Greg Smith: I Saw Lloyd Blankfein Naked

By Liz Rappaport

I see London, I see France, I see Lloyd Blankfein without his underpants.

Or so says Greg Smith, the former Goldman Sachs Group Inc. equity derivatives salesman, in his forthcoming book, “Why I Left Goldman Sachs: A Wall Street Story.”

Photocopies of parts of the highly anticipated book–and photocopies of the photocopies–are circulating on Wall Street despite Grand Central Publishing’s attempt to keep the contents under lockdown until Monday’s official release date.

Mr. Smith is expected to appear on “60 Minutes” on Sunday night, and then do a blitz of media appearances next week.

Mr. Smith quit Goldman in March, the same day his scathing op-ed appeared in the New York Times. He reportedly got $1.5 million to write a book expanding on the article, which accused Goldman of losing its way, devolving into a culture of toxic greed and self-dealing.

Inside Goldman, executives are mostly relieved by what they’ve read, though some of Mr. Smith’s recollections are cringe-worthy.

The book mostly chronicles his life as a Goldman employee, rather than airing any particularly explosive allegations. And it reads more like a diary than an expose.

Here are a few examples:

Brushes with Goldman Greatness

Mr. Smith outlines moments when he came into close contact with Goldman’s chairman and chief executive, according to pages reviewed by The Wall Street Journal.

Mr. Smith tells of one near-encounter when he saw Mr. Blankfein, sans clothes, after taking a shower at the gym. Mr. Blankfein was “air-drying,” Mr. Smith writes, something Mr. Smith took not as a display of power but as something men of an older generation tend to do.

Another up-close-and-personal moment with the big boss came when Mr. Blankfein and Berkshire Hathaway Inc. Chief Executive Warren Buffett walked through the Goldman trading floor the day after Mr. Buffett’s $5 billion investment as Goldman was reeling in 2008.

In the book, Mr. Smith says he had a co-worker snap a photo as he stood near Mr. Buffett.

Party Central

Mr. Smith describes a business trip to Las Vegas where he spends some time with topless women. When it comes to drugs and alcohol, though, Goldman isn’t exactly Haight Ashbury.

Taking illegal drugs is “severely frowned upon” by the firm and “regarded with a certain horror” because it displays a lack of discipline that suggests one couldn’t survive the rigors of Goldman.

Mr. Smith says there was a “smoking crew” in New York that consisted largely of European expatriates and quantitative traders in New York. In London, the “smoking crew” overran the entire office.

As for alcohol, Mr. Smith says “getting smashed” is a regular event for Goldman employees and senior management. He describes at least one going-away party where a drunk employee leeringly harped on about how “hot” a new female analyst was while she stood a few feet away.

“Holy crap!” Mr. Smith writes. “This guy is embarrassing himself, perhaps irreparably.”

He was a DJ for a colleagues’ going-away party at the members-only Soho House club in lower Manhattan, where he spun tunes like Nelly’s “Ride Wit’ Me” and U2’s “Beautiful Day.”

One sign that slogging your way up the ladder pays off, according to Mr. Smith: Senior-level Goldman people are freer to get trashed without consequence. “They’re the bosses, after all,” he writes.

The Crush of Lunch

Mr. Smith describes Goldman’s cafeteria at its sparkling new headquarters building at 200 West Street in lower Manhattan. “Something was terribly wrong,” he writes in an ominous tone.

Apparently, Goldman employees were so hungry that they knocked each other over to get to the omelet station. It got so terrible, he writes, that Goldman offered discounts to entice employees to eat early or after the omelet rush.

He also half-accuses higher-ranking executives of being cheap. With incredulity, Mr. Smith says even managing directors who made $1 million or more were hungry for the lunch discounts. Another Goldman executive filed a $1 charge on his expense report for buying ChapStick for a client on a ski trip.

“It was all very strange,” writes Mr. Smith.

Glory Days

For all of Mr. Smith’s distaste for Goldman’s culture, he includes several passages that suggest lust for the trappings of wealth and bankerdom.

For example, the book brags about taking business-class flights with “wine and sashimi at thirty thousand feet,” three-star dinners with clients, meetings at Ritz-Carlton hotels around the world and a visit to an Asian tailor to fit some handmade suits.

“It never got old for me,” he writes.

As for France, he calls it “a massive monument to financial engineering: a beehive of quants, espresso sippers, and cigarette smokers.”