Goldman Sachs Group, Inc. (NYSE:GS) continues to face the fallout from Greg Smiths letter today as Washington Lawmakers were made aware of it and commented publicly on it. Greg Smith wrote an Op-Ed in the New York Times today starting with the line “today is my last day at Golsman Sachs”. The financial press has been full of reactions and commentary on the piece today. Worryingly for Goldman it was reported in the Wall Street Journal this afternoon that representatives and senators in Washington had been made aware of the piece and were discussing it publicly. Goldman Sachs (NYSE:GS) closed down more than four percent today largely on the disturbance the piece caused.

Representative Elijah Cumming (D., Md.) who is the highest ranking Democrat on the House Oversight Committee commented on the letter describing the corporate culture at Goldman alleged by Smith as “corrosive” and said that the firm clearly hadn’t learned any lessons from the financial crisis or the SEC investigations into happenings at the firm. Senator Jeff Merkely (D., Ore.) also commented saying the letter “goes to the heart”. He suggested that the practice of profiting while selling customers known bad investments was “misaligned from thee interests…. of their clients”. No ranking Republican had been available to comment on the piece.

If it stays in the news the piece could have resounding effects on attempts to regulate the financial sector by Washington. The Dodd-Frank bill has been passed but most of its provisions were never properly implemented. The reaction to Greg ~Smith’s piece could impact the future of financial regulation if it causes enough of a stir among Washington’s power players and their constituents. Politically it may also become a football though its appearance during the Republican Primaries rather than during the General election may be a blessing for the GOP. All of the nominees in the primaries are holding the party’s long held views on market regulation, particularly Mitt Romney who founded and worked at Bain Capital for many years. Democrat policy makers will try to use the revelation of these practices to gain support for greater market regulation and ultimately the reelection of President Obama if attention lingers on the matter.

If it does Goldman (NYSE:GS) could feasibly see itself in more trouble with regulator as they try to stem the tide of what they see as bad practices on Wall Street reminiscent of those leading up to the 2008 crash. Their response is key at this point.