Goldman Sachs Group Inc., the fifth-biggest U.S. bank by assets, hired former U.S. Treasury Department aide and presidential spokesman Richard L. “Jake” Siewert Jr. as global head of corporate communications.
Siewert, 48, has started work in New York and is a managing director, according to an internal memo from John F. W. Rogers and obtained by Bloomberg News. Michael DuVally, a Goldman Sachs spokesman, confirmed the memo’s contents. Lucas van Praag, who had been the global head of communications, is leaving at the end of March after 12 years, according to a Feb. 8 memo.
Chairman and Chief Executive Officer Lloyd C. Blankfein, 57, has spent the past three years fending off accusations that the New York-based company’s actions contributed to the 2008 financial crisis. Siewert’s experience as a press secretary to former President Bill Clinton and as an aide to Treasury Secretary Timothy F. Geithner may help the firm navigate disputes that mix politics, financial policy and public image.
“He’s particularly suitable because he’s low-key, knowledgeable and battle-tested,” said Martha Joynt Kumar, a Washington-based professor of political science at Maryland’s Towson University who studies the relationship between the presidency and the media. “At the White House you’re dealing with tough issues and high-stakes issues, and that’s what you’re dealing with at a place like Goldman, too.”
Politico reported on Siewert’s move to Goldman Sachs earlier today.
Siewert is a graduate of Yale University and the University of California at Berkeley’s law school. He started his Washington career as communications director for the Democratic Governors Association before working for Gene Sperling at the National Economic Council during the Clinton administration.
Siewert worked his way up in Clinton’s communications department, eventually succeeding Joe Lockhart as White House press secretary in the last few months of the presidency. At age 37, he joined Pittsburgh-based Alcoa Inc., the aluminum maker, and managed corporate development and public strategy before joining Geithner at Treasury in 2009.
Goldman Sachs was the most profitable securities firm in Wall Street history before converting to a bank in 2008, after smaller rival Lehman Brothers Holdings Inc. filed for bankruptcy during the worst of the credit crunch. Goldman Sachs in 2008 took $10 billion in taxpayer money from the Treasury, which was run at the time by former CEO Henry Paulson, and subsequently repaid the U.S. with interest.
The company’s success in skirting mortgage-related losses that destroyed some rivals later came under scrutiny. In 2010, Goldman Sachs paid $550 million to settle a fraud lawsuit filed by the Securities and Exchange Commission, which accused the firm of misleading buyers of a 2007 mortgage-linked investment. The Senate’s Permanent Subcommittee on Investigations, in a report published last year, also accused Goldman Sachs of misleading investors about products sold before the crisis.
Goldman Sachs was viewed unfavorably by 54 percent of respondents in a Bloomberg survey of traders, investors and analysts conducted last May, more than double the negative rating of JPMorgan Chase & Co., the biggest U.S. bank. Goldman Sachs’s score was among the lowest in a recent study of corporate reputations, according to a Feb. 13 statement from Harris Interactive Inc., the market research and polling firm.
Siewert’s move may add to the perception of close ties between policy makers and the firm, sometimes nicknamed Government Sachs because of the senior executives who have moved into public posts and regulators who have joined the firm.
Blankfein was promoted to chairman and CEO in 2006 when Paulson became Treasury secretary under President George W. Bush. Jon Corzine, Paulson’s predecessor, was elected a U.S. senator and governor of New Jersey. Robert Rubin was Treasury secretary under Clinton after running Goldman Sachs, and Stephen Friedman was named Bush’s National Economic Council director.
The firm has also hired government officials, regulators and policy makers. Goldman Sachs paid Sperling, Siewert’s former boss and currently director of the National Economic Council, $887,727 in 2008 for advice on its charitable giving.
Mario Draghi, president of the European Central Bank and a former Italian treasury official, worked as a vice chairman of Goldman Sachs from 2002 until 2005. Robert Zoellick, who has had jobs in the State Department, Treasury Department and White House, served as a Goldman Sachs vice chairman before becoming World Bank president in 2007.
While former White House press secretaries have taken jobs in the media, at public relations firms, and working for special interest groups, it’s uncommon for them to take a job at a bank. Facebook Inc., the social media company planning to go public this year, hired Siewert’s predecessor Lockhart from strategic communications firm Glover Park Group in June.
“Banks now have a visibility they may not have had previously,” Kumar said. “They’re newsworthy.”