goldmansachs bak

1219<div><h2></h2><div>see gs tag for newer content
GOLDMAN 2

=<a href="https://www.propublica.org/article/why-havent-bankers-been-punished-just-read-these-insider-sec-emails">https://www.propublica.org/article/why-havent-bankers-been-punished-just-read-these-insider-sec-emails</a>story was co-published with <a href="http://www.newyorker.com/business/currency/why-the-s-e-c-didnt-hit-goldman-sachs-harder">The New Yorker</a>. It is not subject to our Creative Commons license.In the late summer of 2009, lawyers at the Securities and Exchange Commission were preparing to bring charges in what they expected would be their first big crackdown coming out of the financial crisis. The investigators had been looking into Goldman Sachs’ mortgage-securities business, and were preparing to take on the bank over a complex deal, known as Abacus, that it had arranged with a hedge fund. They believed that Goldman had committed securities violations in developing Abacus, and were ready to charge the firm.James Kidney, a longtime SEC lawyer, was assigned to take the completed investigation and bring the case to trial. Right away, something seemed amiss. He thought that the staff had assembled enough evidence to support charging individuals. At the very least, he felt, the agency should continue to investigate more senior executives at Goldman and John Paulson & Co., the hedge fund run by John Paulson that made about a billion dollars from the Abacus deal. In his view, the SEC staff was more worried about the effect the case would have on Wall Street executives, a fear that deepened when he read an email from Reid Muoio, the head of the SEC’s team looking into complex mortgage securities. Muoio, who had worked at the agency for years, told colleagues that he had seen the “<a href="https://www.propublica.org/documents/item/2805339-Good-People.html">devasting [sic] impact</a> our little ol’ civil actions reap on real people more often than I care to remember. It is the least favorite part of the job. Most of our civil defendants are good people who have done one bad thing.” This attitude agitated Kidney, and he felt that it held his agency back from pursuing the people who made the decisions that led to the financial collapse.<div class="callout-ad ad" id="google-callout" />While the SEC, as well as federal prosecutors, eventually wrenched billions of dollars from the big banks, a vexing question remains: Why did no top bankers go to prison? Some have pointed out that statutes weren’t strong enough in some areas and resources were scarce, and while there is truth in those arguments, subtler reasons were also at play. During a year spent researching for a book on this subject, I’ve come across case after case in which regulators were reluctant to use the laws and resources available to them. Members of the public don’t have a full sense of the issue because they rarely get to see how such decisions are made inside government agencies.Kidney was on the inside at a crucial moment. Now retired after decades of service to the SEC, Kidney recently provided me with a cache of internal documents and emails about the Abacus investigation. The agency holds the case up as a success, and in some ways it was: Goldman had to pay a $550 million fine, and a low-ranking trader was found liable for violating securities laws. But the documents provided by Kidney show that SEC officials considered and rejected a much broader case against Goldman and John Paulson & Co.Kidney has criticized the SEC publicly in the past, and the agency’s handling of the Abacus case has been previously described, most thoroughly in a piece by Susan Beck, in The American Lawyer, but the documents provided by Kidney offer new details about how the SEC handled its case against Goldman. The SEC declined to comment on the emails or the Abacus investigation, citing its policies not to comment on individual probes. In a recent interview with me, Muoio stood by the agency’s investigation and its case. “Results matter. It was a clear win against a company and culpable individual. We put it to a jury and won,” he said.Kidney, for his part, came to believe that the big banks had “captured” his agency — that is, that the SEC, which is charged with keeping financial institutions in line, had become overly cautious to the point of cowardice....
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</div><div>=<a href="http://www.npr.org/sections/thetwo-way/2016/01/14/463107541/goldman-sachs-will-pay-5-billion-to-settle-financial-crisis-claims">
http://www.npr.org/sections/thetwo-way/2016/01/14/463107541/goldman-sachs-will-pay-5-billion-to-settle-financial-crisis-claims
</a>
Goldman Sachs will pay about $5 billion to resolve state and federal investigations into its handling of mortgage-backed securities in the years leading up to the 2008 financial crisis, the bank said today.The agreement will settle "actual and potential civil claims" by the U.S. Justice Department and the attorneys general of New York and Illinois, as well as the Federal Home Loan Banks of Chicago and Seattle and the National Credit Union Administration, the firm said in <a href="http://www.goldmansachs.com/media-relations/press-releases/current/announcement-14-jan-2016.html">a press release</a> issued after the close of trading Thursday."We are pleased to have reached an agreement in principle to resolve these matters," said Lloyd C. Blankfein, Goldman's chairman and chief executive officer.The firm said it will pay a civil monetary penalty of $2.385 billion, a cash payment of $875 million and $1.8 billion in consumer relief:<blockquote class="edTag">"The consumer relief will be in the form of principal forgiveness for underwater homeowners and distressed borrowers; financing for construction, rehabilitation and preservation of affordable housing; and support for debt restructuring, foreclosure prevention and housing quality improvement programs, as well as land banks."</blockquote>Goldman said the settlement, an agreement in principle, has not yet been finalized by the parties involved. If it is, it will reduce earnings for the last three months of 2013 by $1.5 billion.Ever since the subprime mortgage crisis upended the global financial system, authorities have been investigating a number of large financial institutions and their sale of mortgage-backed securities.The investigations have centered on whether the banks misrepresented the real value of the assets.Regulators have already won large multibillion-dollar settlements from several large banks, including JPMorgan Chase, Bank of America and Citigroup.Last May, Goldman announced it was negotiating with federal and state authorities to resolve claims against it.

<a href="http://www.democracynow.org/2016/1/15/headlines/goldman_sachs_reaches_5_billion_settlement_over_financial_crisis">http://www.democracynow.org/2016/1/15/headlines/goldman_sachs_reaches_5_billion_settlement_over_financial_crisis</a>

Goldman Sachs has reached a tentative $5 billion settlement with federal and state investigators over the investment bank’s role in the 2008 financial crisis. Goldman was under investigation for lying about the value of the mortgage-backed securities it sold in the years leading up to the crash. The sale of toxic securities helped trigger the global economic recession. Under the terms of the tentative settlement, Goldman will pay billions in civil penalties. No one will go to jail.

</div><div>Hey Big SpenderEvery single member of Congress elected last fall got money from the 1 percent of the 1 percent, the tiny elite of top donors like Paul Singer.
Percentage of population these big donors represent: 0.01% [10]
Percentage of all 2012 campaign donations they gave: 28% [11]
Total amount they gave to candidates: $410 million
To super-PACs: $500 million
Percentage of campaign donations that went to Republicans: 59%
Percentage of big donations that came from Wall Street: 25%
Top employer for big donors: Goldman Sachs
13th-biggest employer: Singer's Elliott Management
Total given by Goldman's megadonors: $4.7 million
Total given by Elliott's megadonors: $4.4 million
Source URL: http://www.motherjones.com/politics/2013/07/paul-singer-elliott-republican-fundraiser</div><div></div><div><a href="http://news.muckety.com/2013/09/23/goldman-sachs-the-world-banking-system/44271">http://news.muckety.com/2013/09/23/goldman-sachs-the-world-banking-system/44271</a></div><div>
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</div><div></div><div>ceo GS Blankfein best paid bank ceo pulls a Buffet; new study on inequality says 300:1; zuckerberg alone skews the data</div><div> =<h2 style="font-weight: normal; margin: 0px 0px 0.6em; overflow: hidden; padding-top: 0.5em; padding-bottom: 0.17em; border-bottom: 1px solid rgb(170, 170, 170); line-height: 19.2px; background: none rgb(255, 255, 255);">Financial crisis and the bailout</h2><h3 style="margin: 0px 0px 0.3em; overflow: hidden; padding-top: 0.5em; padding-bottom: 0.17em; border-bottom-style: none; line-height: 19.2px; background: none rgb(255, 255, 255);">Role in the crisis</h3>In 1975, the SEC’s trading and markets division ruled that investment banks must maintain a debt-to-net capital ratio of less than 12 to 1. In 2004, following extensive lobbying by the investment banks, the SEC under chairman Christopher Cox authorized five investment banks to develop their own net capital requirements. This enabled investment banks to push borrowing ratios to as high as 40 to 1.<a href="http://www.sourcewatch.org/index.php/Merrill_Lynch#cite_note-4" style="text-decoration-line: none; white-space: nowrap; background: none;">[4]</a> These five investment banks were Goldman Sachs, <a href="http://www.sourcewatch.org/index.php/Morgan_Stanley" title="Morgan Stanley" style="text-decoration-line: none; background: none;">Morgan Stanley</a>, <a href="http://www.sourcewatch.org/index.php/Lehman_Brothers" title="Lehman Brothers" style="text-decoration-line: none; background: none;">Lehman Brothers</a>, <a href="http://www.sourcewatch.org/index.php/Bear_Stearns" title="Bear Stearns" class="mw-redirect" style="text-decoration-line: none; background: none;">Bear Stearns</a>, and Merrill Lynch. This very high debt-to-reserves helped lead to the financial crisis of 2008 by weakening the ability of these institutions to recover from losses incurred when the risky CDO and CDS bets failed.<a href="http://www.sourcewatch.org/index.php/Merrill_Lynch#cite_note-5" style="text-decoration-line: none; white-space: nowrap; background: none;">[5]</a><a href="http://www.sourcewatch.org/index.php/Merrill_Lynch#cite_note-6" style="text-decoration-line: none; white-space: nowrap; background: none;">[6]</a>Lee A. Pickard, who had been Director of the SEC’s Division of Market Regulation when the 1975 12-1 rule was ordered, said of the change, "The SEC modification in 2004 is the primary reason for all of the losses that have occurred."<a href="http://www.sourcewatch.org/index.php/Merrill_Lynch#cite_note-7" style="text-decoration-line: none; white-space: nowrap; background: none;">[7]</a></div><a href="http://www.democracynow.org/2014/4/8/all_the_presidents_bankers_nomi_prins">http://www.democracynow.org/2014/4/8/all_the_presidents_bankers_nomi_prins</a> With U.S. inequality at its highest point since 1928 and Wall Street bonuses hitting pre-2008 levels, we look at the 100-year history of secret collusion between Washington and the financial industry. In her new book, "All the Presidents’ Bankers: The Hidden Alliances that Drive American Power," financial journalist Nomi Prins explores how a small number of bankers have played critical roles in shaping a century’s worth of financial, foreign and domestic policy in the United States. Prins examines how these relationships have influenced events from the creation of the Federal Reserve, the response to the Great Depression, and the founding of the International Monetary Fund and the World Bank. Now a senior fellow at Demos, Prins is a former managing director at Bear Stearns and Goldman Sachs, and previously an analyst at Lehman Brothers and Chase Manhattan Bank. ...<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Well, actually, we were on the show a few years ago; I was talking about a novel I had written, a historical novel on the 1929 crash called Black Tuesday. And what had happened as one of the segments in that book was that six bankers had gotten together at the behest of the acting chairman of the Morgan bank, who was Thomas Lamont at the time, and they had so been afraid of losing all of the money and all of their reputations and their institutions at the time that they got together and decided to pool their own money to save the markets—stark difference from what happened more recently, which was that the Federal Reserve, Treasury Department and everyone else from the government decided to work with them to save themselves. But the impetus for the book really came from those big six bankers. We still have big six bankers today. And I looked into the relationships that they had with all of the presidents going forward and backward from that time to come up with this All the Presidents’ Bankers analysis.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: Talk about that. Talk about who they were and the companies they represented, and go back.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Yeah, so, in 1929, the men that sat in the room at Morgan was Tom Lamont, who was the acting chair of Morgan, as I mentioned; Charles Mitchell, who was the chairman of National City Bank, which has now grown into Citigroup; Al Wiggin, who was the head of the Chase Bank, which is now part of the Chase—JPMorgan Chase constellation; and a couple of other bankers. And they basically have morphed into some of the six banks we have today. The ones that were absent were Goldman Sachs and Bank of America, but they came in through other avenues and personal connections to bankers, from FDR and forward since that time.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">And what I did was I went backwards from the crash in 1929 and noticed that J.P. Morgan, who is arguably—not even arguably, who is the most powerful banker this country has ever known and the most powerful political, financial actor—he died a hundred years ago, but his legacy, his family and what he created and the constellation of relationships between him and, at the time, Teddy Roosevelt, as far back as 1907, through Jamie Dimon’s relationship with Obama more recently, has been a very apparent apparatus in the connection of politics and finance, which I believe has no separation line.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AARON MATÉ: Well, on that absent separation line, talk about the creation of the Federal Reserve.