Let the whole story out, come clean with what happened, and you might come out of this with your reputation and franchise intact.
There's a big piece of paper on the wall in front of my desk that says: “There's ALWAYS more to the story.” It reminds me that whenever I think that I truly understand someone's motivations, or hear a tale about something happening in my little world, or the world at large, that there is always something left unsaid, something that I DON'T know, and more importantly more that NOBODY knows.
As every scandal unfolds and stories hit the newspapers, the more I believe in this axiom. Think of the Toyota scandal. Perhaps they were envious of the way that the biggest Wall Street brands were able to damage a great brand name in a matter of months. Not to be left behind, their “shock” and “denial” that problems existed at all with their cars disappeared in the face of overwhelming proof. Not only were the car problems real, but they were aware of the issues for months if not years before (Note: corporate executives need to remember that “e-mail” is also “evidence-mail”).
Certainly the folks at Goldman Sachs wish that some of their employees were more circumspect. E-mails have been made public where they used various expletives to describe a product that they created and sold to clients that is under investigation (Abacus 2007-AC1). When confronted with these e-mails yesterday in front of the Senate, Goldman CFO David Veniar replied: “I think that's very unfortunate to have on e-mail.”
You think?
A few months ago, if you had asked 100 people on the street who cared about cars which automobile manufacturer had the best reputation for quality, I would guess that as many as half would have said Toyota. If you asked 100 people who work on Wall Street which Wall Street firm had the best reputation for smarts and integrity, I would guess that as many as half would have said Goldman Sachs.
The corollary to the “Sarch Axiom” is that the cover up of a scandal always ends up worse than the crime itself. Martha Stewart did not go to jail for stock manipulation, but for lying to investigators. Bill Clinton did not get impeached for fooling around with an intern, but for lying about it.
Toyota, to their credit, in the face of the overwhelming evidence and knowing that their franchise was at risk, issued massive recalls to fix their cars and repair their brand.
If Goldman wants to put this behind them quickly, they better read all of their own “evidence mails”. It truly would be “unfortunate” as Mr. Veniar states, to have more embarrassment continue to drip out slowly. Let the whole story out, come clean with what happened, and you might come out of this with your reputation and franchise intact. Show that you lied or obfuscated during the investigation, and nobody will even care that you might not be guilty of what you were accused of; they will only remember that you tried to cover up the truth.
