On Tuesday, April 27, 2010, Senator Carl Levin will convene a hearing of the Senate Permanent Subcommittee on Investigations into Goldman’s shorting of mortgage-backed securities. The panelists, those in the dock, include CEO Lloyd Blankfein, director of structured products group trading Fabrice Tourre, CFO David Vinar, and Chief Risk Officer Craig Broderick. Media reports on Monday, April 26, portray Blankfein as defiant and confident.
Blankfein and his GS colleagues are mistaken if they believe that logic and evidence can carry the day in their attempt to prove the firm did nothing wrong or illegal. Protestations of innocence were of little use during the Spanish Inquisition. Many Spaniards fell victim to the wrack. Their innocence was proven if they did not recant their heresy under torture, but the price of proof was often death.
When looking at Senator Levin, Blankfein would do well to visualize Tomás de Torquemada, who served for fifteen years as Grand Inquisitor of Spain, in the chairman’s seat. Although the Senate cannot inflict physical torture, it can dish out considerable mental torture.
Wednesday's stories will likely include photos of Blankfein squirming in his seat and other unflattering images. Snippets taken from Senators' statements and questions will portray GS as a casino in which the house (GS) wins at the expense of the American people.