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: So, this panic in 1907 happened. Teddy Roosevelt, who historically we know as the great trust buster, didn’t bust banks—busted a lot of other companies, a lot of other industries, not banks. And the reason for that was he truly believed—and he says this in documents and memoirs that I looked through—he truly believed that J.P. Morgan, the man, and his bank and his friends could save New York and the country from a greater catastrophe after the panic of 1907. And J.P. Morgan got together with a bunch of people at the Hotel Manhattan at midnight, didn’t have the president there, didn’t have the treasury secretary there, told them later what they would do. And what they would do is save their friends. And that’s what they did, with some of their own money, little bit of Treasury money, saved their friends, saved the Trust Company of America, because they had interests in that. They decided they didn’t want to really have that kind of scare again, so they continued to push for this idea of a central bank, which was the Federal Reserve.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);"> <p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">They had help with a senator, Nelson Aldrich, who was head of the Senate Finance Committee at the time, after—a year or so after that under President Taft. Nelson Aldrich took a group of bankers in 1910 to Jeckyll Island. He almost didn’t make that meeting. He got hit by a trolley car up on Madison Avenue, was convalescing with his son, Winthrop Aldrich, who became the head of Chase later, and took a bunch of representatives from J.P. Morgan’s bank—J.P. Morgan was not there, and that’s power: you don’t go, you send your lieutenants—to Jeckyll Island for 10 days. They hunted. They shot pheasants. They did all sorts of things. But they came out also with the impetus for the Federal Reserve. On the way back, the train back to Washington, Nelson Aldrich had to present this plan. He was still convalescing. Two bankers that came from that meeting went in his place to Washington to put up the plans. Now, it wasn’t passed under Taft; it was passed under the Democratic president, Woodrow Wilson. But a lot of those same individuals were friends with Woodrow Wilson, as well, into his presidency, and in fact helped campaign and raise money for his presidency.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: Go—<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: And it was—sorry—and the Federal Reserve Act was ultimately passed in the end of 1913 under Wilson.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: What were the most famous—or not as well known, but you uncovered them—bromances between top bankers and presidents?<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Right, so this—one of them was Tom Lamont, who, I mentioned, was around in 1929. But he started his life moving up the chain of Morgan after the panic in 1907 in things called the Pujo trials, which were in 1912, which, at the time, looked at what bankers had done to cause the panic of 1907. He was a young lawyer at the time. He had gone to Harvard with FDR. But as a young man, he was also hanging out—living in the house of FDR up on 65th Street, renting it for several years while FDR was the assistant Navy secretary under Woodrow Wilson. They chose Tom Lamont to go with Wilson to France for six weeks. Wilson was in France. It was the longest time a U.S. president was outside of U.S. soil and the first time a U.S. president was outside of U.S. soil. But the banker that was by his side was Tom Lamont. He was a Republican. He went across his party lines to come back with Woodrow Wilson to fight for the League of Nations to try to preserve peace after World War I, which was defeated.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">But Tom Lamont and Woodrow Wilson developed this relationship. And their letters are crazy. They’re like—they’re like so full of gratuity and love and just, you know, "thank you for being there by my side, and I couldn’t have done it without you," because when Woodrow Wilson then got a stroke and it was difficult for him to go around the country to, after the war, fight for the League of Nations, which the Senate didn’t want to pass and ultimately did not pass, Tom Lamont took it up in his newspapers that he owned, the Saturday Review, went before—you know, backdoors in terms of the senators that he knew, and really tried to push it. And the two of them really worked very closely together and had this bromance. And, of course, Woodrow Wilson ultimately did die from complications of those strokes.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AARON MATÉ: If we look back on the Great Depression, it’s understood that Wall Street was hostile in many ways to the New Deal, but how did Wall Street work with Roosevelt, and why?<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: So, one of the men, Winthrop Aldrich, who I mentioned before was the son of the founder of the Fed, one of the founders of the Fed, Senator Nelson Aldrich, was also friends with the Roosevelts. He was friends with FDR. And he also knew, from a business perspective, he wanted to outdo the Morgans. So he said, you know, Chase has some trading, some speculation, that went miles wrong in the crash of 1929, and he believed that for the stability of the economy and for his bank going forward, so he could sort of walk and chew gum at the same time—see the public interest as well as his bank’s interest—worked with FDR to pass the Glass-Steagall Act, which separated the speculative activities from the depositors that had their money entrusted to banks at the time, including at Chase. And, actually, Carter Glass, whose name is on that act, wanted a slightly weaker version of the act than Winthrop Aldrich pushed inside of Washington with the alliance of FDR. So that was a very, very different time. You cannot imagine today Jamie Dimon pushing with President Obama to separate his bank in such a way that it decreases its risk to depositors and taxpayers. It’s just unimaginable.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: Well, talk about the relationship today. You have said that the relationships between bankers and presidents, those in power, is more dangerous today. And maybe you can use the example of JPMorgan Chase, Jamie Dimon’s relationship. I mean, it’s hard to forget him going before a Senate committee when there are so many questions, even the question of would he be criminally prosecuted, and they are on bended knee to him. And you’re just looking at senators, one by one, and though the TV corporate networks weren’t showing it, you know, the ch-ching, how many millions his bank and him were responsible for giving to these senators, Republican and Democrat.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Well, yeah, and I actually remember being up that 4:30 or so in the morning and all night talking about Jamie Dimon bold-faced lying to those committees and then—yeah, and then turning over and saying, "Well, can you give us advice about the economy?" It was kind of ridiculous. This was after the London Whale trade, after they had lost billions in dollars, in money that should have been separated from speculation, to begin with.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">So, the relationship is much more dangerous also because those big six banks today—again, slight derivations of the big six banks in 1929, but today—own 85 percent of deposits of all the commercial banks, 84 percent of assets of all the commercial banks, and control 96 percent of all of the derivatives that financial institutions that are backed by the government utilize today, and 45 percent of the world’s derivatives. Six banks control so much capital and have so much power as to the laws around that capital. And the administration—and this started in Reagan, through Bush, through Clinton, into Obama—this is not new—but the reaction of the administrations has been to allow this to happen, to allow the concentration of this capital, of this power, to do nothing in the face of the financial crisis of 2008, which I believe is still ongoing, just in a different manifestation, because this risk still exists and because these numbers are worse than they were before the crisis of 2008.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: JFK, his relationship with the bankers?<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: JFK was interesting. Of course, he wasn’t, you know, president for a long time.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: You say he could have been president of a bank.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: I think—one of the things I look at in the book is sort of the pedigree and the social stature of a lot of the bankers and presidents, and also their connections. In the case of JFK, for example, he was in London in 1938 because his father, Joe Kennedy, who was the first appointed SEC head under FDR, because they were friends, because he helped with that campaign—met David Rockefeller in London at this gala coming-out party for JFK’s sister Kathleen. And David Rockefeller even briefly dated his sister Kathleen. So there were just so many social ties, as well.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">But the other side of JFK is that his personal relationship, despite the social background, was a little more stilted. He just came off as a little more trying to do his own thing. So, even when—and because he had this long-standing relationship with David Rockefeller, they started to really diffuse. Rockefeller started saying disparaging things in public, in particular in this really interesting Life magazine article that came out in 1962, that were going against what JFK was trying to do. JFK, for example, in Latin America was trying to allow those countries to be more independent, to not have more private debt imposed upon them, which is what Rockefeller and the other bankers wanted to do at the time as a new source of making money. And this really disturbed Rockefeller, in particular, who was trying to expand the bank into those areas.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">So, on the one side, they had a very strong social connection, and on the other side,JFK really tried to go about in a way to make external countries a little bit more independent financially from the United States, whereas that was a point where things started going in separate directions, and Rockefeller and Walter Wriston, who ran National City Bank at the time, really wanted to dump them with debt and to privatize and do all sorts of things that have gotten worse since then.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AARON MATÉ: So what happens since the 1970s? You have, at least for the bulk of the 20th century, banks and the government working together. Since the ’70s, though, Wall Street kind of goes rogue. So, what accounts for this shift, and how do we fix it now?<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Yeah, so, it’s a little bit—started when they found they could do a foreign policy that was separate from U.S. policy, that was an expansion of banks in a foreign capacity. And then LBJ tried to rein some of that back. He had some friends that he basically said, "You know, you guys, I know you want to do your own thing, but I have a Great Society vision coming on board, so you need to back me." So there was a little, still, quid pro quo there.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">By the time the ’70s came along, with Nixon, who had less personal relationships and also ultimately took the country off the gold standard, which he did because the bankers pushed him to do it, because at this point they wanted two things. They saw that there was Middle East oil, and they could go in there and start to forge relationships and branches in the Middle East and utilize those petrodollars to recycle—it was a huge thing in the early ’70s—into Latin America and other countries. So they started operating more internationally and independently of their connections to the president.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">And the minute they discovered all that money and they dumped all of that debt into the Third World, that manifested in a huge Third World debt crisis in the 1980s. And that was the first very large instance of a bailout. There was a small bailout for Penn Central, which was a railroad constellation in the '70s. But in the ’80s, under Reagan and under Bush, the idea of bailing out the banks, who had now refunneled all of this debt into Latin America, was a very epic decision, and it was one in which the bankers gave nothing back to the government. They were like, "We're going to use your money to bail us out." They were in Washington talking about the catastrophe that would happen to America if that didn’t happen. They got the government to basically push the World Bank and the IMF to work on the areas where they had the most risk and they had the most interest in retrieving it, and then in the ’90s just compiled that with the Mexican peso crisis, where Clinton also worked with Robert Rubin to save Mexican interests for Goldman and other U.S. banks, and then the repeal of Glass-Steagall in 1999. And then all of this idea of consolidation of risk and power just exponentially grew from there.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: Nomi Prins, you talk about Goldman Sachs and that it wasn’t always as powerful as it is today.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Yeah, Goldman Sachs almost died in 1928. Or, well, basically between 1928 and 1929, they had a trading partnership, "partnership," in which investors invested money, and the stock of that trust went up to $320-something, and then it subsequently went down to $1. And there were a lot of angry investors around the street and so forth. But a man named Sidney Weinberg, who was the chairman of Goldman at the time, who actually joined Goldman in the panic of 1907 as sort of an underling, decided that if he could befriend FDR in such a manner as to help him run his 1932 campaign, he would kind of have a seat at the table. And so, the legitimacy of Goldman with respect to FDR also allowed FDR to create the first Business Council, that Sidney Weinberg pushed in Washington to forge relationships between the business financial community and Washington and so on. Sidney Weinberg also was behind LBJ’s choice of Henry Fowler as a treasury secretary, who then joined Goldman Sachs after being a treasury secretary. And, of course, we had Henry Paulson, who did the other way—Bush picked him to be the treasury secretary, George W. Bush. And then, of course, Clinton picked Robert Rubin, coming from Goldman Sachs, to be the treasury secretary in his administration. So, but it started with Sidney Weinberg and FDR.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: We’re going to break and then come back to this discussion. Then we’re going to be speaking with the Vermont congressman, Peter Welch. He wants to expose the budgets of the 16 intelligence agencies. When we come back, though, Nomi Prins will talk about her favorite story in the book. She’s the author of the new book, All the Presidents’ Bankers: The Hidden Alliances that Drive American Power. Stay with us.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">[break]<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: In a moment, we’ll be speaking with Vermont Congressmember Peter Welch, but right now we’re continuing with Nomi Prins, the author of All the Presidents’ Bankers. She’s a former managing director at Bear Stearns and Goldman Sachs and previously an analyst at Lehman Brothers and other places. But we want to go to a clip right now of President Obama in 2009, 60 Minutes. He lashes out at what he calls the "fat cat bankers" of Wall Street.