WASHINGTON (CN) – Amid a crush of news cameras and protesters, four former and current Goldman Sachs executives on Tuesday entered a Senate hearing to investigate investment banks’ role in the financial crisis, one day after a Senate investigative committee announced that the bank bet against its own mortgages and pocketed billions.
“We want our jobs back,” a woman yelled, backed by a small group of people from the activist group Code Pink, clad in mock prison uniforms and yellow crime scene tape and bearing the names of Goldman Executive Director Fabrice Tourre and CEO Lloyd Blankfein. “The police are threatening to arrest us for speaking the truth,” another called out.
The hearing was called to investigate the role of investment banks in the 2008 financial crisis. During its 18-month investigation, the Senate Subcommittee on Investigations uncovered “overwhelming” evidence that Goldman bet against the mortgage market and against specific mortgage-backed securities they marketed and sold.
“Goldman Sachs did well as its clients lost money,” committee chair Sen. Carl Levin, D-Mich., said, adding that the firm viewed its customers as “objects of its own profits.”
“Goldman Sachs was slicing, dicing and selling toxic mortgage-related securities on Wall Street like many other investment banks, but its executives continue to downplay the firm’s role in the financial engineering that blew up the financial markets and cost millions of Americans their jobs, homes, and livelihoods,” Levin said. “They turned bad mortgage loans into economy-wrecking financial instruments.”
“Goldman Sachs, like all the major Wall Street firms, got a multibillion-dollar lifeline from the taxpayers in 2008,” said Levin, but the firm “continues to deny that it shorted the mortgage market for profit. Why the denial? Why the denial?” he repeated.
“It is unsettling to read e-mails of Goldman executives celebrating the collapse of the housing market when the reality for millions of Americans is lost homes and disappearing jobs,” said committee member Sen. Susan Collins, R-Maine.
Levin said the three hearings held thus far on the economic collapse have unveiled a thread of “unbridled greed and the absence of a cop on the beat” among Wall Street firms.
“Wall Street is on the wrong side of this fight,” Levin said, expressing disdain that lobbyists are “roaming” the halls of the Capitol trying to weaken financial reform currently being negotiated in the Senate.
Levin said the recent Securities and Exchange Commission suit filed against Goldman will reveal the legality of Goldman’s actions, while “the question for us is one of ethics and policy.”
“The ultimate harm here is not just to clients poorly served,” Levin said. “It is to all of us.”
Tuesday’s hearing will feature testimony from former and current Goldman executives Daniel Sparks, Joshua Birnbaum, Michael Swenson, Fabrice Tourre, David Viniar, Craig Broderick and Lloyd Blankfein.