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Goldman at a PR Crossroads

Lucas van Pragg and Lloyd Blankfein
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Lucas van Pragg and Lloyd Blankfein

Goldman Sachs has been battling a seemingly never-ending barrage of negative publicity since the financial crisis.

Many of the wounds have been self-inflicted. In 2010, the Securities and Exchange Commission accused Goldman of securities fraud, accusations that the company paid $550 million to settle. And the company’s own comments have not helped. Goldman’s chief executive, Lloyd C. Blankfein, told The Times of London in a 2009 interview that he was doing “God’s work.”

As the missteps mounted, many Goldman insiders focused their anger at the messenger — in this case, the company’s public relations department.

The person who has taken the brunt of the criticism for the bad publicity is Lucas van Praag, a smooth-talking Briton who has run the department for more than a decade. Mr. van Praag, 62, is not without his supporters, and in a nod to his success, he was made a partner in 2006.

But this week, Bloomberg News reported that the Wall Street bank was in talks to hire Richard Siewert Jr., a former counselor to Treasury Secretary Timothy F. Geithner. News of Goldman’s courtship of Mr. Siewert has had Wall Street buzzing. It increased speculation that Mr. van Praag was being shown the door, and highlighted the often cozy relationship between Wall Street and government organizations like the Treasury Department, even in this postfinancial-crisis era.

Mr. Siewert has been in and out of Goldman for months interviewing for Mr. van Praag’s job, and he has met with more than 20 senior Goldman executives, according to people briefed on the matter who were not authorized to speak on the record.

Mr. Siewert has not received a formal offer, these people say, and he is talking with another major publicly traded company. But Goldman is favorably impressed with Mr. Siewert and the discussions are continuing.

And Mr. van Praag has also been making noises about leaving, these people say.

Mr. van Praag has been on the front line of Goldman’s public relations effort for more than a decade. In addition to suffering from battle fatigue, he has at times clashed over strategy with his boss, John Rogers, a member of the company’s executive office and secretary to the board. The two executives, remarked one senior Goldman executive, have a “complicated” relationship.

Mr. Siewert’s courtship has put Mr. van Praag in an uncomfortable position internally. He is aware that his possible successor is interviewing — he and Mr. Rogers have both signed an introductory note for executives meeting with Mr. Siewert. And since news of Mr. Siewert’s courtship became public, Mr. van Praag has been forced to answer a barrage of questions about it.