Schwartz Media Strategies CEO, Tadd Schwartz, shares with the Wall Street Journal his crisis communications plan for Goldman Sachs as the company faces backlash for purchasing bonds from Venezuela.
By Ben DiPietro
Goldman Sachs Group finds itself in the crisis crosshairs after it purchased bonds from the embattled Venezuelan government, opening Goldman to charges it is helping to keep in power a regime that is accused of human-rights abuses. The $2.8 billion bond purchase comes as opponents of Venezuela President Nicolás Maduro pressure financial institutions to stop doing deals with the government.
In a statement, Goldman said it bought the securities, which are held in funds and accounts it manages on behalf of clients, from a broker and did not interact with the Venezuelan government. “We recognize that the situation is complex and evolving and that Venezuela is in crisis,” the bank said. “We agree that life there has to get better, and we made the investment in part because we believe it will.”
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Tadd Schwartz, president and CEO, Schwartz Media Strategies:
“As a public company, Goldman Sachs’ primary constituency is its investors. In fact, one of the company’s guiding principles reads, ‘Our goal is to provide superior returns to our shareholders.’ If Goldman Sachs believes purchasing Venezuelan debt is a shrewd investment, then that’s the company’s right–and its responsibility–to shareholders.
But because perception is everything, Venezuela’s humanitarian crisis has now become Goldman Sachs’ public relations crisis. Even though the company correctly stood by its ‘performance-first’ investment philosophy in managing through this crisis, its statement predicting conditions in Venezuela will ultimately improve didn’t go far enough.
Goldman Sachs directs grants to 80 countries around the world but Venezuela is missing from the list. As a corporation with near-limitless financial resources, Goldman Sachs is in a position to accelerate a turnaround in the tormented country by funding humanitarian aid, education and security for the Venezuelan people. Announcing such a move would mitigate public criticism following the controversial bond purchase, while sending a message to investors and the world that Goldman Sachs is bringing real-world social and economic change to a country in peril.”