Goldman Sachs chief executive Lloyd Blankfein said the firm is the target of "disproportionate treatment," but Sen. Carl Levin, D-Mich., argued on "Good Morning America" today that the company's method for making money after the 2007 mortgage crisis was unfair and cost taxpayers billions of dollars.
"Yes, we do" bear responsibility for the financial meltdown, Blankfein told ABC News. "It embarrasses me to say it. But of course we do. The financial system failed and Goldman Sachs is a very influential member of the financial system. We have our share of the burden of that."
But the embattled chief executive said that while he understands Americans' anger, Goldman employees are also taxpayers and that the company has been singled out for being profitable.
"I understand that reaction," Blankfein said Tuesday of the hostility directed at the financial giant for profiting from the financial meltdown. "But I tell you, we are all citizens and family people and taxpayers and members of our community."
"I think it is not an issue of fair," Blankfein added. "Because if you bear a burden, it is no relief for you to say, other people had -- should have that burden also. ... At the same time I think that we're getting some disproportionate treatment because we surely are not the only financial firm. ... So I can wish that the focus weren't so disproportionately on us. But I'm not making any claims of unfairness."
Levin, who chairs the subcommittee that heard from Goldman executives Tuesday, told "GMA's" George Stephanopoulos that the real problem was not that the investment giant was profitable, it was that it made a lot of money "unfairly" and "at the expense of the taxpayers."
The Securities and Exchange Commission brought fraud charges against Goldman this month and claimed that the company bet against its own clients and helped create the housing bubble that preceded the worst financial crisis since the Great Depression of the 1930s.
"They sold these financial instruments that they had designed and put into them a lot of bad mortgages they described in pretty colorful ways," Levin said. "Then they go out and bet against those same financial instruments that they're pedaling to people."
Levin said Goldman should have disclosed to its clients that the securities it was selling them were unsound investments and the company itself was betting against them.
"They have a right to make money, but they can't make it any way they want," Levin said on "GMA."
Blankfein said he will not resign despite some calls for him to step down and that Congress should step up action on financial overhaul regulation.
"I think they know enough" about financial markets to regular Wall Street, Blankfein said. "I think Washington has a responsibility to respond to the events of the last several years by enacting some kind of financial reform."
Read the full transcript of ABC News' interview with Lloyd Blankfein here.
Democrats have introduced financial overhaul legislation in Congress -- one that Blankfein said Tuesday he generally supports -- but it has been bogged down in procedural motions and opposed by some Republicans.
Levin today said he would put an end to the "bad practices" by mortgage firms, where the amount of money people made was falsified on a mortgage application and the banks were aware of it.
Levin argued that banks backed by the Federal Deposit Insurance Corp.should not be engaged in risky trading.
"No risky trading if you're going to go to the federal reserve and have access to federal funds or if there's going to be a federal guarantee, one or the other," he said.
The Senate Permanent Subcommittee on Investigations said Monday that its 18-month investigation found that Goldman helped create the housing bubble by selling securities backed by risky subprime mortgage loans and then profited off that bubble's bursting by secretly betting against the market.
Levin's committee forced Goldman to turn over 2 million pages of documents that Levin said proves his case and shows that Goldman overall made $3.7 billion from the financial crisis.
At a testy hearing Tuesday that lasted 10 hours and 41 minutes, senators grilled Blankfein and and six others, including now-infamous Goldman trader Fabrice "Fabulous Fab" Tourre.
Tourre made headlines earlier this month after the SEC's lawsuit revealed an e-mail from him that seemed to indicate he didn't fully understand the complex deals he was making.
"More and more leverage in the system, The whole building is about to collapse anytime now ... Only potential survivor, the fabulous Fab (rice Tourre) ... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities (sic)!!!" Tourre wrote to a friend in January 2007, according to the SEC's complaint.
Tourre strongly asserted his innocence, insisting repeatedly to a Senate panel that he didn't mislead clients in a controversial mortgage derivative product the SEC claims was designed to fail.
"I deny -- categorically -- the SEC's allegation," Tourre said. "And I will defend myself in court against this false claim."
Levin on Tuesday also confronted a former Goldman trader with an e-mail in which another former Goldman executive described a mortgage-backed deal as "sh**ty."
The transaction in question was Timberwolf Ltd., a $1 billion collateralized debt obligation holding pieces of other such instruments. In an e-mail to Daniel Sparks, then head of Goldman's mortgage desk, Thomas Montag, Goldman's former head of sales and trading, called a set of mortgage-linked investments sold by the firm as "one shi**y deal," according to an e-mail that Sen. Levin quoted. Within five months, Timberwolf lost 80 percent of its value.
"Do you think it was a sh**ty deal?" Levin asked Sparks, one of seven Goldman executives who testified Tuesday. Sparks said he did not recall the e-mail, and did not directly answer the question.
"If you can't give a clear answer to that one Mr. Sparks then we're not going to get any clear answers from you today," Levin said.
Goldman's profits rose considerably after the financial collapse in 2007, just as other investment banks saw a drop.
Blankfein and other Goldman executives defended the firm even as senators accused them of deceiving their own clients.
"Our clients' trust is not only important to us, it's essential to us," Blankfein told senators Tuesday. "It's why we're a successful firm."
None of the executives present at the hearing ever said they were sorry or regretful for the deals that senators charge tanked the market. But Blankfein said that wasn't coordinated.
"Look, we had different groups, the first panel are four individuals, by the way, two who are out of the firm now, but four individuals really engaged in market making and I don't know if they have been challenged or asked about these issues before," he said. "But I think in the senior people you talk to, I think they were very reflective about their responsibilities and their role."
ABC News' Jonathan Karl, Alice Gomstyn and Matthew Jaffe contributed to this report.