This year, I introduced a new weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions last year, when compiling my list of the Worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week I want to highlight the CEO of the Evil Empire -- pardon me, I mean Goldman Sachs (NYS: GS) -- Lloyd Blankfein.

The dunce cap
I guess the week isn't complete unless Goldman Sachs is ticking someone off, but who knew that this time it wouldn't be Congress or its own clients -- but one of its own employees?

In what has turned into a media circus that is, in my guess, just hours away from becoming a Saturday Night Live skit, Greg Smith, Goldman's executive director and head of the company's U.S. equity derivatives business in Europe, the Middle East, and Africa, abruptly and publicly resigned on Wednesday posting his resignation in an op-ed in The New York Times.

While most disgruntled employees would just send a scathing letter to management, which would then toss it in the paper shredder, this letter was rife with deep-rooted accusations that point the finger of blame directly at Blankfein and President Gary Cohn.

The basis of Smith's objections lie in Goldman's move away from what is best for its clients toward a view of how the company could stand to make more money from them. In Smith's own words:

What are three quick ways to become a leader? (a) Execute on the firm's "axes," which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. (b) "Hunt Elephants." In English: get your clients -- some of whom are sophisticated, and some of whom aren't -- to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don't like selling my clients a product that is wrong for them. (c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Wow! All we're missing is the pre-duel glove slap across the face.

But are these allegations against Goldman justified? I can't concretely say yes, but I am very inclined to think so.

In 2010, Goldman Sachs was forced to pay $550 million in settlements for compelling its clients to buy toxic assets that it was bundling during the height of the credit crisis while it was simultaneously shorting these products of destruction.

More recently, a Delaware court nearly blocked a merger between Kinder Morgan (NYS: KMI) and El Paso (NYS: EP) because of Goldman's vested interests in both companies. Goldman was acting as an advisor to El Paso but owned a large chunk of Kinder Morgan, and it stood to make a considerable chunk of money regardless of whether the two merged or if El Paso chose to just spin off its exploration business.

To the corner Mr. Blankfein
But wait -- there's more!

While taking a break from operating Mega Maid and sucking the air out of Druidia, Blankfein issued the following statement to shareholders in regard to Smith's resignation:

We disagree with the views expressed, which we don't think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.

That's it? Goldman Sachs has been hit with a barrage of damaging accusations over the past few years, and I can tell you firsthand that it's going to take a lot more than a generic "no, we didn't do that" statement to get people to believe that you're putting your clients' needs before the needs of your own wallet.

What's even worse is that Goldman Sachs' bottom-line results haven't been all that impressive, either. The company's consolidated sales have shrunk for seven consecutive quarters, which, maybe or maybe not by coincidence, corresponds to when it received a slap on the wrist for selling those "illiquid, opaque products with three-letter acronyms" to its clients. If Goldman has been operating in a way that involves turning its clients upside-down and shaking the money out of them, it's scary to think just how poorly it'd be doing if it was simply offering sound financial advice that was in its clients' best interests.

The other thing we have to remember is that Goldman Sachs took $10 billion in TARP funds during the height of the credit crisis. Somehow, Goldman seems to have completely forgotten about that humbling era of its history even though it was just four years ago.

But still, Glassdoor.com, a website that allows employees to "rate their CEO," reports that Blankfein has the highest approval rating of all Wall Street companies. Blankfein's 94% approval edges out JPMorgan Chase's (NYS: JPM) CEO Jamie Dimon (86%,) who has completely turned that bank around and reinstated a healthy dividend. Vikram Pandit, the CEO of Citigroup (NYS: C) , who just gave himself a truly epic bonus, remains far down the list with a 59% approval.

Understandably, Glassdoor.com uses an honor policy and assumes no one is creating multiple aliases to skew the ratings. But seriously, what the heck? Here's Blankfein's rating since the credit crisis, according to Glassdoor.com:


Source: Glassdoor.com.

Just for reference here, Goldman Sachs took a $10 billion bailout in 2008 and was slapped with a $550 million fine in 2010, yet both of these times correspond to Blankfein's highest approval rating. If these truly are Goldman Sachs employees divvying out these ratings, I have to ask, "Do you really want these guys managing your money?"

Do you have a CEO you'd like to nominate for this dubious weekly-gaffe honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may wind up seeing your nominee in the spotlight.

And if you'd like a surefire way to avoid investing in companies with questionable leadership practices, I invite you to download a copy of our latest special report, "Secure Your Future With 9 Rock-Solid Dividend Stocks." This report contains a wide array of companies and sectors that are likely to keep your best interests in mind, regardless of whether the market is up or down. Best of all, it's completely free for a limited time, so don't miss out!

At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He is merciless when it comes to poking fun at dubious CEO antics. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Citigroup and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that never wears a dunce cap.

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