Goldman Sachs investors are learning (or at least they should be), yet again, that a world-class brand is not the same thing as world-class governance.
The New York Post reports a fresh round of internal turmoil tied to newly released emails involving Goldman’s chief legal officer, Kathryn Ruemmler, and Jeffrey Epstein, even as CEO David Solomon and senior leadership continue to stand by her:
The DOJ files show Epstein lavished Ruemmler, who was a partner at law firm Latham & Watkins at the time, with expensive gifts including a $9,400 Hermès bag, a $4,200 Fendi fur-trimmed plaid wool coat, and a $1,700 Fendi leather shoulder bag.
When Epstein’s office asked whether she wanted a new Apple Watch band, Ruemmler requested an indigo blue leather strap from Hermès, according to the records.
Other emails show Epstein’s staff offering to buy her Broadway tickets, and Ruemmler once reminding the sick financier that she likes wine with dinner, signing off with “xoxo” and a smiley emoji.
Goldman executives who spoke to Bloomberg News on condition of anonymity said that they would be fired for accepting gifts worth a fraction of the value that Ruemmler was given by Epstein before she was hired by the firm.
Newly released emails show Ruemmler used an affectionate tone with Epstein, at times calling him “Uncle Jeffrey” and likening him to “another older brother,” according to emails shared by the Justice Department.
She also forwarded Epstein an angry email from the wife of his lawyer Reid Weingarten accusing Ruemmler of having an affair with Weingarten.
In one 2017 exchange touching on sex crimes, Ruemmler addressed Epstein as “sweetie,” writing: “I hear you, sweetie, but there is abuse of p=wer with your stuff too. I know you didn’t think about it tha= way, but it’s there. And, yes, please kee= your head down. :-)”
The messages also document Ruemmler appearing to express deep personal attachment to Epstein. In a 2015 email, she told him: “friendships goes two ways — getti=g you some peace with respect to all of this legal s–t is important to me.”
Later that year, she wrote to Epstein’s assistant: “Well, I adore him.”
In another exchange, in which Epstein raised questions about prostitution and consent, Ruemmler responded that minors “could not legally consent to engaging in prostitution.”
In a different missive, she asked whether she had left a ring behind at Epstein’s house, later being told by an assistant that it had been found. Goldman spokesman Tony Fratto said the ring was left after “an afternoon meeting.”
NLPC previously filed independent chair proposals at Goldman Sachs in 2022, 2023, and 2024, which criticized the company over Solomon’s unchecked power as both CEO and Chairman. We repeatedly argued that Solomon’s uneven management and sometimes erratic behavior has been evidence that the Board does not have a handle on its CEO. Our concerns appear to apply to the rest of management as well.
The Ruemmler controversy fits the broader pattern NLPC has warned about under Solomon: the firm repeatedly invites reputational blowback and then treats it as a communications problem instead of a board-oversight problem.
Solomon has defended Ruemmler’s Epstein ties and called her an “excellent lawyer” in response to the Epstein revelations, which makes us wonder if he is doing so because of past poor optics related to women’s roles and mistreatment at Goldman Sachs. In investor reports we circulated in support of our proposals in recent years, we pointed out where high-profile stories highlighted negative perceptions in that regard:
Unsurprisingly, many of Goldman Sachs’s female employees have begun to question Mr. Solomon’s leadership and doubt the promises he made when he took over the firm to promote women to senior positions. According to an article published in the Wall Street Journal titled “Women Aren’t Getting the Big Jobs at Goldman Sachs, and They’re Heading for the Exits”:
“Roughly two-thirds of the women who were partners at the end of 2018 have left the firm or no longer have the title, a Wall Street Journal analysis found. The same can be said of just under half of male partners at the time.
“No woman currently runs a major division or is seen internally as a credible candidate to one day succeed Solomon. Two of the eight executive officers at Goldman are women—in legal and accounting, nonrevenue generating positions.
“In Goldman’s core division of investment banking and markets, a number of star women partners have left or are no longer partners after they saw little or no path to moving up the ranks. Many women who left the firm found better opportunities elsewhere.”
The article later provided several examples of prominent female leaders within the Company who were snubbed for senior positions and chose to leave the firm in response. According to Business Insider, Company Chief of Staff Russell Horwitz admitted in a 12-point internal memo responding to the aforementioned Wall Street Journal article that the Company needs to do more to elevate its female employees.
The Ruemmler episode has brought fresh scrutiny on the bank and has breathed new life into our concerns that Goldman’s governance structure is incapable of restraining management when the brand is at risk.
