Tweeting against Goldman Sachs

The investment bank warns in an SEC filing that bad publicity could hurt profits. Does that include mean tweets?


Andrew Leonard
March 3, 2010 3:50AM (UTC)

For the past 24 hours I've been contemplating a series of tweets generated by someone pretending to be Goldman Sachs' chief spokesperson, Lucas van Praag.

Just writing that sentence, I know, says something profoundly disturbing about the state of journalism, the "promise" of social media, and Wall Street's influence on popular culture in the year 2010. But I don't make the tweets, I just report 'em. Well actually, that's not true. Sometimes I do make the tweets. But not in this case.

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The real Lucas van Praag is renowned throughout the financial press as arrogant, caustic, and in possession of a very large vocabulary -- traits that normally aren't considered desirable public relations attributes. But this is Goldman Sachs we're talking about, so until recently, van Praag may have seemed like a good fit for a company whose CEO seems convinced that earning billions of dollars while helping to engineer the greatest financial collapse in the history of humanity is equivalent to doing "God's work."

The fake Lucas van Praag is just funny. To wit:

@thattwerptaibbi. Stop hounding me! Yes, it's true. $GS funded Kate Gosselin's makeover AND bought CDS against her performance on DWTS.

(Ostensibly addressed to Goldman's most earthy critic, Rolling Stone's Matt Taibbi, this admission purportedly reveals that Goldman Sachs paid for reality TV star Kate Gosselin's makeover, but insured itself against any potential financial losses related to her appearance on "Dancing With The Stars" by purchasing a credit default swap. How troubled am I to realize that I didn't have to use Google once to understand that tweet? Very. But think about it -- this pop cultural structured finance mashup is a perfectly executed metaphor for Goldman's patented ability to sell crap to its clients and then bet on the possibility that the crap would be, well, crappy, for its own account. That's tweeterrific stuff.)

Then there's this one:

Who put this in the annual? Lloyd? Viniar? Cowards! http://bit.ly/9wrx0Q

Here, Fake Lucas van Praag is referencing a new "risk factor" included in an SEC filing made by Goldman on Monday. In it, the investment bank added a new entry to the usual boiler plate of possible profit-dampening future disasters: bad media publicity that could "adversely affect our business."

We may be adversely affected by increased governmental and regulatory scrutiny or negative publicity.

Governmental scrutiny from regulators, legislative bodies and law enforcement agencies with respect to matters relating to compensation, our business practices, our past actions and other matters has increased dramatically in the past several years. The financial crisis and the current political and public sentiment regarding financial institutions has resulted in a significant amount of adverse press coverage, as well as adverse statements or charges by regulators or elected officials. Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, often results in some type of investigation by regulators, legislators and law enforcement officials or in lawsuits. Responding to these investigations and lawsuits, regardless of the ultimate outcome of the proceeding, is time consuming and expensive and can divert the time and effort of our senior management from our business. Penalties and fines sought by regulatory authorities have increased substantially over the last several years, and certain regulators have been more likely in recent years to commence enforcement actions or to advance or support legislation targeted at the financial services industry. Adverse publicity, governmental scrutiny and legal and enforcement proceedings can also have a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.

Now here's where the story gets snake-eating-its-own-tail silly. There are few better ways to attract negative media attention than deciding to blame the media for your problems. A good communications strategist would know that. But lately, some members of the media have started to make a pretty good case that the real Lucas van Praag is himself of a font of bad publicity for the company.

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Max Abelson sums it up best in The New York Observer:

 

But... all of these majestic Victorian taunts might not be in the best interest of a firm that large sections of a beleaguered country are quick to pounce on every time the Dow takes a dip. Nevertheless, the message from Mr. van Praag and his team has been that criticism of the firm is not only moronic -- "chimera produced by a febrile mind" -- but that criticizers are troublemaking simpletons who, as he likes to say, are doing their readers a great disservice.

One could argue that Fake Lucas van Praag's tweets provide ample proof that no better medium has ever been invented for broadcasting "chimera produced by febrile minds" than Twitter. But at the same time, it's more fun to laugh at Goldman than to scream in anger. It may even be useful. Somehow, Goldman still feels a sense of entitlement, still feels that it can argue with a straight face against financial regulatory reform, and still, on some very deep level, just doesn't get that negative media attention is a direct consequence of its own actions. So there's work still to be done.

Long may Fake Lucas van Praag tweet! Because at this point, maybe the only hope we've got at puncturing Wall Street's balloon is to pepper it with unrelenting ridicule.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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