After listening to three hours of sometimes contentious, often mind-numbingly technical questions and answers, Sen. Mark Pryor (D-Ark.) went directly to a question on the mind of many Americans: “Do you believe Goldman’s actions contributed to the financial downturn we experienced in 2008?”
He posed that to all four of the current and former Goldman executives on the hearing’s first panel, and while he got expressions of concern and sympathy for the deep recession caused by the financial crisis, he got nothing close to an admission of fault or even improper actions.
“We did not cause the financial crisis,” Michael Swenson, managing director of Goldman’s structured products trading group, said bluntly of the role of the firm’s mortgage department. "I do not think we did anything wrong. There’s things we wished we could have done better in hindsight but at the time I did not think we did anything wrong."
Fabrice Tourre, the trader who is the focus of the Securities and Exchange Commission fraud suit against Goldman, also said he did nothing wrong.
“I am saddened and humbled by what happened in the market in 2007 and 2008…but I believe my conduct was proper,” he said.
Daniel Sparks, the former head of Goldman’s mortgage division, went so far as to say that Goldman was “a participant in an industry that got loose” with credit. And he admitted the company made some "bad business decisions."
But said he would have to think about whether Goldman’s actions in particular contributed to the economic downturn. And he was clear he had no regrets.
“Regret to me means something you feel that you did wrong. I don’t have that,” Sparks said. “What I do have is [that] we made mistakes in our business …and we made some poor business decisions in hindsight.”
The answers weren’t good enough for Pryor, who said the executives were not taking responsibility for their actions in a Wall Street betting environment that resembled Las Vegas.
Sen. John Ensign (R-Nevada) took exception to the reference to his state’s largest city.
“I think most people in Las Vegas would take offense to having Wall Street compared to Las Vegas,” Ensign said after Pryor finished his questioning. He said Wall Street was “much more dishonest” because people know the odds in Las Vegas. On Wall Street, firms like Goldman are frequently changing the odds, Ensign said.
“It’s almost like somebody was playing a slot machine and the guys on Wall Street were in there tweaking the odds while you’re playing it,” Ensign said.
--Jim Puzzanghera, reporting from Washington
Photo: Fabrice Tourre. Credit: Chip Somodevilla / Getty Images