<blockquote class="collapsed-hide" style="margin: 1em 0px; padding: 0px 3em; direction: ltr; overflow: auto; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">PRESIDENT BARACK OBAMA: I did not run for office to be helping out a bunch of, you know, fat cat bankers on Wall Street. The only ones that are going to be paying out these fat bonuses are the ones that have now paid back that TARP money and aren’t using taxpayer loans.</blockquote><blockquote class="collapsed-hide" style="margin: 1em 0px; padding: 0px 3em; direction: ltr; overflow: auto; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">STEVE KROFT: Do you think that’s why they paid it back so quickly?</blockquote><blockquote class="collapsed-hide" style="margin: 1em 0px; padding: 0px 3em; direction: ltr; overflow: auto; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">PRESIDENT BARACK OBAMA: I think, in some cases, that was a motivation, which I think tells me that the people on Wall Street still don’t get it. They don’t get it. They’re still puzzled: Why is it that people are mad at the banks? Well, let’s see. You know, you guys are drawing down $10-20 million bonuses after America went through the worst economic year that it’s gone through in decades, and you guys caused the problem, and we’ve got 10 percent unemployment—why do you think people might be a little frustrated?</blockquote><p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AARON MATÉ: That’s President Obama speaking in 2009. I’m wondering if there’s been any break in the symbiotic relationship between Wall Street and Washington that you document. Certainly with Obama’s second term, when he ran against Romney, his donations from Wall Street dropped. It was something like $16 million, went down to $6 million. So, do you see any change of course in this pattern of symbiosis that you trace in your book?<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: Well, of course, Wall Street was very primary in getting him elected, to begin with. And I think also Wall Street doesn’t really particularly care who is in office, so there was a time during that campaign period where they just believed Romney had a better shot. It wasn’t so much necessarily a negative on Obama. I think they were just playing their bet, and they happened to have lost, which they usually haven’t over the many of elections. Who Wall Street backs tends to be who wins. But sometimes that backing gets a little bit split.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">But in that clip, and in a lot of what Obama has said, you know, what is said publicly and what actually happens inside the private office and with respect to what’s going on with bankers, you know, shows up in the reforms. It shows up in the structures. It shows up in the minions of lobbyists and lawyers that continue to funnel money, and little chips away at even very weak but existing rules. And Obama has allowed that to happen. He’s never come out and named a name against a banker. He talks about Wall Street "fat cats" as some sort of like big, broad category. He has not named names. He has not said what Wall Street needs to done. It’s just sort of fluffy rhetoric.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: Would he even say what he said in 2009, talking about the fat cat bankers, today?<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">NOMI PRINS: No. You know why? Because he believes—or he says—I shouldn’t say "believes," I don’t know—but that the 2010 Dodd-Frank Act was somehow sweeping reform, and he characterizes it as being relative to FDR’s reform when he did the Glass-Steagall Act and the New Deal and created the SEC and all sorts of things. And it simply wasn’t. As I mentioned before, banks got bigger. Their concentration of our deposits and assets and risk got bigger. Nothing was fixed by that, quote, "reform" act. And so, he would—he doesn’t need to say that now. He said it kind of in the beginning to consolidate his base, to get elected, whatever it was. But many presidents—and, actually, Democrats are a little bit more guilty of this than Republicans, because I think they feel they need to do this—from Wilson on, have always bashed the bankers in their campaign speeches, and then when it comes right down to it, most of them have been very helpful and very symbiotic with them after they have been in office. So it tends to get said to the public, and then when you look at what actually occurred, it’s a completely different matter, because they are connected.<p class="collapsed-hide" style="margin: 0px 0px 1em; padding: 0px; direction: ltr; font-variant-numeric: normal; font-variant-east-asian: normal; line-height: 30px; background-color: rgb(255, 255, 255);">AMY GOODMAN: Well, Nomi Prins, we want to thank you for being with us. All the Presidents’ Bankers is her book, The Hidden Alliances that Drive American Power. You can <a href="http://www.democracynow.org/blog/2014/4/8/read_excerpt_of_nomi_prins_all" style="text-decoration-line: none; outline: 0px;">read an excerpt</a> of that book on our website at democracynow.org. This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Aaron Maté.<h2>=</h2><h2>Kirsten Gillibrand (D-NY)</h2><h2>Jim Himes (D-CT)</h2><h2>Harry Reid (D-NV)</h2><h2>Reshma M. Saujani (D-NY)</h2><h2>Scott Murphy (D-NY)</h2><h2>Roy Blunt (R-MO)</h2><h2>Michael E McMahon (D-NY)</h2><h2>Andy McKenna (R-IL)</h2><h2>marco rubio  (R-FL)</h2><h2>Meg Whitman (R-CA</h2>Project Censored has just finish a year long study on the people on the boards of directors of the top ten asset management firms and the top ten most centralized corporations in the world. With overlaps there is a total of thirteen firms in our study:Barclays PLC, BlackRock Inc., Capital Group Companies Inc., FMR Corporation: Fidelity Worldwide Investment, AXA Group, State Street Corporation, JPMorgan Chase & Co., Legal & General Group PLC (LGIMA), Vanguard Group Inc., UBS AG, Bank of America/Merrill Lynch, Credit Suisse Group AG, and Allianz SE (Owners of PIMCO) PIMCO-Pacific Investment Management Co
 . The boards of directors of these firms, totaling 161 individuals. They are the financial core of the world’s Transnational Capitalist Class.  Collectively, these 161 people manage $23.91 trillion in funds impacting nearly every country in the world.  The institutional arrangements within the money management systems of global capital relentlessly seek ways to achieve maximum return on investment, and the structural conditions for manipulations—legal or not—are always open (Libor scandel). These institutions have become “too big to fail,” their scope and interconnections pressure government regulators to shy away from criminal investigations, much less prosecutions. The result is a semi-protected class of people with increasingly vast amounts of money, seeking unlimited growth and returns, with little concern for consequences of their economic pursuits on other people, societies, cultures, and environments.  One hundred thirty-six of the 161 core members (84 percent) are male. Eighty-eight percent are whites of European descent (just nineteen are people of color). Fifty-two percent hold graduate degrees—including thirty-seven MBAs, fourteen JDs, twenty-one PhDs, and twelve MA/MS degrees. Almost all have attended private colleges, with close to half attending the same ten universities: Harvard University (25), Oxford University (11), Stanford University (8), Cambridge University (8), University of Chicago (8), University of Cologne (6), Columbia University (5), Cornell University (4), the Wharton School of the University of Pennsylvania (3), and University of California–Berkeley (3). Forty-nine are or were CEOs, eight are or were CFOs; six had prior experience at Morgan Stanley, six at Goldman Sachs, four at Lehman Brothers, four at Swiss Re, seven at Barclays, four at Salomon Brothers, and four at Merrill Lynch. 
 Not Mark Tercek, the former investment banker at Goldman Sachs who became CEO of The Nature Conservancy in 2008. His new book, Nature’s Fortune: How Business and Society Thrive by Investing in Nature (Basic Books, 2013), argues that nature provides enormous economic benefits to society, business and consumers, and that, if we can figure out how to value and pay for those benefits, we can slow down and even reverse the degradation of nature that threatens our well-being.GS FDN gives $ to kipp, but <h2 class="date-header">Wednesday, November 10, 2010</h2><div class="date-posts"><div class="post-outer"><div class="post hentry" itemprop="blogPost" itemscope="itemscope" itemtype="http://schema.org/BlogPosting"><a id="7417192820098950056" name="7417192820098950056" /><h3 class="post-title entry-title" itemprop="name">Goldman Sees Gold</h3><div class="post-header"><div class="post-header-line-1"><div class="post-body entry-content" id="post-body-7417192820098950056" itemprop="description articleBody">From <a href="http://www.marketwatch.com/story/lisc-goldman-sachs-partner-on-charter-school-financing-facility-2010-11-09?utm_campaign=US+Education+-+Google+News&utm_medium=Twitter&reflink=MW_news_stmp&utm_source=SNSanalytics">Marketwatch</a>:
 <blockquote>PRESS RELEASE
Nov. 9, 2010, 10:28 a.m. EST
LISC, Goldman Sachs Partner on Charter School Financing Facility

NEW YORK, Nov. 9, 2010 /PRNewswire via COMTEX/ -- The Local Initiatives Support Corporation (LISC) and The Goldman Sachs Group Inc. today announced the formation of a $25 million charter school facility that will finance the development of approximately 16 charter schools over the next two years.

The Goldman Sachs Charter School Loan Facility will be capitalized by Goldman Sachs and credit-enhanced by funds awarded by the US Department of Education to LISC, which will also manage the facility and its lending program. LISC currently supports 130 charter schools nationwide. This facility will be focused on the greater New York City and New Jersey areas. In total, the fund is expected to leverage approximately $100 million in additional capital to support high-quality charter school facilities.

"Providing financing for charter school facilities that benefit low- and moderate-income families is a critical component of the firm's commitment to comprehensive community development," said Alicia Glen, Managing Director and Head of the Urban Investment Group at Goldman Sachs. "To date, the Urban Investment Group has committed approximately $150 million for charter school facilities in New York and New Jersey, and we are thrilled to partner with LISC, who has been a leader in charter school finance."

Since 1997, LISC has provided $127 million in charter school financing through direct loans, credit enhancement and New Markets Tax Credit investment authority. Supporting quality local schools is part of LISC's Building Sustainable Communities initiative, a comprehensive strategy to help transform distressed neighborhoods into good places to live, work, do business and raise families.

"Access to a quality education is fundamental to families and is at the core of healthy communities," noted Michael Rubinger, LISC President and CEO. "By funding this facility, Goldman Sachs ensures that thousands of low-income children will have access to innovative local schools that also help revitalize blighted neighborhoods."

"Securing and operating quality facilities are among the greatest challenges for charter schools," noted Reena Bhatia, Director with LISC's Educational Facilities Financing Center. "There are 1.5 million children educated through charter schools and 400,000 additional kids on waiting lists. There is tremendous need, especially in low-income communities.

"In the current economic environment, meeting that need is more difficult than ever," she continued. "Despite the fact that charter schools are a high-performing line of community development lending, private financing is severely constrained. That's why this Goldman Sachs facility is so critical. It offers children without a decent school option the chance at the educational opportunities they deserve."</blockquote>Shades of <a href="http://www.nydailynews.com/ny_local/education/2010/05/07/2010-05-07_albany_charter_cash_cow_big_banks_making_a_bundle_on_new_construction_as_schools.html">a Juan Gonzalez article</a> from earlier this year.  ---Alicia K. Glen is a Managing Director at Goldman Sachs Group, Merchant Banking Division and at Urban Investment Group's Real Estate business. Prior to joining Goldman Sachs, Ms. Glen was the Assistant Commissioner for housing finance at the New York City Department of Housing, Preservation and Development. Ms. Glen also serves on the boards of the Corporation for Supportive Housing, the Citizens Budget Commission and the Bowery Residents Committee. Ms. Glen serves as a Trustee of Enterprise Community Partners, Inc.</div></div></div></div> =<div class="byline news-politics"><a href="http://robertreich.org/">Robert Reich's Blog</a> [1] / By <a href="http://www.alternet.org/authors/robert-b-reich">Robert B. Reich</a> [2]</div><div class="story_comments"><div class="headline"><h1 property="dc:title" datatype="" class="node-title">Why Democrats Can't Be Trusted to Control Wall Street</h1></div><div class="the_body body_news-politics clearfix"><div class="story-date">May 25, 2013  |  </div>Who needs Republicans when Wall Street has the Democrats? With the help of congressional Democrats, the Street is rolling back financial reforms enacted after its near meltdown.According to the <a href="http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/?hp" target="hplink">New York Times</a> [3], a bill that's already moved through the House Financial Services Committee, allowing more of the very kind of derivatives trading (bets on bets) that got the Street into trouble, was drafted by Citigroup -- whose recommended language was copied nearly word for word in 70 lines of the 85-line bill. Where were House Democrats? Right behind it. Rep. Sean Patrick Maloney, Democrat of New York, a major recipient of the Street's political largesse, co-sponsored it. Most of the Democrats on the Committee, also receiving generous donations from the big banks, voted for it. Rep. Jim Himes, another proponent of the bill and a former banker at Goldman Sachs, now leads the Democrat's fund-raising effort in the House. Bob Rubin -- co-chair of Goldman before he joined the Clinton White House, and chair of Citigroup's management committee after he left it -- is still influential in the Party, and his protégés are all over the Obama administration. I like Bob personally but I battled his Street-centric views the whole time I served, and soon after I left the administration he persuaded Clinton to support a repeal of the Glass-Steagall Act. Jack Lew, Obama's current Treasury Secretary, was chief operating officer of Citigroup's Alternative Investments unit, a proprietary trading group, from 2006 to 2008, before he joined the Obama administration. Peter Orszag, Obama's Director of the Office of Management and Budget, left the Obama Administration to become Citigroup's vice chairman of corporate and investment banking, and chairman of the financial strategy and solutions group.All these men are honorable. None has broken any law. But they and their ilk in congress -- the Democrats who are now rolling back Dodd-Frank -- don't seem to appreciate the extent to which Wall Street has harmed, and continues to harm, America.It's not entirely coincidental that the Obama administration never put tough conditions on banks receiving bailout money, never prosecuted a single top Wall Street executive for the excesses that led to the near meltdown, and still refuses to support a tiny tax on financial transactions that would bring in tens of billions of dollars as well as discourage program trading. Democrats can't be trusted to control Wall Street. If there were ever an issue ripe for a third party, the Street would be it.</div><h2>
