Is Goldman Sachs Dragging Down Warren Buffett?

(Berkshire Hathaway poll updated for Goldman Sachs, financial reform news)
NEW YORK (TheStreet) --

Goldman Sachs is like the negative reputational gift that keeps on giving to Warren Buffett and Berkshire Hathaway(BRK.B).

Over the weekend, the Senate released emails showing that Goldman Sachs had profited from shorting subprime investments in which some big institutional investors lost a bundle. The Goldman Sachs' emails run counter to claims loudly voiced by Goldman Sachs executives that the bank lost money due to the subprime mortage meltdown.

The latest dent in Goldman's armor hit just days after negative Goldman news that sent sparks flying in the direction of Omaha. Last Friday, allegation surfaced that a Goldman director who is on his way out of the board room, director Rajat Gupta, allegedly passed on insider trading information to already ethically challenged Galleon Group hedge fund founder Raj Rajaratnam, about Buffett's then-impending $5 billion investment in Goldman.

Buffett and Berkshire Hathaway have plenty of reason to stand behind Goldman Sachs, given the $5 billion investment Buffett made in Goldman at the height of the financial crisis.

There was also news on Sunday night that Buffett's investment in Goldman Sachs was leading to some closed door Berkshire Hathaway lobbying in Washington D.C.

The Wall Street Journal reported that Buffett has sent one of his top lieutenants to the Capital Hill to lobby for an exemption for Berkshire Hathaway from the pending derivatives reform that might require Berkshire Hathaway to post collateral on derivatives contracts it owns.

The Goldman Sachs bad press and its influence on Berkshire Hathaway came full circle in the report of Berkshire Hathaway's lobbying effort. The SEC fraud charges against Goldman Sachs provided the biggest boost to President Obama's financial reform agenda, and the derivatives reform portion of that agenda has now forced Buffett to press his personal derivatives case in the Capitol.

In another respect, Buffett's investment in Goldman has raised questions about the businessman with the world's most sterling reputation potentially suffering a reputational stain.

In fact, Buffett has been busy issuing smoke signals about Goldman's integrity as negative events unfold. The Oracle of Omaha has not come forward himself and said in his own words that he stands by Goldman Sachs, but Berkshire Hathaway directors have been busy serving as public relations ballasts for Goldman Sachs.

Just days before the Goldman fraud charges, a Berkshire Hathaway director gave an interview to Bloomberg TV reiterating that Berkshire Hathaway stood behind Goldman and its integrity.

As news of the Goldman Sachs and Galleon Group insider trading scandal surfaced on Thursday, another Berkshire Hathaway director took to the airwaves, granting another interview to Bloomberg TV.