of Goldman's Washington office this week.

He accused company executives of "gorging themselves" on bonuses made possible by tax money from working Americans.

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Mr. Stern and others point to the more than $20-billion in bonuses Goldman is expected to pay employees this year, and comments that Mr. Blankfein made to The Times of London suggesting the firm was "doing God's work" and that it had "a social purpose."

In that article, Mr. Blankfein took pains to note that Goldman helps businesses by playing a key role in financial markets. He also stressed that it didn't want a government handout and has paid back the $10-billion it was obliged to borrow. But he acknowledged the public animosity toward Goldman. "I know I could slit my wrists and people would cheer," he said.

For consumer activists such as Larry Rubinoff, the public anger toward Goldman is showing no sign of trailing off. He runs a website called which provides information "to demonstrate how destructive they are to our lives and the hopes and dreams of our children."

Last spring Goldman tried unsuccessfully to shut down the site, but that made it only more popular. "They are their own worst enemy," Mr. Rubinoff said yesterday from his office in Florida.

Mr. Rubinoff is a semi-retired mortgage broker who runs the site with a group of volunteers (under an agreement with Goldman, the site can't make money off the firm's name).

He sees the recent gestures by Mr. Blankfein as "relatively meaningless." Goldman executives "evidently feel that the American people will not see through this." And he said comments to the site are still pouring in from across the U.S., Britain and a few from Canada. "It's never-ending."

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With files from Bloomberg

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About the Author
European Correspondent

Paul Waldie has been an award-winning journalist with The Globe and Mail for more than 10 years. He has won three National Newspaper Awards for business coverage and been nominated for a Michener Award for meritorious public service journalism. He has also won a Sports Media Canada award for sports writing and authored a best-selling biography of the McCain family. More

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