</h2>---<h2>bet against junk sold to clients</h2><h2>---</h2><h2>off the hook:</h2> <div class="byline">By Jim PuzzangheraAugust 10, 2012, 11:33 a.m.</div>WASHINGTON — The <a class="taxInlineTagLink" id="ORGOV0000160" title="U.S. Department of Justice" href="http://www.latimes.com/topic/crime-law-justice/u.s.-department-of-justice-ORGOV0000160.topic">Justice Department</a> said it would not pursue criminal charges against <a class="taxInlineTagLink" id="ORCRP015181" title="Goldman Sachs Group, Inc." href="http://www.latimes.com/topic/economy-business-finance/goldman-sachs-group-inc.-ORCRP015181.topic">Goldman Sachs Group Inc.</a> or its employees related to allegations by a Senate panel that the bank deceived investors and Congress about its activities in the subprime mortgage market.After an “exhaustive review” that began last year, investigators “concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the Justice Department said in a statement released Thursday night. The officials said they could change their minds “if any additional or new evidence emerges.”The investigation by officials from the Justice Department’s Criminal Division, the U.S. attorney’s office for the southern district of New York, the <a class="taxInlineTagLink" id="ORGOV000008" title="FBI" href="http://www.latimes.com/topic/crime-law-justice/crimes/fbi-ORGOV000008.topic">FBI</a> and other agencies began after a scathing report regarding Goldman was issued in April 2011 by the Senate's Permanent Subcommittee on Investigations.The panel, which conducted a bipartisan, two-year probe into the origins of the financial crisis, concluded that Goldman was a major culprit.The subcommittee’s report, based on internal memos, emails and interviews with employees of financial firms and regulators, said Goldman profited from the crisis by betting billions of dollars against the mortgage market and then misled the bank’s clients and lawmakers about its activities.The committee’s investigation included a high-profile hearing in which senators grilled Goldman Chief Executive <a class="taxInlineTagLink" id="PEBSL0000918" title="Lloyd Blankfein" href="http://www.latimes.com/topic/economy-business-finance/companies-corporations/corporate-officers/lloyd-blankfein-PEBSL0000918.topic">Lloyd Blankfein</a>. He testified that the bank had not consistently tilted its own investments heavily against the housing market, also known as having a “net short” position, as it was selling mortgage-related securities to its clients.The subcommittee’s report said Goldman’s own financial records and internal communications directly contradicted Blankfein’s denial.Goldman had strongly challenged the subcommittee’s findings, saying the company had acknowledged being intermittently net short but never had a "massive net short position."On Friday a company spokesman said, “We are pleased that this matter is behind us."But Sen. <a class="taxInlineTagLink" id="PEPLT003901" title="Carl Levin" href="http://www.latimes.com/topic/politics/carl-levin-PEPLT003901.topic">Carl Levin</a> (D-Mich.), the subcommittee’s chairman, said he stood by his panel’s findings.“Whether the decision by the Department of Justice is the product of weak laws or weak enforcement, Goldman Sachs’ actions were deceptive and immoral,” Levin said.The lack of prosecution by federal officials highlighted the need to prevent banks from convincing regulators and Congress to water down new rules in the 2010 financial reform law designed to prevent another crisis, Levin said.The Justice announcement came after Goldman reported in a regulatory filing Thursday that the <a class="taxInlineTagLink" id="ORGOV000050" title="U.S. Securities and Exchange Commission" href="http://www.latimes.com/topic/economy-business-finance/market-exchange/securities/u.s.-securities-exchange-commission-ORGOV000050.topic">Securities and Exchange Commission</a> had decided not to file charges against the firm over a $1.3-billion subprime mortgage portfolio. The SEC was investigating Goldman’s disclosures about the portfolio, which was offered to investors in 2006.In 2010, Goldman agreed to pay pay $550 million to settle SEC allegations that the bank misled investors who bought some mortgage-related securities.[also just dept says not enough evidence]
 <h2><a href="http://www.latimes.com/business/money/la-fi-mo-goldman-sachs-justice-investigation-mortgages-20120810,0,6319671.story">http://www.latimes.com/business/money/la-fi-mo-goldman-sachs-justice-investigation-mortgages-20120810,0,6319671.story</a></h2><h2>---</h2><h2>griftopia: </h2>ch 3G-S 2006 8k mortgages lumped, less than 1% down, 60% low or no doc [NINJA} 70% AAA rated  busted Moody's later said computer error 86 but kept doing almost year after knewbanks were making their savings requirements by LENDING 96not even a casino b/c not req to be able to cover betsAIG Cassano ex Milken (2 divs of AIG dealing w/ GS so it caight on and aggressive about calling in loans, so hasterned collapse. Cassano enabled by Gramm CFMA 101  Summers & Rubin  Cassano insured AAA deals but cd not cover  1999 700M$ 3.26b$ 2005 101 cassano unit made 1m$/yr/personMr 2005 hank Greenberg quit b/c of Spitzer AIG  AAA ->AA costs 1.6B$ (prooof able to repay anyway)  Cassano fired honest acc'tant; he's canned 2007 but still gets 1m/moanother downgrade, whole econ on lineCasano CDS unit got 22b$ bailouts, mostly went to GS  and Societe Generale 119 then 44B neuger GS #2 at 4.8B$ (Deutsche got 7)Maiden lane II deal sep crap from goodish and US ppl bought crap 119state of Mass AG Coakley went aftyer GS got 50m$, not admit guilt rec'd 3.44b$ profits 2nd qtr 2009 120GS Blankfein burned AIG b/c more profitable to do so than help/deal 121spent 13trillion$ on bailout (only cost 1.4 to pay off all the morts) 123Taibbi dissects the housing bubble crisis as a complex scam involving players at many levels. Entry level assessments, income levels, and credit scores were falsified or neglected, allowing unqualified customers to acquire mortgages they could not carry. Taibbi maintains that ARMs and other "financial inventions" enlarged the pool of loans that could never be paid back, yet issuing agents and agencies were made rich by commissions. The real money, however, came in for the big banks that securitized these loans, that is to say, repackaged them as investment vehicles (and in the process took the loan originators off the hook). Collateralized debt obligations (CDOs) then cut these bundled loans into "tranches", where the statistically more likely to be paid-back tranch would be given a AAA rating (rating agencies depend on the banks for their living), remaining CDOs were tranched again, and the better part again AAA rated, and tranched further so that eventually most of the mortgages ended up in AAA-rated instruments. The "time-bomb mortgages" were insured by credit default swaps (CDSs) in an unregulated environment, so that neither sellers (such as AIG) needed capitalization, nor buyers needed to own the insured assets. Further, AIG's investment arm invested in CDOs as a collateral to lend-out stocks further exposing itself to financial calamity. ch 41936 FDR commod exge act prevented spec in stuff we need to live; tradit commod trade is legitoct 18 1991 b2 apptee agreed that a spec is really a legit hedge b/c taking a risk, by 2008 80% of trades were spec  17 secret letters, so no one knew (only reveraled accidently many yrs later 135GS sold to big pools like CalPERS 2003-8 13b$ to 317b 25x in 5 yrs 144; all 25 commod on GS and AIG indexes went up on avg 200% (despiter oil supply at alltime high 144BO ppls said CFTC Harris wrong; 2008 oil 149 bbl, by december 33$ 150 when bubble burstBO nom G Gensler, ex GS to head CFTC (lt to Rubin) 152so we get 4.50/gal gas while inside traders get rich 154The commodities bubble of 2008 led to global food shortages and prompted the price of oil to rise over $140 per barrel. Taibbi depicts as its cause investment-bank led commodity speculation, after having convinced regulators to dismantle sensible regulations that had safeguarded the process of commodity trading, in place since the Great Depression. Goldman Sachs' invention was the Goldman Sachs Commodity Index p 142 inviting pension funds and other investors to speculate long in such index trading leading to higher prices for commodities that directly affect the livelihoods of people.ch 7 Bubble machineJohn Thain Merr Ly carpet  Robt Steel ex GS at Wachovia RIPbanks supposed to direct $ to PRODUCTIVE uses, but just moves huge bunches around on sometime tiny margins in very shiort timeline; makes us pooer and weaker, thus more vulnerable to shocks oligarchy  (death spiral?) 210JK Galbraith wrote up GS shell game as case study  485B$ loss led to 29 crashIPO set up two tier system, one for bakers and insoders, rest for investors; w/ IPO gave up on all standards/trad criteria  ; piad 40m 2005 for laddering, no admit wrong; spitzer 50m$ for spinning; 5trillion lost on nasdaq 45 of 50 out of biz within 1 yr 219  Corzine1999 6.4b to 15k ppl 420k/ppl about same in 2002 AFTER tech CRASHHOUSE: by peak in 2006 GS issuing 44.5B$ mort-back, mostly CDO to pension and insur co THEN BET ~ IT, THEN TAXPAYERS HAD TO BUY THEM. AFTER 2006 CRASH, 16.5B$ pay, 26k ppl got 634K?ppl "we work very hard here" 221ex GS Paulson lets GS competitior Lehman Bros die. (bear gone, others merge, so only GS and MorganS left) 221another 3 trill lent to banks (secert) now that GS is a holding co, its regulator is NY FEd (headed by ex GS S Freidman) he's supposed to divest, but he buys 37K more shares, worth 13m total 222got gov to ban short selling against them, tho they did it before bigtime (stock up 30% 1st week of ban)after mult havoc, paid 14m$ taxes 2008 or 1%; paid 10b$ compensation, 2b profits ceo blankfein got 42.6m 224GAO found 1998-2005 2/3 US corps paid zip 224changed date of rep and orphaned a month of big losses 225 then called the bailout $ profit! 1st qtr after 4.7b$ bonus and cop (up 18%); then raised (borrowed) 5B$ for new issue (thus borrowed to salaries, just months after bailout) 2252nd qtr prot 3.44B$ les than a year after AIG implosion, set aside 11.4 b for comp in 09blogger on case, so NYSE stopped publising data 228busted for seling "shitty deal" SEc 2010 550m fine a record, but pittance ; ceo blanfein said no disclosure obligation 238  GS advisoer said in St Paul's in Londomn we have to tolerate inequality s oall can prosper 239 Brian Griffiths  ceo says doing "God's work" 239Taibbi’s last chapter takes on Goldman Sachs (GS) in an updated version of his 2009 Rolling Stone article where he "famously"[4] likened it to "a great vampire squid wrapped around the face of humanity". He describes GS as it was in the forefront of pushing Initial public offerings (IPOs) (most of which lost money ) during the internet bubble, at the heart of the commodity crisis of 2008 (enabling speculation in oil and other essentials and driving up their prices), and was right at the center of the financial crisis of 2008 ongoing. Taibbi indicates that, in 2008, in spite of $2 billion earnings and $10 billion compensation and bonuses, GS only paid $14 million in taxes at an effective tax rate of 1%. Goldman Sachs, which Taibbi refers to as "a company of criminals," is seen as the "apotheosis of the Grifter Era" controlling rules and regulations through manipulation of the government by money, pressure, insider connections, and revolving door jobs as a "parasitic enterprise". The author asserts that "...in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy."[5]<h2>---</h2>Documents released by Wikileaks on Sunday also include a purported memo from Friedman to his staff detailing how Stratfor was partnering with a Goldman Sachsveteran, Shea Morenz, to create its own hedge fund.The new venture, Friedman wrote in the memo, "… would allow us to utilize the intelligence we were gathering about the world in a new but related venue - an investment fund. Where we had previously advised other hedge funds, we would now have our own, itself fully funded by Shea. Shea invested over $2 million in Stratfor.”<h2>deal w/ stratfor:</h2><h2><a href="http://www.deathandtaxesmag.com/179389/the-stratfor-files-how-a-goldman-sachs-advisor-invested-in-espionage/">http://www.deathandtaxesmag.com/179389/the-stratfor-files-how-a-goldman-sachs-advisor-invested-in-espionage/</a></h2>morenz [b2 pres library talk congrats himself on queens print shop small biz 2 hires]<h2>=</h2>speculates in oil, boosts gas prices: [cf stratfor spec in currencies?]<h2 style="margin: 20px 0px 0px;">How Wall Street Drives Up Gas Prices -- Ripping Us Off and Killing Jobs</h2><h5 style="margin: 0px 0px 20px;">By Les Leopold, AlterNet
Posted on May 3, 2012, Printed on May 6, 2012
