"God's work" under criminal investigation

Goldman Sachs Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten, according to a government source, as the Justice Department continues to investigate the bank.

Blankfein, 56, is in his sixth year at the helm of the largest U.S. investment bank, which has spent two years fending off accusations of conflicts of interest and fraud.
The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue.

The news spooked already jittery investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring, finishing down 4.7 percent at $106.51, their lowest level since March 2009.

They slipped further in after-hours trade to $105.45.

The Senate's Permanent Subcommittee on Investigations (PSI) in April released a scathing report that criticized Goldman for "exploiting" clients by unloading subprime loan exposure onto unsuspecting clients in 2006 and 2007, and concluded that its top executives misled Congress during testimony in 2010.

Goldman has said it disagreed with many of the report's conclusions, but took seriously the issues addressed. The Justice Department launched its investigation in late April.

On Monday, Goldman said: "As is common in such situations, Mr. Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department's inquiry into certain matters raised in the PSI report hired counsel at the outset."

Blankfein has not been charged in any civil or criminal case.

"Why do you bring in someone like that?" said the source, who was not authorized to speak publicly, about Weingarten. "It says one thing: that they're taking it seriously."

Western nations — especially the NATO countries that provided crucial air support to the rebels — want to make sure their companies are in prime position to pump the Libyan crude.

Foreign Minister Franco Frattini of Italy said on state television on Monday that the Italian oil company Eni “will have a No. 1 role in the future” in the North African country. Mr. Frattini even reported that Eni technicians were already on their way to eastern Libya to restart production. (Eni quickly denied that it had sent any personnel to the still-unsettled region, which is Italy’s largest source of imported oil.)

Libyan production has been largely shut down during the long conflict between rebel forces and troops loyal to Libya’s leader, Col. Muammar el-Qaddafi.

Eni, with BP of Britain, Total of France, Repsol YPF of Spain and OMV of Austria, were all big producers in Libya before the fighting broke out, and they stand to gain the most once the conflict ends. American companies like Hess, ConocoPhillips and Marathon also made deals with the Qaddafi regime, although the United States relies on Libya for less than 1 percent of its imports.