Goldman's White House Connections Raise Eyebrows
WASHINGTON — While Goldman Sachs' lawyers negotiated with the
Securities and Exchange Commission over potentially explosive civil
fraud charges, Goldman's chief executive visited the White House at
least four times.
White House logs show that Chief Executive Lloyd Blankfein traveled to
Washington for at least two events with President Barack Obama, whose
2008 presidential campaign received $994,795 in donations from
Goldman's political action committee, its employees and their
relatives. He also met twice with Obama's top economic adviser, Larry
evidence has surfaced to suggest that Blankfein or any other Goldman
executive raised the SEC case with the president or his aides. SEC
Chairwoman Mary Schapiro said in a statement Wednesday that the SEC
doesn't coordinate enforcement actions with the White House or other
however, Goldman is retaining former Obama White House counsel Gregory
Craig as a member of its legal team. In addition, when he worked as an
investment banker in Chicago a decade ago, White House Chief of Staff
Rahm Emanuel advised one client who also retained Goldman as an adviser
on the same $8.2 billion deal.
Goldman's connections to the White
House and the Obama administration are raising eyebrows at a time when
Washington and Wall Street are dueling over how to overhaul regulation
of the financial world.
Lawrence Jacobs, a University of
Minnesota political scientist, said that "almost everything that the
White House has done has been haunted by the personnel and the money of
Goldman . . . as well as the suspicion that the White House,
particularly early on, was pulling its punches out of deference to
Goldman and its war chest.
"There's now kind of a magnifying
glass on the administration for any sign of interference or
conversations with the regulators and the judiciary," Jacobs said.
SEC investigation of Goldman's dealings lasted 18 months and culminated
with the SEC filing civil fraud charges against the investment bank
According to White House visitor logs, Blankfein was
among the business leaders who attended an Obama speech on Feb. 13,
2009, and he also joined more than a dozen bank CEOs in a meeting with
Obama on March 27, 2009.
Blankfein also was supposed be among the
CEOs who met with Obama in December, but he and two others phoned in
from New York, blaming inclement weather.
He and his wife, Laura, were listed on the logs among 438 presidential guests at the Kennedy Center Honors the previous week.
logs also indicate that Blankfein met twice in 2009, on Feb. 4 and
Sept. 30, with Summers, who was undersecretary of the Treasury
Department during the Clinton administration when it was headed by
Robert Rubin, a former Goldman CEO.
Asked whether Goldman
executives had talked to administration officials about the SEC
inquiry, Goldman spokesman Michael DuVally said that the firm doesn't
discuss "what conversations we may or may not have had with government
Schapiro's statement said that she's "disappointed"
by Republican rhetoric suggesting that the SEC case against Goldman
might have been timed to boost legislative prospects for a financial
regulation overhaul bill, which Obama plans to pitch in a speech in New
"We do not coordinate our enforcement actions with
the White House, Congress or political committees," Schapiro said. "We
do not time our cases around political events or the legislative
calendar . . . We will neither bring cases, nor refrain from bringing
them, because of the political consequences."
Obama dismissed any
such suggestion as "completely false" Wednesday, saying in a CNBC
television interview that the SEC "never discussed with us anything
with respect to the charges that would be brought."
describing Craig, his former counsel, as "one of the top lawyers in the
country," Obama also said that he'd imposed "the toughest ethics rules
that any president's ever had."
"One thing he (Craig) knows is
that he cannot talk to the White House," Obama said. "He cannot lobby
the White House. He cannot in any way use his former position to have
any influence on us."
Goldman's chief spokesman, Lucas van Praag, said the firm "wanted Craig . . . for his wisdom and insight."
now an attorney with the Washington law firm of Skadden, Arps, Slate,
Meagre & Flom, said: "I am a lawyer, not a lobbyist. Goldman Sachs
has hired me to provide legal advice and to assist in its legal
Goldman's nearly $1 million in campaign
contributions to Obama's presidential campaign were the most from any
single employer except the University of California. Still, they
represented only a fraction of the more than $700 million that the
"The vast majority of the money I got was from
small donors all across the country," Obama told CNBC. "Moreover,
anybody who gave me money during the course of my campaign knew that I
was on record in 2007 and 2008 pushing very strongly that we needed to
reform how Wall Street did business."
One White House insider who
knows something about how Wall Street does business is chief of staff
Emanuel, who earned millions of dollars in investment banking after he
left the Clinton White House. His work for the Chicago-based financial
services firm Wasserstein Perella & Co. intersected with Goldman in
at least one deal.
In 1999, Emanuel was a key player representing
Unicom Corp., the parent of Commonwealth Edison, in forging its merger
with Peco Energy Co. to create utility giant Exelon Corp. Goldman was
also advising Unicom.
The White House declined immediate comment on that connection.
former Goldman executives hold senior positions in the Obama
administration, including Gary Gensler, the chairman of the Commodity
Futures Trading Commission; Mark Patterson, a former Goldman lobbyist
who is chief of staff to Treasury Secretary Timothy Geithner; and
Robert Hormats, the undersecretary of state for economic, energy and
Jacobs of the University of Minnesota said that the administration now risks "kind of a feeding frenzy."
administration has to be very careful," he said, "because . . . they're
seen as the ones who bailed out Wall Street. If there are indications
that the administration was talking to regulators or to Justice
Department people about when and how Goldman or other firms would be
investigated, I think that's going to create almost a mob scene."
(Margaret Talev, Steven Thomma and Tish Wells contributed to this article.)