This is a rush transcript from "On the Record," April 27, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Goldman Sachs gets a grilling. Goldman Sachs executives appeared at a Senate hearing today. The investment bank is accused of unloading bad housing investments on customers and at the same time, making money on the unloaded investments.

Senator Carl Levin hammered the executives about an e-mail sent at Goldman describing an investment the company sold as an "expletive deal."

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN, D- MICH.: OK, you're trying to sell a (EXPLETIVE DELETED) deal, and it's your top priority. Come on, Mr. Sparks!

DANIEL SPARKS, FORMER GOLDMAN EXECUTIVE: Well, Mr. Chairman...

VAN SUSTEREN: Should Goldman Sachs be trying to sell -- and by the way, it sold it, a lot of it, after that date. Should Goldman Sachs be trying to sell a (EXPLETIVE DELETED) deal?

SPARKS: Well...

LEVIN: Can you answer that one?

SPARKS: Well, again, I didn't use those words, but...

LEVIN: Can you answer that one yes or no?

SPARKS: There are prices (ph) in the market that people want to invest in things. I didn't use that term with respect to this deal.

SEN. JON TESTER, D - MONT.: What would you change? Anything?

SPARKS: Sure. ... Senator, I think, clearly, some things need to be changed. I have not read what's proposed...

(CROSSTALK)

TESTER: ... you really don't need to what's proposed. Actually, I just -- you're in the business, OK? I'm a farmer, and if you ask me what we need to change in agriculture, I could tell you pretty quick.

(END VIDEO CLIP)

VAN SUSTEREN: Joining us live is Louise Story, Wall Street reporter for The New York Times. She was at the hearing today. And you have -- what is that, that you brought?

LOUISE STORY, NEW YORK TIMES: Well, this, Greta, is all these e-mail documents that the committee put together. And it's from these e-mails that they were citing extensively during the hearing. And literally, they would say to the Goldman executives, OK, turn to exhibit 70. What do you mean by this e-mail? And you could tell that in many cases, they were really put on the spot, that these mortgage workers at Goldman and these executives didn't remember these exact e-mails they had had in the past and they had to think through what this deal was right on the spot, in front of tons of lawmakers and the media.

VAN SUSTEREN: They were not the least bit -- as I was looking at them today, watching them, they were not the least bit afraid or apologetic or anything else. They were taking the U.S. senators on, and the U.S. senators were taking them on.

STORY: They were. And in fact, you know, you referred in the intro to this e-mail with the expletive that called these deals -- you know, they used a vulgar word for these deals. And when Senator Levin questioned David Viniar, who's the chief financial officer for Goldman, about the fact that his employees called these deals bad words, he said, What do you think about that?

And David Viniar, the chief financial officer, said he regretted that those things were in e-mail, which brought a groan across the room. And Senator Levin really exploded and said, E-mails? And later, David Viniar had to apologize and say, yes, you know, I regret that the people thought that at all.

VAN SUSTEREN: One of the -- one of the transactions they were talking about, one of the investments was Timberwolf, which is the one we heard about today which seemed to grab all the -- the vulgar words. And it -- I mean, looking through the documents, did Goldman Sachs know when they sold this investment -- and they ultimately -- they made money on it. The people who got it didn't make money it, but they did. Did they know it was a lousy thing they were doing at the time?

STORY: So it's hard to know everything that they knew, but in a lot of these deals, they were talking about they did put in some of the assets that looked like they were the most troubled in deals where people wanted to bet against them. And you know, there's this other deal, Abacus, that's at the center of an SEC complaint right now against Goldman. So we heard a lot about Abacus today. And the Goldman employee who's named in that SEC case, Fabrice Tourre, appeared also today and testified, and he was very defensive, as well.

VAN SUSTEREN: Did the people who bought these investments, though -- did they have transparency? Did -- I mean, Goldman knew what was in it, but did the people who bought it -- did they know the level of risk and how toxic, essentially, these investments were?

STORY: That is the real issue here, is What did they know? Goldman did disclose typically what was in these or what sorts of things might be in these. But the SEC case focuses on a deal where Goldman did not disclose that a prominent short seller was picking out some of what would go into the deal. And they said that that should have been...

VAN SUSTEREN: So the had every incentive -- if he's a short seller...

STORY: Right.

VAN SUSTEREN: ... he had every incentive to have the investment fail or to give a lousy...

STORY: He was betting again the market.

VAN SUSTEREN: All right. Well, we'll continue to follow this in The New York Times. I'm sure you're going to -- you have a lot of stories for us to continue to read. Thank you, Louise.

STORY: Thank you.

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