On a cold evening in early February, after a long day of effectively deploying capital, you, Lloyd Blankfein, step into your 15 Central Park West apartment to find a message scribbled on the notepad by the fridge: Gary called. A faint melancholy comes over you. He was your right-hand man. He was like a kid brother. Now...oh well. It'll be good to hear how things are shaking out in DC.
You grab your phone and hit Favorites. That old lunkhead is still #1. Two rings. “Lloyd!”
“Hey buddy, how's it going, listen, quick question.”
“See, we're rolling out a bunch of executive orders over here–”
“So I've noticed.”
“Ha, right, yeah. Well anyway we're doing these EOs and I wanted to pick your brain for a sec. We wanna do something about Dodd-Frank and all that, and I was wondering what you'd recommend I tell the boss. You know, what regulatory changes might maximize the profits of Goldman Sachs, the multinational bank you run, and where I worked for 26 years. Any specific, actionable suggestions?”
This, or something vaguely like it, seems to be the conversation Senators Tammy Baldwin and Elizabeth Warren imagine transpiring between current bankers at Goldman Sachs and National Economic Council Director Gary Cohn. On Thursday, Baldwin and Warren sent a letter to Blankfein requesting records of any contacts between the former Goldman president and Goldman staff in advance of last week's executive orders that opened the doors to financial deregulation, as well as Goldman's position on those orders.
“We are concerned that Mr. Cohn ... will be unable to develop economic policies that will help middle-class families, and will instead favor Wall Street over Main Street,” the senators wrote, noting the $284 million in cash and equity Cohn was awarded at his departure. “The executive orders released by President Trump on Friday last week raise our concerns about the degree to which Mr. Cohn's advice to President Trump is good for Wall Street, but bad for Americans.”
Granted, the letter is mostly political posturing meant to convey that the Warren wing isn't gonna give up playing hardball. But the working theory behind the request seems to be that a guy who worked at Goldman for a quarter of a century, eventually becoming president and chief operating officer, would have to call up his old colleagues in order to craft measures that benefit the bank he helped run.
Leaving aside the implication of conflicted interests among Goldman alumni in the White House – an aspersion Lloyd Blankfein has been adamant in rebutting – it's downright insulting (to Cohn) to suggest that he wouldn't be able to sit down and draft a point-by-point overhaul of Dodd-Frank all by himself, if the object were to benefit his old pals at 200 West. Imagine Lloyd's reaction if he got that call. He wouldn't be eager to help; he'd be concerned for his BFF's mental wellbeing.
Then again, maybe the letter will turn something up after all. Recall that Goldman partners have reportedly become virtual switchboard operators for executives trying to get a word in at the White House. But if any of those calls ended up being relayed in emails to Cohn, expect subject lines that are less “Repeal xyz” and more “pls don't let us all die, ty.”