http://www.alternet.org/story/155193/how_wall_street_drives_up_gas_prices--_ripping_us_off_and_killing_jobs</h5>Gasoline prices have been falling in recent weeks, but they're still close to their five-year high after climbing steeply for three years. For every penny increase at the pump, $1.4 billion per year <a href="http://naturalresources.house.gov/Issues/Issue/?IssueID=32333">leaves our collective pockets</a>, creating a drag on the sluggish “recovery.” Where does it go and what caused the price explosion at the pump?It's a common belief that oil prices are set on the world market by supply and demand. Less supply and/or more demand causes prices to rise. Oil is getting harder to find; OPEC is holding back supply; China and India are guzzling it up; Iran is threatening to blow it up. And regulations are getting in the way of drill, baby, drill -- end of story.But this fixation on blind market forces ignores the fact that Wall Street is financializing the commodities markets – especially oil – as it seeks new ways to pick our pockets. The same greedy swindlers who puffed up the housing bubble and then milked it dry are now hard at work doing the same with gasoline.What is financialization and why is it coming to the oil industry?Here’s a chilling definition provided by economist Thomas I. Palley (<a href="http://www.levyinstitute.org/pubs/wp_525.pdf">PDF</a>):<blockquote>Financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes…..Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector, (2) transfer income from the real sector to the financial sector, and (3) increase income inequality and contribute to wage stagnation. </blockquote>In short, we’re talking about the spread and growing supremacy of financial gambling – the ability to bet on the prices of goods produced in the real economy without actually owning those goods.The vital activities of manufacturing, resource extraction and agriculture are turned into financial instruments that can be rapidly bought and sold. More to the point, financialization allows financial gamblers to extract profits from the real economy to enrich themselves without producing any real economic value for our economy.When markets are financialized, they offer a myriad of ways for Wall Street firms to bend or break laws to manipulate markets and haul in enormous profits. In effect, financialization extracts a hidden tax from the real economy which is then passed onto us in the form of higher prices, economic hardship and then government bailouts when it all comes crashing down.The oil markets have become just another profitable Wall Street casino. Why? Because, as the infamous outlaw Willie Sutton said, “That’s where the money is.” Oil markets as well as other commodity markets require a certain number of speculators. Oil producers and end users go to these markets in order to lock in prices for the products they use or sell. From refiners to shippers to airlines, oil markets provide a way to obtain price certainty for a specified period of time. To make these markets function, speculators are needed to take the other side of those trades. For more than a century about 30 percent of these commodity markets involved speculators and 70 percent of the participants in terms of volume were real producers, distributors and users. That’s what a healthy commodities market looks like.But once financialization metastasized, the proportions flipped. Now <a href="http://naturalresources.house.gov/UploadedFiles/KelleherTestimony03.21.12.pdf">70 percent of the action comes from speculators</a>, while only 30 percent comes from those who really produce, distribute and use the actual commodities. The casino has taken over.This speculative invasion is why gasoline prices are climbing rapidly. The only question remaining is how much of the price rise is due to excess speculation. Here’s what the experts say:<ul><li>The St. Louis Federal Reserve (not exactly a Marxist institution) claims that 15 percent of the rise in gasoline prices is due to Wall Street speculation (<a href="http://research.stlouisfed.org/wp/2011/2011-027.pdf">PDF</a>).</li><li>A <a href="http://democrats.oversight.house.gov/index.php?option=com_content&view=article&id=5314&Itemid=102">report</a> from the House Committee on Government Oversight claims that up to 30 percent of the rise may be due to speculators.</li><li>Even experts at Goldman Sachs, of all places, <a href="http://www.cnn.com/2012/02/28/opinion/sanders-gas-speculation/index.html">say</a> that “excessive speculation is causing oil prices to spike by up to 40%.”</li><li>And Saudi Arabia, ”the largest exporter of oil in the world, <a href="http://www.cnn.com/2012/02/28/opinion/sanders-gas-speculation/index.html">told the Bush administration back in 2008</a>, during the last major spike in oil prices, that speculation was responsible for about $40 of a barrel of oil.”</li></ul>This flip in the balance of real economic activity and speculation is precisely what John Maynard Keynes warned us about more than 75 years ago:"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism…." Who are the speculators?Senator Bernie Sanders <a href="http://thinkprogress.org/climate/2011/09/15/317330/leaked-cftc-oil-speculation-data/">released classified documents</a> revealing the names of the largest speculators in the oil markets as of 2008.A look at the top 20 speculators reveals that only five are actually involved in producing, shipping, refining and consuming oil (Vitol, CMA, ENA, Semgroup and Emirates Oil). The other 15 are banks and investment houses – a virtual who’s who of Wall Street firms that puffed up the housing bubble and took down the economy. Goldman Sachs, Morgan Stanley, JP Morgan Chase, Merrill Lynch, Citigroup -- they all make the list.A tale of two casinos<h2>=</h2>tear the eyes out of muppetsMATT TAIBBI: I’m sure Goldman was always a ruthless company. And definitely, if you go back to the '20s, they had a big part—you know, John Kenneth Galbraith writes about this in his book, The Great Crash, Goldman's role in the speculative boom that led to the Depression. But to give them credit, there was a time—and I knew people who worked at Goldman when I lived in Russia, and they had this credo in the company, which was "long-term greedy." In other words, we want to make money, but we want to make money for the long term. And I think that changed somewhere in the early ’90s to the early part of the last decade. They started grabbing the quick buck and gouging their clients, instead of looking for the long term.<a href="http://www.democracynow.org/2012/3/22/matt_taibbi_on_the_explosive_resignation">http://www.democracynow.org/2012/3/22/matt_taibbi_on_the_explosive_resignation</a>=<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs">http://www.sourcewatch.org/index.php?title=Goldman_Sachs</a>Goldman Sachs, founded in 1869, promotes itself as a “leading global investment banking, securities and investment management firm that provides a wide range of services worldwide.” [<a href="http://www2.goldmansachs.com/services/index.html" class="external autonumber" title="http://www2.goldmansachs.com/services/index.html" rel="nofollow">[38]</a>] Goldman Sachs has became “the most profitable securities firm in Wall Street history.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-0" title="">[1]</a> In 2008, the New York Federal Reserve approved a change in Goldman Sach’s legal status from that of investment bank to bank holding company, enabling it to qualify for a government bailout. The extensive network of top government officials who previously worked for Goldman Sachs, including former Treasury Secretary Henry Paulson, has been called “Government Sachs”.<table id="toc" class="toc" summary="Contents"><tbody><tr><td><div id="toctitle"><h2>Contents</h2>[<a class="internal" id="togglelink">hide</a>]</div><ul><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Financial_crisis_and_the_bailout">1 Financial crisis and the bailout</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Role_in_the_crisis">1.1 Role in the crisis</a><ul><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Deregulation_of_Investment_Banks">1.1.1 Deregulation of Investment Banks</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Dealing_in_Subprime_Mortgage_Securities">1.1.2 Dealing in Subprime Mortgage Securities</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Profiting_on_the_Downturn_in_the_US_Housing_Market">1.1.3 Profiting on the Downturn in the US Housing Market</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Exposing_foreign_institutions_to_subprime_risk">1.1.4 Exposing foreign institutions to subprime risk</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Marketing_what_Goldman_Sachs_was_simultaneously_betting_against">1.1.5 Marketing what Goldman Sachs was simultaneously betting against</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Bubble_machine">1.1.6 Bubble machine</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Trading_scandal">1.1.7 Trading scandal</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Alleged_fraud">1.1.8 Alleged fraud</a><ul><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#The_SEC_case_against_Goldman_Sachs">1.1.8.1 The SEC case against Goldman Sachs</a></li><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#The_SEC_case_against_Goldman_Sachs_employee_Fabrice_Tourre">1.1.8.2 The SEC case against Goldman Sachs employee Fabrice Tourre</a></li><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Goldman_Sachs.E2.80.99_defense_against_fraud_charges">1.1.8.3 Goldman Sachs’ defense against fraud charges</a></li></ul></li></ul></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Bailouts">1.2 Bailouts</a><ul><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Bailout_amounts">1.2.1 Bailout amounts</a><ul><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#TARP_Bailout">1.2.1.1 TARP Bailout</a></li></ul></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Goldman_Benefits_from_Lehman_Failure_and_AIG_Bailout">1.2.2 Goldman Benefits from Lehman Failure and AIG Bailout</a><ul><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Lehman_Brothers_Bankruptcy">1.2.2.1 Lehman Brothers Bankruptcy</a></li><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#AIG_Bailout">1.2.2.2 AIG Bailout</a><ul><li class="toclevel-5"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Benefits_to_Goldman_Sachs_of_AIG_Bailout">1.2.2.2.1 Benefits to Goldman Sachs of AIG Bailout</a></li></ul></li><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#AIG_and_Goldman_Connections">1.2.2.3 AIG and Goldman Connections</a></li><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Geithner_and_AIG">1.2.2.4 Geithner and AIG</a></li></ul></li></ul></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Actions_as_bank_holding_company">1.3 Actions as bank holding company</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Notable_reactions_to_the_financial_crisis">1.4 Notable reactions to the financial crisis</a><ul><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Invoking_religious_themes">1.4.1 Invoking religious themes</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Apologies">1.4.2 Apologies</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Discouraging_holiday_parties">1.4.3 Discouraging holiday parties</a></li></ul></li></ul></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Other_controversies">2 Other controversies</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Greek_Financial_Crisis">2.1 Greek Financial Crisis</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Minimal_Tax_Payments">2.2 Minimal Tax Payments</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Phoning_in_to_White_House_meeting">2.3 Phoning in to White House meeting</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Seeking_gun_permits">2.4 Seeking gun permits</a></li></ul></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Goldman_Sachs.E2.80.99_Post-crisis_Profits">3 Goldman Sachs’ Post-crisis Profits</a></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Earnings_and_bonuses">4 Earnings and bonuses</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Bad_bonus_publicity">4.1 Bad bonus publicity</a></li></ul></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Coal_issues">5 Coal issues</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Coal_investments">5.1 Coal investments</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Coal_energy_assets">5.2 Coal energy assets</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Coal_investment_pricing">5.3 Coal investment pricing</a></li></ul></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Political_influence">6 Political influence</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Lobbying">6.1 Lobbying</a><ul><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Lobbying_positions">6.1.1 Lobbying positions</a></li></ul></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Campaign_contributions">6.2 Campaign contributions</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Revolving_door_influence">6.3 Revolving door influence</a><ul><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Political_appointees_and_figures">6.3.1 Political appointees and figures</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Former_Goldman_Sachs_Employees_Hired_by_the_Obama_Administration">6.3.2 Former Goldman Sachs Employees Hired by the Obama Administration</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Former_Goldman_Sachs_Employees_Hired_by_the_Bush_Administration">6.3.3 Former Goldman Sachs Employees Hired by the Bush Administration</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Former_Goldman_Sachs_Employees_Hired_by_the_Clinton_Administration">6.3.4 Former Goldman Sachs Employees Hired by the Clinton Administration</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Former_Government_Officials_Hired_by_Goldman_Sachs">6.3.5 Former Government Officials Hired by Goldman Sachs</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Goldman_Sachs_Connections_with_the_Federal_Reserve">6.3.6 Goldman Sachs Connections with the Federal Reserve</a></li><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Other_notable_Goldman_connections">6.3.7 Other notable Goldman connections</a><ul><li class="toclevel-4"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#South_African_officials">6.3.7.1 South African officials</a></li></ul></li></ul></li></ul></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Personnel">7 Personnel</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Key_executives">7.1 Key executives</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Members_of_the_board">7.2 Members of the board</a></li></ul></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Contact_details">8 Contact details</a></li><li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Articles_and_resources">9 Articles and resources</a><ul><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#Related_SourceWatch_articles">9.1 Related SourceWatch articles</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#References">9.2 References</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#External_resources">9.3 External resources</a></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#External_articles">9.4 External articles</a><ul><li class="toclevel-3"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#The_McClatchy_Series">9.4.1 The McClatchy Series</a></li></ul></li><li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#External_links">9.5 External links</a></li></ul></li></ul></td></tr></tbody></table><a name="Financial_crisis_and_the_bailout" id="Financial_crisis_and_the_bailout"> </a><h2>Financial crisis and the bailout</h2><a name="Role_in_the_crisis" id="Role_in_the_crisis"> </a><h3>Role in the crisis</h3><a name="Deregulation_of_Investment_Banks" id="Deregulation_of_Investment_Banks"> </a><h4>Deregulation of Investment Banks</h4>Goldman Sachs, with Henry Paulson as its CEO before he was named Treasury Secretary in 2006, campaigned successfully to eliminate any effective limits on the amount of leverage the largest investment banks could use. Under pressure from Goldman Sachs in particular, in 2004 the Securities and Exchange Commission removed the 12 to 1 debt to net capital ratio it had previously imposed. The SEC gave the five largest investment banks a special exemption so they could use their own risk models to determine their capital requirements. Goldman Sachs, Bear Stearns, Merrill Lynch, Lehman Brothers and Morgan Stanley were freed to leverage to extremely risky levels, in some cases reaching a ratio of 40 to 1. This piece of deregulation enabled the investment banks to substantially expand their businesses through borrowing, but left them fatally undercapitalized when they suffered losses. