Ooo, ooo, Charlie Gasparino knows! It's because of their image problem. According to Chaz, people at the Treasury were worried about Blankein running his mouth re: Hova (again), among other things.
For the past year, executives inside the image-challenged Goldman Sachs have debated whether the firm's publicity problems will have an impact on its bottom line. The answer so far has been ‘no’ given the firm's huge profits last year. Indeed, the big Wall Street firm has held off on plans for a major publicity plan designed to change public opinion. But times might be changing. The decision announced earlier Monday that the Treasury Department has chosen Morgan Stanley to advise it on unloading its massive stake in Citigroup-- the largest stock offering in history and one of the most high-profile investment banking assignments in years -- has given credence to the opinion of some senior executives inside the firm that Goldman's image problems will impact its client related business. These executives worried that prospective investment-banking clients concerned about their association with the firm will simply hire other players rather than face the fallout of working with Goldman.