Page last updated at 14:33 GMT, Tuesday, 27 April 2010 15:33 UK

Profile: Goldman Sachs chief executive Lloyd Blankfein

By Edward Stourton
Profile, BBC Radio 4

Goldman Sachs' Lloyd Blankfein

Many people do not recognise the name of Goldman Sachs' chairman and chief executive, and he would probably rather it stayed that way.

But, whether he likes it or not, Lloyd Blankfein is emerging as what his fellow Americans might call the "poster child" of greedy banking.

Goldman Sachs is an institution which famously prefers to conduct its lucrative business discreetly, in the shadows.

But the firm has been accused of fraud by US regulator the Securities and Exchange Commission (SEC), and is being investigated by the Financial Services Authority in the UK.

Goldman Sachs - and its chief executive - have also been given a mauling by politicians on the both sides of the Atlantic, most recently by the US Senate Subcommittee on Investigations.

So who is the man at the centre of the storm?


Lloyd Blankfein's life story reads like an American dream.

He was born in 1954 of immigrant stock. His family came to America from Europe in the late nineteenth century in search of a better life. His father was a truck driver and then took a job sorting mail at the post office.

The young Lloyd grew up in the public housing projects of East New York. In an interview for the New York Times website, he described his first job - aged 13 - selling drinks at Yankee stadium:

Yankee Stadium in the Bronx, New York, circa 1965
New York's Yankee Stadium where Blankfein earned his first wages

"A soft drink was 25 cents and I think you got a 10 or 11% commission, and I'd remember walking along and somebody in the upper part of the upper decks would raise their hand and say I'd like a soda.

"And I'm thinking this tray is unbelievably heavy, and I'm going to walk all the way up there for 2 and 3/4 cents? Guess what? I walked up the way up there for 2 and 3/4 cents."

Note that eye for the precise profit margin - it reflects a formidable financial brain which recently earned Lloyd Blankfein nearly $70m in one year, a record for any Wall Street boss.

The journey upwards began with a Harvard scholarship which led to a job at a law firm. But after three years he decided to move into finance. He applied to Goldman Sachs but was turned down - so in 1981 he joined J Aron, a commodities trader dealing in gold.

Former colleague Martha Gifford remembers him as a hard-working young lawyer before he made the switch:

"He certainly was not one of these people who tried to hide his background, all of us who dealt with him assumed that his family's circumstances were a backdrop and an incentive to the kind of ambition he had," she told Radio 4's Profile programme.


Joining J Aron certainly paid off, as shortly afterwards it was taken over by Goldman Sachs, and Lloyd Blankfein found himself where he had wanted to be in the first place.

Former Treasury Secretary Henry Paulsion (l) with former President George W Bush (r)
Paulson is just one of many Goldman Old Boys to excel in the political world

He became chief executive in 2006, when his predecessor, Henry Paulson, left to become the Treasury Secretary in the Bush Administration.

The firm he inherited was already a formidable money-making machine. The Sunday Times' John Arlidge recently visited Blankfein's Wall Street office for a rare interview:

"What drive Lloyd and people like Lloyd is money and a sense that they are doing good.

"They really, really, really, believe in capitalism, and in the bank's role in creating wealth. Making money is a sign of success, it's a way of keeping score so he can prove he's the best, and also it's proof that he's doing good."

But despite his conspicuous success, Mr Arlidge describes a comparatively modest man:

"He's soft-spoken, he's funny, he's engaging, you'd want to have dinner with him, he's still married to the same woman he first married. He has some nice houses, but he doesn't have a boat, he doesn't have a plane.

"If you sat next to him on the tube you really wouldn't think that you were sitting next to the sun king."

'Tone deaf'

The Financial Times made Lloyd Blankfein its person of the year in 2009.

Editor Lionel Barber, whose children attended the same school as Blankfein's in New York, says there is much to admire in the man: "Lloyd Blankfein is an extremely smart individual, very intelligent."

Senator Carl Levin briefs the press on his committee's findings about Goldman Sachs
Senator Carl Levin accused Goldman Sachs of misleading its investors

But he believes the case against Goldman Sachs - that the firm profited at its clients' expense by betting on property prices falling, while selling investments that relied on a rising market - goes to the heart of the way Lloyd Blankfein has run the company:

"He feared that if Goldman Sachs stuck to its traditional separation of agency and principal businesses - that's keeping client advisory and asset management work isolated from risk-taking with its own capital - then it would be overtaken by the competition.

"Therefore he actively and consciously embraced conflicts of interest because he thought it was essential to the bank's survival and prosperity.

"These conflicts of interest have [now] been exposed, and I think Goldman Sachs and Lloyd Blankfein have been somewhat tone deaf, particularly as political criticism has mounted."

Goldman Sachs has denied any wrong-doing.

'God's work'

And many who know him say he minds very much about doing the right thing.

From his window high over Wall Street he looks down on the streets of East New York where he grew up - and the view is a constant reminder that many American dreams are never realised.

Goldman Sachs' New York headquarters
Characteristically, Goldman Sachs' New York office has no sign

Kathy Wilde recruited Lloyd Blankfein to a charity group which works to improve New York:

"He talks about how the school that he attended is one of those high schools that was closed... because it was such an utter failure, and how tragic it is that in a period of 35 years the public education system in the city of New York deteriorated so badly.

"That makes him particularly passionate about working to improve it."

But Lloyd Blankfein is now performing on a public stage - where you do not always get much credit for private philanthropy.

The rules are different - as he learnt when he gave his rare interview to the Sunday Times last autumn. Bankers he said, are "doing God's work", a phrase which made headlines around the world.

"When [he] talked about bankers, and he himself, "doing God's work," what he was doing was reinforcing this sense that they have a social purpose," says John Arlidge.

"It was half joking but it was half serious, he knew that he was using a particularly fruity couple of words but he knew that he was using those words specifically because he wanted to strongly reinforce this notion that banks, and Goldman in particular, does do good."

Lionel Barber argues that the comment was misinterpreted:

"Lloyd is a great wise-cracking New Yorker, he was trying to make a self-deprecating joke, he didn't mean it seriously at all, but he really regrets it, that he made that quote."

'Ultimate insiders'

Everyone says Lloyd Blankfein is a quick learner - so there probably won't be many quips in his evidence to the Senate.

Within Goldman Sachs, Lloyd Blankfein is known for the morale-building voicemails he sends round the staff. One of his most recent was leaked to the papers and he seemed to be in bullish mood about fighting the charges against the firm.

He has also - it is reported - been ringing round the famously powerful Goldman network to make his case.

"They are the ultimate insiders," says Lionel Barber. "I don't mean that in any illegal sense. I'm just saying because of their network, because they're smart, because they can embrace these multiple roles.

"The network is very powerful, it's not just in Washington, it's around the world, and Lloyd, who does need some friends right now, is using it."

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