Goldman's White House connections raise eyebrows

By Greg Gordon | McClatchy Newspapers

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 Summers.

No 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 political bodies.

Meanwhile, 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.

The SEC investigation of Goldman's dealings lasted 18 months and culminated with the SEC filing civil fraud charges against the investment bank last week.

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.

The 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 officials."

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 York Thursday.

"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."

While 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."

Craig, 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 representation."

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 campaign raised.

"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.

Several 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 agricultural affairs.

Jacobs of the University of Minnesota said that the administration now risks "kind of a feeding frenzy."

"The 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.)

Why are you so surprised? THis has been known shortly after Obama was elected(possibly even before). Nothing new here except to a few uninformed tea-baggers like you.

Chicago politics - stab your friend in the back to score politically.

Robert, I'd rather be a tea bagger than a douche bagger.

If this was Bush or the Republicans, the Lame Stream Media would be all over this. You have to ask, Why is the Lame Stream Media still running cover for comrade Obama?

(04-22-2010 05:54 PM)SumOfAllFears Wrote:  If this was Bush or the Republicans, the Lame Stream Media would be all over this. You have to ask, Why is the Lame Stream Media still running cover for comrade Obama?

Not sure why Faux didn't mention it right after(or possibly before) he was elected. I have known about it that long from MSNBC and CNN.

It only "raises eyebrows" at McClatchy Newspapers (and the other state run news outlets).

Its common knowledge the DEMs and left raise MILLIONS from Wall St. The question is whether it is bribery or extortion. I tend to believe toward extortion. Private citizens are threaten by lawsuits and regulations. If you do not pay you get squeezed.