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-1" title="">[2]</a> Barry Ritholtz and Aaron Task wrote in their book, Bailout Nation, that the deregulation of investment bank leverage made the financial crisis predictable. They state: “Thus we learn that the tragic financial events of 2008 and 2009 are not an unfortunate accident. Rather, they are the results of a conscious SEC decision to allow these firms to legally violate net capital rules…” The authors point out that none of the top US investment banks, despite their long history on Wall Street, survived this experiment with deregulation. Lehman Brothers shook global markets by going bankrupt. Merrill Lynch and Bear Stearns were on the verge of bankruptcy when they were bought out by commercial banks. Goldman Sachs and Morgan Stanley had to be quickly transformed into bank holding companies so that they could qualify for Federal Reserve loans and government bailout money. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-2" title="">[3]</a>In their report - “Sold Out: How Wall Street and Washington Betrayed America” - Robert Weissman and Harry Rosenfeld explain that: “This superleverage not only made the investment banks more vulnerable when the housing bubble popped, it enabled the banks to create a more tangled mess of derivative investments — so that their individual failures, or the potential of failure, became systemic crises. Former SEC Chair Chris Cox has acknowledged that the voluntary regulation was a complete failure.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-3" title="">[4]</a><a name="Dealing_in_Subprime_Mortgage_Securities" id="Dealing_in_Subprime_Mortgage_Securities"> </a><h4>Dealing in Subprime Mortgage Securities</h4>Goldman Sachs contributed to the financial crisis by selling subprime, mortgage-backed securities. Alternative Mortgage Products, the bank’s mortgage bond division, sold $12.9 billion worth of sub-prime mortgage bonds in 2006. This made Goldman Sachs the 15th largest subprime mortgage bond seller and represented an increase of 59% in its subprime business over the previous year. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-4" title="">[5]</a> From 2001 to 2007, Goldman Sachs sold $135 billion of bonds backed by risky mortgages. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-5" title="">[6]</a> The bank was also the largest creditor of New Century, which was the second biggest subprime lender in the US until it went bankrupt in 2007. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-6" title="">[7]</a>Carl Levin, the Democrat senator chairing the Senate Permanent Subcommittee on Investigations, stated in a April 26, 2010 news release that: “From 2004 to 2007, in exchange for lucrative fees, Goldman Sachs helped lenders like Long Beach, Fremont, and New Century, securitize high risk, poor quality loans, obtain favorable credit ratings for the resulting residential mortgage backed securities (RMBS), and sell the RMBS securities to investors, pushing billions of dollars of risky mortgages into the financial system.”<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-7" title="">[8]</a>In 2007 when Washington Post columnist Allan Sloane asked mortgage experts to name the worst subprime mortgage product sold by a top bank, they picked a Goldman Sachs bond called “GSAMP Trust 2006-S3”. Within 18 months after Goldman Sachs sold this bond to investors, one sixth of the mortgages underlying the bond had defaulted. Some investors lost their entire stake. Sloane explained how Goldman Sachs’ subprime bond related to the losses and foreclosures suffered in the financial crisis:<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-8" title="">[9]</a><blockquote>“This issue, which is backed by ultra-risky second-mortgage loans, contains all the elements that facilitated the housing bubble and bust. It's got speculators searching for quick gains in hot housing markets, it's got loans that seem to have been made with little or no serious analysis by lenders, and finally, it's got Wall Street, which churned out mortgage ‘product’ because buyers wanted it.”</blockquote>In 2009, the McClatchy newspaper group conducted a five-month investigation [<a href="http://www.mcclatchydc.com/goldman/" class="external autonumber" title="http://www.mcclatchydc.com/goldman/" rel="nofollow">[39]</a>] into Goldman Sachs’ sub-prime business. The investigation concluded that “Goldman had joined other Wall Street firms in creating a colossal secondary market for subprime mortgages, converting them to securities and selling many of those securities offshore to circumvent federal tax laws and securities regulations.” Pension funds and unions are now suing the bank, claiming Goldman Sachs did not inform them of the risks when it sold them subprime mortgage-backed bonds. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-9" title="">[10]</a> McClatchy found that in 2006 and 2007, Goldman Sachs sold $40 billion in securities backed by 200,000 risky mortgages. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-10" title="">[11]</a><a name="Profiting_on_the_Downturn_in_the_US_Housing_Market" id="Profiting_on_the_Downturn_in_the_US_Housing_Market"> </a><h4>Profiting on the Downturn in the US Housing Market</h4>Goldman Sachs expanded its involvement in the subprime market up to the end of 2006, but subsequently “sold their mortgage positions, sometimes at a loss, and then adopted a bearish stance, using large quantities of the company’s own money to benefit from a crash.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-11" title="">[12]</a> In the third quarter of 2007, when other banks were announcing massive losses due to the housing downturn, Goldman Sachs trading division reported record profits. It earned $50 million in just one day by betting against the housing market. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-12" title="">[13]</a>The bank’s third quarter report for 2007 stated: "Net revenues in [trading] mortgages were...significantly higher, despite continued deterioration in the market environment. Significant losses on non-prime loans and securities were more than offset by gains on short mortgage positions." <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-13" title="">[14]</a> Chief Financial Officer David Viniar said in a December 15, 2006 email: “My basic message is let’s be aggressive distributing things because there will be very good opportunities as the markets goes (sic) into what is likely to be even greater distress and we want to be in a position to take advantage of them.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-14" title="">[15]</a> A November 18, 2007 email from CEO Lloyd Blankfein to Goldman Sachs executives said: “Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-15" title="">[16]</a>The short mortgage positions that were so profitable for Goldman Sachs involved using complex financial products to bet that the US housing market would deteriorate. One such product, Abacus, became the subject of an SEC fraud charges.The bank was unique among the large banks in the degree to which it speculated on the downturn. A financial analyst commented that only Goldman Sachs “had the chutzpah to short the very market in junk they'd given birth to.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-16" title="">[17]</a> Phil Angelides, Democrat chair of the Financial Crisis Inquiry Commission, described what Goldman Sachs did in shorting the mortgage market as “like selling a car with faulty brakes, then buying an insurance policy on the buyer of those cars.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-17" title="">[18]</a>In an article entitled “A Wall Street Invention Let the Crisis Mutate”, New York Times columnist Joe Nocera explains how Goldman Sachs helped turn the US housing crisis into a full-blown financial crisis. The housing bubble had already begun to deflate by 2007, with lenders “starting to run out of risky borrowers to make bad loans to.” By creating packages of securities, “synthetic collateralized debt obligations”<a href="http://topics.nytimes.com/topics/reference/timestopics/subjects/c/collateralized-debt-obligations/index.html" class="external autonumber" title="http://topics.nytimes.com/topics/reference/timestopics/subjects/c/collateralized-debt-obligations/index.html" rel="nofollow">[40]</a>, Goldman Sachs allowed investors to bet on loans that had already been made. In this way, Goldman Sachs contributed to a whole new wave of speculative activity that ended with the near-collapse of the global financial system and government bailouts of banks. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-18" title="">[19]</a>In its fraud case against Goldman Sachs, the Securities and Exchange Commission (SEC) that CDO’s of the type the bank was marketing “contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-19" title="">[20]</a>Problems with other Goldman products have also come to light At the April 2010 Senate subcommittee hearings [<a href="http://hsgac.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_id=f07ef2bf-914c-494c-aa66-27129f8e6282" class="external autonumber" title="http://hsgac.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_id=f07ef2bf-914c-494c-aa66-27129f8e6282" rel="nofollow">[41]</a>] looking into the role of investment firms in the financial crisis, Goldman Sachs’ internal emails were cited as evidence that traders were selling financial products they knew were bad. A senior Goldman executive said “Boy that timeberwof (sic) was one shitty (sic) deal,” referring to a $1 billion CDO Goldman Sachs sold named Timberwolf. The trader responsible for Timberwolf said that the day it was issued was “a day that will live in infamy”. Five months later, Timberwolf had lost 80% of its value and resulted in major losses for Bear Stearns, an investment bank that subsequently collapsed. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-20" title="">[21]</a> In another email, the head of Goldman Sachs’ mortgage division said: "Need you to send message to peter ostrem and darryl herrick telling them what a great job they did. They structured like mad and travelled the world, and worked their tails off to make some lemonade from some big old lemons." In some cases, Goldman Sachs has packaged and sold products with itself as the only party betting them, which was the case with the $2 billion CDO named “Hudson Mezzanine 2006-1”. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-21" title="">[22]</a>Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, is investigating “whether securities sold by Goldman Sachs Group Inc (GS.N) led to losses at AIG and if the American taxpayer was a victim of fraud.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-22" title="">[23]</a> AIG, the world’s largest insurance company, was effectively nationalized in 2008 when the US government paid $85 billion (ultimately $180 billion) to rescue it from bankruptcy. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-23" title="">[24]</a><a name="Exposing_foreign_institutions_to_subprime_risk" id="Exposing_foreign_institutions_to_subprime_risk"> </a><h4>Exposing foreign institutions to subprime risk</h4>Goldman Sachs used offshore tax havens, often in the form of secret deals run through the Cayman Islands, to sell its mortgage-backed securities to institutions worldwide, including European and Asian banks. In at least one such offering, as documented in a September 26, 2006 investment circular, Goldman Sachs pitched supposedly high-grade bonds backed by residential, commercial, and student loans, but the ratings of many of the mortgage securities hid their true risks and, in some cases, Goldman's descriptions exaggerated their quality. The September 2006 offering, one of billions of dollars worth of such deals in 2006 and 2007, was made at a time when Goldman Sachs began to disengage from the subprime market. "One bond analyst who reviewed the 2006 Cayman deal dismissed it in a report to clients as 'a not so cleverly disguised way for Goldman Sachs & Co. to unload its unwanted exposures to the subprime real estate market onto foreign investors.'"<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-24" title="">[25]</a><a name="Marketing_what_Goldman_Sachs_was_simultaneously_betting_against" id="Marketing_what_Goldman_Sachs_was_simultaneously_betting_against"> </a><h4>Marketing what Goldman Sachs was simultaneously betting against</h4>"In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. . . . Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk."<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-25" title="">[26]</a><a name="Bubble_machine" id="Bubble_machine"> </a><h4>Bubble machine</h4>A recent article in Rolling Stone, "The Great American Bubble Machine"<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-26" title="">[27]</a>, caused a great deal of controversy when writer, Matt Taibbi, placed Goldman Sachs at the center of every market manipulation since the 19th century including: The Great Depression, Tech Stocks, The Housing Craze, $4 a gallon oil prices, Rigging the Bailout, and future global warming derivatives trade.Analysts have commented that the traditional investment bank functions Blankfein emphasizes make up a small proportion of Goldman Sachs’ operations. David Stockman, President Ronald Reagan’s budget director, estimates that 75 percent of Goldman Sachs’ revenues come not from serving clients but from trading for its own account in currencies, stocks, commodities, and fixed-income securities. Stockman said that it was “absolutely true” that Goldman Sachs could accurately be described as “a hedge fund masquerading as a bank.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-27" title="">[28]</a>The bank’s portrayal of the social utility of its business contrasts with Matt Taibbi’s oft-quoted comparison of it with “a “great vampire squid wrapped around the face of humanity.” In his Rolling Stone article on Goldman Sachs, Taibbi puts the bank at the center of key economic crises – the Great Depression, the Internet bubble at the end of the 1990’s, the housing craze that lead to the 2008 financial meltdown, and, most recently, the speculative surge in commodity prices.<a name="Trading_scandal" id="Trading_scandal"> </a><h4>Trading scandal</h4>As a matter of practice, the Goldman Sachs Group Inc. has provided select clients with advice that contradicts what its traders tell the rest of its customers. Once a week beginning in 2007, Goldman analysts gathered in what is called a "trading huddle" to talk about short-term changes in individual stocks or the market at large. Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008, but about 50 top customers got a phone call that the stock was likely to go up, according to company documents.<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-28" title="">[29]</a><a name="Alleged_fraud" id="Alleged_fraud"> </a><h4>Alleged fraud</h4><a name="The_SEC_case_against_Goldman_Sachs" id="The_SEC_case_against_Goldman_Sachs"> </a><h5>The SEC case against Goldman Sachs</h5>In July 2009, the SEC served Goldman Sachs with notice that it intended to file fraud charges against it. