Lucas van Praag is retiring from Goldman Sachs (NYSE: GS). Maybe that doesn't jump off the page at you. He's not the financial giant's CEO or CFO. Though he's undoubtedly paid very well, his name doesn't show up in Goldman's proxy filings where they disclose pay for their "named executive officers." But make no mistake -- van Praag has had one of the toughest jobs at Goldman over the past few years.
For those still stumped, van Praag is -- until next month at least -- Goldman Sachs' head of public relations. And for many news outlets, the end of the van Praag era couldn't come soon enough.
Transcending the simply stupid
Thanks to its position as a major investment bank during one of the worst financial crises the world has ever seen, van Praag had the unenviable task of defending the bank against withering criticisms and -- I'll keep this polite -- pointed characterizations.
So how do you convince the world that your megabank employer isn't, in fact, the devil? For van Praag, a primary tactic seemed to be taking the nearest sharp stick and setting about poking every reporter in sight with it. And, I should add, doing said poking in a distinctly aristocratic manner.
Last year, New York magazine published a great compilation of some of van Praag's tastiest jabs, including these:
- "There's speculation, and there is stupidity. This speculation transcends the simply stupid and takes it to an entirely new level ... giving credibility to tittle-tattle is pretty shoddy journalism."
- "As prudent risk managers, we hedge our risk. To describe that activity as a cynical breaking of faith with clients is both misleading and horribly naïve."
- "The speculation about compensation is ill-informed and, frankly, pretty stupid."
- And regarding Rolling Stone's "Vampire Squid" story by Matt Taibbi: "[Taibbi's] story is an hysterical compilation of conspiracy theories ... Notable ones missing are Goldman Sachs as the third shooter [in John F. Kennedy's assassination] and faking the first lunar landing."
Don't move and maybe they won't see us...
If the idea was to build further on the view of Goldman as some sort of cross between the Freemasons and Skull and Bones, only richer, far more evil, and with more political clout, van Praag's approach has been genius.
The tactic veers sharply from that of other major banks like Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Citigroup (NYSE: C), and JPMorgan Chase (NYSE: JPM). When it comes to blame for the financial crisis, some might argue that a lot more should be laid at the feet of upended investment banks like Bear Stearns (subsumed by JPMorgan), Merrill Lynch (now part of B of A), and Lehman Brothers (some remnants remain at Barclays).
If, instead, you want to take the view that people hate Goldman because it escaped the crisis with far less punishment than the investment banks, then Morgan Stanley -- which in a lot of ways is a clone of Goldman -- and JPMorgan should probably hit more most-hated lists. And yet Goldman remains the poster child for what it means to be an evil bank.
Perhaps it's simply because there's always been a certain dark mystery around Goldman and that mystique turned sour as Goldman reported billions in profits just as Average Joe lost his job, his house, and his retirement savings. Or perhaps it's because other banks have taken a bit more of a soft-spoken, demure approach to handling the post-crisis fallout, and avoided saying things like they're "doing God's work."
The accidental exit interview
The title of The New York Times' article was "Goldman Sachs P.R. Chief's Accidental Exit Interview," and the intro certainly sounds juicy: "Mr. van Praag's last major interview may be one he never intended to be made public."
What the story refers to is a 37-minute taped telephone interview with Alexander Oey from the Dutch television show Tegenlicht. Far from being particularly juicy, fiery, or otherwise salacious, the interview is notable for the extent to which it is sober and reasoned. To be sure, Oey was very direct with many of his questions, but van Praag sounded patient and relaxed, and he showed off the razor sharpness that one would expect from the public relations guru at Goldman.
Throughout the wide-ranging interview, van Praag highlighted some of the tough gray areas of the financial market. Regarding the swaps transactions that Goldman advised Greece on and whether they should be banned in the future, van Praag responded that that's like saying "we should ban cars because cars kill people." Later, speaking on financial regulation more generally, he noted that "you can't regulate for greed and stupidity." (Which we do all the time for cars, in fact.)
And while much of what van Praag talked about was general to all big banks, there was also a good deal that emphasized the message that Goldman wasn't doing anything different than the other major investment banks. Except, perhaps that what it did, it did better.
For the defenders of Goldman and the rest of the investment banks, the interview is a chance to nod and even fist-pump along with some solid public relations work. Of course, for the haters of the banks, the interview could be seen simply as sweet nothings from a golden-tongued serpent dead set on lulling the world back into its constricting clutch.
For me, as neither an occupier nor a big fan of the banks, it was a chance to step back and consider whether all of the post-crisis Goldman hate is really justified. Is Goldman really that much worse than its rivals? Or has it all been just a massive public relations failing?
Van Praag put a very savvy, debonair -- "very Masterpiece Theater," according to one writer -- face on Goldman's public relations, which is bound to rub people the wrong way when the country's in a sluggish post-recession muck and the unemployment rate is in spitting distance of double digits. It'll be interesting to see if the bank tries to take another tack going forward... and if that makes any difference.
As to investing in the big banks, even if Goldman isn't your cup of tea, it's notable that some of the smartest investors have been investing in banks. To find out which ones, grab a free copy of The Motley Fool's special report: "The Stocks Only the Smartest Investors Are Buying."
