By SEWELL CHAN and GRETCHEN MORGENSON
Published: June 7, 2010
WASHINGTON — The commission investigating the causes of the financial crisis said on Monday that it had subpoenaed Goldman Sachs and harshly accused the investment bank of trying to delay and disrupt its inquiry.
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Ozier Muhammad/The New York Times
Phil Angelides, left, and Bill Thomas, of the Financial Crisis Inquiry Commission, said Goldman Sachs was uncooperative.
Times Topic: Financial Crisis Inquiry Commission
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“Goldman Sachs has not, in our view, been cooperative with our requests for information, or forthcoming with respect to documents, information or interviews,” Phil Angelides, the chairman of the Financial Crisis Inquiry Commission, told reporters on a conference call.
The deputy chairman, Bill Thomas, accused Goldman of stonewalling, and said, “They may have more to cover up than either we thought or than they told us.”
But even as Goldman appeared to be uncooperative, it tried over the last month to set up personal meetings with members of the commission, two people briefed on the discussions said.
Lobbyists representing Goldman in Washington tried to arrange one-on-one meetings with a handful of commissioners, including Mr. Angelides, but he declined to meet with them, according to the people, who spoke on the condition of anonymity because they were not authorized to discuss the commission’s inner workings.
Mr. Angelides and Mr. Thomas both said that Goldman had inundated the panel with data — about five terabytes, equivalent to several billion printed pages — and dragged its feet on answering detailed questions about derivatives, securitization and other business activities.
In particular, the commission sought records on collateralized debt obligations based on mortgage-backed securities, and the names of Goldman’s customers in transactions of derivatives. In a chronology it provided, the commission also indicated that it was interested in Goldman’s dealings with the American International Group, the insurance giant that collapsed in 2008, and in the bank’s so-called Abacus transactions, which are at the heart of a civil fraud suit brought by the Securities and Exchange Commission.
The commission’s unusual public criticism — it has issued 12 subpoenas, none accompanied by stinging accusations of obstruction — underscored the anger in Washington at the outsize profits and influence of Goldman, which had emerged nearly unscathed from the financial crisis. It also reflected the fallout from Goldman’s unyielding strategy of standing its ground in the face of inquiries and attacks.
A spokesman for Goldman, Michael DuVally, said, “We have been and continue to be committed to providing the F.C.I.C. with the information they have requested.”
The lashing by the commission further complicated Goldman’s public image. In April, the bank was accused of securities fraud in a civil suit filed by the S.E.C., which contended that it created and sold a mortgage investment that was secretly devised to fail.
That investment and others like it were the subject of a Senate investigation that also exposed Goldman to withering criticism. And federal prosecutors in Manhattan have begun looking into the mortgage practices of banks, including Goldman.
The commission, created by Congress, is required to deliver a report by December, but with only $8 million and some 50 employees to draw on, it has at times seemed outmatched by the targets of its inquiries.
“I suspect they’re spending more on their lawyers than our whole budget,” Mr. Thomas conceded.
Lloyd C. Blankfein, Goldman’s chairman and chief executive, testified at the commission’s first public hearing in January, with the top bankers Jamie Dimon of JPMorgan Chase, John J. Mack of Morgan Stanley and Brian T. Moynihan of Bank of America.
After the hearing, the commission sent written questions for Mr. Blankfein and made requests for records in April and May.
Mr. Thomas, a California Republican who served 28 years in the House, said the requests to Goldman were “not inordinate” compared with similar queries sent to a half-dozen other banks. All of the other institutions complied, he said.
In contrast, Mr. Thomas said, Goldman gave a “basically incomplete” response, even as it deluged the commission with so much irrelevant information that it amounted to “mischief-making” that was both “deliberate and disruptive.”
Mr. Angelides, a former California treasurer and candidate for governor, said, “We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish.” He added, “This has been a very deliberate effort over time to run out the clock.”
The two men also seemed to acknowledge that the sheer volume of data was beyond the commission’s capacity to analyze. “We should not be forced to play Where’s Waldo? on behalf of the American people,” Mr. Angelides said. “This is not right.”
Mr. Thomas, turning to the proverb about looking for a needle in a haystack, said, “We expect them to provide us with the needle.”
The two men said that after the subpoena was issued on Friday, Goldman had moved to schedule interviews with several executives, including Mr. Blankfein; David A. Viniar, the chief financial officer; Gary D. Cohn, the president and chief operating officer; and Craig W. Broderick, the chief risk officer.
The 10-member commission was slow to get started. It recently replaced its executive director, B. Thomas Greene, with Wendy M. Edelberg, an economist on loan from the Federal Reserve, who had been the research director. Mr. Greene, a former chief assistant attorney general for California, remains on the commission’s staff as senior counsel.
Sewell Chan reported from Washington, and Gretchen Morgenson from New York.
A version of this article appeared in print on June 8, 2010, on page B1 of