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-29" title="">[30]</a> On April 15, 2010, the SEC followed through and charged Goldman Sachs and Fabrice Tourre, an employee of the bank, with defrauding investors. In addition to the SEC’s civil case, Rep. Marcy Kaptur, D-Ohio has asked the Attorney General for criminal charges as well, arguing "On the face of the SEC filing, criminal fraud on a historic scale seems to have occurred in this instance.” Shareholders are also suing the bank because of its failure to disclose the SEC investigation against it. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-30" title="">[31]</a>The SEC’s case focuses on a particular Goldman Sachs’ product named “Abacus 2007-AC1”. This product enabled Paulson & Co. Inc., a hedge fund headed by John Paulson, to make $1 billion betting against the US mortgage market. Paulson paid Goldman Sachs $15 million to create and market Abacus. The specific rules Goldman Sachs is accused of violating are: 17(a) of the Securities Act 1933, section 10(b) of the Securities Act 1934 and Exchange Act Rule 10b-5. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-31" title="">[32]</a>The SEC is claiming Goldman Sachs made “materially misleading statements and omissions” in its marketing of Abacus to investors, failing to inform them that Paulson’s hedge fund had “played a significant role” in choosing the subprime mortgage-backed securities underlying this CDO and that Paulson had an incentive to pick securities that would probably decline in value. Nine months after Abacus 2007-AC1 was sold to investors, 99 percent of the underlying mortgage securities had been downgraded. Abacus investors lost over $1 billion and Paulson made $1 billion from derivative side bets that Abacus would decline . <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-32" title="">[33]</a>Commenting on the charges, former SEC lawyer Steven Thel says that given their serious nature the SEC would not have launched the case unless it thought it was going to win. Thel stated in an interview with the International Financial Law Review: “This is an example of a bank saying it was client led, but in fact was favouring hedge funds over institutional investors in the most grotesque way. I am sure the Goldman Sachs line will be that they gave all sorts of disclosure. But that boilerplate provision may not be enough.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-33" title="">[34]</a>The potential for conflicts of interest is illustrated by the Abacus deal, since it involved Goldman Sachs structuring a collateralized debt obligation for a hedge fund that wanted to bet against it at the same the bank was responsible for convincing investors to buy this product. In its pitch book to market Abacus to investors, Goldman Sachs touted the reliability of ACA, a firm hired to manage this CDO. Goldman Sachs described ACA as having a “commitment to longterm bondholder and counterparty security - Durability and stability emphasized”. The bank assured investors that “No rated notes in any of ACA’s CDO’s have ever been downgraded.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-34" title="">[35]</a>This marketing of Abacus on the basis of its safety contrasts with the comments in Goldman Sachs employee emails about the dire state of the housing market. In addition, Tourre wrote in an internal March 2007 email that the Abacus portfolio was “selected by ACA/Paulson” which seems to confirm the role Paulson had in selecting the securities making up the deal. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-35" title="">[36]</a><a name="The_SEC_case_against_Goldman_Sachs_employee_Fabrice_Tourre" id="The_SEC_case_against_Goldman_Sachs_employee_Fabrice_Tourre"> </a><h5>The SEC case against Goldman Sachs employee Fabrice Tourre</h5>The SEC case against Fabrice Tourre describes him as the Goldman Sachs executive “principally responsible” for the Abacus deal. The SEC alleges that Tourre knew of Paulson’s interest in having Abacus decline in value, did not disclose this, and instead gave the misleading impression that Paulson had invested $200 million in the equity of the CDO with the expectation that it would do well. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-36" title="">[37]</a> At a Senate subcommittee hearing, Tourre categorically denied that he had failed to disclose material information to investors. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-37" title="">[38]</a>Tourre’s emails suggest the trader knew at the time he was selling his CDO deals that they were bad for investors. Tourre advised his colleagues not to try to sell these types of deals to hedge fund managers because they were too “sophisticated” and would not let Goldman charge large fees, but instead that they should target "buy-and-hold ratings-based buyers". <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-38" title="">[39]</a> A particularly revealing email stated: “More and more leverage in the system, The whole building 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!!!” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-39" title="">[40]</a> Another Tourre email, passing on information from a Goldman’s Sachs mortgage trader, said that the mortgage business “is totally dead and the poor little subprime borrowers will not last so long!!!” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-40" title="">[41]</a>In a disparaging comment about the investors he was selling CDOs to, Tourre said in an email “I’ve managed to sell a few Abacus bonds to widows and orphans that I ran into at the airport…” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-41" title="">[42]</a> An email from a Goldman Sachs executive to Tourre suggests Tourre was under pressure to execute these deals quickly, because “the cdo biz is dead we don’t have a lot of time left.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-42" title="">[43]</a><a name="Goldman_Sachs.E2.80.99_defense_against_fraud_charges" id="Goldman_Sachs.E2.80.99_defense_against_fraud_charges"> </a><h5>Goldman Sachs’ defense against fraud charges</h5>Goldman Sachs CEO Lloyd Blankfein has denied there is a conflict when his employees package securities they know are bad and sell them to investors. At the April 26, 2010 Senate subcommittee hearings on Goldman Sachs’ role in the financial crisis, Blankfein stated: ""In the context of market making, that is not a conflict. What clients are buying... is they are buying an exposure. The thing that we are selling to them is supposed to give them the risk they want. They are not coming to us to represent what our views are. They probably, the institutional clients we have, wouldn't care what our views are, they shouldn't care.” Blankfein did not address the role the bank plays in actively promoting deals, as its pitch book for Abacus demonstrates. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-43" title="">[44]</a>Not all financial institutions felt the kind of deals Goldman Sachs made to bet against the housing market were ethical. In his book on John Paulson, Gregory Zuckerman reports how Paulson also approached the now-defunct firm Bear Stearns to create a CDO his hedge fund could bet against. Paulson believed “the debt backing the CDOs would blow up.” According to Zuckerman, Paulson “didn’t think there was anything wrong with working with various bankers to create more toxic investments”. Paulson was open about what he was doing. However Scott Eichel, a senior Bear Stearns trader, was “worried that Paulson would want especially ugly mortgages for the CDOs, like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team.” Eichel turned Paulson down, in his words, because “it didn’t pass the ethics standards; it was a reputation issue, and it didn’t pass our moral compass. We didn’t think we should sell deals that someone was shorting on the other side.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-44" title="">[45]</a>Goldman Sachs has said the SEC’s charges were “completely unfounded.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-45" title="">[46]</a> It released a report presenting the firm as a small player in the subprime business overall and with insignificant investments that could profit from a housing downturn. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-46" title="">[47]</a> The bank is also claiming it lost money on the Abacus deal. However, a story in Businessweek points out “Goldman won't reveal the positions in its mortgage trading book, so there's no way to tell what's real.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-47" title="">[48]</a>The bank has its defenders in the media. The CEO of Thomson Reuters, Tom Glocer, published an extraordinary blog, saying “Enough already” about the criticism of Goldman Sachs. In what may be taken as direction from management by Reuters reporters, Glocer said that the “[SEC]proceedings are best left to the securities and regulatory lawyers.” Glocer argued that while there may be a few “bad apples” among Goldman Sachs’ 35,000 employees, many were “upstanding, ethically decent mothers and fathers” and he knew a number of them personally. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-48" title="">[49]</a> Sebastian Mallaby, writing in the Washington Post, said by charging Goldman Sachs the SEC had become “a poster child for government power run amok.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-49" title="">[50]</a>As well, Republicans are questioning whether the SEC timing of it fraud charges was politically motivated to help the Democrats pass financial reform legislation. In this regard, Republican Congressman Darrell Issa gave the SEC a May 2010 deadline to provide records of communication between Democrats and the SEC.<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-50" title="">[51]</a><a name="Bailouts" id="Bailouts"> </a><h3>Bailouts</h3><a name="Bailout_amounts" id="Bailout_amounts"> </a><h4>Bailout amounts</h4><a name="TARP_Bailout" id="TARP_Bailout"> </a><h5>TARP Bailout</h5>On October 28, 2008, the US Treasury paid Goldman Sachs $10 billion in exchange for Goldman Sachs shares as one of the six large banks initially given funding from TARP intended to unfreeze credit markets. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-51" title="">[52]</a><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-52" title="">[53]</a><a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-53" title="">[54]</a> This bailout was done through the capital purchase division of the Troubled Assets Relief Program (TARP). The congressional oversight committee for TARP calculated that the Treasury paid $3.5 billion more for stocks than they were worth. Around the same time Warren Buffett’s firm Berkshire Hathaway bought $5 billion in Goldman Sachs shares but paid less for them than the US government did. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-54" title="">[55]</a>In its 2009 letter to shareholders, Goldman Sachs acknowledges that the bank and its shareholders benefited from government intervention during the financial crisis: “Looking back on 2009, it is impossible to know what would have happened to the financial system absent concerted government action around the world… Goldman Sachs is grateful for the indispensable role governments played and we recognize that our firm and our shareholders benefited from it.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-55" title="">[56]</a>Goldman Sachs’ Chief Financial Officier David Viniar said in February 2009 that the firm was eager to repay the TARP money because of the restrictions on executive pay that came with it. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-56" title="">[57]</a> In June, 2009 Goldman Sachs bought back its shares from the government for $10.04 billion. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-57" title="">[58]</a> It also paid the government an additional $1.4 billion to repay warrants and cover dividends. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-58" title="">[59]</a>Goldman repaid the $10 billion TARP money it received in June 2009.<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-59" title="">[60]</a>In September, 2008, as the financial crisis peaked, Goldman Sachs ceased to be an investment bank and became a bank holding company<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-60" title="">[61]</a>.<a name="Goldman_Benefits_from_Lehman_Failure_and_AIG_Bailout" id="Goldman_Benefits_from_Lehman_Failure_and_AIG_Bailout"> </a><h4>Goldman Benefits from Lehman Failure and AIG Bailout</h4>Questions were raised about the federal government's decision to allow the collapse of <a href="http://www.sourcewatch.org/index.php?title=Lehman_Brothers" title="Lehman Brothers">Lehman Brothers</a>, a Goldman Sachs competitor, and the decision to prop up <a href="http://www.sourcewatch.org/index.php?title=American_International_Group" title="American International Group">American International Group</a>, Inc.<a name="Lehman_Brothers_Bankruptcy" id="Lehman_Brothers_Bankruptcy"> </a><h5>Lehman Brothers Bankruptcy</h5>Goldman Sachs is one of the firms being investigated for possibly helping to bankrupt Lehman Brothers, an investment bank competitor, by short selling Lehman shares. A bankruptcy judge has given Lehman subpoena power, and it is using this power to require Goldman Sachs and others to produce documents. Lehman representatives say they are assisting the investigation of the firm’s bankruptcy which might lead to “possible prosecution of certain litigation” against those that damaged its business. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-61" title="">[62]</a>Another possible source of legal problems for Goldman Sachs relates to its purchase of Lehman’s trading positions when the firm went bankrupt in September 2008. CME Group, the world’s largest futures exchange, selected Goldman Sachs as one of a select group of companies allowed to bid on $2 billion worth of contracts held by Lehman Brothers Inc.(LBI) after it declared bankruptcy. According to a report by CNBC, this was “the first and only time the CME Group has conducted a forced liquidation of a member firm's positions, and left Lehman creditors with little to show for the valuable contracts.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-62" title="">[63]</a>The bank examiner’s report on the Lehman Brothers bankruptcy concluded that the sale of Lehman contracts by CME Group resulted in a $1.2 billion loss, and there may be a basis for those with stakes in Lehman to sue. The bank examiner found that: “The bulk sale process (including the Goldman Sachs sale arranged by LBCS) resulted in a substantial loss to LBI (Lehman Brothers Inc.) exceeding $1.2 billion over the close-of-business liabilities associated with the positions, and a net loss of close to $100 million over the SPAN Risk (margin) requirements. Thus, LBI may have a colorable claim against CME, or any of the firms that bought LBI’s positions at a steep discount during the liquidation ordered by the CME, for the losses that LBI sustained as a result of the forced sale of house positions held for the benefit of LBI and its affiliates.