PR: The Good, Bad and Ugly

When It Comes To Apologies, Goldman Sachs

by Wesley Hyatt on 11/18/2009

According to The New York Times, the announcement by mega-bank Goldman Sachs that it is setting aside $500 million to help 10,000 small businesses recover from the recession is in no way motivated by criticism of its greedy reputation.  Right.  And Bernie Madoff is a misunderstood altruist.

No bigger firm generates worse PR than Goldman Sachs does right now.  It is trying to combat its bad image that has been created, according to the blog Seeking Alpha, by such tactics as CEO Lloyd Blankfein saying the firm was “doing God’s work” by paying out billions in bonuses to employees while getting a government bailout for a financial crisis it helped precipitate.  Blankfein claimed he had to pay the bonuses to stay competitive and that rules that apply to the rest of America do not apply to them.

Addressing the Fallout: Blankfein, Buffett and Brunswick

The consequences of his statement have been startling:

1) Blankfein held a press conference saying Goldman had made mistakes, though he did not specify them.  His firm later announced the half-billion going to assist small businesses in need.

2) Normally straight-up Warren Buffett, Goldman Sachs’ largest investor, said with a straight face that this program was not a reaction to critics, but a legitimate business initiative.  Not one of your shining moments, Warren.

3) Goldman Sachs has hired PR firm Brunswick to improve its image with the public.  That sounds encouraging, but as the Brunswick partners include the former head of public affairs and the chief of staff to controversial ex-Treasury Secretary (and former Goldman Sachs CEO) Henry M. Paulson Jr., it may be the wrong move.

Walk the Walk, Not Just Talk the Talk

Here is what Blankfein should do: Show people you care about Main Street as much as Wall Street, and meet as many of these small businesses as you can in person.  Show how your donations benefit them and, in turn, the many communities across America hurting deeply from this recession.   

If you fail to do this, the legacy of Goldman Sachs will be that of the leading symbol of everything wrong with the American economy at this time.  That certainly is not “doing God’s work,” no matter what way you look at it.