There they sat -- the not-so-fabulous four – the current and former wise guys of Wall Street from mighty Goldman Sachs, squirming under the glare of TV klieg lights and Senate grilling.

At least the “Fabulous" Fabrice P. Tourre, as he was known, the only person whom the SEC has yet charged in its civil fraud case against Goldman, said that he “regretted” having written and sent the boastful emails that were read aloud in the hearing room. He was sorry, he added, because they reflected “badly” on himself and the firm.

The other three – Michael J. Swenson, managing director of the Goldman’s Structured Products Group Trading, and two former employees, Joshua S. Birnbaum, who once headed that group and Daniel L. Sparks, a former partner who headed Goldman’s mortgage’s department -- were zombies. All lawyered up and coached on what to say, and more importantly, what not to say, they fumbled with exhibits and asked senators repeatedly to explain what was intended by their simple questions. The smartest guys in the room were suddenly unable to locate exhibits being discussed, or the emails they had written or received. Gosh, said Republican Senator Susan Collins, of Maine, demurely: It was almost as if the witnesses, testifying under oath, were trying to run out the clock on the hearing through their evasive replies, their refusal to answer some of the senators’ questions, and their convoluted answers in Wall Street gibberish to others.

Such tactics wouldn’t work, insisted Senator Carl Levin, the Michigan Democrat who chaired the Senate Permanent Subcommittee on Investigations hearing Tuesday. “We’ll stay here as long as it takes,” he vowed.

Anyone who bothered to listen to the four hours of testimony before Goldman’s chairman Lloyd C. Blankfein’s scheduled appearance had to be appalled. Yes, it was complex stuff, as all the senators noted. There was lots of Wall Street jargon designed to obfuscate what Goldman had done at its clients’ expense. The Goldman gurus didn’t warn clients that their bosses were betting against the securities they were peddling. They didn’t warn clients that they thought the housing market was heading south, or that Goldman was going to make millions selling short. They did “socialize” their thoughts "with some people,” as one of the four geniuses testified today in Wall Street English.

Americans got a tutorial in “thin files” and “bar belling,” that is, mixing high with low rated securities in a package that obscures the true risk to the investor. We heard about “collateralized debt obligations, or “CDO’s,” and “synthetic CDO’s,” which Missouri’s Senator Claire McCaskill described simply as “a bet,” Wall Street’s equivalent of a roulette wheel in Las Vegas.
Actually, said Senator John Ensign, Republican of Nevada, no stranger to financial scandal (federal investigators are exploring allegations that his family paid off a former mistress and other allegations of financial misconduct) what Goldman did was riskier than gambling. In Vegas, he said, “people know the odds are stacked against you before you play the game. “On Wall Street,” by contrast, “they manipulate the odds while you’re playing the game.” And in Vegas, another senator chimed in, gamblers play with their own money.

At the end of the morning session, this much seemed clear:

Senator Levin’s committee had shown that Goldman had devised not one, as the SEC alleged, but several complex deals designed to profit from the collapse of the home mortgage market, and that they had often failed to disclose their own conflicted dealings in those instruments to the “sophisticated” customers who had bought them. Levin also clearly established that Goldman partners had made millions in bonuses by betting against the market and against securities they were selling. But the fab four insisted it was all perfectly legal, perfectly ethical. In fact, Goldman had the highest of ethics.

Tourre, who still has a job at Goldman, was “saddened” by the terrible suffering that those wretched market forces inflicted on Americans who had lost their homes and savings in the super volatility of 2007 and 2008. He was “humbled” by what had happened, he added, as if he and his cohorts had been hit by a giant tsunami from outer space rather than a financial storm partly of their own making. His conduct was entirely “proper,” he insisted.

Yes, mistakes were made, said the oily Mr. Sparks. So were some bad business judgments. But none of the four could think of any changes they would make in our financial system. Not one.

I am not a lawyer. The SEC and federal prosecutors may ultimately decide that no one at Goldman broke the law. But what Goldman and its minions did was wrong, morally wrong, by any standard. And while there is plenty of blame to go around -- the SEC was comatose, worse than negligent, and Congress, too, encouraged lenders to give mortgages to people who could ill afford them – Goldman cannot and should not escape blame. The buck, or the CDO, started here.

Judith Miller is a writer and Fox News contributor. 

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