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-63" title="">[64]</a><a name="AIG_Bailout" id="AIG_Bailout"> </a><h5>AIG Bailout</h5>After the $182.5 billion taxpayer bailout of AIG<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-64" title="">[65]</a>, Goldman received $12.9 billion from AIG in the form of collateral that Goldman already had in its possession and a cash settlement of ongoing margin disputes. $90 billion of the bailout money provided to <a href="http://www.sourcewatch.org/index.php?title=AIG" title="AIG" class="mw-redirect">AIG</a> by the government went directly to banks, including this $12.9 billion to Goldman Sachs<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-65" title="">[66]</a>. Foreign banks were also major recipients of the AIG bailout funds prompting an investigation by New York Attorney General Andrew Cuomo.<a name="Benefits_to_Goldman_Sachs_of_AIG_Bailout" id="Benefits_to_Goldman_Sachs_of_AIG_Bailout"> </a><h6>Benefits to Goldman Sachs of AIG Bailout</h6>Some financial analysts have argued that in calculating Goldman Sachs’ government bailout, the total should include the $12.9 billion in government funds that flowed from the New York Federal Reserve through AIG to Goldman Sachs. Goldman Sachs was paid full-value for collateral calls on debt swaps it had made with AIG, and received more of AIG’s bailout money than any other firm. It also received AIG bailout money through deals it had with Societe Generale, a French bank that received $11 billion of the AIG bailout. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-66" title="">[67]</a>According to a New York Times analysis, before the government was forced to bail out AIG “Goldman’s demands for billions of dollars from the insurer helped put it in a precarious financial position by bleeding much-needed cash.” AIG analysts believed that Goldman Sachs had pushed other banks, including Societe Generale, to demand collateral payments, an accusation Goldman Sachs denies. AIG disagreed that the securities in dispute had fallen as much as Goldman Sachs claimed, but Goldman Sachs refused to allow third parties to set a value on these securities. The Times reported that “The federal bailout locked in the paper losses of those deals for A.I.G. The prices on many of those securities have since rebounded.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-67" title="">[68]</a>Without the bailout of AIG, Goldman Sachs might have had to wait and seek compensation through bankruptcy courts as just one of a number of AIG’s creditors. Instead, because of AIG’s government bailout Goldman Sachs was able to immediately recoup100% of what it claimed AIG owed the bank. Investment analyst Joshua Rosner commented: ``It was the biggest crisis ever, if you're an investment bank. We didn't just save AIG. We saved the counterparties, the banks. It's true that it would have been a disaster, but it would have been a disaster for them. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-68" title="">[69]</a>David Viniar, Goldman Sachs’ Chief Financial Officer, has revealed that the bank refused when AIG had asked Goldman to take less than it was demanding. In a media interview, he downplayed the potential impact on his firm of an AIG bankruptcy, saying it had hedged its AIG contracts. He did not address the implications of what AIG’s collapse would have meant for the financial system as a whole, and what would have happened to Goldman Sachs if an AIG bankruptcy had triggered widespread failures of other institutions. Viniar stated: “All we did is call for the collateral that was due to us under the contracts. So I don’t think there’s any guilt whatsoever.”<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-69" title="">[70]</a>The 2009 Goldman Sachs shareholder letter, however, recognizes the benefits Goldman Sachs got from the AIG bailout: “While our direct economic exposure to AIG was minimal, the financial markets, and, as a result, Goldman Sachs and every other financial institution and company, benefited from the continued viability of AIG.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-70" title="">[71]</a>A Wall Street Journal story draws on a report by the inspector general of TARP to rebut Goldman Sachs’ claim that it would not have suffered if the government had allowed AIG to go under: “If AIG collapsed and markets continued to swoon, Goldman would have had to make payments to the other trading firms and been unable to collect on protection it had bought from AIG.” <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-71" title="">[72]</a><a name="AIG_and_Goldman_Connections" id="AIG_and_Goldman_Connections"> </a><h5>AIG and Goldman Connections</h5>Stephen Friedman was chair of the New York Fed and also sat on the board of Goldman Sachs in 2008 when the Fed organized the bailout of AIG. Between December 2008 and January 2009 Friedman bought over $1 million in shares in Goldman Sachs. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-72" title="">[73]</a> Goldman Sachs CEO Lloyd Blankfein was present at the September 15, 2008 New York Fed meeting where the bailout of AIG was discussed. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-73" title="">[74]</a> On September 17, 2008 Treasury Secretary Henry Paulson, the former Goldman Sachs CEO, endorsed the New York Fed’s bailout of AIG. Edward Liddy, a director of Goldman Sachs, was appointed by Paulson to head the nationalized AIG. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-74" title="">[75]</a><a name="Geithner_and_AIG" id="Geithner_and_AIG"> </a><h5>Geithner and AIG</h5>At the end of 2008, with AIG running out of cash, negotiations were underway to determine what percentage AIG would pay on its obligations to credit default swap (CDS) counterparties, including <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs_Group_Inc." title="Goldman Sachs Group Inc." class="mw-redirect">Goldman Sachs Group Inc.</a>, <a href="http://www.sourcewatch.org/index.php?title=Merrill_Lynch" title="Merrill Lynch">Merrill Lynch</a> & Co., Paris-based <a href="http://www.sourcewatch.org/index.php?title=Societe_Generale_SA&action=edit&redlink=1" class="new" title="Societe Generale SA (page does not exist)">Societe Generale SA</a> and Frankfurt-based <a href="http://www.sourcewatch.org/index.php?title=Deutsche_Bank_AG&action=edit&redlink=1" class="new" title="Deutsche Bank AG (page does not exist)">Deutsche Bank AG</a>. Negotiations had reached discounts of as much as 40 cents on the dollar. However the government took over AIG on Sept. 16, 2008, and beginning November 3 negotiations were taken over by New York Fed President Timothy Geithner, the Treasury Department and the Federal Reserve. After less than a week of negotiations, the New York Fed instructed AIG to pay 100 cents on the dollar, costing taxpayers at least $13 billion<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-Bloomberg-75" title="">[76]</a>.According to an Oct. 27, 2009 Bloomberg report<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-Bloomberg-75" title="">[76]</a>,<blockquote>The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, <a href="http://www.sourcewatch.org/index.php?title=Stephen_Friedman" title="Stephen Friedman">Stephen Friedman</a>, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article.</blockquote><a name="Actions_as_bank_holding_company" id="Actions_as_bank_holding_company"> </a><h3>Actions as bank holding company</h3>There are questions about appearances that Goldman Sachs continues to operate as an investment bank after transitioning to a commercial bank holding company. Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management and AIG, and question why they continue to act as investment bank a senior fellow at the Peterson Institute for International Economics, writes<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-76" title="">[77]</a>,<blockquote>Goldman is also currently engaged in private equity investments in nonfinancial firms around the world, as seen for example in its recent deal with Geely Automotive Holdings in China (People’s Daily; CNBC). US banks or bank holding companies would not generally be allowed to undertake such transactions - in fact, it is annoyed bankers who have asked me to take this up. [. . .] is it envisaged that Goldman will cease being a bank holding company, or that it will divest itself shortly of activities not usually allowed (and with good reason) by banks? Or will all bank holding companies be allowed to expand on the same basis.</blockquote><a name="Notable_reactions_to_the_financial_crisis" id="Notable_reactions_to_the_financial_crisis"> </a><h3>Notable reactions to the financial crisis</h3><a name="Invoking_religious_themes" id="Invoking_religious_themes"> </a><h4>Invoking religious themes</h4>As Goldman's reputation in the general public suffered in late 2008 and 2009, several Goldman spokesmen began to invoke religious themes in their media appearances and public events. "The injunction of Jesus to love others as ourselves is an endorsement of self-interest," Goldman Sachs International adviser Brian Griffiths said on October 20, 2009, to a crowd in St. Paul’s Cathedral in London. "We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all."<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-77" title="">[78]</a>Lloyd Blankfein similarly was quoted in the Sunday Times describing his company's work as having "a social purpose" and himself as "doing God’s work."<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-78" title="">[79]</a> While he later said this was meant as a joke, he also told one of Vanity Fair’s editors that “What’s good for Goldman Sachs is good for America.”<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-79" title="">[80]</a> Blankfein has said that as an investment bank, Goldman Sachs does a lot for the economy by allocating capital, raising funds for companies, and launching new businesses. <a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-80" title="">[81]</a><a name="Apologies" id="Apologies"> </a><h4>Apologies</h4>Goldman chairman and CEO Lloyd Blankfein told a conference in November 2009, "We participated in things that were clearly wrong and have reason to regret. We apologize." Published accounts do not quote Blankfein having elaborated upon which "things ... were clearly wrong."<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-81" title="">[82]</a><a name="Discouraging_holiday_parties" id="Discouraging_holiday_parties"> </a><h4>Discouraging holiday parties</h4>Goldman Sachs canceled its annual Christmas party in 2009, and it prohibited employees from paying for parties in their own homes. It also instructed employees not to gather in any parties of 12 or more people.<a href="http://www.sourcewatch.org/index.php?title=Goldman_Sachs#cite_note-82" title="">[83]</a><a name="Other_controversies" id="Other_controversies"> </a><h2>Other controversies</h2><a name="Greek_Financial_Crisis" id="Greek_Financial_Crisis"> </a><h3>Greek Financial Crisis</h3><h2>-----</h2><h2>Congressional Republicans are cutting funding for the Securities and Exchange Commission and the Commodity Futures Trading Commission as if those already underfunded agencies are centers of anti-business radicalism. The CFTC is run by former Goldman Sachs partner Gary Gensler, who, back when he was in the Clinton Treasury Department serving under another onetime Goldman leader, Robert Rubin, teamed up with Republicans in Congress to gut financial regulation. He is one of the Obama regulators who has managed to delay even the minor controls that the Dodd-Frank law requires for the still wildly out-of-control $600 trillion derivatives market.</h2><h2>What a joke that the tea party assertion that radicals have taken over the Obama government is embraced even by lobbyists for Goldman Sachs, whose former executives have populated the Obama administration as widely as they did the two previous administrations. All they are missing this time around is that they didn’t get to have one of their own named as treasury secretary, as was the case in both the Clinton and Bush cabinets.</h2>Robert Scheer writes <a href="http://www.truth-out.org/tea-party-and-goldman-sachs-love-story/1309960390">The Tea Party and Goldman Sachs: A Love Story</a>:<h2>----</h2><h2><a class="title-link" href="http://www.propublica.org/article/treasurys-point-man-on-aig-bailout-that-benefited-goldman-owned-goldman-sto/">Treasury’s ‘Point Man’ on AIG Bailout That Benefited Goldman, Owned Goldman Stock</a></h2>by <a href="http://www.propublica.org/site/author/karen_weise/">Karen Weise</a>
ProPublica, June 30, 4:53 p.m.<div class="article">Deep in an article today on the government's bailout of AIG, The New York Times cites sources saying that the Treasury Department's "point man" on AIG, Don Jester, was a former Goldman Sachs employee who <a href="http://www.nytimes.com/2010/06/30/business/30aig.html?hp=&pagewanted=all">owned stock in the bank even as he was making decisions</a> on the bailout that ultimately channeled billions of taxpayer dollars to Goldman.Owning stock in a company an official oversees typically is verboten, but because Jester was working as an outside contractor rather than an official employee, he was exempt from <a href="http://www.federalreserve.gov/aboutthefed/section%2010.htm">conflict-of interest rules</a>. Goldman Sachs stood to benefit from the AIG bailout because Goldman had roughly $20 billion in insurance-like credit-default swaps with AIG -- essentially bets by the investment bank that the housing market would go south. But if AIG collapsed, Goldman wouldn't be able to collect on the bets. When the government instead bailed out AIG, taxpayers paid out the swaps at full face value, and <a href="http://www.nytimes.com/2010/02/07/business/07goldman.html">Goldman Sachs got $12.9 billion</a> -- more than any other of AIG's customers.</div>----- Zoellick joins a list of former government officials to join Goldman that includes the late Henry Fowler, U.S. Treasury Secretary under President Lyndon Johnson, and current Vice Chairman Robert Hormats, 63, an assistant U.S. secretary of state from 1981 to 1982. Among the firm's senior advisers are three former European Union antitrust commissioners, Mario Monti, 63, Peter Sutherland, 60, and Karel van Miert, 64. The revolving door also goes the other way. Outgoing Chief Executive Officer Henry Paulson, 60, was last month nominated by President George W. Bush to become Treasury Secretary, becoming the fourth CEO in a row to accept a federal post, according to the firm's records. Ex-leaders Robert Rubin and Stephen Friedman served as White House appointees, while Jon Corzine was elected to the Senate before becoming the governor of New Jersey. <a href="http://www.mindfully.org/Reform/2006/Zoellick-Goldman-Sachs19jun06.htm">Zoellick Leaving State Department, to Join Goldman</a> - Bloomberg 19jun2006    —   <a href="http://www.google.com/custom?q=Zoellick&cof=T%3A%23000000%3BLW%3A522%3BBIMG%3Ahttp%3A%2F%2Fwww.mindfully.org%2Fmindfully-body-search.jpg%3BL%3Ahttp%3A%2F%2Fwww.mindfully.org%2Fmindfully_searchGray.GIF%3BLC%3A%23787878%3BLH%3A60%3BBGC%3A%23F7F7F7%3BAH%3Acenter%3BVLC%3A%23939300%3BGL%3A0%3BS%3Ahttp%3A%2F%2Fwww.mindfully.org%3BAWFID%3A90eb04944af8e231%3B&domains=www.mindfully.org&sitesearch=www.mindfully.org">More on Zoellick</a>http://www.mindfully.org/GE/Revolving-Door.htm==ceo GS Blankfein best paid bank ceo pulls a Buffet; new study on inequality says 300:1; zuckerberg alone skews the data=== 
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