By Richard E. Nicolazzo
Talk about being blindsided.
How convenient that Greg Smith, once an anonymous 33-year-old mid-level executive at Goldman Sachs, became prince of the business world when he resigned via a scathing op-ed in The New York Times.
So here is Smith, just one of 33,000 Goldman employees, getting in bed with the Times to orchestrate his bombshell resignation in the so-called “paper of record.”
One has to seriously ask what bona fides Smith, a derivative salesman toiling in the London office, has to get this kind of royal treatment.
By Goldman standards, he wasn’t highly paid (reports claim he made about $500K). He didn’t manage anyone, and had failed to become a managing director. Keep in mind there are about 12,000 executive directors and 2,500 managing directors at Goldman.
Yet someone at this level is allowed to pen a lengthy op-ed, printed right down the middle of the page with two ugly vulture graphics. Smith technically resigned in an email message to his bosses at 6:40 a.m. London time, but left out the fact that his venom-filled piece would be hitting the street 15 minutes later when the Times was published.
From my perspective, this is the ultimate cheap shot from a paper that clearly has its own agenda. With the viral nature of today’s news, Goldman was caught flat-footed as the country – and world – got to read Smith’s vitriol. One Goldman executive, speaking on the condition of anonymity, said the op-ed landed “like a bomb” inside the company.
Goldman has sophisticated public relations professionals and even a new communications chief, Jake Siewart, but how could any organization rapidly defend itself under these extraordinary circumstances? The first statement issued by Goldman was weak, but probably developed under intense deadline pressure.
The Times knew the timing of Smith’s op-ed. If it was going this route, why didn’t it give Goldman the opportunity to write a rebuttal op-ed?
The paper ran Goldman’s statement a few hours after the paper was out as part of a follow-up online report. How professional… Goldman was left scrambling all day to make sure hundreds of other media outlets included the statement in their coverage. Talk about starting out behind the eight-ball.
What’s really troubling about how this has been managed by the Times is the context of the story. For at least the past four years, taking shots at Goldman has become a national sport.
In 2008, the company got billions in the so-called “backdoor bailout” that involved AIG. A few months later in Rolling Stone Magazine, a writer called Goldman a “great vampire squid wrapped around the face of humanity…”
Two years ago, the SEC accused the bank of creating a subprime mortgage product that was meant to fail. Goldman settled the claim for $550 million and agreed to change its business practices. Last April, a Congressional committee got into the act when it published a massive report criticizing Goldman’s investment banking business for misleading clients.
Goldman also took a hit when Occupy Wall Street protestors camped out in front of its Lower Manhattan headquarters. The company’s “selfish motivations” were also spotlighted in February by a judge commenting on Goldman playing both sides in Kinder Morgan’s acquisition of the El Paso Corporation.
Against this backdrop, how could Smith be granted the platform he captured from The New York Times? His commentary smacks of a “crybaby” mentality. If he was so upset with the culture at Goldman, why didn’t he leave years ago? Or, why doesn’t he give back the money he’s made?
Didn’t the Times realize that Goldman is already viewed by some as unscrupulous and Smith’s outrage comes across as a bit phony? Smith would have us believe he’s a brave soul. I’d say he’s a huckster. Did anyone notice how he managed to get his whole resume worked into the piece?
When approached by Smith, the Times should have turned the tip over to the paper’s business staff. Smith could have aired his complaints to a reporter, and the reporter could have called Goldman for comment.
That would be fair game. Smith gets to air his grievances, yet his claims are vetted by a journalist. Instead, Smith gets a free ride and advances his own agenda at great cost to Goldman. On the day the op-ed appeared, Goldman’s market cap declined by about $2 billion.
More Thoughtful Response from Goldman
Later in the day, Goldman executives Lloyd Blankfein and Gray Cohn wrote a more detailed and thoughtful response to employees. At one point they wrote “…Just two weeks ago, Goldman Sachs was named one of the best places to work in the United Kingdom, where this employee resides. The firm was the highest placed financial services company for the third consecutive year and was the only one in its peer group to make the top 25. We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively.”
Revelations about greed and arrogance on Wall Street are nothing new, and that’s the key point. One Goldman employee decides to quit his job, air his grievances in public, and it becomes the subject of a Times op-ed? Is this really the function of the op-ed pages at the Times?
In my view, the Times has set a bad precedent for the profession of journalism. Going forward, all sorts of disgruntled people will offer to take shots at their former employers, especially if media outlets give them the soapbox.
In the end, Smith’s “opinion piece” is not simply an opinion. It is a sneaky way to blast his now former employer on the way out the door and create advantages for himself. Smith may not get another job on Wall Street anytime soon, but in today’s media free-for-all he’ll get TV appearances, opportunities for more commentary, a chance to write a book, and maybe an offer for a low-budget made-for-TV movie.
All this enabled by none other than The New York Times, who in my view was sucked in, complicit, or both. I expected more from a paper that is trying to salvage what is left of real professional journalism.
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Richard E. Nicolazzo is managing partner of Nicolazzo & Associates, a strategic communications and crisis management firm headquartered in Boston, Massachusetts
Joe M. Grillo, partner, and Linda Harvey, director of client services at Nicolazzo & Associates, contributed to this blog